I.

a) Article 2 NCC; Article 5, Labor Code; Sec 3(1) & 4 Chapter 2 Book
VII Admin Code of 1987
1. NMSI vs. DND
GR 187587 June 5, 2013
HELD: This Court cannot rely on a handwritten note that was not part of
Proclamation No. 2476 as published. Without publication, the note never had
any
legal
force
and
effect.
SEE PDF FULL CASE
2. Cojuangco, Jr. vs. RP
GR 180705 Nov. 27, 2012
HELD: In this case, while it incorporated the PCA-Cojuangco Agreement by
reference, Section 1 of P.D. 755 did not in any way reproduce the exact terms
of the contract in the decree. Neither was a copy thereof attached to the decree
when published. We cannot, therefore, extend to the said Agreement the status
of a law. Consequently, We join the Sandiganbayan in its holding that the PCACojuangco Agreement shall be treated as an ordinary transaction between
agreeing minds to be governed by contract law under the Civil Code.
G.R. No. 180705
November 27, 2012
EDUARDO
M.
COJUANGCO,
JR.,
Petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION
VELASCO, JR., J.:
The Case
Of the several coconut levy appealed cases that stemmed from certain
issuances of the Sandiganbayan in its Civil Case No. 0033, the present recourse
proves to be one of the most difficult.
In particular, the instant petition for review under Rule 45 of the Rules of Court
assails and seeks to annul a portion of the Partial Summary Judgment dated
July 11, 2003, as affirmed in a Resolution of December 28, 2004, both rendered
by the Sandiganbayan in its Civil Case ("CC") No. 0033-A (the judgment shall
hereinafter be referred to as "PSJ-A"), entitled "Republic of the Philippines,
Plaintiff, v. Eduardo M. Cojuangco, Jr., et al., Defendants, COCOFED, et al.,
BALLARES, et al., Class Action Movants." CC No. 0033-A is the result of the
splitting into eight (8) amended complaints of CC No. 0033 entitled, "Republic of
the Philippines v. Eduardo Cojuangco, Jr., et al.," a suit for recovery of ill-gotten
wealth commenced by the Presidential Commission on Good Government
("PCGG"), for the Republic of the Philippines ("Republic"), against Eduardo M.

Cojuangco, Jr. ("Cojuangco") and several individuals, among them, Ferdinand E.

Marcos, Maria Clara Lobregat ("Lobregat"), and Danilo S. Ursua ("Ursua"). Each
of the eight (8) subdivided complaints, CC No. 0033-A to CC No. 0033-H,
correspondingly impleaded as defendants only the alleged participants in the
transaction/s subject of the suit, or who are averred as owner/s of the assets
involved.
Apart from this recourse, We clarify right off that PSJ-A was challenged in two
other separate but consolidated petitions for review, one commenced by
COCOFED et al., docketed as G.R. Nos. 177857-58, and the other, interposed
by Danilo S. Ursua, and docketed as G.R. No. 178193.
By Decision dated January 24, 2012, in the aforesaid G.R. Nos. 177857-58
(COCOFED et al. v. Republic) and G.R. No. 178193 (Ursua v. Republic)
consolidated cases1 (hereinafter collectively referred to as "COCOFED v.
Republic"), the Court addressed and resolved all key matters elevated to it in
relation to PSJ-A, except for the issues raised in the instant petition which have
not yet been resolved therein. In the same decision, We made clear that: (1)
PSJ-A is subject of another petition for review interposed by Eduardo
Cojuangco, Jr., in G.R. No. 180705, entitled Eduardo M. Cojuangco, Jr. v.
Republic of the Philippines, which shall be decided separately by the Court, 2 and
(2) the issues raised in the instant petition should not be affected by the earlier
decision "save for determinatively legal issues directly addressed therein."3
For a better perspective, the instant recourse seeks to reverse the Partial
Summary Judgment4 of the anti-graft court dated July 11, 2003, as reiterated in
a Resolution5 of December 28, 2004, denying COCOFEDs motion for
reconsideration, and the May 11, 2007 Resolution6 denying
COCOFEDs motion to set case for trial and declaring the partial summary
judgment final and appealable, all issued in PSJ-A. In our adverted January 24,
2012 Decision in COCOFED v. Republic, we affirmed with modification PSJ-A of
the Sandiganbayan, and its Partial Summary Judgment in Civil Case No. 0033-F,
dated May 7, 2004 (hereinafter referred to as "PSJ-F).7
More specifically, We upheld the Sandiganbayans ruling that the coconut levy
funds are special public funds of the Government. Consequently, We affirmed
the Sandiganbayans declaration that Sections 1 and 2 of Presidential Decree
("P.D.") 755, Section 3, Article III of P.D. 961 and Section 3, Article III of P.D.
1468, as well as the pertinent implementing regulations of the Philippine
Coconut Authority ("PCA"), are unconstitutional for allowing the use and/or the
distribution of properties acquired through the coconut levy funds to private
individuals for their own direct benefit and absolute ownership. The Decision
also affirmed the Governments ownership of the six CIIF companies, the
fourteen holding companies, and the CIIF block of San Miguel Corporation
shares of stock, for having likewise been acquired using the coconut levy funds.
Accordingly, the properties subject of the January 24, 2012 Decision were
declared owned by and ordered reconveyed to the Government, to be used only
for the benefit of all coconut farmers and for the development of the coconut
industry.
By Resolution of September 4, 2012,8 the Court affirmed the above-stated
Decision promulgated on January 24, 2012.

It bears to stress at this juncture that the only portion of the appealed Partial
Summary Judgment dated July 11, 2003 ("PSJ-A") which remains at issue
revolves around the following decretal holdings of that court relating to the
"compensation" paid to petitioner for exercising his personal and exclusive
option to acquire the FUB/UCPB shares.9 It will be recalled that the
Sandiganbayan declared the Agreement between the PCA and Cojuangco
containing the assailed "compensation" null and void for not having the required
valuable consideration. Consequently, the UCPB shares of stocks that are
subject of the Agreement were declared conclusively owned by the Government.
It also held that the Agreement did not have the effect of law as it was not
published as part of P.D. 755, even if Section 1 thereof made reference to the
same.
Facts
We reproduce, below, portions of the statement of facts in COCOFED v. Republic
relevant to the present case:10
In 1971, Republic Act No. ("R.A.") 6260 was enacted creating the Coconut
Investment Company ("CIC") to administer the Coconut Investment Fund
("CIF"), which, under Section 8 thereof, was to be sourced from a PhP 0.55 levy
on the sale of every 100 kg. of copra. Of the PhP 0.55 levy of which the copra
seller was or ought to be issued COCOFUND receipts, PhP 0.02 was placed
at the disposition of COCOFED, the national association of coconut producers
declared by the
Philippine Coconut Administration ("PHILCOA" now "PCA") as having the largest
membership.
The declaration of martial law in September 1972 saw the issuance of several
presidential decrees ("P.D.") purportedly designed to improve the coconut
industry through the collection and use of the coconut levy fund. While coming
generally from impositions on the first sale of copra, the coconut levy fund came
under various names x x x. Charged with the duty of collecting and
administering the Fund was PCA. Like COCOFED with which it had a legal
linkage, the PCA, by statutory provisions scattered in different coco levy
decrees, had its share of the coco levy.
The following were some of the issuances on the coco levy, its collection and
utilization, how the proceeds of the levy will be managed and by whom and the
purpose it was supposed to serve:
1. P.D. No. 276 established the Coconut Consumers Stabilization Fund ("CCSF")
and declared the proceeds of the CCSF levy as trust fund, to be utilized to
subsidize the sale of coconut-based products, thus stabilizing the price of edible
oil.
2. P.D. No. 582 created the Coconut Industry Development Fund ("CIDF") to
finance the operation of a hybrid coconut seed farm.
3. Then came P.D. No. 755 providing under its Section 1 the following:
It is hereby declared that the policy of the State is to provide readily available
credit facilities to the coconut farmers at preferential rates; that this policy can
be expeditiously and efficiently realized by the implementation of the
"Agreement for the Acquisition of a Commercial Bank for the benefit of Coconut
Farmers" executed by the PCA; and that the PCA is hereby authorized to

distribute, for free, the shares of stock of the bank it acquired to the coconut
farmers.
Towards achieving the policy thus declared, P.D. No. 755, under its Section 2,
authorized PCA to utilize the CCSF and the CIDF collections to acquire a
commercial bank and deposit the CCSF levy collections in said bank interest
free, the deposit withdrawable only when the bank has attained a certain level
of sufficiency in its equity capital. The same section also decreed that all levies
PCA is authorized to collect shall not be considered as special and/or fiduciary
funds or form part of the general funds of the government within the
contemplation of P.D. No. 711.
4. P.D. No. 961 codified the various laws relating to the development of
coconut/palm oil industries.
5. The relevant provisions of P.D. No. 961, as later amended by P.D. No. 1468
(Revised Coconut Industry Code), read:
ARTICLE
III
Levies
Section 1. Coconut Consumers Stabilization Fund Levy. The PCA is hereby
empowered to impose and collect the Coconut Consumers Stabilization Fund
Levy, .
.
Section 5. Exemption. The CCSF and theCIDF as well as all disbursements as
herein authorized, shall not be construed as special and/or fiduciary funds, or
as part of the general funds of the national government within the
contemplation of PD 711; the intention being that said Fund and the
disbursements thereof as herein authorized for the benefit of the coconut
farmers shall be owned by them in their private capacities: . (Emphasis
supplied)
6. Letter of Instructions No. ("LOI") 926, s. of 1979, made reference to the
creation, out of other coco levy funds, of the Coconut Industry Investment Fund
("CIIF") in P.D. No. 1468 and entrusted a portion of the CIIF levy to UCPB for
investment, on behalf of coconut farmers, in oil mills and other private
corporations, with the following equity ownership structure:
Section 2. Organization of the Cooperative Endeavor. The UCPB, in its capacity
as the investment arm of the coconut farmers thru the CIIF is hereby directed
to invest, on behalf of the coconut farmers, such portion of the CIIF in private
corporations under the following guidelines:
a) The coconut farmers shall own or control at least (50%) of the outstanding
voting capital stock of the private corporation acquired thru the CIIF and/or
corporation owned or controlled by the farmers thru the CIIF . (Words in
bracket added.)
Through the years, a part of the coconut levy funds went directly or indirectly to
finance various projects and/or was converted into various assets or
investments.11 Relevant to the present petition is the acquisition of the First
United Bank ("FUB"), which was subsequently renamed as United Coconut
Planters Bank ("UCPB").12
Apropos the intended acquisition of a commercial bank for the purpose stated
earlier, it would appear that FUB was the bank of choice which Pedro

Cojuangcos group (collectively, "Pedro Cojuangco") had control of. The plan,
then, was for PCA to buy all of Pedro Cojuangcos shares in FUB. However, as
later events unfolded, a simple direct sale from the seller (Pedro) to PCA did not
ensue as it was made to appear that Cojuangco had the exclusive option to
acquire the formers FUB controlling interests. Emerging from this elaborate,
circuitous arrangement were two deeds. The first one was simply denominated
as Agreement, dated May 1975, entered into by and between Cojuangco for and
in his behalf and in behalf of "certain other buyers", and Pedro Cojuangco in
which the former was purportedly accorded the option to buy 72.2% of FUBs
outstanding capital stock, or 137,866 shares (the "option shares," for brevity),
at PhP 200 per share. On its face, this agreement does not mention the word
"option."
The second but related contract, dated May 25, 1975, was denominated as
Agreement for the Acquisition of a Commercial Bank for the Benefit of the
Coconut Farmers of the Philippines. It had PCA, for itself and for the benefit of
the coconut farmers, purchase from Cojuangco the shares of stock subject of
the First Agreement for PhP200.00 per share. As additional consideration for
PCAs buy-out of what Cojuangco would later claim to be his exclusive and
personal option, it was stipulated that, from PCA, Cojuangco shall receive equity
in FUB amounting to 10%, or 7.22%, of the 72.2%, or fully paid shares. And so
as not to dilute Cojuangcos equity position in FUB, later UCPB, the PCA agreed
under paragraph 6 (b) of the second agreement to cede over to the former a
number of fully paid FUB shares out of the shares it (PCA) undertakes to
eventually subscribe. It was further stipulated that Cojuangco would act as bank
president for an extendible period of 5 years.
Apart from the aforementioned 72.2%, PCA purchased from other FUB
shareholders 6,534 shares of which Cojuangco, as may be gathered from the
records, got 10%..
While the 64.98% portion of the option shares (72.2% 7.22% = 64.98%)
ostensibly pertained to the farmers, the corresponding stock certificates
supposedly representing the farmers equity were in the name of and delivered
to PCA. There were, however, shares forming part of the aforesaid 64.98%
portion, which ended up in the hands of non-farmers. The remaining 27.8% of
the FUB capital stock were not covered by any of the agreements.
Under paragraph # 8 of the second agreement, PCA agreed to expeditiously
distribute the FUB shares purchased to such "coconut farmers holding registered
COCOFUND receipts" on equitable basis.
As found by the Sandiganbayan, the PCA appropriated, out of its own fund, an
amount for the purchase of the said 72.2% equity, albeit it would later
reimburse itself from the coconut levy fund.
And per Cojuangcos own admission, PCA paid, out of the CCSF, the entire
acquisition price for the 72.2% option shares.13
As of June 30, 1975, the list of FUB stockholders included Cojuangco with
14,440 shares and PCA with 129,955 shares.14 It would appear later that,
pursuant to the stipulation on maintaining Cojuangcos equity position in the
bank, PCA would cede to him 10% of its subscriptions to (a) the authorized but
unissued shares of FUB and (b) the increase in FUBs capital stock (the

equivalent of 158,840 and 649,800 shares, respectively). In all, from the

"mother" PCA shares, Cojuangco would receive a total of 95,304 FUB (UCPB)
shares broken down as follows: 14,440 shares + 10% (158,840 shares) + 10%
(649,800 shares) = 95,304.15
We further quote, from COCOFED v. Republic, facts relevant to the instant
case:16
Shortly after the execution of the PCA Cojuangco Agreement, President
Marcos issued, on July 29, 1975, P.D. No. 755 directing x x x as narrated, PCA
to use the CCSF and CIDF to acquire a commercial bank to provide coco farmers
with "readily available credit facilities at preferential rate" x x x.
Then came the 1986 EDSA event. One of the priorities of then President
Corazon C. Aquinos revolutionary government was the recovery of ill-gotten
wealth reportedly amassed by the Marcos family and close relatives, their
nominees and associates. Apropos thereto, she issued Executive Order Nos.
(EO) 1, 2 and 14, as amended by E.O. 14-A, all series of 1986. E.O. 1 created
the PCGG and provided it with the tools and processes it may avail of in the
recovery efforts;17 E.O. No. 2 asserted that the ill-gotten assets and properties
come in the form of shares of stocks, etc., while E.O. No. 14 conferred on the
Sandiganbayan exclusive and original jurisdiction over ill-gotten wealth cases,
with the proviso that "technical rules of procedure and evidence shall not be
applied strictly" to the civil cases filed under the EO. Pursuant to these
issuances, the PCGG issued numerous orders of sequestration, among which
were those handed out x x x against shares of stock in UCPB purportedly owned
by or registered in the names of (a) the more than a million coconut farmers,
(b) the CIIF companies and (c) Cojuangco, Jr., including the SMC shares held by
the CIIF companies. On July 31, 1987, the PCGG instituted before the
Sandiganbayan a recovery suit docketed thereat as CC No. 0033.
xxxx
3. Civil Case 0033 x x x would be subdivided into eight complaints, docketed as
CC 0033-A to CC 0033-H.
xxxx
5. By Decision of December 14, 2001, in G.R. Nos. 147062-64 (Republic v.
COCOFED),18 the Court declared the coco levy funds as prima facie public funds.
And purchased as the sequestered UCPB shares were by such funds, beneficial
ownership thereon and the corollary voting rights prima facie pertain, according
to the Court, to the government.
xxxx
Correlatively, the Republic, on the strength of the December 14, 2001 ruling in
Republic v. COCOFED and on the argument, among others, that the claim of
COCOFED and Ballares et al., over the subject UCPB shares is based solely on
the supposed COCOFUND receipts issued for payment of the RA 6260 CIF levy,
filed a Motion for Partial Summary Judgment RE: COCOFED, et al. and Ballares,
et al. dated April 22, 2002, praying that a summary judgment be rendered
declaring:
a. That Section 2 of [PD] 755, Section 5, Article III of P.D. 961 and Section 5,
Article III of P.D. No. 1468 are unconstitutional;

b. That x x x (CIF) payments under x x x (R.A.) No. 6260 are not valid and legal
bases for ownership claims over UCPB shares; and
c. That COCOFED, et al., and Ballares, et al. have not legally and validly
obtained title over the subject UCPB shares.
Right after it filed the Motion for Partial Summary Judgment RE: COCOFED, et
al. and Ballares, et al., the Republic interposed a Motion for Partial Summary
Judgment Re: Eduardo M. Cojuangco, Jr., praying that a summary judgment be
rendered:
a. Declaring that Section 1 of P.D. No. 755 is unconstitutional insofar as it
validates the provisions in the "PCA-Cojuangco Agreement x x x" dated May 25,
1975 providing payment of ten percent (10%) commission to defendant
Cojuangco with respect to the FUB, now UCPB shares subject matter thereof;
b. Declaring that x x x Cojuangco, Jr. and his fronts, nominees and dummies,
including x x x and Danilo S. Ursua, have not legally and validly obtained title
over the subject UCPB shares; and
c. Declaring that the government is the lawful and true owner of the subject
UCPB shares registered in the names of Cojuangco, Jr. and the entities and
persons above-enumerated, for the benefit of all coconut farmers. x x x
Following an exchange of pleadings, the Republic filed its sur-rejoinder praying
that it be conclusively declared the true and absolute owner of the coconut levy
funds and the UCPB shares acquired therefrom.19
We quote from COCOFED v. Republic:20
A joint hearing on the separate motions for summary judgment to determine
what material facts exist with or without controversy then ensued. By Order of
March 11, 2003, the Sandiganbayan detailed, based on this Courts ruling in
related ill-gotten cases, the parties manifestations made in open court and the
pleadings and evidence on record, the facts it found to be without substantial
controversy, together with the admissions and/or extent of the admission made
by the parties respecting relevant facts, as follows:
As culled from the exhaustive discussions and manifestations of the parties in
open court of their respective pleadings and evidence on record, the facts which
exist without any substantial controversy are set forth hereunder, together with
the admissions and/or the extent or scope of the admissions made by the
parties relating to the relevant facts:
1. The late President Ferdinand E. Marcos was President x x x for two terms
under the 1935 Constitution and, during the second term, he declared Martial
Law through Proclamation No. 1081 dated September 21, 1972.
2. On January 17, 1973, he issued Proclamation No. 1102 announcing the
ratification of the 1973 Constitution.
3. From January 17, 1973 to April 7, 1981, he x x x exercised the powers and
prerogative of President under the 1935 Constitution and the powers and
prerogative of President x x x the 1973 Constitution.
He x x x promulgated various P.D.s, among which were P.D. No. 232, P.D. No.
276, P.D. No. 414, P.D. No. 755, P.D. No. 961 and P.D. No. 1468.
4. On April 17, 1981, amendments to the 1973 Constitution were effected and,
on June 30, 1981, he, after being elected President, "reassumed the title and
exercised the powers of the President until 25 February 1986."

5. Defendants Maria Clara Lobregat and Jose R. Eleazar, Jr. were PCA Directors
x x x during the period 1970 to 1986 x x x.
6. Plaintiff admits the existence of the following agreements which are attached
as Annexes "A" and "B" to the Opposition dated October 10, 2002 of defendant
Eduardo M. Cojuangco, Jr. to the above-cited Motion for Partial Summary
Judgment:
a) "This Agreement made and entered into this ______ day of May, 1975 at
Makati, Rizal, Philippines, by and between:
PEDRO COJUANGCO, Filipino, of legal age and with residence at 1575 Princeton
St., Mandaluyong, Rizal, for and in his own behalf and in behalf of certain other
stockholders of First United Bank listed in Annex "A" attached hereto
(hereinafter collectively called the SELLERS);
and
EDUARDO COJUANGCO, JR., Filipino, of legal age and with residence at 136 9th
Street corner Balete Drive, Quezon City, represented in this act by his duly
authorized attorney-in-fact, EDGARDO J. ANGARA, for and in his own behalf and
in behalf of certain other buyers, (hereinafter collectively called the BUYERS)";
WITNESSETH: That
WHEREAS, the SELLERS own of record and beneficially a total of 137,866 shares
of stock, with a par value of P100.00 each, of the common stock of the First
United Bank (the "Bank"), a commercial banking corporation existing under the
laws of the Philippines;
WHEREAS, the BUYERS desire to purchase, and the SELLERS are willing to sell,
the aforementioned shares of stock totaling 137,866 shares (hereinafter called
the "Contract Shares") owned by the SELLERS due to their special relationship
to EDUARDO COJUANGCO, JR.;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Sale and Purchase of Contract Shares
Subject to the terms and conditions of this Agreement, the SELLERS hereby sell,
assign, transfer and convey unto the BUYERS, and the BUYERS hereby purchase
and acquire, the Contract Shares free and clear of all liens and encumbrances
thereon.
2. Contract Price
The purchase price per share of the Contract Shares payable by the BUYERS is
P200.00 or an aggregate price of P27,573,200.00 (the "Contract Price").
3. Delivery of, and payment for, stock certificates
Upon the execution of this Agreement, (i) the SELLERS shall deliver to the
BUYERS the stock certificates representing the Contract Shares, free and clear
of all liens, encumbrances, obligations, liabilities and other burdens in favor of
the Bank or third parties, duly endorsed in blank or with stock powers sufficient
to transfer the shares to bearer; and (ii) BUYERS shall deliver to the SELLERS
P27,511,295.50 representing the Contract Price less the amount of stock
transfer taxes payable by the SELLERS, which the BUYERS undertake to remit to
the appropriate authorities. (Emphasis added.)
4. Representation and Warranties of Sellers

The SELLERS respectively and independently of each other represent and

warrant that:
(a) The SELLERS are the lawful owners of, with good marketable title to, the
Contract Shares and that (i) the certificates to be delivered pursuant thereto
have been validly issued and are fully paid and non-assessable; (ii) the Contract
Shares are free and clear of all liens, encumbrances, obligations, liabilities and
other burdens in favor of the Bank or third parties x x x.
This representation shall survive the execution and delivery of this Agreement
and the consummation or transfer hereby contemplated.
(b) The execution, delivery and performance of this Agreement by the SELLERS
does not conflict with or constitute any breach of any provision in any
agreement to which they are a party or by which they may be bound.
(c) They have complied with the condition set forth in Article X of the Amended
Articles of Incorporation of the Bank.
5. Representation of BUYERS
xxxx
6. Implementation
The parties hereto hereby agree to execute or cause to be executed such
documents and instruments as may be required in order to carry out the intent
and purpose of this Agreement.
7. Notices
xxxx
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands at the
place and on the date first above written.
PEDRO
COJUANGCO EDUARDO
COJUANGCO,
JR.
(on
his
own
behalf
and
in (on his own behalf and in behalf
behalf
of
the
other Sellers
of
the
other
Buyers)
listed
in
Annex
"A"
hereof) (BUYERS)
(SELLERS)
By:
EDGARDO
J.
ANGARA
Attorney-in-Fact
xxxx
b) "Agreement for the Acquisition of a Commercial Bank for the Benefit of the
Coconut Farmers of the Philippines, made and entered into this 25th day of May
1975 at Makati, Rizal, Philippines, by and between:
EDUARDO M. COJUANGCO, JR., Filipino, of legal age, with business address at
10th Floor, Sikatuna Building, Ayala Avenue, Makati, Rizal, hereinafter referred
to as the SELLER;
and
PHILIPPINE COCONUT AUTHORITY, a public corporation created by Presidential
Decree No. 232, as amended, for itself and for the benefit of the coconut
farmers of the Philippines, (hereinafter called the BUYER)"
WITNESSETH: That
WHEREAS, on May 17, 1975, the Philippine Coconut Producers Federation
("PCPF"), through its Board of Directors, expressed the desire of the coconut
farmers to own a commercial bank which will be an effective instrument to solve

the perennial credit problems and, for that purpose, passed a resolution
requesting the PCA to negotiate with the SELLER for the transfer to the coconut
farmers of the SELLERs option to buy the First United Bank (the "Bank") under
such terms and conditions as BUYER may deem to be in the best interest of the
coconut farmers and instructed Mrs. Maria Clara Lobregat to convey such
request to the BUYER;
WHEREAS, the PCPF further instructed Mrs. Maria Clara Lobregat to make
representations with the BUYER to utilize its funds to finance the purchase of
the Bank;
WHEREAS, the SELLER has the exclusive and personal option to buy 144,400
shares (the "Option Shares") of the Bank, constituting 72.2% of the present
outstanding shares of stock of the Bank, at the price of P200.00 per share,
which option only the SELLER can validly exercise;
WHEREAS, in response to the representations made by the coconut farmers, the
BUYER has requested the SELLER to exercise his personal option for the benefit
of the coconut farmers;
WHEREAS, the SELLER is willing to transfer the Option Shares to the BUYER at a
price equal to his option price of P200 per share;
WHEREAS, recognizing that ownership by the coconut farmers of a commercial
bank is a permanent solution to their perennial credit problems, that it will
accelerate the growth and development of the coconut industry and that the
policy of the state which the BUYER is required to implement is to achieve
vertical integration thereof so that coconut farmers will become participants in,
and beneficiaries of the development and growth of the coconut industry, the
BUYER approved the request of PCPF that it acquire a commercial bank to be
owned by the coconut farmers and, appropriated, for that purpose, the sum of
P150 Million to enable the farmers to buy the Bank and capitalize the Bank to
such an extension as to be in a position to adopt a credit policy for the coconut
farmers at preferential rates;
WHEREAS, x x x the BUYER is willing to subscribe to additional shares
("Subscribed Shares") and place the Bank in a more favorable financial position
to extend loans and credit facilities to coconut farmers at preferential rates;
NOW, THEREFORE, for and in consideration of the foregoing premises and the
other terms and conditions hereinafter contained, the parties hereby declare
and affirm that their principal contractual intent is (1) to ensure that the
coconut farmers own at least 60% of the outstanding capital stock of the Bank;
and (2) that the SELLER shall receive compensation for exercising his personal
and exclusive option to acquire the Option Shares, for transferring such shares
to the coconut farmers at the option price of P200 per share, and for performing
the management services required of him hereunder.
1. To ensure that the transfer to the coconut farmers of the Option Shares is
effected with the least possible delay and to provide for the faithful performance
of the obligations of the parties hereunder, the parties hereby appoint the
Philippine National Bank as their escrow agent (the "Escrow Agent").
Upon execution of this Agreement, the BUYER shall deposit with the Escrow
Agent such amount as may be necessary to implement the terms of this
Agreement x x x.

2. As promptly as practicable after execution of this Agreement, the SELLER

shall exercise his option to acquire the Option Share and SELLER shall
immediately thereafter deliver and turn over to the Escrow Agent such stock
certificates as are herein provided to be received from the existing stockholders
of the Bank by virtue of the exercise on the aforementioned option x x x.
3. To ensure the stability of the Bank and continuity of management and credit
policies to be adopted for the benefit of the coconut farmers, the parties
undertake to cause the stockholders and the Board of Directors of the Bank to
authorize and approve a management contract between the Bank and the
SELLER under the following terms:
(a) The management contract shall be for a period of five (5) years, renewable
for another five (5) years by mutual agreement of the SELLER and the Bank;
(b) The SELLER shall be elected President and shall hold office at the pleasure of
the Board of Directors. While serving in such capacity, he shall be entitled to
such salaries and emoluments as the Board of Directors may determine;
(c) The SELLER shall recruit and develop a professional management team to
manage and operate the Bank under the control and supervision of the Board of
Directors of the Bank;
(d) The BUYER undertakes to cause three (3) persons designated by the SELLER
to be elected to the Board of Directors of the Bank;
(e) The SELLER shall receive no compensation for managing the Bank, other
than such salaries or emoluments to which he may be entitled by virtue of the
discharge of his function and duties as President, provided x x x and
(f) The management contract may be assigned to a management company
owned and controlled by the SELLER.
4. As compensation for exercising his personal and exclusive option to acquire
the Option Shares and for transferring such shares to the coconut farmers, as
well as for performing the management services required of him, SELLER shall
receive equity in the Bank amounting, in the aggregate, to 95,304 fully paid
shares in accordance with the procedure set forth in paragraph 6 below;
5. In order to comply with the Central Bank program for increased capitalization
of banks and to ensure that the Bank will be in a more favorable financial
position to attain its objective to extend to the coconut farmers loans and credit
facilities, the BUYER undertakes to subscribe to shares with an aggregate par
value of P80,864,000 (the "Subscribed Shares"). The obligation of the BUYER
with respect to the Subscribed Shares shall be as follows:
(a) The BUYER undertakes to subscribe, for the benefit of the coconut farmers,
to shares with an aggregate par value of P15,884,000 from the present
authorized but unissued shares of the Bank; and
(b) The BUYER undertakes to subscribe, for the benefit of the coconut farmers,
to shares with an aggregate par value of P64,980,000 from the increased capital
stock of the Bank, which subscriptions shall be deemed made upon the approval
by the stockholders of the increase of the authorized capital stock of the Bank
from P50 Million to P140 Million.
The parties undertake to declare stock dividends of P8 Million out of the present
authorized but unissued capital stock of P30 Million.

6. To carry into effect the agreement of the parties that the SELLER shall
receive as his compensation 95,304 shares:
(a) The Escrow Agent shall, upon receipt from the SELLER of the stock
certificates representing the Option Shares, duly endorsed in blank or with stock
powers sufficient to transfer the same to bearer, present such stock certificates
to the Transfer Agent of the Bank and shall cause such Transfer Agent to issue
stock certificates of the Bank in the following ratio: one share in the name of the
SELLER for every nine shares in the name of the BUYER.
(b) With respect to the Subscribed Shares, the BUYER undertakes, in order to
prevent the dilution of SELLERs equity position, that it shall cede over to the
SELLER 64,980 fully-paid shares out of the Subscribed Shares. Such
undertaking shall be complied with in the following manner: upon receipt of
advice that the BUYER has subscribed to the Subscribed Shares upon approval
by the stockholders of the increase of the authorized capital stock of the Bank,
the Escrow Agent shall thereupon issue a check in favor of the Bank covering
the total payment for the Subscribed Shares. The Escrow Agent shall thereafter
cause the Transfer Agent to issue a stock certificates of the Bank in the
following ratio: one share in the name of the SELLER for every nine shares in
the name of the BUYER.
7. The parties further undertake that the Board of Directors and management of
the Bank shall establish and implement a loan policy for the Bank of making
available for loans at preferential rates of interest to the coconut farmers x x x.
8. The BUYER shall expeditiously distribute from time to time the shares of the
Bank, that shall be held by it for the benefit of the coconut farmers of the
Philippines under the provisions of this Agreement, to such, coconut farmers
holding registered COCOFUND receipts on such equitable basis as may be
determine by the BUYER in its sound discretion.
9. x x x x
10. To ensure that not only existing but future coconut farmers shall be
participants in and beneficiaries of the credit policies, and shall be entitled to the
benefit of loans and credit facilities to be extended by the Bank to coconut
farmers at preferential rates, the shares held by the coconut farmers shall not
be entitled to pre-emptive rights with respect to the unissued portion of the
authorized capital stock or any increase thereof.
11. After the parties shall have acquired two-thirds (2/3) of the outstanding
shares of the Bank, the parties shall call a special stockholders meeting of the
Bank:
(a) To classify the present authorized capital stock of P50,000,000 divided into
500,000 shares, with a par value of P100.00 per share into: 361,000 Class A
shares, with an aggregate par value of P36,100,000 and 139,000 Class B
shares, with an aggregate par value of P13,900,000. All of the Option Shares
constituting 72.2% of the outstanding shares, shall be classified as Class A
shares and the balance of the outstanding shares, constituting 27.8% of the
outstanding shares, as Class B shares;
(b) To amend the articles of incorporation of the Bank to effect the following
changes:
(i) change of corporate name to First United Coconut Bank;

(ii) replace the present provision restricting the transferability of the shares with
a limitation on ownership by any individual or entity to not more than 10% of
the outstanding shares of the Bank;
(iii) provide that the holders of Class A shares shall not be entitled to preemptive rights with respect to the unissued portion of the authorized capital
stock or any increase thereof; and
(iv) provide that the holders of Class B shares shall be absolutely entitled to
pre-emptive rights, with respect to the unissued portion of Class B shares
comprising part of the authorized capital stock or any increase thereof, to
subscribe to Class B shares in proportion t the subscriptions of Class A shares,
and to pay for their subscriptions to Class B shares within a period of five (5)
years from the call of the Board of Directors.
(c) To increase the authorized capital stock of the Bank from P50 Million to P140
Million, divided into 1,010,800 Class A shares and 389,200 Class B shares, each
with a par value of P100 per share;
(d) To declare a stock dividend of P8 Million payable to the SELLER, the BUYER
and other stockholders of the Bank out of the present authorized but unissued
capital stock of P30 Million;
(e) To amend the by-laws of the Bank accordingly; and
(f) To authorize and approve the management contract provided in paragraph 2
above.
The parties agree that they shall vote their shares and take all the necessary
corporate action in order to carry into effect the foregoing provisions of this
paragraph 11, including such other amendments of the articles of incorporation
and by-laws of the Bank as are necessary in order to implement the intention of
the parties with respect thereto.
12. It is the contemplation of the parties that the Bank shall achieve a financial
and equity position to be able to lend to the coconut farmers at preferential
rates.
In order to achieve such objective, the parties shall cause the Bank to adopt a
policy of reinvestment, by way of stock dividends, of such percentage of the
profits of the Bank as may be necessary.
13. The parties agree to execute or cause to be executed such documents and
instruments as may be required in order to carry out the intent and purpose of
this Agreement.
IN WITNESS WHEREOF x x x
PHILIPPINE
COCONUT
AUTHORITY
(BUYER)
By:
EDUARDO
COJUANGCO,
JR. MARIA CLARA L. LOBREGAT
(SELLER)
xxxx
7. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit
that the x x x (PCA) was the "other buyers" represented by defendant Eduardo
M. Cojuangco, Jr. in the May 1975 Agreement entered into between Pedro
Cojuangco (on his own behalf and in behalf of other sellers listed in Annex "A"of
the agreement) and defendant Eduardo M. Cojuangco, Jr. (on his own behalf

and in behalf of the other buyers). Defendant Cojuangco insists he was the
"only buyer" under the aforesaid Agreement.
8. Defendant Eduardo M. Cojuangco, Jr. did not own any share in the x x x
(FUB) prior to the execution of the two Agreements x x x.
9. Defendants Lobregat, et al., and COCOFED, et al., and Ballares, et al. admit
that in addition to the 137,866 FUB shares of Pedro Cojuangco, et al. covered
by the Agreement, other FUB stockholders sold their shares to PCA such that
the total number of FUB shares purchased by PCA increased from 137,866
shares to 144,400 shares, the OPTION SHARES referred to in the Agreement of
May 25, 1975. Defendant Cojuangco did not make said admission as to the said
6,534 shares in excess of the 137,866 shares covered by the Agreement with
Pedro Cojuangco.
10. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit
that the Agreement, described in Section 1 of Presidential Decree (P.D.) No. 755
dated July 29, 1975 as the "Agreement for the Acquisition of a Commercial Bank
for the Benefit of Coconut Farmers" executed by the Philippine Coconut
Authority" and incorporated in Section 1 of P.D. No. 755 by reference, refers to
the "AGREEMENT FOR THE ACQUISITION OF A COMMERCIAL BANK FOR THE
BENEFIT OF THE COCONUT FARMERS OF THE PHILIPPINES" dated May 25, 1975
between defendant Eduardo M. Cojuangco, Jr. and the PCA (Annex "B" for
defendant Cojuangcos OPPOSITION TO PLAINTIFFS MOTION FOR PARTIAL
SUMMARY JUDGMENT RE: EDUARDO M. COJUANGCO, JR. dated September 18,
2002).
Plaintiff refused to make the same admission.
11. As to whether P.D. No. 755 and the text of the agreement described therein
was published, the Court takes judicial notice that P.D. No. 755 was published in
x x x volume 71 of the Official Gazette but the text of the agreement x x x was
not so published with P.D. No. 755.
12. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. admit
that the PCA used public funds x x x in the total amount of P150 million, to
purchase the FUB shares amounting to 72.2% of the authorized capital stock of
the FUB, although the PCA was later reimbursed from the coconut levy funds
and that the PCA subscription in the increased capitalization of the FUB, which
was later renamed the x x x (UCPB), came from the said coconut levy funds x x
x.
13. Pursuant to the May 25, 1975 Agreement, out of the 72.2% shares of the
authorized and the increased capital stock of the FUB (later UCPB), entirely paid
for by PCA, 64.98% of the shares were placed in the name of the "PCA for the
benefit of the coconut farmers" and 7,22% were given to defendant Cojuangco.
The remaining 27.8% shares of stock in the FUB which later became the UCPB
were not covered by the two (2) agreements referred to in item no. 6, par. (a)
and (b) above. "There were shares forming part of the aforementioned 64.98%
which were later sold or transferred to non-coconut farmers.
14. Under the May 27, 1975 Agreement, defendant Cojuangcos equity in the
FUB (now UCPB) was ten percent (10%) of the shares of stock acquired by the
PCA for the benefit of the coconut farmers.

15. That the fully paid 95.304 shares of the FUB, later the UCPB, acquired by
defendant x x x Cojuangco, Jr. pursuant to the May 25, 1975 Agreement were
paid for by the PCA in accordance with the terms and conditions provided in the
said Agreement. 16. Defendants Lobregat, et al. and COCOFED, et al. and
Ballares, et al. admit that the affidavits of the coconut farmers (specifically,
Exhibit "1-Farmer" to "70-Farmer") uniformly state that:
a. they are coconut farmers who sold coconut products;
b. in the sale thereof, they received COCOFUND receipts pursuant to R.A. No.
6260;
c. they registered the said COCOFUND receipts; and
d. by virtue thereof, and under R.A. No. 6260, P.D. Nos. 755, 961 and 1468,
they are allegedly entitled to the subject UCPB shares.
but subject to the following qualifications:
a. there were other coconut farmers who received UCPB shares although they
did not present said COCOFUND receipt because the PCA distributed the
unclaimed UCPB shares not only to those who already received their UCPB
shares in exchange for their COCOFUND receipts but also to the coconut farmers
determined by a national census conducted pursuant to PCA administrative
issuances;
b. there were other affidavits executed by Lobregat, Eleazar, Ballares and
Aldeguer relative to the said distribution of the unclaimed UCPB shares; and
c. the coconut farmers claim the UCPB shares by virtue of their compliance not
only with the laws mentioned in item (d) above but also with the relevant
issuances of the PCA such as, PCA Administrative Order No. 1, dated August 20,
1975 (Exh. "298-Farmer"); PCA Resolution No. 033-78 dated February 16,
1978.
The plaintiff did not make any admission as to the foregoing qualifications.
17. Defendants Lobregat, et al. and COCOFED, et al. and Ballares, et al. claim
that the UCPB shares in question have legitimately become the private
properties of the 1,405,366 coconut farmers solely on the basis of their having
acquired said shares in compliance with R.A. No. 6260, P.D. Nos. 755, 961 and
1468 and the administrative issuances of the PCA cited above.
18. On the other hand, defendant Cojuangco, Jr. claims ownership of the
UCPB shares, which he holds, solely on the basis of the two Agreements.
(Emphasis and words in brackets added.)
On July 11, 2003, the Sandiganbayan issued the assailed PSJ-A, ruling in favor
of the Republic, disposing insofar as pertinent as follows:21
WHEREFORE, in view of the foregoing, we rule as follows:
xxxx
C. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M.
COJUANGCO, JR.) dated September 18, 2002 filed by plaintiff.
1. Sec. 1 of P.D. No. 755 did not validate the Agreement between PCA and
defendant Eduardo M. Cojuangco, Jr. dated May 25, 1975 nor did it give the
Agreement the binding force of a law because of the non-publication of the said
Agreement.
2. Regarding the questioned transfer of the shares of stock of FUB (later UCPB)
by PCA to defendant Cojuangco or the so-called "Cojuangco UCPB shares" which

cost the PCA more than Ten Million Pesos in CCSF in 1975, we declare, that the
transfer of the following FUB/UCPB shares to defendant Eduardo M. Cojuangco,
Jr. was not supported by valuable consideration, and therefore null and void:
a. The 14,400 shares from the "Option Shares";
b. Additional Bank Shares Subscribed and Paid by PCA, consisting of:
1. Fifteen Thousand Eight Hundred Eighty-Four (15,884) shares out of the
authorized but unissued shares of the bank, subscribed and paid by PCA;
2. Sixty Four Thousand Nine Hundred Eighty (64,980) shares of the increased
capital stock subscribed and paid by PCA; and
3. Stock dividends declared pursuant to paragraph 5 and paragraph 11 (iv) (d)
of the Agreement.
3. The above-mentioned shares of stock of the FUB/UCPB transferred to
defendant Cojuangco are hereby declared conclusively owned by the plaintiff
Republic of the Philippines.
4. The UCPB shares of stock of the alleged fronts, nominees and dummies of
defendant Eduardo M. Cojuangco, Jr. which form part of the 72.2% shares of
the FUB/UCPB paid for by the
PCA with public funds later charged to the coconut levy funds, particularly the
CCSF, belong to the plaintiff Republic of the Philippines as their true and
beneficial owner.
Let trial of this Civil Case proceed with respect to the issues which have not
been disposed of in this Partial Summary Judgment. For this purpose, the
plaintiffs Motion Ad Cautelam to Present
Additional Evidence dated March 28, 2001 is hereby GRANTED. 22 (Emphasis and
underlining added.)
As earlier explained, the core issue in this instant petition is Part C of the
dispositive portion in PSJ-A declaring the 7.22% FUB (now UCPB) shares
transferred to Cojuangco, plus the other shares paid by the PCA as
"conclusively" owned by the Republic. Parts A and B of the same dispositive
portion have already been finally resolved and adjudicated by this Court in
COCOFED v. Republic on January 24, 2012.23
From PSJ-A, Cojuangco moved for partial reconsideration but the
Sandiganbayan, by Resolution24 of December 28, 2004, denied the motion.
Hence, the instant petition.
The Issues
Cojuangcos petition formulates the issues in question form, as follows:25
a. Is the acquisition of the so-called Cojuangco, Jr. UCPB shares by petitioner
Cojuangco x x x "not supported by valuable consideration and, therefore, null
and void"?
b. Did the Sandiganbayan have jurisdiction, in Civil Case No. 0033-A, an "illgotten wealth" case brought under EO Nos. 1 and 2, to declare the Cojuangco
UCPB shares acquired by virtue of the Pedro Cojuangco, et al. Agreement
and/or the PCA Agreement null and void because "not supported by valuable
consideration"?
c. Was the claim that the acquisition by petitioner Cojuangco of shares
representing 7.2% of the outstanding capital stock of FUB (later UCPB) "not
supported by valuable consideration", a "claim" pleaded in the complaint and

may therefore be the basis of a "summary judgment" under Section 1, Rule 35

of the Rules of Court?
d. By declaring the Cojuangco UCPB shares as "not supported by valuable
consideration, and therefore, null and void", did the Sandiganbayan effectively
nullify the PCA Agreement? May the Sandiganbayan nullify the PCA Agreement
when the parties to the Agreement, namely: x x x concede its validity? If the
PCA Agreement be deemed "null and void", should not the FUB (later UCPB)
shares revert to petitioner Cojuangco (under the PCA Agreement) or to Pedro
Cojuangco, et al. x x x? Would there be a basis then, even assuming the
absence of consideration x x x, to declare 7.2% UCPB shares of petitioner
Cojuangco as "conclusively owned by the plaintiff Republic of the Philippines"?26
The Courts Ruling
I
THE SANDIGANBAYAN HAS JURISDICTION OVER THE SUBJECT MATTER OF THE
SUBDIVIDED AMENDED COMPLAINTS, INCLUDING THE SHARES ALLEGEDLY
ACQUIRED BY COJUANGCO BY VIRTUE OF THE PCA AGREEMENTS.
The issue of jurisdiction over the subject matter of the subdivided amended
complaints has peremptorily been put to rest by the Court in its January 24,
2012 Decision in COCOFED v. Republic. There, the Court, citing Regalado27 and
settled jurisprudence, stressed the following interlocking precepts: Subject
matter jurisdiction is conferred by law, not by the consent or acquiescence of
any or all of the parties. In turn, the issue on whether a suit comes within the
penumbra of a statutory conferment is determined by the allegations in the
complaint, regardless of whether or not the suitor will be entitled to recover
upon all or part of the claims asserted.
The Republics material averments in its complaint subdivided in CC No. 0033-A
included the following:
CC No. 0033-A
12. Defendant Eduardo M. Cojuangco, Jr. served as a public officer during the
Marcos administration. During the period of his incumbency as a public officer,
he acquired assets, funds and other property grossly and manifestly
disproportionate to his salaries, lawful income and income from legitimately
acquired property.
13. Defendant Eduardo M. Cojuangco, Jr., taking undue advantage of his
association, influence, connection, and acting in unlawful concert with
Defendants Ferdinand E. Marcos and Imelda R. Marcos, AND THE INDIVIDUAL
DEFENDANTS, embarked upon devices, schemes and stratagems, to unjustly
enrich themselves at the expense of Plaintiff and the Filipino people, such as
when he
a) manipulated, beginning the year 1975 with the active collaboration of
Defendants x x x Maria Clara Lobregat, Danilo Ursua etc., the purchase by . . .
(PCA) of 72.2% of the outstanding capital stock of the x x x (FUB) which was
subsequently converted into a universal bank named x x x (UCPB) through the
use of the Coconut Consumers Stabilization Fund (CCSF) being initially in the
amount of P85,773,100.00 in a manner contrary to law and to the specific
purposes for which said coconut levy funds were imposed and collected under
P.D. 276, and with sinister designs and under anomalous circumstances, to wit:

(i) Defendant Eduardo Cojuangco, Jr. coveted the coconut levy funds as a
cheap, lucrative and risk-free source of funds with which to exercise his private
option to buy the controlling interest in FUB; thus, claiming that the 72.2% of
the outstanding capital stock of FUB could only be purchased and transferred
through the exercise of his "personal and exclusive action option to acquire the
144,000 shares" of the bank, Defendant Eduardo M. Cojuangco, Jr. and PCA, x x
x executed on May 26, 1975 a purchase agreement which provides, among
others, for the payment to him in fully paid shares as compensation thereof
95,384 shares worth P1,444,000.00 with the further condition that he shall
manage and control the bank as Director and President for a term of five (5)
years renewable for another five (5) years and to designate three (3) persons of
his choice who shall be elected as members of the Board of Directors of the
Bank;
(ii) to legitimize a posteriori his highly anomalous and irregular use and
diversion of government funds to advance his own private and commercial
interests, Defendant Eduardo Cojuangco, Jr. caused the issuance by Defendant
Ferdinand E. Marcos of PD 755 (a) declaring that the coconut levy funds shall
not be considered special and fiduciary and trust funds and do not form part of
the general funds of the National Government, conveniently repealing for that
purpose a series of previous decrees, PDs 276 and 414, establishing the
character of the coconut levy funds as special, fiduciary, trust and governmental
funds; (b) confirming the agreement between Defendant Eduardo Cojuangco, Jr.
and PCA on the purchase of FUB by incorporating by reference said private
commercial agreement in PD 755;
(iii)To further consolidate his hold on UCPB, Defendant Eduardo Cojuangco, Jr.
imposed as consideration and conditions for the purchase that (a) he gets one
out of every nine shares given to PCA, and (b) he gets to manage and control
UCPB as president for a term of five (5) years renewable for another five (5)
years;
(iv) To perpetuate his opportunity to deal with and make use of the coconut levy
funds x x x Cojuangco, Jr. caused the issuance by Defendant Ferdinand E.
Marcos of an unconstitutional decree (PD 1468) requiring the deposit of all
coconut levy funds with UCPB, interest free to the prejudice of the government.
(v) In gross violation of their fiduciary positions and in contravention of the goal
to create a bank for the coconut farmers of the country, the capital stock of
UCPB as of February 25, 1986 was actually held by the defendants, their
lawyers, factotum and business associates, thereby finally gaining control of the
UCPB by misusing the names and identities of the so-called "more than one
million coconut farmers."
14. The acts of Defendants, singly or collectively, and/or in unlawful concert
with one another, constitute gross abuse of official position and authority,
flagrant breach of public trust and fiduciary obligations, brazen abuse of right
and power, and unjust enrichment, violation of the constitution and laws of the
Republic of the Philippines, to the grave and irreparable damage of Plaintiff and
the Filipino people.28

In no uncertain terms, the Court has upheld the Sandiganbayans assumption of

jurisdiction over the subject matter of Civil Case Nos. 0033-A and 0033-F.29 The
Court wrote:
Judging from the allegations of the defendants illegal acts thereat made, it is
fairly obvious that both CC Nos. 0033-A and CC 0033-F partake, in the context
of EO Nos. 1, 2 and 14, series of 1986, the nature of ill-gotten wealth suits.
Both deal with the recovery of sequestered shares, property or business
enterprises claimed, as alleged in the corresponding basic complaints, to be illgotten assets of President Marcos, his cronies and nominees and acquired by
taking undue advantage of relationships or influence and/or through or as a
result of improper use, conversion or diversion of government funds or
property. Recovery of these assetsdetermined as shall hereinafter be
discussed as prima facie ill-gottenfalls within the unquestionable jurisdiction
of the Sandiganbayan.30
P.D. No. 1606, as amended by R.A. 7975 and E.O. No. 14, Series of 1986, vests
the Sandiganbayan with, among others, original jurisdiction over civil and
criminal cases instituted pursuant to and in connection with E.O. Nos. 1, 2, 14
and 14-A. Correlatively, the PCGG Rules and Regulations defines the term "IllGotten Wealth" as "any asset, property, business enterprise or material
possession of persons within the purview of E.O. Nos. 1 and 2, acquired by
them directly, or indirectly thru dummies, nominees, agents, subordinates
and/or business associates by any of the following means or similar schemes":
(1) Through misappropriation, conversion, misuse or malversation of public
funds or raids on the public treasury;
(2) x x x x
(3) By the illegal or fraudulent conveyance or disposition of assets belonging to
the government or any of its subdivisions, agencies or instrumentalities or
government-owned or controlled corporations;
(4) By obtaining, receiving or accepting directly or indirectly any shares of
stock, equity or any other form of interest or participation in any business
enterprise or undertaking;
(5) Through the establishment of agricultural, industrial or commercial
monopolies or other combination and/or by the issuance, promulgation and/or
implementation of decrees and orders intended to benefit particular persons or
special interests; and
(6) By taking undue advantage of official position, authority, relationship or
influence for personal gain or benefit. (Emphasis supplied)
Section 2(a) of E.O. No. 1 charged the PCGG with the task of assisting the
President in "The recovery of all ill-gotten wealth accumulated by former
President Marcos, his immediate family, relatives, subordinates and close
associates including the takeover or sequestration of all business enterprises
and entities owned or controlled by them, during his administration, directly or
through nominees, by taking undue advantage of their public office and/or using
their powers, authority, influence, connections or relationship." Complementing
the aforesaid Section 2(a) is Section 1 of E.O. No. 2 decreeing the freezing of all
assets "in which the Marcoses their close relatives, subordinates, business
associates, dummies, agents or nominees have any interest or participation."

The Republics averments in the amended complaints, particularly those

detailing the alleged wrongful acts of the defendants, sufficiently reveal that the
subject matter thereof comprises the recovery by the Government of ill-gotten
wealth acquired by then President Marcos, his cronies or their associates and
dummies through the unlawful, improper utilization or diversion of coconut levy
funds aided by P.D. No. 755 and other sister decrees. President Marcos himself
issued these decrees in a brazen bid to legalize what amounts to private taking
of the said public funds.
xxxx
There was no actual need for Republic, as plaintiff a quo, to adduce evidence to
show that the Sandiganbayan has jurisdiction over the subject matter of the
complaints as it leaned on the averments in the initiatory pleadings to make
visible the jurisdiction of the Sandiganbayan over the ill-gotten wealth
complaints. As previously discussed, a perusal of the allegations easily reveals
the sufficiency of the statement of matters disclosing the claim of the
government against the coco levy funds and the assets acquired directly or
indirectly through said funds as ill-gotten wealth. Moreover, the Court finds no
rule that directs the plaintiff to first prove the subject matter jurisdiction of the
court before which the complaint is filed. Rather, such burden falls on the
shoulders of defendant in the hearing of a motion to dismiss anchored on said
ground or a preliminary hearing thereon when such ground is alleged in the
answer.
xxxx
Lest it be overlooked, this Court has already decided that the sequestered
shares are prima facie ill-gotten wealth rendering the issue of the validity of
their sequestration and of the jurisdiction of the Sandiganbayan over the case
beyond doubt. In the case of COCOFED v. PCGG, We stated that:
It is of course not for this Court to pass upon the factual issues thus raised. That
function pertains to the Sandiganbayan in the first instance. For purposes of this
proceeding, all that the Court needs to determine is whether or not there is
prima facie justification for the sequestration ordered by the PCGG. The Court is
satisfied that there is. The cited incidents, given the public character of the
coconut levy funds, place petitioners COCOFED and its leaders and officials, at
least prima facie, squarely within the purview of Executive Orders Nos. 1, 2 and
14, as construed and applied in BASECO, to wit:
"1. that ill-gotten properties (were) amassed by the leaders and supporters of
the previous regime;
"a. more particularly, that (i) Ill-gotten wealth was accumulated by x x x
Marcos, his immediate family, relatives, subordinates and close associates, x x x
(and) business enterprises and entities (came to be) owned or controlled by
them, during x x x (the Marcos) administration, directly or through nominees,
by taking undue advantage of their public office and using their powers,
authority, influence, connections or relationships;
"b. otherwise stated, that there are assets and properties purportedly
pertaining to the Marcoses, their close relatives, subordinates, business
associates, dummies, agents or nominees which had been or were acquired by
them directly or indirectly, through or as a result of the improper or illegal use

of funds or properties owned by the Government x x x or any of its branches,

instrumentalities, enterprises, banks or financial institutions, or by taking undue
advantage of their office, authority, influence, connections or relationship,
resulting in their unjust enrichment x x x;
xxxx
2. The petitioners claim that the assets acquired with the coconut levy funds
are privately owned by the coconut farmers is founded on certain provisions of
law, to wit Sec. 7, RA 6260 and Sec. 5, Art. III, PD 1468 (Words in bracket
added; italics in the original).
xxxx
E.O. 1, 2, 14 and 14-A, it bears to stress, were issued precisely to effect the
recovery of ill-gotten assets amassed by the Marcoses, their associates,
subordinates and cronies, or through their nominees. Be that as it may, it
stands to reason that persons listed as associated with the Marcoses refer to
those in possession of such ill-gotten wealth but holding the same in behalf of
the actual, albeit undisclosed owner, to prevent discovery and consequently
recovery. Certainly, it is well-nigh inconceivable that ill-gotten assets would be
distributed to and left in the hands of individuals or entities with obvious
traceable connections to Mr. Marcos and his cronies. The Court can take, as it
has in fact taken, judicial notice of schemes and machinations that have been
put in place to keep ill-gotten assets under wraps. These would include the
setting up of layers after layers of shell or dummy, but controlled, corporations 31
or manipulated instruments calculated to confuse if not altogether mislead
would-be investigators from recovering wealth deceitfully amassed at the
expense of the people or simply the fruits thereof. Transferring the illegal assets
to third parties not readily perceived as Marcos cronies would be another. So it
was that in PCGG v. Pena, the Court, describing the rule of Marcos as a "well
entrenched plundering regime of twenty years," noted the magnitude of the
past regimes organized pillage and the ingenuity of the plunderers and pillagers
with the assistance of experts and the best legal minds in the market.32
Prescinding from the foregoing premises, there can no longer be any serious
challenge as to the Sandiganbayans subject matter jurisdiction. And in
connection therewith, the Court wrote in COCOFED v. Republic, that the instant
petition shall be decided separately and should not be affected by the January
24, 2012 Decision, "save for determinatively legal issues directly addressed"
therein.33 Thus:
We clarify that PSJ-A is subject of another petition for review interposed by
Eduardo Cojuangco, Jr., in G.R. No. 180705 entitled, Eduardo M. Cojuangco, Jr.
v. Republic of the Philippines, which shall be decided separately by this Court.
Said petition should accordingly not be affected by this Decision save for
determinatively legal issues directly addressed herein.34 (Emphasis Ours.)
We, therefore, reiterate our holding in COCOFED v. Republic respecting the
Sandiganbayans jurisdiction over the subject matter of Civil Case No. 0033-A,
including those matters whose adjudication We shall resolve in the present case.
II

PRELIMINARILY, THE AGREEMENT BETWEEN THE PCA AND EDUARDO M.

COJUANGCO, JR. DATED MAY 25, 1975 CANNOT BE ACCORDED THE STATUS OF
A LAW FOR THE LACK OF THE REQUISITE PUBLICATION.
It will be recalled that Cojuangcos claim of ownership over the UCPB shares is
hinged on two contract documents the respective contents of which formed part
of and reproduced in their entirety in the aforecited Order35 of the
Sandiganbayan dated March 11, 2003. The first contract refers to the
agreement entered into by and between Pedro Cojuangco and his group, on one
hand, and Eduardo M. Cojuangco, Jr., on the other, bearing date "May 1975"36
(hereinafter referred to as "PC-ECJ Agreement"), while the second relates to the
accord between the PCA and Eduardo M. Cojuangco, Jr. dated May 25, 1975
(hereinafter referred to as "PCA-Cojuangco Agreement"). The PC-ECJ
Agreement allegedly contains, inter alia, Cojuangcos personal and exclusive
option to acquire the FUB ("UCPB") shares from Pedro and his group. The PCACojuangco Agreement shows PCAs acquisition of the said option from Eduardo
M. Cojuangco, Jr.
Section 1 of P.D. No. 755 incorporated, by reference, the "Agreement for the
Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers"
executed by the PCA. Particularly, Section 1 states:
Section 1. Declaration of National Policy. It is hereby declared that the policy of
the State is to provide readily available credit facilities to the coconut farmers at
preferential rates; that this policy can be expeditiously and efficiently realized
by the implementation of the "Agreement for the Acquisition of a Commercial
Bank for the benefit of the Coconut Farmers" executed by the Philippine Coconut
Authority, the terms of which "Agreement" are hereby incorporated by
reference; and that the Philippine Coconut Authority is hereby authorized to
distribute, for free, the shares of stock of the bank it acquired to the coconut
farmers under such rules and regulations it may promulgate. (Emphasis Ours.)
It bears to stress at this point that the PCA-Cojuangco Agreement referred to
above in Section 1 of P.D. 755 was not reproduced or attached as an annex to
the same law. And it is well-settled that laws must be published to be valid. In
fact, publication is an indispensable condition for the effectivity of a law. Taada
v. Tuvera37 said as much:
Publication of the law is indispensable in every case x x x.
xxxx
We note at this point the conclusive presumption that every person knows the
law, which of course presupposes that the law has been published if the
presumption is to have any legal justification at all. It is no less important to
remember that Section 6 of the Bill of Rights recognizes "the right of the people
to information on matters of public concern," and this certainly applies to,
among others, and indeed especially, the legislative enactments of the
government.
xxxx
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which shall
begin fifteen days after publication unless a different effectivity date is fixed by
the legislature.

Covered by this rule are presidential decrees and executive orders promulgated
by the President in the exercise of legislative powers whenever the same are
validly delegated by the legislature, or, at present, directly conferred by the
Constitution. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid
delegation.38
We even went further in Taada to say that:
Laws must come out in the open in the clear light of the sun instead of skulking
in the shadows with their dark, deep secrets. Mysterious pronouncements and
rumored rules cannot be recognized as binding unless their existence and
contents are confirmed by a valid publication intended to make full disclosure
and give proper notice to the people. The furtive law is like a scabbarded saber
that cannot feint, parry or cut unless the naked blade is drawn.39
The publication, as further held in Taada, must be of the full text of the law
since the purpose of publication is to inform the public of the contents of the
law. Mere referencing the number of the presidential decree, its title or
whereabouts and its supposed date of effectivity would not satisfy the
publication requirement.40
In this case, while it incorporated the PCA-Cojuangco Agreement by reference,
Section 1 of P.D. 755 did not in any way reproduce the exact terms of the
contract in the decree. Neither was acopy thereof attached to the decree when
published. We cannot, therefore, extend to the said
Agreement the status of a law. Consequently, We join the Sandiganbayan in its
holding that the PCA-Cojuangco Agreement shall be treated as an ordinary
transaction between agreeing minds to be governed by contract law under the
Civil Code.
III
THE PCA-COJUANGCO AGREEMENT IS A VALID CONTRACT FOR HAVING THE
REQUISITE CONSIDERATION.
In PSJ-A, the Sandiganbayan struck down the PCA-Cojuangco Agreement as
void for lack of consideration/cause as required under Article 1318, paragraph 3
in relation to Article 1409, paragraph 3 of the Civil Code. The Sandiganbayan
stated:
In sum, the evidence on record relied upon by defendant Cojuangco negates the
presence of: (1) his claimed personal and exclusive option to buy the 137,866
FUB shares; and (2) any pecuniary advantage to the government of the said
option, which could compensate for generous payment to him by PCA of
valuable shares of stock, as stipulated in the May 25, 1975 Agreement between
him and the PCA.41
On the other hand, the aforementioned provisions of the Civil Code state:
Art. 1318. There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established. (Emphasis supplied)42
Art. 1409. The following contracts are inexistent and void from the beginning:
xxxx
(3) Those whose cause or object did not exist at the time of the transaction; 43

The Sandiganbayan found and so tagged the alleged cause for the agreement in
question, i.e., Cojuangcos "personal and exclusive option to acquire the Option
Shares," as fictitious. A reading of the purchase agreement between Cojuangco
and PCA, so the Sandiganbayan ruled, would show that Cojuangco was not the
only seller; thus, the option was, as to him, neither personal nor exclusive as he
claimed it to be. Moreover, as the Sandiganbayan deduced, that option was
inexistent on the day of execution of the PCA-Cojuangco Agreement as the
Special Power of Attorney executed by Cojuangco in favor of now Senator
Edgardo J. Angara, for the latter to sign the PC-ECJ Agreement, was dated May
25, 1975 while the PCA-Cojuangco Agreement was also signed on May 25,
1975. Thus, the Sandiganbayan believed that when the parties affixed their
signatures on the second Agreement, Cojuangcos option to purchase the FUB
shares of stock did not yet exist. The Sandiganbayan further ruled that there
was no justification in the second Agreement for the compensation of Cojuangco
of 14,400 shares, which it viewed as exorbitant. Additionally, the
Sandiganbayan ruled that PCA could not validly enter, in behalf of FUB/UCPB,
into a veritable bank management contract with Cojuangco, PCA having a
personality separate and distinct from that of FUB. As such, the Sandiganbayan
concluded that the PCA-Cojuangco Agreement was null and void.
Correspondingly, the Sandiganbayan also ruled that the sequestered FUB
(UCPB) shares of stock in the name of Cojuangco are conclusively owned by the
Republic.
After a circumspect study, the Court finds as inconclusive the evidence relied
upon by Sandiganbayan to support its ruling that the PCA-Cojuangco Agreement
is devoid of sufficient consideration. We shall explain.
Rule 131, Section 3(r) of the Rules of Court states:
Sec. 3. Disputable presumptions.The following presumptions are satisfactory if
uncontradicted, but may be contradicted and overcome by other evidence:
xxxx
(r) That there was a sufficient consideration for a contract;
The Court had the occasion to explain the reach of the above provision in
Surtida v. Rural Bank of Malinao (Albay), Inc.,44 to wit:
Under Section 3, Rule 131 of the Rules of Court, the following are disputable
presumptions: (1) private transactions have been fair and regular; (2) the
ordinary course of business has been followed; and (3) there was sufficient
consideration for a contract. A presumption may operate against an adversary
who has not introduced proof to rebut it. The effect of a legal presumption upon
a burden of proof is to create the necessity of presenting evidence to meet the
legal presumption or the prima facie case created thereby, and which if no proof
to the contrary is presented and offered, will prevail. The burden of proof
remains where it is, but by the presumption, the one who has that burden is
relieved for the time being from introducing evidence in support of the
averment, because the presumption stands in the place of evidence unless
rebutted.
The presumption that a contract has sufficient consideration cannot be
overthrown by the bare uncorroborated and self-serving assertion of petitioners
that it has no consideration. To overcome the presumption of consideration, the

alleged lack of consideration must be shown by preponderance of evidence.

Petitioners failed to discharge this burden x x x. (Emphasis Ours.)
The assumption that ample consideration is present in a contract is further
elucidated in Pentacapital Investment Corporation v. Mahinay:45
Under Article 1354 of the Civil Code, it is presumed that consideration exists
and is lawful unless the debtor proves the contrary. Moreover, under Section 3,
Rule 131 of the Rules of Court, the following are disputable presumptions: (1)
private transactions have been fair and regular; (2) the ordinary course of
business has been followed; and (3) there was sufficient consideration for a
contract. A presumption may operate against an adversary who has not
introduced proof to rebut it. The effect of a legal presumption upon a burden of
proof is to create the necessity of presenting evidence to meet the legal
presumption or the prima facie case created thereby, and which, if no proof to
the contrary is presented and offered, will prevail. The burden of proof remains
where it is, but by the presumption, the one who has that burden is relieved for
the time being from introducing evidence in support of the averment, because
the presumption stands in the place of evidence unless rebutted.46 (Emphasis
supplied.)
The rule then is that the party who stands to profit from a declaration of the
nullity of a contract on the ground of insufficiency of considerationwhich
would necessarily refer to one who asserts such nullityhas the burden of
overthrowing the presumption offered by the aforequoted Section 3(r).
Obviously then, the presumption contextually operates in favor of Cojuangco
and against the Republic, as plaintiff a quo, which then had the burden to prove
that indeed there was no sufficient consideration for the Second Agreement. The
Sandiganbayans stated observation, therefore, that based on the wordings of
the Second Agreement, Cojuangco had no personal and exclusive option to
purchase the FUB shares from Pedro Cojuangco had really little to commend
itself for acceptance. This, as opposed to the fact that such sale and purchase
agreement is memorialized in a notarized document whereby both Eduardo
Cojuangco, Jr. and Pedro Cojuangco attested to the correctness of the
provisions thereof, among which was that Eduardo had such option to purchase.
A notarized document, Lazaro v. Agustin47 teaches, "generally carries the
evidentiary weight conferred upon it with respect to its due execution, and
documents acknowledged before a notary public have in their favor the
disputable presumption of regularity."
In Samanilla v. Cajucom,48 the Court clarified that the presumption of a valid
consideration cannot be discarded on a simple claim of absence of
consideration, especially when the contract itself states that consideration was
given:
x x x This presumption appellants cannot overcome by a simple assertion of lack
of consideration. Especially may not the presumption be so lightly set aside
when the contract itself states that consideration was given, and the same has
been reduced into a public instrument will all due formalities and solemnities as
in this case. (Emphasis ours.)
A perusal of the PCA-Cojuangco Agreement disclosed an express statement of
consideration for the transaction:

NOW, THEREFORE, for and in consideration of the foregoing premises and the
other terms and conditions hereinafter contained, the parties hereby declare
and affirm that their principal contractual intent is (1) to ensure that the
coconut farmers own at least 60% of the outstanding capital stock of the Bank,
and (2) that the SELLER shall receive compensation for exercising his personal
and exclusive option to acquire the Option Shares, for transferring such shares
to the coconut farmers at the option price of P200 per share, and for performing
the management services required of him hereunder.
xxxx
4. As compensation for exercising his personal and exclusive option to acquire
the Option ShareApplying Samanilla to the case at bar, the express and positive
declaration by the parties of the presence of adequate consideration in the
contract makes conclusive the presumption of sufficient consideration in the PCA
Agreement. Moreover, the option to purchase shares and management services
for UCPB was already availed of by petitioner Cojuangco for the benefit of the
PCA. The exercise of such right resulted in the execution of the PC-ECJ
Agreement, which fact is not disputed. The document itself is incontrovertible
proof and hard evidence that petitioner Cojuangco had the right to purchase the
subject FUB (now UCPB) shares. Res ipsa loquitur.
The Sandiganbayan, however, pointed to the perceived "lack of any pecuniary
value or advantage to the government of the said option, which could
compensate for the generous payment to him by PCA of valuable shares of
stock, as stipulated in the May 25, 1975 Agreement between him and the
PCA."49
Inadequacy of the consideration, however, does not render a contract void
under Article 1355 of the Civil Code:
Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall
not invalidate a contract, unless there has been fraud, mistake or undue
influence. (Emphasis supplied.)
Alsua-Betts v. Court of Appeals50 is instructive that lack of ample consideration
does not nullify the contract:
Inadequacy of consideration does not vitiate a contract unless it is proven which
in the case at bar was not, that there was fraud, mistake or undue influence.
(Article 1355, New Civil Code). We do not find the stipulated price as so
inadequate to shock the courts conscience, considering that the price paid was
much higher than the assessed value of the subject properties and considering
that the sales were effected by a father to her daughter in which case filial love
must be taken into account. (Emphasis supplied.)s and for transferring such
shares to the coconut farmers, as well as for performing the management
services required of him, SELLER shall receive equity in the Bank amounting, in
the aggregate, to 95,304 fully paid shares in accordance with the procedure set
forth in paragraph 6 below. (Emphasis supplied.)
Vales v. Villa51 elucidates why a bad transaction cannot serve as basis for
voiding a contract:
x x x Courts 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. x x x Men may do foolish things,

make ridiculous contracts, use miserable judgment, and lose money by them
indeed, all they have in the world; but not for that alone can the law intervene
and restore. There must be, in addition, a violation of law, the commission of
what the law knows as an actionable wrong, before the courts are authorized to
lay hold of the situation and remedy it. (Emphasis ours.)
While one may posit that the PCA-Cojuangco Agreement puts PCA and the
coconut farmers at a disadvantage, the facts do not make out a clear case of
violation of any law that will necessitate the recall of said contract. Indeed, the
anti-graft court has not put forward any specific stipulation therein that is at war
with any law, or the Constitution, for that matter. It is even clear as day that
none of the parties who entered into the two agreements with petitioner
Cojuangco contested nor sought the nullification of said agreements, more
particularly the PCA who is always provided legal advice in said transactions by
the Government corporate counsel, and a battery of lawyers and presumably
the COA auditor assigned to said agency. A government agency, like the PCA,
stoops down to level of an ordinary citizen when it enters into a private
transaction with private individuals. In this setting, PCA is bound by the law on
contracts and is bound to comply with the terms of the PCA-Cojuangco
Agreement which is the law between the parties. With the silence of PCA not to
challenge the validity of the PCA-Cojuangco Agreement and the inability of
government to demonstrate the lack of ample consideration in the transaction,
the Court is left with no other choice but to uphold the validity of said
agreements.
While consideration is usually in the form of money or property, it need not be
monetary. This is clear from Article 1350 which reads:
Art. 1350. In onerous contracts the cause is understood to be, for each
contracting party, the prestation or promise of a thing or service by the other;
in remuneratory ones, the service or benefit which is remunerated; and in
contracts of pure beneficence, the mere liability of the benefactor. (Emphasis
supplied.)
Gabriel v. Monte de Piedad y Caja de Ahorros52 tells us of the meaning of
consideration:
x x x A consideration, in the legal sense of the word, is some right, interest,
benefit, or advantage conferred upon the promisor, to which he is otherwise not
lawfully entitled, or any detriment, prejudice, loss, or disadvantage suffered or
undertaken by the promisee other than to such as he is at the time of consent
bound to suffer. (Emphasis Ours.)
The Court rules that the transfer of the subject UCPB shares is clearly supported
by valuable consideration.
To justify the nullification of the PCA-Cojuangco Agreement, the Sandiganbayan
centered on the alleged imaginary option claimed by petitioner to buy the FUB
shares from the Pedro Cojuangco group. It relied on the phrase "in behalf of
certain other buyers" mentioned in the PC-ECJ Agreement as basis for the
finding that petitioners option is neither personal nor exclusive. The pertinent
portion of said agreement reads:
EDUARDO COJUANGCO, JR., Filipino, of legal age and with residence at 136 9th
Street corner Balete Drive, Quezon City, represented in this act by his duly

authorized attorney-in-fact, EDGARDO J. ANGARA, for and in his own behalf and
in behalf of certain other buyers, (hereinafter collectively called the "BUYERS");
x x x.
A plain reading of the aforequoted description of petitioner as a party to the PCECJ Agreement reveals that petitioner is not only the buyer. He is the named
buyer and there are other buyers who were unnamed. This is clear from the
word "BUYERS." If petitioner is the only buyer, then his description as a party to
the sale would only be "BUYER." It may be true that petitioner intended to
include other buyers. The fact remains, however, that the identities of the
unnamed buyers were not revealed up to the present day. While one can
conjure or speculate that PCA may be one of the buyers, the fact that PCA
entered into an agreement to purchase the FUB shares with petitioner militates
against such conjecture since there would be no need at all to enter into the
second agreement if PCA was already a buyer of the shares in the first contract.
It is only the parties to the PC-ECJ Agreement that can plausibly shed light on
the import of the phrase "certain other buyers" but, unfortunately, petitioner
was no longer allowed to testify on the matter and was precluded from
explaining the transactions because of the motion for partial summary judgment
and the eventual promulgation of the July 11, 2003 Partial Summary Judgment.
Even if conceding for the sake of argument that PCA is one of the buyers of the
FUB shares in the PC-ECJ Agreement, still it does not necessarily follow that
petitioner had no option to buy said shares from the group of Pedro Cojuangco.
In fact, the very execution of the first agreement undeniably shows that he had
the rights or option to buy said shares from the Pedro Cojuangco group.
Otherwise, the PC-ECJ Agreement could not have been consummated and
enforced. The conclusion is incontestable that petitioner indeed had the right or
option to buy the FUB shares as buttressed by the execution and enforcement of
the very document itself.
We can opt to treat the PC-ECJ Agreement as a totally separate agreement from
the PCA-Cojuangco Agreement but it will not detract from the fact that
petitioner actually acquired the rights to the ownership of the FUB shares from
the Pedro Cojuangco group. The consequence is he can legally sell the shares to
PCA. In this scenario, he would resell the shares to PCA for a profit and PCA
would still end up paying a higher price for the FUB shares. The "profit" that will
accrue to petitioner may just be equal to the value of the shares that were given
to petitioner as commission. Still we can only speculate as to the true intentions
of the parties. Without any evidence adduced on this issue, the Court will not
venture on any unproven conclusion or finding which should be avoided in
judicial adjudication.
The anti-graft court also inferred from the date of execution of the special power
of attorney in favor of now Senator Edgardo J. Angara, which is May 25, 1975,
that the PC-ECJ Agreement appears to have been executed on the same day as
the PCA-Cojuangco Agreement (dated May 25, 1975). The coincidence on the
dates casts "doubts as to the existence of defendant Cojuangcos prior personal
and exclusive option to the FUB shares."
The fact that the execution of the SPA and the PCA-Cojuangco Agreement
occurred sequentially on the same day cannot, without more, be the basis for

the conclusion as to the non-existence of the option of petitioner. Such

conjecture cannot prevail over the fact that without petitioner Cojuangco, none
of the two agreements in question would have been executed and implemented
and the FUB shares could not have been successfully conveyed to PCA.
Again, only the parties can explain the reasons behind the execution of the two
agreements and the SPA on the same day. They were, however, precluded from
elucidating the reasons behind such occurrence. In the absence of such
illuminating proof, the proposition that the option does not exist has no leg to
stand on.
More importantly, the fact that the PC-ECJ Agreement was executed not earlier
than May 25, 1975 proves that petitioner Cojuangco had an option to buy the
FUB shares prior to that date. Again, it must be emphasized that from its terms,
the first Agreement did not create the option.It, however, proved the exercise of
the option by petitioner.
The execution of the PC-ECJ Agreement on the same day as the PCA-Cojuangco
Agreement more than satisfies paragraph 2 thereof which requires petitioner to
exercise his option to purchase the FUB shares as promptly as practicable after,
and not before, the execution of the second agreement, thus:
2. As promptly as practicable after execution of this Agreement, the SELLER
shall exercise his option to acquire the Option Shares and SELLER shall
immediately thereafter deliver and turn over to the Escrow Agent such stock
certificates as are herein provided to be received from the existing stockholders
of the bank by virtue of the exercise on the aforementioned option. The Escrow
Agent shall thereupon issue its check in favor of the SELLER covering the
purchase price for the shares delivered. (Emphasis supplied.)
The Sandiganbayan viewed the compensation of petitioner of 14,400 FUB shares
as exorbitant. In the absence of proof to the contrary and considering the
absence of any complaint of illegality or fraud from any of the contracting
parties, then the presumption that "private transactions have been fair and
regular"53 must apply.
Lastly, respondent interjects the thesis that PCA could not validly enter into a
bank management agreement with petitioner since PCA has a personality
separate and distinct from that of FUB. Evidently, it is PCA which has the right
to challenge the stipulations on the management contract as unenforceable.
However, PCA chose not to assail said stipulations and instead even complied
with and implemented its prestations contained in said stipulations by installing
petitioner as Chairman of UCPB. Thus, PCA has waived and forfeited its right to
nullify said stipulations and is now estopped from questioning the same.
In view of the foregoing, the Court is left with no option but to uphold the
validity of the two agreements in question.
IV
COJUANGCO IS NOT ENTITLED TO THE UCPB SHARES WHICH WERE BOUGHT
WITH PUBLIC FUNDS AND HENCE, ARE PUBLIC PROPERTY.
The
coconut
levy
funds
were
exacted
for
a
special
public
purpose.
Consequently,
any
use
or
transfer
of
the
funds
that
directly

benefits
private
individuals
should
be
invalidated.
The issue of whether or not taxpayers money, or funds and property acquired
through the imposition of taxes may be used to benefit a private individual is
once again posed. Preliminarily, the instant case inquires whether the coconut
levy funds, and accordingly, the UCPB shares acquired using the coconut levy
funds are public funds. Indeed, the very same issue took center stage,
discussed and was directly addressed in COCOFED v. Republic. And there is
hardly any question about the subject funds public and special character. The
following excerpts from COCOFED v. Republic,54 citing Republic v. COCOFED and
related cases, settle once and for all this core, determinative issue:
Indeed, We have hitherto discussed, the coconut levy was imposed in the
exercise of the States inherent power of taxation. As We wrote in Republic v.
COCOFED:
Indeed, coconut levy funds partake of the nature of taxes, which, in general, are
enforced proportional contributions from persons and properties, exacted by the
State by virtue of its sovereignty for the support of government and for all
public needs.
Based on its definition, a tax has three elements, namely: a) it is an enforced
proportional contribution from persons and properties; b) it is imposed by the
State by virtue of its sovereignty; and c) it is levied for the support of the
government. The coconut levy funds fall squarely into these elements for the
following reasons:
(a) They were generated by virtue of statutory enactments imposed on the
coconut farmers requiring the payment of prescribed amounts. Thus, PD No.
276, which created the (CCSF), mandated the following:
"a. A levy, initially, of P15.00 per 100 kilograms of copra resecada or its
equivalent in other coconut products, shall be imposed on every first sale, in
accordance with the mechanics established under RA 6260, effective at the start
of business hours on August 10, 1973.
"The proceeds from the levy shall be deposited with the Philippine National Bank
or any other government bank to the account of the Coconut Consumers
Stabilization Fund, as a separate trust fund which shall not form part of the
general fund of the government."
The coco levies were further clarified in amendatory laws, specifically PD No.
961 and PD No. 1468 in this wise:
"The Authority (PCA) is hereby empowered to impose and collect a levy, to be
known as the Coconut Consumers Stabilization Fund Levy, on every one
hundred kilos of copra resecada, or its equivalent delivered to, and/or
purchased by, copra exporters, oil millers, desiccators and other end-users of
copra or its equivalent in other coconut products. The levy shall be paid by such
copra exporters, oil millers, desiccators and other end-users of copra or its
equivalent in other coconut products under such rules and regulations as the
Authority may prescribe. Until otherwise prescribed by the Authority, the
current levy being collected shall be continued."

Like other tax measures, they were not voluntary payments or donations by the
people. They were enforced contributions exacted on pain of penal sanctions, as
provided under PD No. 276:
"3. Any person or firm who violates any provision of this Decree or the rules and
regulations promulgated thereunder, shall, in addition to penalties already
prescribed under existing administrative and special law, pay a fine of not less
than P2, 500 or more than P10,000, or suffer cancellation of licenses to operate,
or both, at the discretion of the Court."
Such penalties were later amended thus: .
(b) The coconut levies were imposed pursuant to the laws enacted by the
proper legislative authorities of the State. Indeed, the CCSF was collected under
PD No. 276, ."
(c) They were clearly imposed for a public purpose. There is absolutely no
question that they were collected to advance the governments avowed policy of
protecting the coconut industry.
This Court takes judicial notice of the fact that the coconut industry is one of the
great economic pillars of our nation, and coconuts and their byproducts occupy
a leading position among the countrys export products; .
Taxation is done not merely to raise revenues to support the government, but
also to provide means for the rehabilitation and the stabilization of a threatened
industry, which is so affected with public interest as to be within the police
power of the State .
Even if the money is allocated for a special purpose and raised by special
means, it is still public in character. In Cocofed v. PCGG, the Court observed
that certain agencies or enterprises "were organized and financed with revenues
derived from coconut levies imposed under a succession of law of the late
dictatorship with deposed Ferdinand Marcos and his cronies as the suspected
authors and chief beneficiaries of the resulting coconut industry monopoly." The
Court continued: ". It cannot be denied that the coconut industry is one of the
major industries supporting the national economy. It is, therefore, the States
concern to make it a strong and secure source not only of the livelihood of a
significant segment of the population, but also of export earnings the sustained
growth of which is one of the imperatives of economic stability. (Emphasis
Ours.)
The following parallel doctrinal lines from Pambansang Koalisyon ng mga
Samahang Magsasaka at Manggagawa sa Niyugan (PKSMMN) v. Executive
Secretary55 came next:
The Court was satisfied that the coco-levy funds were raised pursuant to law to
support a proper governmental purpose. They were raised with the use of the
police and taxing powers of the State for the benefit of the coconut industry and
its farmers in general. The COA reviewed the use of the funds. The Bureau of
Internal Revenue (BIR) treated them as public funds and the very laws
governing coconut levies recognize their public character.
The Court has also recently declared that the coco-levy funds are in the nature
of taxes and can only be used for public purpose. Taxes are enforced
proportional contributions from persons and property, levied by the State by
virtue of its sovereignty for the support of the government and for all its public

needs. Here, the coco-levy funds were imposed pursuant to law, namely, R.A.
6260 and P.D. 276. The funds were collected and managed by the PCA, an
independent government corporation directly under the President. And, as the
respondent public officials pointed out, the pertinent laws used the term levy,
which means to tax, in describing the exaction.
Of course, unlike ordinary revenue laws, R.A. 6260 and P.D. 276 did not raise
money to boost the governments general funds but to provide means for the
rehabilitation and stabilization of a threatened industry, the coconut industry,
which is so affected with public interest as to be within the police power of the
State. The funds sought to support the coconut industry, one of the main
economic backbones of the country, and to secure economic benefits for the
coconut farmers and far workers. The subject laws are akin to the sugar liens
imposed by Sec. 7(b) of P.D. 388, and the oil price stabilization funds under
P.D. 1956, as amended by E.O. 137.
From the foregoing, it is at once apparent that any property acquired by means
of the coconut levy funds, such as the subject UCPB shares, should be treated
as public funds or public property, subject to the burdens and restrictions
attached by law to such property. COCOFED v. Republic, delved into such
limitations, thusly:
We have ruled time and again that taxes are imposed only for a public purpose.
"They cannot be used for purely private purposes or for the exclusive benefit of
private persons." When a law imposes taxes or levies from the public, with the
intent to give undue benefit or advantage to private persons, or the promotion
of private enterprises, that law cannot be said to satisfy the requirement of
public purpose. In Gaston v. Republic Planters Bank, the petitioning sugar
producers, sugarcane planters and millers sought the distribution of the shares
of stock of the Republic Planters Bank (RPB), alleging that they are the true
beneficial owners thereof. In that case, the investment, i.e., the purchase of
RPB, was funded by the deduction of PhP 1.00 per picul from the sugar proceeds
of the sugar producers pursuant to P.D. No. 388. In ruling against the
petitioners, the Court held that to rule in their favor would contravene the
general principle that revenues received from the imposition of taxes or levies
"cannot be used for purely private purposes or for the exclusive benefit of
private persons." The Court amply reasoned that the sugar stabilization fund is
to "be utilized for the benefit of the entire sugar industry, and all its
components, stabilization of the domestic market including foreign market, the
industry being of vital importance to the countrys economy and to national
interest."
Similarly in this case, the coconut levy funds were sourced from forced
exactions decreed under P.D. Nos. 232, 276 and 582, among others, with the
end-goal of developing the entire coconut industry. Clearly, to hold therefore,
even by law, that the revenues received from the imposition of the coconut
levies be used purely for private purposes to be owned by private individuals in
their private capacity and for their benefit, would contravene the rationale
behind the imposition of taxes or levies.
Needless to stress, courts do not, as they cannot, allow by judicial fiat the
conversion of special funds into a private fund for the benefit of private

individuals. In the same vein, We cannot subscribe to the idea of what appears
to be an indirect if not exactly direct conversion of special funds into private
funds, i.e., by using special funds to purchase shares of stocks, which in turn
would be distributed for free to private individuals. Even if these private
individuals belong to, or are a part of the coconut industry, the free distribution
of shares of stocks purchased with special public funds to them, nevertheless
cannot be justified. The ratio in Gaston, as articulated below, applies mutatis
mutandis to this case:
The stabilization fees in question are levied by the State for a special purpose
that of "financing the growth and development of the sugar industry and all its
components, stabilization of the domestic market including the foreign market."
The fact that the State has taken possession of moneys pursuant to law is
sufficient to constitute them as state funds even though they are held for a
special purpose.
That the fees were collected from sugar producers etc., and that the funds were
channeled to the purchase of shares of stock in respondent Bank do not convert
the funds into a trust fund for their benefit nor make them the beneficial owners
of the shares so purchased. It is but rational that the fees be collected from
them since it is also they who are benefited from the expenditure of the funds
derived from it. .56
In this case, the coconut levy funds were being exacted from copra exporters,
oil millers, desiccators and other end-users of copra or its equivalent in other
coconut products.57 Likewise so, the funds here were channeled to the purchase
of the shares of stock in UCPB. Drawing a clear parallelism between Gaston and
this case, the fact that the coconut levy funds were collected from the persons
or entities in the coconut industry, among others, does not and cannot entitle
them to be beneficial owners of the subject funds or more bluntly, owners
thereof in their private capacity. Parenthetically, the said private individuals
cannot own the UCPB shares of stocks so purchased using the said special funds
of the government.58 (Emphasis Ours.)
As the coconut levy funds partake of the nature of taxes and can only be used
for public purpose, and importantly, for the purpose for which it was exacted,
i.e., the development, rehabilitation and stabilization of the coconut industry,
they cannot be used to benefitwhether directly or indirectly private
individuals, be it by way of a commission, or as the subject Agreement
interestingly words it, compensation. Consequently, Cojuangco cannot stand to
benefit by receiving, in his private capacity, 7.22% of the FUB shares without
violating the constitutional caveat that public funds can only be used for public
purpose. Accordingly, the 7.22% FUB (UCPB) shares that were given to
Cojuangco shall be returned to the Government, to be used "only for the benefit
of all coconut farmers and for the development of the coconut industry."59
The ensuing are the underlying rationale for declaring, as unconstitutional,
provisions that convert public property into private funds to be used ultimately
for personal benefit:
not only were the laws unconstitutional for decreeing the distribution of the
shares of stock for free to the coconut farmers and therefore negating the public
purposed declared by P.D. No. 276, i.e., to stabilize the price of edible oil and to

protect the coconut industry. They likewise reclassified the coconut levy fund as
private fund, to be owned by private individuals in their private capacities,
contrary to the original purpose for the creation of such fund. To compound the
situation, the offending provisions effectively removed the coconut levy fund
away from the cavil of public funds which normally can be paid out only
pursuant to an appropriation made by law. The conversion of public funds into
private assets was illegally allowed, in fact mandated, by these provisions.
Clearly therefore, the pertinent provisions of P.D. Nos. 755, 961 and 1468 are
unconstitutional for violating Article VI, Section 29 (3) of the Constitution. In
this context, the distribution by PCA of the UCPB shares purchased by means of
the coconut levy fund a special fund of the government to the coconut
farmers is, therefore, void.60
It is precisely for the foregoing that impels the Court to strike down as
unconstitutional the provisions of the PCA-Cojuangco Agreement that allow
petitioner Cojuangco to personally and exclusively own public funds or property,
the disbursement of which We so greatly protect if only to give light and
meaning to the mandates of the Constitution.
As heretofore amply discussed, taxes are imposed only for a public purpose.61
They must, therefore, be used for the benefit of the public and not for the
exclusive profit or gain of private persons.62 Otherwise, grave injustice is
inflicted not only upon the Government but most especially upon the citizenry
the taxpayersto whom We owe a great deal of accountability.
In this case, out of the 72.2% FUB (now UCPB) shares of stocks PCA purchased
using the coconut levy funds, the May 25, 1975 Agreement between the PCA
and Cojuangco provided for the transfer to the latter, by way of compensation,
of 10% of the shares subject of the agreement, or a total of 7.22% fully paid
shares. In sum, Cojuangco received public assets in the form of FUB (UCPB)
shares with a value then of ten million eight hundred eighty-six thousand pesos
(PhP 10,886,000) in 1975, paid by coconut levy funds. In effect, Cojuangco
received the aforementioned asset as a result of the PCA-Cojuangco Agreement,
and exclusively benefited himself by owning property acquired using solely
public funds. Cojuangco, no less, admitted that the PCA paid, out of the CCSF,
the entire acquisition price for the 72.2% option shares.63 This is in clear
violation of the prohibition, which the Court seeks to uphold.1wphi1
We, therefore, affirm, on this ground, the decision of the Sandiganbayan
nullifying the shares of stock transfer to Cojuangco. Accordingly, the UCPB
shares of stock representing the 7.22% fully paid shares subject of the instant
petition, with all dividends declared, paid or issued thereon, as well as any
increments thereto arising from, but not limited to, the exercise of pre-emptive
rights, shall be reconveyed to the Government of the Republic of the Philippines,
which as We previously clarified, shall "be used only for the benefit of all
coconut farmers and for the development of the coconut industry."64
But apart from the stipulation in the PCA-Cojuangco Agreement, more
specifically paragraph 4 in relation to paragraph 6 thereof, providing for the
transfer to Cojuangco for the UCPB shares adverted to immediately above, other
provisions are valid and shall be enforced, or shall be respected, if the
corresponding prestation had already been performed. Invalid stipulations that

are independent of, and divisible from, the rest of the agreement and which can
easily be separated therefrom without doing violence to the manifest intention
of the contracting minds do not nullify the entire contract.65
WHEREFORE, Part C of the appealed Partial Summary Judgment in
Sandiganbayan Civil Case No. 0033-A is AFFIRMED with modification. As
MODIFIED, the dispositive portion in Part C of the Sandiganbayans Partial
Summary Judgment in Civil Case No. 0033-A, shall read as follows:
C. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M.
COJUANGCO, JR.) dated September 18, 2002 filed by Plaintiff.
1. Sec. 1 of P.D. No. 755 did not validate the Agreement between PCA and
defendant Eduardo M. Cojuangco, Jr. dated May 25, 1975 nor did it give the
Agreement the binding force of a law because of the non-publication of the said
Agreement.
2. The Agreement between PCA and defendant Eduardo M. Cojuangco, Jr. dated
May 25, 1975 is a valid contract for having the requisite consideration under
Article 1318 of the Civil Code.
3. The transfer by PCA to defendant Eduardo M. Cojuangco, Jr. of 14,400 shares
of stock of FUB (later UCPB) from the "Option Shares" and the additional FUB
shares subscribed and paid by PCA, consisting of
a. Fifteen Thousand Eight Hundred Eighty-Four (15,884) shares out of the
authorized but unissued shares of the bank, subscribed and paid by PCA;
b. Sixty Four Thousand Nine Hundred Eighty (64,980) shares of the increased
capital stock subscribed and paid by PCA; and
c. Stock dividends declared pursuant to paragraph 5 and paragraph 11 (iv) (d)
of the PCA-Cojuangco Agreement dated May 25, 1975. or the so-called
"Cojuangco-UCPB shares" is declared unconstitutional, hence null and
void.1wphi1
4. The above-mentioned shares of stock of the FUB/UCPB transferred to
defendant Cojuangco are hereby declared conclusively owned by the Republic of
the Philippines to be used only for the benefit of all coconut farmers and for the
development of the coconut industry, and ordered reconveyed to the
Government.
5. The UCPB shares of stock of the alleged fronts, nominees and dummies of
defendant Eduardo M. Cojuangco, Jr. which form part of the 72.2% shares of
the FUB/UCPB paid for by the PCA with public funds later charged to the coconut
levy funds, particularly the CCSF, belong to the plaintiff Republic of the
Philippines as their true and beneficial owner.
Accordingly, the instant petition is hereby DENIED.
Costs against petitioner Cojuangco.
SO ORDERED.
PRESBITERO
J.
VELASCO,
JR.
Associate Justice

3. SEC vs. GMA Network

GR 164026 Dec. 23, 2008
FACTS: GMA filed an application for collective approval of various amendments
to its Articles of Incorporation and By-Laws with SEC. The amendments applied
for include, among others, the change in the corporate name of petitioner from
"Republic Broadcasting System, Inc." to "GMA Network, Inc." as well as the
extension of the corporate term for another fifty (50) years .Upon such filing,
the petitioner had been assessed by the SEC's Corporate and Legal Department
a separate filing fee for the application for extension of corporate term
equivalent to 1/10 of 1% of its authorized capital stock plus 20% thereof or an
amount of P1,212,200.00. Memorandum Circular no. 1 was superseded by
Memorandum circular no. 2 w/c removed the maximum amount that can be
imposed by SEC. GMA questioned the implementation of Memorandum Circular
no. 2 for lack of publication.
HELD: we agree with the Court of Appeals that the questioned memorandum
circular is invalid as it does not appear from the records that it has been
published in the Official Gazette or in a newspaper of general circulation.
Executive Order No. 200, which repealed Art. 2 of the Civil Code, provides that
"laws shall take effect after fifteen days following the completion of their
publication either in the Official Gazette or in a newspaper of general circulation
in
the
Philippines,
unless
it
is
otherwise
provided."
In Taada v. Tuvera, the Court, expounding on the publication requirement,
held:
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which shall
begin fifteen days after publication unless a different effectivity date is fixed by
the
legislature.
Covered by this rule are presidential decrees and executive orders promulgated
by the President in the exercise of legislative powers whenever the same are
validly delegated by the legislature, or, at present, directly conferred by the
Constitution. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid
delegation.
Interpretative regulations and those merely internal in nature, that is, regulating
only the personnel of the administrative agency and not the public, need not be
published. Neither is publication required of the so-called letters of instructions
issued by administrative superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of their duties.
The questioned memorandum circular, furthermore, has not been filed with the
Office of the National Administrative Register of the University of the Philippines
Law Center as required in the Administr ative Code of 1987.
In Philsa International Placement and Services Corp. v. Secretary of Labor and

Employment, Memorandum Circular No. 2, Series of 1983 of the Philippine

Overseas Employment Administration, which provided for the schedule of
placement and documentation fees for private employment agencies or
authority holders, was struck down as it was not published or filed with the
National
Administrative
Register.
The questioned memorandum circular, it should be emphasized, cannot be
construed as simply interpretative of R.A. No. 3531. This administrative
issuance is an implementation of the mandate of R.A. No. 3531 and indubitably
regulates and affects the public at large. It cannot, therefore, be considered a
mere internal rule or regulation, nor an interpretation of the law, but a rule
which must be declared ineffective as it was neither published nor filed with the
Office
of
the
National
Administrative
Register.

On August 19, 1995, the petitioner, GMA NETWORK, INC., (GMA, for brevity), a
domestic corporation, filed an application for collective approval of various
amendments to its Articles of Incorporation and By-Laws with the respondent
Securities and Exchange Commission, (SEC, for brevity). The amendments
applied for include, among others, the change in the corporate name of
petitioner from "Republic Broadcasting System, Inc." to "GMA Network, Inc." as
well as the extension of the corporate term for another fifty (50) years from and
after
June
16,
2000.
Upon such filing, the petitioner had been assessed by the SEC's Corporate and
Legal Department a separate filing fee for the application for extension of
corporate term equivalent to 1/10 of 1% of its authorized capital stock plus
20%
thereof
or
an
amount
of
P1,212,200.00.

A related factor which precludes consideration of the questioned issuance as

interpretative in nature merely is the fact the SEC's assessment amounting to
P1,212,200.00 is exceedingly unreasonable and amounts to an imposition. A
filing fee, by legal definition, is that charged by a public official to accept a
document for processing. The fee should be just, fair, and proportionate to the
service for which the fee is being collected, in this case, the examination and
verification of the documents submitted by GMA to warrant an extension of its
corporate
term.

On September 26, 1995, the petitioner informed the SEC of its intention to
contest the legality and propriety of the said assessment. However, the
petitioner requested the SEC to approve the other amendments being requested
by the petitioner without being deemed to have withdrawn its application for
extension
of
corporate
term.

Rate-fixing is a legislative function which concededly has been delegated to the

SEC by R.A. No. 3531 and other pertinent laws. The due process clause,
however, permits the courts to determine whether the regulation issued by the
SEC is reasonable and within the bounds of its rate-fixing authority and to strike
it down when it arbitrarily infringes on a person's right to property.

On February 20, 1996, the SEC approved the other amendments to the
petitioner's Articles of Incorporation, specifically Article 1 thereof referring to the
corporate name of the petitioner as well as Article 2 thereof referring to the
principal
purpose
for
which
the
petitioner
was
formed.

On October 20, 1995, the petitioner formally protested the assessment

amounting to P1,212,200.00 for its application for extension of corporate term.

On March 19, 1996, the petitioner requested for an official opinion/ruling from
the SEC on the validity and propriety of the assessment for application for
extension
of
its
corporate
term.
SECOND DIVISION
[ G.R. No. 164026, December 23, 2008 ]
SECURITIES AND EXCHANGE COMMISSION, PETITIONER, VS. GMA
NETWORK,
INC.,
RESPONDENT.

Consequently, the respondent SEC, through Associate Commissioner Fe Eloisa

C. Gloria, on April 18, 1996, issued its ruling upholding the validity of the
questioned
assessment,
the
dispositive
portion
of
which
states:

DECISION
TINGA, J.:
Petitioner Securities and Exchange Commission (SEC) assails the Decision [1]
dated February 20, 2004 of the Court of Appeals in CA-G.R. SP No. 68163,
which directed that SEC Memorandum Circular No. 1, Series of 1986 should be
the basis for computing the filing fee relative to GMA Network, Inc.'s (GMA's)
application for the amendment of its articles of incorporation for purposes of
extending
its
corporate
term.

"In light of the foregoing, we believe that the questioned assessment is

in accordance with law. Accordingly, you are hereby required to comply
with
the
required
filing
fee."

The undisputed facts as narrated by the appellate court are as follows:

On September 26, 2001, following three (3) motions for early resolution filed by
the petitioner, the respondent SEC En Banc issued the assailed order dismissing

An appeal from the aforequoted ruling of the respondent SEC was subsequently
taken by the petitioner on the ground that the assessment of filing fees for the
petitioner's application for extension of corporate term equivalent to 1/10 of 1%
of the authorized capital stock plus 20% thereof is not in accordance with law.

the petitioner's appeal, the dispositive portion of which provides as follows:

WHEREFORE, for lack of merit, the instant Appeal is hereby dismissed.
SO ORDERED.[2]
In its petition for review[3] with the Court of Appeals, GMA argued that its
application for the extension of its corporate term is akin to an amendment and
not to a filing of new articles of incorporation. It further averred that SEC
Memorandum Circular No. 2, Series of 1994, which the SEC used as basis for
assessing P1,212,200.00 as filing fee for the extension of GMA's corporate term,
is
not
valid.
The appellate court agreed with the SEC's submission that an extension of the
corporate term is a grant of a fresh license for a corporation to act as a juridical
being endowed with the powers expressly bestowed by the State. As such, it is
not an ordinary amendment but is analogous to the filing of new articles of
incorporation.
However, the Court of Appeals ruled that Memorandum Circular No. 2, Series of
1994 is legally invalid and ineffective for not having been published in
accordance with law. The challenged memorandum circular, according to the
appellate court, is not merely an internal or interpretative rule, but affects the
public in general. Hence, its publication is required for its effectivity.
The appellate court denied reconsideration in a Resolution[4] dated June 9,
2004.
In its Memorandum[5] dated September 6, 2005, the SEC argues that it issued
the questioned memorandum circular in the exercise of its delegated legislative
power to fix fees and charges. The filing fees required by it are allegedly
uniformly imposed on the transacting public and are essential to its supervisory
and regulatory functions. The fees are not a form of penalty or sanction and,
therefore,
require
no
publication.
For its part, GMA points out in its Memorandum,[6] dated September 23, 2005,
that SEC Memorandum Circular No. 1, Series of 1986 refers to the filing fees for
amended articles of incorporation where the amendment consists of extending
the term of corporate existence. The questioned circular, on the other hand,
refers only to filing fees for articles of incorporation. Thus, GMA argues that the
former circular, being the one that specifically treats of applications for the
extension
of
corporate
term,
should
apply
to
its
case.
Assuming that Memorandum Circular No. 2, Series of 1994 is applicable, GMA
avers that the latter did not take effect and cannot be the basis for the
imposition of the fees stated therein for the reasons that it was neither filed with
the University of the Philippines Law Center nor published either in the Official
Gazette or in a newspaper of general circulation as required under existing laws.

It should be mentioned at the outset that the authority of the SEC to collect and
receive fees as authorized by law is not in question.[7] Its power to collect fees
for examining and filing articles of incorporation and by-laws and amendments
thereto, certificates of increase or decrease of the capital stock, among others,
is recognized. Likewise established is its power under Sec. 7 of P.D. No. 902-A
to recommend to the President the revision, alteration, amendment or
adjustment
of
the
charges
which
it
is
authorized
to
collect.
The subject of the present inquiry is not the authority of the SEC to collect and
receive fees and charges, but rather the validity of its imposition on the basis of
a memorandum circular which, the Court of Appeals held, is ineffective.
Republic Act No. 3531 (R.A. No. 3531) provides that where the amendment
consists in extending the term of corporate existence, the SEC "shall be entitled
to collect and receive for the filing of the amended articles of incorporation the
same fees collectible under existing law as the filing of articles of
incorporation."[8] As is clearly the import of this law, the SEC shall be entitled to
collect and receive the same fees it assesses and collects both for the filing of
articles of incorporation and the filing of an amended articles of incorporation for
purposes
of
extending
the
term
of
corporate
existence.
The SEC, effectuating its mandate under the aforequoted law and other
pertinent laws,[9] issued SEC Memorandum Circular No. 1, Series of 1986,
imposing the filing fee of 1/10 of 1% of the authorized capital stock but not less
than P300.00 nor more than P100,000.00 for stock corporations, and 1/10 of
1% of the authorized capital stock but not less than P200.00 nor more than
P100,000.00 for stock corporations without par value, for the filing of amended
articles of incorporation where the amendment consists of extending the term of
corporate
existence.
Several years after, the SEC issued Memorandum Circular No. 2, Series of 1994,
imposing new fees and charges and deleting the maximum filing fee set forth in
SEC Circular No. 1, Series of 1986, such that the fee for the filing of articles of
incorporation became 1/10 of 1% of the authorized capital stock plus 20%
thereof
but
not
less
than
P500.00.
A reading of the two circulars readily reveals that they indeed pertain to
different matters, as GMA points out. SEC Memorandum Circular No. 1, Series of
1986 refers to the filing fee for the amendment of articles of incorporation to
extend corporate life, while Memorandum Circular No. 2, Series of 1994 pertains
to the filing fee for articles of incorporation. Thus, as GMA argues, the former
circular, being squarely applicable and, more importantly, being more favorable
to
it,
should
be
followed.
What this proposition fails to consider, however, is the clear directive of R.A. No.
3531 to impose the same fees for the filing of articles of incorporation and the

filing of amended articles of incorporation to reflect an extension of corporate

term. R.A. No. 3531 provides an unmistakable standard which should guide the
SEC in fixing and imposing its rates and fees. If such mandate were the only
consideration, the Court would have been inclined to rule that the SEC was
correct in imposing the filing fees as outlined in the questioned memorandum
circular,
GMA's
argument
notwithstanding.

issuance

However, we agree with the Court of Appeals that the questioned memorandum
circular is invalid as it does not appear from the records that it has been
published in the Official Gazette or in a newspaper of general circulation.
Executive Order No. 200, which repealed Art. 2 of the Civil Code, provides that
"laws shall take effect after fifteen days following the completion of their
publication either in the Official Gazette or in a newspaper of general circulation
in
the
Philippines,
unless
it
is
otherwise
provided."

A related factor which precludes consideration of the questioned issuance as

interpretative in nature merely is the fact the SEC's assessment amounting to
P1,212,200.00 is exceedingly unreasonable and amounts to an imposition. A
filing fee, by legal definition, is that charged by a public official to accept a
document for processing. The fee should be just, fair, and proportionate to the
service for which the fee is being collected, in this case, the examination and
verification of the documents submitted by GMA to warrant an extension of its
corporate
term.

In Taada v. Tuvera,[10] the Court, expounding on the publication requirement,

held:
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which shall
begin fifteen days after publication unless a different effectivity date is fixed by
the
legislature.
Covered by this rule are presidential decrees and executive orders promulgated
by the President in the exercise of legislative powers whenever the same are
validly delegated by the legislature, or, at present, directly conferred by the
Constitution. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid
delegation.
Interpretative regulations and those merely internal in nature, that is, regulating
only the personnel of the administrative agency and not the public, need not be
published. Neither is publication required of the so-called letters of instructions
issued by administrative superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of their duties.[11]
The questioned memorandum circular, furthermore, has not been filed with the
Office of the National Administrative Register of the University of the Philippines
Law Center as required in the Administr ative Code of 1987. [12]

is

an

implementation

of

the

mandate

of

R.A.

No. 3531 and indubitably regulates and affects the public at large. It cannot,
therefore, be considered a mere internal rule or regulation, nor an interpretation
of the law, but a rule which must be declared ineffective as it was neither
published nor filed with the Office of the National Administrative Register.

Rate-fixing is a legislative function which concededly has been delegated to the

SEC by R.A. No. 3531 and other pertinent laws. The due process clause,
however, permits the courts to determine whether the regulation issued by the
SEC is reasonable and within the bounds of its rate-fixing authority and to strike
it down when it arbitrarily infringes on a person's right to property.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in
CA-G.R. SP No. 68163, dated February 20, 2004, and its Resolution, dated June
9,
2004,
are
AFFIRMED.
No
pronouncement
as
to
costs.
SO

ORDERED.

Quisumbing, (Chairperson), Carpio Morales, *Chico-Nazario and Velasco, Jr., JJ.,

concur.

4. REP vs. Pilipinas Shell

GR 173918 April 8, 2008

In Philsa International Placement and Services Corp. v. Secretary of Labor and

Employment,[13] Memorandum Circular No. 2, Series of 1983 of the Philippine
Overseas Employment Administration, which provided for the schedule of
placement and documentation fees for private employment agencies or
authority holders, was struck down as it was not published or filed with the
National
Administrative
Register.

FACTS: The Office of Energy Affairs (OEA), now the DOE, informed the
respondent that respondents contributions to the OPSF for foreign exchange
risk charge for the period December 1989 to March 1991 were insufficient. As a
consequence of the underpayment, a surcharge was imposed upon respondent.
The said surcharge was imposed pursuant to MOF Circular No. 1-85, as
amended by Department of Finance (DOF) Circular No. 2-94.

The questioned memorandum circular, it should be emphasized, cannot be

construed as simply interpretative of R.A. No. 3531. This administrative

HELD: As early as 1986, this Court in Taada v. Tuvera enunciated that

publication is indispensable in order that all statutes, including administrative

rules that are intended to enforce or implement existing laws, attain binding
force and effect, to wit:
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which shall
begin fifteen days after publication unless a different effectivity date is fixed by
the
legislature.
Covered by this rule are presidential decrees and executive orders promulgated
by the President in the exercise of legislative powers whenever the same are
validly delegated by the legislature or, at present, directly conferred by the
Constitution. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid
delegation. (Emphasis provided.)
Thereafter, the Administrative Code of 1987 was enacted, with Section 3 of
Chapter 2, Book VII thereof specifically providing that:
Filing.(1) Every agency shall file with the University of the Philippines Law
Center three (3) certified copies of every rule adopted by it. Rules in force on
the date of effectivity of this Code which are not filed within three (3) months
from the date shall not thereafter be the basis of any sanction against any party
or
persons.
(2) The records officer of the agency, or his equivalent functionary, shall carry
out the requirements of this section under pain of disciplinary action.
(3) A permanent register of all rules shall be kept by the issuing agency and
shall be open to public inspection. (Emphasis provided.)
Under the doctrine of Tanada v. Tuvera, the MOF Circular No. 1-85, as
amended, is one of those issuances which should be published before it
becomes effective since it is intended to enforce Presidential Decree No. 1956.
The said circular should also comply with the requirement stated under Section
3 of Chapter 2, Book VII of the Administrative Code of 1987 filing with the
ONAR in the University of the Philippines Law Center for rules that are already
in force at the time the Administrative Code of 1987 became effective. These
requirements of publication and filing were put in place as safeguards against
abuses on the part of lawmakers and as guarantees to the constitutional right to
due process and to information on matters of public concern and, therefore,
require
strict
compliance.

THIRD DIVISION
[ 574 Phil. 134, April 08, 2008 ]
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF
ENERGY (DOE), Petitioner, vs. PILIPINAS SHELL PETROLEUM
CORPORATION,
Respondent.

DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the Decision dated 4 August 2006 of the Court of
Appeals in C.A. G.R. SP No. 82183.[1] The appellate court reversed the
Decision[2] dated 19 August 2003 of the Office of the President in OP
NO. Case 96-H-6574 and declared that Ministry of Finance (MOF)
Circular No. 1-85 dated 15 April 1985, as amended, is ineffective for
failure to comply with Section 3 of Chapter 2, Book 7 of the
Administrative Code of 1987,[3] which requires the publication and filing
in the Office of the National Administration Register (ONAR) of
administrative issuances. Thus, surcharges provided under the
aforementioned circular cannot be imposed upon respondent Pilipinas
Shell
Petroleum
Corporation.
Respondent is a corporation duly organized existing under the laws of
the Philippines. It is engaged in the business of refining oil, marketing
petroleum,
and
other
related
activities.[4]
The Department of Energy (DOE) is a government agency under the
direct control and supervision of the Office of the President. The
Department is mandated by Republic Act No. 7638 to prepare,
integrate, coordinate, supervise and control all plans, programs,
projects and activities of the Government relative to energy
exploration, development, utilization, distribution and conservation.
On 10 October 1984, the Oil Price Stabilization Fund (OPSF) was
created under Presidential Decree No. 1956 for the purpose of
minimizing frequent price changes brought about by exchange rate
adjustments and/or increase in world market prices of crude oil and
imported
petroleum
products.[5]
Letter of Instruction No. 1431 dated 15 October 1984 was issued
directing the utilization of the OPSF to reimburse oil companies the
additional costs of importation of crude oil and petroleum products due
to fluctuation in foreign exchange rates to assure adequate and
continuous supply of petroleum products at reasonable prices.[6]
Letter of Instruction No. 1441, issued on 20 November 1984, mandated
the Board of Energy (now, the Energy Regulatory Board) to review and
reset prices of domestic oil products every two months to reflect the
prevailing prices of crude oil and petroleum. The prices were regulated
by adjusting the OPSF impost, increasing or decreasing this price
component as necessary to maintain the balance between revenues and
claims
on
the
OPSF.[7]

On 27 February 1987, Executive Order No. 137 was enacted to amend P.

D. No. 1956. It expanded the sources and utilization of the OPSF in
order to maintain stability in the domestic prices of oil products at
reasonable
levels.[8]
On 4 December 1991, the Office of Energy Affairs (OEA), now the DOE,
informed the respondent that respondents contributions to the OPSF
for foreign exchange risk charge for the period December 1989 to
March 1991 were insufficient. OEA Audit Task Force noted a total
underpayment of P14,414,860.75 by respondent to the OPSF. As a
consequence of the underpayment, a surcharge of P11,654,782.31 was
imposed upon respondent. The said surcharge was imposed pursuant to
MOF Circular No. 1-85, as amended by Department of Finance (DOF)
Circular No. 2-94,[9] which provides that:
2. Remittance of payment to the OPSF as provided for under Section 5
of MOF Order No. 11-85 shall be made not later than 20th of the month
following the month of remittance of the foreign exchange payment for
the import or the month of payment to the domestic producers in the
case of locally produced crude. Payment after the specified date shall
be subject to a surcharge of fifteen percent (15%) of the amount, if
paid within thirty (30) days from the due date plus two percent (2%)
per month if paid after thirty days.[10] (Emphasis supplied.)
On 9 December 1991, the OEA wrote another letter[11] to respondent
advising the latter of its additional underpayment to the OPSF of the
foreign exchange risk fee in the amount of P10,139,526.56 for the
period April 1991 to October 1991. In addition, surcharges in the
amount
of
P2,806,656.65
were
imposed
thereon.
In a letter dated 20 January 1992 addressed to the OEA, respondent
justified that its calculations for the transactions in question were
based on a valid interpretation of MOF Order NO. 11-85 dated 12 April
1985 and MOE Circular No. 85-05-82 dated 16 May 1985.[12]
On 24 March 1992, respondent paid the OEA in full the principal amount
of
its underpayment,
totaling
P24,554,387.31,
but
not
the
surcharges.[13]
In a letter[14] dated 15 March 1996, OEA notified the respondent that
the latter is required to pay the OPSF a total amount of P18,535,531.40
for surcharges on the late payment of foreign exchange risk charges for
the
period
December
1989
to
October
1991.
In a letter[15] dated 11 July 1996, the DOE reiterated its demand for
respondent to settle the surcharges due. Otherwise, the DOE warned
that it would proceed against the respondents Irrevocable Standby
Letter
of
Credit
to
recover
its
unpaid
surcharges.

On 19 July 1996, respondent filed a Notice of Appeal before the Office

of the President. The Office of the President affirmed the conclusion of
the DOE, contained in its letters dated 15 March 1996 and 11 July 1996.
While it admitted that the implementation of MOF Circular No. 1-85 is
contingent upon its publication and filing with the ONAR, it noted that
respondent failed to adduce evidence of lack of compliance with such
requirements. The aforementioned Decision reads:[16]
Given the foregoing, the DOEs implementation of MOF Circular 1-85 by
imposing surcharges on Pilipinas Shell is only proper. Like this Office,
the DOE is bound to presume the validity of that administrative
regulation.
WHEREFORE, premises considered, the Decision of the Department of
Energy, contained in its letters dated 15 March 1996 and 11 July 1996,
is hereby AFFIRMED in toto.
Respondent filed a Motion for Reconsideration of the Decision dated 19
August 2003 of the Office of the President, which was denied on 28
November
2003.[17]
Respondent filed an appeal before the Court of Appeals wherein it
presented Certifications dated 9 February 2004[18] and 11 February
2004[19] issued by ONAR stating that DOF Circular No. 2-94 and MOF
Circular No. 1-85 respectively, have not been filed before said office.
The Court of Appeals reversed the Decision of the Office of the
President in O.P. CASE No. 96-H-6574 and ruled that MOF Circular 1-85,
as amended, was ineffective for failure to comply with the requirement
to file with ONAR. It decreed that even if the said circular was issued by
then Acting Minister of Finance Alfredo de Roda, Jr. long before the
Administrative Code of 1987, Section 3 of Chapter 2, Book 7 thereof
specifies that rules already in force on the date of the effectivity of the
Administrative Code of 1987 must be filed within three months from the
date of effectivity of said Code, otherwise such rules cannot thereafter
be the basis of any sanction against any party or persons.[20] According
to the dispositive of the appellate courts Decision:[21]
WHEREFORE, the instant petition is hereby GRANTED. The Decision
dated August 19, 2003 and the Resolution dated November 28, 2003 of
the
Office
of
the
President,
are
hereby
REVERSED.
ACCORDINGLY, the imposition of surcharges upon petitioner is hereby
declared without legal basis.
On 25 September 2006, petitioner filed the present Petition for Review
on Certiorari, wherein the following issues were raised:[22]
I
THE SURCHARGE IMPOSED BY MINISTRY OF FINANCE (MOF) CIRCULAR
No. 1-85 HAS BEEN AFFIRMED BY E.O. NO. 137 HAVING RECEIVED

VITALITY FROM A LEGISLATIVE ENACTMENT, MOF CIRCULAR NO. 1-85

CANNOT BE RENDERED INVALID BY THE SUBSEQUENT ENACTMENT OF A
LAW REQUIRING REGISTRATION OF THE MOF CIRCULAR WITH THE
OFFICE OF THE NATIONAL REGISTER
II
ASSUMING THAT THE REGISTRATION OF MOF NO. 1-85 IS REQUIRED,
RESPONDENT WAIVED ITS OBJECTION ON THE BASIS OF NONREGISTRATION WHEN IT PAID THE AMOUNT REQUIRED BY
PETITIONER.
This
petition
is
without
merit.
As early as 1986, this Court in Taada v. Tuvera[23] enunciated that
publication is indispensable in order that all statutes, including
administrative rules that are intended to enforce or implement existing
laws, attain binding force and effect, to wit:
We hold therefore that all statutes, including those of local application
and private laws, shall be published as a condition for their effectivity,
which shall begin fifteen days after publication unless a different
effectivity
date
is
fixed
by
the
legislature.
Covered by this rule are presidential decrees and executive orders
promulgated by the President in the exercise of legislative powers
whenever the same are validly delegated by the legislature or, at
present, directly conferred by the Constitution. Administrative rules and
regulations must also be published if their purpose is to enforce or
implement existing law pursuant also to a valid delegation. (Emphasis
provided.)
Thereafter, the Administrative Code of 1987 was enacted, with Section
3 of Chapter 2, Book VII thereof specifically providing that:
Filing.(1) Every agency shall file with the University of the Philippines
Law Center three (3) certified copies of every rule adopted by it. Rules
in force on the date of effectivity of this Code which are not filed within
three (3) months from the date shall not thereafter be the basis of any
sanction
against
any
party
or
persons.
(2) The records officer of the agency, or his equivalent functionary,
shall carry out the requirements of this section under pain of
disciplinary
action.
(3) A permanent register of all rules shall be kept by the issuing agency
and shall be open to public inspection. (Emphasis provided.)
Under the doctrine of Tanada v. Tuvera,[24] the MOF Circular No. 1-85,
as amended, is one of those issuances which should be published
before it becomes effective since it is intended to enforce Presidential
Decree No. 1956. The said circular should also comply with the
requirement stated under Section 3 of Chapter 2, Book VII of the

Administrative Code of 1987 filing with the ONAR in the University of

the Philippines Law Center for rules that are already in force at the
time the Administrative Code of 1987 became effective. These
requirements of publication and filing were put in place as safeguards
against abuses on the part of lawmakers and as guarantees to the
constitutional right to due process and to information on matters of
public
concern
and,
therefore,
require
strict
compliance.
In the present case, the Certifications dated 11 February 2004[25] and 9
February 2004[26] issued by ONAR prove that MOF Circular No. 1-85 and
its amendatory rule, DOF Circular No. 2-94, have not been filed before
said office. Moreover, petitioner was unable to controvert respondents
allegation that neither of the aforementioned circulars were published
in the Official Gazette or in any newspaper of general circulation. Thus,
failure to comply with the requirements of publication and filing of
administrative issuances renders MOF Circular No. 1-85, as amended,
ineffective.
In National Association of Electricity Consumers for Reforms v. Energy
Regulatory Board,[27] this Court emphasized that both the requirements
of publication and filing of administrative issuances intended to enforce
existing laws are mandatory for the effectivity of said issuances. In
support of its ruling, it specified several instances wherein this Court
declared administrative issuances, which failed to observe the proper
requirements, to have no force and effect:
Nowhere from the above narration does it show that the GRAM
Implementing Rules was published in the Official Gazette or in a
newspaper of general circulation. Significantly, the effectivity clauses of
both the GRAM and ICERA Implementing Rules uniformly provide that
they shall take effect immediately. These clauses made no mention of
their publication in either the Official Gazette or in a newspaper of
general circulation. Moreover, per the Certification dated January 11,
2006 of the Office of the National Administrative Register (ONAR), the
said implementing rules and regulations were not likewise filed with
the said office in contravention of the Administrative Code of 1987.
Applying the doctrine enunciated in Taada v. Tuvera, the Court has
previously declared as having no force and effect the following
administrative issuances: (1) Rules and Regulations issued by the Joint
Ministry of Health-Ministry of Labor and Employment Accreditation
Committee regarding the accreditation of hospitals, medical clinics and
laboratories; (2) Letter of Instruction No. 1416 ordering the suspension
of payments due and payable by distressed copper mining companies to
the national government; (3) Memorandum Circulars issued by the
Philippine Overseas Employment Administration regulating the
recruitment of domestic helpers to Hong Kong; (4) Administrative Order
No. SOCPEC 89-08-01 issued by the Philippine International Trading

Corporation regulating applications for importation from the Peoples

Republic of China; (5) Corporation Compensation Circular No. 10 issued
by the Department of Budget and Management discontinuing the
payment of other allowances and fringe benefits to government officials
and employees; and (6) POEA Memorandum Circular No. 2 Series of
1983 which provided for the schedule of placement and documentation
fees for private employment agencies or authority holders.
In all these cited cases, the administrative issuances questioned therein
were uniformly struck down as they were not published or filed with the
National Administrative Register. On the other hand, in Republic v.
Express Telecommunications Co., Inc, the Court declared that the 1993
Revised Rules of the National Telecommunications Commission had not
become effective despite the fact that it was filed with the National
Administrative Register because the same had not been published at
the time. The Court emphasized therein that publication in the Official
Gazette or a newspaper of general circulation is a condition sine qua
non before statutes, rules or regulations can take effect.
Petitioners argument that respondent waived the requisite registration
of MOF Circular No. 1-85, as amended, when it paid in full the principal
amount of underpayment totaling P24,544,387.31, is specious. MOF
Circular No. 1-85, as amended imposes surcharges, while respondents
underpayment is based on MOF Circular No. 11-85 dated 12 April 1985.
Petitioner also insists that the registration of MOF Circular No. 1-85, as
amended, with the ONAR is no longer necessary since the respondent
knew of its existence, despite its non-registration. This argument is
seriously flawed and contrary to jurisprudence. Strict compliance with
the requirements of publication cannot be annulled by a mere allegation
that parties were notified of the existence of the implementing rules
concerned. Hence, also in National Association of Electricity Consumers
for Reforms v. Energy Regulatory Board, this Court pronounced:
In this case, the GRAM Implementing Rules must be declared
ineffective as the same was never published or filed with the National
Administrative Register. To show that there was compliance with the
publication requirement, respondents MERALCO and the ERC dwell
lengthily on the fact that parties, particularly the distribution utilities
and consumer groups, were duly notified of the public consultation on
the ERCs proposed implementing rules. These parties participated in
the said public consultation and even submitted their comments
thereon.
However, the fact that the parties participated in the public consultation
and submitted their respective comments is not compliance with the
fundamental rule that the GRAM Implementing Rules, or any
administrative rules whose purpose is to enforce or implement existing
law, must be published in the Official Gazette or in a newspaper of

general circulation. The requirement of publication of implementing

rules of statutes is mandatory and may not be dispensed with
altogether even if, as in this case, there was public consultation and
submission by the parties of their comments.[28] (Emphasis provided.)
Petitioner further avers that MOF Circular No. 1-85, as amended, gains
its vitality from the subsequent enactment of Executive Order No. 137,
which reiterates the power of then Minister of Finance to promulgate
the necessary rules and regulations to implement the executive order.
Such contention is irrelevant in the present case since the power of the
Minister of Finance to promulgate rules and regulations is not under
dispute. The issue rather in the Petition at bar is the ineffectivity of his
administrative issuance for non-compliance with the requisite
publication and filing with the ONAR. And while MOF Circular No. 1-85,
as amended, may be unimpeachable in substance, the due process
requirements of publication and filing cannot be disregarded. Moreover,
none of the provisions of Executive Order No. 137 exempts MOF Circular
No. 1-85, as amended from the aforementioned requirements.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED and the
assailed Decision dated 4 August 2006 of the Court of Appeals in C.A.
G.R.
SP
No.
82183
is
AFFIRMED.
No
cost.
SO

ORDERED.

Austria-Martinez, (Acting Chairperson), Carpio-Morales, Tinga, and

Reyes,
JJ.,
concur.

5. PASEI vs. Torres

GR 101279 August 6, 1992
FACTS: On June 1, 1991, as a result of published stories regarding the abuses
suffered by Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben
D. Torres issued Department Order No. 16, Series of 1991, temporarily
suspending the recruitment by private employment agencies of "Filipino
domestic helpers going to Hong Kong". The DOLE itself, through the POEA took
over the business of deploying such Hong Kong-bound workers.
ISSUE: 3. W/N that the requirements of publication and filing with the Office of
the National Administrative Register were not complied with?
HELD: The questioned circulars are therefore a valid exercise of the police
power as delegated to the executive branch of Government.

Nevertheless, they are legally invalid, defective and unenforceable for lack of
proper publication and filing in the Office of the National Administrative Register
as required in Article 2 of the Civil Code, Article 5 of the Labor Code and
Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987
which provide:
"Art. 2. Laws shall take effect after fifteen (15) days following the completion of
their publication in the Official Gazette, unless it is otherwise provided. x x x."
(Civil Code.)
Art. 5. Rules and Regulations. The Department of Labor and other
government agencies charged with the administration and enforcement of this
Code or any of its parts shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become effective fifteen (15) days
after announcement of their adoption in newspapers of general circulation."
(Emphasis supplied, Labor Code, as amended.)
Section 3. Filing. (1) Every agency shall file with the University of the
Philippines Law Center, three (3) certified copies of every rule adopted by it.
Rules in force on the date of effectivity of this Code which are not filed within
three (3) months shall not thereafter be the basis of any sanction against any
party or persons." (Underscoring supplied, Chapter 2, Book VII of the
Administrative Code of 1987.)
"Section 4. Effectivity. In addition to other rule-making requirements provided
by law not inconsistent with this Book, each rule shall become effective fifteen
(15) days from the date of filing as above provided unless a different date is
fixed by law, or specified in the rule in cases of imminent danger to public
health, safety and welfare, the existence of which must be expressed in a
statement accompanying the rule. The agency shall take appropriate measures
to make emergency rules known to persons who may be affected by them."
(Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.)
Once more, we advert to our ruling in Taada vs. Tuvera, 146 SCRA 446 that:
"x x x Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid
delegation." (p. 447.)
"Interpretative regulations and those merely internal in nature, that is,
regulating only the personnel of the administrative agency and not the public,
need not be published. Neither is publication required of the so-called letters of
instructions issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the performance of their
duties." (p. 448.)
"We agree that publication must be in full or it is no publication at all since its
purpose is to inform the public of the content of the laws." (p. 448.)
For lack of proper publication, the administrative circulars in question may not
be enforced and implemented.
WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE
Department Order No. 16, Series of 1991, and POEA Memorandum Circulars
Nos. 30 and 37, Series of 1991, by the public respondents is hereby
SUSPENDED pending compliance with the statutory requirements of publication
and filing under the aforementioned laws of the land.

EN BANC
[ G.R. No. 101279, August 06, 1992 ]
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., PETITIONER,
VS. HON. RUBEN D. TORRES, AS SECRETARY OF THE DEPARTMENT OF
LABOR & EMPLOYMENT, AND JOSE N. SARMIENTO, AS ADMINISTRATOR
OF THE PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,
RESPONDENTS.
DECISION
GRINO-AQUINO, J.:
This petition for prohibition with temporary restraining order was filed by the
Philippine Association of Service Exporters (PASEI, for short), to prohibit and
enjoin the Secretary of the Department of Labor and Employment (DOLE) and
the Administrator of the Philippine Overseas Employment Administration (or
POEA) from enforcing and implementing DOLE Department Order No. 16, Series
of 1991 and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991,
temporarily suspending the recruitment by private employment agencies of
Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the
facilities of the POEA, the task of processing and deploying such workers.
PASEI is the largest national organization of private employment and
recruitment agencies duly licensed and authorized by the POEA, to engage in
the business of obtaining overseas employment for Filipino landbased workers,
including domestic helpers.
On June 1, 1991, as a result of published stories regarding the abuses suffered
by Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D.
Torres issued Department Order No. 16, Series of 1991, temporarily suspending
the recruitment by private employment agencies of "Filipino domestic helpers
going to Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA took over
the business of deploying such Hong Kong-bound workers.
"In view of the need to establish mechanisms that will enhance the protection
for Filipino domestic helpers going to Hong Kong, the recruitment of the same
by private employment agencies is hereby temporarily suspended effective 1
July 1991. As such, the DOLE through the facilities of the Philippine Overseas
Employment Administration shall take over the processing and deployment of
household workers bound for Hong Kong, subject to guidelines to be issued for
said purpose.
"In support of this policy, all DOLE Regional Directors and the Bureau of Local
Employment's regional offices are likewise directed to coordinate with the POEA
in maintaining a manpower pool of prospective domestic helpers to Hong Kong
on a regional basis.
"For compliance." (Underscoring ours; p. 30, Rollo.)
Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No.
30, Series of 1991, dated July 10, 1991, providing GUIDELINES on the

Government processing and deployment of Filipino domestic helpers to Hong

Kong and the accreditation of Hong Kong recruitment agencies intending to hire
Filipino domestic helpers.
"Subject: Guidelines on the Temporary Government Processing and Deployment
of Domestic Helpers to Hong Kong
"Pursuant to Department Order No. 16, series of 1991 and in order to
operationalize the temporary government processing and deployment of
domestic helpers (DHs) to Hong Kong resulting from the temporary suspension
of recruitment by private employment agencies for said skill and host market,
the following guidelines and mechanisms shall govern the implementation of
said policy:
"I. Creation of a Joint POEA-OWWA Household Workers Placement Unit (HWPU)
"An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the
supervision of the POEA shall take charge of the various operations involved in
the Hong Kong-DH industry segment:
"The HWPU shall have the following functions in coordination with appropriate
units and other entities concerned:
"1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies
2. Manpower Pooling
3. Worker Training and Briefing
4. Processing and Deployment
5. Welfare Programs
"II. Documentary Requirements and Other Conditions for Accreditation of Hong
Kong Recruitment Agencies or Principals
"Recruitment agencies in Hong Kong intending to hire Filipino DHs for their
employers may negotiate with the HWPU in Manila directly or through the
Philippine Labor Attache's Office in Hong Kong.
"xxx
xxx
xxx
X. Interim Arrangement
"All contracts stamped in Hong Kong as of June 30 shall continue to be
processed by POEA until 31 July 1991 under the name of the Philippine agencies
concerned. Thereafter, all contracts shall be processed with the HWPU.
"Recruitment agencies in Hong Kong shall submit to the Philippine Consulate
General in Hong Kong a list of their accepted applicants in their pool within the
last week of July. The last day of acceptance shall be July 31 which shall then be
the basis of HWPU in accepting contracts for processing. After the exhaustion of
their respective pools the only source of applicants will be the POEA manpower
pool.
"For strict compliance of all concerned." (pp. 31-35, Rollo.)
On August 1, 1991, the POEA Administrator also issued Memorandum Circular
No. 37, Series of 1991, on the processing of employment contracts of domestic
workers for Hong Kong.
"TO: All Philippine and Hong Kong Agencies engaged in the recruitment of
Domestic helpers for Hong Kong
"Further to Memorandum Circular No. 30, series of 1991 pertaining to the
government processing and deployment of domestic helpers (DHs) to Hong
Kong, processing of employment contracts which have been attested by the

Hong Kong Commissioner of Labor up to 30 June 1991 shall be processed by the

POEA Employment Contracts Processing Branch up to 15 August 1991 only.
"Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from
the Philippines shall recruit under the new scheme which requires prior
accreditation with the POEA.
"Recruitment agencies in Hong Kong may apply for accreditation at the Office of
the Labor Attache, Philippine Consulate General where a POEA team is posted
until 31 August 1991. Thereafter, those who failed to have themselves
accredited in Hong Kong may proceed to the POEA-OWWA Household Workers
Placement Unit in Manila for accreditation before their recruitment and
processing of DHs shall be allowed.
"Recruitment agencies in Hong Kong who have some accepted applicants in
their pool after the cut-off period shall submit this list of workers upon
accreditation. Only those DHs in said list will be allowed processing outside of
the HWPU manpower pool.
"For strict compliance of all concerned." (Emphasis supplied, p. 36, Rollo.)
On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to
annul the aforementioned DOLE and POEA circulars and to prohibit their
implementation for the following reasons:
1. that the respondents acted with grave abuse of discretion and/or in excess of
their rule-making authority in issuing said circulars;
2. that the assailed DOLE and POEA circulars are contrary to the Constitution,
are unreasonable, unfair and oppressive; and
3. that the requirements of publication and filing with the Office of the National
Administrative Register were not complied with.
There is no merit in the first and second grounds of the petition.
Article 36 of the Labor Code grants the Labor Secretary the power to restrict
and regulate recruitment and placement activities.
"Art. 36. Regulatory Power. The Secretary of Labor shall have the power to
restrict and regulate the recruitment and placement activities of all agencies
within the coverage of this title [Regulation of Recruitment and Placement
Activities] and is hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the provisions of this
title." (Underlining ours.)
On the other hand, the scope of the regulatory authority of the POEA, which was
created by Executive Order No. 797 on May 1, 1982 to take over the functions
of the Overseas Employment Development Board, the National Seamen Board,
and the overseas employment functions of the Bureau of Employment Services,
is broad and far-ranging for:
1. Among the functions inherited by the POEA from the defunct Bureau of
Employment Services was the power and duty:
2. To establish and maintain a registration and/or licensing system to regulate
private sector participation in the recruitment and placement of workers, locally
and overseas, x x x.' (Art. 15, Labor Code, underscoring supplied)." (p. 13,
Rollo.)
2. It assumed from the defunct Overseas Employment Development Board the
power and duty:

"'3. To recruit and place workers for overseas employment of Filipino contract
workers on a government to government arrangement and in such other sectors
as policy may dictate x x x.' (Art. 17, Labor Code.)" (p. 13, Rollo.)
3. From the National Seamen Board, the POEA took over:
"2. To regulate and supervise the activities of agents or representatives of
shipping companies in the hiring of seamen for overseas employment; and
secure the best possible terms of employment for contract seamen workers and
secure compliance therewith." (Art. 20, Labor Code.)
The vesture of quasi-legislative and quasi?judicial powers in administrative
bodies is not unconstitutional, unreasonable and oppressive. It has been
necessitated by "the growing complexity of the modern society" (Solid Homes,
Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are
necessary to help in the regulation of society's ramified activities. "Specialized in
the particular field assigned to them, they can deal with the problems thereof
with more expertise and dispatch than can be expected from the legislature or
the courts of justice" (Ibid.).
It is noteworthy that the assailed circulars do not prohibit the petitioner from
engaging in the recruitment and deployment of Filipino landbased workers for
overseas employment. A careful reading of the challenged administrative
issuances discloses that the same fall within the "administrative and policing
powers expressly or by necessary implication conferred" upon the respondents
(People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate
conferred by Article 36 of the Labor Code involves a grant of police power (City
of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine,
limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the
power to protect, foster, promote, preserve, and control with due regard for the
interests, first and foremost, of the public, then of the utility and of its patrons"
(Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218).
The Solicitor General, in his Comment, aptly observed:
"x x x Said Administrative Order [i.e., DOLE Administrative Order No. 16]
merely restricted the scope or area of petitioner's business operations by
excluding therefrom recruitment and deployment of domestic helpers for Hong
Kong till after the establishment of the 'mechanisms' that will enhance the
protection of Filipino domestic helpers going to Hong Kong. In fine, other than
the recruitment and deployment of Filipino domestic helpers for Hongkong,
petitioner may still deploy other class of Filipino workers either for Hongkong
and other countries and all other classes of Filipino workers for other countries.
"Said administrative issuances, intended to curtail, if not to end, rampant
violations of the rule against excessive collections of placement and
documentation fees, travel fees and other charges committed by private
employment agencies recruiting and deploying domestic helpers to Hongkong.
[They are] are reasonable, valid and justified under the general welfare clause
of the Constitution, since the recruitment and deployment business, as it is
conducted today, is affected with public interest.
xxx
xxx
xxx
"The alleged takeover [of the business of recruiting and placing Filipino domestic
helpers in Hongkong] is merely a remedial measure, and expires after its

purpose shall have been attained. This is evident from the tenor of
Administrative Order No. 16 that recruitment of Filipino domestic helpers going
to Hongkong by private employment agencies are hereby 'temporarily
suspended effective July 1, 1991.'
"The alleged takeover is limited in scope, being confined to recruitment of
domestic helpers going to Hongkong only.
"xxx
xxx
xxx
"x x x the justification for the takeover of the processing and deploying of
domestic helpers for Hongkong resulting from the restriction of the scope of
petitioner's business is confined solely to the unscrupulous practice of private
employment agencies victimizing applicants for employment as domestic
helpers for Hongkong and not the whole recruitment business in the
Philippines." (pp. 62-65, Rollo.)
The questioned circulars are therefore a valid exercise of the police power as
delegated to the executive branch of Government.
Nevertheless, they are legally invalid, defective and unenforceable for lack of
proper publication and filing in the Office of the National Administrative Register
as required in Article 2 of the Civil Code, Article 5 of the Labor Code and
Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987
which provide:
"Art. 2. Laws shall take effect after fifteen (15) days following the completion of
their publication in the Official Gazette, unless it is otherwise provided. x x x."
(Civil Code.)
Art. 5. Rules and Regulations. The Department of Labor and other
government agencies charged with the administration and enforcement of this
Code or any of its parts shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become effective fifteen (15) days
after announcement of their adoption in newspapers of general circulation."
(Emphasis supplied, Labor Code, as amended.)
Section 3. Filing. (1) Every agency shall file with the University of the
Philippines Law Center, three (3) certified copies of every rule adopted by it.
Rules in force on the date of effectivity of this Code which are not filed within
three (3) months shall not thereafter be the basis of any sanction against any
party or persons." (Underscoring supplied, Chapter 2, Book VII of the
Administrative Code of 1987.)
"Section 4. Effectivity. In addition to other rule-making requirements provided
by law not inconsistent with this Book, each rule shall become effective fifteen
(15) days from the date of filing as above provided unless a different date is
fixed by law, or specified in the rule in cases of imminent danger to public
health, safety and welfare, the existence of which must be expressed in a
statement accompanying the rule. The agency shall take appropriate measures
to make emergency rules known to persons who may be affected by them."
(Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.)
Once more, we advert to our ruling in Taada vs. Tuvera, 146 SCRA 446 that:
"x x x Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid
delegation." (p. 447.)

"Interpretative regulations and those merely internal in nature, that is,

regulating only the personnel of the administrative agency and not the public,
need not be published. Neither is publication required of the so-called letters of
instructions issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the performance of their
duties." (p. 448.)
"We agree that publication must be in full or it is no publication at all since its
purpose is to inform the public of the content of the laws." (p. 448.)
For lack of proper publication, the administrative circulars in question may not
be enforced and implemented.
WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE
Department Order No. 16, Series of 1991, and POEA Memorandum Circulars
Nos. 30 and 37, Series of 1991, by the public respondents is hereby
SUSPENDED pending compliance with the statutory requirements of publication
and filing under the aforementioned laws of the land.
SO
ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Medialdea, Regalado,
Davide, Jr., Romero, Nocon, and Bellosillo, JJ., concur.

b. Retroactivity of Laws. Vested Rights

1. Rotairo v. Alcantara

REYES, J.:
1

For review is the Decision dated July 21, 2005 and Resolution dated July 7, 2006 of the
3
Court of Appeals (CA) in CA-G.R. CV No. 58455, which set aside the Decision dated
December 27, 1996 of the Regional Trial Court (RTC) of Antipolo, Rizal, Branch 71 in Civil
Case No. 672.
Civil Case No. 672 was filed by the respondent Rovira Alcantara (Rovira) for the recovery of
possession of a parcel of land in Barangay San Andres, Cainta, Rizal, measuring 2,777
square meters and originally titled under Transfer Certificate of Title (TCT) No. 481018. Said
property was formerly owned by Roviras father, Victor C. Alcantara (Alcantara), and Alfredo
C. Ignacio (Ignacio), who mortgaged the property to Pilipinas Bank and Trust Company
(Pilipinas Bank) in 1968. Two years after, the property was parcelled out by Alcantara and
Ignacio, through their firm Wilfredo S. Ignacio & Company (Ignacio & Co.), and separately
sold to different buyers. One of the buyers was Ambrosio Rotairo (Rotairo) who bought a
200-square meter portion on installment basis. Rotairo constructed his house on the
property identified as Lot C-1, and after completing payments, a Deed of Absolute Sale was
4
executed on September 25, 1979 in his favor by Ignacio & Co.
In the meantime, Alcantara and Ignacio defaulted in their loan obligations causing Pilipinas
Bank to foreclose the mortgage on the entire property. Without redemption being made by
Alcantara and Ignacio, title was consolidated in the name of Pilipinas Bank, being the
highest bidder during the auction sale. Pilipinas Bank then sold the property in a Deed of
5
Absolute Sale dated June 6, 1975 to Rovira, who happens to be Alcantaras daughter.
In 1988, Rovira filed her Amended Complaint in Civil Case No. 672 for recovery of
possession and damages.After trial, the RTC dismissed Civil Case No. 672. The Decision
dated December 27, 1996 provides for the following dispositive portion:

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 173632

DECISION

September 29, 2014

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

WHEREFORE, judgment is hereby rendered dismissing the complaint and defendants

counterclaim; and plaintiff, being the successor-in-interest of the subdivision owner, Wilfredo
S. Ignacio, is ordered to issue the corresponding transfer certificate of title to defendant
Ambrosio Rotairo pursuant to the provisions of PD [No.] 957.
6

SO ORDERED.

The RTC ruled that the transaction between Ignacio & Co. and Rotairo was covered by
7
Presidential Decree (P.D.) No. 957. Rovira, as "successor-in-interest of Wilfredo S.Ignacio
[and Victor Alcantara] was well aware of the condition of the property which she bought from
the Pilipinas Bank, because she lives near the land, and at the time she purchased it she
8
was aware of the existing houses or structures on the land." She was, therefore, not
entitled to the relief prayed for in her complaint.

On appeal, the CA set aside the RTC decision and ordered the turnover of possession of
the property to Rovira. The dispositive portion of the assailed CA Decision dated July 21,
2005 provides:
WHEREFORE, the decision appealed from is SET ASIDE. The Heirs of Ambrosio Rotairo
and their assigns, are ORDERED to turn over possession of Lot C-1 to Rovira Alcantara.
Third party defendants, William [sic] Ignacio and Victor Alcantara, are ORDERED to return
the purchase price of P10,000.00 to the Heirs of Ambrosio Rotairo, with interest at the rate
of 6% per annum until finality of this decision, and at the rate of 12% per annum thereafter
until fully paid.
SO ORDERED.

Petitioners sought reconsideration, which was denied by the CA in the assailed

10
Resolution dated July 7, 2006.
In granting possession in favor of Rovira, the CA held that P.D. No. 957 is not applicable
since the mortgagewas constituted prior to the sale to Rotairo. According to the CA, Section
11
18 of P.D. No. 957 protects innocent lot buyers, and where there is a prior registered
mortgage, the buyer purchases it with knowledge of the mortgage. In the caseof Rotairo,
P.D. No. 957 does not confer "more" rights to an unregistered buyer like him, as against a
12
registered prior mortgagee like Pilipinas Bank and its buyer, Rovira. Hence, the present
petition.
Petitioners raise the following issues:
1. Whether or not, notwithstanding that the subject land is subdivision lot,
Ambrosio Rotairo (father of the Petitioners), [a] buyer and builder in good faith
should suffer, while the seller in bad faith Victor Alcantara should be benefited by
his malicious acts.
2. Whether or not, Ambrosio Rotairo (father of the Petitioners), a buyer and builder
in good faith should suffer while the seller in bad faith Victor Alcantara should be
13
benefited by his malicious acts.

The retroactive application of P.D. No. 957 to transactions entered into prior to its
14
enactment in 1976 is already settled.1wphi1 In Eugenio v. Exec. Sec. Drilon, which
involved a land purchase agreement entered into in 1972, the Court stated that the
unmistakeable intent of the legislature is to have P.D. No. 957 operate retrospectively.
Moreover, the specific terms of P.D. No. 957 provide for its retroactive effect even to
contracts and transactions entered into prior to its enactment. In particular, Section 21 of
P.D. No. 957 provides:
Sec. 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or
disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or
developer of the subdivision or condominium project to complete compliance with his or its
obligations as provided in the preceding section within two years from the date of this
Decree unless otherwise extended by the Authority or unless an adequate performance
bond isfiled in accordance with Section 6 hereof.
Failure of the owner or developer to comply with the obligations under this and the
preceding provisions shall constitute a violation punishable under Section 38 and 39 ofthis
Decree. (Emphasis ours)
In this case, the contract to sell between Rotairo and Ignacio & Co. was entered into in
1970, and the agreement was fully consummated with Rotairos completion of payments
and the execution of the Deed of Sale in his favor in 1979. Clearly, P.D. No. 957 is
applicable in this case.
It was error for the CA to rule thatthe retroactive application of P.D. No. 957 is "warranted
only where the subdivision is mortgaged after buyers have purchased individual
15
lots." According to the CA, the purpose of Section 18 requiring notice of the mortgage to
the buyers is to give the buyer the option to pay the instalments directly to the mortgagee;
hence, if the subdivision is mortgaged before the lots are sold, then there are no buyers to
16
notify. What the CA overlooked is that Section 21 requires the owner or developer of the
subdivision project to complete compliance with its obligations within two years from
1976.The two-year compliance provides the developer the opportunity to comply with its
obligation to notify the buyers of the existence of the mortgage, and consequently, for the
latter to exercise their option to pay the instalments directly to the mortgagee.

Petitioners insist on the applicabilityof P.D. No. 957 in this case, and that the transaction
between Rotairo and Ignacio & Co. should fall within the protection of the law. On the other
hand, Rovira principally relies on the prior registration of the mortgage and the sale in her
favor vis--visthe petitioners unregistered transactions.

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

The first issue then that must be resolved is whether P.D. No. 957 is applicable in this case.
But the more crucial issue before the Court is who, as between the petitioners and Rovira,
has better right to the property in dispute?

Rovira is not a buyer in good faith

Retroactive application of P.D. No. 957

Notwithstanding the preceding discussion, the Court finds that Rovira cannot claim a better
right to the property because she is not a buyer in good faith. Initially, it must be stated that
the determination of whether one is a buyer in good faith is a factual issue, which generally
17
cannotbe determined by the Court in a petition for review filed under Rule 45. The rule,

nonetheless, admits of exceptions, someof which are when the judgment of the CA is based
on a misapprehension offacts or when the CA overlooked undisputed facts which, if properly
18
considered, would justify a different conclusion. A review of this case shows that the CA
failed to appreciate the relevance of certain undisputed facts, thus giving rise to its
erroneous conclusion that Rovira has a better right to the property in dispute.
Rovira contended that the registered mortgage between Pilipinas Bank and Alcantara and
Ignacio is superior to the unregistered contract to sell between Ignacio & Co. and Rotairo,
which was sustained by the CA. The CA applied Section 50 of Act No. 496 or the Land
Registration Act and ruled that since the sale to Rotairo was unregistered and subsequent
to the registered mortgage, the latter was obligated to respect the foreclosure and eventual
19
sale of the property in dispute, among others.
Indeed, the rule is that as "[b]etween two transactions concerning the same parcel of land,
20
the registered transaction prevails over the earlier unregistered right." This is in accord
21
with Section 50 of the Land Registration Act, which provides:
Sec. 50. An owner of registered land may convey, mortgage, lease, charge, or otherwise
deal with the same as fully as if it had not been registered. He may use forms of deeds,
mortgages[,] leases, or other voluntary instruments like those now in use and sufficient in
law for the purpose intended. But no deed, mortgage, lease, or other voluntary instrument,
except a will purporting to convey or affect registered land, shall take effect as a
conveyance or bind the land, but shall operate only as a contract between the parties and
as evidence of authority to the clerk or register of deeds to make registration. The act of
registration shall be the operative act to convey and affect the land, and in all cases under
this Act the registration shall be made inthe office of register of deeds for the province or
provinces or city where the land lies. (Emphasis ours)
Section 51 of the Land Registration Act further states that "[e]very conveyance, mortgage,
lease, lien, attachment, order, decree, instrument, or entry affecting registered land x x x, if
registered x x x be notice to all persons from the time of such registeringx x x." "The
principal purpose of registration is merely to notify other persons not parties to a contract
22
that a transaction involving the property has been entered into." Thus, it has been held
that "registration in a publicregistry creates constructive notice to the whole
23
world." Moreover, "[a] person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor, and he is not required to go beyond the
24
certificate to determine the condition of the property."
The rule, however, is not without recognized exceptions. "The conveyance shall not be valid
against any person unless registered, except (1) the grantor, (2) his heirs and devisees, and
25
(3) third persons having actual notice or knowledge thereof." Moreover, "when the party
has actual knowledge of facts and circumstances that would impel a reasonably cautious
man to make such inquiry or when the purchaser has knowledge of a defect or the lack of
title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the
26
status of the title of the property in litigation, he cannot find solace in the protection
afforded by a prior registration. Neither can such person be considered an innocent
27
purchaser for value nor a purchaser in good faith.

In this case, two factors work against Rovira as a buyer in good faith. One, she cannot be
considered a third person for purposes of applying the rule. Rovira does not deny that she is
the daughter and an heir of Victor C. Alcantara, one of the parties to the contract to sell (and
the contract of sale) executed in favor of Rotairo. "The vendors heirs are his
28
privies." Based on such privity, Rovira is charged with constructive knowledge of prior
29
dispositions or encumbrances affecting the subject property made by her father. The fact
that the contract to sell was unregistered became immaterial and she is, therefore, bound by
the provisions of the contract to sell and eventually, the contract of sale, executed by her
father in favor of Rotairo.
Further, more than the chargeof constructive knowledge, the surrounding circumstances of
this case show Roviras actual knowledgeof the disposition of the subject property and
Rotairos possession thereof. It is undisputed that after the contract to sell was executed in
April 1970, Rotairo immediately secured a mayors permit in September 28, 1970 for the
30
construction of his residential house on the property. Rotairo, and subsequently, his heirs,
has been residing on the property since then. Rovira, who lives only fifty (50) meters away
from the subject property, in fact, knew that there were "structures built on the
31
property." Rovira, however, claims that "she did not bother to inquire as to the legitimacy
of the rights of the occupants, because she was assured by the bank of its title to the
32
property." But Rovira cannot rely solely on the title and assurances of Pilipinas Bank; it
was incumbent upon her to look beyond the title and make necessary inquiries because the
bank was not in possession of the property. "Where the vendor is not in possession of the
property, the prospective vendees are obligated to investigate the rights of one in
33
possession." A purchaser cannot simply close his eyes to facts which should put a
34
reasonable man on guard, and thereafter claim that he acted in good faith under the belief
35
that there was no defect in the title of the vendor. Hence, Rovira cannot claim a right better
than that of Rotairo' s as she is not a buyer in good faith.
"[I]t is a settled rule that the Land Registration Act protects only holders of title in good faith,
and does not permit its provision to be used as a shield for the commission of fraud, or as a
36
means to enrich oneself at the expense of others. "
Under different circumstances, the prior registration of the mortgage between Pilipinas Bank
and Alcantara and Ignacio, and Rovira's subsequent purchase of the subject property would
have been valid and binding, and could have defeated Rotairo's unregistered claim over it.
But given Rovira's privity with her father Victor C. Alcantara and the fact that she had actual
knowledge of the disposition of the property and Rotairo's possession thereof, her
acquisition of the property cannot be upheld.
WHEREFORE, the petition is GRANTED. The Decision dated July 21, 2005 and Resolution
dated July 7, 2006 of the Court of Appeals in CA-G.R. CV No. 58455 are SET ASIDE. The
Decision dated December 27, 1996 of the Regional Trial Court of Antipolo, Rizal, Branch
71, dismissing Civil Case No. 672 is REINSTATED.
SO ORDERED.

2. Garcia Quiazon v Belen

G.R. No. 189121

July 31, 2013

AMELIA GARCIA-QUIAZON, JENNETH QUIAZON and MARIA JENNIFER

QUIAZON,
Petitioners,
vs.
MA. LOURDES BELEN, for and in behalf of MARIA LOURDES ELISE
QUIAZON, Respondent.
PEREZ, J.:
This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the
Revised Rules of Court, primarily assailing the 28 November 2008 Decision
rendered by the Ninth Division of the Court of Appeals in CA-G.R. CV No.
88589,1 the decretal portion of which states:
WHEREFORE, premises considered, the appeal is hereby DENIED. The assailed
Decision dated March 11, 2005, and the Order dated March 24, 2006 of the
Regional Trial Court, Branch 275, Las Pias City are AFFIRMED in toto.2
The Facts
This case started as a Petition for Letters of Administration of the Estate of
Eliseo Quiazon (Eliseo), filed by herein respondents who are Eliseos commonlaw wife and daughter. The petition was opposed by herein petitioners Amelia
Garcia-Quaizon (Amelia) to whom Eliseo was married. Amelia was joined by her
children, Jenneth Quiazon (Jenneth) and Maria Jennifer Quiazon (Jennifer).
Eliseo died intestate on 12 December 1992.
On 12 September 1994, Maria Lourdes Elise Quiazon (Elise), represented by her
mother, Ma. Lourdes Belen (Lourdes), filed a Petition for Letters of
Administration before the Regional Trial Court (RTC) of Las Pias City. 3 In her
Petition docketed as SP Proc. No. M-3957, Elise claims that she is the natural
child of Eliseo having been conceived and born at the time when her parents
were both capacitated to marry each other. Insisting on the legal capacity of
Eliseo and Lourdes to marry, Elise impugned the validity of Eliseos marriage to
Amelia by claiming that it was bigamous for having been contracted during the
subsistence of the latters marriage with one Filipito Sandico (Filipito). To prove
her filiation to the decedent, Elise, among others, attached to the Petition for
Letters of Administration her Certificate of Live Birth4 signed by Eliseo as her
father. In the same petition, it was alleged that Eliseo left real properties worth

P2,040,000.00 and personal properties worth P2,100,000.00. In order to

preserve the estate of Eliseo and to prevent the dissipation of its value, Elise
sought her appointment as administratrix of her late fathers estate.
Claiming that the venue of the petition was improperly laid, Amelia, together
with her children, Jenneth and Jennifer, opposed the issuance of the letters of
administration by filing an Opposition/Motion to Dismiss.5 The petitioners
asserted that as shown by his Death Certificate, 6 Eliseo was a resident of
Capas, Tarlac and not of Las Pias City, at the time of his death. Pursuant to
Section 1, Rule 73 of the Revised Rules of Court,7 the petition for settlement of
decedents estate should have been filed in Capas, Tarlac and not in Las Pias
City. In addition to their claim of improper venue, the petitioners averred that
there are no factual and legal bases for Elise to be appointed administratix of
Eliseos estate.
In a Decision8 dated 11 March 2005, the RTC directed the issuance of Letters of
Administration to Elise upon posting the necessary bond. The lower court ruled
that the venue of the petition was properly laid in Las Pias City, thereby
discrediting the position taken by the petitioners that Eliseos last residence was
in Capas, Tarlac, as hearsay. The dispositive of the RTC decision reads:
Having attained legal age at this time and there being no showing of any
disqualification or incompetence to serve as administrator, let letters of
administration over the estate of the decedent Eliseo Quiazon, therefore, be
issued to petitioner, Ma. Lourdes Elise Quiazon, after the approval by this Court
of a bond in the amount of P100,000.00 to be posted by her.9
On appeal, the decision of the trial court was affirmed in toto in the 28
November 2008 Decision10 rendered by the Court of Appeals in CA-G.R.CV No.
88589. In validating the findings of the RTC, the Court of Appeals held that Elise
was able to prove that Eliseo and Lourdes lived together as husband and wife by
establishing a common residence at No. 26 Everlasting Road, Phase 5, Pilar
Village, Las Pias City, from 1975 up to the time of Eliseos death in 1992. For
purposes of fixing the venue of the settlement of Eliseos estate, the Court of
Appeals upheld the conclusion reached by the RTC that the decedent was a
resident of Las Pias City. The petitioners Motion for Reconsideration was
denied by the Court of Appeals in its Resolution11 dated 7 August 2009.
The Issues
The petitioners now urge Us to reverse the assailed Court of Appeals Decision
and Resolution on the following grounds:
I. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THAT
ELISEO QUIAZON WAS A RESIDENT OF LAS PIAS AND THEREFORE,

THE PETITION FOR LETTERS OF ADMINISTRATION WAS PROPERLY

FILED WITH THE RTC OF LAS PIAS;
II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT
AMELIA GARCIA-QUIAZON WAS NOT LEGALLY MARRIED TO ELISEO
QUIAZON DUE TO PREEXISTING MARRIAGE; AND
III. THE COURT OF APPEALS OVERLOOKED THE FACT THAT ELISE
QUIAZON HAS NOT SHOWN ANY INTEREST IN THE PETITION FOR
LETTERS OF ADMINISTRATION.12
The Courts Ruling
We find the petition bereft of merit.
Under Section 1, Rule 73 of the Rules of Court, the petition for letters of
administration of the estate of a decedent should be filed in the RTC of the
province where the decedent resides at the time of his death:
Sec. 1. Where estate of deceased persons settled. If the decedent is an
inhabitant of the Philippines at the time of his death, whether a citizen or an
alien, his will shall be proved, or letters of administration granted, and his
estate settled, in the Court of First Instance now Regional Trial Court in the
province in which he resides at the time of his death, and if he is an inhabitant
of a foreign country, the Court of First Instance now Regional Trial Court of any
province in which he had estate. The court first taking cognizance of the
settlement of the estate of a decedent, shall exercise jurisdiction to the
exclusion of all other courts. The jurisdiction assumed by a court, so far as it
depends on the place of residence of the decedent, or of the location of his
estate, shall not be contested in a suit or proceeding, except in an appeal from
that court, in the original case, or when the want of jurisdiction appears on the
record. (Emphasis supplied).
The term "resides" connotes ex vi termini "actual residence" as distinguished
from "legal residence or domicile." This term "resides," like the terms "residing"
and "residence," is elastic and should be interpreted in the light of the object or
purpose of the statute or rule in which it is employed. In the application of
venue statutes and rules Section 1, Rule 73 of the Revised Rules of Court is of
such nature residence rather than domicile is the significant factor.13 Even
where the statute uses word "domicile" still it is construed as meaning residence
and not domicile in the technical sense.14 Some cases make a distinction
between the terms "residence" and "domicile" but as generally used in statutes
fixing venue, the terms are synonymous, and convey the same meaning as the
term "inhabitant."15 In other words, "resides" should be viewed or understood in
its popular sense, meaning, the personal, actual or physical habitation of a

person, actual residence or place of abode.16 It signifies physical presence in a

place and actual stay thereat.17 Venue for ordinary civil actions and that for
special proceedings have one and the same meaning.18 As thus defined,
"residence," in the context of venue provisions, means nothing more than a
persons actual residence or place of abode, provided he resides therein with
continuity and consistency.19
Viewed in light of the foregoing principles, the Court of Appeals cannot be
faulted for affirming the ruling of the RTC that the venue for the settlement of
the estate of Eliseo was properly laid in Las Pias City. It is evident from the
records that during his lifetime, Eliseo resided at No. 26 Everlasting Road, Phase
5, Pilar Village, Las Pias City. For this reason, the venue for the settlement of
his estate may be laid in the said city.
In opposing the issuance of letters of administration, the petitioners harp on the
entry in Eliseos Death Certificate that he is a resident of Capas, Tarlac where
they insist his estate should be settled. While the recitals in death certificates
can be considered proofs of a decedents residence at the time of his death, the
contents thereof, however, is not binding on the courts. Both the RTC and the
Court of Appeals found that Eliseo had been living with Lourdes, deporting
themselves as husband and wife, from 1972 up to the time of his death in 1995.
This finding is consistent with the fact that in 1985, Eliseo filed an action for
judicial partition of properties against Amelia before the RTC of Quezon City,
Branch 106, on the ground that their marriage is void for being bigamous. 20
That Eliseo went to the extent of taking his marital feud with Amelia before the
courts of law renders untenable petitioners position that Eliseo spent the final
days of his life in Tarlac with Amelia and her children. It disproves rather than
supports petitioners submission that the lower courts findings arose from an
erroneous appreciation of the evidence on record. Factual findings of the trial
court, when affirmed by the appellate court, must be held to be conclusive and
binding upon this Court.21
Likewise unmeritorious is petitioners contention that the Court of Appeals erred
in declaring Amelias marriage to Eliseo as void ab initio. In a void marriage, it
was though no marriage has taken place, thus, it cannot be the source of rights.
Any interested party may attack the marriage directly or collaterally. A void
marriage can be questioned even beyond the lifetime of the parties to the
marriage.22 It must be pointed out that at the time of the celebration of the
marriage of Eliseo and Amelia, the law in effect was the Civil Code, and not the
Family Code, making the ruling in Nial v. Bayadog23 applicable four-square to
the case at hand. In Nial, the Court, in no uncertain terms, allowed therein
petitioners to file a petition for the declaration of nullity of their fathers
marriage to therein respondent after the death of their father, by
contradistinguishing void from voidable marriages, to wit:

Consequently, void marriages can be questioned even after the death of either
party but voidable marriages can be assailed only during the lifetime of the
parties and not after death of either, in which case the parties and their
offspring will be left as if the marriage had been perfectly valid. That is why the
action or defense for nullity is imprescriptible, unlike voidable marriages where
the action prescribes. Only the parties to a voidable marriage can assail it but
any proper interested party may attack a void marriage.24

Section 6, Rule 78 of the Revised Rules of Court lays down the preferred
persons who are entitled to the issuance of letters of administration, thus:

It was emphasized in Nial that in a void marriage, no marriage has taken place
and it cannot be the source of rights, such that any interested party may attack
the marriage directly or collaterally without prescription, which may be filed
even beyond the lifetime of the parties to the marriage.25

(a) To the surviving husband or wife, as the case may be, or next of kin,
or both, in the discretion of the court, or to such person as such
surviving husband or wife, or next of kin, requests to have appointed, if
competent and willing to serve;

Relevant to the foregoing, there is no doubt that Elise, whose successional

rights would be prejudiced by her fathers marriage to Amelia, may impugn the
existence of such marriage even after the death of her father. The said marriage
may be questioned directly by filing an action attacking the validity thereof, or
collaterally by raising it as an issue in a proceeding for the settlement of the
estate of the deceased spouse, such as in the case at bar. Ineluctably, Elise, as
a compulsory heir,26 has a cause of action for the declaration of the absolute
nullity of the void marriage of Eliseo and Amelia, and the death of either party
to the said marriage does not extinguish such cause of action.

(b) If such surviving husband or wife, as the case may be, or next of
kin, or the person selected by them, be incompetent or unwilling, or if
the husband or widow, or next of kin, neglects for thirty (30) days after
the death of the person to apply for administration or to request that
administration be granted to some other person, it may be granted to
one or more of the principal creditors, if competent and willing to serve;

Having established the right of Elise to impugn Eliseos marriage to Amelia, we

now proceed to determine whether or not the decedents marriage to Amelia is
void for being bigamous.
Contrary to the position taken by the petitioners, the existence of a previous
marriage between Amelia and Filipito was sufficiently established by no less
than the Certificate of Marriage issued by the Diocese of Tarlac and signed by
the officiating priest of the Parish of San Nicolas de Tolentino in Capas, Tarlac.
The said marriage certificate is a competent evidence of marriage and the
certification from the National Archive that no information relative to the said
marriage exists does not diminish the probative value of the entries therein. We
take judicial notice of the fact that the first marriage was celebrated more than
50 years ago, thus, the possibility that a record of marriage can no longer be
found in the National Archive, given the interval of time, is not completely
remote. Consequently, in the absence of any showing that such marriage had
been dissolved at the time Amelia and Eliseos marriage was solemnized, the
inescapable conclusion is that the latter marriage is bigamous and, therefore,
void ab initio.27
Neither are we inclined to lend credence to the petitioners contention that Elise
has not shown any interest in the Petition for Letters of Administration.

Sec. 6. When and to whom letters of administration granted. If no executor is

named in the will, or the executor or executors are incompetent, refuse the
trust, or fail to give bond, or a person dies intestate, administration shall be
granted:

(c) If there is no such creditor competent and willing to serve, it may be

granted to such other person as the court may select.
Upon the other hand, Section 2 of Rule 79 provides that a petition for Letters of
Administration must be filed by an interested person, thus:
Sec. 2. Contents of petition for letters of administration. A petition for letters
of administration must be filed by an interested person and must show, so far
as known to the petitioner:
(a) The jurisdictional facts;
(b) The names, ages, and residences of the heirs, and the names and
residences of the creditors, of the decedent;
(c) The probable value and character of the property of the estate;
(d) The name of the person for whom letters of administration are
prayed.
But no defect in the petition shall render void the issuance of letters of
administration.

An "interested party," in estate proceedings, is one who would be benefited in

the estate, such as an heir, or one who has a claim against the estate, such as a
creditor. Also, in estate proceedings, the phrase "next of kin" refers to those
whose relationship with the decedent Is such that they are entitled to share in
the estate as distributees.28

this case involving legal separation

dissolution and partition of properties.

In the instant case, Elise, as a compulsory heir who stands to be benefited by

the distribution of Eliseos estate, is deemed to be an interested party. With the
overwhelming evidence on record produced by Elise to prove her filiation to
Eliseo, the petitioners pounding on her lack of interest in the administration of
the decedents estate, is just a desperate attempt to sway this Court to reverse
the findings of the Court of Appeals. Certainly, the right of Elise to be appointed
administratix of the estate of Eliseo is on good grounds. It is founded on her
right as a compulsory heir, who, under the law, is entitled to her legitimate after
the debts of the estate are satisfied.29 Having a vested right in the distribution
of Eliseos estate as one of his natural children, Elise can rightfully be considered
as an interested party within the purview of the law.

This case comes before us via Petition for Review on Certiorari [1] under
Rule 45 of the Rules of Court. The petitioner seeks that we vacate and
set aside the Order[2] dated January 8, 2007 of the Regional Trial Court
(RTC), Branch 1, Butuan City. In lieu of the said order, we are asked to
issue a Resolution defining the net profits subject of the forfeiture as a
result of the decree of legal separation in accordance with the provision
of Article 102(4) of the Family Code, or alternatively, in accordance
with the provisions of Article 176 of the Civil Code.

WHEREFORE, premises considered, the petition is DENIED for lack of merit.

Accordingly, the Court of Appeals assailed 28 November 2008 Decision and 7
August 2009 Resolution, arc AFFIRMED in toto.

3. Quiao vs Quiao
SECOND DIVISION
[ G.R. No 176556, July 04, 2012 ]
BRIGIDO B. QUIAO, PETITIONER, VS. RITA C. QUIAO, KITCHIE C.
QUIAO, LOTIS C. QUIAO, PETCHIE C. QUIAO, REPRESENTED BY THEIR
MOTHER
RITA
QUIAO,
RESPONDENTS.
DECISION
REYES, J.:
The family is the basic and the most important institution of society. It
is in the family where children are born and molded either to become
useful citizens of the country or troublemakers in the community. Thus,
we are saddened when parents have to separate and fight over
properties, without regard to the message they send to their children.
Notwithstanding this, we must not shirk from our obligation to rule on

escalating

to

questions

on

The Case

Antecedent Facts

On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a

complaint for legal separation against herein petitioner Brigido B. Quiao
(Brigido).[3] Subsequently, the RTC rendered a Decision[4] dated
October 10, 2005, the dispositive portion of which provides:
WHEREFORE, viewed from the foregoing considerations, judgment is
hereby rendered declaring the legal separation of plaintiff Rita C. Quiao
and defendant-respondent Brigido B. Quiao pursuant to Article 55.
As such, the herein parties shall be entitled to live separately from each
other,
but
the
marriage
bond
shall
not
be
severed.
Except for Letecia C. Quiao who is of legal age, the three minor children,
namely, Kitchie, Lotis and Petchie, all surnamed Quiao shall remain
under the custody of the plaintiff who is the innocent spouse.
Further, except for the personal and real properties already foreclosed
by the RCBC, all the remaining properties, namely:
1.
2.
3.
4.
5.

coffee mill in Balongagan, Las Nieves, Agusan del Norte;

coffee mill in Durian, Las Nieves, Agusan del Norte;
corn mill in Casiklan, Las Nieves, Agusan del Norte;
coffee mill in Esperanza, Agusan del Sur;
a parcel of land with an area of 1,200 square meters located in
Tungao, Butuan City;
6. a parcel of agricultural land with an area of 5 hectares located in
Manila de Bugabos, Butuan City;

7. a parcel of land with an area of 84 square meters located in

Tungao, Butuan City;
8. Bashier Bon Factory located in Tungao, Butuan City;

shall be divided equally between herein [respondents] and [petitioner]

subject to the respective legitimes of the children and the payment of
the
unpaid
conjugal
liabilities
of
[P]45,740.00.
[Petitioners] share, however, of the net profits earned by the conjugal
partnership is forfeited in favor of the common children.
He is further ordered to reimburse [respondents] the sum
[P]19,000.00 as attorney's fees and litigation expenses
[P]5,000.00[.]

of
of

SO ORDERED.[5]

Section 9, Rule 39, Rule [sic] of the 1997 Rules of Civil Procedure.
You are hereby ordered to make a return of the said proceedings
immediately after the judgment has been satisfied in part or in full in
consonance with Section 14, Rule 39 of the 1997 Rules of Civil
Procedure, as amended.[10]

On July 6, 2006, the writ was partially executed with the petitioner
paying the respondents the amount of P46,870.00, representing the
following payments:
(a) P22,870.00 as petitioner's share of the payment of the conjugal
share;
(b)

P19,000.00

as

attorney's

fees;

and

(c) P5,000.00 as litigation expenses.[11]

Neither party filed a motion for reconsideration and appeal within the
period provided for under Section 17(a) and (b) of the Rule on Legal
Separation.[6]
On December 12, 2005, the respondents filed a motion for execution[7]
which the trial court granted in its Order dated December 16, 2005, the
dispositive portion of which reads:
Wherefore, finding the motion to be well taken, the same is hereby
granted. Let a writ of execution be issued for the immediate
enforcement
of
the
Judgment.
SO ORDERED.[8]

Subsequently, on February 10, 2006, the RTC issued a Writ of

Execution[9] which reads as follows:
NOW THEREFORE, that of the goods and chattels of the [petitioner]
BRIGIDO B. QUIAO you cause to be made the sums stated in the aforequoted DECISION [sic], together with your lawful fees in the service of
this
Writ,
all
in
the
Philippine
Currency.
But if sufficient personal property cannot be found whereof to satisfy
this execution and your lawful fees, then we command you that of the
lands and buildings of the said [petitioner], you make the said sums in
the manner required by law. You are enjoined to strictly observed

On July 7, 2006, or after more than nine months from the promulgation
of the Decision, the petitioner filed before the RTC a Motion for
Clarification,[12] asking the RTC to define the term Net Profits Earned.
To resolve the petitioner's Motion for Clarification, the RTC issued an
Order[13] dated August 31, 2006, which held that the phrase NET
PROFIT EARNED denotes the remainder of the properties of the
parties after deducting the separate properties of each [of the] spouse
and the debts.[14] The Order further held that after determining the
remainder of the properties, it shall be forfeited in favor of the common
children because the offending spouse does not have any right to any
share of the net profits earned, pursuant to Articles 63, No. (2) and 43,
No. (2) of the Family Code.[15] The dispositive portion of the Order
states:
WHEREFORE, there is no blatant disparity when the sheriff intends to
forfeit all the remaining properties after deducting the payments of the
debts for only separate properties of the defendant-respondent shall be
delivered
to
him
which
he
has
none.
The Sheriff is herein directed to proceed with the execution of the
Decision.
IT IS SO ORDERED.[16]

III
Not satisfied with the trial court's Order, the petitioner filed a Motion
for Reconsideration[17] on September 8, 2006. Consequently, the RTC
issued another Order[18] dated November 8, 2006, holding that although
the Decision dated October 10, 2005 has become final and executory, it
may still consider the Motion for Clarification because the petitioner
simply wanted to clarify the meaning of net profit earned.[19]
Furthermore, the same Order held:
ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set
aside. NET PROFIT EARNED, which is subject of forfeiture in favor of
[the] parties' common children, is ordered to be computed in
accordance [with] par. 4 of Article 102 of the Family Code.[20]

On November 21, 2006, the respondents filed a Motion for

Reconsideration,[21] praying for the correction and reversal of the Order
dated November 8, 2006. Thereafter, on January 8, 2007,[22] the trial
court had changed its ruling again and granted the respondents' Motion
for Reconsideration whereby the Order dated November 8, 2006 was
set aside to reinstate the Order dated August 31, 2006.
Not satisfied with the trial court's Order, the petitioner filed on
February 27, 2007 this instant Petition for Review under Rule 45 of the
Rules of Court, raising the following:
Issues

IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE

COMMON PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF THE
DECREE OF LEGAL SEPARATION GOVERNED BY ARTICLE 125 (SIC) OF
THE FAMILY CODE?
II

WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE

CONJUGAL PARTNERSHIP FOR PURPOSES OF EFFECTING THE
FORFEITURE AUTHORIZED UNDER ARTICLE 63 OF THE FAMILY CODE?

WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE

HUSBAND AND WIFE WHO GOT MARRIED IN 1977? CAN THE FAMILY
CODE OF THE PHILIPPINES BE GIVEN RETROACTIVE EFFECT FOR
PURPOSES OF DETERMINING THE NET PROFITS SUBJECT OF
FORFEITURE AS A RESULT OF THE DECREE OF LEGAL SEPARATION
WITHOUT IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER THE
CIVIL CODE?
IV

WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE

SHARE OF THE GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP
AS A RESULT OF THE ISSUANCE OF THE DECREE OF LEGAL
SEPARATION?[23]

Our Ruling

While the petitioner has raised a number of issues on the applicability

of certain laws, we are well-aware that the respondents have called our
attention to the fact that the Decision dated October 10, 2005 has
attained finality when the Motion for Clarification was filed.[24] Thus,
we are constrained to resolve first the issue of the finality of the
Decision dated October 10, 2005 and subsequently discuss the matters
that
we
can
clarify.
The Decision dated October 10, 2005 has become final and executory at
the time the Motion for Clarification was filed on July 7, 2006.
Section 3, Rule 41 of the Rules of Court provides:
Section 3. Period of ordinary appeal. - The appeal shall be taken within
fifteen (15) days from notice of the judgment or final order appealed
from. Where a record on appeal is required, the appellant shall file a
notice of appeal and a record on appeal within thirty (30) days from
notice
of
the
judgment
or
final
order.
The period of appeal shall be interrupted by a timely motion for new

trial or reconsideration. No motion for extension of time to file a

motion for new trial or reconsideration shall be allowed.

In Neypes v. Court of Appeals,[25] we clarified that to standardize the

appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, we held that it would be practical to
allow a fresh period of 15 days within which to file the notice of appeal
in the RTC, counted from receipt of the order dismissing a motion for a
new
trial
or
motion
for
reconsideration. [26]
In Neypes, we explained that the "fresh period rule" shall also apply to
Rule 40 governing appeals from the Municipal Trial Courts to the RTCs;
Rule 42 on petitions for review from the RTCs to the Court of Appeals
(CA); Rule 43 on appeals from quasi-judicial agencies to the CA and
Rule 45 governing appeals by certiorari to the Supreme Court. We also
said, The new rule aims to regiment or make the appeal period
uniform, to be counted from receipt of the order denying the motion for
new trial, motion for reconsideration (whether full or partial) or any
final order or resolution.[27] In other words, a party litigant may file
his notice of appeal within a fresh 15-day period from his receipt of the
trial court's decision or final order denying his motion for new trial or
motion for reconsideration. Failure to avail of the fresh 15-day period
from the denial of the motion for reconsideration makes the decision or
final
order
in
question
final
and
executory.
In the case at bar, the trial court rendered its Decision on October 10,
2005. The petitioner neither filed a motion for reconsideration nor a
notice of appeal. On December 16, 2005, or after 67 days had lapsed,
the trial court issued an order granting the respondent's motion for
execution; and on February 10, 2006, or after 123 days had lapsed, the
trial court issued a writ of execution. Finally, when the writ had already
been partially executed, the petitioner, on July 7, 2006 or after 270
days had lapsed, filed his Motion for Clarification on the definition of the
net profits earned. From the foregoing, the petitioner had clearly
slept on his right to question the RTCs Decision dated October 10,
2005. For 270 days, the petitioner never raised a single issue until the
decision had already been partially executed. Thus at the time the
petitioner filed his motion for clarification, the trial courts decision has
become final and executory. A judgment becomes final and executory
when the reglementary period to appeal lapses and no appeal is
perfected within such period. Consequently, no court, not even this
Court, can arrogate unto itself appellate jurisdiction to review a case or
modify
a
judgment
that
became
final.[28]
The petitioner argues that the decision he is questioning is a void
judgment. Being such, the petitioner's thesis is that it can still be

disturbed even after 270 days had lapsed from the issuance of the
decision to the filing of the motion for clarification. He said that a void
judgment is no judgment at all. It never attains finality and cannot be a
source of any right nor any obligation.[29] But what precisely is a void
judgment in our jurisdiction? When does a judgment becomes void?
A judgment is null and void when the court which rendered it had no
power to grant the relief or no jurisdiction over the subject matter or
over the parties or both.[30] In other words, a court, which does not
have the power to decide a case or that has no jurisdiction over the
subject matter or the parties, will issue a void judgment or a coram non
judice.[31]
The questioned judgment does not fall within the purview of a void
judgment. For sure, the trial court has jurisdiction over a case involving
legal separation. Republic Act (R.A.) No. 8369 confers upon an RTC,
designated as the Family Court of a city, the exclusive original
jurisdiction to hear and decide, among others, complaints or petitions
relating to marital status and property relations of the husband and
wife or those living together.[32] The Rule on Legal Separation[33]
provides that the petition [for legal separation] shall be filed in the
Family Court of the province or city where the petitioner or the
respondent has been residing for at least six months prior to the date of
filing or in the case of a non-resident respondent, where he may be
found in the Philippines, at the election of the petitioner.[34] In the
instant case, herein respondent Rita is found to reside in Tungao,
Butuan City for more than six months prior to the date of filing of the
petition; thus, the RTC, clearly has jurisdiction over the respondent's
petition below. Furthermore, the RTC also acquired jurisdiction over
the persons of both parties, considering that summons and a copy of
the complaint with its annexes were served upon the herein petitioner
on December 14, 2000 and that the herein petitioner filed his Answer to
the Complaint on January 9, 2001.[35] Thus, without doubt, the RTC,
which has rendered the questioned judgment, has jurisdiction over the
complaint
and
the
persons
of
the
parties.
From the aforecited facts, the questioned October 10, 2005 judgment of
the trial court is clearly not void ab initio, since it was rendered within
the ambit of the court's jurisdiction. Being such, the same cannot
anymore be disturbed, even if the modification is meant to correct what
may be considered an erroneous conclusion of fact or law.[36] In fact,
we have ruled that for [as] long as the public respondent acted with
jurisdiction, any error committed by him or it in the exercise thereof
will amount to nothing more than an error of judgment which may be
reviewed or corrected only by appeal.[37] Granting without admitting
that the RTC's judgment dated October 10, 2005 was erroneous, the
petitioner's remedy should be an appeal filed within the reglementary

period. Unfortunately, the petitioner failed to do this. He has already

lost the chance to question the trial court's decision, which has become
immutable and unalterable. What we can only do is to clarify the very
question
raised
below
and
nothing
more.
For our convenience, the following matters cannot anymore be
disturbed since the October 10, 2005 judgment has already become
immutable
and
unalterable,
to
wit:
(a) The finding that the petitioner is the offending spouse since he
cohabited
with
a
woman
who
is
not
his
wife;[38]
(b) The trial court's grant of the petition for legal separation of
respondent
Rita;[39]

liabilities totaling
generated

P503,862.10
by

shall be charged
these

to

the income
properties;[49]

(m) The fact that the trial court had no way of knowing whether the
petitioner had separate properties which can satisfy his share for the
support
of
the
family;[50]
(n) The holding that the applicable law in this case is Article 129(7);[51]
(o) The ruling that the remaining properties not subject to any
encumbrance shall therefore be divided equally between the petitioner
and the respondent without prejudice to the children's legitime;[52]

(c) The dissolution and liquidation of the conjugal partnership;[40]

(p) The holding that the petitioner's share of the net profits earned by
the conjugal partnership is forfeited in favor of the common children;[53]
and

(d) The forfeiture of the petitioner's right to any share of the net profits
earned
by
the
conjugal
partnership;[41]

(q) The order to the petitioner to reimburse the respondents the sum of
P19,000.00 as attorney's fees and litigation expenses of P5,000.00.[54]

(e) The award to the

custody;[42]

After discussing lengthily the immutability of the Decision dated

October 10, 2005, we will discuss the following issues for the
enlightenment
of
the
parties
and
the
public
at
large.

innocent spouse

of

the

minor children's

(f) The disqualification of the offending spouse from inheriting from the
innocent
spouse
by
intestate
succession;[43]
(g) The revocation of provisions in favor of the offending spouse made
in
the
will
of
the
innocent
spouse; [44]

Article
129
of
the
Family
Code
applies
to
case
since
the
parties'
property
relation
by
the
system
of
relative
community
partnership
of

(h) The holding that the property relation of the parties is conjugal
partnership of gains and pursuant to Article 116 of the Family Code, all
properties acquired during the marriage, whether acquired by one or
both spouses, is presumed to be conjugal unless the contrary is
proved;[45]

The petitioner claims that the court a quo is wrong when it applied
Article 129 of the Family Code, instead of Article 102. He confusingly
argues that Article 102 applies because there is no other provision
under the Family Code which defines net profits earned subject of
forfeiture
as
a
result
of
legal
separation.

(i) The finding that the spouses acquired their real and personal
properties
while
they
were
living
together;[46]

Offhand, the trial court's Decision dated October 10, 2005 held that
Article 129(7) of the Family Code applies in this case. We agree with
the
trial
court's
holding.

(j) The list of properties which Rizal Commercial Banking Corporation

(RCBC)
foreclosed;[47]
(k) The list of the remaining properties of the couple which must be
dissolved and liquidated and the fact that respondent Rita was the one
who took charge of the administration of these properties; [48]
(l) The holding that the conjugal partnership shall be liable to matters
included under Article 121 of the Family Code and the conjugal

the
present
is
governed
or
conjugal
gains.

First, let us determine what governs the couple's property relation.

From the record, we can deduce that the petitioner and the respondent
tied the marital knot on January 6, 1977. Since at the time of the
exchange of marital vows, the operative law was the Civil Code of the
Philippines (R.A. No. 386) and since they did not agree on a marriage
settlement, the property relations between the petitioner and the
respondent is the system of relative community or conjugal partnership
of gains.[55] Article 119 of the Civil Code provides:

Art. 119. The future spouses may in the marriage settlements agree
upon absolute or relative community of property, or upon complete
separation of property, or upon any other regime. In the absence of
marriage settlements, or when the same are void, the system of relative
community or conjugal partnership of gains as established in this Code,
shall govern the property relations between husband and wife.

Thus, from the foregoing facts and law, it is clear that what governs the
property relations of the petitioner and of the respondent is conjugal
partnership of gains. And under this property relation, the husband
and the wife place in a common fund the fruits of their separate
property and the income from their work or industry.[56] The husband
and wife also own in common all the property of the conjugal
partnership
of
gains.[57]
Second, since at the time of the dissolution of the petitioner and the
respondent's marriage the operative law is already the Family Code, the
same applies in the instant case and the applicable law in so far as the
liquidation of the conjugal partnership assets and liabilities is
concerned is Article 129 of the Family Code in relation to Article 63(2)
of the Family Code. The latter provision is applicable because according
to Article 256 of the Family Code [t]his Code shall have retroactive
effect insofar as it does not prejudice or impair vested or acquired
rights in accordance with the Civil Code or other law. [58]
Now, the petitioner asks: Was his vested right over half of the common
properties of the conjugal partnership violated when the trial court
forfeited them in favor of his children pursuant to Articles 63(2) and
129
of
the
Family
Code?
We

respond

in

the

negative.

Indeed, the petitioner claims that his vested rights have been impaired,
arguing: As earlier adverted to, the petitioner acquired vested rights
over half of the conjugal properties, the same being owned in common
by the spouses. If the provisions of the Family Code are to be given
retroactive application to the point of authorizing the forfeiture of the
petitioner's share in the net remainder of the conjugal partnership
properties, the same impairs his rights acquired prior to the effectivity
of the Family Code.[59] In other words, the petitioner is saying that
since the property relations between the spouses is governed by the
regime of Conjugal Partnership of Gains under the Civil Code, the
petitioner acquired vested rights over half of the properties of the
Conjugal Partnership of Gains, pursuant to Article 143 of the Civil Code,
which provides: All property of the conjugal partnership of gains is
owned in common by the husband and wife.[60] Thus, since he is one

of the owners of the properties covered by the conjugal partnership of

gains, he has a vested right over half of the said properties, even after
the promulgation of the Family Code; and he insisted that no provision
under the Family Code may deprive him of this vested right by virtue of
Article 256 of the Family Code which prohibits retroactive application of
the Family Code when it will prejudice a person's vested right.
However, the petitioner's claim of vested right is not one which is
written on stone. In Go, Jr. v. Court of Appeals,[61] we define and
explained vested right in the following manner:
A vested right is one whose existence, effectivity and extent do not
depend upon events foreign to the will of the holder, or to the exercise
of which no obstacle exists, and which is immediate and perfect in itself
and not dependent upon a contingency. The term vested right
expresses the concept of present fixed interest which, in right reason
and natural justice, should be protected against arbitrary State action,
or an innately just and imperative right which enlightened free society,
sensitive to inherent and irrefragable individual rights, cannot deny.
To be vested, a right must have become a titlelegal or equitableto
the present or future enjoyment of property.[62] (Citations omitted)

In our en banc Resolution dated October 18, 2005 for ABAKADA Guro
Party List Officer Samson S. Alcantara, et al. v. The Hon. Executive
Secretary Eduardo R. Ermita,[63] we also explained:
The concept of vested right is a consequence of the constitutional
guaranty of due process that expresses a present fixed interest which
in right reason and natural justice is protected against arbitrary state
action; it includes not only legal or equitable title to the enforcement of
a demand but also exemptions from new obligations created after the
right has become vested. Rights are considered vested when the right
to enjoyment is a present interest, absolute, unconditional, and perfect
or fixed and irrefutable.[64] (Emphasis and underscoring supplied)

From the foregoing, it is clear that while one may not be deprived of his
vested right, he may lose the same if there is due process and such
deprivation
is
founded
in
law
and
jurisprudence.
In the present case, the petitioner was accorded his right to due
process. First, he was well-aware that the respondent prayed in her
complaint that all of the conjugal properties be awarded to her.[65] In
fact, in his Answer, the petitioner prayed that the trial court divide the

community assets between the petitioner and the respondent as

circumstances and evidence warrant after the accounting and inventory
of all the community properties of the parties.[66] Second, when the
Decision dated October 10, 2005 was promulgated, the petitioner never
questioned the trial court's ruling forfeiting what the trial court termed
as net profits, pursuant to Article 129(7) of the Family Code.[67] Thus,
the petitioner cannot claim being deprived of his right to due process.

liquidation of the conjugal partnership, or after dissolution of the

marriage, when it is finally determined that, after settlement of
conjugal obligations, there are net assets left which can be divided
between the spouses or their respective heirs.[69] (Citations omitted)

Furthermore, we take note that the alleged deprivation of the

petitioner's vested right is one founded, not only in the provisions of
the Family Code, but in Article 176 of the Civil Code. This provision is
like Articles 63 and 129 of the Family Code on the forfeiture of the
guilty spouse's share in the conjugal partnership profits. The said
provision says:

Finally, as earlier discussed, the trial court has already decided in its
Decision dated October 10, 2005 that the applicable law in this case is
Article 129(7) of the Family Code.[70] The petitioner did not file a motion
for reconsideration nor a notice of appeal. Thus, the petitioner is now
precluded from questioning the trial court's decision since it has
become final and executory. The doctrine of immutability and
unalterability of a final judgment prevents us from disturbing the
Decision dated October 10, 2005 because final and executory decisions
can no longer be reviewed nor reversed by this Court. [71]

Art. 176. In case of legal separation, the guilty spouse shall forfeit his
or her share of the conjugal partnership profits, which shall be awarded
to the children of both, and the children of the guilty spouse had by a
prior marriage. However, if the conjugal partnership property came
mostly or entirely from the work or industry, or from the wages and
salaries, or from the fruits of the separate property of the guilty spouse,
this
forfeiture
shall
not
apply.

From the above discussions, Article 129 of the

applies to the present case since the parties'
governed by the system of relative community or
of gains and since the trial court's Decision has
immutability.

In case there are no children, the innocent spouse shall be entitled to

all the net profits.

From the foregoing, the petitioner's claim of a vested right has no basis
considering that even under Article 176 of the Civil Code, his share of
the conjugal partnership profits may be forfeited if he is the guilty party
in a legal separation case. Thus, after trial and after the petitioner was
given the chance to present his evidence, the petitioner's vested right
claim may in fact be set aside under the Civil Code since the trial court
found
him
the
guilty
party.
More, in Abalos v. Dr. Macatangay, Jr.,[68] we reiterated our longstanding ruling that:
[P]rior to the liquidation of the conjugal partnership, the interest of
each spouse in the conjugal assets is inchoate, a mere expectancy,
which constitutes neither a legal nor an equitable estate, and does not
ripen into title until it appears that there are assets in the community as
a result of the liquidation and settlement. The interest of each spouse
is limited to the net remainder or remanente liquido (haber
ganancial) resulting from the liquidation of the affairs of the
partnership after its dissolution. Thus, the right of the husband or wife
to one-half of the conjugal assets does not vest until the dissolution and

Family Code clearly

property relation is
conjugal partnership
attained finality and

The net profits of the conjugal partnership of gains are all the fruits of
the separate properties of the spouses and the products of their labor
and
industry.
The petitioner inquires from us the meaning of net profits earned by
the conjugal partnership for purposes of effecting the forfeiture
authorized under Article 63 of the Family Code. He insists that since
there is no other provision under the Family Code, which defines net
profits earned subject of forfeiture as a result of legal separation, then
Article
102
of
the
Family
Code
applies.
What does Article 102 of the Family Code say? Is the computation of
net profits earned in the conjugal partnership of gains the same with
the computation of net profits earned in the absolute community?
Now,

we

clarify.

First and foremost, we must distinguish between the applicable law as

to the property relations between the parties and the applicable law as
to the definition of net profits. As earlier discussed, Article 129 of the
Family Code applies as to the property relations of the parties. In other
words, the computation and the succession of events will follow the
provisions under Article 129 of the said Code. Moreover, as to the
definition of net profits, we cannot but refer to Article 102(4) of the
Family Code, since it expressly provides that for purposes of computing

the net profits subject to forfeiture under Article 43, No. (2) and Article
63, No. (2), Article 102(4) applies. In this provision, net profits shall
be the increase in value between the market value of the community
property at the time of the celebration of the marriage and the market
value at the time of its dissolution.[72] Thus, without any iota of doubt,
Article 102(4) applies to both the dissolution of the absolute community
regime under Article 102 of the Family Code, and to the dissolution of
the conjugal partnership regime under Article 129 of the Family Code.
Where lies the difference? As earlier shown, the difference lies in the
processes used under the dissolution of the absolute community regime
under Article 102 of the Family Code, and in the processes used under
the dissolution of the conjugal partnership regime under Article 129 of
the
Family
Code.
Let us now discuss the difference in the processes between the
absolute community regime and the conjugal partnership regime.
On

Absolute

Community

Regime:

When a couple enters into a regime of absolute community, the

husband and the wife becomes joint owners of all the properties of the
marriage. Whatever property each spouse brings into the marriage, and
those acquired during the marriage (except those excluded under
Article 92 of the Family Code) form the common mass of the couple's
properties. And when the couple's marriage or community is dissolved,
that common mass is divided between the spouses, or their respective
heirs, equally or in the proportion the parties have established,
irrespective of the value each one may have originally owned. [73]
Under Article 102 of the Family Code, upon dissolution of marriage, an
inventory is prepared, listing separately all the properties of the
absolute community and the exclusive properties of each; then the
debts and obligations of the absolute community are paid out of the
absolute community's assets and if the community's properties are
insufficient, the separate properties of each of the couple will be
solidarily liable for the unpaid balance. Whatever is left of the separate
properties will be delivered to each of them. The net remainder of the
absolute community is its net assets, which shall be divided between
the husband and the wife; and for purposes of computing the net profits
subject to forfeiture, said profits shall be the increase in value between
the market value of the community property at the time of the
celebration of the marriage and the market value at the time of its
dissolution.[74]
Applying Article 102 of the Family Code, the net profits requires that
we first find the market value of the properties at the time of the
community's dissolution. From the totality of the market value of all

the properties, we subtract the debts and obligations of the absolute

community and this result to the net assets or net remainder of the
properties of the absolute community, from which we deduct the
market value of the properties at the time of marriage, which then
results
to
the
net
profits.[75]
Granting without admitting that Article 102 applies to the instant case,
let
us
see
what
will
happen
if
we
apply
Article
102:
(a) According to the trial court's finding of facts, both husband and wife
have no separate properties, thus, the remaining properties in the list
above are all part of the absolute community. And its market value at
the time of the dissolution of the absolute community constitutes the
market
value
at
dissolution.
(b) Thus, when the petitioner and the respondent finally were legally
separated, all the properties which remained will be liable for the debts
and obligations of the community. Such debts and obligations will be
subtracted
from
the
market
value
at
dissolution.
(c) What remains after the debts and obligations have been paid from
the total assets of the absolute community constitutes the net
remainder or net asset. And from such net asset/remainder of the
petitioner and respondent's remaining properties, the market value at
the time of marriage will be subtracted and the resulting totality
constitutes
the
net
profits.
(d) Since both husband and wife have no separate properties, and
nothing would be returned to each of them, what will be divided equally
between them is simply the net profits. However, in the Decision
dated October 10, 2005, the trial court forfeited the half-share of the
petitioner in favor of his children. Thus, if we use Article 102 in the
instant case (which should not be the case), nothing is left to the
petitioner since both parties entered into their marriage without
bringing
with
them
any
property.
On

Conjugal

Partnership

Regime:

Before we go into our disquisition on the Conjugal Partnership Regime,

we make it clear that Article 102(4) of the Family Code applies in the
instant case for purposes only of defining net profit. As earlier
explained, the definition of net profits in Article 102(4) of the Family
Code applies to both the absolute community regime and conjugal
partnership regime as provided for under Article 63, No. (2) of the
Family Code, relative to the provisions on Legal Separation.
Now, when a couple enters into a regime of conjugal partnership of

gains under Article 142 of the Civil Code, the husband and the wife
place in common fund the fruits of their separate property and income
from their work or industry, and divide equally, upon the dissolution of
the marriage or of the partnership, the net gains or benefits obtained
indiscriminately by either spouse during the marriage.[76] From the
foregoing provision, each of the couple has his and her own property
and debts. The law does not intend to effect a mixture or merger of
those debts or properties between the spouses. Rather, it establishes a
complete
separation
of
capitals.[77]
Considering that the couple's marriage has been dissolved under the
Family Code, Article 129 of the same Code applies in the liquidation of
the couple's properties in the event that the conjugal partnership of
gains is dissolved, to wit:

the marriage settlements or unless there has been a voluntary waiver

or
forfeiture
of
such
share
as
provided
in
this
Code.
(8) The presumptive legitimes of the common children shall be
delivered upon the partition in accordance with Article 51.
(9) In the partition of the properties, the conjugal dwelling and the lot
on which it is situated shall, unless otherwise agreed upon by the
parties, be adjudicated to the spouse with whom the majority of the
common children choose to remain. Children below the age of seven
years are deemed to have chosen the mother, unless the court has
decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said children.

Art. 129. Upon the dissolution of the conjugal partnership regime, the
following
procedure
shall
apply:

In the normal course of events, the following are the steps in the
liquidation
of
the
properties
of
the
spouses:

(1) An inventory shall be prepared, listing separately all the properties

of the conjugal partnership and the exclusive properties of each spouse.

(a) An inventory of all the actual properties shall be made, separately

listing
the
couple's
conjugal
properties
and
their
separate
properties.[78] In the instant case, the trial court found that the couple
has no separate properties when they married.[79] Rather, the trial
court identified the following conjugal properties, to wit:

(2) Amounts advanced by the conjugal partnership in payment of

personal debts and obligations of either spouse shall be credited to the
conjugal
partnership
as
an
asset
thereof.
(3) Each spouse shall be reimbursed for the use of his or her exclusive
funds in the acquisition of property or for the value of his or her
exclusive property, the ownership of which has been vested by law in
the
conjugal
partnership.
(4) The debts and obligations of the conjugal partnership shall be paid
out of the conjugal assets. In case of insufficiency of said assets, the
spouses shall be solidarily liable for the unpaid balance with their
separate properties, in accordance with the provisions of paragraph (2)
of
Article
121.
(5) Whatever remains of the exclusive properties of the spouses shall
thereafter
be
delivered
to
each
of
them.
(6) Unless the owner had been indemnified from whatever source, the
loss or deterioration of movables used for the benefit of the family,
belonging to either spouse, even due to fortuitous event, shall be paid
to
said
spouse
from
the
conjugal
funds,
if
any.
(7) The net remainder of the conjugal partnership properties shall
constitute the profits, which shall be divided equally between husband
and wife, unless a different proportion or division was agreed upon in

1.

coffee

2.

coffee

3.

corn

4.

mill
mill
mill

coffee

in
in

Balongagan,

Las

Nieves,

Agusan

del

Norte;

Durian,

Las

Nieves,

Agusan

del

Norte;

in

Casiklan,

Las

Nieves,

Agusan

del

Norte;

mill

in

del

Sur;

Esperanza,

Agusan

5. a parcel of land with an area of 1,200 square meters located in

Tungao,
Butuan
City;
6. a parcel of agricultural land with an area of 5 hectares located in
Manila
de
Bugabos,
Butuan
City;
7. a parcel of land with an area of 84 square meters located in Tungao,
Butuan
City;
8. Bashier Bon Factory located in Tungao, Butuan City.[80]

(b) Ordinarily, the benefit received by a spouse from the conjugal

partnership during the marriage is returned in equal amount to the
assets of the conjugal partnership;[81] and if the community is enriched

at the expense of the separate properties of either spouse, a restitution

of the value of such properties to their respective owners shall be
made.[82]
(c) Subsequently, the couple's conjugal partnership shall pay the debts
of the conjugal partnership; while the debts and obligation of each of
the spouses shall be paid from their respective separate properties. But
if the conjugal partnership is not sufficient to pay all its debts and
obligations, the spouses with their separate properties shall be
solidarily
liable.[83]
(d) Now, what remains of the separate or exclusive properties of the
husband and of the wife shall be returned to each of them.[84] In the
instant case, since it was already established by the trial court that the
spouses have no separate properties,[85]there is nothing to return to
any of them. The listed properties above are considered part of the
conjugal partnership. Thus, ordinarily, what remains in the abovelisted properties should be divided equally between the spouses and/or
their respective heirs.[86] However, since the trial court found the
petitioner the guilty party, his share from the net profits of the conjugal
partnership is forfeited in favor of the common children, pursuant to
Article 63(2) of the Family Code. Again, lest we be confused, like in the
absolute community regime, nothing will be returned to the guilty party
in the conjugal partnership regime, because there is no separate
property which may be accounted for in the guilty party's favor.
In the discussions above, we have seen that in both instances, the
petitioner is not entitled to any property at all. Thus, we cannot but
uphold the Decision dated October 10, 2005 of the trial court. However,
we must clarify, as we already did above, the Order dated January 8,
2007.
WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial
Court, Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for
Clarification dated July 7, 2006 in the Regional Trial Court, the Order
dated January 8, 2007 of the Regional Trial Court is hereby CLARIFIED
in
accordance
with
the
above
discussions.
SO
Carpio,

ORDERED.
(Chairperson),

Brion,

Perez,

and

Sereno,

JJ.,

concur.

4. Juliano-Llave vs Republic
FIRST DIVISION
[ G. R. No. 169766, March 30, 2011 ]
ESTRELLITA JULIAJVO-LLAVE, PETITIONER, VS. REPUBLIC OF THE
PHILIPPINES, HAJA PUTRI ZORAYDA A. TAMANO AND ADIB AHMAD A.
TAMANO,
RESPONDENTS.
DECISION
DEL CASTILLO, J.:
A new law ought to affect the future, not what is past. Hence, in the
case of subsequent marriage laws, no vested rights shall be impaired
that pertain to the protection of the legitimate union of a married
couple.
This petition for review on certiorari assails the Decision[1] dated
August 17, 2004 of the Court of Appeals (CA) in CA-GR. CVNo. 61762
and its subsequent Resolution[2] dated September 13, 2005, which
affirmed the Decision of the Regional Trial Court (RTC) of Quezon City,
Branch 89 declaring petitioner Estrellita Juliano-Llave's (Estrellita)
marriage to Sen. Mamintal AJ. Tamano (Sen. Tainano) as void ab initio.
Factual

Antecedents

Around 11 months before his death, Sen. Tamano married Estrellita

twice -initially under the Islamic laws and tradition on May 27, 1993 in
Cotabato City[3] and, subsequently, under a civil ceremony officiated by
an RTC Judge at Malabang, Lanao del Sur on June 2, 1993.[4] In their
marriage contracts, Sen. Tamano's civil status was indicated as
'divorced.'
Since then, Estrellita has been representing herself to the whole world
as Sen. Tamano's wife, and upon his death, his widow.
On November 23,1994, private respondents Haja Putri Zorayda A.
Tamano (Zorayda) and her son Adib Ahmad A. Tamano (Adib), in their
own behalf and in behalf of the rest of Sen. Tamano's legitimate
children with Zorayda,[5] filed a complaint with the RTC of Quezon City
for the declaration of nullity of marriage between Estrellita and Sen.
Tamano for being bigamous. The complaint[6] alleged, inter alia, that
Sen. Tamano married Zorayda on May 31, 1958 under civil rites, and

that this marriage remained subsisting when he married Estrellita in

1993. The complaint likewise averred that:
11. The marriage of the deceased and Complainant Zorayda, having
been celebrated under the New Civil Code, is therefore governed by this
law. Based on Article 35 (4) of the Family Code, the subsequent
marriage entered into by deceased Mamintal with Defendant Llave is
void ab initio because he contracted the same while his prior1 marriage
to Complainant Zorayda was still subsisting, and his status being
declared as "divorced" has no factual or legal basis, because the
deceased never divorced Complainant Zorayda in his lifetime, and he
could not have validly done so because divorce is not allowed under the
New
Civil
Code;
11.1 Moreover, the deceased did not and could not have divorced
Complainant Zorayda by invoking the provision of P.D. 1083, otherwise
known as the Code of Muslim Persona! Laws, for the simple reason that
the marriage of the deceased with Complainant Zorayda was never
deemed, legally and factually, to have been one contracted under
Muslim law as provided under Art. 186 (2) of P.D. 1083, since they
(deceased and Complainant Zorayda) did not register their mutual
desire to be thus covered by this law;[7]

Summons was then served on Estrellita on December 19, 1994. She

then asked from the court for an extension of 30 days to file her answer
to be counted from January 4, 1995,[8] and again, another 15 days[9] or
until February 18, 1995, both of which the court granted.[10]
Instead of submitting her answer, however, Estrellita filed a Motion to
Dismiss[11] on February 20, 1995 where she declared that Sen. Tamano
and Zorayda are both Muslims who were married under the Muslim
rites, as had been averred in the latter's disbarment complaint against
Sen. Tamano.[12] Estrellita argued that the RTC has no jurisdiction to
take cognizance of the case because under Presidential Decree (PD) No.
1083, or the Code of Muslim Personal Laws of the Philippines (Muslim
Code), questions and issues involving Muslim marriages and divorce fall
under
the
exclusive
jurisdiction
of
shari'a
courts.
The trial court denied Estrellita's motion and asserted its jurisdiction
over the case for declaration of nullity.[13] Thus, Estrellita filed in
November 1995 a certiorari petition with this Court questioning the
denial of her Motion to Dismiss. On December 15, 1995, we referred the
petition to the CA[14] which was docketed thereat as CA-GR. SP No.
39656.
During the pendency of CA-GR. SP No. 39656, the RTC continued to try

the case since there can be no default in cases of declaration of nullity

of marriage even if the respondent failed to file an answer. Estrellita
was allowed to participate in the trial while her opposing parties
presented their evidence. When it was A Estrellita's turn to adduce
evidence, the hearings set for such purpose[15] were postponed mostly
at her instance until the trial court, on March 22, 1996, suspended the
proceedings[16] in view of the CA's temporary restraining order issued
on February 29,1996, enjoining it from hearing the case. [17]
Eventually, however, the CA resolved the petition adverse to Estrellita
in its Decision dated September 30, 1996.,[18] Estrellita then elevated
the appellate court's judgment to this Court by way of a petition for
review
on
certiorari
docketed
as
GR.No.
126603.[19]
Subsequent to the promulgation of the CA Decision, the RTC ordered
Estrellita to present her evidence on June 26, 1997.[20]
As Estrellita
was indisposed on that day, the hearing was reset to July 9, 1997. [21]
The day before this scheduled hearing, Estrellita again asked for a
postponement.[22]
Unhappy with the delays in the resolution of their case, Zorayda and
Adib moved to submit the case for decision[23], reasoning that Estrellita
had long been delaying the case. Estrellita opposed, on the ground that
she has not yet filed her answer as she still awaits the outcome of GR.
No.
126603.[24]
On June 29, 1998, we upheld the jurisdiction of the RTC of Quezon
City,[25] stating as one of the reasons that as shari'a courts are not
vested with original and exclusive jurisdiction in cases of marriages
celebrated under both the Civil Code and PD 1083, the RTC, as a court
of general jurisdiction, is not precluded from assuming jurisdiction over
such cases. In our Resolution dated August 24,1998,[26] we denied
Estrellita's
motion
for
reconsideration[27]
with
finality.
A few days before this resolution, or on August 18,1998, the RTC
rendered the aforementioned judgment declaring Estrellita's marriage
]
with
Sen.
Tamano
as
void
ab
initio.[28
Ruling

of

the

Regional

Trial

Court

The RTC, finding that the marital ties of Sen. Tamano and Zorayda were
never severed, declared Sen. Tamano's subsequent marriage to
Estrellita as void ah initio for being bigamous under Article 35 of the
Family Code of the Philippines and under Article 83 of the Civil Code of
the Philippines.[29] The court said:

A comparison between Exhibits A and B (supra) immediately shows that

the second marriage of the late Senator with [Estrellita] was entered
into during the subsistence of his first marriage1 with [Zorayda]. This
renders the subsequent marriage void from the very beginning. The fact
that the late Senator declared his civil status as "divorced" will not in
any way affect the void character of the second marriage because, in
this jurisdiction, divorce obtained by the Filipino spouse is not an
acceptable method of terminating the effects of a previous marriage,
especially, where the subsequent marriage was solemnized under the
Civil Code or Family Code.[30]
Ruling

of

the

Court

of

Appeals

In her appeal,[31] Estrellita argued that she was denied her right to be
heard as a the RTC rendered its judgment even without waiting for the
finality of the Decision of the Supreme Court in GR. No. 126603. She
claimed that the RTC should have required her to file her answer after
the denial of her motion to dismiss. She maintained that Sen. Tamano is
capacitated to marry her as his marriage and subsequent divorce with
Zorayda is governed by the Muslim Code. Lastly, she highlighted
Zorayda's lack of legal standing to question the validity of her marriage
to
the
deceased.
In dismissing the appeal in its Decision dated August 17, 2004;[32] the
CA held that Estrellita can no longer be allowed to file her answer as
she was given ample opportunity to be heard but simply ignored it by
asking for numerous postponements. She never filed her answer
despite the lapse of around 60 days, a period longer than what was
prescribed by the rules. It also ruled that Estrellita cannot rely on her
pending petition for certiorari with the higher courts since, as an
independent and original action, it does not interrupt the proceedings in
the
trial
court.
As to the substantive merit of the case, the CA adjudged that Estrellita's
marriage to Sen. Tamano is void ab initio for being bigamous, reasoning
that the marriage of Zorayda and Sen. Tamano is governed by the Civil
Code, which does not provide for an absolute divorce. It noted that
their first nuptial celebration was under civil rites, while the subsequent
Muslim celebration was only ceremonial. Zorayda then, according to the
CA, had the legal standing to file the action as she is Sen. Tamano's
wife and, hence, the injured party in the senator's subsequent
bigamous
marriage
with
Estrellita.
In its September 13, 2005 Resolution,[33] the CA denied Estrellita's
Motion for Reconsideration/Supplemental Motion for Reconsideration
where it debunked the additional errors she raised. The CA noted that
the allegation of lack of they public prosecutor's report on the existence

of collusion in violation of both Rule 9, Section 3(e) of the Rules of

Court[34] and Article 48 of the Family Code[35] will not invalidate the trial
court's judgment as the proceedings between the parties had been
adversarial, negating the existence of collusion. Assuming that the
issues have not been joined before the RTC, the same is attributable to
Estrellita's refusal to file an answer. Lastly, the CA disregarded
Estrellita's allegation that the trial court erroneously rendered its
judgment way prior to our remand to the RTC of the records of the case
ratiocinating that GR. No. 126603 pertains to the issue on the denial of
the Motion to Dismiss, and not to the issue of the validity of Estrellita's
marriage
to
Sen.
Tamano.
The

Parties'Respective

Arguments

Reiterating her arguments before the court a quo, Estrellita now argues
that the CA erred in upholding the RTC judgment as the latter was
prematurely issued, depriving her of the opportunity to file an answer
and to present her evidence to dispute the allegations against the
validity of her marriage. She claims that Judge Macias v. Macias[36] laid
down the rule that the filing of a motion to dismiss instead of an answer
suspends the period to file an answer and, consequently, the trial court
is obliged to suspend proceedings while her motion to dismiss on the
ground of lack of jurisdiction has not yet been resolved with finality.
She maintains that she merely participated in the RTC hearings because
of the trial court's assurance that the proceedings will be without
prejudice to whatever action the High Court will take on her petition
questioning the RTC's jurisdiction and yet, the RTC violated this
commitment as it rendered an adverse judgment on August 18, 1998,
months before the records of GR. No. 126603 were remanded to the CA
on November 11, 1998.[37] She also questions the lack of a report of the
public prosecutor anent a finding of whether there was collusion, this
being a prerequisite before further proceeding could be held when a
party has failed to file an answer in a suit for declaration of nullity of
marriage.
Estrellita is also steadfast in her belief that her marriage with the late
senator is valid as the latter was already divorced under the Muslim
Code at the time he married her. She asserts that such law
automatically applies to the marriage of Zorayda and the deceased
without need of registering their consent to be covered by it, as both
parties are Muslims whose marriage was solemnized under Muslim law.
She pointed out that Sen. Tamano married all his wives under Muslim
rites, as attested to by the affidavits of the siblings of the deceased.[38]
Lastly, Estrellita argues that Zorayda and Adib have no legal standing to
file suit because only the husband or the wife can file a complaint for
the declaration of nullity of marriage under Supreme Court Resolution

A.M.

02-11-10-SC.[39]

No.

Refuting the arguments, the Solicitor General (Sol Gen) defends the
CA's reasoning and stresses that Estrellita was never deprived of her
right to be heard; and, that filing an original action for certiorari does
not stay the proceedings of the main action before the RTC.
As regards the alleged lack of report of the public prosecutor if there is
collusion, the Sol Gen says that this is no longer essential considering
the vigorous opposition of Estrellita in the suit that obviously shows the
lack of collusion. The Sol Gen also supports private respondents' legal
standing to challenge the validity of Estrellita's purported marriage with
Sen. Tamano, reasoning that any proper interested party may attack
directly or collaterally a void marriage, and Zorayda and Adib have such
right to file the action as they are the ones prejudiced by the marital
union.
Zorayda and Adib, on the other hand, did not file any comment

certiorari questioning the denial of

the motion to dismiss before the
higher courts does not at all
suspend the trial proceedings of the
principal suit before the RTC of
Quezon City.

Firstly, it can never be argued that Estrellita was deprived of her right
to due process. She was never declared in default, and she even
actively
participated
in
the
trial
to
defend
her
interest.
Estrellita invokes Judge Macias v. Macias [40]to justify the suspension of
the period to file an answer and of the proceedings in the trial court
until her petition for certiorari questioning the validity of the denial of
her Motion to Dismiss has been decided by this Court. In said case, we
affirmed the following reasoning of the CA which, apparently, is
Estrellita's basis for her argument, to wit

Issues

The

issues

that

must

be

resolved

are

the

following:

1. Whether the CA erred in affirming the trial court's judgment, even

though the latter was rendered prematurely because: a) the judgment
was rendered without waiting for the Supreme Court's final resolution
of her certiorari petition, i.e., GR. No. 126603; b) she has not yet filed
her answer and thus was denied due process; and c) the public
prosecutor did not even conduct an investigation whether there was
collusion;

However, she opted to file, on April 10, 2001, a 'Motion to Dismiss?

instead of filing an Answer to the complaint The filing of said motion
suspended the period for her to file her Answer to the complaint. Until
said motion is resolved by the Respondent Court with finality, it
behooved the Respondent Court to suspend the hearings of the case on
the merits. The Respondent Court, on April 19,2001, issued its Order
denying the 'Motion to Dismiss' of the Petitioner. Under Section 6, Rule
16 of the 1997 Rules of Civil Procedure [now Section 4], the Petitioner
had the balance of the period provided for in Rule 11 of the said Rules
but in no case less than five (5) days computed from sendee on her of
the aforesaid Order of the Respondent Court within which to file her
Answer to the complaint x x x[41]' (Emphasis supplied.)

2. Whether the marriage between Estrellita and the late Sen. Tamano
was
bigamous;
and
3. Whether Zorayda and Adib have the legal standing to have
Estrellita's marriage declared void ab initio.
Our Ruling

Estrellita s refusal to file an answer

eventually led to the loss of her
right to answer; and her pending
petition for certiorari/review on

Estrellita obviously misappreciated Macias. All we pronounced therein is

that the trial court is mandated to suspend trial until it finally resolves
the motion to dismiss that is filed before it. Nothing in the above
excerpt states that the trial court should suspend its proceedings
should the issue of the propriety or impropriety of the motion to dismiss
be raised before the appellate courts. In Macias, the trial court failed to
observe due process in the course of the proceeding of the case
because after it denied the wife's motion to dismiss, it immediately
proceeded to allow the husband to present evidence ex parte and
resolved the case with undue haste even when, under the rules of
procedure, the wife still had time to file an answer. In the instant case,
Estrellita had no time left for filing an answer, as she filed the motion to
dismiss beyond the extended period earlier granted by the trial court

after she filed motions for extension of time to file an answer.

Estrellita argues that the trials court prematurely issued its judgment,
as it should have waited first for the resolution of her Motion to Dismiss
before the CA and, subsequently, before this Court. However, in
upholding the RTC, the CA correctly ailed that the pendency of ,a
petition for certiorari does not suspend the proceedings before the trial
court. "An application for certiorari is an independent action which is
not part or a continuation of the trial which resulted in the rendition of
the judgment complained of."[42] Rule 65 of the Rules of Court is explicit
in stating that "[t]he petition shall not interrupt the 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."[43] In fact, the trial court
respected the CA's temporary restraining order and only after the CA
rendered judgment did the RTC again require Estrellita to present her
evidence.
Notably, when the CA judgment was elevated to us by way of Rule 45,
we never issued any order precluding the trial court from proceeding
with the principal action. With her numerous requests for
postponements, Estrellita remained obstinate in refusing to file an
answer or to present her evidence when it was her turn to do so,
insisting that the trial court should wait first for our decision in GR. Mo.
126603. Her failure to file an answer and her refusal to present her
evidence were attributable only to herself and she should not be
allowed to benefit from her own dilatory tactics to the prejudice of the
other party. Sans her answer, the trial court correctly proceeded with
the trial and rendered its Decision after it deemed Estrellita to have
waived her right to present her side of the story. Neither should the
lower court wait for the decision in GR. No. 126603 to become final and
executory, nor should it wait for its records to be remanded back to it
because GR. No. 126603 involves strictly the propriety of the Motion to
Dismiss
and
not
the
issue
of
validity
of
marriage.
The
to

Public
the

Prosecutor
issued
non-existence

a
of

report
as
collusion.

Aside from Article 48 of the Family Code and Rule 9, Section 3(e) of the
Rules of Court, the Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10SC)[44] also requries the participation of the public prosecutor in cases
involving void marriages. It specifically mandates the prosecutor to
submit his investigation report to determine whether there is collusion
between the parties:

Sec. 9. Investigation report of public prosecutor.- (1) Within one month

after receipt of the court order mentioned in paragraph (3) of Section 8
above, the public prosecutor shall submit a report to the court stating
whether the parties are in collusion and serve copies thereof on the
parties
and
their
respective
counsels,
if
any.
(2) If the public prosecutor finds that collusion exists, he shall slate the
basis thereof in his report. The parties shall file their respective
comments on the finding of collusion within ten days from receipt of a
copy of the report. The court shall set the report for hearing and if
convinced that the parties are in collusion, it shall dismiss the petition.
(3) If the public prosecutor reports that no collusion exists, the court
shall set the case for pre-trial. It shall be the duty of the public
prosecutor to appear for the State at the pre-trial.

Records show that the trial court immediately directed the public
prosecutor to submit the required report,[45] which we find to have been
sufficiently complied with by Assistant City Prosecutor Edgardo T.
Paragua in his Manifestation dated March 30,1995,[46] wherein he
attested that there could be no collusion between the parties and no
fabrication of evidence because Estrellita is not the spouse of any of the
private
respondents.
Furthermore, the lack of collusion is evident in the case at
assuming that there is a lack of report of collusion or
participation by the public prosecutor, just as we held in
Court of Appeals,[47] the lack of participation of a fiscal
invalidate the proceedings in the trial court:

bar. Even
a lack of
Tuason v.
does not

The role of the prosecuting attorney or fiscal in annulment of marriage

and legal separation proceedings is to determine whether collusion
exists between the parties and to take care that the evidence is not
suppressed or fabricated. Petitioner's vehement opposition to the
annulment proceedings negates the conclusion that collusion existed
between the parties. There is no allegation by the petitioner that
evidence was suppressed or fabricated by any of the parties. Under
these circumstances, we are convinced that the nonintervention of a
prosecuting attorney to assure lack of collusion between the contending
parties is not fatal to the validity of the proceedings in the trial
court.[48]

The Civil Code governs the marriage

of Zorayda and the late Sen.

Tamano; their marriage was never
invalidated by PD 1083. Sen.
Tamano's subsequent marriage to
Estrellita is void ab initio.

case of doubt will be resolved against the retroactive operation of laws.

Article 186 aforecited enunciates the general rule of the Muslim Code to
have its provisions applied prospectively, and implicitly upholds the
force and effect of a pre-existing body of law, specifically, the Civil Code
- in respect of civil acts that took place before the Muslim Code's
enactment.[54]

The marriage between the late Sen. Tamano and Zorayda was
celebrated in 1958, solemnized under civil and Muslim rites.[49] The only
law in force governing marriage relationships between Muslims and
non-Muslims alike was the Civil Code of 1950, under the provisions of
which only one marriage can exist at any given time.[50] Under the
marriage provisions of the Civil Code, divorce is not recognized except
during the efifectivity of Republic Act No. 394[51] which was not availed
of
during
its
effectivity.

An instance of retroactive application of the Muslim Code is Article

186(2) which states:

As far as Estrellita is concerned, Sen. Tamano's prior marriage to

Zorayda has been severed by way of divorce under PD 1083,[52] the law
that codified Muslim personal laws. However, PD 1083 cannot benefit
Estrellita. Firstly, Article 13(1) thereof provides that the law applies to
"marriage and divorce wherein both parties are Muslims, or wherein
only the male party is a Muslim and the marriage is solemnized in
accordance with Muslim law or this Code in any part of the Philippines."
But we already ruled in GR. No. 126603 that "Article 13 of PD 1083 does
not provide for a situation where the parties were married both in civil
and
Muslim
rites."[53]
Moreover, the Muslim Code took effect only on February 4, 1977, and
this law cannot retroactively override the Civil Code which already
bestowed certain rights on the marriage of Sen. Tamano and Zorayda.
The former explicitly provided for the prospective application of its
provisions unless otherwise provided:
Art. 186 (1). Effect of code on past acts. Acts executed prior to the
effectivity of this Code shall be governed by the laws in force at the
time of their execution, and nothing herein except as otherwise
specifically provided, shall affect their validity or legality or operate to
extinguish any right acquired or liability incurred thereby.

It has been held that:

The foregoing provisions are consistent with the principle that all laws
operate prospectively, unless the contrary appears or is clearly, plainly
and unequivocably expressed or necessarily implied; accordingly, every

A marriage contracted by a Muslim male prior to the effectivity of this

Code in accordance with non-Muslim law shall be considered as one
contracted under Muslim law provided the spouses register their mutual
desire to thiseffect.

Even granting that there was registration of mutual consent for the
marriage to be considered as one contracted under the Muslim law, the
registration of mutual consent between Zorayda and Sen. Tamano will
still be ineffective, as both are Muslims whose marriage was celebrated
under both civil and Muslim laws. Besides, as we have already settled,
the Civil Code governs their personal status since this was in effect at
the time of the celebration of their marriage. In view of Sen. Tamano's
prior marriage which subsisted at the time Estrellita married him, their
subsequent marriage is correctly adjudged by the CA as void ab initio.
Zorayda andAdib, as the injured
parties, have the legal personalities
to file the declaration of nullity of
marriage. A.M. No. 02-11-10SC,
which limits to only the husband or
the wife the filing of a petition for
nullity is prospective in application
and does not shut out the prior
spouse from filing suit if the ground
is
a
bigamous
subsequent
marriage.

Her marriage covered by the Family Code of the Philippines,"[55]

Estrellita relies on A.M. No. 02-11-10-SC which took effect on March 15,
2003 claiming that under Section 2(a) [56] thereof, only the husband or
the wife, to the exclusion of others, may file a petition for declaration of
absolute nullity, therefore only she and Sen. Tamano may directly
attack
the
validity
of
their
own
marriage.

Estrellita claims that only the husband or the wife in a void marriage
can file a petition for declaration of nullity of marriage. However, this
interpretation does not apply if the reason behind the petition is
bigamy.
In explaining why under A.M. No. 02-11-10-SC only the spouses may
file the petition to the exclusion of compulsory or intestate heirs, we
said:
The Rationale of the Rules on Annulment of Voidable Marriages and
Declaration of Absolute Nullity of Void Marriages, Legal Separation and
Provisional Orders explicates on Section 2(a) in the following manner,
viz:
(1) Only an aggrieved or injured spouse may file petitions for
annulment of voidable marriages and declaration of absolute nullity of
void marriages. Such petitions cannot be filed by the compulsory or
intestate heirs of the spouses or by the State. [Section 2; Section 3,
paragraph
a]
Only an aggrieved or injured spouse may file a petition for annulment of
voidable marriages or declaration of absolute nullity of void marriages.
Such petition cannot be filed by compulsory or intestate heirs of the
spouses or by the State. The Committee is of the belief that they do not
have a legal right to file the petition. Compulsory or intestate heirs have
only inchoate rights prior to the death of their predecessor, and hence
can only question.the validity of the marriage of the spouses upon the
death of a spouse in a proceeding for the settlement of the estate of the
deceased spouse filed in the regular courts. On the other hand, the
concern of the State is to preserve marriage and not to seek its
dissolution.[57]

Note that the Rationale makes it clear that Section 2(a) of A.M. No. 0211-10-SC refers to the "aggrieved or injured spouse." If Estrellita's
interpretation is employed, the prior spouse is unjustly precluded from
filing an action. Surely, this is not what the Rule contemplated.
The subsequent spouse may only be expected to take action if he or she
had only discovered during the connubial period that the fnarriage was
bigamous, and especially if the conjugal bliss had already vanished.
Should parties in a subsequent marriage benefit from the bigamous
marriage, it would not be expected that they would file an action to
declare the marriage void and thus, in such circumstance, the "injured
spouse" who should be given a legal remedy is the one in a subsisting
previous marriage. The latter is clearly the aggrieved party as the

bigamous marriage not only threatens the financial and the property
ownership aspect of the prior marriage but most of all, it causes an
emotional burden to the prior spouse. The subsequent marriage will
always be a reminder of the infidelity of the spouse and the disregard of
the prior marriage which sanctity is protected by the Constitution.
Indeed, Section 2(a) of A.M. No. 02-11-10-SC precludes the son from
impugning the subsequent marriage. But in the case at bar, both
Zorayda and Adib have legal personalities to file an action for nullity.
Albeit the Supreme Court Resolution governs marriages celebrated
under the Family Code, such is prospective in application and does not
apply to cases already commenced before March 15,2003.[58]
Zorayda and Adib filed the case for declaration of nullity of Estrellita's
marriage
in
November
1994.
While the Family Code is silent with respect to the proper party who can
file a petition for declaration of nullity of marriage prior to A.M. No. 0211-10-SC, it has been held that in a void marriage, in which no marriage
has taken place and cannot be the source of rights, any interested party
may attack the mairiage directly or collaterally without prescription,
which may be filed even beyond the lifetime of the parties to the
marriage.[59] Since A.M. No. 02-11-10-SC does not apply, Adib, as one of
the children of the deceased who has property rights as an heir, is
likewise considered to be the real party in interest in the suit he and his
mother had filed since both of them stand to be benefited or injured by
the
judgment
in
the
suit.[60]
Since our Philippine laws protect the marital union of a couple, they
should be interpreted in a way that would preserve their respective
rights which include striking down bigamous marriages. We thus find
the
CA
Decision
correctly
rendered.
WHEREFORE, the petition is DENIED. The assailed August 17, 2004
Decision of the Court of Appeals in CA-GR. CV No. 61762, as well as its
subsequent Resolution issued on September 13, 2005, are hereby
AFFIRMED.
SO

ORDERED.

Corana, C.J., (Chairperson), Velasco, Jr., Leonardo-De Castro, and

Perez,
JJ.,
concur.

5. Ablaza v. Republic

ISIDRO

ABLAZA,

VS.

REPUBLIC

OF

THE

PHILIPPINES

FACTS: On October 17, 2000, the petitioner filed in the Regional Trial
Court (RTC) in Cataingan, Masbate a petition for the declaration of the
absolute nullity of the marriage contracted on December 26, 1949
between his late brother Cresenciano Ablaza and Leonila Honato.
The petitioner alleged that the marriage between Cresenciano and
Leonila had been celebrated without a marriage license, due to such
license being issued only on January 9, 1950, thereby rendering the
marriage void ab initio for having been solemnized without a marriage
license. He insisted that his being the surviving brother of Cresenciano
who had died without any issue entitled him to one-half of the real
properties acquired by Cresenciano before his death, thereby making
him a real party in interest; and that any person, himself included, could
impugn the validity of the marriage between Cresenciano and Leonila at
any time, even after the death of Cresenciano, due to the marriage
being void ab initio.[2]

ISSUE: whether the petitioner is a real party in interest in the action to

seek the declaration of nullity of the marriage of his deceased brother.
HELD: A valid marriage is essential in order to create the relation of
husband and wife and to give rise to the mutual rights, duties, and
liabilities arising out of such relation. The law prescribes the requisites
of a valid marriage. Hence, the validity of a marriage is tested according
to the law in force at the time the marriage is contracted. [6] As a
general rule, the nature of the marriage already celebrated cannot be
changed by a subsequent amendment of the governing law.[7] To
illustrate, a marriage between a stepbrother and a stepsister was void
under the Civil Code, but is not anymore prohibited under the Family
Code; yet, the intervening effectivity of the Family Code does not affect
the void nature of a marriage between a stepbrother and a stepsister
solemnized under the regime of the Civil Code. The Civil Code marriage
remains void, considering that the validity of a marriage is governed by
the law in force at the time of the marriage ceremony. [8]
Before anything more, the Court has to clarify the impact to the issue
posed herein of Administrative Matter (A.M.) No. 02-11-10-SC (Rule on
Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages), which took effect on March 15, 2003.

Section 2, paragraph (a), of A.M. No. 02-11-10-SC explicitly provides

the limitation that a petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or wife. Such limitation
demarcates a line to distinguish between marriages covered by the
Family Code and those solemnized under the regime of the Civil Code.[9]
Specifically, A.M. No. 02-11-10-SC extends only to marriages covered by
the Family Code, which took effect on August 3, 1988, but, being a
procedural rule that is prospective in application, is confined only to
proceedings
commenced
after
March
15,
2003.[10]
Based on Carlos v. Sandoval,[11] the following actions for declaration of
absolute nullity of a marriage are excepted from the limitation, to wit:
1. Those commenced before March 15, 2003, the effectivity date of
A.M. No. 02-11-10-SC; and
2. Those filed vis--vis marriages celebrated during the effectivity
of the Civil Code and, those celebrated under the regime of the
Family Code prior to March 15, 2003.

Considering that the marriage between Cresenciano and Leonila was

contracted on December 26, 1949, the applicable law was the old Civil
Code, the law in effect at the time of the celebration of the marriage.
Hence, the rule on the exclusivity of the parties to the marriage as
having the right to initiate the action for declaration of nullity of the
marriage under A.M. No. 02-11-10-SC had absolutely no application to
the
petitioner.
The old and new Civil Codes contain no provision on who can file a
petition to declare the nullity of a marriage, and when. Accordingly, in
Nial v. Bayadog,[12] the children were allowed to file after the death of
their father a petition for the declaration of the nullity of their father's
marriage to their stepmother contracted on December 11, 1986 due to
lack of a marriage license. There, the Court distinguished between a
void marriage and a voidable one, and explained how and when each
might be impugned, thuswise:
Jurisprudence under the Civil Code states that no judicial decree is
necessary in order to establish the nullity of a marriage. "A void
marriage does not require a judicial decree to restore the parties to
their original rights or to make the marriage void but though no
sentence of avoidance be absolutely necessary, yet as well for the sake
of good order of society as for the peace of mind of all concerned, it is
expedient that the nullity of the marriage should be ascertained and
declared by the decree of a court of competent jurisdiction." "Under
ordinary circumstances, the effect of a void marriage, so far as concerns
the conferring of legal rights upon the parties, is as though no marriage

had ever taken place. And therefore, being good for no legal purpose,
its invalidity can be maintained in any proceeding in which the fact of
marriage may be material, either direct or collateral, in any civil court
between any parties at any time, whether before or after the death of
either or both the husband and the wife, and upon mere proof of the
facts rendering such marriage void, it will be disregarded or treated as
non-existent by the courts." It is not like a voidable marriage which
cannot be collaterally attacked except in direct proceeding instituted
during the lifetime of the parties so that on the death of either, the
marriage cannot be impeached, and is made good ab initio. But Article
40 of the Family Code expressly provides that there must be a judicial
declaration of the nullity of a previous marriage, though void, before a
party can enter into a second marriage and such absolute nullity can be
based only on a final judgment to that effect. For the same reason, the
law makes either the action or defense for the declaration of absolute
nullity of marriage imprescriptible. Corollarily, if the death of either
party would extinguish the cause of action or the ground for defense,
then
the
same
cannot
be
considered
imprescriptible.
However, other than for purposes of remarriage, no judicial action is
necessary to declare a marriage an absolute nullity. For other purposes,
such as but not limited to determination of heirship, legitimacy or
illegitimacy of a child, settlement of estate, dissolution of property
regime, or a criminal case for that matter, the court may pass upon the
validity of marriage even in a suit not directly instituted to question the
same so long as it is essential to the determination of the case. This is
without prejudice to any issue that may arise in the case. When such
need arises, a final judgment of declaration of nullity is necessary even
if the purpose is other than to remarry. The clause "on the basis of a
final judgment declaring such previous marriage void" in Article 40 of
the Family Code connotes that such final judgment need not be
obtained only for purpose of remarriage.[13]

It is clarified, however, that the absence of a provision in the old and

new Civil Codes cannot be construed as giving a license to just any
person to bring an action to declare the absolute nullity of a marriage.
According to Carlos v. Sandoval,[14] the plaintiff must still be the party
who stands to be benefited by the suit, or the party entitled to the
avails of the suit, for it is basic in procedural law that every action must
be prosecuted and defended in the name of the real party in interest.[15]
Thus, only the party who can demonstrate a "proper interest" can file
the action.[16] Interest within the meaning of the rule means material
interest, or an interest in issue to be affected by the decree or judgment
of the case, as distinguished from mere curiosity about the question
involved or a mere incidental interest. One having no material interest
to protect cannot invoke the jurisdiction of the court as plaintiff in an

action. When the plaintiff is not the real party in interest, the case is
dismissible on the ground of lack of cause of action.[17]
Here, the petitioner alleged himself to be the late Cresenciano's brother
and surviving heir. Assuming that the petitioner was as he claimed
himself to be, then he has a material interest in the estate of
Cresenciano that will be adversely affected by any judgment in the suit.
Indeed, a brother like the petitioner, albeit not a compulsory heir under
the laws of succession, has the right to succeed to the estate of a
deceased brother under the conditions stated in Article 1001 and Article
1003 of the Civil Code, as follows:
Article 1001. Should brothers and sisters or their children survive with
the widow or widower, the latter shall be entitled to one half of the
inheritance and the brothers and sisters or their children to the other
half.
Article 1003. If there are no descendants, ascendants, illegitimate
children, or a surviving spouse, the collateral relatives shall succeed to
the entire estate of the deceased in accordance with the following
articles.

Pursuant to these provisions, the presence of descendants, ascendants,

or illegitimate children of the deceased excludes collateral relatives like
the petitioner from succeeding to the deceased's estate. [18] Necessarily,
therefore, the right of the petitioner to bring the action hinges upon a
prior determination of whether Cresenciano had any descendants,
ascendants, or children (legitimate or illegitimate), and of whether the
petitioner was the late Cresenciano's surviving heir. Such prior
determination must be made by the trial court, for the inquiry thereon
involves
questions
of
fact.
As can be seen, both the RTC and the CA erroneously resolved the issue
presented in this case. We reverse their error, in order that the
substantial right of the petitioner, if any, may not be prejudiced.
Nevertheless, we note that the petitioner did not implead Leonila, who,
as the late Cresenciano's surviving wife,[19] stood to be benefited or
prejudiced by the nullification of her own marriage. It is relevant to
observe, moreover, that not all marriages celebrated under the old Civil
Code
required
a marriage license for their validity;[20] hence, her participation in this
action is made all the more necessary in order to shed light on whether
the marriage had been celebrated without a marriage license and
whether the marriage might have been a marriage excepted from the

requirement of a marriage license. She was truly an indispensable party

who must be joined herein:
xxx under any and all conditions, [her] presence being a sine qua non
for the exercise of judicial power. It is precisely "when an indispensable
party is not before the court [that] the action should be dismissed." The
absence of an indispensable party renders all subsequent actions of the
court null and void for want of authority to act, not only as to the
absent parties but even as to those present.[21]

as whether the petitioner was the brother and surviving heir of the late
Cresenciano Ablaza entitled to succeed to the estate of said deceased;
and
thereafter
to
proceed
accordingly.
No

costs

SO

of

suit.
ORDERED.

THIRD DIVISION
We take note, too, that the petitioner and Leonila were parties in C.A.G.R. CV No. 91025 entitled Heirs of Cresenciano Ablaza, namely: Leonila
G. Ablaza and Leila Ablaza Jasul v. Spouses Isidro and Casilda Ablaza,
an action to determine who between the parties were the legal owners
of the property involved therein. Apparently, C.A.-G.R. CV No. 91025
was decided on November 26, 2009, and the petitioner's motion for
reconsideration was denied on June 23, 2010. As a defendant in that
action, the petitioner is reasonably presumed to have knowledge that
the therein plaintiffs, Leonila and Leila, were the wife and daughter,
respectively, of the late Cresenciano. As such, Leila was another
indispensable party whose substantial right any judgment in this action
will definitely affect. The petitioner should likewise implead Leila.
The omission to implead Leonila and Leila was not immediately fatal to
the present action, however, considering that Section 11,[22] Rule 3,
Rules of Court, states that neither misjoinder nor non-joinder of parties
is a ground for the dismissal of an action. The petitioner can still amend
his initiatory pleading in order to implead her, for under the same rule,
such amendment to implead an indispensable party may be made "on
motion of any party or on (the trial court's) own initiative at any stage
of
the
action
and
on
such
terms
as
are
just."
WHEREFORE,

the

petition

for

review

on

certiorari

is

granted.

We reverse and set aside the decision dated January 30, 2003 rendered
by
the
Court
of
Appeals.
Special Case No. 117 entitled In Re: Petition for Nullification of
Marriage Contract between Cresenciano Ablaza and Leonila Honato;
Isidro Ablaza, petitioner, is reinstated, and its records are returned to
the Regional Trial Court, Branch 49, in Cataingan, Masbate, for further
proceedings, with instructions to first require the petitioner to amend
his initiatory pleading in order to implead Leonila Honato and her
daughter Leila Ablaza Jasul as parties-defendants; then to determine
whether the late Cresenciano Ablaza had any ascendants, descendants,
or children (legitimate or illegitimate) at the time of his death as well

[ G.R. No. 158298, August 11, 2010 ]

ISIDRO ABLAZA, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES,
RESPONDENT.
DECISION
BERSAMIN, J.:
Whether a person may bring an action for the declaration of the
absolute nullity of the marriage of his deceased brother solemnized
under the regime of the old Civil Code is the legal issue to be
determined in this appeal brought by the petitioner whose action for
that purpose has been dismissed by the lower courts on the ground that
he, not being a party in the assailed marriage, had no right to bring the
action.
Antecedents

On October 17, 2000, the petitioner filed in the Regional Trial Court
(RTC) in Cataingan, Masbate a petition for the declaration of the
absolute nullity of the marriage contracted on December 26, 1949
between his late brother Cresenciano Ablaza and Leonila Honato.[1] The
case was docketed as Special Case No. 117 entitled In Re: Petition for
Nullification of Marriage Contract between Cresenciano Ablaza and
Leonila
Honato;
Isidro
Ablaza,
petitioner.
The petitioner alleged that the marriage between Cresenciano and
Leonila had been celebrated without a marriage license, due to such
license being issued only on January 9, 1950, thereby rendering the
marriage void ab initio for having been solemnized without a marriage
license. He insisted that his being the surviving brother of Cresenciano

who had died without any issue entitled him to one-half of the real
properties acquired by Cresenciano before his death, thereby making
him a real party in interest; and that any person, himself included, could
impugn the validity of the marriage between Cresenciano and Leonila at
any time, even after the death of Cresenciano, due to the marriage
being void ab initio.[2]

Certainly, a surviving brother of the deceased spouse is not the proper

party to file the subject petition. More so that the surviving wife, who
stands to be prejudiced, was not even impleaded as a party to said
case.

Ruling of the RTC

On October 18, 2000,

he is considered a real party in interest under Section 2, Rule 3 of the

1997 Rules of Civil Procedure, as he stands to be benefited or injured by
the judgment in the suit, is simply misplaced. Actions for annulment of
marriage will not prosper if persons other than those specified in the
law
file
the
case.

[3]

the RTC dismissed the petition, stating:

Considering the petition for annulment of marriage filed, the Court

hereby resolved to DISMISS the petition for the following reasons: 1)
petition is filed out of time (action had long prescribed) and 2)
petitioner is not a party to the marriage (contracted between
Cresenciano Ablaza and Leonila Nonato on December 26, 1949 and
solemnized
by
Rev.
Fr.
Eusebio
B.
Calolot).

WHEREFORE, finding no reversible error therefrom, the Orders now on

appeal are hereby AFFIRMED. Costs against the petitioner-appellant.
SO ORDERED.[5]

Hence, this appeal.

SO ORDERED.

Issues

The petitioner seasonably filed a motion for reconsideration, but the

RTC denied the motion for reconsideration on November 14, 2000.

The petitioner raises the following issues:

I.

Ruling of the Court of Appeals

The petitioner appealed to the Court of Appeals (CA), assigning the lone
error that:
The trial court erred in dismissing the petition for being filed out of time
and that the petitioner is not a party to the marriage.

In its decision dated January 30, 2003,[4] however, the CA affirmed the
dismissal order of the RTC, thus:
While an action to declare the nullity of a marriage considered void
from the beginning does not prescribe, the law nonetheless requires
that the same action must be filed by the proper party, which in this
case should be filed by any of the parties to the marriage. In the instant
case, the petition was filed by Isidro Ablaza, a brother of the deceasedspouse, who is not a party to the marriage contracted by Cresenciano
Ablaza and Leonila Honato. The contention of petitioner-appellant that

WHETHER OR NOT THE DECISION OF THIS HONORABLE COURT

APPEALS IN CA-G.R. CV. NO. 69684 AFFIRMING THE ORDER
DISMISSAL OF THE REGIONAL TRIAL COURT, BRANCH 49
CATAINGAN, MASBATE IN SPECIAL PROCEEDING NO. 117 IS
ACCORDANCE WITH APPLICABLE LAWS AND JURISPRUDENCE;

OF
OF
AT
IN

II.

WHETHER OR NOT THE DECISION OF THE HONORABLE COURT OF

APPEALS IN CA-G.R. CV NO. 69684 (SHOULD) BE REVERSED BASED ON
EXECUTIVE ORDER NO. 209 AND EXISTING JURISPRUDENCE.

The issues, rephrased, boil down to whether the petitioner is a real

party in interest in the action to seek the declaration of nullity of the
marriage of his deceased brother.

Ruling

The

petition

is

meritorious.

A valid marriage is essential in order to create the relation of husband

and wife and to give rise to the mutual rights, duties, and liabilities
arising out of such relation. The law prescribes the requisites of a valid
marriage. Hence, the validity of a marriage is tested according to the
law in force at the time the marriage is contracted.[6] As a general rule,
the nature of the marriage already celebrated cannot be changed by a
subsequent amendment of the governing law.[7] To illustrate, a
marriage between a stepbrother and a stepsister was void under the
Civil Code, but is not anymore prohibited under the Family Code; yet,
the intervening effectivity of the Family Code does not affect the void
nature of a marriage between a stepbrother and a stepsister
solemnized under the regime of the Civil Code. The Civil Code marriage
remains void, considering that the validity of a marriage is governed by
the law in force at the time of the marriage ceremony. [8]
Before anything more, the Court has to clarify the impact to the issue
posed herein of Administrative Matter (A.M.) No. 02-11-10-SC (Rule on
Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages), which took effect on March 15, 2003.
Section 2, paragraph (a), of A.M. No. 02-11-10-SC explicitly provides
the limitation that a petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or wife. Such limitation
demarcates a line to distinguish between marriages covered by the
Family Code and those solemnized under the regime of the Civil Code.[9]
Specifically, A.M. No. 02-11-10-SC extends only to marriages covered by
the Family Code, which took effect on August 3, 1988, but, being a
procedural rule that is prospective in application, is confined only to
proceedings
commenced
after
March
15,
2003.[10]
Based on Carlos v. Sandoval,[11] the following actions for declaration of
absolute nullity of a marriage are excepted from the limitation, to wit:
1. Those commenced before March 15, 2003, the effectivity date of
A.M. No. 02-11-10-SC; and
2. Those filed vis--vis marriages celebrated during the effectivity
of the Civil Code and, those celebrated under the regime of the
Family Code prior to March 15, 2003.

Considering that the marriage between Cresenciano and Leonila was

contracted on December 26, 1949, the applicable law was the old Civil

Code, the law in effect at the time of the celebration of the marriage.
Hence, the rule on the exclusivity of the parties to the marriage as
having the right to initiate the action for declaration of nullity of the
marriage under A.M. No. 02-11-10-SC had absolutely no application to
the
petitioner.
The old and new Civil Codes contain no provision on who can file a
petition to declare the nullity of a marriage, and when. Accordingly, in
Nial v. Bayadog,[12] the children were allowed to file after the death of
their father a petition for the declaration of the nullity of their father's
marriage to their stepmother contracted on December 11, 1986 due to
lack of a marriage license. There, the Court distinguished between a
void marriage and a voidable one, and explained how and when each
might be impugned, thuswise:
Jurisprudence under the Civil Code states that no judicial decree is
necessary in order to establish the nullity of a marriage. "A void
marriage does not require a judicial decree to restore the parties to
their original rights or to make the marriage void but though no
sentence of avoidance be absolutely necessary, yet as well for the sake
of good order of society as for the peace of mind of all concerned, it is
expedient that the nullity of the marriage should be ascertained and
declared by the decree of a court of competent jurisdiction." "Under
ordinary circumstances, the effect of a void marriage, so far as concerns
the conferring of legal rights upon the parties, is as though no marriage
had ever taken place. And therefore, being good for no legal purpose,
its invalidity can be maintained in any proceeding in which the fact of
marriage may be material, either direct or collateral, in any civil court
between any parties at any time, whether before or after the death of
either or both the husband and the wife, and upon mere proof of the
facts rendering such marriage void, it will be disregarded or treated as
non-existent by the courts." It is not like a voidable marriage which
cannot be collaterally attacked except in direct proceeding instituted
during the lifetime of the parties so that on the death of either, the
marriage cannot be impeached, and is made good ab initio. But Article
40 of the Family Code expressly provides that there must be a judicial
declaration of the nullity of a previous marriage, though void, before a
party can enter into a second marriage and such absolute nullity can be
based only on a final judgment to that effect. For the same reason, the
law makes either the action or defense for the declaration of absolute
nullity of marriage imprescriptible. Corollarily, if the death of either
party would extinguish the cause of action or the ground for defense,
then
the
same
cannot
be
considered
imprescriptible.
However, other than for purposes of remarriage, no judicial action is
necessary to declare a marriage an absolute nullity. For other purposes,
such as but not limited to determination of heirship, legitimacy or

illegitimacy of a child, settlement of estate, dissolution of property

regime, or a criminal case for that matter, the court may pass upon the
validity of marriage even in a suit not directly instituted to question the
same so long as it is essential to the determination of the case. This is
without prejudice to any issue that may arise in the case. When such
need arises, a final judgment of declaration of nullity is necessary even
if the purpose is other than to remarry. The clause "on the basis of a
final judgment declaring such previous marriage void" in Article 40 of
the Family Code connotes that such final judgment need not be
obtained only for purpose of remarriage.[13]

It is clarified, however, that the absence of a provision in the old and

new Civil Codes cannot be construed as giving a license to just any
person to bring an action to declare the absolute nullity of a marriage.
According to Carlos v. Sandoval,[14] the plaintiff must still be the party
who stands to be benefited by the suit, or the party entitled to the
avails of the suit, for it is basic in procedural law that every action must
be prosecuted and defended in the name of the real party in interest.[15]
Thus, only the party who can demonstrate a "proper interest" can file
the action.[16] Interest within the meaning of the rule means material
interest, or an interest in issue to be affected by the decree or judgment
of the case, as distinguished from mere curiosity about the question
involved or a mere incidental interest. One having no material interest
to protect cannot invoke the jurisdiction of the court as plaintiff in an
action. When the plaintiff is not the real party in interest, the case is
dismissible on the ground of lack of cause of action. [17]
Here, the petitioner alleged himself to be the late Cresenciano's brother
and surviving heir. Assuming that the petitioner was as he claimed
himself to be, then he has a material interest in the estate of
Cresenciano that will be adversely affected by any judgment in the suit.
Indeed, a brother like the petitioner, albeit not a compulsory heir under
the laws of succession, has the right to succeed to the estate of a
deceased brother under the conditions stated in Article 1001 and Article
1003 of the Civil Code, as follows:
Article 1001. Should brothers and sisters or their children survive with
the widow or widower, the latter shall be entitled to one half of the
inheritance and the brothers and sisters or their children to the other
half.
Article 1003. If there are no descendants, ascendants, illegitimate
children, or a surviving spouse, the collateral relatives shall succeed to
the entire estate of the deceased in accordance with the following
articles.

Pursuant to these provisions, the presence of descendants, ascendants,

or illegitimate children of the deceased excludes collateral relatives like
the petitioner from succeeding to the deceased's estate. [18] Necessarily,
therefore, the right of the petitioner to bring the action hinges upon a
prior determination of whether Cresenciano had any descendants,
ascendants, or children (legitimate or illegitimate), and of whether the
petitioner was the late Cresenciano's surviving heir. Such prior
determination must be made by the trial court, for the inquiry thereon
involves
questions
of
fact.
As can be seen, both the RTC and the CA erroneously resolved the issue
presented in this case. We reverse their error, in order that the
substantial right of the petitioner, if any, may not be prejudiced.
Nevertheless, we note that the petitioner did not implead Leonila, who,
as the late Cresenciano's surviving wife,[19] stood to be benefited or
prejudiced by the nullification of her own marriage. It is relevant to
observe, moreover, that not all marriages celebrated under the old Civil
Code
required
a marriage license for their validity;[20] hence, her participation in this
action is made all the more necessary in order to shed light on whether
the marriage had been celebrated without a marriage license and
whether the marriage might have been a marriage excepted from the
requirement of a marriage license. She was truly an indispensable party
who must be joined herein:
xxx under any and all conditions, [her] presence being a sine qua non
for the exercise of judicial power. It is precisely "when an indispensable
party is not before the court [that] the action should be dismissed." The
absence of an indispensable party renders all subsequent actions of the
court null and void for want of authority to act, not only as to the
absent parties but even as to those present.[21]

We take note, too, that the petitioner and Leonila were parties in C.A.G.R. CV No. 91025 entitled Heirs of Cresenciano Ablaza, namely: Leonila
G. Ablaza and Leila Ablaza Jasul v. Spouses Isidro and Casilda Ablaza,
an action to determine who between the parties were the legal owners
of the property involved therein. Apparently, C.A.-G.R. CV No. 91025
was decided on November 26, 2009, and the petitioner's motion for
reconsideration was denied on June 23, 2010. As a defendant in that
action, the petitioner is reasonably presumed to have knowledge that
the therein plaintiffs, Leonila and Leila, were the wife and daughter,
respectively, of the late Cresenciano. As such, Leila was another
indispensable party whose substantial right any judgment in this action

will definitely affect. The petitioner should likewise implead Leila.

The omission to implead Leonila and Leila was not immediately fatal to
the present action, however, considering that Section 11, [22] Rule 3,
Rules of Court, states that neither misjoinder nor non-joinder of parties
is a ground for the dismissal of an action. The petitioner can still amend
his initiatory pleading in order to implead her, for under the same rule,
such amendment to implead an indispensable party may be made "on
motion of any party or on (the trial court's) own initiative at any stage
of
the
action
and
on
such
terms
as
are
just."
WHEREFORE,

the

petition

for

review

on

certiorari

is

granted.

We reverse and set aside the decision dated January 30, 2003 rendered
by
the
Court
of
Appeals.
Special Case No. 117 entitled In Re: Petition for Nullification of
Marriage Contract between Cresenciano Ablaza and Leonila Honato;
Isidro Ablaza, petitioner, is reinstated, and its records are returned to
the Regional Trial Court, Branch 49, in Cataingan, Masbate, for further
proceedings, with instructions to first require the petitioner to amend
his initiatory pleading in order to implead Leonila Honato and her
daughter Leila Ablaza Jasul as parties-defendants; then to determine
whether the late Cresenciano Ablaza had any ascendants, descendants,
or children (legitimate or illegitimate) at the time of his death as well
as whether the petitioner was the brother and surviving heir of the late
Cresenciano Ablaza entitled to succeed to the estate of said deceased;
and
thereafter
to
proceed
accordingly.
No

costs

of

SO
Carpio Morales, (Chairperson), Brion, Abad,* and
concur.

6. Guy vs CA
FIRST DIVISION
[ G.R. No. 163707, September 15, 2006 ]

suit.
ORDERED.
Villarama, Jr., JJ.,

MICHAEL C. GUY, PETITIONER, PRESENT: VS. HON. COURT OF APPEALS,

HON. SIXTO MARELLA, JR., PRESIDING JUDGE, RTC, BRANCH 138,
MAKATI CITY AND MINORS, KAREN DANES WEI AND KAMILLE DANES
WEI,
REPRESENTED
BY
THEIR
MOTHER,
REMEDIOS
OANES,
RESPONDENTS.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the January 22, 2004
Decision[1] of the Court of Appeals in CA-G.R. SP No. 79742, which
affirmed the Orders dated July 21, 2000[2] and July 17, 2003[3] of the
Regional Trial Court of Makati City, Branch 138 in SP Proc. Case No.
4549 denying petitioner's motion to dismiss; and its May 25, 2004
Resolution[4]
denying
petitioner's
motion
for
reconsideration.
The

facts

are

as

follows:

On June 13, 1997, private respondent-minors Karen Oanes Wei and

Kamille Oanes Wei, represented by their mother Remedios Oanes
(Remedios), filed a petition for letters of administration [5] before the
Regional Trial Court of Makati City, Branch 138. The case was docketed
as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima Wei (a.k.a.
Rufino
Guy
Susim).
Private respondents alleged that they are the duly acknowledged
illegitimate children of Sima Wei, who died intestate in Makati City on
October 29, 1992, leaving an estate valued at P10,000,000.00
consisting of real and personal properties. His known heirs are his
surviving spouse Shirley Guy and children, Emy, Jeanne, Cristina,
George and Michael, all surnamed Guy. Private respondents prayed for
the appointment of a regular administrator for the orderly settlement of
Sima Wei's estate. They likewise prayed that, in the meantime,
petitioner Michael C. Guy, son of the decedent, be appointed as Special
Administrator of the estate. Attached to private respondents' petition
was a Certification Against Forum Shopping[6] signed by their counsel,
Atty.
Sedfrey
A.
Ordoez.
In his Comment/Opposition,[7] petitioner prayed for the dismissal of the
petition. He asserted that his deceased father left no debts and that his
estate can be settled without securing letters of administration
pursuant to Section 1, Rule 74 of the Rules of Court. He further argued
that private respondents should have established their status as
illegitimate children during the lifetime of Sima Wei pursuant to Article
175
of
the
Family
Code.

The other heirs of Sima Wei filed a Joint Motion to Dismiss[8] on the
ground that the certification against forum shopping should have been
signed by private respondents and not their counsel. They contended
that Remedios should have executed the certification on behalf of her
minor daughters as mandated by Section 5, Rule 7 of the Rules of Court.
In a Manifestation/Motion as Supplement to the Joint Motion to
Dismiss,[9] petitioner and his co-heirs alleged that private respondents'
claim had been paid, waived, abandoned or otherwise extinguished by
reason of Remedios' June 7, 1993 Release and Waiver of Claim stating
that in exchange for the financial and educational assistance received
from petitioner, Remedios and her minor children discharge the estate
of
Sima
Wei
from
any
and
all
liabilities.
The Regional Trial Court denied the Joint Motion to Dismiss as well as
the Supplemental Motion to Dismiss. It ruled that while the Release and
Waiver of Claim was signed by Remedios, it had not been established
that she was the duly constituted guardian of her minor daughters.
Thus, no renunciation of right occurred. Applying a liberal application of
the rules, the trial court also rejected petitioner's objections on the
certification
against
forum
shopping.
Petitioner moved for reconsideration but was denied. He filed a petition
for certiorari before the Court of Appeals which affirmed the orders of
the Regional Trial Court in its assailed Decision dated January 22, 2004,
the dispositive portion of which states:
WHEREFORE, premises considered, the present petition is hereby
DENIED DUE COURSE and accordingly DISMISSED, for lack of merit.
Consequently, the assailed Orders dated July 21, 2000 and July 17,
2003 are hereby both AFFIRMED. Respondent Judge is hereby
DIRECTED to resolve the controversy over the illegitimate filiation of
the private respondents (sic) minors [-] Karen Oanes Wei and Kamille
Oanes Wei who are claiming successional rights in the intestate estate
of the deceased Sima Wei, a.k.a. Rufino Guy Susim.
SO ORDERED.[10]
The Court of Appeals denied petitioner's motion for reconsideration,
hence,
this
petition.
Petitioner argues that the Court of Appeals disregarded existing rules
on certification against forum shopping; that the Release and Waiver of
Claim executed by Remedios released and discharged the Guy family
and the estate of Sima Wei from any claims or liabilities; and that
private respondents do not have the legal personality to institute the
petition for letters of administration as they failed to prove their

filiation during the lifetime of Sima Wei in accordance with Article 175
of
the
Family
Code.
Private respondents contend that their counsel's certification can be
considered substantial compliance with the rules on certification of
non-forum shopping, and that the petition raises no new issues to
warrant the reversal of the decisions of the Regional Trial Court and the
Court
of
Appeals.
The issues for resolution are: 1) whether private respondents' petition
should be dismissed for failure to comply with the rules on certification
of non-forum shopping; 2) whether the Release and Waiver of Claim
precludes private respondents from claiming their successional rights;
and 3) whether private respondents are barred by prescription from
proving
their
filiation.
The

petition

lacks

merit.

Rule 7, Section 5 of the Rules of Court provides that the certification of

non-forum shopping should be executed by the plaintiff or the principal
party. Failure to comply with the requirement shall be cause for
dismissal of the case. However, a liberal application of the rules is
proper where the higher interest of justice would be served. In Sy Chin
v. Court of Appeals,[11] we ruled that while a petition may have been
flawed where the certificate of non-forum shopping was signed only by
counsel and not by the party, this procedural lapse may be overlooked
in the interest of substantial justice.[12] So it is in the present
controversy where the merits[13] of the case and the absence of an
intention to violate the rules with impunity should be considered as
compelling reasons to temper the strict application of the rules.
As regards Remedios' Release and Waiver of Claim, the same does not
bar private respondents from claiming successional rights. To be valid
and effective, a waiver must be couched in clear and unequivocal terms
which leave no doubt as to the intention of a party to give up a right or
benefit which legally pertains to him. A waiver may not be attributed to
a person when its terms do not explicitly and clearly evince an intent to
abandon
a
right.[14]
In this case, we find that there was no waiver of hereditary rights. The
Release and Waiver of Claim does not state with clarity the purpose of
its execution. It merely states that Remedios received P300,000.00 and
an educational plan for her minor daughters "by way of financial
assistance and in full settlement of any and all claims of whatsoever
nature and kind x x x against the estate of the late Rufino Guy
Susim."[15] Considering that the document did not specifically mention
private respondents' hereditary share in the estate of Sima Wei, it

cannot

be

construed

as

waiver

of

successional

rights.

Moreover, even assuming that Remedios truly waived the hereditary

rights of private respondents, such waiver will not bar the latter's
claim. Article 1044 of the Civil Code, provides:
ART. 1044. Any person having the free disposal of his property may
accept
or
repudiate
an
inheritance.
Any inheritance left to minors or incapacitated persons may be
accepted by their parents or guardians. Parents or guardians may
repudiate the inheritance left to their wards only by judicial
authorization.
The right to accept an inheritance left to the poor shall belong to the
persons designated by the testator to determine the beneficiaries and
distribute the property, or in their default, to those mentioned in Article
1030. (Emphasis supplied)
Parents and guardians may not therefore repudiate the inheritance of
their wards without judicial approval. This is because repudiation
amounts to an alienation of property[16] which must pass the court's
scrutiny in order to protect the interest of the ward. Not having been
judicially authorized, the Release and Waiver of Claim in the instant
case is void and will not bar private respondents from asserting their
rights
as
heirs
of
the
deceased.
Furthermore, it must be emphasized that waiver is the intentional
relinquishment of a known right. 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.[17]
In the present case, private respondents could not have possibly
waived their successional rights because they are yet to prove their
status as acknowledged illegitimate children of the deceased. Petitioner
himself has consistently denied that private respondents are his coheirs. It would thus be inconsistent to rule that they waived their
hereditary rights when petitioner claims that they do not have such
right. Hence, petitioner's invocation of waiver on the part of private
respondents
must
fail.
Anent the issue on private respondents' filiation, we agree with the
Court of Appeals that a ruling on the same would be premature
considering that private respondents have yet to present evidence.
Before the Family Code took effect, the governing law on actions for

recognition of illegitimate children was Article 285 of the Civil Code, to

wit:
ART. 285. The action for the recognition of natural children may be
brought only during the lifetime of the presumed parents, except in the
following
cases:
(1) If the father or mother died during the minority of the child, in
which case the latter may file the action before the expiration of four
years
from
the
attainment
of
his
majority;
(2) If after the death of the father or of the mother a document should
appear of which nothing had been heard and in which either or both
parents
recognize
the
child.
In this case, the action must be commenced within four years from the
finding of the document. (Emphasis supplied)
We ruled in Bernabe v. Alejo[18] that illegitimate children who were still
minors at the time the Family Code took effect and whose putative
parent died during their minority are given the right to seek recognition
for a period of up to four years from attaining majority age. This vested
right was not impaired or taken away by the passage of the Family
Code.[19]
On the other hand, Articles 172, 173 and 175 of the Family Code, which
superseded Article 285 of the Civil Code, provide:
ART. 172. The filiation of legitimate children is established by any of the
following:
(1) The record of birth appearing in the civil register or a final
judgment;
or
(2) An admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall
be
proved
by:
(1) The open and continuous possession of the status of a legitimate
child;
or
(2) Any other means allowed by the Rules of Court and special laws.

ART. 173. The action to claim legitimacy may be brought by the child
during his or her lifetime and shall be transmitted to the heirs should
the child die during minority or in a state of insanity. In these cases, the
heirs shall have a period of five years within which to institute the
action.
The action already commenced by
notwithstanding the death of either

the child shall

or both of the

survive
parties.

ART. 175. Illegitimate children may establish their illegitimate filiation

in the same way and on the same, evidence as legitimate children.
The action must be brought within the same period specified in Article
173, except when the action is based on the second paragraph of Article
172, in which case the action may be brought during the lifetime of the
alleged parent.
Under the Family Code, when filiation of an illegitimate child is
established by a record of birth appearing in the civil register or a final
judgment, or an admission of filiation in a public document or a private
handwritten instrument signed by the parent concerned, the action for
recognition may be brought by the child during his or her lifetime.
However, if the action is based upon open and continuous possession of
the status of an illegitimate child, or any other means allowed by the
rules or special laws, it may only be brought during the lifetime of the
alleged
parent.
It is clear therefore that the resolution of the issue of prescription
depends on the type of evidence to be adduced by private respondents
in proving their filiation. However, it would be impossible to determine
the same in this case as there has been no reception of evidence yet.
This Court is not a trier of facts. Such matters may be resolved only by
the
Regional
Trial
Court
after
a
full-blown
trial.
While the original action filed by private respondents was a petition for
letters of administration, the trial court is not precluded from receiving
evidence on private respondents' filiation. Its jurisdiction extends to
matters incidental and collateral to the exercise of its recognized
powers in handling the settlement of the estate, including the
determination of the status of each heir.[20] That the two causes of
action, one to compel recognition and the other to claim inheritance,
may be joined in one complaint is not new in our jurisprudence.[21] As
held in Briz v. Briz: [22]
The question whether a person in the position of the present plaintiff
can in any event maintain a complex action to compel recognition as a
natural child and at the same time to obtain ulterior relief in the

character of heir, is one which in the opinion of this court must be

answered in the affirmative, provided always that the conditions
justifying the joinder of the two distinct causes of action are present in
the particular case. In other words, there is no absolute necessity
requiring that the action to compel acknowledgment should have been
instituted and prosecuted to a successful conclusion prior to the action
in which that same plaintiff seeks additional relief in the character of
heir. Certainly, there is nothing so peculiar to the action to compel
acknowledgment as to require that a rule should be here applied
different from that generally applicable in other cases. x x x
The conclusion above stated, though not heretofore explicitly
formulated by this court, is undoubtedly to some extent supported by
our prior decisions. Thus, we have held in numerous cases, and the
doctrine must be considered well settled, that a natural child having a
right to compel acknowledgment, but who has not been in fact
acknowledged, may maintain partition proceedings for the division of
the inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5;
Tiamson vs. Tiamson, 32 Phil., 62); and the same person may intervene
in proceedings for the distribution of the estate of his deceased natural
father, or mother (Capistrano vs. Fabella, 8 Phil., 135; Conde vs. Abaya,
13 Phil., 249; Ramirez vs. Gmur, 42 Phil., 855). In neither of these
situations has it been thought necessary for the plaintiff to show a prior
decree compelling acknowledgment. The obvious reason is that in
partition suits and distribution proceedings the other persons who
might take by inheritance are before the court; and the declaration of
heirship is appropriate to such proceedings.
WHEREFORE, the instant petition is DENIED. The Decision dated
January 22, 2004 of the Court of Appeals in CA-G.R. SP No. 79742
affirming the denial of petitioner's motion to dismiss; and its Resolution
dated May 25, 2004 denying petitioner's motion for reconsideration, are
AFFIRMED. Let the records be REMANDED to the Regional Trial Court of
Makati
City,
Branch
138
for
further
proceedings.
SO

ORDERED.

Panganiban, C. J., (Chairperson), Asutria-Martinez, Callejo, Sr., and

Chico-Nazario,
JJ.
concur.

7. Duenas vs. Santos

SECOND DIVISION
[ G.R. No. 149417, June 04, 2004 ]

GLORIA SANTOS DUEAS, PETITIONER, VS. SANTOS SUBDIVISION

HOMEOWNERS
ASSOCIATION,
RESPONDENT.

P.D. No. 957, as amended by P.D. No. 1216, was not applicable to
Santos
Subdivision.[9]

DECISION

SSHA then filed a petition/motion for reconsideration, [10] docketed as

HLURB Case No. REM-070297-9821, which averred among others that:
(1) P.D. No. 957 should apply retroactively to Santos Subdivision,
notwithstanding that the subdivision plans were approved in 1966 and
(2) Gloria Santos Dueas should be bound by the verbal promise made
by her late father during his lifetime that an open space would be
provided for in Phase III of Santos Subdivision, the lots of which were
at
that
time
already
for
sale.

QUISUMBING, J.:
For review on certiorari is the Decision[1] dated December 29, 2000, of
the Court of Appeals in CA-G.R. SP No. 51601, setting aside the
Decision[2] of the Housing and Land Use Regulatory Board (HLURB) in
HLURB Case No. REM-A-980227-0032 which earlier affirmed the
Decision[3] of the HLURB-NCR Regional Field Office in HLURB Case No.
REM-070297-9821. Said Regional Field Office dismissed the petition of
herein respondent Santos Subdivision Homeowners Association (SSHA)
seeking to require herein petitioner, Gloria Santos Dueas, to provide
for an open space in the subdivision for recreational and community
activities. In its assailed decision, the CA remanded the case to the
HLURB for determination of a definitive land area for open space.[4]
Petitioner assails also the Court of Appeals Resolution[5] dated July 31,
2001,
denying
her
motion
for
reconsideration.
The

facts

of

this

case

are

as

follows:

Petitioner Gloria Santos Dueas is the daughter of the late Cecilio J.

Santos who, during his lifetime, owned a parcel of land with a total area
of 2.2 hectares located at General T. De Leon, Valenzuela City, Metro
Manila. In 1966, Cecilio had the realty subdivided into smaller lots, the
whole forming the Cecilio J. Santos Subdivision (for brevity, Santos
Subdivision). The then Land Registration Commission (LRC) approved
the project and the National Housing Authority (NHA) issued the
required Certificate of Registration and License to Sell. At the time of
Cecilios death in 1988, there were already several residents and
homeowners
in
Santos
Subdivision.
Sometime in 1997, the members of the SSHA submitted to the
petitioner a resolution asking her to provide within the subdivision an
open space for recreational and other community activities, in
accordance with the provisions of P.D. No. 957,[6] as amended by P.D.
No. 1216.[7] Petitioner, however, rejected the request, thus, prompting
the
members
of
SSHA
to
seek
redress
from
the
NHA.
On April 25, 1997, the NHA General Manager forwarded the SSHA
resolution to Romulo Q. Fabul, Commissioner and Chief Executive
Officer
of
the
HLURB
in
Quezon
City.[8]
In a letter dated May 29, 1997, the Regional Director of the Expanded
NCR Field Office, HLURB, opined that the open space requirement of

Petitioner denied any knowledge of the allegations of SSHA. She

stressed that she was not a party to the alleged transactions, and had
neither participation nor involvement in the development of Santos
Subdivision and the sale of the subdivisions lots. As affirmative
defenses, she raised the following: (a) It was her late father, Cecilio J.
Santos, who owned and developed the subdivision, and she was neither
its owner nor developer; (b) that this suit was filed by an unauthorized
entity against a non-existent person, as SSHA and Santos Subdivision
are not juridical entities, authorized by law to institute or defend
against actions; (c) that P.D. No. 957 cannot be given retroactive effect
to make it applicable to Santos Subdivision as the law does not
expressly provide for its retroactive applicability; and (d) that the
present
petition
is
barred
by
laches.
On January 14, 1998, HLURB-NCR disposed of HLURB Case No. REM070297-9821
in
this
wise:
In
It

view

of

the

foregoing,
is

the

complaint
So

is

hereby

dismissed.
Ordered.[11]

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

statute.[12]

mans

SSHA then appealed the NCR offices ruling to the HLURB Board of
Commissioners. The latter body, however, affirmed the action taken by
the HLURB-NCR office, concluding thus:
WHEREFORE, premises considered, the Petition for Review is hereby
DISMISSED and the decision of the Office below is hereby AFFIRMED IN
TOTO.
SO ORDERED.

an oral contract, but mandated by law, hence, an action may be brought

within ten (10) years from the time the right of action accrues under
Article 1144[17] of the Civil Code. Moreover, the equitable principle of
laches will not apply when the claim was filed within the reglementary
period.
Petitioner duly moved for reconsideration, which the Court of Appeals
denied
on
July
31,
2001.
Hence, this petition grounded on the following assignment of errors:

[13]

I.
The HLURB Board decreed that there was no basis to compel the
petitioner to provide an open space within Santos Subdivision,
inasmuch as the subdivision plans approved on July 8, 1966, did not
provide for said space and there was no law requiring the same at that
time. It further ruled that P.D. No. 957 could not be given retroactive
effect in the absence of an express provision in the law. Finally, it found
the action time-barred since it was filed nine (9) years after the death
of Cecilio. The Board noted that SSHA sought to enforce an alleged oral
promise of Cecilio, which should have been done within the six-year
prescriptive period provided for under Article 1145[14] of the Civil Code.
Dissatisfied, respondent sought relief from the Court of Appeals via a
petition for review under Rule 43 of the 1997 Rules of Civil Procedure.
The petition, docketed as CA-G.R. SP No. 51601, was decided by the
appellate court in this manner:
WHEREFORE, the petition is GRANTED--and the decision, dated January
20, 1999, of the Housing and Land Use Regulatory Board (HLURB) in
HLURB Case No. REM-A-980227-0032 is hereby REVERSED and SET
ASIDE. Accordingly, this case is ordered REMANDED to the HLURB for
the determination of the definitive land area that shall be used for open
space in accordance with law and the rules and standards prescribed by
the
HLURB.
No
pronouncement
as
to
costs.

II.

III.

IV.

V.

SO ORDERED.[15]
In finding for SSHA, the appellate court relied upon Eugenio v. Exec.
Sec. Drilon,[16] which held that while P.D. No. 957 did not expressly
provide for its retroactive application, nonetheless, it can be plainly
inferred from its intent that it was to be given retroactive effect so as to
extend its coverage even to those contracts executed prior to its
effectivity in 1976. The Court of Appeals also held that the action was
neither barred by prescription nor laches as the obligation of a
subdivision developer to provide an open space is not predicated upon

VI.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW

BY TAKING COGNIZANCE OF RESPONDENTS PETITION (WHICH
ASSAILS THE DECISION OF THE BOARD OF COMMISSIONERS OF
THE HLURB) WHEN JURISDICTION THEREON IS WITH THE
OFFICE OF THE PRESIDENT, AS CLEARLY MANDATED BY SEC. 2,
RULE XVIII OF THE 1996 RULES OF PROCEDURE OF THE
HOUSING AND LAND USE REGULATORY BOARD.
IT WAS GRAVE ERROR FOR THE COURT OF APPEALS TO HAVE
ASSUMED JURISDICTION OVER THE PETITION BELOW WHEN
RESPONDENTS
CLEARLY
FAILED
TO
EXHAUST
THE
ADMINISTRATIVE REMEDIES AVAILABLE TO THEM UNDER THE
LAW.
THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
RESPONDENT
SANTOS
SUBDIVISION
HOMEOWNERS
ASSOCIATION, A NON-REGISTERED ORGANIZATION, LACKED
THE LEGAL PERSONALITY TO SUE.
THE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING
THAT RESPONDENT SANTOS SUBDIVISION HOMEOWNERS
ASSOCIATION HAS NO CAUSE OF ACTION AGAINST PETITIONER;
NEITHER
WAS
SANTOS
SUBDIVISION,
A
NON-ENTITY,
POSSESSED WITH CAPACITY TO BE SUED NOR IS PETITIONER
GLORIA SANTOS-DUEAS A PROPER PARTY TO THE CASE, THE
LATTER NOT BEING THE OWNER OR DEVELOPER OF SANTOS
SUBDIVISION.
THE COURT OF APPEALS SERIOUSLY ERRED IN SUBSTITUTING
ITS FINDINGS WITH THAT OF THE ADJUDICATION BOARD AND
BOARD OF COMMISSIONERS OF THE HLURB WHEN THEIR
DECISION IS BASED ON SUBSTANTIAL EVIDENCE AND NO
GRAVE ABUSE OF DISCRETION CAN BE ATTRIBUTED TO THEM.
THE COURT OF APPEALS DEVIATED FROM THE EXISTING LAW
AND JURISPRUDENCE WHEN IT RULED THAT P.D. 957 HAS
RETROACTIVE APPLICATION -- WHEN THE LAW ITSELF DOES
NOT PROVIDE FOR ITS RETROACTIVITY AND THE EXISTING
JURISPRUDENCE THEREON CLEARLY PRONOUNCED THAT IT HAS
NO RETROACTIVE APPLICATION. TO PROVIDE RETROACTIVITY
TO P.D. 957 WOULD CAUSE IMPAIRMENT OF VESTED RIGHTS.

VII.

WHILE AS A GENERAL RULE, THE FACTUAL FINDINGS OF THE

COURT OF APPEALS IS BINDING ON THE SUPREME COURT, THE
SAME IS NOT TRUE WHEN THE FORMERS CONCLUSION IS
BASED ON SPECULATION, SURMISES AND CONJECTURES, THE
INFERENCE MADE IS MANIFESTLY MISTAKEN OR ABSURD,
THERE IS GRAVE ABUSE OF DISCRETION, JUDGMENT IS BASED
ON MISAPPREHENSION OF FACTS CONTRARY TO THOSE OF THE
ADMINISTRATIVE AGENCY CONCERNED, AND IT WENT BEYOND
THE ISSUES OF THE CASE AND THE SAME IS CONTRARY TO THE
ADMISSIONS OF BOTH PARTIES.[18]

To our mind, the foregoing may be reduced into the following issues:
(1) the applicability of the doctrine of non-exhaustion of administrative
remedies; (2) the legal capacity of respondent to sue the petitioner
herein; and (3) the retroactivity of P.D. No. 957, as amended by P.D.
No.
1216.
On the first issue, the petitioner contends that the filing of CA-G.R. SP
No. 51601 was premature as SSHA failed to exhaust all administrative
remedies. Petitioner submits that since Section 1,[19] Rule 43 of the
1997 Rule of Civil Procedure does not mention the HLURB, the
respondent should have appealed the decision of the HLURB Board in
HLURB Case No. REM-A-980227-0032 to the Office of the President
prior to seeking judicial relief. In other words, it is the decision of the
Office of the President,[20] and not that of the HLURB Board, which the
Court
of
Appeals
may
review.
We find petitioners contentions bereft of merit. The principle of nonexhaustion of administrative remedies is, under the factual
circumstances of this case, inapplicable. While this Court has held that
before a party is allowed to seek intervention of the courts, it is a pre
condition that he avail himself of all administrative processes afforded
him,[21] nonetheless, said rule is not without exceptions.[22] The
doctrine is a relative one and is flexible depending on the peculiarity
and uniqueness of the factual and circumstantial settings of each
case.[23]
In the instant case, the questions posed are purely legal, namely: (1)
whether the respondent had any right to demand an open space and the
petitioner had any legal obligation to provide said open space within
Santos Subdivision under P.D. No. 957, as amended by P.D. No. 1216,
and (2) whether the action had already prescribed under Article 1145 of
the Civil Code. Moreover, the Court of Appeals found that SSHA had
sought relief from the Office of the President, but the latter forwarded
the case to the HLURB. In view of the foregoing, we find that in this
particular case, there was no need for SSHA to exhaust all
administrative
remedies
before
seeking
judicial
relief.

On the second issue, the petitioner claims that respondent SSHA failed
to present any evidence showing that it is a legally organized juridical
entity, authorized by law to sue or be sued in its own name. Thus,
pursuant to Section 1, Rule 3[24] of the 1997 Rules of Civil Procedure, it
has no legal capacity to file this suit before the HLURB and the Court of
Appeals.
SSHA counters that it has the capacity to sue as an association, since it
is a member of the Federation of Valenzuela Homeowners Association,
Inc., which is registered with the Securities and Exchange Commission.
In the alternative, the individual members of SSHA who signed both the
resolution and the complaint in this case may, as natural persons,
pursue
the
action.
There is merit in petitioners contention. Under Section 1, Rule 3 of the
Revised Rules of Court, only natural or juridical persons, or entities
authorized by law may be parties in a civil action. Article 44[25] of the
Civil Code enumerates the various classes of juridical persons. Under
said Article, an association is considered a juridical person if the law
grants it a personality separate and distinct from that of its
members.[26] The records of the present case are bare of any showing
by SSHA that it is an association duly organized under Philippine law. It
was thus an error for the HLURB-NCR Office to give due course to the
complaint in HLURB Case No. REM-070297-9821, given the SSHAs lack
of capacity to sue in its own name. Nor was it proper for said agency to
treat the complaint as a suit by all the parties who signed and verified
the complaint. The members cannot represent their association in any
suit without valid and legal authority. Neither can their signatures
confer on the association any legal capacity to sue. Nor will the fact that
SSHA belongs to the Federation of Valenzuela Homeowners Association,
Inc., suffice to endow SSHA with the personality and capacity to sue.
Mere allegations of membership in a federation are insufficient and
inconsequential. The federation itself has a separate juridical
personality and was not impleaded as a party in HLURB Case No. REM070297-9821 nor in this case. Neither was it shown that the federation
was authorized to represent SSHA. Facts showing the capacity of a
party to sue or be sued or the authority of a party to sue or be sued in a
representative capacity or the legal existence of an organized
association of persons that is made a party, must be averred.[27] Hence,
for failing to show that it is a juridical entity, endowed by law with
capacity to bring suits in its own name, SSHA is devoid of any legal
capacity,
whatsoever,
to
institute
any
action.
Anent the third issue, the petitioner ascribes error to the appellate
court for holding that P.D. No. 957 has retroactive application. She
points out that there is no retroactivity provision in the said decree.

Hence, it cannot be applied retroactively pursuant to Article 4[28] of the

Civil Code of the Philippines. The same holds true for P.D. No. 1216,
which amended Section 31 of P.D. No. 957 and imposed the open space
requirement in subdivisions. Petitioner stresses that P.D. No. 1216 only
took effect on October 14, 1977 or more than ten (10) years after the
approval
of
the
subdivision
plans
of
Cecilio
Santos.
Although it may seem that this particular issue, given our ruling on the
first issue regarding the lack of capacity of SSHA to bring any action in
its name, is now moot and academic, we are constrained to still address
it.
This petition was brought to us not by respondent SSHA but by Gloria
Santos Dueas who assails the appellate courts finding that our ruling
in Eugenio v. Exec. Sec. Drilon[29] allows P.D. No. 957, as amended, to
apply
retroactively.

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

We

find

merit

in

petitioners

ORDERED.

contention.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

Eugenio v. Exec. Sec. Drilon is inapplicable. It is not on all fours with

the instant case. The issue in Eugenio was the applicability of P.D. No.
957 to purchase agreements on lots entered into prior to its enactment
where there was non-payment of amortizations, and failure to develop
the subdivision. We held therein that although P.D. No. 957 does not
provide for any retroactive application, nonetheless, the intent of the
law of protecting the helpless citizens from the manipulations and
machinations of unscrupulous subdivision and condominium sellers
justify its retroactive application to contracts entered into prior to its
enactment. Hence, we ruled that the non-payment of amortizations was
justified under Section 23 of the said decree in view of the failure of the
subdivision
owner
to
develop
the
subdivision
project.
Unlike Eugenio, non-development of the subdivision is not present in
this case, nor any allegation of non-payment of amortizations. Further,
we have held in a subsequent case[30] that P.D. No. 957, as amended,
cannot be applied retroactively in view of the absence of any express
provision on its retroactive application. Thus:
Article 4 of the Civil Code provides that laws shall have no retroactive
effect, unless the contrary is provided. Thus, it is necessary that an
express provision for its retroactive application must be made in the
law. There being no such provision in both P.D. Nos. 957 and 1344,
these decrees cannot be applied to a situation that occurred years
before their promulgation
At any rate, our principal concern in this case is Section 31 of P.D. No.
957, an amendment introduced by P.D. No. 1216. Properly, the question

8. Bernabe vs Alejo
THIRD DIVISION
[ G.R. No. 140500, January 21, 2002 ]
ERNESTINA BERNABE, PETITIONER, VS. CAROLINA ALEJO AS
GUARDIAN AD LITEM FOR THE MINOR ADRIAN BERNABE, RESPONDENT.
DECISION
PANGANIBAN, J.:
The right to seek recognition granted by the Civil Code to illegitimate
children who were still minors at the time the Family Code took effect
cannot be impaired or taken away. The minors have up to four years
from attaining majority age within which to file an action for
recognition.
Statement of the Case

Before us is a Petition[1] for Review on Certiorari under Rule 45 of the

Rules of Court, praying for (1) the nullification of the July 7, 1999 Court
of Appeals[2] (CA) Decision[3] in CA-GR CV No. 51919 and the October
14,
1999
CA
Resolution[4]
denying
petitioners
Motion
for
Reconsideration, as well as (2) the reinstatement of the two Orders
issued by the Regional Trial Court (RTC) of Pasay City (Branch 109)
concerning the same case. The dispositive portion of the assailed
Decision reads as follows:
WHEREFORE, premises considered, the order of the lower court
dismissing Civil Case No. 94-0562 is REVERSED and SET ASIDE. Let the
records of this case be remanded to the lower court for trial on the
merits.[5]
The Facts

The undisputed facts are summarized by the Court of Appeals in this

wise:
The late Fiscal Ernesto A. Bernabe allegedly fathered a son with his
secretary of twenty-three (23) years, herein plaintiff-appellant Carolina
Alejo. The son was born on September 18, 1981 and was named Adrian
Bernabe. Fiscal Bernabe died on August 13, 1993, while his wife
Rosalina died on December 3 of the same year, leaving Ernestina as the
sole
surviving
heir.
On May 16, 1994, Carolina, in behalf of Adrian, filed the aforesaid
complaint praying that Adrian be declared an acknowledged illegitimate
son of Fiscal Bernabe and as such he (Adrian) be given his share in
Fiscal Bernabes estate, which is now being held by Ernestina as the
sole
surviving
heir.
On July 16, 1995, the Regional Trial Court dismissed the complaint,
ruling that under the provisions of the Family Code as well as the case
of Uyguangco vs. Court of Appeals, the complaint is now barred x x
x.[6]
Orders of the Trial Court

In an Order dated July 26, 1995, the trial court granted Ernestina
Bernabes Motion for Reconsideration of the trial courts Decision and
ordered the dismissal of the Complaint for recognition. Citing Article
175 of the Family Code, the RTC held that the death of the putative

father

had

barred

the

action.

In its Order dated October 6, 1995, the trial court added that since the
putative father had not acknowledged or recognized Adrian Bernabe in
writing, the action for recognition should have been filed during the
lifetime of the alleged father to give him the opportunity to either affirm
or deny the childs filiation.
Ruling of the Court of Appeals

On the other hand, the Court of Appeals ruled that in the interest of
justice, Adrian should be allowed to prove that he was the illegitimate
son of Fiscal Bernabe. Because the boy was born in 1981, his rights are
governed by Article 285 of the Civil Code, which allows an action for
recognition to be filed within four years after the child has attained the
age of majority. The subsequent enactment of the Family Code did not
take
away
that
right.
Hence, this appeal.[7]
Issues

In her Memorandum,[8] petitioner raises the following issues for our

consideration:
I

Whether or not respondent has a cause of action to file a case against

petitioner, the legitimate daughter of the putative father, for
recognition and partition with accounting after the putative fathers
death in the absence of any written acknowledgment of paternity by the
latter.
II

Whether or not the Honorable Court of Appeals erred in ruling that

respondents had four years from the attainment of minority to file an
action for recognition as provided in Art. 285 of the Civil Code, in
complete disregard of its repeal by the [express] provisions of the
Family Code and the applicable jurisprudence as held by the Honorable
Court of Appeals.

III

The two exceptions provided under the foregoing provision, have

however been omitted by Articles 172, 173 and 175 of the Family Code,
which we quote:

Whether or not the petition for certiorari filed by the petition[er] is

fatally defective for failure to implead the Court of Appeals as one of the
respondents.[9]

ART. 172. The filiation of legitimate children is established by any of

the following:

The Courts Ruling

(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.

The Petition has no merit.

First
and
Period to File Action for Recognition

Second

Issues:

Because the first and the second issues are interrelated, we shall
discuss
them
jointly.
Petitioner contends that respondent is barred from filing an action for
recognition, because Article 285 of the Civil Code has been supplanted
by the provisions of the Family Code. She argues that the latter Code
should be given retroactive effect, since no vested right would be
impaired.
We
do
not
agree.
Article 285 of the Civil Code provides the period for filing an action for
recognition as follows:
ART. 285. The action for the recognition of natural children may be
brought only during the lifetime of the presumed parents, except in the
following cases:
(1)

If the father or mother died during the minority of the child, in

which case the latter may file the action before the expiration of
four years from the attainment of his majority;

In the absence of the foregoing evidence, the legitimate filiation shall

be proved by:
(1)

The open and continuous

legitimate child; or

possession

of

the

status

of

(2)

Any other means allowed by the Rules of Court and special

laws.

ART. 173. The action to claim legitimacy may be brought by the child
during his or her lifetime and shall be transmitted to the heirs should
the child die during minority or in a state of insanity. In these cases, the
heirs shall have a period of five years within which to institute the
action.
The action already commenced by the child shall survive
notwithstanding the death of either or both of the parties.
ART. 175. Illegitimate children may establish their illegitimate filiation
in the same way and on the same, evidence as legitimate children.

If after the death of the father or of the mother a document

should appear of which nothing had been heard and in which
either or both parents recognize the child.

The action must be brought within the same period specified in Article
173, except when the action is based on the second paragraph of Article
172, in which case the action may be brought during the lifetime of the
alleged parent.

In this case, the action must be commenced within four years from the
finding of the document.

Under the new law, an action for the recognition of an illegitimate child
must be brought within the lifetime of the alleged parent. The Family
Code makes no distinction on whether the former was still a minor
when the latter died. Thus, the putative parent is given by the new Code

(2)

a chance to dispute the claim, considering that illegitimate children are

usually begotten and raised in secrecy and without the legitimate family
being aware of their existence. x x x The putative parent should thus be
given the opportunity to affirm or deny the childs filiation, and this, he
or
she
cannot
do
if
he
or
she
is
already
dead.[10]
Nonetheless, the Family Code provides the caveat that rights that have
already vested prior to its enactment should not be prejudiced or
impaired as follows:
ART. 255. This Code shall have retroactive effect insofar as it does not
prejudice or impair vested or acquired rights in accordance with the
Civil Code or other laws.
The crucial issue to be resolved therefore is whether Adrians right to
an action for recognition, which was granted by Article 285 of the Civil
Code, had already vested prior to the enactment of the Family Code. Our
answer
is
affirmative.
A vested right is defined as one which is absolute, complete and
unconditional, to the exercise of which no obstacle exists, and which is
immediate and perfect in itself and not dependent upon a contingency x
x x.[11] Respondent however contends that the filing of an action for
recognition is procedural in nature and that as a general rule, no
vested right may attach to [or] arise from procedural laws. [12]
Bustos v. Lucero[13] distinguished substantive from procedural law in
these words:
x x x. Substantive law creates substantive rights and the two terms in
this respect may be said to be synonymous. Substantive rights is a term
which includes those rights which one enjoys under the legal system
prior to the disturbance of normal relations. Substantive law is that part
of the law which creates, defines and regulates rights, or which
regulates the rights and duties which give rise to a cause of action; that
part of the law which courts are established to administer; as opposed
to adjective or remedial law, which prescribes the method of enforcing
rights or obtains redress for their invasion. [14] (Citations omitted)
[15]

Recently, in Fabian v. Desierto,

the Court laid down the test for
determining whether a rule is procedural or substantive:
[I]n determining whether a rule prescribed by the Supreme Court, for
the practice and procedure of the lower courts, abridges, enlarges, or
modifies any substantive right, the test is whether the rule really
regulates procedure, that is, the judicial process for enforcing rights

and duties recognized by substantive law and for justly administering

remedy and redress for a disregard or infraction of them. If the rule
takes away a vested right, it is not procedural. If the rule creates a
right such as the right to appeal, it may be classified as a substantive
matter; but if it operates as a means of implementing an existing right
then the rule deals merely with procedure.[16]
Applying the foregoing jurisprudence, we hold that Article 285 of the
Civil Code is a substantive law, as it gives Adrian the right to file his
petition for recognition within four years from attaining majority age.
Therefore, the Family Code cannot impair or take Adrians right to file
an action for recognition, because that right had already vested prior to
its
enactment.
Uyguangco v. Court of Appeals[17] is not applicable to the case at bar,
because the plaintiff therein sought recognition as an illegitimate child
when he was no longer a minor. On the other hand, in Aruego Jr. v.
Court of Appeals[18] the Court ruled that an action for recognition filed
while the Civil Code was in effect should not be affected by the
subsequent enactment of the Family Code, because the right had
already
vested.
Not
Natural

Limited

to
Children

To be sure, Article 285 of the Civil Code refers to the action for
recognition of natural children. Thus, petitioner contends that the
provision cannot be availed of by respondent, because at the time of his
conception, his parents were impeded from marrying each other. In
other
words,
he
is
not
a
natural
child.
A natural child is one whose parents, at the time of conception, were
not disqualified by any legal impediment from marrying each other.
Thus, in De Santos v. Angeles,[19] the Court explained:
A childs parents should not have been disqualified to marry each other
at the time of conception for him to qualify as a natural child.[20]
A strict and literal interpretation of Article 285 has already been
frowned upon by this Court in the aforesaid case of Aruego, which
allowed minors to file a case for recognition even if their parents were
disqualified from marrying each other. There, the Complaint averred
that the late Jose Aruego Sr., a married man, had an extramarital liason
with Luz Fabian. Out of this relationship were born two illegitimate
children who in 1983 filed an action for recognition. The two children
were born in 1962 and 1963, while the alleged putative father died in
1982. In short, at the time of their conception, the two childrens

parents were legally disqualified from marrying each other. The Court
allowed the Complaint to prosper, even though it had been filed almost
a year after the death of the presumed father. At the time of his death,
both
children
were
still
minors.

Thus, under the Civil Code, natural children have superior successional
rights over spurious ones.[23] However, Rovira treats them as equals
with respect to other rights, including the right to recognition granted
by
Article
285.

Moreover, in the earlier case Divinagracia v. Rovira,[21] the Court said

that the rules on voluntary and compulsory acknowledgment of natural
children, as well as the prescriptive period for filing such action, may
likewise be applied to spurious children. Pertinent portions of the case
are quoted hereunder:

To emphasize, illegitimate children who were still minors at the time

the Family Code took effect and whose putative parent died during their
minority are thus given the right to seek recognition (under Article 285
of the Civil Code) for a period of up to four years from attaining
majority age. This vested right was not impaired or taken away by the
passage
of
the
Family
Code.

The so-called spurious children, or illegitimate children other than

natural children, commonly known as bastards, include those
adulterous children or those born out of wedlock to a married woman
cohabiting with a man other than her husband or to a married man
cohabiting with a woman other than his wife. They are entitled to
support and successional rights. But their filiation must be duly proven.
How should their filiation be proven? Article 289 of the Civil Code
allows the investigation of the paternity or maternity or spurious
children under the circumstances specified in articles 283 and 284 of
the Civil Code. The implication is that the rules on compulsory
recognition of natural children are applicable to spurious children.
Spurious children should not be in a better position than natural
children. The rules on proof of filiation of natural children or the rules
on voluntary and compulsory acknowledgment for natural children may
be
applied
to
spurious
children.
That does not mean that spurious children should be acknowledged, as
that term is used with respect to natural children. What is simply meant
is that the grounds or instances for the acknowledgment of natural
children are utilized to establish the filiation of spurious children.
A spurious child may prove his filiation by means of a record of birth, a
will, a statement before a court of record, or in any authentic writing.
These are the modes of voluntary recognition of natural children.
In case there is no evidence on the voluntary recognition of the
spurious child, then his filiation may be established by means of the
circumstances or grounds for compulsory recognition prescribed in the
aforementioned
articles
283
and
284.
The prescriptive period for filing the action for compulsory recognition
in the case of natural children, as provided for in article 285 of the Civil
Code, applies to spurious children.[22] (Citations omitted, italics
supplied)

Indeed, our overriding consideration is to protect the vested rights of

minors who could not have filed suit, on their own, during the lifetime
of their putative parents. As respondent aptly points out in his
Memorandum,[24] the State as parens patriae should protect a minors
right. Born in 1981, Adrian was only seven years old when the Family
Code took effect and only twelve when his alleged father died in 1993.
The minor must be given his day in court.
Third
Failure to Implead the CA

Issue:

Under Section 4(a) of Rule 45 of the current Rules of Court, it is no

longer required to implead the lower courts or judges x x x either as
petitioners or respondents. Under Section 3, however, the lower
tribunal should still be furnished a copy of the petition. Hence, the
failure of petitioner to implead the Court of Appeals as a party is not a
reversible
error;
it
is
in
fact
the
correct
procedure.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision
and
Resolution
AFFIRMED.
Costs
against
petitioner.
SO

ORDERED.

Melo, (Chairman), Sandoval-Gutierrez, and Carpio, JJ.,

Vitug,
J.,
no
part.
Relationship
with

9. Ty vs CA
SECOND DIVISION

concur.
family.

[ G.R. No. 127406, November 27, 2000 ]

OFELIA P. TY,PETITIONER, VS.THE COURT OF APPEALS, AND EDGARDO
M.
REYES,
RESPONDENTS.
DECISION
QUISUMBING, J.:
This appeal seeks the reversal of the decision dated July 24, 1996, of
the Court of Appeals in C.A. - G.R. CV 37897, which affirmed the
decision of the Regional Trial Court of Pasig, Branch 160, declaring the
marriage contract between private respondent Edgardo M. Reyes and
petitioner Ofelia P. Ty null and voidab initio. It also ordered private
respondent to pay P15,000.00 as monthly support for their children
Faye
Eloise
Reyes
and
Rachel
Anne
Reyes.
As shown in the records of the case, private respondent married Anna
Maria Regina Villanueva in a civil ceremony on March 29, 1977, in
Manila. Then they had a church wedding on August 27, 1977. However,
on August 4, 1980, the Juvenile and Domestic Relations Court of
Quezon City declared their marriage null and voidab initio for lack of a
valid marriage license. The church wedding on August 27, 1977, was
also declared null and void ab initio for lack of consent of the parties.
Even before the decree was issued nullifying his marriage to Anna
Maria, private respondent wed Ofelia P. Ty, herein petitioner, on April 4,
1979, in ceremonies officiated by the judge of the City Court of Pasay.
On April 4, 1982, they also had a church wedding in Makati, Metro
Manila.
On January 3, 1991, private respondent filed a Civil Case 1853-J with
the RTC of Pasig, Branch 160, praying that his marriage to petitioner be
declared null and void. He alleged that they had no marriage license
when they got married. He also averred that at the time he married
petitioner, he was still married to Anna Maria. He stated that at the
time he married petitioner the decree of nullity of his marriage to Anna
Maria had not been issued. The decree of nullity of his marriage to
Anna Maria was rendered only on August 4, 1980, while his civil
marriage
to
petitioner
took
place
on
April
4,
1979.
Petitioner, in defending her marriage to private respondent, pointed out
that his claim that their marriage was contracted without a valid license
is untrue. She submitted their Marriage License No. 5739990 issued at
Rosario, Cavite on April 3, 1979, as Exh. 11, 12 and 12-A. He did not
question this document when it was submitted in evidence. Petitioner
also submitted the decision of the Juvenile and Domestic Relations

Court of Quezon City dated August 4, 1980, which declared null and
void his civil marriage to Anna Maria Regina Villanueva celebrated on
March 29, 1977, and his church marriage to said Anna Maria on August
27, 1977. These documents were submitted as evidence during trial
and, according to petitioner, are therefore deemed sufficient proof of
the facts therein. The fact that the civil marriage of private respondent
and petitioner took place on April 4, 1979, before the judgment
declaring his prior marriage as null and void is undisputed. It also
appears indisputable that private respondent and petitioner had a
church
wedding
ceremony
on
April
4,
1982.[1]
The Pasig RTC sustained private respondent's civil suit and declared his
marriage to herein petitioner null and void ab initio in its decision dated
November 4, 1991. Both parties appealed to respondent Court of
Appeals. On July 24, 1996, the appellate court affirmed the trial court's
decision. It ruled that a judicial declaration of nullity of the first
marriage (to Anna Maria) must first be secured before a subsequent
marriage could be validly contracted. Said the appellate court:
We can accept, without difficulty, the doctrine cited by defendant's
counsel that `no judicial decree is necessary to establish the invalidity
of void marriages.' It does not say, however, that a second marriage
may proceed even without a judicial decree. While it is true that if a
marriage is null and void, ab initio, there is in fact no subsisting
marriage, we are unwilling to rule that the matter of whether a
marriage is valid or not is for each married spouse to determine for
himself - for this would be the consequence of allowing a spouse to
proceed to a second marriage even before a competent court issues a
judicial decree of nullity of his first marriage. The results would be
disquieting, to say the least, and could not have been the intendment of
even the now-repealed provisions of the Civil Code on marriage.
x xx

WHEREFORE, upon the foregoing ratiocination, We modify the appealed

Decision
in
this
wise:
1. The marriage contracted by plaintiff-appellant [herein private
respondent] Eduardo M. Reyes and defendant-appellant [herein
petitioner] Ofelia P. Ty is declared null and void ab initio;
2. Plaintiff-appellant Eduardo M. Reyes is ordered to give monthly
support in the amount of P15,000.00 to his children Faye Eloise Reyes
and
Rachel
Anne
Reyes
from
November
4,
1991;
and
3.

Cost

against

plaintiff-appellant

Eduardo

M.

Reyes.

SO ORDERED.[2]
Petitioner's motion for reconsideration was denied. Hence, this instant
petition asserting that the Court of Appeals erred:

People v. Mendoza[3]and People v. Aragon[4]are applicable in this case.

For these cases held that where a marriage is void from its
performance, no judicial decree is necessary to establish its invalidity.
But the appellate court said these cases, decided before the enactment
of the Family Code (E.O. No. 209 as amended by E.O No. 227), no longer
control. A binding decree is now needed and must be read into the
provisions
of
law
previously
obtaining.[5]

I.

In refusing to consider petitioner's appeal favorably, the appellate court

also said:

BOTH IN THE DECISION AND THE RESOLUTION, IN REQUIRING FOR

THE VALIDITY OF PETITIONER'S MARRIAGE TO RESPONDENT, A
JUDICIAL DECREE NOT REQUIRED BY LAW.

Terre v. Attorney Terre, Adm. Case No. 2349, 3 July 1992 is mandatory
precedent for this case. Although decided by the High Court in 1992, the
facts situate it within the regime of the now-repealed provisions of the
Civil Code, as in the instant case.

II

x xx

IN THE RESOLUTION,
VS.COURT OF APPEALS.

IN

APPLYING

THE

RULING

IN

DOMINGO

For purposes of determining whether a person is legally free to contract

a second marriage, a judicial declaration that the first marriage was
null and void ab initio is essential. . . .[6]

III

IN BOTH THE DECISION AND RESOLUTION IN NOT CONSIDERING THE

CIVIL EFFECTS OF THE RELIGIOUS RATIFICATION WHICH USED THE
SAME MARRIAGE LICENSE.
IV

IN THE DECISION NOT GRANTING MORAL AND EXEMPLARY DAMAGES

TO THE DEFENDANT-APPELLANT.
The principal issue in this case is whether the decree of nullity of the
first marriage is required before a subsequent marriage can be entered
into validly? To resolve this question, we shall go over applicable laws
and pertinent cases to shed light on the assigned errors, particularly
the first and the second which we shall discuss jointly.
In sustaining the trial court, the Court of Appeals declared the marriage
of petitioner to private respondent null and void for lack of a prior
judicial decree of nullity of the marriage between private respondent
and Villanueva. The appellate court rejected petitioner's claim that

At the outset, we must note that private respondent's first and second
marriages contracted in 1977 and 1979, respectively, are governed by
the provisions of the Civil Code. The present case differs significantly
from the recent cases of Bobis v. Bobis[7]and Mercado v. Tan,[8] both
involving a criminal case for bigamy where the bigamous marriage was
contracted during the effectivity of the Family Code,[9] under which a
judicial declaration of nullity of marriage is clearly required.
Pertinent to the present controversy, Article 83 of the Civil Code
provides
that:
Art. 83. Any marriage subsequently contracted by any person during
the lifetime of the first spouse of such person with any person other
than such first spouse shall be illegal and void from its performance,
unless:
(1)

The

first

marriage

was

annulled

or

dissolved;

or

(2) The first spouse had been absent for seven consecutive years at the
time of the second marriage without the spouse present having news of
the absentee being alive, or if the absentee, though he has been absent
for less than seven years, is generally considered as dead and before
any person believed to be so by the spouse present at the time of

contracting such subsequent marriage, or if the absentee is presumed

dead according to articles 390 and 391. The marriage so contracted
shall be valid in any of the three cases until declared null and void by a
competent court.

man, Wiegel. Wiegel filed a petition with the Juvenile Domestic

Relations Court to declare his marriage to Lilia as void on the ground of
her previous valid marriage.
The Court, expressly relying on
Consuegra, concluded that:[18]

As to whether a judicial declaration of nullity of a void marriage is

necessary, the Civil Code contains no express provision to that effect.
Jurisprudence on the matter, however, appears to be conflicting.

There is likewise no need of introducing evidence about the existing

prior marriage of her first husband at the time they married each other,
for then such a marriage though void still needs according to this Court
a judicial declaration (citing Consuegra) of such fact and for all legal
intents and purposes she would still be regarded as a married woman at
the time she contracted her marriage with respondent Karl Heinz
Wiegel; accordingly, the marriage of petitioner and respondent would
be regarded VOID under the law. (Emphasis supplied).

Originally, in People v. Mendoza,[10] and People v. Aragon,[11] this Court

held that no judicial decree is necessary to establish the nullity of a void
marriage. Both cases involved the same factual milieu. Accused
contracted a second marriage during the subsistence of his first
marriage. After the death of his first wife, accused contracted a third
marriage during the subsistence of the second marriage. The second
wife initiated a complaint for bigamy. The Court acquitted accused on
the ground that the second marriage is void, having been contracted
during the existence of the first marriage. There is no need for a
judicial declaration that said second marriage is void. Since the second
marriage is void, and the first one terminated by the death of his wife,
there are no two subsisting valid marriages. Hence, there can be no
bigamy. Justice Alex Reyes dissented in both cases, saying that it is not
for the spouses but the court to judge whether a marriage is void or
not.
In Gomez v. Lipana,[12] and Consuegra v. Consuegra,[13] however, we
recognized the right of the second wife who entered into the marriage
in good faith, to share in their acquired estate and in proceeds of the
retirement insurance of the husband. The Court observed that although
the second marriage can be presumed to be void ab initio as it was
celebrated while the first marriage was still subsisting, still there was a
need for judicial declaration of such nullity (of the second marriage).
And since the death of the husband supervened before such declaration,
we upheld the right of the second wife to share in the estate they
acquired,
on
grounds
of
justice
and
equity.[14]
But in Odayat v. Amante(1977),[15] the Court adverted to Aragon and
Mendoza as precedents. We exonerated a clerk of court of the charge
of immorality on the ground that his marriage to FilomenaAbella in
October of 1948 was void, since she was already previously married to
one Eliseo Portales in February of the same year. The Court held that
no judicial decree is necessary to establish the invalidity of void
marriages. This ruling was affirmed in Tolentino v. Paras.[16]
[17]

Yet again in Wiegel v. Sempio-Diy (1986),

the Court held that there
is a need for a judicial declaration of nullity of a void marriage. In
Wiegel, Lilia married Maxion in 1972. In 1978, she married another

In Yap v. Court of Appeals,[19] however, the Court found the second

marriage void without need of judicial declaration, thus reverting to the
Odayat,
Mendoza
and
Aragon
rulings.
At any rate, the confusion under the Civil Code was put to rest under
the Family Code. Our rulings in Gomez, Consuegra, and Wiegel were
eventually embodied in Article 40 of the Family Code.[20] Article 40 of
said Code expressly required a judicial declaration of nullity of marriage
Art. 40. The absolute nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final judgment declaring
such
previous
marriage
void.
In Terre v. Terre (1992)[21] the Court, applying Gomez, Consuegra and
Wiegel, categorically stated that a judicial declaration of nullity of a
void marriage is necessary. Thus, we disbarred a lawyer for contracting
a bigamous marriage during the subsistence of his first marriage. He
claimed that his first marriage in 1977 was void since his first wife was
already married in 1968. We held that Atty. Terre should have known
that the prevailing case law is that "for purposes of determining
whether a person is legally free to contract a second marriage, a
judicial declaration that the first marriage was null and void ab initio is
essential."
The Court applied this ruling in subsequent cases. In Domingo v. Court
of Appeals (1993),[22] the Court held:
Came the Family Code which settled once and for all the conflicting
jurisprudence on the matter. A declaration of absolute nullity of
marriage is now explicitly required either as a cause of action or a
ground for defense. (Art. 39 of the Family Code). Where the absolute
nullity of a previous marriage is sought to be invoked for purposes of

contracting a second marriage, the sole basis acceptable in law for said
projected marriage to be free from legal infirmity is a final judgment
declaring the previous marriage void. (Family Code, Art. 40; See also
arts. 11, 13, 42, 44, 48, 50, 52, 54, 86, 99, 147, 148).[23]
However, a recent case applied the old rule because of the peculiar
circumstances of the case. In Apiag v. Cantero, (1997)[24] the first wife
charged a municipal trial judge of immorality for entering into a second
marriage. The judge claimed that his first marriage was void since he
was merely forced into marrying his first wife whom he got pregnant.
On the issue of nullity of the first marriage, we applied Odayat,
Mendoza and Aragon. We held that since the second marriage took
place and all the children thereunder were born before the
promulgation of Wiegeland the effectivity of the Family Code, there is
no need for a judicial declaration of nullity of the first marriage
pursuant
to
prevailing
jurisprudence
at
that
time.
Similarly, in the present case, the second marriage of private
respondent was entered into in 1979, before Wiegel. At that time, the
prevailing rule was found in Odayat, Mendoza and Aragon. The first
marriage of private respondent being void for lack of license and
consent, there was no need for judicial declaration of its nullity before
he could contract a second marriage. In this case, therefore, we
conclude that private respondent's second marriage to petitioner is
valid.
Moreover, we find that the provisions of the Family Code cannot be
retroactively applied to the present case, for to do so would prejudice
the vested rights of petitioner and of her children. As held in Jison v.
Court of Appeals,[25]the Family Code has retroactive effect unless there
be impairment of vested rights. In the present case, that impairment of
vested rights of petitioner and the children is patent. Additionally, we
are not quite prepared to give assent to the appellate court's finding
that despite private respondent's "deceit and perfidy" in contracting
marriage with petitioner, he could benefit from her silence on the
issue. Thus, coming now to the civil effects of the church ceremony
wherein petitioner married private respondent using the marriage
license used three years earlier in the civil ceremony, we find that
petitioner now has raised this matter properly. Earlier petitioner
claimed as untruthful private respondent's allegation that he wed
petitioner but they lacked a marriage license. Indeed we find there was
a marriage license, though it was the same license issued on April 3,
1979 and used in both the civil and the church rites. Obviously, the
church ceremony was confirmatory of their civil marriage. As petitioner
contends, the appellate court erred when it refused to recognize the
validity and salutary effects of said canonical marriage on a
technicality, i.e. that petitioner had failed to raise this matter as

affirmative defense during trial. She argues that such failure does not
prevent the appellate court from giving her defense due consideration
and weight. She adds that the interest of the State in protecting the
inviolability of marriage, as a legal and social institution, outweighs
such technicality. In our view, petitioner and private respondent had
complied with all the essential and formal requisites for a valid
marriage, including the requirement of a valid license in the first of the
two ceremonies. That this license was used legally in the celebration of
the civil ceremony does not detract from the ceremonial use thereof in
the church wedding of the same parties to the marriage, for we hold
that the latter rites served not only to ratify but also to fortify the first.
The appellate court might have its reasons for brushing aside this
possible defense of the defendant below which undoubtedly could have
tendered a valid issue, but which was not timely interposed by her
before the trial court. But we are now persuaded we cannot play blind
to the absurdity, if not inequity, of letting the wrongdoer profit from
what
the
CA
calls
"his
own
deceit
and
perfidy."
On the matter of petitioner's counterclaim for damages and attorney's
fees. Although the appellate court admitted that they found private
respondent acted "duplicitously and craftily" in marrying petitioner, it
did not award moral damages because the latter did not adduce
evidence
to
support
her
claim.[26]
Like the lower courts, we are also of the view that no damages should
be awarded in the present case, but for another reason. Petitioner
wants her marriage to private respondent held valid and subsisting.
She is suing to maintain her status as legitimate wife. In the same
breath, she asks for damages from her husband for filing a baseless
complaint for annulment of their marriage which caused her mental
anguish, anxiety, besmirched reputation, social humiliation and
alienation from her parents. Should we grant her prayer, we would
have a situation where the husband pays the wife damages from
conjugal or common funds. To do so, would make the application of the
law absurd. Logic, if not common sense, militates against such
incongruity. Moreover, our laws do not comprehend an action for
damages between husband and wife merely because of breach of a
marital
obligation.[27]
There
are
other
remedies.[28]
WHEREFORE, the petition is GRANTED. The assailed Decision of the
Court of Appeals dated July 24, 1996 and its Resolution dated
November 7, 1996, are reversed partially, so that the marriage of
petitioner Ofelia P. Ty and private respondent Edgardo M. Reyes is
hereby DECLARED VALID AND SUBSISTING; and the award of the
amount of P15,000.00 is RATIFIED and MAINTAINED as monthly
support to their two children, Faye Eloise Reyes and Rachel Anne Reyes,
for as long as they are of minor age or otherwise legally entitled

thereto.

Costs

against

private

respondent.

SO

assistant city fiscal of Angeles City, in representation of the Solicitor

General, respondents adduced evidence showing that:

ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

"Claude A. Miller, 38 years old and Jumrus S. Miller, 40 years of age,

both American citizens, are husband and wife, having been married on
June
21,
1982.
They were childless and "do not expect to have sibling out of their
union
on
account
of
a
medical
problem
of
the
wife."
Claude A. Miller was a member of the United States Air Force, as airman
first class, assigned at Clark Air Base since January 26, 1985.

10. Rep. vs Miller

FIRST DIVISION

"The family maintains their residence at Don Bonifacio Subdivision,

Balibago,
Angeles
City,
since
1985."[1]

[ G.R. No. 125932, April 21, 1999 ]

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. CLAUDE A. MILLER
AND
JUMRUS
S.
MILLER,
RESPONDENTS.
DECISION
PARDO, J.:
The Republic of the Philippines, through the Solicitor General, appealed
originally to the Court of Appeals from a decision of the Regional Trial
Court, Branch 59, Angeles City, granting the petition of respondent
spouses
to
adopt
the
minor
Michael
Magno
Madayag.
In its decision promulgated on April 17, 1996, the Court of Appeals
certified the case to the Supreme Court because the petition raised only
questions
of
law.
By resolution adopted on September 23, 1996, we accepted the appeal.
We shall treat the appeal as one via certiorari from a decision of the
Regional Trial Court under the Supreme Court Circular 2-90, dated
March
9,
1990,
on
pure
questions
of
law.
The

facts

are

undisputed

and

may

be

related

as

follows:

On July 29, 1988, the spouses Claude A. Miller and Jumrus S. Miller,
filed with the Regional Trial Court, Branch 59, Angeles City, a verified
petition
to
adopt
the
minor
Michael
Magno
Madayag.
The trial court scheduled the petition for hearing on September 9, 1988,
at 9:00 in the morning. At the hearing, with the attendance of an

"The minor Michael Magno Madayag is the legitimate son of Marcelo S.

Madayag, Jr. and Zenaida Magno. Born on July 14, 1987, at San
Fernando, La Union, the minor has been in the custody of respondents
since the first week of August 1987. Poverty and deep concern for the
future of their son prompted the natural parents who have no visible
means of livelihood to have their child adopted by respondents. They
executed affidavits giving their irrevocable consent to the adoption by
respondents."
The Department of Social Welfare and Development, through its
Regional Office at San Fernando, Pampanga, recommended approval of
the petition on the basis of its evaluation that respondents were
morally, emotionally and financially fit to be adoptive parents and that
the adoption would be to the minor's best interest and welfare."[2]
On May 12, 1989, the trial court rendered decision granting the petition
for adoption, the dispositive portion of which reads as follows:
"WHEREFORE, finding that petitioners possess all the qualifications and
none of the disqualifications for adoption, the instant petition is hereby
Granted, and this Court decrees the minor MICHAEL MAGNO MADAYAG
freed from all obligation of obedience and support with respect to
natural parents and is hereby declared the child of the herein
petitioners by adoption. The minor's surname shall be changed from
"MADAYAG" to "MILLER", which is the surname of the herein
petitioners."[3]
In due time, the Solicitor General, in behalf of the Republic, interposed
an appeal to the Court of Appeals. As heretofore stated, the Court of
Appeals
certified
the
case
to
this
Court.

The issue raised is whether the court may allow aliens to adopt a
Filipino child despite the prohibition under the Family Code, [4] effective
on August 3, 1988[5] when the petition for adoption was filed on July
29, 1988, under the provision of the Child and Youth Welfare Code[6]
which
allowed
aliens
to
adopt.
The issue is not new. This Court has ruled that an alien qualified to
adopt under the Child and Youth Welfare Code, which was in force at
the time of the filing of the petition, acquired a vested right which could
not be affected by the subsequent enactment of a new law disqualifying
him.[7]
7
Consequently, the enactment of the Family Code, effective August 3,
1988, will not impair the right of respondents who are aliens to adopt a
Filipino child because the right has become vested at the time of filing
of the petition for adoption and shall be governed by the law then in
force. "A vested right is one whose existence, effectivity and extent
does not depend upon events foreign to the will of the holder. The term
expresses the concept of present fixed interest which in right reason
and natural justice should be protected against arbitrary State action,
or an innately just and imperative right which enlightened free society,
sensitive to inherent and irrefragable individual rights, cannot deny." [8]
"Vested rights include not only legal or equitable title to the
enforcement of a demand, but also an exemption from new obligations
created
after
the
right
has
vested."[9]
"As long as the petition for adoption was sufficient in form and
substance in accordance with the law in governance at the time it was
filed, the court acquires jurisdiction and retains it until it fully disposes
of the case. To repeat, the jurisdiction of the court is determined by the
statute in force at the time of the commencement of the action. Such
jurisdiction of a court, whether in criminal or civil cases, once it
attaches cannot be ousted by a subsequent happenings or events,
although of a character which would have prevented jurisdiction from
attaching
in
the
first
instance."[10]
Therefore, an alien who filed a petition for adoption before the
effectivity of the Family code, although denied the right to adopt under
Art. 184 of said Code, may continue with his petition under the law
prevailing
before
the
Family
Code.[11]
"Adoption statutes, being humane and salutary, hold the interests and
welfare of the child to be of paramount consideration. They are
designed to provide homes, parental care and education for
unfortunate, needy or orphaned children and give them the protection
of society and family in the person of the adopter, as well as childless

couples or persons to experience the joy of parenthood and give them

legally a child in the person of the adopted for the manifestation of their
natural parent instincts. Every reasonable intendment should be
sustained to promote and fulfill these noble and compassionate
objectives
of
the
law."[12]
WHEREFORE, we hereby AFFIRM the appealed decision of the Regional
Trial Court, Branch 59, Angeles City, in SP. Proc. No. 3562.
No

costs.

SO

ORDERED.

Davide, Jr., C.J., (Chairman), Melo, Kapunan, and Ynares-Santiago, JJ.,

concur.

11. Atienza vs Brillantes

EN BANC
[ A.M. No. MTJ-92-706, March 29, 1995 ]
LUPO ALMODIEL ATIENZA, COMPLAINANT, VS. JUDGE FRANCISCO F.
BRILLANTES, JR., METROPOLITAN TRIAL COURT, BRANCH 20, MANILA,
RESPONDENT.
DECISION
QUIASON, J.:
This is a complaint by Lupo A. Atienza for Gross Immorality and
Appearance of Impropriety against Judge Francisco Brillantes, Jr.,
Presiding Judge of the Metropolitan Trial Court, Branch 20, Manila.
Complainant alleges that he has two children with Yolanda De Castro,
who are living together at No. 34 Galaxy Street, Bel-Air Subdivision,
Makati, Metro Manila. He stays in said house, which he purchased in
1987,
whenever
he
is
in
Manila.
In December 1991, upon opening the door to his bedroom, he saw
respondent sleeping on his (complainant's) bed. Upon inquiry, he was
told by the houseboy that respondent had been cohabiting with De

Castro. Complainant did not bother to wake up respondent and instead

left the house after giving instructions to his houseboy to take care of
his
children.
Thereafter, respondent prevented him from visiting his children and
even
alienated
the
affection
of
his
children
for
him.
Complainant claims that respondent is married to one ZenaidaOngkiko
with whom he has five children, as appearing in his 1986 and 1991
sworn statements of assets and liabilities. Furthermore, he alleges that
respondent caused his arrest on January 13, 1992, after he had a
heated argument with De Castro inside the latter's office.
For his part, respondent alleges that complainant was not married to De
Castro and that the filing of the administrative action was related to
complainant's claim on the Bel-Air residence, which was disputed by De
Castro.
Respondent denies that he caused complainant's arrest and claims that
he was even a witness to the withdrawal of the complaint for Grave
Slander filed by De Castro against complainant. According to him, it was
the sister of De Castro who called the police to arrest complainant.
Respondent also denies having been married to Ongkiko, although he
admits having five children with her. He alleges that while he and
Ongkiko went through a marriage ceremony before a Nueva Ecija town
mayor on April 25, 1965, the same was not a valid marriage for lack of a
marriage license. Upon the request of the parents of Ongkiko,
respondent went through another marriage ceremony with her in
Manila on June 5, 1965. Again, neither party applied for a marriage
license. Ongkiko abandoned respondent 19 years ago, leaving their
children
to
his
care
and
custody
as
a
single
parent.
Respondent claims that when he married De Castro in civil rites in Los
Angeles, California on December 4, 1991, he believed, in all good faith
and for all legal intents and purposes, that he was single because his
first
marriage
was
solemnized
without
a
license.
Under the Family Code, there must be a judicial declaration of the
nullity of a previous marriage before a party thereto can enter into a
second marriage. Article 40 of said Code provides:
"The absolute nullity of a previous marriage may be invoked for the
purposes of remarriage on the basis solely of a final judgment declaring
such previous marriage void."

Respondent argues that the provision of Article 40 of the Family Code

does not apply to him considering that his first marriage took place in
1965 and was governed by the Civil Code of the Philippines; while the
second marriage took place in 1991 and governed by the Family Code.
Article 40 is applicable to remarriages entered into after the effectivity
of the Family Code on August 3, 1988 regardless of the date of the first
marriage. Besides, under Article 256 of the Family Code, said Article is
given "retroactive effect insofar as it does not prejudice or impair
vested or acquired rights in accordance with the Civil Code or other
laws." This is particularly true with Article 40, which is a rule of
procedure. Respondent has not shown any vested right that was
impaired
by
the
application
of
Article
40
to
his
case.
The fact that procedural statutes may somehow affect the litigants'
rights may not preclude their retroactive application to pending actions.
The retroactive application of procedural laws is not violative of any
right of a person who may feel that he is adversely affected (Gregorio v.
Court of Appeals, 26 SCRA 229 [1968]). The reason is that as a general
rule no vested right may attach to, nor arise from, procedural laws
(Billones v. Court of Industrial Relations, 14 SCRA 674 [1965]).
Respondent is the last person allowed to invoke good faith. He made a
mockery of the institution of marriage and employed deceit to be able
to cohabit with a woman, who begot him five children.
Respondent passed the Bar examinations in 1962 and was admitted to
the practice of law in 1963. At the time he went through the two
marriage ceremonies with Ongkiko, he was already a lawyer. Yet, he
never secured any marriage license. Any law student would know that a
marriage license is necessary before one can get married. Respondent
was given an opportunity to correct the flaw in his first marriage when
he and Ongkiko were married for the second time. His failure to secure
a marriage license on these two occasions betrays his sinister motives
and
bad
faith.
It is evident that respondent failed to meet the standard of moral
fitness
for
membership
in
the
legal
profession.
While the deceit employed by respondent existed prior to his
appointment as a Metropolitan Trial Judge, his immoral and illegal act
of cohabiting with De Castro began and continued when he was already
in
the
judiciary.
The Code of Judicial Ethics mandates that the conduct of a judge must
be free of a whiff of impropriety, not only with respect to his

performance of his judicial duties but also as to his behavior as a

private individual. There is no duality of morality. A public figure is also
judged by his private life. A judge, in order to promote public
confidence in the integrity and impartiality of the judiciary, must
behave with propriety at all times, in the performance of his judicial
duties and in his everyday life. These are judicial guideposts too selfevident to be overlooked. No position exacts a greater demand on moral
righteousness and uprightness of an individual than a seat in the
judiciary
(Imbingv.
Tiongzon
229
SCRA
690
[1994]).
WHEREFORE, respondent is DISMISSED from the service with forfeiture
of all leave and retirement benefits and with prejudice to
reappointment in any branch, instrumentality, or agency of the
government, including government-owned and controlled corporations.
This
decision
is
immediately
executory.
SO

ORDERED.

c. Article 8 Stare Decisis.

1. FBDC v CIR
FIRST DIVISION
G.R. No. 175707, November 19, 2014
FORT BONIFACIO DEVELOPMENT
CORPORATION, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE
AND REVENUE DISTRICT OFFICER, REVENUE DISTRICT NO. 44, TAGUIG
AND PATEROS, BUREAU OF INTERNAL REVENUE, Respondents.
G.R. NO. 18003
FORT BONIFACIO DEVELOPMENT
CORPORATION, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE
AND REVENUE DISTRICT OFFICER, REVENUE DISTRICT NO. 44, TAGUIG
AND PATEROS, BUREAU OF INTERNAL REVENUE, Respondents.
G.R. No. 181092
5 FORT BONIFACIO DEVELOPMENT
CORPORATION, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE
AND REVENUE DISTRICT OFFICER, REVENUE DISTRICT NO. 44, TAGUIG
AND PATEROS, BUREAU OF INTERNAL REVENUE, Respondents.

DECISION
LEONARDO-DE CASTRO, J.:
The Court has consolidated these three petitions as they involve the same
parties, similar facts and common questions of law. This is not the first time that
Fort Bonifacio Development Corporation (FBDC) has come to this Court about
these issues against the very same respondents, and the CourtEn Banc has
resolved them in two separate, recent cases1 that are applicable here for
reasons
to
be
discussed
below.
G.R. No. 175707 is an appeal by certiorari pursuant to Rule 45 of the 1997
Rules of Civil Procedure from (a) the Decision2 dated April 22, 2003 of the
Court of Appeals in CA-G.R. SP No. 61516 dismissing FBDCs Petition for
Review with regard to the Decision of the Court of Tax Appeals (CTA) dated
October 13, 2000 in CTA Case No. 5885, and from (b) the Court of
Appeals Resolution3dated November 30, 2006 denying its Motion for
Reconsideration.
G.R. No. 180035 is likewise an appeal by certiorari pursuant to Rule 45 from
(a) the Court of Appeals Decision4 dated April 30, 2007 in CA-G.R. SP No.
76540 denying FBDCs Petition for Review with respect to the
CTA Resolution5 dated March 28, 2003 in CTA Case No. 6021, and from (b)
the Court of Appeals Resolution6 dated October 8, 2007 denying its Motion for
Reconsideration.
The CTA Resolution reconsidered and reversed its earlier Decision7 dated
January 30, 2002 ordering respondents in CTA Case No. 6021 to refund or issue
a tax credit certificate in favor of petitioner in the amount of P77,151,020.46,
representing VAT erroneously paid by or illegally collected from petitioner for
the first quarter of 1998, and instead denied petitioners Claim for Refund
therefor.8
G.R. No. 181092 is also an appeal by certiorari pursuant to Rule 45 from the
Court of AppealsDecision9 dated December 28, 2007 in CA-G.R. SP No.
61158 dismissing FBDCs petition for review with respect to the CTA
Decision10 dated September 29, 2000 in CTA Case No. 5694. The aforesaid
CTA Decision, which the Court of Appeals affirmed, denied petitioners Claim for
Refund in the amount of P269,340,469.45, representing VAT erroneously paid
by or illegally collected from petitioner for the fourth quarter of 1996.11
The

facts

are

not

in

dispute.

Petitioner FBDC (petitioner) is a domestic corporation duly registered and

existing under Philippine laws. Its issued and outstanding capital stock is owned
in part by the Bases Conversion Development Authority, a wholly-owned
government corporation created by Republic Act No. 7227 for the purpose of

accelerating the conversion of military reservations into alternative productive

uses and raising funds through the sale of portions of said military reservations
in order to promote the economic and social development of the country in
general.12 The remaining fifty-five per cent (55%) is owned by Bonifacio Land
Corporation,
a
consortium
of
private
domestic
corporations.13
Respondent Commissioner of Internal Revenue is the head of the Bureau of
Internal Revenue (BIR). Respondent Revenue District Officer, Revenue District
No. 44, Taguig and Pateros, BIR, is the chief of the aforesaid District Office.
The parties entered into a Stipulation of Facts, Documents, and
Issue14 before the CTA for each case. It was established before the CTA that
petitioner is engaged in the development and sale of real property. It is the
owner of, and is developing and selling, parcels of land within a newtown
development area known as the Fort Bonifacio Global City (the Global City),
located within the former military camp known as Fort Bonifacio, Taguig, Metro
Manila.15 The National Government, by virtue of Republic Act No. 7227 16 and
Executive Order No. 40,17 was the one that conveyed to petitioner these parcels
of
land
on
February
8,
1995.
In May 1996, petitioner commenced developing the Global City, and since
October 1996, had been selling lots to interested buyers.18 At the time of
acquisition, value-added tax (VAT) was not yet imposed on the sale of real
properties. Republic Act No. 7716 (the Expanded Value-Added Tax [E-VAT]
Law),19 which took effect on January 1, 1996, restructured the VAT system by
further amending pertinent provisions of the National Internal Revenue Code
(NIRC). Section 100 of the old NIRC was so amended by including real
properties in the definition of the term goods or properties, thereby
subjecting the sale of real properties to VAT. The provision, as amended,
reads:
SEC. 100. Value-Added Tax on Sale of Goods or Properties. (a) Rate and Base
of Tax. There shall be levied, assessed and collected on every sale, barter or
exchange of goods or properties, a value-added tax equivalent to 10% of the
gross selling price or gross value in money of the goods or properties sold,
bartered or exchanged, such tax to be paid by the seller or transferor.
(1)The term goods or properties shall mean all tangible and intangible objects
which are capable of pecuniary estimation and shall include:
(A) Real properties held primarily for sale to customers or held for lease in
the ordinary course of trade or business[.]
While prior to Republic Act No. 7716, real estate transactions were not subject
to VAT, they became subject to VAT upon the effectivity of said law. Thus,
the sale of the parcels of land by petitioner became subject to a 10% VAT, and
this was later increased to 12%, pursuant to Republic Act No. 9337. 20 Petitioner
afterwards
became
a
VAT-registered
taxpayer.

On September 19, 1996, in accordance with Revenue Regulations No. 7-95

(Consolidated VAT Regulations), petitioner submitted to respondent BIR,
Revenue District No. 44, Taguig and Pateros, an inventory list of its properties
as of February 29, 1996. The total book value of petitioners land inventory
amounted
to
P71,227,503,200.00.21
On the basis of Section 105 of the NIRC,22 petitioner claims a transitional or
presumptive input tax credit of 8% of P71,227,503,200.00, the total value
of the real properties listed in its inventory, or a total input tax credit of
P5,698,200,256.00.23 After the value of the real properties was reduced due to
a reconveyance by petitioner to BCDA of a parcel of land, petitioner claims that
it
is
entitled
to input
tax
credit in
the reduced
amount of P4,250,475,000.48.24
What petitioner seeks to be refunded are the actual VAT payments made by it in
cash, which it claims were either erroneously paid by or illegally collected from
it.25 Each Claim for Refund is based on petitioners position that it is entitled to
a transitional input tax credit under Section 105 of the old NIRC, which more
than
offsets
the
aforesaid
VAT
payments.
G.R.

No.

175707

Petitioners VAT returns filed with the BIR show that for the second quarter of
1997, petitioner received the total amount of P5,014,755,287.40 from its sales
and lease of lots, on which the output VAT payable was P501,475,528.74.26 The
VAT returns likewise show that petitioner made cash payments totaling
P486,355,846.78 and utilized its input tax credit of P15,119,681.96 on
purchases
of
goods
and
services.27
On February 11, 1999, petitioner filed with the BIR a claim for refund of the
amount of P486,355,846.78 which it paid in cash as VAT for the second quarter
of
1997.28
On May 21, 1999, petitioner filed with the CTA a petition for review 29 by way of
appeal, docketed as CTA Case No. 5885, from the alleged inaction by
respondents of petitioners claim for refund with the BIR. On October 1, 1999,
the parties submitted to the CTA a Stipulation of Facts, Documents and Issue.30
On October 13, 2000, the CTA issued its Decision31 in CTA Case No. 5885
denying
petitioners
claim
for
refund
for
lack
of
merit.
On November 23, 2000, petitioner filed with the Court of Appeals a Petition for
Review of the aforesaid CTA Decision, which was docketed as CA-G.R SP No.
61516. On April 22, 2003, the CA issued its Decision32 dismissing the Petition
for Review. On November 30, 2006, the Court of Appeals issued its
Resolution33 denying
petitioners
Motion
for
Reconsideration.

On

December

21,

2006,

this

Petition

for

Review

was

filed.

Petitioner submitted its Memorandum34 on November 7, 2008 while respondents

filed
their
Comment35 on
May
4,
2009.36
On December 2, 2009, petitioner submitted a Supplement37 to its Memorandum
dated November 6, 2008, stating that the said case is intimately related to the
cases of Fort Bonifacio Development Corporation v. Commissioner of Internal
Revenue, G.R. No. 158885, and Fort Bonifacio Development Corporation v.
Commissioner of Internal Revenue, G.R. No. 170680, which were already
decided by this Court, and which involve the same parties and similar facts and
issues.38
Except for the amounts of tax refund being claimed and the periods
covered for each claim, the facts in this case and in the other two
consolidated cases below are the same. The parties entered into similar
Stipulations
in
the
other
two
cases
consolidated
here.39
G.R.

No.

180035

input tax credit more than sufficiently covers the amount of P77,151,020.46
subject of petitioners claim for refund of November 22, 1999.
1.15. As of the date of the Petition, no action had been taken by respondents on
petitioners claim for refund of November 22, 1999.41 (Emphases ours.)
The petition in G.R. No. 180035 seeks to correct the unauthorized limitation of
the term real properties to improvements thereon by Revenue Regulations 795 and the error of the Court of Tax Appeals and Court of Appeals in sustaining
the aforesaid Regulations.42 This theory of petitioner is the same for all three
cases
now
before
us.
On March 14, 2013, petitioner filed a Motion for Consolidation 43 of G.R. No.
180035
with
G.R.
No.
175707.
Petitioner submitted its Memorandum44 on September
respondents
filed
theirs
on
September
G.R.

No.

15, 2009 while

22,
2009.45
181092

We quote relevant portions of the parties Stipulation of Facts, Documents and

Issue in CTA Case No. 602140 below:

The facts summarized below are found in the parties Stipulation of Facts,
Documents and Issue in CTA Case No. 569446:

1.11. Per VAT returns filed by petitioner with the BIR, for the second
quarter
of
1998,
petitioner
derived
the
total
amount
of
P903,427,264.20 from its sales and lease of lots, on which the output
VAT payable to the Bureau of Internal Revenue was P90,342,726.42.

1.09. Per VAT returns filed by petitioner with the BIR, for the fourth quarter
of 1996, petitioner derived the total amount of P3,498,888,713.60 from its
sales and lease of lots, on which the output VAT payable to the Bureau of
Internal
Revenue
was P318,080,792.14.

1.12. The VAT returns filed by petitioner likewise show that to pay said
amount of P90,342,726.42 due to the BIR, petitioner made cash
payments totalling P77,151,020.46 and utilized its regular input tax
credit of P39,878,959.37 on purchases of goods and services.

1.10. The VAT returns filed by petitioner likewise show that to pay said amount
of P318,080,792.14 due to the BIR, petitioner made cash payments totalling
P269,340,469.45 and utilized (a) part of the total transitional/presumptive input
tax credit of P5,698,200,256.00 being claimed by it to the extent of
P28,413,783.00; and (b) its regular input tax credit of P20,326,539.69 on
purchases
of
goods
and
services.

1.13. On November 22, 1999, petitioner filed with the BIR a claim for
refund of the amount of P77,151,020.46 which it paid as value-added
tax
for
the
first
quarter
of
1998.
1.14. Earlier, on October 8, 1998 and November 17, 1998, February 11, 1999,
May 11, 1999, and September 10, 1999, based on similar grounds, petitioner
filed with the BIR claims for refund of the amounts of P269,340,469.45,
P359,652,009.47, P486,355,846.78, P347,741,695.74, and P15,036,891.26,
representing value-added taxes paid by it on proceeds derived from its sales
and lease of lots for the quarters ended December 31, 1996, March 31, 1997,
June 30, 1997, September 30, 1997, and December 31, 1997, respectively.
After deducting these amounts of P269,340,469.45, P359,652,009.47,
P486,355,846.78, P347,741,695.74, and P15,036,891.26 from the total amount
of P5,698,200,256.00 claimed by petitioner as input tax credit, the remaining

1.11. On October 8, 1998 petitioner filed with the BIR a claim for refund
of the amounts of P269,340,469.45, which it paid as value-added tax.
1.12. As of the date of the Petition, no action had been taken by respondents on
petitioners claim for refund.47 (Emphases ours.)
Petitioner submitted its Memorandum48 on January 18, 2010 while respondents
filed
theirs
on
October
14,
2010.49
On March 14, 2013, petitioner filed a Motion for Consolidation50 of G.R. No.
181092
with
G.R.
No.
175707.

On January 23, 2014, petitioner filed a Motion to Resolve51 these consolidated

cases, alleging that the parties had already filed their respective memoranda;
and, more importantly, that the principal issue in these cases, whether
petitioner is entitled to the 8% transitional input tax granted in Section 105
(now Section 111[A]) of the NIRC based on the value of its inventory of land,
and as a consequence, to a refund of the amounts it paid as VAT for the periods
in question, had already been resolved by the Supreme Court En Banc in its
Decision dated April 2, 2009 in G.R. Nos. 158885 and 170680, as well as its
Decision dated September 4, 2012 in G.R. No. 173425. Petitioner further alleges
that said decided cases involve the same parties, facts, and issues as the cases
now
before
this
Court.52

Section 105. Thus, Section 105, as quoted above, remained effective even after
the
enactment
of
Republic
Act
No.
7716.

THEORY

Gross selling price means the total amount of money or its equivalent which
the purchaser pays or is obligated to pay to the seller in consideration of the
sale, barter or exchange of the goods or properties, excluding the value-added
tax. The excise tax, if any, on such goods or properties shall form part of the
gross selling price. In the case of sale, barter or exchange of real property
subject to VAT, gross selling price shall mean the consideration stated in the
sales document or the zonal value whichever is higher. Provided however, in the
absence of zonal value, gross selling price refers to the market value shown in
the
latest declaration
or
the consideration
whichever
is
higher.

OF

PETITIONER

Petitioner claims that the 10% value-added tax is based on the gross selling
price or gross value in money of the goods sold, bartered or exchanged.53
Petitioner likewise claims that by definition, the term goods was limited to
movable, tangible objects which is appropriable or transferable and that said
term did not originally include real property.54 It was previously defined as
follows under Revenue Regulations No. 5-87:
(p) Goods means any movable, tangible objects which is appropriable or
transferrable.
Republic Act No. 7716 (E-VAT Law, January 1, 1996) expanded the coverage of
the original VAT Law (Executive Order No. 273), specifically Section 100 of the
old NIRC. According to petitioner, while under Executive Order No. 273, the
term goods did not include real properties, Republic Act No. 7716, in
amending Section 100, explicitly included in the term goods real properties
held primarily for sale to customers or held for lease in the ordinary course of
trade or business. Consequently, the sale, barter, or exchange of real
properties was made subject to a VAT equivalent to 10% (later increased to
12%, pursuant to Republic Act No. 9337) of the gross selling price of real
properties.
Among the new provisions included by Executive Order No. 273 in the NIRC was
the following:
SEC. 105. Transitional Input Tax Credits. A person who becomes liable to
value-added tax or any person who elects to be a VAT-registered person shall,
subject to the filing of an inventory as prescribed by regulations, be allowed
input tax on his beginning inventory of goods, materials and supplies equivalent
to 8% of the value of such inventory or the actual value-added tax paid on such
goods, materials and supplies, whichever is higher, which shall be creditable
against the output tax.
According to petitioner, the E-VAT Law, Republic Act No. 7716, did not amend

Previously, or on December 9, 1995, the Secretary of Finance and the

Commissioner of Internal Revenue issued Revenue Regulations No. 7-95,
which included the following provisions:
SECTION 4.100-1. Value-added tax on sale of goods or properties. VAT is
imposed and collected on every sale, barter or exchange or transactions
deemed sale of taxable goods or properties at the rate of 10% of the gross
selling
price.

Taxable sale refers to the sale, barter, exchange and/or lease of goods or
properties, including transactions deemed sale and the performance of service
for a consideration, all of which are subject to tax under Sections 100 and 102
of
the
Code.
Any person otherwise required to register for VAT purposes who fails to register
shall also be liable to VAT on his sale of taxable goods or properties as defined
in the preceding paragraph. The sale of goods subject to excise tax is also
subject to VAT, except manufactured petroleum products (other than lubricating
oil,
processed
gas,
grease,
wax
and
petrolatum).
Goods or properties refer to all tangible and intangible objects which
are capable of pecuniary estimation and shall include:
1. Real properties held primarily for sale to customers or held for lease
in
the
ordinary
course
of
trade
or
business.
xxxx
SECTION

4.104-1. Credits

for

input

tax.

Input tax means the value-added tax due from or paid by a VAT-registered
person on importation of goods or local purchases of goods or services,
including lease or use of property, from another VAT-registered person in the
course of his trade or business. It shall also include the transitional or
presumptive input tax determined in accordance with Section 105 of the Code.

SECTION 4.105-1. Transitional input tax on beginning inventories. Taxpayers

who became VAT-registered persons upon effectivity of RA No. 7716 who have
exceeded the minimum turnover of P500,000.00 or who voluntarily register
even if their turnover does not exceed P500,000.00 shall be entitled to a
presumptive input tax on the inventory on hand as of December 31, 1995 on
the following; (a) goods purchased for sale in their present condition; (b)
materials purchased for further processing, but which have not yet undergone
processing; (c) goods which have been manufactured by the taxpayer; (d)
goods in process and supplies, all of which are for sale or for use in the course
of the taxpayer's trade or business as a VAT-registered person.
However, in the case of real estate dealers, the basis of the
presumptive input tax shall be the improvements, such as buildings,
roads, drainage systems, and other similar structures, constructed on
or
after
effectivity
of
E.O.
273
(January
1,
1988).
The transitional input tax shall be 8% of the value of the inventory or actual
VAT paid, whichever is higher, which amount may be allowed as tax credit
against
the
output
tax
of
the
VAT-registered
person.
The value allowed for income tax purposes on inventories shall be the basis for
the computation of the 8% excluding goods that are exempt from VAT under
SECTION 103. Only VAT-registered persons shall be entitled to presumptive
input
tax
credits.
xxxx

For purposes of sub-paragraph (i), (ii) and (iii) above, an inventory as of

December 31, 1995 of such goods or properties and improvements showing the
quantity, description, and amount should be filed with the RDO not later than
January 31, 1996. (Emphases supplied.)
Petitioner argues that Section 4.100-1 of Revenue Regulations No. 7-95
explicitly limited the term goods as regards real properties to improvements,
such as buildings, roads, drainage systems, and other similar structures,
thereby excluding the real property itself from the coverage of the term goods
as it is used in Section 105 of the NIRC. This has brought about, as a
consequence,
the
issues
involved
in
the
instant
case.
Petitioner claims that the Court of Appeals erred in not holding that Revenue
Regulations No. 6-97 has effectively repealed or repudiated Revenue
Regulations No. 7-95 insofar as the latter limited the transitional/presumptive
input tax credit which may be claimed under Section 105 of the NIRC to the
improvements on real properties.55 Petitioner argues that the provision in
Section 4.105-1 of Revenue Regulations No. 7-95 stating that in the case of real
estate dealers, the basis of the input tax credit shall be the improvements, has
been deleted by Revenue Regulations No. 6-97, dated January 2, 1997, which
amended Revenue Regulations No. 7-95. Revenue Regulations No. 6-97 was
issued to implement Republic Act No. 8241 (the law amending Republic Act No.
7716, the E-VAT Law), which took effect on January 1, 1997.
Petitioner notes that Section 4.105-1 of Revenue Regulations No. 6-97 is but a
reenactment of Section 4.105-1 of Revenue Regulations No. 7-95, with the only
difference being that the following paragraph in Revenue Regulations No. 7-95
was deleted:

TRANSITORY PROVISIONS
(a) Presumptive Input Tax Credits
(i)

(ii)

(iii)

For goods, materials or supplies not for sale but purchased for use in
business in their present condition, which are not intended for further
processing and are on hand as of December 31, 1995, a presumptive
input tax equivalent to 8% of the value of the goods or properties shall
be allowed.
For goods or properties purchased with the object of resale in their
present condition, the same presumptive input tax equivalent to 8% of
the value of the goods unused as of December 31, 1995 shall be
allowed, which amount may also be credited against the output tax of a
VAT-registered person.
For real estate dealers, the presumptive input tax of 8% of the book
value of improvements constructed on or after January 1, 1988 (the
effectivity of E.O. 273) shall be allowed.

However, in the case of real estate dealers, the basis of the presumptive input
tax shall be the improvements, such as buildings, roads, drainage systems, and
other similar structures, constructed on or after the effectivity of E.O. 273
(January 1, 1988).
Petitioner calls this an express repeal, and with the deletion of the above
paragraph, what stands and should be applied is the statutory definition in
Section 100 of the NIRC of the term goods in Section 105 thereof. 56
Petitioner contends that the relevant provision now states that [t]he
transitional input tax credit shall be eight percent (8%) of the value of
the beginning inventory x x x on such goods, materials and supplies. It no
longer limits the allowable transitional input tax credit to improvements on the
real properties. The amendment recognizes that the basis of the 8% input tax
credit should not be confined to the value of the improvements. Petitioner
further contends that the Commissioner of Internal Revenue has in fact
corrected
the
mistake
in
Revenue
Regulations
No.
7-95.57

Petitioner argues that Revenue Regulations No. 6-97, being beneficial to the
taxpayer, should be given a retroactive application.58 Petitioner states that the
transactions involved in these consolidated cases took place after Revenue
Regulations No. 6-97 took effect, under the provisions of which the transitional
input tax credit with regard to real properties would be based on the value of
the land inventory and not limited to the value of the improvements.
Petitioner assigns another error: the Court of Appeals erred in holding that
Revenue Regulations No. 7-95 is a valid implementation of the NIRC and in
according it great respect, and should have held that the same is invalid for
being contrary to the provisions of Section 105 of the NIRC. 59
Petitioner contends that Revenue Regulations No. 7-95 is not valid for being
contrary to the express provisions of Section 105 of the NIRC, and in fact
amends the same, for it limited the scope of Section 105 to less than what the
law provides.60 Petitioner elaborates:
[Revenue Regulations No. 7-95] illegally constricted the provisions of the
aforesaid section. It delimited the coverage of Section 105 and practically
amended it in violation of the fundamental principle that administrative
regulations are subordinate to the law. Based on the numerous authorities cited
above, Section 4.105-1 and the Transitory Provisions of Revenue Regulations
No. 7-95 are invalid and ineffective insofar as they limit the input tax credit to
8% of the value of the improvements on land, for being contrary to the
express provisions of Section 105, in relation to Section 100, of the NIRC, and
the
Court
of
Appeals
should
have
so
held.61
Petitioner likewise raises the following arguments:

The rule that the construction given by the administrative agency

charged with the enforcement of the law should be accorded great
weight by the courts, does not apply here.62
x x x Section 4.105-1 of Revenue Regulations No. 7-95 neither
exclude[s] nor prohibit[s] that the 8% input tax credit may also [be]
based on the taxpayers inventory of land.63
The issuance of Revenue Regulations No. 7-95 by the [BIR], which
changed the statutory definition of goods with regard to the
application of Section 105 of the NIRC, and the declaration of validity of
said regulations by the Court of Appeals and Court of Tax Appeals, was
in violation of the fundamental principle of separation of powers.64
x

Insofar, therefore, as Revenue Regulation[s] No. 7-95 limited the scope of the
term goods under Section 105, to improvements on real properties, contrary

to the definition of goods in Section 100, [RR] No. 7-95 decreed what the law
shall be, now how the law may be enforced, and is, consequently, of no effect
because
it
constitutes
undue
delegation
of
legislative
power.
x

[T]he transgression by the BIR and the CTA and CA of the basic principle of
separation of powers, including the fundamental rule of non-delegation of
legislative power, is clear.65
Furthermore, petitioner claims that:
SINCE THE PROVISIONS OF SECTION 105 OF THE [NIRC] IN RELATION TO
SECTION 100 THEREOF, ARE CLEAR, THERE WAS NO BASIS AND NECESSITY
FOR THE BUREAU OF INTERNAL REVENUE AND THE COURT OF APPEALS AND
THE COURT OF TAX APPEALS TO INTERPRET AND CONSTRUE THE SAME. 66
PETITIONER IS CLEARLY ENTITLED TO THE TRANSITIONAL/PRESUMPTIVE
INPUT TAX CREDIT GRANTED IN SECTION 105 OF THE NIRC AND HENCE TO A
REFUND OF THE VALUE-ADDED TAX PAID BY IT FOR THE SECOND QUARTER OF
1997.67
Petitioner insists that there was no basis and necessity for the BIR, the CTA, and
the Court of Appeals to interpret and construe Sections 100 and 105 of the
NIRC because where the law speaks in clear and categorical language, or the
terms of the statute are clear and unambiguous and free from doubt, there is no
room for interpretation or construction and no interpretation or construction is
called for; there is only room for application. 68 Petitioner asserts that
legislative intent is determined primarily from the language of the statute;
legislative intent has to be discovered from the four corners of the law; and
thus, where no ambiguity appears, it may be presumed conclusively that the
clear and explicit terms of a statute express the legislative intention. 69
So looking at the cases now before us, petitioner avers that the Court of
Appeals, the CTA, and the BIR did not merely interpret and construe Section
105, and that they virtually amended the said section, for it is allegedly clear
from Section 105 of the old NIRC, in relation to Section 100, that legislative
intent is to the effect that the taxpayer is entitled to the input tax credit based
on the value of the beginning inventory of land, not merely on the
improvements thereon, and irrespective of any prior payment of sales tax or
VAT.70
THEORY

OF

RESPONDENTS

Petitioners claims for refund were consistently denied in the three cases now
before us. Even if in one case, G.R. No. 180035, petitioner succeeded in getting
a favorable decision from the CTA, the grant of refund or tax credit was

subsequently reversed on respondents Motion for Reconsideration, and such

denial of petitioners claim was affirmed by the Court of Appeals.
Respondents reasons for denying petitioners claims are summarized in their
Comment in G.R. No. 175707, and we quote:
REASONS
WHY
DENIED OR DISMISSED

PETITION

SHOULD

BE

1. The 8% input tax credit provided for in Section 105 of the NIRC,
in relation to Section 100 thereof, is based on the value of the
improvements on the land.
2. The taxpayer is entitled to the input tax credit provided for in
Section 105 of the NIRC only if it has previously paid VAT or
sales taxes on its inventory of land.
3. Section 4.105-1 of Revenue Regulations No. 7-95 of the BIR is
valid, effective and has the force and effect of law, which
implemented Section 105 of the NIRC.71

In respondents Comment72 dated November 3, 2008 in G.R. No. 180035, they

averred that petitioners claim for the 8% transitional/presumptive input tax is
inconsistent with the purpose and intent of the law in granting such tax refund
or tax credit.73 Respondents raise the following arguments:
1. The transitional input tax provided under Section 105 in relation to
Section 100 of the Tax Code, as amended by EO No. 273 effective
January 1, 1988, is subject to certain conditions which petitioner failed
to meet.74
2. The claim for petitioner for transitional input tax is in the nature of a tax
exemption which should be strictly construed against it.75
3. Revenue Regulations No. 7-95 is valid and consistent with provisions of
the NIRC.76

Moreover, respondents contend that:

[P]etitioner is not legally entitled to any transitional input tax credit, whether it
be the 8% presumptive input tax credit or any actual input tax credit in respect
of its inventory of land brought into the VAT regime beginning January 1, 1996,
in
view
of
the
following:

VAT free acquisition of the raw land. petitioner purchased and acquired,
from the Government, the aforesaid raw land under a VAT-free sale
transaction. The Government, as a vendor, was tax-exempt and accordingly did
not pass on any VAT or sales tax as part of the price paid therefor by the
petitioner.
No transitory input tax on inventory of land is allowed. Section 105 of the
Code, as amended by Republic Act No. 7716, and as implemented by Section
4.105-1 of Revenue Regulations No. 7-95, expressly provides that no
transitional input tax credit shall be allowed to real estate dealers in respect of
their beginning inventory of land brought into the VAT regime beginning January
1, 1996 (supra). Likewise, the Transitory Provisions [(a) (iii)] of Revenue
Regulations No. 7-95 categorically states that for real estate dealers, the
presumptive input tax of 8% of the book value of improvements constructed on
or after January 1, 1998 (effectivity of E.O. 273) shall be allowed. For purposes
of subparagraphs (i), (ii) and (iii) above, an inventory as of December 31, 1995
of such goods or properties and improvements showing the quantity,
description, and amount should be filed with the RDO not later than January 31,
1996. It is admitted that petitioner filed its inventory listing of real properties
on September 19, 1996 or almost nine (9) months late in contravention [of] the
requirements in Revenue Regulations No. 7-95.77
Respondents, quoting the Civil Code,78 argue that Section 4.105-1 of Revenue
Regulations No. 7-95 has the force and effect of a law since it is not contrary to
any law or the Constitution. Respondents add that [w]hen the administrative
agency promulgates rules and regulations, it makes a new law with the force
and
effect
of
a
valid
law
x
x
x.79
ISSUES
The main issue before us now is whether or not petitioner is entitled to a
refund of the amounts of: 1) P486,355,846.78 in G.R. No. 175707, 2)
P77,151,020.46 for G.R. No. 180035, and 3) P269,340,469.45 in G.R.
No. 181092, which it paid as value-added tax, or to a tax credit for said
amounts.
To resolve the issue stated above, it is also necessary to determine:

Whether the transitional/presumptive input tax credit under Section 105

of the NIRC may be claimed only on the improvements on real
properties;
Whether there must have been previous payment of sales tax or valueadded tax by petitioner on its land before it may claim the input tax
credit granted by Section 105 of the NIRC;
Whether Revenue Regulations No. 7-95 is a valid implementation of
Section 105 of the NIRC; and

THE
G.R.

Whether the issuance of Revenue Regulations No. 7-95 by the BIR, and
declaration of validity of said Regulations by the Court of Tax Appeals
and the Court of Appeals, was in violation of the fundamental principle
of separation of powers.

RULINGS
No.

BELOW
175707

CTA Case No. 5885 Decision (October 13, 2000) The CTA traced the history
of transitional input tax credit from the original VAT Law of 1988 (Executive
Order No. 273) up to the Tax Reform Act of 1997 and looked into Section 105 of
the Tax Code. According to the CTA, the BIR issued Revenue Regulations No. 587, specifically Section 26(b),80 to implement the provisions of Section 105.
The CTA concluded from these provisions that the purpose of granting
transitional input tax credit to be utilized as payment for output VAT is primarily
to give recognition to the sales tax component of inventories which would
qualify as input tax credit had such goods been acquired during the effectivity of
the VAT Law of 1988.81 The CTA stated that the purpose of transitional input
tax credit remained the same even after the amendments introduced by the EVAT Law.82 The CTA held that the rationale in granting the transitional input
tax credit also serves as its condition for its availment as a benefit83 and that
[i]nherent in the law is the condition of prior payment of VAT or sales taxes. 84
The CTA excluded petitioner from availing of the transitional input tax credit
provided by law, reasoning that to base the 8% transitional input tax on the
book value of the land is to negate the purpose of the law in granting such
benefit. It would be tantamount to giving an undeserved bonus to real estate
dealers similarly situated as petitioner which the Government cannot afford to
provide.85 Furthermore, the CTA held that respondent was correct in basing
the 8% transitional input tax credit on the value of the improvements on the
land, citing Section 4.105-1 of Revenue Regulations No. 7-95, which the CTA
claims is consistent and in harmony with the law it seeks to implement. Thus,
the
CTA
denied
petitioners
claim
for
refund.86
CA-G.R. No. 61516 Decision (April 22, 2003) The Court of Appeals affirmed
the CTA and ruled that petitioner is not entitled to refund or tax credit in the
amount of P486,355,846.78 and stated that Revenue Regulations No. 7-95 is
a valid implementation of the NIRC.87 According to the Court of Appeals:
[P]etitioner acquired the contested property from the National Government
under a VAT-free transaction. The Government, as a vendor was outside the
operation of the VAT and ergo, could not possibly have passed on any VAT or
sales tax as part of the purchase price to the petitioner as vendee. 88
x x x [T]he grant of transitional input tax credit indeed presupposes that the
manufacturers, producers and importers should have previously paid sales taxes
on their inventories. They were given the benefit of transitional input tax

credits, precisely, to make up for the previously paid sales taxes which were
now abolished by the VAT Law. It bears stressing that the VAT Law took the
place of privilege taxes, percentage taxes and sales taxes on original or
subsequent sale of articles. These taxes were substituted by the VAT at the
constant rate of 0% or 10%.8

3. CA-G.R. No. 61516 Resolution (November 30, 2006)

Upon petitioners Motion for Reconsideration, the Court of Appeals affirmed its
decision, but we find the following statement by the appellate court worthy of
note:
We concede that the inventory restrictions under Revenue Regulation No. 7-95
limiting the coverage of the inventory only to acquisition cost of the materials
used in building improvements has already been deleted by Revenue
Regulation 6-97. This notwithstanding, we are poised to sustain our earlier
ruling as regards the refund presently claimed.90
G.R.
No.
180035
CTA Case No. 6021 Decision (January 30, 2002) The CTA sustained
petitioners position and held that respondent erred in basing the transitional
input tax credit of real estate dealers on the value of the improvements. 91 The
CTA ratiocinated as follows:
This Court, in upholding the position taken by the petitioner, is convinced that
Section 105 of the Tax Code is clear in itself. Explicit therefrom is the fact that
a taxpayer shall be allowed a transitional/presumptive input tax credit based on
the value of its beginning inventory of goods which is defined in Section 100 as
to encompass even real property. x x x.92
The CTA went on to point out inconsistencies it had found between the
transitory provisions of Revenue Regulations No. 7-95 and the law it sought to
implement, in the following manner:
Notice that letter (a)(ii) of the x x x transitory provisions 93 states that goods or
properties purchased with the object of resale in their present condition comes
with the corresponding 8% presumptive input tax of the value of the goods,
which amount may also be credited against the output tax of a VAT-registered
person. It must be remembered that Section 100 as amended by Republic Act
No. 7716 extends the term goods or properties to real properties held
primarily for sale to customers or held for lease in the ordinary course of trade
or business. This provision alone entitles Petitioner to the 8% presumptive
input tax of the value of the land (goods or properties) sold. However in letter
(a)(iii) of the same Transitory Provisions, Respondent apparently changed his
(sic) course when it declared that real estate dealers are only entitled to the 8%

of the value of the improvements. This glaring inconsistency between the two
provisions prove that Revenue Regulations No. 7-95 was not a result of an
intensive study and analysis and may have been haphazardly formulated.94
The CTA held that the implementing regulation, which provides that the 8%
transitional input tax shall be based on the improvements only of the real
properties, is neither valid nor effective.95 The CTA also sustained petitioners
argument that Revenue Regulations No. 7-95 provides no specific date as to
when the inventory list should be submitted. The relevant portion of the CTA
decision reads:
The only requirement is that the presumptive input tax shall be supported by an
inventory of goods as shown in a detailed list to be submitted to the BIR.
Moreover, the requirement of filing an inventory of goods not later than January
31, 1996 in the transitory provision of the same regulation refers to the
recognition of presumptive input tax on goods or properties on hand as of
December 31, 1995 of taxpayers already liable to VAT as of that date.
Clearly, Petitioner is entitled to the presumptive input tax in the amount of
P5,698,200,256.00, computed as follows:
Book Value of Inventory x x x
P71,227,503,200.00
Multiply by Presumptive
Input Tax rate
8%
Available Presumptive Input Tax
P5,698,200,256.00
The failure of the Petitioner to consider the presumptive input tax in the
computation of its output tax liability for the 1st quarter of 1998 results to
overpayment
of
the
VAT
for
the
same
period.
To prove the fact of overpayment, Petitioner presented the original Monthly VAT
Declaration for the month of January 1998 showing the amount of
P77,151,020.46 as the cash component of the value-added taxes paid (Exhibits
E-14 & E-14-A) which is the subject matter of the instant claim for refund.

CTA
Case
No.
6021
Resolution
(March
28,
2003)
The CTA reversed its earlier ruling upon respondents motion for
reconsideration and thus denied petitioners claim for refund. The CTA reasoned
and concluded as follows:
The vortex of the controversy in the instant case actually involves the question
of whether or not Section 4.105-1 of Revenue Regulations No. 7-95, issued by
the Secretary of Finance upon recommendation of the Commissioner of Internal
Revenue, is valid and consistent with and not violative of Section 105 of the Tax
Code,
in
relation
to
Section
100
(a)(1)(A).
x

WHEREFORE, in view of the foregoing, the Petition for Review is GRANTED.

Respondents are hereby ORDERED to REFUND or issue a TAX CREDIT
CERTIFICATEin favor of the Petitioner the total amount of P77,151,020.46
representing the erroneously paid value-added tax for the first quarter of
1998.96

We agree with the position taken by the respondents that Revenue Regulations
No. 7-95 is not contrary to the basic law which it seeks to implement. As clearly
worded, Section 105 of the Tax Code provides that a person who becomes liable
to value-added tax or any person who elects to be a VAT-registered person shall
be allowed 8% transitional input tax subject to the filing of an inventory as
prescribed
by
regulations.
Section 105, which requires the filing of an inventory for the grant of the
transitional input tax, is couched in a manner where there is a need for an
implementing rule or regulation to carry its intendment. True to its wordings,
the BIR issued Revenue Regulations No. 7-95 (specifically Section 4.105-1)
which succinctly mentioned that the basis of the presumptive input tax shall be
the
improvements
in
case
of
real
estate
dealers.97
x

WHEREFORE, in view of the foregoing, the instant Motion for Reconsideration

filed by respondents is hereby GRANTED. Accordingly, petitioners claim for
refund of the alleged overpaid Value-Added Tax in the amount of
P77,151,020.46 covering the first quarter of 1998 is hereby DENIED for lack of
merit.98

In Petitioners amended quarterly VAT return for the 1st quarter of 1998
(Exhibit D-1), Petitioner deducted the amount of P77,151,020.46 from the total
available input tax to show that the amount being claimed would no longer be
available
as
input
tax
credit.
In conclusion, the Petitioner has satisfactorily proven its entitlement to the
refund of value-added taxes paid for the first quarter of taxable year 1998.

3. CA-G.R. SP No. 76540 Decision (April 30, 2007)

The Court of Appeals affirmed the CTAs Resolution denying petitioners claim
for refund, and we quote portions of the discussion from the Court of Appeals
decision below:
To Our mind, the key to resolving the jugular issue of this controversy involves
a deeper analysis on how the much-contested transitional input tax credit has
been encrypted in the countrys value-added tax (VAT) system.
x

x x x [T]he Commissioner of Internal Revenue promulgated Revenue

Regulations No. 7-95 which laid down, among others, the basis of the
transitional
input
tax
credit
for
real
estate
dealers: 99
x

The Regulation unmistakably allows credit for transitional input tax of any
person who becomes liable to VAT or who elects to be a VAT-registered person.
More particularly, real estate dealers who were beforehand not subject to VAT
are allowed a tax credit to cushion the staggering effect of the newly imposed
10%
output
VAT
liability
under
RA
No.
7716.
Bearing in mind the purpose of the transitional input tax credit under the VAT
system, We find it incongruous to grant petitioners claim for tax refund. We
take note of the fact that petitioner acquired the Global City lots from the
National Government. The transaction was not subject to any sales or business
tax. Since the seller did not pass on any tax liability to petitioner, the latter
may not claim tax credit. Clearly then, petitioner cannot simply demand that it
is
entitled
to
the
transitional
input
tax
credit.
x

Another point. Section 105 of the National Internal Revenue Code, as amended
by EO No. 273, explicitly provides that the transitional input tax credit shall be
based on the beginning inventory of goods, materials and supplies or the
actual value-added tax paid on such goods, materials and supplies, whichever is
higher. Note that the law did not simply say the transitional input tax credit
shall be 8% of the beginning inventory of goods, materials and supplies.
Instead, lawmakers went on to say that the creditable input tax shall
be whichever is higher between the value of the inventory and the actual VAT
paid. Necessarily then, a comparison of these two figures would have to be
made. This strengthens Our view that previous payment of the VAT is
indispensable to determine the actual value of the input tax creditable against
the output tax. So too, this is in consonance with the present tax credit method
adopted in this jurisdiction whereby an entity can credit against or subtract from
the VAT charged on its sales or outputs the VAT paid on its purchases, inputs
and
imports.
We proceed to traverse another argument raised in this controversy. Petitioner
insists that the term goods which was one of the bases in computing the
transitional input tax credit must be construed so as to include real properties
held primarily for sale to customers. Petitioner posits that respondent
Commissioner practically rewrote the law when it issued Revenue Regulations
No. 7-95 which limited the basis of the 8% transitional input tax credit to the
value
of improvements alone.

Petitioner

is

clearly

mistaken.

The term goods has been defined to mean any movable or tangible objects
which are appreciable or tangible. More specifically, the word goods is always
used to designate wares, commodities, and personal chattels; and does not
include chattels real. Real property on the other hand, refers to land, and
generally whatever is erected or growing upon or affixed to land. It is therefore
quite absurd to equate goods as being synonymous to properties. The vast
difference between the terms goods and real properties is so obvious that
petitioners assertion must be struck down for being utterly baseless and
specious.
Along this line, We uphold the validity of Revenue Regulations No. 7-95. The
authority of the Secretary of Finance, in conjunction with the Commissioner of
Internal Revenue, to promulgate all needful rules and regulations for the
effective enforcement of internal revenue laws cannot be controverted. Neither
can it be disputed that such rules and regulations, as well as administrative
opinions and rulings, ordinarily should deserve weight and respect by the
courts. Much more fundamental than either of the above, however, is that all
such issuances must not override, but must remain consistent and in harmony
with, the law they seek to apply and implement. Administrative rules and
regulations are intended to carry out, neither to supplant nor to modify, the
law. Revenue Regulations No. 7-95 is clearly not inconsistent with the
prevailing statute insofar as the provision on transitional input tax credit is
concerned.100
CA-G.R.

SP

No.

76540

Resolution

(October

8,

2007)

In this Resolution, the Court of Appeals denied petitioners Motion for

Reconsideration
of
its
Decision
dated
April
30,
2007.
G.R.

No.

181092

CTA
Case
No.
5694
Decision
(September
29,
2000)
The CTA ruled that petitioner is not automatically entitled to the 8% transitional
input tax allowed under Section 105 of the Tax Code based solely on its
inventory of real properties, and cited the rule on uniformity in taxation duly
enshrined in the Constitution.101 According to the CTA:
As defined under the above Section 104 of the Tax Code, an input tax means
the VAT paid by a VAT-registered person in the course of his trade or business
on importation of goods or services from a VAT-registered person; and that
such tax shall include the transitional input tax determined in accordance with
Section
105
of
the
Tax
Code,
supra.102
Applying the rule on statutory construction that particular words, clauses and

phrases should not be studied as detached and isolated expressions, but the
whole and every part of the statute must be considered in fixing the meaning of
any of its parts in order to produce a harmonious whole, the phrase transitional
input tax found in Section 105 should be understood to encompass goods,
materials and supplies which are subject to VAT, in line with the context of
input tax as defined in Section 104, most especially that the latter includes,
and immediately precedes, the former under its statutory meaning. Petitioners
contention that the 8% transitional input tax is statutorily presumed to the
extent that its real properties which have not been subjected to VAT are entitled
thereto, would directly contradict input tax as defined in Section 104 and
would invariably cause disharmony.103
The CTA held that the 8% transitional input tax should not be viewed as an
outright grant or presumption without need of prior taxes having been paid.
Expounding on this, the CTA said:
The simple instance in the aforesaid paragraphs of requiring the tax on the
materials, supplies or goods comprising the inventory to be currently unutilized
as deferred sales tax credit before the 8% presumptive input tax can be enjoyed
readily leads to the inevitable conclusion that such 8% tax cannot be just
granted to any VAT liable person if he has no priorly paid creditable sales taxes.
Legislative intent thus clearly points to priorly paid taxes on goods, materials
and supplies before a VAT-registered person can avail of the 8% presumptive
input tax.104
Anent the applicability to petitioners case of the requirement under Article VI,
Section 28, par. 1 of the Constitution that the rule of taxation shall be uniform
and equitable, the CTA held thus:
Granting arguendo that Petitioner is statutorily presumed to be entitled to the
8% transitional input tax as provided in Section 105, even without having
previously paid any tax on its inventory of goods, Petitioner would be placed at
a more advantageous position than a similar VAT-registered person who also
becomes liable to VAT but who has actually paid VAT on his purchases of goods,
materials and supplies. This is evident from the alternative modes of acquiring
the proper amount of transitional input tax under Section 105, supra. One is by
getting the equivalent amount of 8% tax based on the beginning inventory of
goods, materials and supplies and the other is by the actual VAT paid on such
goods,
materials
and
supplies,
whichever
is
higher.
As it is supposed to work, the transitional input tax should answer for the 10%
output VAT liability that a VAT-registered person will incur once he starts
business operations. While a VAT-registered person who is allowed a
transitional input tax based on his actual payment of 10% VAT on his purchases
can utilize the same to pay for his output VAT liability, a similar VAT-registered
person like herein Petitioner, when allowed the alternative 8% transitional input
tax, can offset his output VAT liability equally through such 8% tax even without

having paid any previous tax. This obvious inequity that may arise could not
have been the intention and purpose of the lawmakers in granting the
transitional
input
tax
credit.
x
x
x105
Evidently, Petitioner is not similarly situated both as to privileges and liabilities
to that of a VAT-registered person who has paid actual 10% input VAT on his
purchases of goods, materials and supplies. The latter person will not earn
anything from his transitional input tax which, to emphasize, has been paid by
him because the same will just offset his 10% output VAT liability. On the other
hand, herein Petitioner will earngratis the amount equivalent to 10% output VAT
it has passed on to buyers for the simple reason that it has never previously
paid any input tax on its goods. Its gain will be facilitated by herein claim for
refund if ever granted. This is the reason why we do not see any incongruity in
Section 4.105-1 of Revenue Regulations No. 7-95 as it relates to Section 105 of
the 1996 Tax Code, contrary to the contention of Petitioner. Section 4.105-1
(supra), which bases the transitional input tax credit on the value of the
improvements, is consistent with the purpose of the law x x x.106
CA-G.R.

SP

No.

61158

Decision

(December

28,

2007)

The Court of Appeals affirmed the CTAs denial of petitioners claim for refund
and upheld the validity of the questioned Revenue Regulation issued by
respondent Commissioner of Internal Revenue, reasoning as follows:
Sec. 105 of the NIRC, as amended, provides that the allowance for the 8% input
tax on the beginning inventory of a VAT-covered entity is subject to the filing of
an inventory as prescribed by regulations. This means that the legislature left
to the BIR the determination of what will constitute the beginning inventory of
goods, materials and supplies which will, in turn, serve as the basis for
computing
the
8%
input
tax.
While the power to tax cannot be delegated to executive agencies, details as to
the enforcement and administration of an exercise of such power may be left to
them, including the power to determine the existence of facts on which its
operation depends x x x. Hence, there is no gainsaying that the CIR and the
Secretary of Finance, in limiting the application of the input tax of real estate
dealers to improvements constructed on or after January 1, 1988, merely
exercised their delegated authority under Sec. 105, id., to promulgate rules and
regulations defining what should be included in the beginning inventory of a
VAT-registered
entity.
x

In the instant case, We find that, contrary to petitioners attacks against its
validity, the limitation on the beginning inventory of real estate dealers
contained in Sec. 4.105-1 of RR No. 7-95 is reasonable and consistent with the
nature
of
the
input
VAT.
x
x
x.

Based on the foregoing antecedents, it is clear why the second paragraph of

Sec. 4.105-1 of RR No. 7-95 limits the transitional input taxes of real estate
dealers to the value of improvements constructed on or after January 1, 1988.
Since the sale of the land was not subject to VAT or other sales taxes prior to
the effectivity of Rep. Act No. 7716, real estate dealers at that time had no
input taxes to speak of. With this in mind, the CIR correctly limited the
application of the 8% transitional input tax to improvements on real estate
dealers constructed on or after January 1, 1988 when the VAT was initially
implemented. This is, as it should be, for to grant petitioner a refund or credit
for input taxes it never paid would be tantamount to unjust enrichment.
As petitioner itself observes, the input tax credit provided for by Sec. 105 of the
NIRC is a mechanism used to grant some relief from burdensome taxes. It
follows, therefore, that not having been burdened by VAT or any other sales tax
on its inventory of land prior to the effectivity of Rep. Act No. 7716, petitioner is
not entitled to the relief afforded by Sec. 105, id.107
The Court of Appeals ruled that petitioner is not similarly situated as those
business entities which previously paid taxes on their inputs, and stressed that
a tax refund or credit x x x is in the nature of a tax exemption which must be
construed strictissimi
juris against
the
taxpayer
x
x
x.108
THIS

COURTS

As previously stated, the

resolved by this Court En
and we are bound by the
these consolidated cases,
parties.
Thus,

we

RULING

issues here have already been passed upon and

Banc twice, in decisions that have reached finality,
doctrine of stare decisisto apply those decisions to
for they involve the same facts, issues, and even
find

for

the

petitioner.

DISCUSSION
The errors assigned by petitioner to the Court of Appeals and the arguments
offered by respondents to support the denial of petitioners claim for tax refund
have already been dealt with thoroughly by the Court En Banc in Fort Bonifacio
Development Corporation v. Commissioner of Internal Revenue,G.R. Nos.
158885 and 170680 (Decision - April 2, 2009; Resolution - October 2, 2009);
and Fort Bonifacio Development Corporation v. Commissioner of Internal
Revenue, G.R. No. 173425(Decision - September 4, 2012; Resolution January
22,
2013).
The Court En Banc decided on the following issues in G.R. Nos. 158885 and
170680:

1. In determining the 10% value-added tax in Section 100 of the [Old

NIRC] on the sale of real properties by real estate dealers, is the 8%
transitional input tax credit in Section 105 applied only to the
improvements on the real property or is it applied on the value of the
entire real property?
2. Are Section 4.105.1 and paragraph (a)(III) of the Transitory Provisions
of Revenue Regulations No. 7-95 valid in limiting the 8% transitional
input tax to the improvements on the real property?

Subsequently, in G.R. No. 173425, the Court resolved issues that are identical
to the ones raised here by petitioner,109 thus:
3.05.a.Whether Revenue Regulations No. 6-97 effectively repealed or
repudiated Revenue Regulations No. 7-95 insofar as the latter limited the
transitional/presumptive input tax credit which may be claimed under
Section 105 of the National Internal Revenue Code to the
improvements on real properties.
3.05.b.Whether Revenue Regulations No. 7-95 is a valid implementation of
Section 105 of the National Internal Revenue Code.
3.05.c. Whether the issuance of Revenue Regulations No. 7-95 by the Bureau of
Internal Revenue, and declaration of validity of said Regulations by the
Court of Tax Appeals and Court of Appeals, [were] in violation of the
fundamental principle of separation of powers.
3.05.d.Whether there is basis and necessity to interpret and construe the
provisions of Section 105 of the National Internal Revenue Code.
3.05.e.Whether there must have been previous payment of business tax [sales
tax or value-added tax]110 by petitioner on its land before it may claim
the input tax credit granted by Section 105 of the National Internal
Revenue Code.
3.05.f. Whether the Court of Appeals and Court of Tax Appeals merely
speculated on the purpose of the transitional/presumptive input tax
provided for in Section 105 of the National Internal Revenue Code.
3.05.g.Whether the economic and social objectives in the acquisition of the
subject property by petitioner from the Government should be taken into
consideration.111
The Courts pronouncements in the decided cases regarding these issues are
discussed below. The doctrine of stare decisis et non quieta movere, which
means to abide by, or adhere to, decided cases,112 compels us to apply the
rulings by the Court to these consolidated cases before us. Under the doctrine
of stare decisis, when this 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; regardless of
whether the parties and property are the same.113 This is to provide stability in
judicial decisions, as held by the Court in a previous case:

Stand by the decisions and disturb not what is settled. Stare decisis simply
means that for the sake of certainty, a conclusion reached in one case should be
applied to those that follow if the facts are substantially the same, even though
the parties may be different. It proceeds from the first principle of justice that,
absent any powerful countervailing considerations, like cases ought to be
decided alike.114
More importantly, we cannot depart from the legal precedents as laid down by
the Court En Banc. It is provided in the Constitution that no doctrine or
principle of law laid down by the court in a decision rendered en banc or
in division may be modified or reversed except by the court sitting en
banc.115
What is left for this Court to do is to reiterate the rulings in the aforesaid legal
precedents
and
apply
them
to
these
consolidated
cases.
As regards the main issue, the Court conclusively held that petitioner is entitled
to the 8% transitional input tax on its beginning inventory of land, which is
granted in Section 105 (now Section 111[A]) of the NIRC, and granted the
refund of the amounts petitioner had paid as output VAT for the different tax
periods
in
question.116
Whether
input
tax
NIRC
may
improvements

the
credit
be

transitional/presumptive
under
Section
105
of
the
claimed
only
on
the
on
real
properties.

The Court held in the earlier consolidated decision, G.R. Nos. 158885 and
170680, as follows:
On its face, there is nothing in Section 105 of the Old NIRC that
prohibits the inclusion of real properties, together with the
improvements thereon, in the beginning inventory of goods, materials
and supplies, based on which inventory the transitional input tax credit
is computed. It can be conceded that when it was drafted Section 105 could
not have possibly contemplated concerns specific to real properties, as real
estate transactions were not originally subject to VAT. At the same time, when
transactions on real properties were finally made subject to VAT beginning with
Rep. Act No. 7716, no corresponding amendment was adopted as regards
Section 105 to provide for a differentiated treatment in the application of the
transitional input tax credit with respect to real properties or real estate dealers.
It was Section 100 of the Old NIRC, as amended by Rep. Act No. 7716, which
made real estate transactions subject to VAT for the first time. Prior to the
amendment, Section 100 had imposed the VAT on every sale, barter or
exchange of goods, without however specifying the kind of properties that fall
within or under the generic class goods subject to the tax.

Rep. Act No. 7716, which significantly is also known as the Expanded
Value-Added Tax (EVAT) law, expanded the coverage of the VAT by
amending Section 100 of the Old NIRC in several respects, some of
which we will enumerate. First, it made every sale, barter or exchange
of goods or properties subject to VAT. Second, it generally defined
goods or properties as all tangible and intangible objects which are
capable of pecuniary estimation. Third, it included a non-exclusive
enumeration of various objects that fall under the class goods or
properties subject to VAT, including [r]eal properties held primarily
for sale to customers or held for lease in the ordinary course of trade or
business.
From these amendments to Section 100, is there any differentiated VAT
treatment on real properties or real estate dealers that would justify
the suggested limitations on the application of the transitional input tax
on
them?
We
see
none.
Rep. Act No. 7716 clarifies that it is the real properties held primarily
for sale to customers or held for lease in the ordinary course of trade or
business that are subject to the VAT, and not when the real estate
transactions are engaged in by persons who do not sell or lease
properties in the ordinary course of trade or business. It is clear that
those regularly engaged in the real estate business are accorded the
same treatment as the merchants of other goods or properties available
in the market. In the same way that a milliner considers hats as his
goods and a rancher considers cattle as his goods, a real estate dealer
holds real property, whether or not it contains improvements, as his
goods.117 (Citations
omitted,
emphasis
added.)
x

Under Section 105, the beginning inventory of goods forms part of the
valuation of the transitional input tax credit. Goods, as commonly understood in
the business sense, refers to the product which the VAT-registered person offers
for sale to the public. With respect to real estate dealers, it is the real properties
themselves which constitute their goods. Such real properties are the
operating
assets
of
the
real
estate
dealer.
Section 4.100-1 of RR No. 7-95 itself includes in its enumeration of goods or
properties such real properties held primarily for sale to customers or held for
lease in the ordinary course of trade or business. Said definition was taken
from the very statutory language of Section 100 of the Old NIRC. By limiting
the definition of goods to improvements in Section 4.105-1, the BIR
not only contravened the definition of goods as provided in the Old
NIRC, but also the definition which the same revenue regulation itself
has provided.118 (Emphasis added.)

The Court then emphasized in its Resolution in G.R. No. 158885 and G.R. No.
170680 that Section 105 of the old NIRC, on the transitional input tax credit,
remained intact despite the enactment of Republic Act No. 7716. Section 105
was amended by Republic Act No. 8424, and the provisions on the transitional
input tax credit are now embodied in Section 111(A) of the new NIRC, which
reads:
Section

111. Transitional/Presumptive

Input

Tax

Credits.

(A) Transitional Input Tax Credits. A person who becomes liable to valueadded tax or any person who elects to be a VAT-registered person shall, subject
to the filing of an inventory according to rules and regulations prescribed by the
Secretary of [F]inance, upon recommendation of the Commissioner, be allowed
input tax on his beginning inventory of goods, materials and supplies equivalent
for 8% of the value of such inventory or the actual value-added tax paid on
such goods, materials and supplies, whichever is higher, which shall be
creditable against the output tax.119
In G.R. Nos. 158885 and 170680, the Court asked, If the plain text of Republic
Act No. 7716 fails to supply any apparent justification for limiting the beginning
inventory of real estate dealers only to the improvements on their properties,
how then were the Commissioner of Internal Revenue and the courts a quo able
to justify such a view?120 The Court then answered this question in this
manner:
IV.
The fact alone that the denial of FBDC's claims is in accord with Section 4.105-1
of RR 7-95 does not, of course, put this inquiry to rest. If Section 4.105-1 is
itself incongruent to Rep. Act No. 7716, the incongruence cannot by itself justify
the denial of the claims. We need to inquire into the rationale behind Section
4.105-1, as well as the question whether the interpretation of the law embodied
therein
is
validated
by
the
law
itself.
x

It is correct, as pointed out by the CTA, that upon the shift from sales taxes to
VAT in 1987 newly-VAT registered people would have been prejudiced by the
inability to credit against the output VAT their payments by way of sales tax on
their existing stocks in trade. Yet that inequity was precisely addressed by a
transitory provision in E.O. No. 273 found in Section 25 thereof. The provision
authorized VAT-registered persons to invoke a presumptive input tax
equivalent to 8% of the value of the inventory as of December 31, 1987
of materials and supplies which are not for sale, the tax on which was
not taken up or claimed as deferred sales tax credit, and a similar
presumptive input tax equivalent to 8% of the value of the inventory as

of December 31, 1987 of goods for sale, the tax on which was not taken
up or claimed as deferred sales tax credit.121 (Emphasis ours.)
Whether
there
must
have
been
previous
payment
of
sales
tax
or
value-added
tax
by
petitioner
on
its
land
before
petitioner
may
claim
the
input
tax
credit
granted
by
Section
105
(now
Section
111[A])
of
the
NIRC.
The Court discussed this matter lengthily in its Decision in G.R. Nos. 158885
and 170680, and we quote:
Section 25 of E.O. No. 273 perfectly remedies the problem assumed by the CTA
as the basis for the introduction of transitional input tax credit in 1987. If the
core purpose of the tax credit is only, as hinted by the CTA, to allow for some
mode of accreditation of previously-paid sales taxes, then Section 25 alone
would have sufficed. Yet E.O. No. 273 amended the Old NIRC itself by
providing for the transitional input tax credit under Section 105,
thereby assuring that the tax credit would endure long after the last
goods
made
subject
to
sales
tax
have
been
consumed.
If indeed the transitional input tax credit is integrally related to
previously paid sales taxes, the purported causal link between those
two would have been nonetheless extinguished long ago. Yet Congress
has reenacted the transitional input tax credit several times; that fact
simply belies the absence of any relationship between such tax credit
and the long-abolished sales taxes. Obviously then, the purpose behind
the transitional input tax credit is not confined to the transition from
sales
tax
to
VAT.
x x x Section 105 states that the transitional input tax credits become
available either to (1) a person who becomes liable to VAT; or (2) any
person who elects to be VAT-registered. The clear language of the law
entitles new trades or businesses to avail of the tax credit once they
become VAT-registered. The transitional input tax credit, whether under
the Old NIRC or the New NIRC, may be claimed by a newly-VAT
registered person such as when a business as it commences operations.
x x x [I]t is not always true that the acquisition of such goods,
materials and supplies entail the payment of taxes on the part of the
new business. In fact, this could occur as a matter of course by virtue of
the operation of various provisions of the NIRC, and not only on account
of
a
specially
legislated
exemption.
x

The interpretation proffered by the CTA would exclude goods and

properties which are acquired through sale not in the ordinary course of
trade or business, donation or through succession, from the beginning
inventory on which the transitional input tax credit is based. This
prospect all but highlights the ultimate absurdity of the respondents'
position. Again, nothing in the Old NIRC (or even the New NIRC) speaks
of such a possibility or qualifies the previous payment of VAT or any
other taxes on the goods, materials and supplies as a pre-requisite for
inclusion
in
the
beginning
inventory.
It is apparent that the transitional input tax credit operates to benefit
newly VAT-registered persons, whether or not they previously paid
taxes in the acquisition of their beginning inventory of goods, materials
and supplies.During that period of transition from non-VAT to VAT status, the
transitional input tax credit serves to alleviate the impact of the VAT on the
taxpayer. At the very beginning, the VAT-registered taxpayer is obliged to remit
a significant portion of the income it derived from its sales as output VAT. The
transitional input tax credit mitigates this initial diminution of the taxpayer's
income by affording the opportunity to offset the losses incurred through the
remittance of the output VAT at a stage when the person is yet unable to credit
input
VAT
payments.
There is another point that weighs against the CTA's interpretation. Under
Section 105 of the Old NIRC, the rate of the transitional input tax credit is 8%
of the value of such inventory or the actual value-added tax paid on such goods,
materials and supplies, whichever is higher. If indeed the transitional input
tax credit is premised on the previous payment of VAT, then it does not
make sense to afford the taxpayer the benefit of such credit based on
8% of the value of such inventory should the same prove higher than
the actual VAT paid. This intent that the CTA alluded to could have been
implemented with ease had the legislature shared such intent by providing the
actual VAT paid as the sole basis for the rate of the transitional input tax credit.
The CTA harped on the circumstance that FBDC was excused from paying any
tax on the purchase of its properties from the national government, even
claiming that to allow the transitional input tax credit is tantamount to giving
an undeserved bonus to real estate dealers similarly situated as [FBDC] which
the Government cannot afford to provide. Yet the tax laws in question, and
all tax laws in general, are designed to enforce uniform tax treatment to
persons or classes of persons who share minimum legislated standards.
The common standard for the application of the transitional input tax
credit, as enacted by E.O. No. 273 and all subsequent tax laws which
reinforced or reintegrated the tax credit, is simply that the taxpayer in
question has become liable to VAT or has elected to be a VAT-registered
person. E.O. No. 273 and the subsequent tax laws are all decidedly
neutral and accommodating in ascertaining who should be entitled to

the tax credit, and it behooves the CIR and the CTA to adopt a similarly
judicious perspective.122 (Citations omitted, emphases ours.)
The Court En Banc in its Resolution in G.R. No. 173425 likewise discussed the
question of prior payment of taxes as a prerequisite before a taxpayer could
avail of the transitional input tax credit. The Court found that petitioner is
entitled to the 8% transitional input tax credit, and clearly said that the fact that
petitioner acquired the Global City property under a tax-free transaction makes
no difference as prior payment of taxes is not a prerequisite.123 We quote
pertinent portions of the resolution below:
This argument has long been settled. To reiterate, prior payment of
taxes is not necessary before a taxpayer could avail of the 8%
transitional input tax credit. This position is solidly supported by law and
jurisprudence, viz.:
First . Section 105 of the old National Internal Revenue Code (NIRC) clearly
provides that for a taxpayer to avail of the 8% transitional input tax credit, all
that is required from the taxpayer is to file a beginning inventory with the
Bureau of Internal Revenue (BIR). It was never mentioned in Section 105 that
prior
payment
of
taxes
is
a
requirement.
x
x
x.
x

Second. Since the law (Section 105 of the NIRC) does not provide for prior
payment of taxes, to require it now would be tantamount to judicial legislation
which,
to
state
the
obvious,
is
not
allowed.
Third. A transitional input tax credit is not a tax refund per se but a tax credit.
Logically, prior payment of taxes is not required before a taxpayer could avail of
transitional input tax credit. As we have declared in our September 4, 2012
Decision, [t]ax credit is not synonymous to tax refund. Tax refund is defined as
the money that a taxpayer overpaid and is thus returned by the taxing
authority. Tax credit, on the other hand, is an amount subtracted directly from
one's total tax liability. It is any amount given to a taxpayer as a subsidy, a
refund,
or
an
incentive
to
encourage
investment.
Fourth. The issue of whether prior payment of taxes is necessary to avail of
transitional input tax credit is no longer novel. It has long been settled by
jurisprudence.
x
x
x.
Fifth . Moreover, in Commissioner of Internal Revenue v. Central Luzon Drug
Corp., this Court had already declared that prior payment of taxes is not
required in order to avail of a tax credit. x x x124 (Citations omitted, emphases
ours.)
The Court has thus categorically ruled that prior payment of taxes is not

required for a taxpayer to avail of the 8% transitional input tax credit

provided in Section 105 of the old NIRC and that petitioner is entitled to
it, despite the fact that petitioner acquired the Global City property
under a tax-free transaction.125 The Court En Banc held:
Contrary to the view of the CTA and the CA, there is nothing in the abovequoted
provision to indicate that prior payment of taxes is necessary for the availment
of the 8% transitional input tax credit. Obviously, all that is required is for the
taxpayer
to
file
a
beginning
inventory
with
the
BIR.
To require prior payment of taxes x x x is not only tantamount to judicial
legislation but would also render nugatory the provision in Section 105 of the
old NIRC that the transitional input tax credit shall be 8% of the value of [the
beginning] inventory or the actual [VAT] paid on such goods, materials and
supplies, whichever is higher because the actual VAT (now 12%) paid on the
goods, materials, and supplies would always be higher than the 8% (now 2%)
of the beginning inventory which, following the view of Justice Carpio, would
have to exclude all goods, materials, and supplies where no taxes were paid.
Clearly, limiting the value of the beginning inventory only to goods, materials,
and supplies, where prior taxes were paid, was not the intention of the law.
Otherwise, it would have specifically stated that the beginning inventory
excludes goods, materials, and supplies where no taxes were paid.126
Whether
a
valid
the

Revenue
Regulations
implementation
of

No.
Section

7-95
105

is
of
NIRC.

In the April 2, 2009 Decision in G.R. Nos. 158885 and 170680, the Court
struck down Section 4.105-1 of Revenue Regulations No. 7-95 for being
in conflict with the law.127 The decision reads in part as follows:
[There] is no logic that coheres with either E.O. No. 273 or Rep. Act No. 7716
which supports the restriction imposed on real estate brokers and their ability to
claim the transitional input tax credit based on the value of their real properties.
In addition, the very idea of excluding the real properties itself from the
beginning inventory simply runs counter to what the transitional input tax credit
seeks to accomplish for persons engaged in the sale of goods, whether or not
such goods take the form of real properties or more mundane commodities.

properties such real properties held primarily for sale to customers or held for
lease in the ordinary course of trade or business. Said definition was taken
from the very statutory language of Section 100 of the Old NIRC. By limiting the
definition of goods to improvements in Section 4.105-1, the BIR not only
contravened the definition of goods as provided in the Old NIRC, but also the
definition which the same revenue regulation itself has provided.
The Court of Tax Appeals claimed that under Section 105 of the Old NIRC the
basis for the inventory of goods, materials and supplies upon which the
transitional input VAT would be based shall be left to regulation by the
appropriate administrative authority. This is based on the phrase filing of an
inventory as prescribed by regulations found in Section 105. Nonetheless,
Section 105 does include the particular properties to be included in the
inventory, namely goods, materials and supplies. It is questionable whether the
CIR has the power to actually redefine the concept of goods, as she did when
she excluded real properties from the class of goods which real estate
companies in the business of selling real properties may include in their
inventory. The authority to prescribe regulations can pertain to more technical
matters, such as how to appraise the value of the inventory or what papers
need to be filed to properly itemize the contents of such inventory. But such
authority cannot go as far as to amend Section 105 itself, which the
Commissioner
had
unfortunately
accomplished
in
this
case.
It is of course axiomatic that a rule or regulation must bear upon, and be
consistent with, the provisions of the enabling statute if such rule or regulation
is to be valid. In case of conflict between a statute and an administrative order,
the former must prevail. Indeed, the CIR has no power to limit the
meaning and coverage of the term goods in Section 105 of the Old
NIRC absent statutory authority or basis to make and justify such
limitation. A contrary conclusion would mean the CIR could very well
moot the law or arrogate legislative authority unto himself by retaining
sole discretion to provide the definition and scope of the term
goods.128 (Emphasis added.)
Furthermore, in G.R. No. 173425, the Court held:
Section
inconsistent
of

4.105-1

of
with

the

RR
Section
old

7-95

is
105
NIRC

Under Section 105, the beginning inventory of goods forms part of the
valuation of the transitional input tax credit. Goods, as commonly understood in
the business sense, refers to the product which the VAT-registered person offers
for sale to the public. With respect to real estate dealers, it is the real properties
themselves which constitute their goods. Such real properties are the
operating
assets
of
the
real
estate
dealer.

As regards Section 4.105-1 of RR 7-95 which limited the 8% transitional input

tax credit to the value of the improvements on the land, the same contravenes
the provision of Section 105 of the old NIRC, in relation to Section 100 of the
same Code, as amended by RA 7716, which defines goods or properties, to
wit:

Section 4.100-1 of RR No. 7-95 itself includes in its enumeration of goods or

In fact, in our Resolution dated October 2, 2009, in the related case

of Fort Bonifacio, we ruled that Section 4.105-1 of RR 7-95, insofar as it
limits the transitional input tax credit to the value of the improvement
of the real properties, is a nullity. Pertinent portions of the Resolution read:
As mandated by Article 7 of the Civil Code, an administrative rule or regulation
cannot contravene the law on which it is based. RR 7-95 is inconsistent with
Section 105 insofar as the definition of the term goods is concerned. This is a
legislative act beyond the authority of the CIR and the Secretary of Finance. The
rules and regulations that administrative agencies promulgate, which are the
product of a delegated legislative power to create new and additional legal
provisions that have the effect of law, should be within the scope of the
statutory authority granted by the legislature to the objects and purposes of the
law, and should not be in contradiction to, but in conformity with, the standards
prescribed
by
law.
To be valid, an administrative rule or regulation must conform, not contradict,
the provisions of the enabling law. An implementing rule or regulation cannot
modify, expand, or subtract from the law it is intended to implement. Any rule
that is not consistent with the statute itself is null and void.
While administrative agencies, such as the Bureau of Internal Revenue, may
issue regulations to implement statutes, they are without authority to limit the
scope of the statute to less than what it provides, or extend or expand the
statute beyond its terms, or in any way modify explicit provisions of the law.
Indeed, a quasi-judicial body or an administrative agency for that matter cannot
amend an act of Congress. Hence, in case of a discrepancy between the basic
law and an interpretative or administrative ruling, the basic law prevails.
To recapitulate, RR 7-95, insofar as it restricts the definition of goods as basis
of transitional input tax credit under Section 105 is a nullity.
As we see it then, the 8% transitional input tax credit should not be limited to
the value of the improvements on the real properties but should include the
value of the real properties as well.129 (Citations omitted, emphasis ours.)

[The April 2, 2009 Decision] held that the CIR had no power to limit the
meaning and coverage of the term goods in Section 105 of the Old NIRC sans
statutory authority or basis and justification to make such limitation. This it did
when it restricted the application of Section 105 in the case of real estate
dealers only to improvements on the real property belonging to their beginning
inventory.
x

the
issuance
of
Revenue
No.
7-95
by
the
BIR,
and
of
validity
of
said
Regulations
CTA
and
the
Court
of
Appeals,
violation
of
the
fundamental
of
separation
of
powers.

In the Resolution dated October 2, 2009 in G.R. Nos. 158885 and 170680 the
Court denied the respondents Motion for Reconsideration with finality and held:

The statutory definition of the term goods or properties leaves no room for
doubt. It states:chanroblesvirtuallawlibrary
Sec. 100. Value-added tax on sale of goods or properties. (a) Rate and base
of
tax.

x
x
x
(1) The term goods or properties shall mean all tangible and intangible objects
which
are
capable
of
pecuniary
estimation
and
shall
include:chanroblesvirtuallawlibrary
(A) Real properties held primarily for sale to customers or held for lease in the
ordinary course of trade or business; x x x.
The amendatory provision of Section 105 of the NIRC, as introduced by RA
7716, states:
Sec. 105. Transitional Input [T]ax Credits. A person who becomes liable to
value-added tax or any person who elects to be a VAT-registered person shall,
subject to the filing of an inventory as prescribed by regulations, be allowed
input tax on his beginning inventory of goods, materials and supplies equivalent
to 8% of the value of such inventory or the actual value-added tax paid on such
goods, materials and supplies, whichever is higher, which shall be creditable
against the output tax.
The term goods or properties by the unambiguous terms of Section
100 includes real properties held primarily for sale to c[u]st[o]mers or
held for lease in the ordinary course of business. Having been defined
in Section 100 of the NIRC, the term goods as used in Section 105 of
the same code could not have a different meaning. This has been
explained
in
the
Decision
dated
April
2,
2009,
thus:
x

Whether
Regulations
declaration
by
the
was
in
principle

Section 4.105-1 of RR 7-95 restricted the definition of goods, viz.:

However, in the case of real estate dealers, the basis of the presumptive input
tax shall be the improvements , such as buildings, roads, drainage systems, and
other similar structures, constructed on or after the effectivity of EO 273
(January 1, 1988).
As mandated by Article 7 of the Civil Code, an administrative rule or
regulation cannot contravene the law on which it is based. RR 7-95 is
inconsistent with Section 105 insofar as the definition of the
term goods is concerned. This is a legislative act beyond the authority

of the CIR and the Secretary of Finance. The rules and regulations that
administrative agencies promulgate, which are the product of a
delegated legislative power to create new and additional legal
provisions that have the effect of law, should be within the scope of the
statutory authority granted by the legislature to the objects and
purposes of the law, and should not be in contradiction to, but in
conformity
with,
the
standards
prescribed
by
law.
To be valid, an administrative rule or regulation must conform, not contradict,
the provisions of the enabling law. An implementing rule or regulation cannot
modify, expand, or subtract from the law it is intended to implement. Any rule
that is not consistent with the statute itself is null and void.
While administrative agencies, such as the Bureau of Internal Revenue, may
issue regulations to implement statutes, they are without authority to limit the
scope of the statute to less than what it provides, or extend or expand the
statute beyond its terms, or in any way modify explicit provisions of the law.
Indeed, a quasi-judicial body or an administrative agency for that matter cannot
amend an act of Congress. Hence, in case of a discrepancy between the basic
law and an interpretative or administrative ruling, the basic law prevails.
To recapitulate, RR 7-95, insofar as it restricts the definition
of "goods" as basis of transitional input tax credit under Section 105 is
a
nullity.
On January 1, 1997, RR 6-97 was issued by the Commissioner of Internal
Revenue. RR 6-97 was basically a reiteration of the same Section 4.105-1 of RR
7-95,
except
that
the
RR
6-97 deleted the
following
paragraph:chanroblesvirtuallawlibrary
However, in the case of real estate dealers, the basis of the presumptive input
tax shall be the improvements, such as buildings, roads, drainage systems, and
other similar structures, constructed on or after the effectivity of E.O. 273
(January 1, 1988).
It is clear, therefore, that under RR 6-97, the allowable transitional input tax
credit is not limited to improvements on real properties. The particular provision
of RR 7-95 has effectively been repealed by RR 6-97 which is now in
consonance with Section 100 of the NIRC, insofar as the definition of real
properties as goods is concerned. The failure to add a specific repealing clause
would not necessarily indicate that there was no intent to repeal RR 7-95. The
fact that the aforequoted paragraph was deleted created an irreconcilable
inconsistency and repugnancy between the provisions of RR 6-97 and RR 7-95.
x

As pointed out in Our Decision of April 2, 2009, to give Section 105 a restrictive
construction that transitional input tax credit applies only when taxes were
previously paid on the properties in the beginning inventory and there is a law

imposing the tax which is presumed to have been paid, is to impose conditions
or requisites to the application of the transitional tax input credit which are not
found in the law. The courts must not read into the law what is not there. To do
so will violate the principle of separation of powers which prohibits this Court
from engaging in judicial legislation.130 (Emphases added.)
As the Court En Banc held in G.R. No. 173425, the issues in this case are not
novel. These same issues have been squarely ruled upon by this Court in the
earlier
decided
cases
that
have
attained
finality.131
It is now this Courts duty to apply the previous rulings to the present
case. Once a case has been decided one way, any other case involving
exactly the same point at issue, as in the present case, should be
decided
in
the
same
manner. 132
Thus, we find that petitioner is entitled to a refund of the amounts of: 1)
P486,355,846.78 in G.R. No. 175707, 2) P77,151,020.46 in G.R. No.
180035, and 3) P269,340,469.45 in G.R. No. 181092, which petitioner
paid as value-added tax, or to a tax credit for said amounts.
WHEREFORE, in view of the foregoing, the consolidated petitions are
hereby GRANTED. The following are REVERSED and SET ASIDE:
1)
2)
3)

Under G.R. No. 175707, the Decision dated April 22, 2003 of the
Court
of
Appeals
inCA-G.R.
SP
No.
61516 and
its
subsequent Resolution dated November 30, 2006;
Under G.R. No. 180035, the Decision dated April 30, 2007 of the
Court
of
Appeals
inCA-G.R.
SP
No.
76540 and
its
subsequent Resolution dated October 8, 2007; and
Under G.R. No. 181092, the Decision dated December 28, 2007 of
the Court of Appeals in CA-G.R. SP No. 61158.

Respondent Commissioner of Internal Revenue is ordered to REFUND, OR, IN

THE ALTERNATIVE, TO ISSUE A TAX CREDIT CERTIFICATE to petitioner
Fort Bonifacio Development Corporation, the following amounts:
1)
2)
3)

P486,355,846.78 paid as output value-added tax for the second

quarter of 1997 (G.R. No. 175707);
P77,151,020.46 paid as output value-added tax for the first quarter
of 1998 (G.R. No. 180035); and
P269,340,469.45 paid as output value-added tax for the fourth
quarter of 1996 (G.R. No. 181092).

SO ORDERED.

2. Ting vs Velez Ting

Carmen filed a verified petition before the RTC of Cebu City praying for
the declaration of nullity of their marriage based on Article 36 of the
Family Code. She claimed that Benjamin suffered from psychological
incapacity even at the time of the celebration of their marriage, which,
[13]
however,
only
became
manifest
thereafter.

THIRD DIVISION
[ G.R. No. 166562, March 31, 2009 ]
BENJAMIN G.
RESPONDENT.

TING,

PETITIONER,

VS.

CARMEN

M.

VELEZ-TING,

DECISION
NACHURA, J.:
Before us is a petition for review on certiorari seeking to set aside the
November 17, 2003 Amended Decision[1] of the Court of Appeals (CA),
and its December 13, 2004 Resolution[2] in CA-G.R. CV No. 59903. The
appellate court, in its assailed decision and resolution, affirmed the
January 9, 1998 Decision[3] of the Regional Trial Court (RTC), Branch
23, Cebu City, declaring the marriage between petitioner and
respondent null and void ab initio pursuant to Article 36 of the Family
Code.[4]
The

facts

follow.

Petitioner Benjamin Ting (Benjamin) and respondent Carmen VelezTing (Carmen) first met in 1972 while they were classmates in medical
school.[5] They fell in love, and they were wed on July 26, 1975 in Cebu
City when respondent was already pregnant with their first child.
At first, they resided at Benjamin's family home in Maguikay, Mandaue
City.[6] When their second child was born, the couple decided to move to
Carmen's family home in Cebu City.[7] In September 1975, Benjamin
passed the medical board examinations[8] and thereafter proceeded to
take a residency program to become a surgeon but shifted to
anesthesiology after two years. By 1979, Benjamin completed the
preceptorship program for the said field[9] and, in 1980, he began
working for Velez Hospital, owned by Carmen's family, as member of its
active staff,[10] while Carmen worked as the hospital's Treasurer.[11]
The couple begot six (6) children, namely Dennis, born on December 9,
1975; James Louis, born on August 25, 1977; Agnes Irene, born on April
5, 1981; Charles Laurence, born on July 21, 1986; Myles Vincent, born
on July 19, 1988; and Marie Corinne, born on June 16, 1991.[12]
On October 21, 1993, after being married for more than 18 years to
petitioner and while their youngest child was only two years old,

In her complaint, Carmen stated that prior to their marriage, she was
already aware that Benjamin used to drink and gamble occasionally
with his friends.[14] But after they were married, petitioner continued to
drink regularly and would go home at about midnight or sometimes in
the wee hours of the morning drunk and violent. He would confront and
insult respondent, physically assault her and force her to have sex with
him. There were also instances when Benjamin used his gun and shot
the gate of their house.[15] Because of his drinking habit, Benjamin's job
as anesthesiologist was affected to the point that he often had to refuse
to answer the call of his fellow doctors and to pass the task to other
anesthesiologists. Some surgeons even stopped calling him for his
services because they perceived petitioner to be unreliable. Respondent
tried to talk to her husband about the latter's drinking problem, but
Benjamin
refused
to
acknowledge
the
same.[16]
Carmen also complained that petitioner deliberately refused to give
financial support to their family and would even get angry at her
whenever she asked for money for their children. Instead of providing
support, Benjamin would spend his money on drinking and gambling
and would even buy expensive equipment for his hobby.[17] He rarely
stayed home[18] and even neglected his obligation to his children.[19]
Aside from this, Benjamin also engaged in compulsive gambling. [20] He
would gamble two or three times a week and would borrow from his
friends, brothers, or from loan sharks whenever he had no money.
Sometimes, Benjamin would pawn his wife's own jewelry to finance his
gambling.[21] There was also an instance when the spouses had to sell
their family car and even a portion of the lot Benjamin inherited from
his father just to be able to pay off his gambling debts.[22] Benjamin
only stopped going to the casinos in 1986 after he was banned
therefrom for having caused trouble, an act which he said he purposely
committed so that he would be banned from the gambling
establishments.[23]
In sum, Carmen's allegations of Benjamin's psychological incapacity
consisted of the following manifestations:
1. Benjamin's alcoholism, which adversely affected his family
relationship and his profession;
2. Benjamin's violent nature brought about by his excessive and
regular drinking;

3. His compulsive gambling habit, as a result of which Benjamin

found it necessary to sell the family car twice and the property
he inherited from his father in order to pay off his debts,
because he no longer had money to pay the same; and
4. Benjamin's irresponsibility and immaturity as shown by his
failure and refusal to give regular financial support to his
family.[24]
In his answer, Benjamin denied being psychologically incapacitated. He
maintained that he is a respectable person, as his peers would confirm.
He said that he is an active member of social and athletic clubs and
would drink and gamble only for social reasons and for leisure. He also
denied being a violent person, except when provoked by
circumstances.[25] As for his alleged failure to support his family
financially, Benjamin claimed that it was Carmen herself who would
collect his professional fees from Velez Hospital when he was still
serving there as practicing anesthesiologist.[26] In his testimony,
Benjamin also insisted that he gave his family financial support within
his means whenever he could and would only get angry at respondent
for lavishly spending his hard-earned money on unnecessary things.[27]
He also pointed out that it was he who often comforted and took care of
their children, while Carmen played mahjong with her friends twice a
week.[28]
During the trial, Carmen's testimony regarding Benjamin's drinking and
gambling habits and violent behavior was corroborated by Susana
Wasawas, who served as nanny to the spouses' children from 1987 to
1992.[29] Wasawas stated that she personally witnessed instances when
Benjamin maltreated Carmen even in front of their children.[30]
Carmen also presented as witness Dr. Pureza Trinidad-Oate, a
psychiatrist.[31] Instead of the usual personal interview, however, Dr.
Oate's evaluation of Benjamin was limited to the transcript of
stenographic notes taken during Benjamin's deposition because the
latter had already gone to work as an anesthesiologist in a hospital in
South Africa. After reading the transcript of stenographic notes, Dr.
Oate concluded that Benjamin's compulsive drinking, compulsive
gambling and physical abuse of respondent are clear indications that
petitioner
suffers
from
a
personality
disorder.[32]
To refute Dr. Oate's opinion, petitioner presented Dr. Renato D. Obra,
a psychiatrist and a consultant at the Department of Psychiatry in Don
Vicente Sotto Memorial Medical Center, as his expert witness. [33] Dr.
Obra evaluated Benjamin's psychological behavior based on the
transcript of stenographic notes, as well as the psychiatric evaluation
report prepared by Dr. A.J.L. Pentz, a psychiatrist from the University of
Pretoria in South Africa, and his (Dr. Obra's) interview with Benjamin's

brothers.[34] Contrary to Dr. Oate's findings, Dr. Obra observed that

there is nothing wrong with petitioner's personality, considering the
latter's good relationship with his fellow doctors and his good track
record
as
anesthesiologist.[35]
On January 9, 1998, the lower court rendered its Decision[36] declaring
the marriage between petitioner and respondent null and void. The RTC
gave credence to Dr. Oate's findings and the admissions made by
Benjamin in the course of his deposition, and found him to be
psychologically incapacitated to comply with the essential obligations of
marriage. Specifically, the trial court found Benjamin an excessive
drinker, a compulsive gambler, someone who prefers his extracurricular activities to his family, and a person with violent tendencies,
which character traits find root in a personality defect existing even
before his marriage to Carmen. The decretal portion of the decision
reads:
WHEREFORE, all the foregoing considered, judgment is hereby rendered
declaring the marriage between plaintiff and defendant null and void ab
initio pursuant to Art. 36
of the Family Code. x x x
x

SO ORDERED.[37]
Aggrieved, petitioner appealed to the CA. On October 19, 2000, the CA
rendered a Decision[38] reversing the trial court's ruling. It faulted the
trial court's finding, stating that no proof was adduced to support the
conclusion that Benjamin was psychologically incapacitated at the time
he married Carmen since Dr. Oate's conclusion was based only on
theories and not on established fact,[39] contrary to the guidelines set
forth in Santos v. Court of Appeals[40] and in Rep. of the Phils. v. Court
of
Appeals
and
Molina.[41]
Because of this, Carmen filed a motion for reconsideration, arguing that
the Molina guidelines should not be applied to this case since the Molina
decision was promulgated only on February 13, 1997, or more than five
years after she had filed her petition with the RTC.[42] She claimed that
the Molina ruling could not be made to apply retroactively, as it would
run counter to the principle of stare decisis. Initially, the CA denied the
motion for reconsideration for having been filed beyond the prescribed
period. Respondent thereafter filed a manifestation explaining
compliance with the prescriptive period but the same was likewise
denied for lack of merit. Undaunted, respondent filed a petition for
certiorari[43] with this Court. In a Resolution[44] dated March 5, 2003,
this Court granted the petition and directed the CA to resolve Carmen's
motion for reconsideration.[45] On review, the CA decided to reconsider

its previous ruling. Thus, on November 17, 2003, it issued an Amended

Decision[46] reversing its first ruling and sustaining the trial court's
decision.[47]

developed conflicting decisions; and, (3) the binding force of the

decision was the "actual principle or principles necessary for the
decision; not the words or reasoning used to reach the decision."

A motion for reconsideration was filed, this time by Benjamin, but the
same was denied by the CA in its December 13, 2004 Resolution.[48]

The doctrine migrated to the United States. It was recognized by the

framers of the U.S. Constitution. According to Hamilton, "strict rules
and precedents" are necessary to prevent "arbitrary discretion in the
courts." Madison agreed but stressed that "x x x once the precedent
ventures into the realm of altering or repealing the law, it should be
rejected." Prof. Consovoy well noted that Hamilton and Madison
"disagree about the countervailing policy considerations that would
allow a judge to abandon a precedent." He added that their ideas
"reveal a deep internal conflict between the concreteness required by
the rule of law and the flexibility demanded in error correction. It is this
internal conflict that the Supreme Court has attempted to deal with for
over
two
centuries."

Hence,

this

petition.

For our resolution are the following issues:

I.
II.

III.

Whether the CA violated the rule on stare decisis when it refused

to follow the guidelines set forth under the Santos and Molina
cases;
Whether the CA correctly ruled that the requirement of proof of
psychological incapacity for the declaration of absolute nullity of
marriage based on Article 36 of the Family Code has been
liberalized; and
Whether the CA's decision declaring the marriage between
petitioner and respondent null and void [is] in accordance with
law and jurisprudence.

We
I.

find
On

merit
the

issue

in

the
of

stare

petition.
decisis.

The principle of stare decisis enjoins adherence by lower courts to

doctrinal rules established by this Court in its final decisions. It is based
on the principle that once a question of law has been examined and
decided, it should be deemed settled and closed to further argument.[49]
Basically, it is a bar to any attempt to relitigate the same issues,[50]
necessary for two simple reasons: economy and stability. In our
jurisdiction, the principle is entrenched in Article 8 of the Civil Code. [51]
This doctrine of adherence to precedents or stare decisis was applied by
the English courts and was later adopted by the United States.
Associate Justice (now Chief Justice) Reynato S. Puno's discussion on
the historical development of this legal principle in his dissenting
opinion in Lambino v. Commission on Elections[52] is enlightening:
The latin phrase stare decisis et non quieta movere means "stand by
the thing and do not disturb the calm." The doctrine started with the
English Courts. Blackstone observed that at the beginning of the 18th
century, "it is an established rule to abide by former precedents where
the same points come again in litigation." As the rule evolved, early
limits to its application were recognized: (1) it would not be followed if
it were "plainly unreasonable"; (2) where courts of equal authority

Indeed, two centuries of American case law will confirm Prof.

Consovoy's observation although stare decisis developed its own life in
the United States. Two strains of stare decisis have been isolated by
legal scholars. The first, known as vertical stare decisis deals with the
duty of lower courts to apply the decisions of the higher courts to cases
involving the same facts. The second, known as horizontal stare decisis
requires that high courts must follow its own precedents. Prof.
Consovoy correctly observes that vertical stare decisis has been viewed
as an obligation, while horizontal stare decisis, has been viewed as a
policy, imposing choice but not a command. Indeed, stare decisis is not
one
of
the
precepts
set
in
stone
in
our
Constitution.
It is also instructive to distinguish the two kinds of horizontal stare
decisis -- constitutional stare decisis and statutory stare decisis.
Constitutional stare decisis involves judicial interpretations of the
Constitution while statutory stare decisis involves interpretations of
statutes. The distinction is important for courts enjoy more flexibility in
refusing to apply stare decisis in constitutional litigations. Justice
Brandeis' view on the binding effect of the doctrine in constitutional
litigations still holds sway today. In soothing prose, Brandeis stated:
"Stare decisis is not . . . a universal and inexorable command. The rule
of stare decisis is not inflexible. Whether it shall be followed or
departed from, is a question entirely within the discretion of the court,
which is again called upon to consider a question once decided." In the
same vein, the venerable Justice Frankfurter opined: "the ultimate
touchstone of constitutionality is the Constitution itself and not what
we have said about it." In contrast, the application of stare decisis on
judicial interpretation of statutes is more inflexible. As Justice Stevens
explains: "after a statute has been construed, either by this Court or by
a consistent course of decision by other federal judges and agencies, it

acquires a meaning that should be as clear as if the judicial gloss had

been drafted by the Congress itself." This stance reflects both respect
for Congress' role and the need to preserve the courts' limited
resources.
In general, courts follow the stare decisis rule for an ensemble of
reasons, viz.: (1) it legitimizes judicial institutions; (2) it promotes
judicial economy; and, (3) it allows for predictability. Contrariwise,
courts refuse to be bound by the stare decisis rule where (1) its
application perpetuates illegitimate and unconstitutional holdings; (2)
it cannot accommodate changing social and political understandings;
(3) it leaves the power to overturn bad constitutional law solely in the
hands of Congress; and, (4) activist judges can dictate the policy for
future courts while judges that respect stare decisis are stuck agreeing
with
them.
In its 200-year history, the U.S. Supreme Court has refused to follow
the stare decisis rule and reversed its decisions in 192 cases. The most
famous of these reversals is Brown v. Board of Education which junked
Plessy v. Ferguson's "separate but equal doctrine." Plessy upheld as
constitutional a state law requirement that races be segregated on
public transportation. In Brown, the U.S. Supreme Court, unanimously
held that "separate . . . is inherently unequal." Thus, by freeing itself
from the shackles of stare decisis, the U.S. Supreme Court freed the
colored Americans from the chains of inequality. In the Philippine
setting, this Court has likewise refused to be straitjacketed by the stare
decisis rule in order to promote public welfare. In La Bugal-B'laan Tribal
Association, Inc. v. Ramos, we reversed our original ruling that certain
provisions of the Mining Law are unconstitutional. Similarly, in
Secretary of Justice v. Lantion, we overturned our first ruling and held,
on motion for reconsideration, that a private respondent is bereft of the
right to notice and hearing during the evaluation stage of the
extradition
process.
An examination of decisions on stare decisis in major countries will
show that courts are agreed on the factors that should be considered
before overturning prior rulings. These are workability, reliance,
intervening developments in the law and changes in fact. In addition,
courts put in the balance the following determinants: closeness of the
voting,
age
of
the
prior
decision
and
its
merits.
The leading case in deciding whether a court should follow the stare
decisis rule in constitutional litigations is Planned Parenthood v. Casey.
It established a 4-pronged test. The court should (1) determine
whether the rule has proved to be intolerable simply in defying practical
workability; (2) consider whether the rule is subject to a kind of
reliance that would lend a special hardship to the consequences of

overruling and add inequity to the cost of repudiation; (3) determine

whether related principles of law have so far developed as to have the
old rule no more than a remnant of an abandoned doctrine; and, (4)
find out whether facts have so changed or come to be seen differently,
as to have robbed the old rule of significant application or
justification.[53]
To be forthright, respondent's argument that the doctrinal guidelines
prescribed in Santos and Molina should not be applied retroactively for
being contrary to the principle of stare decisis is no longer new. The
same argument was also raised but was struck down in Pesca v.
Pesca,[54] and again in Antonio v. Reyes.[55] In these cases, we
explained that the interpretation or construction of a law by courts
constitutes a part of the law as of the date the statute is enacted. It is
only when a prior ruling of this Court is overruled, and a different view
is adopted, that the new doctrine may have to be applied prospectively
in favor of parties who have relied on the old doctrine and have acted in
good faith, in accordance therewith under the familiar rule of "lex
prospicit,
non
respicit."
II. On liberalizing the required proof for the declaration of nullity of
marriage
under
Article
36.
Now, petitioner wants to know if we have abandoned the Molina
doctrine.
We

have

not.

In Edward Kenneth Ngo Te v. Rowena Ong Gutierrez Yu-Te,[56] we

declared that, in hindsight, it may have been inappropriate for the Court
to impose a rigid set of rules, as the one in Molina, in resolving all cases
of psychological incapacity. We said that instead of serving as a
guideline, Molina unintentionally became a straightjacket, forcing all
cases involving psychological incapacity to fit into and be bound by it,
which is not only contrary to the intention of the law but unrealistic as
well because, with respect to psychological incapacity, no case can be
considered
as
on
"all
fours"
with
another.[57]
By the very nature of cases involving the application of Article 36, it is
logical and understandable to give weight to the expert opinions
furnished by psychologists regarding the psychological temperament of
parties in order to determine the root cause, juridical antecedence,
gravity and incurability of the psychological incapacity. However, such
opinions, while highly advisable, are not conditions sine qua non in
granting petitions for declaration of nullity of marriage.[58] At best,
courts must treat such opinions as decisive but not indispensable
evidence in determining the merits of a given case. In fact, if the

totality of evidence presented is enough to sustain a finding of

psychological incapacity, then actual medical or psychological
examination of the person concerned need not be resorted to.[59] The
trial court, as in any other given case presented before it, must always
base its decision not solely on the expert opinions furnished by the
parties but also on the totality of evidence adduced in the course of the
proceedings.
It was for this reason that we found it necessary to emphasize in Ngo
Te that each case involving the application of Article 36 must be treated
distinctly and judged not on the basis of a priori assumptions,
predilections or generalizations but according to its own attendant
facts. Courts should interpret the provision on a case-to-case basis,
guided by experience, the findings of experts and researchers in
psychological disciplines, and by decisions of church tribunals.
Far from abandoning Molina, we simply suggested the relaxation of the
stringent requirements set forth therein, cognizant of the explanation
given by the Committee on the Revision of the Rules on the rationale of
the Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages (A.M. No. 02-11-10-SC), viz.:
To require the petitioner to allege in the petition the particular root
cause of the psychological incapacity and to attach thereto the verified
written report of an accredited psychologist or psychiatrist have proved
to be too expensive for the parties. They adversely affect access to
justice o poor litigants. It is also a fact that there are provinces where
these experts are not available. Thus, the Committee deemed it
necessary to relax this stringent requirement enunciated in the Molina
Case. The need for the examination of a party or parties by a
psychiatrist or clinical psychologist and the presentation of psychiatric
experts shall now be determined by the court during the pre-trial
conference.[60]
But where, as in this case, the parties had the full opportunity to
present professional and expert opinions of psychiatrists tracing the
root cause, gravity and incurability of a party's alleged psychological
incapacity, then such expert opinion should be presented and,
accordingly, be weighed by the court in deciding whether to grant a
petition
for
nullity
of
marriage.
III.

On

petitioner's

psychological

incapacity.

Coming now to the main issue, we find the totality of evidence adduced
by respondent insufficient to prove that petitioner is psychologically
unfit to discharge the duties expected of him as a husband, and more
particularly, that he suffered from such psychological incapacity as of

the date of the marriage eighteen (18) years ago. Accordingly, we

reverse the trial court's and the appellate court's rulings declaring the
marriage between petitioner and respondent null and void ab initio.
The intendment of the law has been to confine the application of Article
36 to the most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give meaning and
significance to the marriage.[61] The psychological illness that must
have afflicted a party at the inception of the marriage should be a
malady so grave and permanent as to deprive one of awareness of the
duties and responsibilities of the matrimonial bond he or she is about to
assume.[62]
In this case, respondent failed to prove that petitioner's "defects" were
present at the time of the celebration of their marriage. She merely
cited that prior to their marriage, she already knew that petitioner
would occasionally drink and gamble with his friends; but such
statement, by itself, is insufficient to prove any pre-existing
psychological defect on the part of her husband. Neither did the
evidence
adduced
prove
such
"defects"
to
be
incurable.
The evaluation of the two psychiatrists should have been the decisive
evidence in determining whether to declare the marriage between the
parties null and void. Sadly, however, we are not convinced that the
opinions provided by these experts strengthened respondent's
allegation of psychological incapacity. The two experts provided
diametrically contradicting psychological evaluations: Dr. Oate
testified that petitioner's behavior is a positive indication of a
personality disorder,[63] while Dr. Obra maintained that there is nothing
wrong with petitioner's personality. Moreover, there appears to be
greater weight in Dr. Obra's opinion because, aside from analyzing the
transcript of Benjamin's deposition similar to what Dr. Oate did, Dr.
Obra also took into consideration the psychological evaluation report
furnished by another psychiatrist in South Africa who personally
examined Benjamin, as well as his (Dr. Obra's) personal interview with
Benjamin's brothers.[64] Logically, therefore, the balance tilts in favor of
Dr.
Obra's
findings.
Lest it be misunderstood, we are not condoning petitioner's drinking
and gambling problems, or his violent outbursts against his wife. There
is no valid excuse to justify such a behavior. Petitioner must remember
that he owes love, respect, and fidelity to his spouse as much as the
latter owes the same to him. Unfortunately, this court finds
respondent's testimony, as well as the totality of evidence presented by
the respondent, to be too inadequate to declare him psychologically
unfit
pursuant
to
Article
36.

It should be remembered that the presumption is always in favor of the

validity of marriage. Semper praesumitur pro matrimonio.[65] In this
case, the presumption has not been amply rebutted and must, perforce,
prevail.

In the first week of August 2003, respondent Shigekane Suzuki (Suzuki), a Japanese
national, met with Ms. Helen Soneja (Soneja) to inquire about a condominium unit and a
parking slot at Cityland Pioneer, Mandaluyong City, allegedly owned by Yung Sam Kang
(Kang), a Korean national and a Special Resident Retiree's Visa (SRRV) holder.

WHEREFORE, premises considered, the petition for review on certiorari

is GRANTED. The November 17, 2003 Amended Decision and the
December 13, 2004 Resolution of the Court of Appeals in CA-G.R. CV No.
59903
are
accordingly
REVERSED
and
SET
ASIDE.

At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by Condominium
4
Certificate of Title (CCT) No. 18186] and Parking Slot No. 42 [covered by CCT No.
5
9118] were for sale for P3,000,000.00. Soneja likewise assured Suzuki that the titles to the
unit and the parking slot were clean. After a brief negotiation, the parties agreed to reduce
the price to P2,800,000.00. On August 5, 2003, Suzuki issued Kang a Bank of the Philippine
6
Island (BPI) Check No. 83349 for One Hundred Thousand Pesos (P100,000.00) as
7
reservation fee. On August 21, 2003, Suzuki issued Kang another check, BPI Check No.
8
83350, this time for P2,700,000.00 representing the remaining balance of the purchase
price. Suzuki and Kang then executed a Deed of Absolute Sale dated August 26,
9
2003 covering Unit No. 536 and Parking Slot No. 42. Soon after, Suzuki took possession of
the condominium unit and parking lot, and commenced the renovation of the interior of the
condominium unit.

SO

ORDERED.

Ynares-Santiago, (Chairperson), Carpio Morales,* Chico-Nazario, and

Peralta,
JJ.,
concur.

Kang thereafter made several representations with Suzuki to deliver the titles to the
properties, which were then allegedly in possession of Alexander Perez (Perez, Orions
Loans Officer) for safekeeping. Despite several verbal demands, Kang failed to deliver the
documents. Suzuki later on learned that Kang had left the country, prompting Suzuki to
verify the status of the properties with the Mandaluyong City Registry of Deeds.

d. Arts. 15, 16, 17, 50, 51

1. OSB vs Suzuki
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 205487

November 12, 2014

ORION SAVINGS BANK, Petitioner,

vs.
SHIGEKANE SUZUKI, Respondent.
DECISION
BRION, J.:
1

Before us is the Petition for Review on Certiorari filed by petitioner Orion Savings Bank
2
(Orion) under Rule 45 of the Rules of Court, assailing the decision dated August 23, 2012
3
and the resolution dated January 25, 2013 of the Court of Appeals (CA) in CA-G.R. CV No.
94104.
The Factual Antecedents

Before long, Suzuki learned that CCT No. 9118 representing the title to the Parking Slot No.
42 contained no annotations although it remained under the name of Cityland Pioneer. This
notwithstanding, Cityland Pioneer, through Assistant Vice President Rosario D. Perez,
10
certified that Kang had fully paid the purchase price of Unit. No. 536 and Parking Slot No.
11
42. CCT No. 18186 representing the title to the condominium unit had no existing
encumbrance, except for anannotation under Entry No. 73321/C-10186 which provided that
any conveyance or encumbrance of CCT No. 18186 shall be subject to approval by the
Philippine Retirement Authority (PRA). Although CCT No. 18186 contained Entry No.
66432/C-10186 dated February 2, 1999 representing a mortgage in favor of Orion for
a P1,000,000.00 loan, that annotation was subsequently cancelled on June 16, 2000 by
Entry No. 73232/T. No. 10186. Despite the cancellation of the mortgage to Orion, the titles
to the properties remained in possession of Perez.
12

To protect his interests, Suzuki thenexecuted an Affidavit of Adverse Claim dated

September 8, 2003, withthe Registry of Deeds of Mandaluyong City, annotated as Entry No.
3292/C-No. 18186 in CCT No. 18186. Suzuki then demanded the delivery of the
13
titles. Orion, (through Perez), however, refused to surrender the titles, and cited the need
to consult Orions legal counsel as its reason.
On October 14, 2003, Suzuki received a letter from Orions counsel dated October 9, 2003,
stating that Kang obtained another loan in the amount of P1,800,000.00. When Kang failed
to pay, he executed a Dacion en Pagodated February 2, 2003, in favorof Orion covering
Unit No. 536. Orion, however, did not register the Dacion en Pago, until October 15, 2003.

On October 28, 2003, Suzuki executed an Affidavit of Adverse Claim over Parking Slot No.
42 (covered by CCT No. 9118) and this was annotated as Entry No. 4712/C-No. 9118 in the
parking lots title.
On January 27, 2004, Suzuki filed a complaint for specific performance and damages
against Kang and Orion. At the pre-trial, the parties made the following admissions and
stipulations:
1. That as of August 26, 2003, Kang was the registered owner of Unit No. 536 and
Parking Slot No. 42;
2. That the mortgage in favor ofOrion supposedly executed by Kang, with Entry
No. 66432/C-10186 dated February 2, 1999, was subsequently cancelled by Entry
No. 73232/T No. 10186 dated June 16, 2000;
3. That the alleged Dacion en Pagowas never annotated in CCT Nos. 18186 and
9118;
4. That Orion only paid the appropriate capital gains tax and the documentary
stamp tax for the alleged Dacion en Pago on October 15, 2003;
5. That Parking Slot No. 42, covered by CCT No. 9118, was never mortgaged to
Orion; and
6. That when Suzuki bought the properties, he went to Orion to obtain possession
of the titles.

On August 23, 2012, the CA partially granted Orions appeal and sustained the RTC insofar
as it upheld Suzukis right over the properties. The CA further noted that Entry No. 73321/C10186 pertaining to the withdrawal of investment of an SRRV only serves as a warning to
an SRRV holder about the implications of a conveyance of a property investment. It
deviated from the RTC ruling, however, by deleting the award for moral damages,
exemplary damages, attorneys fees, expenses for litigation and cost of suit.
Orion sought a reconsideration of the CA decision but the CA denied the motion in its
January 25, 2013 resolution. Orion then filed a petition for review on certiorariunder Rule 45
with this Court.
The Petition and Comment
Orions petition is based on the following grounds/arguments:

15

1. The Deed of Sale executed by Kang in favor of Suzuki is null and void. Under
Korean law, any conveyance of a conjugal property should be made with the
consent of both spouses;
2. Suzuki is not a buyer in good faith for he failed to check the owners duplicate
copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No. 73321/C-10186, which
prohibits any conveyance or encumbrance of the property investment, defeats the
alleged claim of good faith by Suzuki; and
4. Orion should not be faulted for exercising due diligence.

The RTC Ruling

14

In its decision dated June 29, 2009, the Regional Trial Court (RTC), Branch 213,
Mandaluyong City ruled infavor of Suzuki and ordered Orion to deliver the CCT Nos. 18186
and 9118 to Suzuki.
The court found that Suzuki was an innocent purchaser for value whose rights over the
properties prevailed over Orions. The RTC further noted that Suzuki exerted efforts to verify
the status of the properties but he did not find any existing encumbrance inthe titles.
Although Orion claims to have purchased the property by way of a Dacion en Pago, Suzuki
only learned about it two (2) months after he bought the properties because Orion never
bothered to register or annotate the Dacion en Pagoin CCT Nos. 18186 and 9116.
The RTC further ordered Orion and Kang to jointly and severally pay Suzuki moral
damages, exemplary damages, attorneys fees, appearance fees, expenses for litigation
and cost ofsuit. Orion timely appealed the RTC decision with the CA.
The CA Ruling

16

In his Comment, Suzuki asserts that the issue on spousal consent was belatedly raised on
appeal. Moreover, proof of acquisition during the marital coverture is a condition sine qua
17
nonfor the operation of the presumption of conjugal ownership. Suzuki additionally
maintains that he is a purchaser in good faith, and is thus entitled to the protection of the
law.
The Courts Ruling
We deny the petition for lack of merit.
The Court may inquire into conclusions of fact when the inference made is manifestly
mistaken
In a Rule 45 petition, the latitude of judicial review generally excludes a factual and
evidentiary re-evaluation, and the Court ordinarily abides by the uniform factual conclusions
18
of the trial court and the appellate court. In the present case, while the courts below both
arrived at the same conclusion, there appears tobe an incongruence in their factual findings
and the legal principle they applied to the attendant factual circumstances. Thus, we are

compelled to examine certain factual issues in the exercise of our sound discretion to
19
correct any mistaken inference that may have been made.
Philippine Law governs the transfer of real property
Orion believes that the CA erred in not ruling on the issue of spousal consent. We cannot
uphold this position, however, because the issue of spousal consent was only raised on
appeal to the CA. It is a well-settled principle that points of law, theories, issues, and
arguments not brought to the attention of the trial court cannot be raised for the first time on
20
appeal and considered by a reviewing court. To consider these belated arguments would
violate basic principles of fairplay, justice, and due process.
Having said these, we shall nonetheless discuss the issues Orion belatedly raised, if only to
put an end to lingering doubts on the correctness of the denial of the present petition.
It is a universal principle thatreal or immovable property is exclusively subject to the laws of
21
the country or state where it is located. The reason is found in the very nature of
immovable property its immobility. Immovables are part of the country and so closely
22
connected to it that all rights over them have their natural center of gravity there.
Thus, all matters concerning the titleand disposition ofreal property are determined by what
is known as the lex loci rei sitae, which can alone prescribe the mode by which a title
canpass from one person to another, or by which an interest therein can be gained or
23
lost. This general principle includes all rules governing the descent, alienation and transfer
of immovable property and the validity, effect and construction of wills and other
24
conveyances.
This principle even governs the capacity of the person making a deed relating to immovable
property, no matter what its nature may be. Thus, an instrument will be ineffective to
transfer title to land if the person making it is incapacitated by the lex loci rei sitae, even
though under the law of his domicile and by the law of the place where the instrument is
25
actually made, his capacity is undoubted.
On the other hand, property relations between spouses are governed principally by the
26
national law of the spouses. However, the party invoking the application of a foreign law
has the burden of proving the foreign law. The foreign law is a question of fact to be
27
properly pleaded and proved as the judge cannot take judicial notice of a foreign law. He
28
is presumed to know only domestic or the law of the forum.
To prove a foreign law, the party invoking it must present a copy thereof and comply with
Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads:

foreign country, the certificate may be made by a secretary of the embassy or legation,
consul general, consul, vice consul, or consular agent or by any officer in the foreign service
of the Philippines stationed in the foreign country inwhich the record is kept, and
authenticated by the seal of his office. (Emphasis supplied)
SEC. 25. What attestation ofcopy must state. Whenever a copy of a document or record
is attested for the purpose of the evidence, the attestation must state, in substance, that the
copy is a correct copy of the original, or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting officer, if there be any, or if he be
the clerk of a court having a seal, under the seal of such court.
Accordingly, matters concerning the title and disposition of real property shall be governed
by Philippine law while issues pertaining to the conjugal natureof the property shall be
governed by South Korean law, provided it is proven as a fact.
In the present case, Orion, unfortunately failed to prove the South Korean law on the
conjugal ownership ofproperty. It merely attached a "Certification from the Embassy of the
29
Republic of Korea" to prove the existence of Korean Law. This certification, does not
qualify as sufficient proof of the conjugal nature of the property for there is no showing that it
was properly authenticated bythe seal of his office, as required under Section 24 of Rule
30
132.
Accordingly, the International Law doctrine of presumed-identity approachor processual
presumption comes into play, i.e., where a foreign law is not pleaded or, evenif pleaded, is
31
not proven, the presumption is that foreign law is the same as Philippine Law.
Under Philippine Law, the phrase "Yung Sam Kang married to' Hyun Sook Jung" is merely
32
descriptive of the civil status of Kang. In other words, the import from the certificates of title
is that Kang is the owner of the properties as they are registered in his name alone, and that
he is married to Hyun Sook Jung.
We are not unmindful that in numerous cases we have held that registration of the property
in the name of only one spouse does not negate the possibility of it being conjugal or
33
community property. In those cases, however, there was proof that the properties, though
registered in the name of only one spouse, were indeed either conjugal or community
34
properties. Accordingly, we see no reason to declare as invalid Kangs conveyance in
favor of Suzuki for the supposed lack of spousal consent.
The petitioner failed to adduce sufficient evidence to prove the due execution of the Dacion
en Pago
Article 1544 of the New Civil Codeof the Philippines provides that:

SEC. 24. Proof of official record. The record of public documents referred to in paragraph
(a) of Section 19, when admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having the legal custody of the
record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a
certificate that such officer has the custody. If the office in which the record is kept is in a

ART. 1544. If the same thing should have been sold to different vendees, the ownership
shall be transferred to the person who may have first taken possession thereof in good faith,
if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who
in good faith first recorded it in the Registry of Property.

A: Well it became past due, there has been delayed interest payment by Mr.
Kangand...

Should there be no inscription, the ownership shall pertain to the person who in good faith
was first in the possession; and, in the absence thereof, to the person who presents the
oldest title, provided there is good faith.

Q: So what did you do after there were defaults[?]

The application of Article 1544 of the New Civil Code presupposes the existence of two or
more duly executed contracts of sale. In the present case, the Deed of Sale dated August
35
36
26, 2003 between Suzuki and Kang was admitted by Orion and was properly identified
37
by Suzukis witness Ms. Mary Jane Samin (Samin).
It is not disputed, too, that the Deed of Sale dated August 26, 2003 was consummated. In a
contract of sale, the seller obligates himself to transfer the ownership of the determinate
thing sold, and to deliver the same to the buyer, who obligates himself to pay a price certain
38
to the seller. The execution of the notarized deed of saleand the actual transfer of
possession amounted to delivery that produced the legal effect of transferring ownership to
39
Suzuki.
On the other hand, although Orion claims priority in right under the principle of prius
tempore, potior jure (i.e.,first in time, stronger in right), it failedto prove the existence and
due execution of the Dacion en Pagoin its favor.
At the outset, Orion offered the Dacion en Pagoas Exhibit "5"with submarkings "5-a" to "5-c"
to prove the existence of the February 6, 2003 transaction in its Formal Offer dated July 20,
2008. Orion likewise offered in evidence the supposed promissory note dated September 4,
2002 as Exhibit "12"to prove the existence of the additionalP800,000.00 loan. The RTC,
however, denied the admission of Exhibits "5" and "12,"among others, in its order dated
40
August 19, 2008 "since the same [were] not identified in court by any witness."
Despite the exclusion of its most critical documentary evidence, Orion failed to make a
tender ofexcluded evidence, as provided under Section 40, Rule 132 of the Rules of Court.
For this reason alone, we are prevented from seriously considering Exhibit "5" and its
submarkings and Exhibit "12" in the present petition.
Moreover, even if we consider Exhibit "5" and its submarkings and Exhibit "12" in the
present petition, the copious inconsistencies and contradictions in the testimonial and
documentary evidence of Orion, militate against the conclusion that the Dacion en Pagowas
duly executed. First, there appears to be no due and demandable obligation when the
Dacion en Pago was executed, contrary to the allegations of Orion. Orions witness Perez
tried to impress upon the RTC that Kang was in default in his P1,800,000.00 loan. During
his direct examination, he stated:

A: We have to secure the money or the investment of the bank through loans and
we have executed a dacion en pagobecause Mr. Kang said he has no money. So
we just execute[d] the dacion en pago rather than going through the Foreclosure
proceedings.
xxxx
Q: Can you tell the court when was this executed?
A: February 6, 2003, your Honor.

41

A reading of the supposed promissory note, however, shows that there was nodefault to
speak of when the supposed Dacion en Pagowas executed.
Based on the promissory note, Kangs loan obligation wouldmature only on August 27,
2003. Neither can Orion claim that Kang had been in default in his installment payments
because the wordings of the promissory note provide that "[t]he principal of this loanand its
interest and other charges shall be paid by me/us in accordance hereunder: SINGLE
42
PAYMENT LOANS. "There was thus no due and demandable loan obligation when the
alleged Dacion en Pago was executed.
Second, Perez, the supposed person who prepared the Dacion en Pago,appears to only
have a vague idea of the transaction he supposedly prepared. During his crossexamination, he testified:
ATTY. DE CASTRO:
Q: And were you the one who prepared this [dacion en pago] Mr. witness?
A: Yes, sir. I personally prepared this.
xxxx
Q: So this 1.8 million pesos is already inclusive of all the penalties, interest and
surcharge due from Mr. Yung Sam Kang?

ATTY. CRUZAT:

A: Its just the principal, sir.

Q: Okay, so this loan of P1.8 million, what happened to this loan, Mr. Witness?

Q: So you did not state the interest [and] penalties?

A: In the [dacion en pago], we do not include interest, sir. We may actually

includethat but....

Credit Line Facility by [Orion] x x x for ONE MILLION EIGHT HUNDRED THOUSAND
PESOS (P1,800,000.00)." Perez, however, testified that there was "no cash movement" in
the originalP1,000,000.00 loan. In his testimony, he said:

Q: Can you read the Second Whereas Clause, Mr. Witness?

COURT:
A: Whereas the first party failed to pay the said loan to the second party and as of
February 10, 2003, the outstanding obligation which is due and demandable
principal and interest and other charges included amounts to P1,800,000.00
pesos, sir.

xxxx
Q: Would you remember what was the subject matter of that real estate mortgage
for that firstP1,000,000.00 loan?

xxxx
A: Its a condominium Unit in Cityland, sir.
Q: You are now changing your answer[.] [I]t now includes interest and other
charges, based on this document?
A: Yes, based on that document, sir.

43

Third, the Dacion en Pago,mentioned that the P1,800,000.00 loan was secured by
a real estate mortgage. However, no document was ever presented to prove this
real estate mortgage aside from it being mentioned in the Dacion en Pago itself.

Q: Would you recall if there was any payment by Mr. Yung Sam Kang of
this P1,000,000.00 loan?
A: None sir.
Q: No payments?

ATTY. DE CASTRO:
Q: Would you know if there is any other document like a supplement to that Credit
Line Agreement referring to this 1.8 million peso loan by Mr. Yung Sam Kang
which says that there was a subsequent collateralization or security given by Mr.
Yung [Sam]
Kang for the loan?

A: None sir.
Q: And from 1999 to 2002, there was no payment, either by way of payment to the
principal, by way ofpayment of interest, there was no payment by Mr. Yung Sam
Kang of this loan?
A: Literally, there was no actual cash movement, sir.

xxxx
A: The [dacion en pago], sir.

xxxx

Q: There was no actual cash?

44

Fourth,the Dacion en Pago was first mentioned only two (2) months after Suzuki and Samin
demanded the delivery of the titles sometime in August 2003,and after Suzuki caused the
annotation of his affidavit of adverse claim. Records show that it was only on October 9,
2003, when Orion, through its counsel, Cristobal Balbin Mapile & Associates first spoke of
45
the Dacion en Pago. Not even Perez mentioned any Dacion en Pago on October 1, 2003,
when he personally received a letter demanding the delivery of the titles.Instead, Perez
46
refused to accept the letter and opted to first consult with his lawyer.
Notably, even the October 9, 2003 letter contained material inconsistencies in its recital of
facts surrounding the execution of the Dacion en Pago. In particular, it mentioned that "on
[September 4, 2002], after paying the original loan, [Kang] applied and was granted a new

A: Yes, sir.
Q: And yet despite no payment, the bank Orion Savings Bank still extended
an P800,000.00 additional right?
47

A: Yes, sir.

Fifth, it is undisputed that notwithstanding the supposed execution of theDacion en Pago on

February 2, 2003, Kang remained in possession of the condominium unit. In fact, nothing in
the records shows that Orion even bothered to take possession of the property even six (6)
months after the supposed date of execution of the Dacion en Pago. Kang was even able to
transfer possession of the condominium unit to Suzuki, who then made immediate

improvements thereon. If Orion really purchased the condominium unit on February 2, 2003
and claimed to be its true owner, why did it not assert its ownership immediately after the
alleged sale took place? Why did it have to assert its ownership only after Suzuki demanded
the delivery of the titles? These gaps have remained unanswered and unfilled.
48

In Suntay v. CA, we held that the most prominent index of simulation is the complete
absence of anattempt on the part of the vendee to assert his rights of ownership over the
property in question. After the sale, the vendee should have entered the land and occupied
the premises. The absence of any attempt on the part of Orion to assert its right of dominion
over the property allegedly soldto it is a clear badge of fraud. That notwithstanding the
execution of the Dacion en Pago, Kang remained in possession of the disputed
condominium unit from the time of the execution of the Dacion en Pagountil the propertys
subsequent transfer to Suzuki unmistakably strengthens the fictitious nature of the Dacion
en Pago.
These circumstances, aside from the glaring inconsistencies in the documents and
testimony of Orions witness, indubitably prove the spurious nature of the Dacion en Pago.
The
fact
is
a
support
sale
it
conveyance

that
notarized

Dacion
document
conclusion
embodies
is

the

the

en
does
that
a

Pago
not
the
true

Public instruments are evidence of the facts that gave rise to their execution and are to be
49
considered as containing all the terms of the agreement. While a notarized document
enjoys this presumption, "the fact that a deed is notarized is not a guarantee of the validity
50
of its contents." The presumption of regularity of notarized documents is not absolute and
51
may be rebutted by clear and convincing evidence to the contrary.

x x x the annotation merely servesas a warning to the owner who holds a Special Resident
Retirees Visa(SRRV) that he shall lose his visa if he disposes his property which serves as
his investment in order to qualify for such status. Section 14 of the Implementing Investment
Guidelines under Rule VIII-A of the Rules and Regulations Implementing Executive Order
No. 1037, Creating the Philippine Retirement Park System Providing Funds Therefor and
For Other Purpose ( otherwise known as the Philippine Retirement Authority) states:
Section 14. Should the retiree-investor withdraw his investment from the Philippines, or
transfer the same to another domestic enterprise, orsell, convey or transfer his
condominium unit or units to another person, natural or juridical without the prior approval of
the Authority, the Special Resident Retirees Visa issued to him, and/or unmarried minor
child or children[,] may be cancelled or revoked by the Philippine Government, through the
54
appropriate government department or agency, upon recommendation of the Authority.
Moreover, Orion should not be allowed to successfully assail the good faith of Suzuki on the
basis of the PRA restriction. Orion knew of the PRA restriction when it transacted with Kang.
Incidentally, Orion admitted accommodating Kangs request to cancel the mortgage
annotation despite the lack of payment to circumvent the PRA restriction. Orion, thus, is
estopped from impugning the validity of the conveyance in favor of Suzuki on the basis of
the PRA restriction that Orion itself ignored and "attempted" to circumvent.
With the conclusion that Orion failed to prove the authenticity of the Dacion en Pago, we
see no reason for the application of the rules on double sale under Article 1544 of the New
Civil Code. Suzuki, moreover, successfully adduced sufficient evidence to establish the
validity of conveyance in his favor.
WHEREFORE, premises considered, we DENY the petition for lack of merit. Costs against
petitioner Orion Savings Bank.
SO ORDERED.

In the present case, the presumption cannot apply because the regularity in the execution of
the Dacion en Pago and the loan documents was challenged in the proceedings below
where their prima facievalidity was overthrown by the highly questionable circumstances
52
surrounding their execution.
Effect
the
property

of
validity

the
of

PRA
Suzukis

title

restriction
to

2. Ando vs DFA

on
the

Republic of the Philippines

SUPREME COURT
Manila

Orion argues that the PRA restriction in CCT No. 18186 affects the conveyance to Suzuki.
In particular, Orion assails the status of Suzuki as a purchaser in good faith in view of the
53
express PRA restriction contained in CCT No. 18186.

FIRST DIVISION
G.R. No. 195432

We reject this suggested approachoutright because, to our mind, the PRA restriction cannot
affect the conveyance in favor of Suzuki. On this particular point, we concur withthe
following findings of the CA:

August 27, 2014

EDELINA T. ANDO, Petitioner,

vs.
DEPARTMENT OF FOREIGN AFFAIRS, Respondent.

DECISION
SERENO, CJ:
This is a Petition for Review under Rule 45 of the Rules of Court, seeking the nullification of
the Orders dated 14 January and 8 February 2011 issued by the Regional Trial Court (R
1
TC), Third Judicial Region, Branch 45, City of San Fernando, Pampanga, in Civil Case No.
137, which dismissed the Petition for Declaratory Relief filed therein.
STATEMENT OF THE FACTS AND OF THE CASE
The pertinent facts of the case, as alleged by petitioner, are as follows:
3. On 16 September 2001, petitioner married Yuichiro Kobayashi, a Japanese
National, in a civil wedding solemnized at Candaba, Pampanga. A copy of their
Certificate of Marriage is hereto attached as Annex 'A' and made an integral part
hereof.
4. On 16 September 2004, Yuichiro Kobayashi sought in Japan, and was validly
granted under Japaneselaws, a divorce in respect of his marriage with petitioner. A
copy of the Divorce Certificate duly issued by the Consulate-General of Japan and
duly authenticated by the Department of Foreign Affairs, Manila, is heretoas Annex
B and made an integral part hereof. 5. Said Divorce Certificate was duly
registered with the Office of the Civil Registry of Manila. A copy of the Certification
dated 28 October 2005 is hereto attached as Annex C and made an integral part
hereof.
6. Believing in good faith that said divorce capacitated her to remarry and that by
such she reverted to her single status, petitioner married Masatomi Y. Ando on 13
September 2005 in a civil wedding celebrated in Sta. Ana, Pampanga. A copy of
their Certificate of Marriage is hereto attached as Annex D and made an integral
part hereof.
7. In the meantime, Yuichiro Kobayashi married Ryo Miken on 27 December 2005.
A copy of the JapaneseFamily Registry Record of Kobayashi showing the divorce
he obtained and his remarriage with Ryo Miken, duly authenticated by the
Consulate-General of Japan and the Department of Foreign Affairs, Manila, is
hereto attached as Annex E and made an integral part hereof.
8. Recently, petitioner applied for the renewal of her Philippine passport to indicate
her surname withher husband Masatomi Y. Ando but she was told at the
Department of Foreign Affairs that the same cannot be issued to her until she can
prove bycompetent court decision that her marriage with her said husband
Masatomi Y. Ando is valid until otherwise declared.
xxxx

12. Prescinding from the foregoing, petitioners marriage with her said husband
Masatomi Y. Ando musttherefore be honored, considered and declared valid, until
otherwise declared by a competent court. Consequently, and until then, petitioner
therefore is and must be declared entitled to the issuance of a Philippine passport
under the name Edelina Ando y Tungol. Hence, this petitioner pursuant to Rule 63
2
of the Rules of Court.
On 29 October 2010, petitioner filed with the RTC a Petition for Declaratory Relief, which
was later raffled off to Branch 46. She impleaded the Department of Foreign Affairs (DFA)
as respondent and prayed for the following reliefs before the lower court:
WHEREFORE, petitioner most respectfully prays of this Honorable Court that after proper
proceedings, judgment be rendered, as follows:
(a) declaring as valid and subsisting the marriage between petitioner Edelina T.
Ando and her husband Masatomi Y. Ando until otherwise declared by a competent
court;
(b) declaring petitioner entitled to the issuance of a Philippine Passport under the
name "Edelina Ando y Tungol"; and
(c) directing the Department ofForeign Affairs to honor petitioners marriage to her
husband Masatomi Y. Ando and to issue a Philippine Passport to petitioner under
the name "Edelina Ando y Tungol".
Petitioner prays for such other just and equitable reliefs.

On 15 November 2010, in an Order dismissing the Petition for want of cause and action, as
well as jurisdiction, the RTC held thus:
Records of the case would reveal that prior to petitioners marriage to Masatomi Y. Ando,
herein petitioner was married to Yuichiro Kobayashi, a Japanese National, in Candaba,
Pampanga, on September 16, 2001, and that though a divorce was obtained and granted in
Japan, with respect to the their (sic) marriage, there is no showing that petitioner herein
complied with the requirements set forth in Art. 13 of the Family Code that is obtaining a
judicial recognition of the foreign decree of absolute divorce in our country.
It is therefore evident, under the foregoing circumstances, that herein petitioner does not
have any causeof action and/or is entitled to the reliefs prayed for under Rule 63 of the
Rules of Court. In the same vein, though there is other adequate remedy available to the
petitioner, such remedy is however beyond the authority and jurisdiction of this court to act
upon and grant, as it isonly the family court which is vested with such authority and
4
jurisdiction.
On 3 December 2010, petitioner filed an Ex ParteMotion for Reconsideration of the Order
dated 15 November 2010. In anOrder dated 14 December 2010, the RTC granted the
motion in this wise:

WHEREFORE, considering that the allegations and reliefs prayed for by the petitioner in her
petition and the instant Motion for Reconsideration falls within the jurisdiction of the Special
Family Court of this jurisdiction and for the interest ofsubstantial justice, the Order of the
Court dated November 15, 2010 is hereby reconsidered.
Let the record of this case be therefore referred back to the Office of the Clerk of Court for
proper endorsement to the Family Court of this jurisdiction for appropriateaction and/or
5
disposition. Thereafter, the case was raffled to Branch 45 of the RTC. On 14 January 2011,
the trial court dismissed the Petition anew on the ground that petitioner had no cause of
action. The Order reads thus:
The petition specifically admits that the marriage she seeks to be declared as valid is
already her second marriage, a bigamous marriage under Article 35(4) of the Family
Codeconsidering that the first one, though allegedly terminated by virtue of the divorce
obtained by Kobayashi, was never recognized by a Philippine court, hence, petitioner is
considered as still married to Kobayashi. Accordingly, the second marriage with Ando
cannot be honored and considered asvalid at this time.
Petitioners allegation of Sec. 2 (a) of A.M. No. 02-11-10-SC is misplaced. The fact that no
judicial declaration of nullity of her marriage with Ando was rendered does not make the
same valid because such declaration under Article 40 ofthe Family Code is applicable onlyin
case of re-marriage. More importantly, the absence of a judicial declaration of nullity of
marriage is not even a requisite to make a marriage valid.
In view of the foregoing, the dismissal of this case is imperative.

marriage. Petitioner further claims that all the requisites for a petition for declaratory relief
have been complied with.
With respect to the failure to furnish a copy of the Ex ParteMotion for Reconsideration to the
OSG and the DFA, petitioner avers that at the time of the filing, the RTC had yet to issue a
summons to respondent; thus, it had yet to acquire jurisdiction over them.
Thereafter, the DFA, through the OSG, filed a Comment on the Petition. The latter raised
the following arguments: (1) the Petition was improperly verified, as the juratin the
Verification thereof only stated that the affiant had exhibited "her currentand valid proof of
identity," which proof was not properly indicated, however; (2) prior judicial recognition by a
Philippine court of a divorce decree obtained by the alien spouse is required before a
Filipino spouse can remarry and be entitled to the legal effects of remarriage; (3) petitioner
failed to show that she had first exhausted all available administrative remedies, such as
appealing to the Secretary of the DFA under Republic Act No. (R.A.) 8239, or the Philippine
Passport Act of 1996, before resorting to the special civil action of declaratory relief; and (4)
petitioners Motion for Reconsideration before the RTC was a mere scrap of paper and did
not toll the running of the period to appeal. Hence, the RTC Order dated 14 January 2011 is
now final.
On 29 November 2011, petitioner filed her Reply to the Comment, addressing the issues
raised therein.
THE COURTS RULING
The Court finds the Petition to be without merit.

On 1 February 2011,petitioner filed an Ex ParteMotion for Reconsideration of the Order

dated 14 January 2011. The motion was denied by the RTC in open court on 8
February2011, considering that neither the Office of the Solicitor General (OSG) nor
respondent was furnished with copies of the motion.
On 24 March 2011, petitioner filed the instant Petition for Review, raising the sole issue of
whether or not the RTC erred in ruling that she had no cause of action.
Petitioner argues that under A.M. No. 02-11-10-SC, or the Rule on the Declaration of
Absolute Nullity of Void Marriages and Annulment of Voidable Marriages, it is solely the wife
or the husband who can file a petition for the declaration of the absolute nullity of a void
marriage. Thus, as the state is not even allowed to filea direct petition for the declaration of
the absolute nullity of a void marriage,with even more reason can it not collaterally attack
the validity of a marriage, as in a petition for declaratory relief. Further, petitioner alleges
that under the law, a marriage even one that is void or voidable shall be deemed valid
until declared otherwise in a judicial proceeding.
Petitioner also argues that assuming a court judgment recognizing a judicial decree of
divorce is required under Article 13 of the Family Code, noncompliance therewith is a mere
irregularity in the issuance of a marriage license. Any irregularity in the formal requisites of
marriage, such as with respect to the marriage license, shall notaffect the legality of the

First, with respect to her prayer tocompel the DFA to issue her passport, petitioner
incorrectly filed a petition for declaratory relief before the RTC. She should have first
appealed before the Secretary of Foreign Affairs, since her ultimate entreaty was toquestion
the DFAs refusal to issue a passport to her under her second husbands name.
Under the Implementing Rules and Regulations (IRR) of R.A. 8239, which was adopted on
25 February 1997, the following are the additional documentary requirements before a
married woman may obtain a passport under the name of her spouse:
SECTION 2. The issuance of passports to married, divorced or widowed women shall be
made inaccordance with the following provisions:
a) In case of a woman who is married and who decides to adopt the surname of
her husband pursuant to Art. 370 of Republic Act No. 386, she must present the
original or certifiedtrue copy of her marriage contract, and one photocopy thereof.
In addition thereto, a Filipino who contracts marriage in the Philippines to a
foreigner, shall be required to present a Certificate of Attendance in a Guidance
and Counselling Seminar conducted by the CFO when applying for a passport for
the first time.

b) In case of annulment of marriage, the applicant must present a certified true

copy of her annotated Marriage Contract or Certificate of Registration and the
Court Order effecting the annulment.

appeal", as instead she "was merely told" that her passport cannot be issued, does not
persuade. The law provides a direct recourse for petitioner in the event of the denial of her
application.

c) In case of a woman who was divorced by her alien husband, she must present a
certified true copy of the Divorce Decree duly authenticated by the Philippine
Embassy or consular post which has jurisdiction over the place where the divorce
is obtained or by the concerned foreign diplomatic or consular mission in the
Philippines.

Second, with respect to her prayer for the recognition of her second marriage as valid,
petitioner should have filed, instead, a petition for the judicial recognition of her foreign
divorce from her first husband.

When the divorcee is a Filipino Muslim, she must present a certified true copy of the Divorce
Decree or a certified true copy of the Certificate of Divorce from the Shariah Court or the
OCRG. d) In the event that marriage is dissolved by the death of the husband, the applicant
must present the original or certified true copy of the Death Certificate of the husband or the
Declaration of Presumptive Death by a Civil or Shariah Court, in which case the applicant
may choose to continue to use her husbands surname or resume the use of her maiden
surname. From the above provisions, it is clear that for petitioner to obtain a copy of her
passport under her married name, all she needed to present were the following: (1) the
original or certified true copyof her marriage contract and one photocopy thereof; (2) a
Certificate of Attendance in a Guidance and Counseling Seminar, if applicable; and (3) a
certified true copy of the Divorce Decree duly authenticated by the Philippine Embassy or
consular post that has jurisdiction over the place where the divorce is obtained or by the
concerned foreign diplomatic or consular mission in the Philippines.
In this case, petitioner was allegedly told that she would not be issued a Philippine passport
under her second husbands name.1wphi1 Should her application for a passport be
denied, the remedies available to her are provided in Section 9 of R.A. 8239, which reads
thus:
Sec. 9. Appeal. Any person who feels aggrieved as a result of the application of this Act
of the implementing rules and regulations issued by the Secretary shall have the right to
appeal to the Secretary of Foreign Affairs from whose decision judicial review may be had to
the Courts in due course.

In Garcia v. Recio, we ruled that a divorce obtained abroad by an alien may be recognized
in our jurisdiction, provided the decree is valid according to the national law of the foreigner.
The presentation solely of the divorce decree is insufficient; both the divorce decree and the
governing personal law of the alien spouse who obtained the divorce must be proven.
Because our courts do not take judicial notice of foreign laws and judgment, our law on
evidence requires that both the divorce decree and the national law of the alien must be
10
alleged and proven and like any other fact.
While it has been ruled that a petition for the authority to remarry filed before a trial court
11
actually constitutes a petition for declaratory relief, we are still unable to grant the prayer of
petitioner. As held by the RTC, there appears to be insufficient proof or evidence presented
on record of both the national law of her first husband, Kobayashi, and of the validity of the
12
divorce decree under that national law. Hence, any declaration as to the validity of the
divorce can only be made upon her complete submission of evidence proving the divorce
decree and the national law of her alien spouse, in an action instituted in the proper forum.
WHEREFORE, the instant Petition is DENIED without prejudice to petitioner's recourse to
the proper remedies available.
SO ORDERED.

3. Noveras v. Noveras

The IRR further provides in detail:

ARTICLE
Appeal

Republic of the Philippines

SUPREME COURT
Manila

10

SECOND DIVISION
In the event that an application for a passport is denied, or an existing one cancelled or
restricted, the applicant or holder thereof shall have the right to appeal in writing to the
Secretary within fifteen (15) days from notice of denial, cancellation or restriction.
Clearly, she should have filed anappeal with the Secretary of the DFA in the event of the
denial of her application for a passport, after having complied with the provisions of R.A.
8239. Petitioners argument that her application "cannot be said to havebeen either denied,
cancelled or restricted by [the DFA ], so as to make her an aggrieved party entitled to

G.R. No. 188289

August 20, 2014

DAVID A. NOVERAS, Petitioner,

vs.
LETICIA T. NOVERAS, Respondent.
DECISION

PEREZ, J.:

$550,000.00
(unpaid debt of $285,000.00)

Before the Court is a petition for review assailing the 9 May 2008 Decision of the Court of
Appeals in CA-G.R .. CV No. 88686, which affirmed in part the 8 December 2006
2
Decision of the Regional Trial Court (RTC) of Baler, Aurora, Branch 96.

Furniture and furnishings

$3,000

The factual antecedents are as follow:

Jewelries (ring and watch)

$9,000

David A. Noveras (David) and Leticia T. Noveras (Leticia) were married on 3 December
1988 in Quezon City, Philippines. They resided in California, United States of America
(USA) where they eventually acquired American citizenship. They then begot two children,
namely: Jerome T.

2000 Nissan Frontier 4x4 pickup truck

$13,770.00

Bank of America Checking Account

$8,000

Noveras, who was born on 4 November 1990 and JenaT. Noveras, born on 2 May 1993.
David was engaged in courier service business while Leticia worked as a nurse in San
Francisco, California.

Bank of America Cash Deposit

During the marriage, they acquired the following properties in the Philippines and in the
USA:
PHILIPPINES
PROPERTY

House and Lot with an area of 150 sq. m. located at P1,693,125.00

1085 Norma Street, Sampaloc, Manila (Sampaloc
property)
Agricultural land with an area of 20,742 sq. m. P400,000.00
located at Laboy, Dipaculao, Aurora
A parcel of land with an area of 2.5 hectares located P490,000.00
at Maria Aurora, Aurora

3-has. coconut plantation in San Joaquin Maria P750,000.00

Aurora, Aurora
USA
PROPERTY
House and Lot at 1155 Hanover Street, Daly City,
California

FAIR MARKET VALUE

$100,000.00

Retirement, pension, profit-sharing, annuities

$56,228.00

The Sampaloc property used to beowned by Davids parents. The parties herein secured a
loan from a bank and mortgaged the property. When said property was about to be
foreclosed, the couple paid a total of P1.5 Million for the redemption of the same.

FAIR MARKET VALUE

A parcel of land with an area of 175 sq.m. located at P175,000.00

Sabang Baler, Aurora

Life Insurance (Cash Value)

Due to business reverses, David left the USA and returned to the Philippines in 2001. In
December 2002,Leticia executed a Special Power of Attorney (SPA) authorizing David to
sell the Sampaloc property for P2.2 Million. According to Leticia, sometime in September
2003, David abandoned his family and lived with Estrellita Martinez in Aurora province.
Leticia claimed that David agreed toand executed a Joint Affidavit with Leticia in the
presence of Davids father, Atty. Isaias Noveras, on 3 December 2003 stating that: 1)
the P1.1Million proceeds from the sale of the Sampaloc property shall be paid to and
collected by Leticia; 2) that David shall return and pay to LeticiaP750,000.00, which is
equivalent to half of the amount of the redemption price of the Sampaloc property; and 3)
that David shall renounce and forfeit all his rights and interest in the conjugal and real
5
properties situated in the Philippines. David was able to collect P1,790,000.00 from the
sale of the Sampaloc property, leaving an unpaid balance of P410,000.00.
Upon learning that David had an extra-marital affair, Leticia filed a petition for divorce with
the Superior Court of California, County of San Mateo, USA. The California court granted
6
the divorce on 24 June 2005 and judgment was duly entered on 29 June 2005. The
California court granted to Leticia the custody of her two children, as well as all the couples
7
properties in the USA.
On 8 August 2005, Leticia filed a petition for Judicial Separation of Conjugal Property before
the RTC of Baler, Aurora. She relied on the 3 December 2003 Joint Affidavit and Davids
failure to comply with his obligation under the same. She prayed for: 1) the power to

administer all conjugal properties in the Philippines; 2) David and his partner to cease and
desist from selling the subject conjugal properties; 3) the declaration that all conjugal
properties be forfeited in favor of her children; 4) David to remit half of the purchase price as
share of Leticia from the sale of the Sampaloc property; and 5) the payment ofP50,000.00
8
and P100,000.00 litigation expenses.
In his Answer, David stated that a judgment for the dissolution of their marriage was entered
on 29 June 2005 by the Superior Court of California, County of San Mateo. He demanded
that the conjugal partnership properties, which also include the USA properties, be
liquidated and that all expenses of liquidation, including attorneys fees of both parties be
9
charged against the conjugal partnership.
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras committed acts of abandonment
and marital infidelity which can result intothe forfeiture of the parties properties in
favor of the petitioner and their two (2) children.
2. Whether or not the Court has jurisdiction over the properties in California, U.S.A.
and the same can be included in the judicial separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by petitioner Leticia T.
Noveras and respondent David A. Noveras will amount to a waiver or forfeiture of
the latters property rights over their conjugal properties.
4. Whether or not Leticia T. Noveras isentitled to reimbursement of onehalf of
the P2.2 [M]illion sales proceeds of their property in Sampaloc, Manila and onehalf of the P1.5 [M]illion used to redeem the property of Atty. Isaias Noveras,
including interests and charges.
5. How the absolute community properties should be distributed.
6. Whether or not the attorneys feesand litigation expenses of the parties were
chargeable against their conjugal properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the parties are entitled to support and
10
presumptive legitimes.
On 8 December 2006, the RTC rendered judgment as follows:
1. The absolute community of property of the parties is hereby declared
DISSOLVED;

2. The net assets of the absolute community of property ofthe parties in the
Philippines are hereby ordered to be awarded to respondent David A. Noveras
only, with the properties in the United States of America remaining in the sole
ownership of petitioner Leticia Noveras a.k.a. Leticia Tacbiana pursuant to the
divorce decree issuedby the Superior Court of California, County of San Mateo,
United States of America, dissolving the marriage of the parties as of June 24,
2005. The titles presently covering said properties shall be cancelled and new titles
be issued in the name of the party to whom said properties are awarded;
3. One-half of the properties awarded to respondent David A. Noveras in the
preceding paragraph are hereby given to Jerome and Jena, his two minor children
with petitioner LeticiaNoveras a.k.a. Leticia Tacbiana as their presumptive
legitimes and said legitimes must be annotated on the titles covering the said
properties.Their share in the income from these properties shall be remitted to
them annually by the respondent within the first half of January of each year,
starting January 2008;
4. One-half of the properties in the United States of America awarded to petitioner
Leticia Noveras a.k.a. Leticia Tacbiana in paragraph 2 are hereby given to Jerome
and Jena, her two minor children with respondent David A. Noveras as their
presumptive legitimes and said legitimes must be annotated on the
titles/documents covering the said properties. Their share in the income from these
properties, if any, shall be remitted to them annually by the petitioner within the first
half of January of each year, starting January 2008;
5. For the support of their two (2) minor children, Jerome and Jena, respondent
David A. Noveras shall give them US$100.00 as monthly allowance in addition to
their income from their presumptive legitimes, while petitioner Leticia Tacbiana
shall take care of their food, clothing, education and other needs while they are in
her custody in the USA. The monthly allowance due from the respondent shall be
increased in the future as the needs of the children require and his financial
capacity can afford;
6. Of the unpaid amount of P410,000.00 on the purchase price of the Sampaloc
property, the Paringit Spouses are hereby ordered to pay P5,000.00 to respondent
David A. Noveras and P405,000.00 to the two children. The share of the
respondent may be paid to him directly but the share of the two children shall be
deposited with a local bank in Baler, Aurora, in a joint account tobe taken out in
their names, withdrawal from which shall only be made by them or by their
representative duly authorized with a Special Power of Attorney. Such
payment/deposit shall be made withinthe period of thirty (30) days after receipt of a
copy of this Decision, with the passbook of the joint account to be submitted to the
custody of the Clerk of Court of this Court within the same period. Said passbook
can be withdrawn from the Clerk of Court only by the children or their attorney-infact; and
7. The litigation expenses and attorneys fees incurred by the parties shall be
11
shouldered by them individually.

The trial court recognized that since the parties are US citizens, the laws that cover their
legal and personalstatus are those of the USA. With respect to their marriage, the parties
are divorced by virtue of the decree of dissolution of their marriage issued by the Superior
Court of California, County of San Mateo on 24June 2005. Under their law, the parties
marriage had already been dissolved. Thus, the trial court considered the petition filed by
Leticia as one for liquidation of the absolute community of property regime with the
determination of the legitimes, support and custody of the children, instead of an action for
judicial separation of conjugal property.
With respect to their property relations, the trial court first classified their property regime as
absolute community of property because they did not execute any marriage settlement
before the solemnization of their marriage pursuant to Article 75 of the Family Code. Then,
the trial court ruled that in accordance with the doctrine of processual presumption,
Philippine law should apply because the court cannot take judicial notice of the US law
since the parties did not submit any proof of their national law. The trial court held that as
the instant petition does not fall under the provisions of the law for the grant of judicial
separation of properties, the absolute community properties cannot beforfeited in favor of
Leticia and her children. Moreover, the trial court observed that Leticia failed to prove
abandonment and infidelity with preponderant evidence.

xxx
6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic) are each
ordered to pay the amount ofP520,000.00 to their two children, Jerome and Jena,
as their presumptive legitimes from the sale of the Sampaloc property inclusive of
the receivables therefrom, which shall be deposited to a local bank of Baler,
Aurora, under a joint account in the latters names. The payment/deposit shall be
made within a period of thirty (30) days from receipt ofa copy of this Decision and
the corresponding passbook entrusted to the custody ofthe Clerk of Court a
quowithin the same period, withdrawable only by the children or their attorney-infact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay petitioner Leticia
Tacbiana (sic) the amount ofP1,040,000.00 representing her share in the proceeds
from the sale of the Sampaloc property.
The last paragraph shall read as follows:

The trial court however ruled that Leticia is not entitled to the reimbursements she is praying
for considering that she already acquired all of the properties in the USA. Relying still on the
principle of equity, the Court also adjudicated the Philippine properties to David, subject to
the payment of the childrens presumptive legitimes. The trial court held that under Article
89 of the Family Code, the waiver or renunciation made by David of his property rights in
the Joint Affidavit is void.
On appeal, the Court of Appeals modified the trial courts Decision by directing the equal
division of the Philippine properties between the spouses. Moreover with respect to the
common childrens presumptive legitime, the appellate court ordered both spouses to each
pay their children the amount of P520,000.00, thus:
WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2, 4 and 6 of the
assailedDecision dated December 8, 2006 of Branch 96, RTC of Baler, Aurora Province, in
Civil Case No. 828 are hereby MODIFIED to read as follows:
2. The net assets of the absolute community of property of the parties in the
Philippines are hereby divided equally between petitioner Leticia Noveras a.k.a.
Leticia Tacbiana (sic) and respondent David A. Noveras;

Send a copy of this Decision to the local civil registry of Baler, Aurora; the local civil registry
of Quezon City; the Civil RegistrarGeneral, National Statistics Office, Vibal Building, Times
Street corner EDSA, Quezon City; the Office of the Registry of Deeds for the Province of
Aurora; and to the children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.

12

In the present petition, David insists that the Court of Appeals should have recognized the
California Judgment which awarded the Philippine properties to him because said judgment
was part of the pleading presented and offered in evidence before the trial court. David
argues that allowing Leticia to share in the Philippine properties is tantamount to unjust
enrichment in favor of Leticia considering that the latter was already granted all US
properties by the California court.
In summary and review, the basic facts are: David and Leticia are US citizens who own
properties in the USA and in the Philippines. Leticia obtained a decree of divorce from the
Superior Court of California in June 2005 wherein the court awarded all the properties in the
USA to Leticia. With respect to their properties in the Philippines, Leticiafiled a petition for
judicial separation ofconjugal properties.

xxx
4. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in
paragraph 2 shall pertain to her minor children, Jerome and Jena, as their
presumptive legitimes which shall be annotated on the titles/documents covering
the said properties. Their share in the income therefrom, if any, shall be remitted to
them by petitioner annually within the first half of January, starting 2008;

At the outset, the trial court erred in recognizing the divorce decree which severed the bond
13
of marriage between the parties. In Corpuz v. Sto. Tomas, we stated that:
The starting point in any recognition of a foreign divorce judgment is the acknowledgment
that our courts do not take judicial notice of foreign judgments and laws. Justice Herrera
explained that, as a rule, "no sovereign is bound to give effect within its dominion to a
judgment rendered by a tribunal of another country." This means that the foreign judgment

and its authenticity must beproven as facts under our rules on evidence, together with the
aliens applicable national law to show the effect of the judgment on the alien himself or
herself. The recognition may be made in an action instituted specifically for the purpose or
in another action where a party invokes the foreign decree as an integral aspect of his claim
14
or defense.

isjudicially approved and refers only to the instances provided in Articles 66,67, 128, 135
18
and 136 of the Family Code.

The requirements of presenting the foreign divorce decree and the national law of the
foreigner must comply with our Rules of Evidence. Specifically, for Philippine courts to
recognize a foreign judgment relating to the status of a marriage, a copy of the foreign
judgment may be admitted in evidence and proven as a fact under Rule 132, Sections 24
15
and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.

Art. 135. Any of the following shall be considered sufficient cause for judicial separation of
property:

Under Section 24 of Rule 132, the record of public documents of a sovereign authority or
tribunal may be proved by: (1) an official publication thereof or (2) a copy attested by the
officer having the legal custody thereof. Such official publication or copy must
beaccompanied, if the record is not kept in the Philippines, with a certificate that the
attesting officer has the legal custody thereof. The certificate may be issued by any of the
authorized Philippine embassy or consular officials stationed in the foreign country in which
the record is kept, and authenticated by the seal of his office. The attestation must state, in
substance, that the copy is a correct copy of the original, or a specific part thereof, asthe
case may be, and must be under the official seal of the attesting officer.
Section 25 of the same Rule states that whenever a copy of a document or record is
attested for the purpose of evidence, the attestation must state, in substance, that the copy
is a correct copy of the original, or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting officer, if there be any, or if hebe
the clerk of a court having a seal, under the seal of such court.
Based on the records, only the divorce decree was presented in evidence. The required
certificates to prove its authenticity, as well as the pertinent California law on divorce were
not presented.
16

It may be noted that in Bayot v. Court of Appeals, we relaxed the requirement on

certification where we held that "[petitioner therein] was clearly an American citizenwhen
she secured the divorce and that divorce is recognized and allowed in any of the States of
the Union, the presentation of a copy of foreign divorce decree duly authenticatedby the
foreign court issuing said decree is, as here, sufficient." In this case however, it appears that
there is no seal from the office where the divorce decree was obtained.
17

Even if we apply the doctrine of processual presumption as the lower courts did with
respect to the property regime of the parties, the recognition of divorce is entirely a different
matter because, to begin with, divorce is not recognized between Filipino citizens in the
Philippines. Absent a valid recognition of the divorce decree, it follows that the parties are
still legally married in the Philippines. The trial court thus erred in proceeding directly to
liquidation.
As a general rule, any modification in the marriage settlements must be made before the
celebration of marriage. An exception to this rule is allowed provided that the modification

Leticia anchored the filing of the instant petition for judicial separation of property on
paragraphs 4 and 6 of Article 135 of the Family Code, to wit:

(1) That the spouse of the petitioner has been sentenced to a penalty which carries
with it civil interdiction;
(2) That the spouse of the petitioner has been judicially declared an absentee;
(3) That loss of parental authority ofthe spouse of petitioner has been decreed by
the court;
(4) That the spouse of the petitioner has abandoned the latter or failed to comply
with his or her obligations to the family as provided for in Article 101;
(5) That the spouse granted the power of administration in the marriage
settlements has abused that power; and
(6) That at the time of the petition, the spouses have been separated in fact for at
least one year and reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the presentation of the final judgment
against the guiltyor absent spouse shall be enough basis for the grant of the decree
ofjudicial separation of property. (Emphasis supplied).
The trial court had categorically ruled that there was no abandonment in this case to
necessitate judicial separation of properties under paragraph 4 of Article 135 of the Family
Code. The trial court ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code quoted above, must be for a
valid cause and the spouse is deemed to have abandoned the other when he/she has left
the conjugal dwelling without intention of returning. The intention of not returning is prima
facie presumed if the allegedly [sic] abandoning spouse failed to give any information as to
his or her whereabouts within the period of three months from such abandonment.
In the instant case, the petitioner knows that the respondent has returned to and stayed at
his hometown in Maria Aurora, Philippines, as she even went several times to visit him there
after the alleged abandonment. Also, the respondent has been going back to the USA to
visit her and their children until the relations between them worsened. The last visit of said
respondent was in October 2004 when he and the petitioner discussed the filing by the latter
of a petition for dissolution of marriage with the California court. Such turn for the worse of

their relationship and the filing of the saidpetition can also be considered as valid causes for
19
the respondent to stay in the Philippines.
Separation in fact for one year as a ground to grant a judicial separation of property was not
tackled in the trial courts decision because, the trial court erroneously treated the petition as
liquidation of the absolute community of properties.
The records of this case are replete with evidence that Leticia and David had indeed
separated for more than a year and that reconciliation is highly improbable. First, while
actual abandonment had not been proven, it is undisputed that the spouses had been living
separately since 2003 when David decided to go back to the Philippines to set up his own
business. Second, Leticia heard from her friends that David has been cohabiting with
Estrellita Martinez, who represented herself as Estrellita Noveras. Editha Apolonio, who
worked in the hospital where David was once confined, testified that she saw the name of
20
Estrellita listed as the wife of David in the Consent for Operation form. Third and more
significantly, they had filed for divorce and it was granted by the California court in June
2005.
Having established that Leticia and David had actually separated for at least one year, the
petition for judicial separation of absolute community of property should be granted.
The grant of the judicial separation of the absolute community property automatically
dissolves the absolute community regime, as stated in the 4th paragraph of Article 99 ofthe
Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Articles 134
to 138. (Emphasis supplied).
Under Article 102 of the same Code, liquidation follows the dissolution of the absolute
community regime and the following procedure should apply:
Art. 102. Upon dissolution of the absolute community regime, the following procedure shall
apply:
(1) An inventory shall be prepared, listing separately all the properties of the
absolute community and the exclusive properties of each spouse.

(2) The debts and obligations of the absolute community shall be paid out of its
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable
for the unpaid balance with their separate properties in accordance with the
provisions of the second paragraph of Article 94.
(3) Whatever remains of the exclusive properties of the spouses shall thereafter be
delivered to each of them.
(4) The net remainder of the properties of the absolute community shall constitute
its net assets, which shall be divided equally between husband and wife, unless a
different proportion or division was agreed upon in the marriage settlements, or
unless there has been a voluntary waiver of such share provided in this Code. For
purposes of computing the net profits subject to forfeiture in accordance with
Articles 43, No. (2) and 63, No. (2),the said profits shall be the increase in value
between the market value of the community property at the time of the celebration
of the marriage and the market value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall be delivered upon
partition, in accordance with Article 51.
(6) Unless otherwise agreed upon by the parties, in the partition of the properties,
the conjugal dwelling and the lot on which it is situated shall be adjudicated tothe
spouse with whom the majority of the common children choose to remain. Children
below the age of seven years are deemed to have chosen the mother, unless the
court has decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said children. At the risk of
being repetitious, we will not remand the case to the trial court. Instead, we shall
adopt the modifications made by the Court of Appeals on the trial courts Decision
with respect to liquidation.
We agree with the appellate court that the Philippine courts did not acquire jurisdiction over
the California properties of David and Leticia. Indeed, Article 16 of the Civil Code clearly
states that real property as well as personal property is subject to the law of the country
where it is situated. Thus, liquidation shall only be limited to the Philippine properties.
We affirm the modification madeby the Court of Appeals with respect to the share of the
spouses in the absolutecommunity properties in the Philippines, as well as the payment of
their childrens presumptive legitimes, which the appellate court explained in this wise:
Leticia and David shall likewise have an equal share in the proceeds of the Sampaloc
property.1wphi1 While both claimed to have contributed to the redemption of the Noveras
property, absent a clear showing where their contributions came from, the same is
presumed to have come from the community property. Thus, Leticia is not entitled to
reimbursement of half of the redemption money.
David's allegation that he used part of the proceeds from the sale of the Sampaloc property
for the benefit of the absolute community cannot be given full credence. Only the amount

of P120,000.00 incurred in going to and from the U.S.A. may be charged thereto. Election
expenses in the amount of P300,000.00 when he ran as municipal councilor cannot be
allowed in the absence of receipts or at least the Statement of Contributions and
Expenditures required under Section 14 of Republic Act No. 7166 duly received by the
Commission on Elections. Likewise, expenses incurred to settle the criminal case of his
personal driver is not deductible as the same had not benefited the family. In sum, Leticia
and David shall share equally in the proceeds of the sale net of the amount ofP120,000.00
or in the respective amounts of P1,040,000.00.
xxxx
Under the first paragraph of Article 888 of the Civil Code, "(t)he legitime of legitimate
children and descendants consists of one-half or the hereditary estate of the father and of
the mother." The children arc therefore entitled to half of the share of each spouse in the net
assets of the absolute community, which shall be annotated on the titles/documents
covering the same, as well as to their respective shares in the net proceeds from the sale of
the Sampaloc property including the receivables from Sps. Paringit in the amount
of P410,000.00. Consequently, David and Leticia should each pay them the amount
21
of P520,000.00 as their presumptive legitimes therefrom.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA
G.R. CV No. 88686 is AFFIRMED.
SO ORDERED.

4. Lavadia v. Heirs of Luna

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 171914

July 23, 2014

SOLEDAD L. LAVADIA, Petitioner,

vs.
HEIRS OF JUAN LUCES LUNA, represented by GREGORIO Z. LUNA and EUGENIA
ZABALLERO-LUNA,Respondents.

Divorce between Filipinos is void and ineffectual under the nationality rule adopted by
Philippine law. Hence, any settlement of property between the parties of the first marriage
involving Filipinos submitted as an incident of a divorce obtained in a foreign country lacks
competent judicial approval, and cannot be enforceable against the assets of the husband
who contracts a subsequent marriage.
The Case
The petitioner, the second wife of the late Atty. Juan Luces Luna, appeals the adverse
1
decision promulgated on November 11, 2005, whereby the Court of Appeals (CA) affirmed
with modification the decision rendered on August 27, 2001 by the Regional Trial Court
2
(RTC), Branch 138, in Makati City. The CA thereby denied her right in the 25/100 pro
indiviso share of the husband in a condominium unit, and in the law books of the husband
acquired during the second marriage.
Antecedents
The antecedent facts were summarized by the CA as follows:
ATTY. LUNA, a practicing lawyer, was at first a name partner in the prestigious law firm
Sycip, Salazar, Luna, Manalo, Hernandez & Feliciano Law Offices at that time when he was
living with his first wife, herein intervenor-appellant Eugenia Zaballero-Luna (EUGENIA),
whom he initially married ina civil ceremony conducted by the Justice of the Peace of
Paraaque, Rizal on September 10, 1947 and later solemnized in a church ceremony at the
Pro-Cathedral in San Miguel, Bulacan on September 12, 1948. In ATTY. LUNAs marriage
to EUGENIA, they begot seven (7) children, namely: Regina Maria L. Nadal, Juan Luis
Luna, Araceli Victoria L. Arellano, Ana Maria L. Tabunda, Gregorio Macario Luna, Carolina
Linda L. Tapia, and Cesar Antonio Luna. After almost two (2) decades of marriage, ATTY.
LUNA and EUGENIA eventually agreed to live apart from each other in February 1966 and
agreed to separation of property, to which end, they entered into a written agreement
entitled "AGREEMENT FOR SEPARATION AND PROPERTY SETTLEMENT" dated
November 12, 1975, whereby they agreed to live separately and to dissolve and liquidate
their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree of his marriage with
EUGENIA from the Civil and Commercial Chamber of the First Circumscription of the Court
of First Instance of Sto. Domingo, Dominican Republic. Also in Sto.Domingo, Dominican
Republic, on the same date, ATTY. LUNA contracted another marriage, this time with
SOLEDAD. Thereafter, ATTY. LUNA and SOLEDAD returned to the Philippines and lived
together as husband and wife until 1987.
Sometime in 1977, ATTY. LUNA organized a new law firm named: Luna, Puruganan, Sison
and Ongkiko (LUPSICON) where ATTY. LUNA was the managing partner.

DECISION
BERSAMIN, J.:

On February 14, 1978, LUPSICON through ATTY. LUNA purchased from Tandang Sora
Development Corporation the 6th Floor of Kalaw-Ledesma Condominium
Project(condominium unit) at Gamboa St., Makati City, consisting of 517.52 square meters,

for P1,449,056.00, to be paid on installment basis for 36months starting on April 15, 1978.
Said condominium unit was to be usedas law office of LUPSICON. After full payment, the
Deed of Absolute Sale over the condominium unit was executed on July 15, 1983, and CCT
No. 4779 was issued on August 10, 1983, which was registered bearing the following
names:
"JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E. ONGKIKO, married
to Sonia P.G. Ongkiko (25/100); GREGORIO R. PURUGANAN, married to Paz A.
Puruganan (17/100); and TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100)
x x x" Subsequently, 8/100 share of ATTY. LUNA and 17/100 share of Atty. Gregorio R.
Puruganan in the condominium unit was sold to Atty. Mario E. Ongkiko, for which a new
CCT No. 21761 was issued on February 7, 1992 in the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E. ONGKIKO, married
to Sonia P.G. Ongkiko (50/100); TERESITA CRUZ SISON, married to Antonio J.M. Sison
(12/100) x x x"
Sometime in 1992, LUPSICON was dissolved and the condominium unit was partitioned by
the partners but the same was still registered in common under CCT No. 21716. The parties
stipulated that the interest of ATTY. LUNA over the condominium unit would be 25/100
share. ATTY. LUNA thereafter established and headed another law firm with Atty. Renato
G. Dela Cruzand used a portion of the office condominium unit as their office. The said law
firm lasted until the death of ATTY. JUAN on July 12, 1997.
After the death of ATTY. JUAN, his share in the condominium unit including the lawbooks,
office furniture and equipment found therein were taken over by Gregorio Z. Luna, ATTY.
LUNAs son of the first marriage. Gregorio Z. Luna thenleased out the 25/100 portion of the
condominium unit belonging to his father to Atty. Renato G. De la Cruz who established his
own law firm named Renato G. De la Cruz & Associates.

On August 27, 2001, the RTC rendered its decision after trial upon the aforementioned
4
facts, disposing thusly:
WHEREFORE, judgment is rendered as follows:
(a) The 24/100 pro-indiviso share in the condominium unit located at the SIXTH
FLOOR of the KALAW LEDESMA CONDOMINIUM PROJECT covered by
Condominium Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) SQUARE METERS is adjudged to have been acquired by
Juan Lucas Luna through his sole industry;
(b) Plaintiff has no right as owner or under any other concept over the
condominium unit, hence the entry in Condominium Certificate of Title No. 21761
of the Registry of Deeds of Makati with respect to the civil status of Juan Luces
Luna should be changed from "JUAN LUCES LUNA married to Soledad L. Luna"
to "JUAN LUCES LUNA married to Eugenia Zaballero Luna";
(c) Plaintiff is declared to be the owner of the books Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal Supreme Court Reports found
in the condominium unit and defendants are ordered to deliver them to the plaintiff
as soon as appropriate arrangements have been madefor transport and storage.
No pronouncement as to costs.
5

SO ORDERED.

Decision of the CA
Both parties appealed to the CA.

The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit as well as the law
books, office furniture and equipment became the subject of the complaint filed by
SOLEDAD against the heirs of ATTY. JUAN with the RTC of Makati City, Branch 138, on
September 10, 1999, docketed as Civil Case No. 99-1644. The complaint alleged that the
subject properties were acquired during the existence of the marriage between ATTY.
LUNA and SOLEDAD through their joint efforts that since they had no children, SOLEDAD
became co-owner of the said properties upon the death of ATTY. LUNA to the extent of
pro-indiviso share consisting of her share in the said properties plus her share in the
net estate of ATTY. LUNA which was bequeathed to her in the latters last will and
testament; and thatthe heirs of ATTY. LUNA through Gregorio Z. Luna excluded SOLEDAD
from her share in the subject properties. The complaint prayed that SOLEDAD be declared
the owner of the portion of the subject properties;that the same be partitioned; that an
accounting of the rentals on the condominium unit pertaining to the share of SOLEDAD be
conducted; that a receiver be appointed to preserve ad administer the subject
properties;and that the heirs of ATTY. LUNA be ordered to pay attorneys feesand costs of
3
the suit to SOLEDAD.
Ruling of the RTC

On her part, the petitioner assigned the following errors to the RTC, namely:
I. THE LOWER COURT ERRED IN RULING THAT THE CONDOMINIUM UNIT
WAS ACQUIRED THRU THE SOLE INDUSTRY OF ATTY. JUAN LUCES LUNA;
II. THE LOWER COURT ERRED IN RULING THAT PLAINTIFFAPPELLANT DID
NOT CONTRIBUTE MONEY FOR THE ACQUISITION OF THE CONDOMINIUM
UNIT;
III. THE LOWER COURT ERRED IN GIVING CREDENCE TO PORTIONS OF
THE TESTIMONY OF GREGORIO LUNA, WHO HAS NO ACTUAL KNOWLEDGE
OF THE ACQUISITION OF THE UNIT, BUT IGNORED OTHER PORTIONS OF
HIS TESTIMONY FAVORABLE TO THE PLAINTIFF-APPELLANT;

IV. THE LOWER COURT ERRED IN NOT GIVING SIGNIFICANCE TO THE FACT
THAT THE CONJUGAL PARTNERSHIP BETWEEN LUNA AND INTERVENORAPPELLANT WAS ALREADY DISSOLVED AND LIQUIDATED PRIOR TO THE
UNION OF PLAINTIFF-APPELLANT AND LUNA;

Republic did not terminate his prior marriage with EUGENIA because foreign divorce
10
between Filipino citizens is not recognized in our jurisdiction. x x x

V. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE

ABSENCE OF THE DISPOSITION OF THE CONDOMINIUM UNIT IN THE
HOLOGRAPHIC WILL OF THE PLAINTIFF-APPELLANT;

WHEREFORE, premises considered, the assailed August 27, 2001 Decision of the RTC of
MakatiCity, Branch 138, is hereby MODIFIEDas follows:

xxxx

(a) The 25/100 pro-indiviso share in the condominium unit at the SIXTH FLOOR of
the KALAW LEDESMA CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE HUNDRED SEVENTEEN
(517/100) (sic) SQUARE METERS is hereby adjudged to defendants-appellants,
the heirs of Juan Luces Luna and Eugenia Zaballero-Luna (first marriage), having
been acquired from the sole funds and sole industry of Juan Luces Luna while
marriage of Juan Luces Luna and Eugenia Zaballero-Luna (first marriage) was still
subsisting and valid;

VI. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE

FACTTHAT THE NAME OF PLAINTIFF-APPELLANT DID NOT APPEAR IN THE
DEED OF ABSOLUTE SALE EXECUTED BY TANDANG SORA DEVELOPMENT
CORPORATION OVER THE CONDOMINIUM UNIT;
VII. THE LOWER COURT ERRED IN RULING THAT NEITHER ARTICLE 148 OF
THE FAMILYCODE NOR ARTICLE 144 OF THE CIVIL CODE OF THE
PHILIPPINES ARE APPLICABLE;

(b) Plaintiff-appellant Soledad Lavadia has no right as owner or under any other
concept over the condominium unit, hence the entry in Condominium Certificate of
Title No. 21761 of the Registry of Deeds ofMakati with respect to the civil status of
Juan Luces Luna should be changed from "JUAN LUCES LUNA married to
Soledad L. Luna" to "JUAN LUCES LUNA married to Eugenia Zaballero Luna";

VIII. THE LOWER COURT ERRED IN NOT RULING THAT THE CAUSE OF
ACTION OF THE INTERVENOR-APPELLANT HAS BEEN BARRED BY
PESCRIPTION AND LACHES; and
IX. THE LOWER COURT ERRED IN NOT EXPUNGING/DISMISSING THE
INTERVENTION FOR FAILURE OF INTERVENOR-APPELLANT TO PAY FILING
7
FEE.

(c) Defendants-appellants, the heirs of Juan Luces Luna and Eugenia ZaballeroLuna(first marriage) are hereby declared to be the owner of the books Corpus
Juris, Fletcher on Corporation, American Jurisprudence and Federal Supreme
Court Reports found in the condominium unit.

In contrast, the respondents attributedthe following errors to the trial court, to wit:
I. THE LOWER COURT ERRED IN HOLDING THAT CERTAIN FOREIGN LAW
BOOKS IN THE LAW OFFICE OF ATTY. LUNA WERE BOUGHT WITH THE USE
OF PLAINTIFFS MONEY;

No pronouncement as to costs.

II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF PROVED BY

PREPONDERANCE OF EVIDENCE (HER CLAIM OVER) THE SPECIFIED
FOREIGN LAW BOOKS FOUND IN ATTY. LUNAS LAW OFFICE; and

On March 13, 2006,

III. THE LOWER COURT ERRED IN NOT HOLDING THAT, ASSUMING

PLAINTIFF PAID FOR THE SAID FOREIGN LAW BOOKS, THE RIGHT TO
RECOVER THEM HAD PRESCRIBED AND BARRED BY LACHES AND
8
ESTOPPEL.

In this appeal, the petitioner avers in her petition for review on certiorarithat:

On November 11, 2005, the CA promulgated its assailed modified decision, holding and
ruling:
EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA until the latters death on
July 12, 1997. The absolute divorce decree obtained by ATTY. LUNA inthe Dominican

11

SO ORDERED.

12

the CA denied the petitioners motion for reconsideration.

13

Issues

A. The Honorable Court of Appeals erred in ruling that the Agreement for
Separation and Property Settlement executed by Luna and Respondent Eugenia
was unenforceable; hence, their conjugal partnership was not dissolved and
liquidated;
B. The Honorable Court of Appeals erred in not recognizing the Dominican
Republic courts approval of the Agreement;

C. The Honorable Court of Appeals erred in ruling that Petitioner failed to adduce
sufficient proof of actual contribution to the acquisition of purchase of the
subjectcondominium unit; and
D. The Honorable Court of Appeals erred in ruling that Petitioner was not entitled
14
to the subject law books.
The decisive question to be resolved is who among the contending parties should be
entitled to the 25/100 pro indivisoshare in the condominium unit; and to the law books (i.e.,
Corpus Juris, Fletcher on Corporation, American Jurisprudence and Federal Supreme Court
Reports).

as a special contract of permanent union between a man and a woman for the
20
establishment of a conjugal and family life. The non-recognition of absolute divorce in the
Philippines is a manifestation of the respect for the sanctity of the marital union especially
among Filipino citizens. It affirms that the extinguishment of a valid marriage must be
grounded only upon the death of either spouse, or upon a ground expressly provided bylaw.
For as long as this public policy on marriage between Filipinos exists, no divorce decree
dissolving the marriage between them can ever be given legal or judicial recognition and
enforcement in this jurisdiction.
2.
The
Agreement
for
was void for lack of court approval

Separation

and

Property

Settlement

The resolution of the decisive question requires the Court to ascertain the law that should
determine, firstly, whether the divorce between Atty. Luna and Eugenia Zaballero-Luna
(Eugenia) had validly dissolved the first marriage; and, secondly, whether the second
marriage entered into by the late Atty. Luna and the petitioner entitled the latter to any rights
in property. Ruling of the Court

The petitioner insists that the Agreement for Separation and Property Settlement
(Agreement) that the late Atty. Luna and Eugenia had entered into and executed in
connection with the divorce proceedings before the CFI of Sto. Domingo in the Dominican
Republic to dissolve and liquidate their conjugal partnership was enforceable against
Eugenia. Hence, the CA committed reversible error in decreeing otherwise.

We affirm the modified decision of the CA.

The insistence of the petitioner was unwarranted.

1.
Atty.
Lunas
subsisted up to the time of his death

first

marriage

with

Eugenia

The first marriage between Atty. Luna and Eugenia, both Filipinos, was solemnized in the
Philippines on September 10, 1947. The law in force at the time of the solemnization was
the Spanish Civil Code, which adopted the nationality rule. The Civil Codecontinued to
follow the nationality rule, to the effect that Philippine laws relating to family rights and
duties, or to the status, condition and legal capacity of persons were binding upon citizens
15
of the Philippines, although living abroad. Pursuant to the nationality rule, Philippine laws
governed thiscase by virtue of bothAtty. Luna and Eugenio having remained Filipinos until
the death of Atty. Luna on July 12, 1997 terminated their marriage.
From the time of the celebration ofthe first marriage on September 10, 1947 until the
present, absolute divorce between Filipino spouses has not been recognized in the
Philippines. The non-recognition of absolute divorce between Filipinos has remained even
16
under the Family Code, even if either or both of the spouses are residing
17
abroad. Indeed, the only two types of defective marital unions under our laws have
beenthe void and the voidable marriages. As such, the remedies against such defective
marriages have been limited to the declaration of nullity ofthe marriage and the annulment
of the marriage.
It is true that on January 12, 1976, the Court of First Instance (CFI) of Sto. Domingo in the
Dominican Republic issued the Divorce Decree dissolving the first marriage of Atty. Luna
18
and Eugenia. Conformably with the nationality rule, however, the divorce, even if
voluntarily obtained abroad, did not dissolve the marriage between Atty. Luna and Eugenia,
which subsisted up to the time of his death on July 12, 1997. This finding conforms to the
19
Constitution, which characterizes marriage as an inviolable social institution, and regards it

Considering that Atty. Luna and Eugenia had not entered into any marriage settlement prior
to their marriage on September 10, 1947, the system of relative community or conjugal
partnership of gains governed their property relations. This is because the Spanish Civil
Code, the law then in force at the time of their marriage, did not specify the property regime
of the spouses in the event that they had not entered into any marriage settlement before or
at the time of the marriage. Article 119 of the Civil Codeclearly so provides, to wit:
Article 119. The future spouses may in the marriage settlements agree upon absolute or
relative community of property, or upon complete separation of property, or upon any other
regime. In the absence of marriage settlements, or when the same are void, the system of
relative community or conjugal partnership of gains as established in this Code, shall govern
the property relations between husband and wife.
Article 142 of the Civil Codehas defined a conjugal partnership of gains thusly:
Article 142. By means of the conjugal partnership of gains the husband and wife place in a
common fund the fruits of their separate property and the income from their work or
industry, and divide equally, upon the dissolution of the marriage or of the partnership, the
net gains or benefits obtained indiscriminately by either spouse during the marriage.
The conjugal partnership of gains subsists until terminated for any of various causes of
termination enumerated in Article 175 of the Civil Code, viz:
Article 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;

(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article 191.
The mere execution of the Agreement by Atty. Luna and Eugenia did not per sedissolve and
liquidate their conjugal partnership of gains. The approval of the Agreement by a competent
court was still required under Article 190 and Article 191 of the Civil Code, as follows:
Article 190. In the absence of an express declaration in the marriage settlements, the
separation of property between spouses during the marriage shall not take place save in
virtue of a judicial order. (1432a)

3.
Atty.
Lunas
marriage
with
was
void;
properties
acquired
were governed by the rules on co-ownership

Soledad,
during

being
their

bigamous,
marriage

What law governed the property relations of the second marriage between Atty. Luna and
Soledad?
The CA expressly declared that Atty. Lunas subsequent marriage to Soledad on January
22
12, 1976 was void for being bigamous, on the ground that the marriage between Atty.
Luna and Eugenia had not been dissolved by the Divorce Decree rendered by the CFI of
Sto. Domingo in the Dominican Republic but had subsisted until the death of Atty. Luna on
July 12, 1997.
The Court concurs with the CA.

Article 191. The husband or the wife may ask for the separation of property, and it shall be
decreed when the spouse of the petitioner has been sentenced to a penalty which carries
with it civil interdiction, or has been declared absent, or when legal separation has been
granted.

In the Philippines, marriages that are bigamous, polygamous, or incestuous are void. Article
71 of the Civil Codeclearly states:

xxxx

Article 71. All marriages performed outside the Philippines in accordance with the laws in
force in the country where they were performed, and valid there as such, shall also be valid
in this country, except bigamous, polygamous, or incestuous marriages as determined by
Philippine law.

The husband and the wife may agree upon the dissolution of the conjugal partnership
during the marriage, subject to judicial approval. All the creditors of the husband and of the
wife, as well as of the conjugal partnership shall be notified of any petition for
judicialapproval or the voluntary dissolution of the conjugal partnership, so that any such
creditors may appear atthe hearing to safeguard his interests. Upon approval of the petition
for dissolution of the conjugal partnership, the court shall take such measures as may
protect the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of articles 214 and 215 shall
apply. The provisions of this Code concerning the effect of partition stated in articles 498 to
501 shall be applicable. (1433a)
But was not the approval of the Agreement by the CFI of Sto. Domingo in the Dominican
Republic sufficient in dissolving and liquidating the conjugal partnership of gains between
the late Atty. Luna and Eugenia?
The query is answered in the negative. There is no question that the approval took place
only as an incident ofthe action for divorce instituted by Atty. Luna and Eugenia, for, indeed,
the justifications for their execution of the Agreement were identical to the grounds raised in
21
the action for divorce. With the divorce not being itself valid and enforceable under
Philippine law for being contrary to Philippine public policy and public law, the approval of
the Agreement was not also legally valid and enforceable under Philippine law.
Consequently, the conjugal partnership of gains of Atty. Luna and Eugenia subsisted in the
lifetime of their marriage.

Bigamy is an illegal marriage committed by contracting a second or subsequent marriage

before the first marriage has been legally dissolved, or before the absent spouse has been
declared presumptively dead by means of a judgment rendered in the proper
23
24
proceedings. A bigamous marriage is considered void ab initio.
Due to the second marriage between Atty. Luna and the petitioner being void ab initioby
virtue of its being bigamous, the properties acquired during the bigamous marriage were
governed by the rules on co-ownership, conformably with Article 144 of the Civil Code, viz:
Article 144. When a man and a woman live together as husband and wife, but they are not
married, ortheir marriage is void from the beginning, the property acquired by eitheror both
of them through their work or industry or their wages and salaries shall be governed by the
rules on co-ownership.(n)
In such a situation, whoever alleges co-ownership carried the burden of proof to confirm
such fact.1wphi1 To establish co-ownership, therefore, it became imperative for the
petitioner to offer proof of her actual contributions in the acquisition of property. Her mere
allegation of co-ownership, without sufficient and competent evidence, would warrant no
25
relief in her favor. As the Court explained in Saguid v. Court of Appeals:
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of coownership ofproperties acquired by the parties to a bigamous marriage and an adulterous
relationship, respectively, we ruled that proof of actual contribution in the acquisition of the
property is essential. The claim of co-ownership of the petitioners therein who were parties

to the bigamous and adulterousunion is without basis because they failed to substantiate
their allegation that they contributed money in the purchase of the disputed properties. Also
in Adriano v. Court of Appeals, we ruled that the fact that the controverted property was
titled in the name of the parties to an adulterous relationship is not sufficient proof of
coownership absent evidence of actual contribution in the acquisition of the property.
As in other civil cases, the burden of proof rests upon the party who, as determined by the
pleadings or the nature of the case, asserts an affirmative issue. Contentions must be
proved by competent evidence and reliance must be had on the strength of the partys own
evidence and not upon the weakness of the opponents defense. This applies with more
vigor where, as in the instant case, the plaintiff was allowed to present evidence ex
parte.1wphi1 The plaintiff is not automatically entitled to the relief prayed for. The law gives
the defendantsome measure of protection as the plaintiff must still prove the allegations in
the complaint. Favorable relief can be granted only after the court isconvinced that the facts
proven by the plaintiff warrant such relief. Indeed, the party alleging a fact has the burden of
26
proving it and a mereallegation is not evidence.
The petitioner asserts herein that she sufficiently proved her actual contributions in the
purchase of the condominium unit in the aggregate amount of at least P306,572.00,
consisting in direct contributions ofP159,072.00, and in repaying the loans Atty. Luna had
27
obtained from Premex Financing and Banco Filipino totaling P146,825.30; and that such
aggregate contributions of P306,572.00 corresponded to almost the entire share of Atty.
Luna in the purchase of the condominium unit amounting to P362,264.00 of the units
28
purchase price of P1,449,056.00. The petitioner further asserts that the lawbooks were
paid for solely out of her personal funds, proof of which Atty. Luna had even sent her a
29
"thank you" note; that she had the financial capacity to make the contributions and
purchases; and that Atty. Luna could not acquire the properties on his own due to the
meagerness of the income derived from his law practice.

faciepresumed to be equal. However, for this presumption to arise, proof of actual

contribution was required. The same rule and presumption was to apply to joint deposits of
money and evidence of credit. If one of the parties was validly married to another, his or her
share in the co-ownership accrued to the absolute community or conjugal partnership
existing in such valid marriage. If the party who acted in bad faith was not validly married to
another, his or her share shall be forfeited in the manner provided in the last paragraph of
the Article 147. The rules on forfeiture applied even if both parties were in bad faith. Coownership was the exception while conjugal partnership of gains was the strict rule whereby
marriage was an inviolable social institution and divorce decrees are not recognized in the
Philippines, as was held by the Supreme Court in the case of Tenchavez vs. Escao, G.R.
No. L-19671, November 29, 1965, 15 SCRA 355, thus:
xxxx
As to the 25/100pro-indivisoshare of ATTY. LUNA in the condominium unit, SOLEDAD
failed to prove that she made an actual contribution to purchase the said property. She
failed to establish that the four (4) checks that she presented were indeed used for the
acquisition of the share of ATTY. LUNA in the condominium unit. This was aptly explained
in the Decision of the trial court, viz.:
"x x x The first check, Exhibit "M" for P55,000.00 payable to Atty. Teresita Cruz Sison was
issued on January 27, 1977, which was thirteen (13) months before the Memorandum of
Agreement, Exhibit "7" was signed. Another check issued on April 29, 1978 in the amount
of P97,588.89, Exhibit "P" was payable to Banco Filipino. According to the plaintiff, thiswas
in payment of the loan of Atty. Luna. The third check which was for P49,236.00 payable to
PREMEX was dated May 19, 1979, also for payment of the loan of Atty. Luna. The fourth
check, Exhibit "M", forP4,072.00 was dated December 17, 1980. None of the foregoing
prove that the amounts delivered by plaintiff to the payees were for the acquisition of the
subject condominium unit. The connection was simply not established. x x x"

Did the petitioner discharge her burden of proof on the co-ownership?

In resolving the question, the CA entirely debunked the petitioners assertions on her actual
contributions through the following findings and conclusions, namely:
SOLEDAD was not able to prove by preponderance of evidence that her own independent
funds were used to buy the law office condominium and the law books subject matter in
contentionin this case proof that was required for Article 144 of the New Civil Code and
Article 148 of the Family Code to apply as to cases where properties were acquired by a
man and a woman living together as husband and wife but not married, or under a marriage
which was void ab initio. Under Article 144 of the New Civil Code, the rules on co-ownership
would govern. But this was not readily applicable to many situations and thus it created a
void at first because it applied only if the parties were not in any way incapacitated or were
without impediment to marry each other (for it would be absurd to create a co-ownership
where there still exists a prior conjugal partnership or absolute community between the man
and his lawful wife). This void was filled upon adoption of the Family Code. Article 148
provided that: only the property acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned in common and in proportion to
their respective contributions. Such contributions and corresponding shares were prima

SOLEDADs claim that she made a cash contribution of P100,000.00 is unsubstantiated.

Clearly, there is no basis for SOLEDADs claim of co-ownership over the 25/100 portion of
the condominium unit and the trial court correctly found that the same was acquired through
the sole industry of ATTY. LUNA, thus:
"The Deed of Absolute Sale, Exhibit "9", covering the condominium unit was in the name of
Atty. Luna, together with his partners in the law firm. The name of the plaintiff does not
appear as vendee or as the spouse of Atty. Luna. The same was acquired for the use of the
Law firm of Atty. Luna. The loans from Allied Banking Corporation and Far East Bank and
Trust Company were loans of Atty. Luna and his partners and plaintiff does not have
evidence to show that she paid for them fully or partially. x x x"
The fact that CCT No. 4779 and subsequently, CCT No. 21761 were in the name of "JUAN
LUCES LUNA, married to Soledad L. Luna" was no proof that SOLEDAD was a co-owner of
the condominium unit. Acquisition of title and registration thereof are two different acts. It is
well settled that registration does not confer title but merely confirms one already existing.
The phrase "married to" preceding "Soledad L. Luna" is merely descriptive of the civil status
of ATTY. LUNA.

SOLEDAD, the second wife, was not even a lawyer. So it is but logical that SOLEDAD had
no participation in the law firm or in the purchase of books for the law firm. SOLEDAD failed
to prove that she had anything to contribute and that she actually purchased or paid for the
law office amortization and for the law books. It is more logical to presume that it was ATTY.
LUNA who bought the law office space and the law books from his earnings from his
practice of law rather than embarrassingly beg or ask from SOLEDAD money for use of the
30
law firm that he headed.

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court are the
1
2
3
Regional Trial Court (RTC) Decision dated May 5, 2009 and Order dated August 25, 2009
in SP. Proc. No. 16519-CEB. The assailed decision granted respondent Merlinda L.
Olaybar's petition for cancellation of entries in the latter's marriage contract; while the
assailed order denied the motion for reconsideration filed by petitioner Republic of the
Philippines through the Office of the Solicitor General (OSG).
The facts of the case are as follows:

The Court upholds the foregoing findings and conclusions by the CA both because they
were substantiated by the records and because we have not been shown any reason to
revisit and undo them. Indeed, the petitioner, as the party claiming the co-ownership, did not
discharge her burden of proof. Her mere allegations on her contributions, not being
31
evidence, did not serve the purpose. In contrast, given the subsistence of the first
marriage between Atty. Luna and Eugenia, the presumption that Atty. Luna acquired the
properties out of his own personal funds and effort remained. It should then be justly
concluded that the properties in litislegally pertained to their conjugal partnership of gains as
of the time of his death. Consequently, the sole ownership of the 25/100 pro indivisoshare of
Atty. Luna in the condominium unit, and of the lawbooks pertained to the respondents as
the lawful heirs of Atty. Luna.
WHEREFORE, the Court AFFIRMS the decision promulgated on November 11, 2005; and
ORDERS the petitioner to pay the costs of suit.
SO ORDERED.

5. Republic v. Olaybar
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 189538

Respondent requested from the National Statistics Office (NSO) a Certificate of No

Marriage (CENOMAR) as one of the requirements for her marriage with her boyfriend of five
years. Upon receipt thereof, she discovered that she was already married to a certain Ye
Son Sune, a Korean National, on June 24, 2002, at the Office of the Municipal Trial Court in
Cities (MTCC), Palace of Justice. She denied having contracted said marriage and claimed
that she did not know the alleged husband; she did not appear before the solemnizing
4
officer; and, that the signature appearing in the marriage certificate is not hers. She, thus,
filed a Petition for Cancellation of Entries in the Marriage Contract, especially the entries in
5
the wife portion thereof. Respondent impleaded the Local Civil Registrar of Cebu City, as
well as her alleged husband, as parties to the case.
During trial, respondent testified on her behalf and explained that she could not have
appeared before Judge Mamerto Califlores, the supposed solemnizing officer, at the time
the marriage was allegedly celebrated, because she was then in Makati working as a
medical distributor in Hansao Pharma. She completely denied having known the supposed
husband, but she revealed that she recognized the named witnesses to the marriage as she
had met them while she was working as a receptionist in Tadels Pension House. She
believed that her name was used by a certain Johnny Singh, who owned a travel agency,
whom she gave her personal circumstances in order for her to obtain a
6
passport. Respondent also presented as witness a certain Eufrocina Natinga, an employee
of MTCC, Branch 1, who confirmed that the marriage of Ye Son Sune was indeed
celebrated in their office, but claimed that the alleged wife who appeared was definitely not
7
respondent. Lastly, a document examiner testified that the signature appearing in the
8
marriage contract was forged.
On May 5, 2009, the RTC rendered the assailed Decision, the dispositive portion of which
reads:

February 10, 2014

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
MERLINDA L. OLAYBAR, Respondent.

WHEREFORE, judgment is hereby rendered, the petition is granted in favor of the

petitioner, Merlinda L. Olaybar. The Local Civil Registrar of Cebu City is directed to cancel
all the entries in the WIFE portion of the alleged marriage contract of the petitioner and
respondent Ye Son Sune.
9

DECISION
PERALTA, J.:

SO ORDERED.

Finding that the signature appearing in the subject marriage contract was not that of
respondent, the court found basis in granting the latters prayer to straighten her record and
10
rectify the terrible mistake.

Petitioner, however, moved for the reconsideration of the assailed Decision on the grounds
that: (1) there was no clerical spelling, typographical and other innocuous errors in the
marriage contract for it to fall within the provisions of Rule 108 of the Rules of Court; and (2)
granting the cancellation of all the entries in the wife portion of the alleged marriage contract
11
is, in effect, declaring the marriage void ab initio.
In an Order dated August 25, 2009, the RTC denied petitioners motion for reconsideration
couched in this wise:
WHEREFORE, the court hereby denies the Motion for Reconsideration filed by the Republic
of the Philippines. Furnish copies of this order to the Office of the Solicitor General, the
petitioners counsel, and all concerned government agencies.
SO ORDERED.

12

Contrary to petitioners stand, the RTC held that it had jurisdiction to take cognizance of
cases for correction of entries even on substantial errors under Rule 108 of the Rules of
Court being the appropriate adversary proceeding required. Considering that respondents
identity was used by an unknown person to contract marriage with a Korean national, it
would not be feasible for respondent to institute an action for declaration of nullity of
marriage since it is not one of the void marriages under Articles 35 and 36 of the Family
13
Code.
Petitioner now comes before the Court in this Petition for Review on Certiorari under Rule
45 of the Rules of Court seeking the reversal of the assailed RTC Decision and Order based
on the following grounds:
I.
RULE 108 OF THE REVISED RULES OF COURT APPLIES ONLY WHEN THERE ARE
ERRORS IN THE ENTRIES SOUGHT TO BE CANCELLED OR CORRECTED.
II.
GRANTING THE CANCELLATION OF "ALL THE ENTRIES IN THE WIFE PORTION OF
THE ALLEGED MARRIAGE CONTRACT," IS IN EFFECT DECLARING THE MARRIAGE
14
VOID AB INITIO.
Petitioner claims that there are no errors in the entries sought to be cancelled or corrected,
because the entries made in the certificate of marriage are the ones provided by the person
who appeared and represented herself as Merlinda L. Olaybar and are, in fact, the latters
15
personal circumstances. In directing the cancellation of the entries in the wife portion of
the certificate of marriage, the RTC, in effect, declared the marriage null and void ab
16
initio. Thus, the petition instituted by respondent is actually a petition for declaration of
17
nullity of marriage in the guise of a Rule 108 proceeding.

We deny the petition.

At the outset, it is necessary to stress that a direct recourse to this Court from the decisions
and final orders of the RTC may be taken where only questions of law are raised or
involved. There is a question of law when the doubt arises as to what the law is on a certain
state of facts, which does not call for the examination of the probative value of the evidence
18
of the parties. Here, the issue raised by petitioner is whether or not the cancellation of
entries in the marriage contract which, in effect, nullifies the marriage may be undertaken in
a Rule 108 proceeding. Verily, petitioner raised a pure question of law.
Rule 108 of the Rules of Court sets forth the rules on cancellation or correction of entries in
the civil registry, to wit:
SEC. 1. Who may file petition. Any person interested in any act, event, order or
decree concerning the civil status of persons which has been recorded in the civil
register, may file a verified petition for the cancellation or correction of any entry
relating thereto, with the Regional Trial Court of the province where the
corresponding civil registry is located.
SEC. 2. Entries subject to cancellation or correction. Upon good and valid
grounds, the following entries in the civil register may be cancelled or corrected: (a)
births; (b) marriages; (c) deaths; (d) legal separations; (e) judgments of
annulments of marriage; (f) judgments declaring marriages void from the
beginning; (g) legitimations; (h) adoptions; (i) acknowledgments of natural children;
(j) naturalization; (k) election, loss or recovery of citizenship; (l) civil interdiction;
(m) judicial determination of filiation; (n) voluntary emancipation of a minor; and (o)
changes of name.
SEC. 3. Parties. When cancellation or correction of an entry in the civil register is
sought, the civil registrar and all persons who have or claim any interest which
would be affected thereby shall be made parties to the proceeding.
SEC. 4. Notice and Publication. Upon the filing of the petition, the court shall, by
an order, fix the time and place for the hearing of the same, and cause reasonable
notice thereof to be given to the persons named in the petition. The court shall also
cause the order to be published once a week for three (3) consecutive weeks in a
newspaper of general circulation in the province.
SEC. 5. Opposition. The civil registrar and any person having or claiming any
interest under the entry whose cancellation or correction is sought may, within
fifteen (15) days from notice of the petition, or from the last date of publication of
such notice, file his opposition thereto.
SEC. 6. Expediting proceedings. The court in which the proceedings is brought
may make orders expediting the proceedings, and may also grant preliminary
injunction for the preservation of the rights of the parties pending such
proceedings.

23

SEC. 7. Order. After hearing, the court may either dismiss the petition or issue an
order granting the cancellation or correction prayed for. In either case, a certified
copy of the judgment shall be served upon the civil registrar concerned who shall
annotate the same in his record.

government issued identification cards. The court thus made a categorical conclusion that
respondents signature in the marriage certificate was not hers and, therefore, was forged.
Clearly, it was established that, as she claimed in her petition, no such marriage was
celebrated.

Rule 108 of the Rules of Court provides the procedure for cancellation or correction of
entries in the civil registry. The proceedings may either be summary or adversary. If the
correction is clerical, then the procedure to be adopted is summary. If the rectification
affects the civil status, citizenship or nationality of a party, it is deemed substantial, and the
19
procedure to be adopted is adversary. Since the promulgation of Republic v. Valencia in
1986, the Court has repeatedly ruled that "even substantial errors in a civil registry may be
corrected through a petition filed under Rule 108, with the true facts established and the
parties aggrieved by the error availing themselves of the appropriate adversarial
20
proceeding." An appropriate adversary suit or proceeding is one where the trial court has
conducted proceedings where all relevant facts have been fully and properly developed,
where opposing counsel have been given opportunity to demolish the opposite partys case,
21
and where the evidence has been thoroughly weighed and considered.

Indeed the Court made a pronouncement in the recent case of Minoru Fujiki v. Maria Paz
Galela Marinay, Shinichi Maekara, Local Civil Registrar of Quezon City, and the
24
Administrator and Civil Registrar General of the National Statistics Office that:

It is true that in special proceedings, formal pleadings and a hearing may be dispensed with,
and the remedy [is] granted upon mere application or motion. However, a special
proceeding is not always summary. The procedure laid down in Rule 108 is not a summary
proceeding per se. It requires publication of the petition; it mandates the inclusion as parties
of all persons who may claim interest which would be affected by the cancellation or
correction; it also requires the civil registrar and any person in interest to file their
opposition, if any; and it states that although the court may make orders expediting the
proceedings, it is after hearing that the court shall either dismiss the petition or issue an
order granting the same. Thus, as long as the procedural requirements in Rule 108 are
followed, it is the appropriate adversary proceeding to effect substantial corrections and
22
changes in entries of the civil register.
In this case, the entries made in the wife portion of the certificate of marriage are admittedly
the personal circumstances of respondent. The latter, however, claims that her signature
was forged and she was not the one who contracted marriage with the purported husband.
In other words, she claims that no such marriage was entered into or if there was, she was
not the one who entered into such contract. It must be recalled that when respondent tried
to obtain a CENOMAR from the NSO, it appeared that she was married to a certain Ye Son
Sune. She then sought the cancellation of entries in the wife portion of the marriage
certificate.
In filing the petition for correction of entry under Rule 108, respondent made the Local Civil
Registrar of Cebu City, as well as her alleged husband Ye Son Sune, as partiesrespondents. It is likewise undisputed that the procedural requirements set forth in Rule 108
were complied with. The Office of the Solicitor General was likewise notified of the petition
which in turn authorized the Office of the City Prosecutor to participate in the proceedings.
More importantly, trial was conducted where respondent herself, the stenographer of the
court where the alleged marriage was conducted, as well as a document examiner, testified.
Several documents were also considered as evidence. With the testimonies and other
evidence presented, the trial court found that the signature appearing in the subject
marriage certificate was different from respondents signature appearing in some of her

To be sure, a petition for correction or cancellation of an entry in the civil registry cannot
substitute for an action to invalidate a marriage. A direct action is necessary to prevent
circumvention of the substantive and procedural safeguards of marriage under the Family
Code, A.M. No. 02-11-10-SC and other related laws. Among these safeguards are the
requirement of proving the limited grounds for the dissolution of marriage, support pendente
lite of the spouses and children, the liquidation, partition and distribution of the properties of
the spouses and the investigation of the public prosecutor to determine collusion. A direct
action for declaration of nullity or annulment of marriage is also necessary to prevent
circumvention of the jurisdiction of the Family Courts under the Family Courts Act of 1997
(Republic Act No. 8369), as a petition for cancellation or correction of entries in the civil
registry may be filed in the Regional Trial Court where the corresponding civil registry is
located. In other words, a Filipino citizen cannot dissolve his marriage by the mere
expedient of changing his entry of marriage in the civil registry.
Aside from the certificate of marriage, no such evidence was presented to show the
existence of marriage.1wphi1Rather, respondent showed by overwhelming evidence that
no marriage was entered into and that she was not even aware of such existence. The
testimonial and documentary evidence clearly established that the only "evidence" of
marriage which is the marriage certificate was a forgery. While we maintain that Rule 108
cannot be availed of to determine the validity of marriage, we cannot nullify the proceedings
before the trial court where all the parties had been given the opportunity to contest the
allegations of respondent; the procedures were followed, and all the evidence of the parties
had already been admitted and examined. Respondent indeed sought, not the nullification
of marriage as there was no marriage to speak of, but the correction of the record of such
marriage to reflect the truth as set forth by the evidence. Otherwise stated, in allowing the
correction of the subject certificate of marriage by cancelling the wife portion thereof, the
trial court did not, in any way, declare the marriage void as there was no marriage to speak
of.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Regional
Trial Court Decision dated May 5, 2009 and Order dated August 25, 2009 in SP. Proc. No.
16519-CEB, are AFFIRMED.
SO ORDERED.

6. Fujiki vs Marinay

SECOND DIVISION
[ G.R. No. 196049, June 26, 2013 ]
MINORU FUJIKI, PETITIONER, VS. MARIA PAZ GALELA MARINAY,
SHINICHI MAEKARA, LOCAL CIVIL REGISTRAR OF QUEZON CITY, AND
THE ADMINISTRATOR AND CIVIL REGISTRAR GENERAL OF THE
NATIONAL
STATISTICS
OFFICE,
RESPONDENTS.
DECISION
CARPIO, J.:
The Case

This is a direct recourse to this Court from the Regional Trial Court
(RTC), Branch 107, Quezon City, through a petition for review on
certiorari under Rule 45 of the Rules of Court on a pure question of law.
The petition assails the Order[1] dated 31 January 2011 of the RTC in
Civil Case No. Q-11-68582 and its Resolution dated 2 March 2011
denying petitioners Motion for Reconsideration. The RTC dismissed the
petition for Judicial Recognition of Foreign Judgment (or Decree of
Absolute Nullity of Marriage) based on improper venue and the lack of
personality of petitioner, Minoru Fujiki, to file the petition.
The Facts

Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married

respondent Maria Paz Galela Marinay (Marinay) in the Philippines[2] on
23 January 2004. The marriage did not sit well with petitioners
parents. Thus, Fujiki could not bring his wife to Japan where he resides.
Eventually,
they
lost
contact
with
each
other.
In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara).
Without the first marriage being dissolved, Marinay and Maekara were
married on 15 May 2008 in Quezon City, Philippines. Maekara brought
Marinay to Japan. However, Marinay allegedly suffered physical abuse
from Maekara. She left Maekara and started to contact Fujiki.[3]
Fujiki and Marinay met in Japan and they were able to reestablish their
relationship. In 2010, Fujiki helped Marinay obtain a judgment from a
family court in Japan which declared the marriage between Marinay and
Maekara void on the ground of bigamy.[4] On 14 January 2011, Fujiki

filed a petition in the RTC entitled: Judicial Recognition of Foreign

Judgment (or Decree of Absolute Nullity of Marriage). Fujiki prayed
that (1) the Japanese Family Court judgment be recognized; (2) that
the bigamous marriage between Marinay and Maekara be declared void
ab initio under Articles 35(4) and 41 of the Family Code of the
Philippines;[5] and (3) for the RTC to direct the Local Civil Registrar of
Quezon City to annotate the Japanese Family Court judgment on the
Certificate of Marriage between Marinay and Maekara and to endorse
such annotation to the Office of the Administrator and Civil Registrar
General in the National Statistics Office (NSO).[6]
The Ruling of the Regional Trial Court

A few days after the filing of the petition, the RTC immediately issued
an Order dismissing the petition and withdrawing the case from its
active civil docket.[7] The RTC cited the following provisions of the Rule
on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages (A.M. No. 02-11-10-SC):
Sec. 2. Petition for declaration of absolute nullity of void marriages.
(a) Who may file. A petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or the wife.
x

Sec. 4. Venue. The petition shall be filed in the Family Court of the
province or city where the petitioner or the respondent has been
residing for at least six months prior to the date of filing, or in the case
of a non-resident respondent, where he may be found in the
Philippines, at the election of the petitioner. x x x

The RTC ruled, without further explanation, that the petition was in
gross violation of the above provisions. The trial court based its
dismissal on Section 5(4) of A.M. No. 02-11-10-SC which provides that
[f]ailure to comply with any of the preceding requirements may be a
ground for immediate dismissal of the petition.[8] Apparently, the RTC
took the view that only the husband or the wife, in this case either
Maekara or Marinay, can file the petition to declare their marriage void,
and
not
Fujiki.
Fujiki moved that the Order be reconsidered. He argued that A.M. No.
02-11-10-SC contemplated ordinary civil actions for declaration of
nullity and annulment of marriage. Thus, A.M. No. 02-11-10-SC does not

apply. A petition for recognition of foreign judgment is a special

proceeding, which seeks to establish a status, a right or a particular
fact,[9] and not a civil action which is for the enforcement or
protection of a right, or the prevention or redress of a wrong.[10] In
other words, the petition in the RTC sought to establish (1) the status
and concomitant rights of Fujiki and Marinay as husband and wife and
(2) the fact of the rendition of the Japanese Family Court judgment
declaring the marriage between Marinay and Maekara as void on the
ground of bigamy. The petitioner contended that the Japanese
judgment was consistent with Article 35(4) of the Family Code of the
Philippines[11] on bigamy and was therefore entitled to recognition by
Philippine
courts.[12]
In any case, it was also Fujikis view that A.M. No. 02-11-10-SC applied
only to void marriages under Article 36 of the Family Code on the
ground of psychological incapacity.[13] Thus, Section 2(a) of A.M. No.
02-11-10-SC provides that a petition for declaration of absolute nullity
of void marriages may be filed solely by the husband or the wife. To
apply Section 2(a) in bigamy would be absurd because only the guilty
parties would be permitted to sue. In the words of Fujiki, [i]t is not, of
course, difficult to realize that the party interested in having a
bigamous marriage declared a nullity would be the husband in the prior,
pre-existing marriage.[14] Fujiki had material interest and therefore the
personality
to
nullify
a
bigamous
marriage.
Fujiki argued that Rule 108 (Cancellation or Correction of Entries in the
Civil Registry) of the Rules of Court is applicable. Rule 108 is the
procedural implementation of the Civil Register Law (Act No.
3753)[15] in relation to Article 413 of the Civil Code.[16] The Civil
Register Law imposes a duty on the successful petitioner for divorce or
annulment of marriage to send a copy of the final decree of the court to
the local registrar of the municipality where the dissolved or annulled
marriage was solemnized.[17] Section 2 of Rule 108 provides that
entries in the civil registry relating to marriages, judgments of
annulments of marriage and judgments declaring marriages void from
the beginning are subject to cancellation or correction.[18] The petition
in the RTC sought (among others) to annotate the judgment of the
Japanese Family Court on the certificate of marriage between Marinay
and
Maekara.
Fujikis motion for reconsideration in the RTC also asserted that the
trial court gravely erred when, on its own, it dismissed the petition
based on improper venue. Fujiki stated that the RTC may be confusing
the concept of venue with the concept of jurisdiction, because it is lack
of jurisdiction which allows a court to dismiss a case on its own. Fujiki
cited Dacoycoy v. Intermediate Appellate Court[19] which held that the
trial court cannot pre-empt the defendants prerogative to object to

the improper laying of the venue by motu proprio dismissing the

case.[20] Moreover, petitioner alleged that the trial court should not
have immediately dismissed the petition under Section 5 of A.M. No.
02-11-10-SC because he substantially complied with the provision.
On 2 March 2011, the RTC resolved to deny petitioners motion for
reconsideration. In its Resolution, the RTC stated that A.M. No. 02-1110-SC applies because the petitioner, in effect, prays for a decree of
absolute nullity of marriage.[21] The trial court reiterated its two
grounds for dismissal, i.e. lack of personality to sue and improper venue
under Sections 2(a) and 4 of A.M. No. 02-11-10-SC. The RTC considered
Fujiki as a third person[22] in the proceeding because he is not the
husband in the decree of divorce issued by the Japanese Family Court,
which he now seeks to be judicially recognized, x x x.[23] On the other
hand, the RTC did not explain its ground of impropriety of venue. It
only said that [a]lthough the Court cited Sec. 4 (Venue) x x x as a
ground for dismissal of this case[,] it should be taken together with the
other ground cited by the Court x x x which is Sec. 2(a) x x x.[24]
The RTC further justified its motu proprio dismissal of the petition
based on Braza v. The City Civil Registrar of Himamaylan City, Negros
Occidental.[25] The Court in Braza ruled that [i]n a special proceeding
for correction of entry under Rule 108 (Cancellation or Correction of
Entries in the Original Registry), the trial court has no jurisdiction to
nullify marriages x x x.[26] Braza emphasized that the validity of
marriages as well as legitimacy and filiation can be questioned only in a
direct action seasonably filed by the proper party, and not through a
collateral attack such as [a] petition [for correction of entry] x x x.[27]
The RTC considered the petition as a collateral attack on the validity of
marriage between Marinay and Maekara. The trial court held that this is
a jurisdictional ground to dismiss the petition.[28] Moreover, the
verification and certification against forum shopping of the petition was
not authenticated as required under Section 5[29] of A.M. No. 02-11-10SC. Hence, this also warranted the immediate dismissal of the petition
under the same provision.
The Manifestation and Motion of the Office of the Solicitor General and
the Letters of Marinay and Maekara

On 30 May 2011, the Court required respondents to file their comment

on the petition for review.[30] The public respondents, the Local Civil
Registrar of Quezon City and the Administrator and Civil Registrar
General of the NSO, participated through the Office of the Solicitor
General. Instead of a comment, the Solicitor General filed a
Manifestation
and
Motion.[31]

The Solicitor General agreed with the petition. He prayed that the RTCs
pronouncement that the petitioner failed to comply with x x x A.M. No.
02-11-10-SC x x x be set aside and that the case be reinstated in the
trial court for further proceedings.[32] The Solicitor General argued that
Fujiki, as the spouse of the first marriage, is an injured party who can
sue to declare the bigamous marriage between Marinay and Maekara
void. The Solicitor General cited Juliano-Llave v. Republic[33] which held
that Section 2(a) of A.M. No. 02-11-10-SC does not apply in cases of
bigamy. In Juliano-Llave, this Court explained:
[t]he subsequent spouse may only be expected to take action if he or
she had only discovered during the connubial period that the marriage
was bigamous, and especially if the conjugal bliss had already vanished.
Should parties in a subsequent marriage benefit from the bigamous
marriage, it would not be expected that they would file an action to
declare the marriage void and thus, in such circumstance, the injured
spouse who should be given a legal remedy is the one in a subsisting
previous marriage. The latter is clearly the aggrieved party as the
bigamous marriage not only threatens the financial and the property
ownership aspect of the prior marriage but most of all, it causes an
emotional burden to the prior spouse. The subsequent marriage will
always be a reminder of the infidelity of the spouse and the disregard of
the prior marriage which sanctity is protected by the Constitution. [34]

The Solicitor General contended that the petition to recognize the

Japanese Family Court judgment may be made in a Rule 108
proceeding.[35] In Corpuz v. Santo Tomas,[36] this Court held that [t]he
recognition of the foreign divorce decree may be made in a Rule 108
proceeding itself, as the object of special proceedings (such as that in
Rule 108 of the Rules of Court) is precisely to establish the status or
right of a party or a particular fact.[37] While Corpuz concerned a
foreign divorce decree, in the present case the Japanese Family Court
judgment also affected the civil status of the parties, especially
Marinay,
who
is
a
Filipino
citizen.
The Solicitor General asserted that Rule 108 of the Rules of Court is the
procedure to record [a]cts, events and judicial decrees concerning the
civil status of persons in the civil registry as required by Article 407 of
the Civil Code. In other words, [t]he law requires the entry in the civil
registry of judicial decrees that produce legal consequences upon a
persons legal capacity and status x x x.[38] The Japanese Family Court
judgment directly bears on the civil status of a Filipino citizen and
should therefore be proven as a fact in a Rule 108 proceeding.
Moreover, the Solicitor General argued that there is no jurisdictional

infirmity in assailing a void marriage under Rule 108, citing De Castro v.

De Castro[39] and Nial v. Bayadog[40] which declared that [t]he
validity of a void marriage may be collaterally attacked.[41]
Marinay and Maekara individually sent letters to the Court to comply
with the directive for them to comment on the petition.[42] Maekara
wrote that Marinay concealed from him the fact that she was previously
married to Fujiki.[43] Maekara also denied that he inflicted any form of
violence on Marinay.[44] On the other hand, Marinay wrote that she had
no reason to oppose the petition.[45] She would like to maintain her
silence for fear that anything she say might cause misunderstanding
between her and Fujiki.[46]
The Issues

Petitioner

raises

the

following

legal

issues:

(1) Whether the Rule on Declaration of Absolute Nullity of Void

Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC)
is
applicable.
(2) Whether a husband or wife of a prior marriage can file a petition to
recognize a foreign judgment nullifying the subsequent marriage
between his or her spouse and a foreign citizen on the ground of
bigamy.
(3) Whether the Regional Trial Court can recognize the foreign
judgment in a proceeding for cancellation or correction of entries in the
Civil Registry under Rule 108 of the Rules of Court.
The Ruling of the Court

We

grant

the

petition.

The Rule on Declaration of Absolute Nullity of Void Marriages and

Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) does not
apply in a petition to recognize a foreign judgment relating to the status
of a marriage where one of the parties is a citizen of a foreign country.
Moreover, in Juliano-Llave v. Republic,[47] this Court held that the rule
in A.M. No. 02-11-10-SC that only the husband or wife can file a
declaration of nullity or annulment of marriage does not apply if the
reason behind the petition is bigamy.[48]
I.

For Philippine courts to recognize a foreign judgment relating to the

status of a marriage where one of the parties is a citizen of a foreign
country, the petitioner only needs to prove the foreign judgment as a
fact under the Rules of Court. To be more specific, a copy of the foreign
judgment may be admitted in evidence and proven as a fact under Rule
132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the
Rules of Court.[49] Petitioner may prove the Japanese Family Court
judgment through (1) an official publication or (2) a certification or
copy attested by the officer who has custody of the judgment. If the
office which has custody is in a foreign country such as Japan, the
certification may be made by the proper diplomatic or consular officer
of the Philippine foreign service in Japan and authenticated by the seal
of
office.[50]
To hold that A.M. No. 02-11-10-SC applies to a petition for recognition
of foreign judgment would mean that the trial court and the parties
should follow its provisions, including the form and contents of the
petition,[51] the service of summons,[52] the investigation of the public
prosecutor,[53] the setting of pre-trial,[54] the trial[55] and the judgment
of the trial court.[56] This is absurd because it will litigate the case
anew. It will defeat the purpose of recognizing foreign judgments,
which is to limit repetitive litigation on claims and issues.[57] The
interpretation of the RTC is tantamount to relitigating the case on the
merits. In Mijares v. Raada,[58] this Court explained that [i]f every
judgment of a foreign court were reviewable on the merits, the plaintiff
would be forced back on his/her original cause of action, rendering
immaterial
the
previously
concluded
litigation.[59]
A foreign judgment relating to the status of a marriage affects the civil
status, condition and legal capacity of its parties. However, the effect of
a foreign judgment is not automatic. To extend the effect of a foreign
judgment in the Philippines, Philippine courts must determine if the
foreign judgment is consistent with domestic public policy and other
mandatory laws.[60] Article 15 of the Civil Code provides that [l]aws
relating to family rights and duties, or to the status, condition and legal
capacity of persons are binding upon citizens of the Philippines, even
though living abroad. This is the rule of lex nationalii in private
international law. Thus, the Philippine State may require, for effectivity
in the Philippines, recognition by Philippine courts of a foreign
judgment affecting its citizen, over whom it exercises personal
jurisdiction relating to the status, condition and legal capacity of such
citizen.
A petition to recognize a foreign judgment declaring a marriage void
does not require relitigation under a Philippine court of the case as if it
were a new petition for declaration of nullity of marriage. Philippine

courts cannot presume to know the foreign laws under which the
foreign judgment was rendered. They cannot substitute their judgment
on the status, condition and legal capacity of the foreign citizen who is
under the jurisdiction of another state. Thus, Philippine courts can only
recognize the foreign judgment as a fact according to the rules of
evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a foreign
judgment or final order against a person creates a presumptive
evidence of a right as between the parties and their successors in
interest by a subsequent title. Moreover, Section 48 of the Rules of
Court states that the judgment or final order may be repelled by
evidence of a want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact. Thus, Philippine courts exercise
limited review on foreign judgments. Courts are not allowed to delve
into the merits of a foreign judgment. Once a foreign judgment is
admitted and proven in a Philippine court, it can only be repelled on
grounds external to its merits, i.e. , want of jurisdiction, want of notice
to the party, collusion, fraud, or clear mistake of law or fact. The rule
on limited review embodies the policy of efficiency and the protection of
party expectations,[61] as well as respecting the jurisdiction of other
states.[62]
Since 1922 in Adong v. Cheong Seng Gee,[63] Philippine courts have
recognized foreign divorce decrees between a Filipino and a foreign
citizen if they are successfully proven under the rules of evidence.[64]
Divorce involves the dissolution of a marriage, but the recognition of a
foreign divorce decree does not involve the extended procedure under
A.M. No. 02-11-10-SC or the rules of ordinary trial. While the
Philippines does not have a divorce law, Philippine courts may,
however, recognize a foreign divorce decree under the second
paragraph of Article 26 of the Family Code, to capacitate a Filipino
citizen to remarry when his or her foreign spouse obtained a divorce
decree
abroad.[65]
There is therefore no reason to disallow Fujiki to simply prove as a fact
the Japanese Family Court judgment nullifying the marriage between
Marinay and Maekara on the ground of bigamy. While the Philippines
has no divorce law, the Japanese Family Court judgment is fully
consistent with Philippine public policy, as bigamous marriages are
declared void from the beginning under Article 35(4) of the Family
Code. Bigamy is a crime under Article 349 of the Revised Penal Code.
Thus, Fujiki can prove the existence of the Japanese Family Court
judgment in accordance with Rule 132, Sections 24 and 25, in relation
to Rule 39, Section 48(b) of the Rules of Court.
II.

Since the recognition of a foreign judgment only requires proof of fact

of the judgment, it may be made in a special proceeding for cancellation
or correction of entries in the civil registry under Rule 108 of the Rules
of Court. Rule 1, Section 3 of the Rules of Court provides that [a]
special proceeding is a remedy by which a party seeks to establish a
status, a right, or a particular fact. Rule 108 creates a remedy to
rectify facts of a persons life which are recorded by the State pursuant
to the Civil Register Law or Act No. 3753. These are facts of public
consequence such as birth, death or marriage,[66] which the State has
an interest in recording. As noted by the Solicitor General, in Corpuz v.
Sto. Tomas this Court declared that [t]he recognition of the foreign
divorce decree may be made in a Rule 108 proceeding itself, as the
object of special proceedings (such as that in Rule 108 of the Rules of
Court) is precisely to establish the status or right of a party or a
particular
fact.[67]
Rule 108, Section 1 of the Rules of Court states:
Sec. 1. Who may file petition. Any person interested in any act, event,
order or decree concerning the civil status of persons which has been
recorded in the civil register, may file a verified petition for the
cancellation or correction of any entry relating thereto, with the
Regional Trial Court of the province where the corresponding civil
registry is located. (Emphasis supplied)

Fujiki has the personality to file a petition to recognize the Japanese

Family Court judgment nullifying the marriage between Marinay and
Maekara on the ground of bigamy because the judgment concerns his
civil status as married to Marinay. For the same reason he has the
personality to file a petition under Rule 108 to cancel the entry of
marriage between Marinay and Maekara in the civil registry on the basis
of
the
decree
of
the
Japanese
Family
Court.
There is no doubt that the prior spouse has a personal and material
interest in maintaining the integrity of the marriage he contracted and
the property relations arising from it. There is also no doubt that he is
interested in the cancellation of an entry of a bigamous marriage in the
civil registry, which compromises the public record of his marriage. The
interest derives from the substantive right of the spouse not only to
preserve (or dissolve, in limited instances[68]) his most intimate human
relation, but also to protect his property interests that arise by
operation of law the moment he contracts marriage.[69] These property
interests in marriage include the right to be supported in keeping with
the financial capacity of the family[70] and preserving the property
regime
of
the
marriage.[71]

Property rights are already substantive rights protected by the

Constitution,[72] but a spouses right in a marriage extends further to
relational rights recognized under Title III (Rights and Obligations
between Husband and Wife) of the Family Code.[73] A.M. No. 02-11-10SC cannot diminish, increase, or modify the substantive right of the
spouse to maintain the integrity of his marriage.[74] In any case, Section
2(a) of A.M. No. 02-11-10-SC preserves this substantive right by
limiting the personality to sue to the husband or the wife of the union
recognized
by
law.
Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse of a
subsisting marriage to question the validity of a subsequent marriage
on the ground of bigamy. On the contrary, when Section 2(a) states
that [a] petition for declaration of absolute nullity of void marriage
may be filed solely by the husband or the wife[75]it refers to the
husband or the wife of the subsisting marriage. Under Article 35(4) of
the Family Code, bigamous marriages are void from the beginning.
Thus, the parties in a bigamous marriage are neither the husband nor
the wife under the law. The husband or the wife of the prior subsisting
marriage is the one who has the personality to file a petition for
declaration of absolute nullity of void marriage under Section 2(a) of
A.M.
No.
02-11-10-SC.
Article 35(4) of the Family Code, which declares bigamous marriages
void from the beginning, is the civil aspect of Article 349 of the Revised
Penal Code,[76] which penalizes bigamy. Bigamy is a public crime. Thus,
anyone can initiate prosecution for bigamy because any citizen has an
interest in the prosecution and prevention of crimes.[77] If anyone can
file a criminal action which leads to the declaration of nullity of a
bigamous marriage,[78] there is more reason to confer personality to
sue on the husband or the wife of a subsisting marriage. The prior
spouse does not only share in the public interest of prosecuting and
preventing crimes, he is also personally interested in the purely civil
aspect
of
protecting
his
marriage.
When the right of the spouse to protect his marriage is violated, the
spouse is clearly an injured party and is therefore interested in the
judgment of the suit.[79] Juliano-Llave ruled that the prior spouse is
clearly the aggrieved party as the bigamous marriage not only
threatens the financial and the property ownership aspect of the prior
marriage but most of all, it causes an emotional burden to the prior
spouse.[80] Being a real party in interest, the prior spouse is entitled to
sue in order to declare a bigamous marriage void. For this purpose, he
can petition a court to recognize a foreign judgment nullifying the
bigamous marriage and judicially declare as a fact that such judgment
is effective in the Philippines. Once established, there should be no

more impediment to cancel the entry of the bigamous marriage in the

civil registry.
III.

In Braza v. The City Civil Registrar of Himamaylan City, Negros

Occidental, this Court held that a trial court has no jurisdiction to
nullify marriages in a special proceeding for cancellation or correction
of entry under Rule 108 of the Rules of Court. [81] Thus, the validity of
marriage[] x x x can be questioned only in a direct action to nullify the
marriage.[82] The RTC relied on Braza in dismissing the petition for
recognition of foreign judgment as a collateral attack on the marriage
between
Marinay
and
Maekara.
Braza is not applicable because Braza does not involve a recognition of
a foreign judgment nullifying a bigamous marriage where one of the
parties
is
a
citizen
of
the
foreign
country.
To be sure, a petition for correction or cancellation of an entry in the
civil registry cannot substitute for an action to invalidate a marriage. A
direct action is necessary to prevent circumvention of the substantive
and procedural safeguards of marriage under the Family Code, A.M. No.
02-11-10-SC and other related laws. Among these safeguards are the
requirement of proving the limited grounds for the dissolution of
marriage,[83] support pendente lite of the spouses and children,[84] the
liquidation, partition and distribution of the properties of the
spouses,[85] and the investigation of the public prosecutor to determine
collusion.[86] A direct action for declaration of nullity or annulment of
marriage is also necessary to prevent circumvention of the jurisdiction
of the Family Courts under the Family Courts Act of 1997 (Republic Act
No. 8369), as a petition for cancellation or correction of entries in the
civil registry may be filed in the Regional Trial Court where the
corresponding civil registry is located.[87] In other words, a Filipino
citizen cannot dissolve his marriage by the mere expedient of changing
his
entry
of
marriage
in
the
civil
registry.
However, this does not apply in a petition for correction or cancellation
of a civil registry entry based on the recognition of a foreign judgment
annulling a marriage where one of the parties is a citizen of the foreign
country. There is neither circumvention of the substantive and
procedural safeguards of marriage under Philippine law, nor of the
jurisdiction of Family Courts under R.A. No. 8369. A recognition of a
foreign judgment is not an action to nullify a marriage. It is an action
for Philippine courts to recognize the effectivity of a foreign judgment,
which presupposes a case which was already tried and decided under
foreign law. The procedure in A.M. No. 02-11-10-SC does not apply in a

petition to recognize a foreign judgment annulling a bigamous marriage

where one of the parties is a citizen of the foreign country. Neither can
R.A. No. 8369 define the jurisdiction of the foreign court.
Article 26 of the Family Code confers jurisdiction on Philippine courts to
extend the effect of a foreign divorce decree to a Filipino spouse
without undergoing trial to determine the validity of the dissolution of
the marriage. The second paragraph of Article 26 of the Family Code
provides that [w]here a marriage between a Filipino citizen and a
foreigner is validly celebrated and a divorce is thereafter validly
obtained abroad by the alien spouse capacitating him or her to remarry,
the Filipino spouse shall have capacity to remarry under Philippine
law. In Republic v. Orbecido,[88] this Court recognized the legislative
intent of the second paragraph of Article 26 which is to avoid the
absurd situation where the Filipino spouse remains married to the alien
spouse who, after obtaining a divorce, is no longer married to the
Filipino spouse[89] under the laws of his or her country. The second
paragraph of Article 26 of the Family Code only authorizes Philippine
courts to adopt the effects of a foreign divorce decree precisely because
the Philippines does not allow divorce. Philippine courts cannot try the
case on the merits because it is tantamount to trying a case for divorce.
The second paragraph of Article 26 is only a corrective measure to
address the anomaly that results from a marriage between a Filipino,
whose laws do not allow divorce, and a foreign citizen, whose laws
allow divorce. The anomaly consists in the Filipino spouse being tied to
the marriage while the foreign spouse is free to marry under the laws of
his or her country. The correction is made by extending in the
Philippines the effect of the foreign divorce decree, which is already
effective in the country where it was rendered. The second paragraph of
Article 26 of the Family Code is based on this Courts decision in Van
Dorn v. Romillo[90] which declared that the Filipino spouse should not
be discriminated against in her own country if the ends of justice are to
be
served.[91]
The principle in Article 26 of the Family Code applies in a marriage
between a Filipino and a foreign citizen who obtains a foreign judgment
nullifying the marriage on the ground of bigamy. The Filipino spouse
may file a petition abroad to declare the marriage void on the ground of
bigamy. The principle in the second paragraph of Article 26 of the
Family Code applies because the foreign spouse, after the foreign
judgment nullifying the marriage, is capacitated to remarry under the
laws of his or her country. If the foreign judgment is not recognized in
the Philippines, the Filipino spouse will be discriminatedthe foreign
spouse can remarry while the Filipino spouse cannot remarry.
Under the second paragraph of Article 26 of the Family Code, Philippine

courts are empowered to correct a situation where the Filipino spouse

is still tied to the marriage while the foreign spouse is free to marry.
Moreover, notwithstanding Article 26 of the Family Code, Philippine
courts already have jurisdiction to extend the effect of a foreign
judgment in the Philippines to the extent that the foreign judgment
does not contravene domestic public policy. A critical difference
between the case of a foreign divorce decree and a foreign judgment
nullifying a bigamous marriage is that bigamy, as a ground for the
nullity of marriage, is fully consistent with Philippine public policy as
expressed in Article 35(4) of the Family Code and Article 349 of the
Revised Penal Code. The Filipino spouse has the option to undergo full
trial by filing a petition for declaration of nullity of marriage under A.M.
No. 02-11-10-SC, but this is not the only remedy available to him or her.
Philippine courts have jurisdiction to recognize a foreign judgment
nullifying a bigamous marriage, without prejudice to a criminal
prosecution
for
bigamy.
In the recognition of foreign judgments, Philippine courts are
incompetent to substitute their judgment on how a case was decided
under foreign law. They cannot decide on the family rights and duties,
or on the status, condition and legal capacity of the foreign citizen who
is a party to the foreign judgment. Thus, Philippine courts are limited to
the question of whether to extend the effect of a foreign judgment in
the Philippines. In a foreign judgment relating to the status of a
marriage involving a citizen of a foreign country, Philippine courts only
decide whether to extend its effect to the Filipino party, under the rule
of lex nationalii expressed in Article 15 of the Civil Code.
For this purpose, Philippine courts will only determine (1) whether the
foreign judgment is inconsistent with an overriding public policy in the
Philippines; and (2) whether any alleging party is able to prove an
extrinsic ground to repel the foreign judgment, i.e. want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or
fact. If there is neither inconsistency with public policy nor adequate
proof to repel the judgment, Philippine courts should, by default,
recognize the foreign judgment as part of the comity of nations. Section
48(b), Rule 39 of the Rules of Court states that the foreign judgment is
already presumptive evidence of a right between the parties. Upon
recognition of the foreign judgment, this right becomes conclusive and
the judgment serves as the basis for the correction or cancellation of
entry in the civil registry. The recognition of the foreign judgment
nullifying a bigamous marriage is a subsequent event that establishes a
new status, right and fact[92] that needs to be reflected in the civil
registry. Otherwise, there will be an inconsistency between the
recognition of the effectivity of the foreign judgment and the public
records
in
the
Philippines.

However, the recognition of a foreign judgment nullifying a bigamous

marriage is without prejudice to prosecution for bigamy under Article
349 of the Revised Penal Code.[93] The recognition of a foreign
judgment nullifying a bigamous marriage is not a ground for extinction
of criminal liability under Articles 89 and 94 of the Revised Penal Code.
Moreover, under Article 91 of the Revised Penal Code, [t]he term of
prescription [of the crime of bigamy] shall not run when the offender is
absent
from
the
Philippine
archipelago.
Since A.M. No. 02-11-10-SC is inapplicable, the Court no longer sees the
need to address the questions on venue and the contents and form of
the petition under Sections 4 and 5, respectively, of A.M. No. 02-11-10SC.
WHEREFORE, we GRANT the petition. The Order dated 31 January 2011
and the Resolution dated 2 March 2011 of the Regional Trial Court,
Branch 107, Quezon City, in Civil Case No. Q-11-68582 are REVERSED
and SET ASIDE. The Regional Trial Court is ORDERED to REINSTATE the
petition for further proceedings in accordance with this Decision.
SO
Brion,

ORDERED.
Del

Castillo,

Perez,

and

Perlas-Bernabe,

JJ.,

concur.

7. Catalan v. Catalan
SECOND DIVISION
[ G. R. No. 183622, February 08, 2012 ]
MEROPE ENRIQUEZ VDA. DE CATALAN, PETITIONER, VS. LOUELLA A.
CATALAN-LEE,
RESPONDENT.
RESOLUTION
SERENO, J.:
Before us is a Petition for Review assailing the Court of Appeals (CA)
Decision[1] and Resolution[2] regarding the issuance of letters of
administration of the intestate estate of Orlando B. Catalan.
The

facts

are

as

follows:

been
Orlando B. Catalan was a naturalized American citizen. After allegedly
obtaining a divorce in the United States from his first wife, Felicitas
Amor, he contracted a second marriage with petitioner herein.
On 18 November 2004, Orlando died intestate in the Philippines.
Thereafter, on 28 February 2005, petitioner filed with the Regional Trial
Court (RTC) of Dagupan City a Petition for the issuance of letters of
administration for her appointment as administratrix of the intestate
estate of Orlando. The case was docketed as Special Proceedings (Spec.
Proc.)
No.
228.
On 3 March 2005, while Spec. Proc. No. 228 was pending, respondent
Louella A. Catalan-Lee, one of the children of Orlando from his first
marriage, filed a similar petition with the RTC docketed as Spec. Proc.
No.
232.
The

two

cases

were

subsequently

consolidated.

Petitioner prayed for the dismissal of Spec. Proc. No. 232 on the ground
of litis pendentia, considering that Spec. Proc. No. 228 covering the
same
estate
was
already
pending.
On the other hand, respondent alleged that petitioner was not
considered an interested person qualified to file a petition for the
issuance of letters of administration of the estate of Orlando. In support
of her contention, respondent alleged that a criminal case for bigamy
was filed against petitioner before Branch 54 of the RTC of Alaminos,
Pangasinan,
and
docketed
as
Crim.
Case
No.
2699-A.
Apparently, Felicitas Amor filed a Complaint for bigamy, alleging that
petitioner contracted a second marriage to Orlando despite having been
married
to
one
Eusebio
Bristol
on
12
December
1959.
On 6 August 1998, the RTC had acquitted petitioner of bigamy.[3] The
trial court ruled that since the deceased was a divorced American
citizen, and since that divorce was not recognized under Philippine
jurisdiction, the marriage between him and petitioner was not valid.
Furthermore, it took note of the action for declaration of nullity then
pending action with the trial court in Dagupan City filed by Felicitas
Amor against the deceased and petitioner. It considered the pending
action to be a prejudicial question in determining the guilt of petitioner
for
the
crime
of
bigamy.
Finally, the trial court found that, in the first place, petitioner had never

married

to

Eusebio

Bristol.

On 26 June 2006, Branch 70 of the RTC of Burgos, Pangasinan

dismissed the Petition for the issuance of letters of administration filed
by petitioner and granted that of private respondent. Contrary to its
findings in Crim. Case No. 2699-A, the RTC held that the marriage
between petitioner and Eusebio Bristol was valid and subsisting when
she married Orlando. Without expounding, it reasoned further that her
acquittal in the previous bigamy case was fatal to her cause. Thus, the
trial court held that petitioner was not an interested party who may file
a petition for the issuance of letters of administration.[4]
After the subsequent denial of her Motion for Reconsideration,
petitioner elevated the matter to the Court of Appeals (CA) via her
Petition for Certiorari, alleging grave abuse of discretion on the part of
the RTC in dismissing her Petition for the issuance of letters of
administration.
Petitioner reiterated before the CA that the Petition filed by respondent
should have been dismissed on the ground of litis pendentia. She also
insisted that, while a petition for letters of administration may have
been filed by an "uninterested person," the defect was cured by the
appearance of a real party-in-interest. Thus, she insisted that, to
determine who has a better right to administer the decedent's
properties, the RTC should have first required the parties to present
their
evidence
before
it
ruled
on
the
matter.
On 18 October 2007, the CA promulgated the assailed Decision. First, it
held that petitioner undertook the wrong remedy. She should have
instead filed a petition for review rather than a petition for certiorari.
Nevertheless, since the Petition for Certiorari was filed within the
fifteen-day reglementary period for filing a petition for review under
Sec. 4 of Rule 43, the CA allowed the Petition and continued to decide
on the merits of the case. Thus, it ruled in this wise:
As to the issue of litis pendentia, we find it not applicable in the case.
For litis pendentia to be a ground for the dismissal of an action, there
must be: (a) identity of the parties or at least such as to represent the
same interest in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same acts, and (c) the
identity in the two cases should be such that the judgment which may
be rendered in one would, regardless of which party is successful,
amount to res judicata in the other. A petition for letters of
administration is a special proceeding. A special proceeding is an
application or proceeding to establish the status or right of a party, or a
particular fact. And, in contrast to an ordinary civil action, a special
proceeding involves no defendant or respondent. The only party in this

kind of proceeding is the petitioner of the applicant. Considering its

nature, a subsequent petition for letters of administration can hardly be
barred by a similar pending petition involving the estate of the same
decedent unless both petitions are filed by the same person. In the case
at bar, the petitioner was not a party to the petition filed by the private
respondent, in the same manner that the latter was not made a party to
the petition filed by the former. The first element of litis pendentia is
wanting. The contention of the petitioner must perforce fail.
Moreover, to yield to the contention of the petitioner would render
nugatory the provision of the Rules requiring a petitioner for letters of
administration to be an "interested party," inasmuch as any person, for
that matter, regardless of whether he has valid interest in the estate
sought to be administered, could be appointed as administrator for as
long as he files his petition ahead of any other person, in derogation of
the rights of those specifically mentioned in the order of preference in
the appointment of administrator under Rule 78, Section 6 of the
Revised Rules of Court, which provides:
xxx xxx xxx

The petitioner, armed with a marriage certificate, filed her petition for
letters of administration. As a spouse, the petitioner would have been
preferred to administer the estate of Orlando B. Catalan. However, a
marriage certificate, like any other public document, is only prima facie
evidence of the facts stated therein. The fact that the petitioner had
been charged with bigamy and was acquitted has not been disputed by
the petitioner. Bigamy is an illegal marriage committed by contracting a
second or subsequent marriage before the first marriage has been
dissolved or before the absent spouse has been declared presumptively
dead by a judgment rendered in a proper proceedings. The deduction of
the trial court that the acquittal of the petitioner in the said case
negates the validity of her subsequent marriage with Orlando B. Catalan
has not been disproved by her. There was not even an attempt from the
petitioner to deny the findings of the trial court. There is therefore no
basis for us to make a contrary finding. Thus, not being an interested
party and a stranger to the estate of Orlando B. Catalan, the dismissal
of her petition for letters of administration by the trial court is in place.

SO ORDERED.[5] (Emphasis supplied)

Petitioner moved for a reconsideration of this Decision.[6] She alleged

that the reasoning of the CA was illogical in stating, on the one hand,
that she was acquitted of bigamy, while, on the other hand, still holding
that her marriage with Orlando was invalid. She insists that with her
acquittal of the crime of bigamy, the marriage enjoys the presumption
of
validity.
On
Hence,

20

June

2008,

the
this

CA

denied

her

motion.
Petition.

At the outset, it seems that the RTC in the special proceedings failed to
appreciate the finding of the RTC in Crim. Case No. 2699-A that
petitioner was never married to Eusebio Bristol. Thus, the trial court
concluded that, because petitioner was acquitted of bigamy, it follows
that the first marriage with Bristol still existed and was valid. By failing
to take note of the findings of fact on the nonexistence of the marriage
between petitioner and Bristol, both the RTC and CA held that petitioner
was
not
an
interested
party
in
the
estate
of
Orlando.
Second, it is imperative to note that at the time the bigamy case in
Crim. Case No. 2699-A was dismissed, we had already ruled that under
the principles of comity, our jurisdiction recognizes a valid divorce
obtained by a spouse of foreign nationality. This doctrine was
established as early as 1985 in Van Dorn v. Romillo, Jr.[7] wherein we
said:
It is true that owing to the nationality principle embodied in Article 15
of the Civil Code, only Philippine nationals are covered by the policy
against absolute divorces[,] the same being considered contrary to our
concept of public policy and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. In this case, the divorce
in Nevada released private respondent from the marriage from the
standards of American law, under which divorce dissolves the marriage.
xxx

xxx xxx xxx

We reiterated this principle in Llorente v. Court of Appeals,[8] to wit:
WHEREFORE, premises considered, the petition is DISMISSED for lack of
merit.
No
pronouncement
as
to
costs.

In Van Dorn v. Romillo, Jr. we held that owing to the nationality

principle embodied in Article 15 of the Civil Code, only Philippine

nationals are covered by the policy against absolute divorces, the same
being considered contrary to our concept of public policy and morality.
In the same case, the Court ruled that aliens may obtain divorces
abroad, provided they are valid according to their national law.
Citing this landmark case, the Court held in Quita v. Court of Appeals,
that once proven that respondent was no longer a Filipino citizen when
he obtained the divorce from petitioner, the ruling in Van Dorn would
become applicable and petitioner could "very well lose her right to
inherit"
from
him.
In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the
respondent in his country, the Federal Republic of Germany. There, we
stated that divorce and its legal effects may be recognized in the
Philippines insofar as respondent is concerned in view of the nationality
principle
in
our
civil
law
on
the
status
of
persons.
For failing to apply these doctrines, the decision of the Court of Appeals
must be reversed. We hold that the divorce obtained by Lorenzo H.
Llorente from his first wife Paula was valid and recognized in this
jurisdiction as a matter of comity. xxx

Nonetheless, the fact of divorce must still first be proven as we have

enunciated in Garcia v. Recio,[9] to wit:
Respondent is getting ahead of himself. Before a foreign judgment is
given presumptive evidentiary value, the document must first be
presented and admitted in evidence. A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best evidence of a
judgment is the judgment itself. The decree purports to be a written act
or record of an act of an official body or tribunal of a foreign country.
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or
document may be proven as a public or official record of a foreign
country by either (1) an official publication or (2) a copy thereof
attested by the officer having legal custody of the document. If the
record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign
country in which the record is kept and (b) authenticated by the seal of
his
office.
The divorce decree between respondent and Editha Samson appears to
be an authentic one issued by an Australian family court. However,
appearance is not sufficient; compliance with the aforementioned rules
on
evidence
must
be
demonstrated.

Fortunately for respondent's cause, when the divorce decree of May 18,
1989 was submitted in evidence, counsel for petitioner objected, not to
its admissibility, but only to the fact that it had not been registered in
the Local Civil Registry of Cabanatuan City. The trial court ruled that it
was admissible, subject to petitioner's qualification. Hence, it was
admitted in evidence and accorded weight by the judge. Indeed,
petitioner's failure to object properly rendered the divorce decree
admissible as a written act of the Family Court of Sydney, Australia.
Compliance with the quoted articles (11, 13 and 52) of the Family Code
is not necessary; respondent was no longer bound by Philippine
personal laws after he acquired Australian citizenship in 1992.
Naturalization is the legal act of adopting an alien and clothing him with
the political and civil rights belonging to a citizen. Naturalized citizens,
freed from the protective cloak of their former states, don the attires of
their adoptive countries. By becoming an Australian, respondent
severed his allegiance to the Philippines and the vinculum juris that had
tied
him
to
Philippine
personal
laws.
Burden

of

Proving

Australian

Law

Respondent contends that the burden to prove Australian divorce law

falls upon petitioner, because she is the party challenging the validity of
a foreign judgment. He contends that petitioner was satisfied with the
original of the divorce decree and was cognizant of the marital laws of
Australia, because she had lived and worked in that country for quite a
long time. Besides, the Australian divorce law is allegedly known by
Philippine courts; thus, judges may take judicial notice of foreign laws
in
the
exercise
of
sound
discretion.
We are not persuaded. The burden of proof lies with the "party who
alleges the existence of a fact or thing necessary in the prosecution or
defense of an action." In civil cases, plaintiffs have the burden of
proving the material allegations of the complaint when those are denied
by the answer; and defendants have the burden of proving the material
allegations in their answer when they introduce new matters. Since the
divorce was a defense raised by respondent, the burden of proving the
pertinent Australian law validating it falls squarely upon him.
It is well-settled in our jurisdiction that our courts cannot take judicial
notice of foreign laws. Like any other facts, they must be alleged and
proved. Australian marital laws are not among those matters that
judges are supposed to know by reason of their judicial function. The
power of judicial notice must be exercised with caution, and every
reasonable doubt upon the subject should be resolved in the negative.
(Emphasis supplied)

It appears that the trial court no longer required petitioner to prove the
validity of Orlando's divorce under the laws of the United States and the
marriage between petitioner and the deceased. Thus, there is a need to
remand the proceedings to the trial court for further reception of
evidence
to
establish
the
fact
of
divorce.
Should petitioner prove the validity of the divorce and the subsequent
marriage, she has the preferential right to be issued the letters of
administration over the estate. Otherwise, letters of administration may
be issued to respondent, who is undisputedly the daughter or next of
kin of the deceased, in accordance with Sec. 6 of Rule 78 of the Revised
Rules
of
Court.
This is consistent with our ruling in San Luis v. San Luis,[10] in which we
said:

reception of evidence on the divorce decree obtained by Merry Lee and

the marriage of respondent and Felicisimo. (Emphasis supplied)

Thus, it is imperative for the trial court to first determine the validity of
the divorce to ascertain the rightful party to be issued the letters of
administration
over
the
estate
of
Orlando
B.
Catalan.
WHEREFORE, premises considered, the Petition is hereby PARTIALLY
GRANTED. The Decision dated 18 October 2007 and the Resolution
dated 20 June 2008 of the Court of Appeals are hereby REVERSED and
SET ASIDE. Let this case be REMANDED to Branch 70 of the Regional
Trial Court of Burgos, Pangasinan for further proceedings in accordance
with
this
Decision.
SO

ORDERED.

Applying the above doctrine in the instant case, the divorce decree
allegedly obtained by Merry Lee which absolutely allowed Felicisimo to
remarry, would have vested Felicidad with the legal personality to file
the present petition as Felicisimo's surviving spouse. However, the
records show that there is insufficient evidence to prove the validity of
the divorce obtained by Merry Lee as well as the marriage of
respondent and Felicisimo under the laws of the U.S.A. In Garcia v.
Recio, the Court laid down the specific guidelines for pleading and
proving foreign law and divorce judgments. It held that presentation
solely of the divorce decree is insufficient and that proof of its
authenticity and due execution must be presented. Under Sections 24
and 25 of Rule 132, a writing or document may be proven as a public or
official record of a foreign country by either (1) an official publication or
(2) a copy thereof attested by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must
be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign
country in which the record is kept and (b) authenticated by the seal of
his
office.

Carpio,

With regard to respondent's marriage to Felicisimo allegedly

solemnized in California, U.S.A., she submitted photocopies of the
Marriage Certificate and the annotated text of the Family Law Act of
California which purportedly show that their marriage was done in
accordance with the said law. As stated in Garcia, however, the Court
cannot take judicial notice of foreign laws as they must be alleged and
proved.

Before the Court is a direct appeal from the decision[1] of the Regional
Trial Court (RTC) of Laoag City, Branch 11, elevated via a petition for
review on certiorari[2] under Rule 45 of the Rules of Court (present
petition).

Therefore, this case should be remanded to the trial court for further

(Chairperson),

Brion,

Perez,

and

Reyes,

JJ.,

concur.

8. Corpuz vs Sto Tomas

THIRD DIVISION
[ G.R. No. 186571, August 11, 2010 ]
GERBERT R. CORPUZ, PETITIONER, VS. DAISYLYN TIROL STO. TOMAS
AND
THE
SOLICITOR
GENERAL,
RESPONDENTS.
DECISION
BRION, J.:

Petitioner Gerbert R. Corpuz was a former Filipino citizen who acquired

Canadian citizenship through naturalization on November 29, 2000.[3]
On January 18, 2005, Gerbert married respondent Daisylyn T. Sto.
Tomas, a Filipina, in Pasig City.[4] Due to work and other professional
commitments, Gerbert left for Canada soon after the wedding. He

returned to the Philippines sometime in April 2005 to surprise Daisylyn,

but was shocked to discover that his wife was having an affair with
another man. Hurt and disappointed, Gerbert returned to Canada and
filed a petition for divorce. The Superior Court of Justice, Windsor,
Ontario, Canada granted Gerbert's petition for divorce on December 8,
2005. The divorce decree took effect a month later, on January 8,
2006.[5]
Two years after the divorce, Gerbert has moved on and has found
another Filipina to love. Desirous of marrying his new Filipina fiance in
the Philippines, Gerbert went to the Pasig City Civil Registry Office and
registered the Canadian divorce decree on his and Daisylyn's marriage
certificate. Despite the registration of the divorce decree, an official of
the National Statistics Office (NSO) informed Gerbert that the marriage
between him and Daisylyn still subsists under Philippine law; to be
enforceable, the foreign divorce decree must first be judicially
recognized by a competent Philippine court, pursuant to NSO Circular
No.
4,
series
of
1982.[6]
Accordingly, Gerbert filed a petition for judicial recognition of foreign
divorce and/or declaration of marriage as dissolved (petition) with the
RTC. Although summoned, Daisylyn did not file any responsive pleading
but submitted instead a notarized letter/manifestation to the trial
court. She offered no opposition to Gerbert's petition and, in fact,
alleged her desire to file a similar case herself but was prevented by
financial and personal circumstances. She, thus, requested that she be
considered as a party-in-interest with a similar prayer to Gerbert's.
In its October 30, 2008 decision,[7] the RTC denied Gerbert's petition.
The RTC concluded that Gerbert was not the proper party to institute
the action for judicial recognition of the foreign divorce decree as he is
a naturalized Canadian citizen. It ruled that only the Filipino spouse
can avail of the remedy, under the second paragraph of Article 26 of the
Family Code,[8] in order for him or her to be able to remarry under
Philippine law.[9] Article 26 of the Family Code reads:
Art. 26. All marriages solemnized outside the Philippines, in accordance
with the laws in force in the country where they were solemnized, and
valid there as such, shall also be valid in this country, except those
prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the
alien spouse capacitating him or her to remarry, the Filipino spouse
shall likewise have capacity to remarry under Philippine law.

This conclusion, the RTC stated, is consistent with the legislative intent
behind the enactment of the second paragraph of Article 26 of the
Family Code, as determined by the Court in Republic v. Orbecido III;[10]
the provision was enacted to "avoid the absurd situation where the
Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse."[11]
THE PETITION

From

the

RTC's

ruling,[12]

Gerbert

filed

the

present

petition.[13]

Gerbert asserts that his petition before the RTC is essentially for
declaratory relief, similar to that filed in Orbecido; he, thus, similarly
asks for a determination of his rights under the second paragraph of
Article 26 of the Family Code. Taking into account the rationale behind
the second paragraph of Article 26 of the Family Code, he contends that
the provision applies as well to the benefit of the alien spouse. He
claims that the RTC ruling unduly stretched the doctrine in Orbecido by
limiting the standing to file the petition only to the Filipino spouse - an
interpretation he claims to be contrary to the essence of the second
paragraph of Article 26 of the Family Code. He considers himself as a
proper party, vested with sufficient legal interest, to institute the case,
as there is a possibility that he might be prosecuted for bigamy if he
marries his Filipina fiance in the Philippines since two marriage
certificates, involving him, would be on file with the Civil Registry
Office. The Office of the Solicitor General and Daisylyn, in their
respective
Comments,[14]
both
support
Gerbert's
position.
Essentially, the petition raises the issue of whether the second
paragraph of Article 26 of the Family Code extends to aliens the right to
petition a court of this jurisdiction for the recognition of a foreign
divorce decree.
THE COURT'S RULING

The alien spouse can claim no right under the second paragraph of
Article 26 of the Family Code as the substantive right it establishes is in
favor
of
the
Filipino
spouse
The resolution of the issue requires a review of the legislative history
and intent behind the second paragraph of Article 26 of the Family
Code.

The Family Code recognizes only two types of defective marriages void[15] and voidable[16] marriages. In both cases, the basis for the
judicial declaration of absolute nullity or annulment of the marriage
exists before or at the time of the marriage. Divorce, on the other hand,
contemplates the dissolution of the lawful union for cause arising after
the marriage.[17] Our family laws do not recognize absolute divorce
between
Filipino
citizens.[18]
Recognizing the reality that divorce is a possibility in marriages
between a Filipino and an alien, President Corazon C. Aquino, in the
exercise of her legislative powers under the Freedom Constitution, [19]
enacted Executive Order No. (EO) 227, amending Article 26 of the
Family Code to its present wording, as follows:
Art. 26. All marriages solemnized outside the Philippines, in accordance
with the laws in force in the country where they were solemnized, and
valid there as such, shall also be valid in this country, except those
prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the
alien spouse capacitating him or her to remarry, the Filipino spouse
shall likewise have capacity to remarry under Philippine law.

Through the second paragraph of Article 26 of the Family Code, EO 227

effectively incorporated into the law this Court's holding in Van Dorn v.
Romillo, Jr.[20] and Pilapil v. Ibay-Somera.[21] In both cases, the Court
refused to acknowledge the alien spouse's assertion of marital rights
after a foreign court's divorce decree between the alien and the
Filipino. The Court, thus, recognized that the foreign divorce had
already severed the marital bond between the spouses. The Court
reasoned in Van Dorn v. Romillo that:
To maintain x x x that, under our laws, [the Filipino spouse] has to be
considered still married to [the alien spouse] and still subject to a
wife's obligations x x x cannot be just. [The Filipino spouse] should not
be obliged to live together with, observe respect and fidelity, and
render support to [the alien spouse]. The latter should not continue to
be one of her heirs with possible rights to conjugal property. She should
not be discriminated against in her own country if the ends of justice
are to be served.[22]

As the RTC correctly stated, the provision was included in the law "to
avoid the absurd situation where the Filipino spouse remains married to

the alien spouse who, after obtaining a divorce, is no longer married to

the Filipino spouse."[23] The legislative intent is for the benefit of the
Filipino spouse, by clarifying his or her marital status, settling the
doubts created by the divorce decree. Essentially, the second
paragraph of Article 26 of the Family Code provided the Filipino spouse
a substantive right to have his or her marriage to the alien spouse
considered as dissolved, capacitating him or her to remarry.[24] Without
the second paragraph of Article 26 of the Family Code, the judicial
recognition of the foreign decree of divorce, whether in a proceeding
instituted precisely for that purpose or as a related issue in another
proceeding, would be of no significance to the Filipino spouse since our
laws do not recognize divorce as a mode of severing the marital
bond;[25] Article 17 of the Civil Code provides that the policy against
absolute divorces cannot be subverted by judgments promulgated in a
foreign country. The inclusion of the second paragraph in Article 26 of
the Family Code provides the direct exception to this rule and serves as
basis for recognizing the dissolution of the marriage between the
Filipino
spouse
and
his
or
her
alien
spouse.
Additionally, an action based on the second paragraph of Article 26 of
the Family Code is not limited to the recognition of the foreign divorce
decree. If the court finds that the decree capacitated the alien spouse
to remarry, the courts can declare that the Filipino spouse is likewise
capacitated to contract another marriage. No court in this jurisdiction,
however, can make a similar declaration for the alien spouse (other
than that already established by the decree), whose status and legal
capacity
are
generally
governed
by
his
national
law.[26]
Given the rationale and intent behind the enactment, and the purpose
of the second paragraph of Article 26 of the Family Code, the RTC was
correct in limiting the applicability of the provision for the benefit of the
Filipino spouse. In other words, only the Filipino spouse can invoke the
second paragraph of Article 26 of the Family Code; the alien spouse can
claim
no
right
under
this
provision.
The foreign divorce decree is presumptive evidence of a right that
clothes the party with legal interest to petition for its recognition in this
jurisdiction
We qualify our above conclusion - i.e., that the second paragraph of
Article 26 of the Family Code bestows no rights in favor of aliens - with
the complementary statement that this conclusion is not sufficient basis
to dismiss Gerbert's petition before the RTC. In other words, the
unavailability of the second paragraph of Article 26 of the Family Code
to aliens does not necessarily strip Gerbert of legal interest to petition
the RTC for the recognition of his foreign divorce decree. The foreign
divorce decree itself, after its authenticity and conformity with the

alien's national law have been duly proven according to our rules of
evidence, serves as a presumptive evidence of right in favor of Gerbert,
pursuant to Section 48, Rule 39 of the Rules of Court which provides for
the effect of foreign judgments. This Section states:

records are not kept in the Philippines, these must be (a) accompanied
by a certificate issued by the proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign country in which the
record is kept and (b) authenticated by the seal of his office.

SEC. 48. Effect of foreign judgments or final orders.--The effect of a

judgment or final order of a tribunal of a foreign country, having
jurisdiction to render the judgment or final order is as follows:

The records show that Gerbert attached to his petition a copy of the
divorce decree, as well as the required certificates proving its
authenticity,[30] but failed to include a copy of the Canadian law on
divorce.[31] Under this situation, we can, at this point, simply dismiss
the petition for insufficiency of supporting evidence, unless we deem it
more appropriate to remand the case to the RTC to determine whether
the divorce decree is consistent with the Canadian divorce law.

(a) In case of a judgment or final order upon a specific thing, the

judgment or final order is conclusive upon the title of the thing; and
(b) In case of a judgment or final order against a person, the judgment
or final order is presumptive evidence of a right as between the parties
and
their
successors
in
interest
by
a
subsequent
title.
In either case, the judgment or final order may be repelled by evidence
of a want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact.

To our mind, direct involvement or being the subject of the foreign

judgment is sufficient to clothe a party with the requisite interest to
institute an action before our courts for the recognition of the foreign
judgment. In a divorce situation, we have declared, no less, that the
divorce obtained by an alien abroad may be recognized in the
Philippines, provided the divorce is valid according to his or her national
law.[27]
The starting point in any recognition of a foreign divorce judgment is
the acknowledgment that our courts do not take judicial notice of
foreign judgments and laws. Justice Herrera explained that, as a rule,
"no sovereign is bound to give effect within its dominion to a judgment
rendered by a tribunal of another country."[28] This means that the
foreign judgment and its authenticity must be proven as facts under our
rules on evidence, together with the alien's applicable national law to
show the effect of the judgment on the alien himself or herself.[29] The
recognition may be made in an action instituted specifically for the
purpose or in another action where a party invokes the foreign decree
as
an
integral
aspect
of
his
claim
or
defense.
In Gerbert's case, since both the foreign divorce decree and the
national law of the alien, recognizing his or her capacity to obtain a
divorce, purport to be official acts of a sovereign authority, Section 24,
Rule 132 of the Rules of Court comes into play. This Section requires
proof, either by (1) official publications or (2) copies attested by the
officer having legal custody of the documents. If the copies of official

We deem it more appropriate to take this latter course of action, given

the Article 26 interests that will be served and the Filipina wife's
(Daisylyn's) obvious conformity with the petition. A remand, at the
same time, will allow other interested parties to oppose the foreign
judgment and overcome a petitioner's presumptive evidence of a right
by proving want of jurisdiction, want of notice to a party, collusion,
fraud, or clear mistake of law or fact. Needless to state, every
precaution must be taken to ensure conformity with our laws before a
recognition is made, as the foreign judgment, once recognized, shall
have the effect of res judicata[32] between the parties, as provided in
Section
48,
Rule
39
of
the
Rules
of
Court.[33]
In fact, more than the principle of comity that is served by the practice
of reciprocal recognition of foreign judgments between nations, the res
judicata effect of the foreign judgments of divorce serves as the deeper
basis for extending judicial recognition and for considering the alien
spouse bound by its terms. This same effect, as discussed above, will
not obtain for the Filipino spouse were it not for the substantive rule
that the second paragraph of Article 26 of the Family Code provides.
Considerations beyond the recognition of the foreign divorce decree
As a matter of "housekeeping" concern, we note that the Pasig City Civil
Registry Office has already recorded the divorce decree on Gerbert and
Daisylyn's marriage certificate based on the mere presentation of the
decree.[34] We consider the recording to be legally improper; hence, the
need to draw attention of the bench and the bar to what had been done.
Article 407 of the Civil Code states that "[a]cts, events and judicial
decrees concerning the civil status of persons shall be recorded in the
civil register." The law requires the entry in the civil registry of judicial
decrees that produce legal consequences touching upon a person's legal
capacity and status, i.e., those affecting "all his personal qualities and
relations, more or less permanent in nature, not ordinarily terminable

at his own will, such as his being legitimate or illegitimate, or his being
married
or
not."[35]
A judgment of divorce is a judicial decree, although a foreign one,
affecting a person's legal capacity and status that must be recorded. In
fact, Act No. 3753 or the Law on Registry of Civil Status specifically
requires the registration of divorce decrees in the civil registry:
Sec. 1. Civil Register. - A civil register is established for recording the
civil status of persons, in which shall be entered:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)

annulments

of

acknowledgment
of
naturalization;
changes

natural
of

births;
deaths;
marriages;
marriages;
divorces;
legitimations;
adoptions;
children;
and
name.

xxxx

Sec. 4. Civil Register Books. -- The local registrars shall keep and
preserve in their offices the following books, in which they shall,
respectively make the proper entries concerning the civil status of
persons:
(1)

Birth

and

death

register;

(2) Marriage register, in which shall be entered not only the marriages
solemnized
but
also
divorces
and
dissolved
marriages.
(3) Legitimation, acknowledgment, adoption, change of name and
naturalization register.

But while the law requires the entry of the divorce decree in the civil
registry, the law and the submission of the decree by themselves do not
ipso facto authorize the decree's registration. The law should be read
in relation with the requirement of a judicial recognition of the foreign
judgment before it can be given res judicata effect. In the context of
the present case, no judicial order as yet exists recognizing the foreign
divorce decree. Thus, the Pasig City Civil Registry Office acted totally

out of turn and without authority of law when it annotated the Canadian
divorce decree on Gerbert and Daisylyn's marriage certificate, on the
strength alone of the foreign decree presented by Gerbert.
Evidently, the Pasig City Civil Registry Office was aware of the
requirement of a court recognition, as it cited NSO Circular No. 4, series
of 1982,[36] and Department of Justice Opinion No. 181, series of
1982[37] - both of which required a final order from a competent
Philippine court before a foreign judgment, dissolving a marriage, can
be registered in the civil registry, but it, nonetheless, allowed the
registration of the decree. For being contrary to law, the registration of
the foreign divorce decree without the requisite judicial recognition is
patently
void
and
cannot
produce
any
legal
effect.
Another point we wish to draw attention to is that the recognition that
the RTC may extend to the Canadian divorce decree does not, by itself,
authorize the cancellation of the entry in the civil registry. A petition
for recognition of a foreign judgment is not the proper proceeding,
contemplated under the Rules of Court, for the cancellation of entries in
the
civil
registry.
Article 412 of the Civil Code declares that "no entry in a civil register
shall be changed or corrected, without judicial order." The Rules of
Court supplements Article 412 of the Civil Code by specifically providing
for a special remedial proceeding by which entries in the civil registry
may be judicially cancelled or corrected. Rule 108 of the Rules of Court
sets in detail the jurisdictional and procedural requirements that must
be complied with before a judgment, authorizing the cancellation or
correction, may be annotated in the civil registry. It also requires,
among others, that the verified petition must be filed with the RTC of
the province where the corresponding civil registry is located;[38] that
the civil registrar and all persons who have or claim any interest must
be made parties to the proceedings;[39] and that the time and place for
hearing must be published in a newspaper of general circulation.[40] As
these basic jurisdictional requirements have not been met in the
present case, we cannot consider the petition Gerbert filed with the RTC
as
one
filed
under
Rule
108
of
the
Rules
of
Court.
We hasten to point out, however, that this ruling should not be
construed as requiring two separate proceedings for the registration of
a foreign divorce decree in the civil registry - one for recognition of the
foreign decree and another specifically for cancellation of the entry
under Rule 108 of the Rules of Court. The recognition of the foreign
divorce decree may be made in a Rule 108 proceeding itself, as the
object of special proceedings (such as that in Rule 108 of the Rules of
Court) is precisely to establish the status or right of a party or a
particular fact. Moreover, Rule 108 of the Rules of Court can serve as

the appropriate adversarial proceeding[41] by which the applicability of

the foreign judgment can be measured and tested in terms of
jurisdictional infirmities, want of notice to the party, collusion, fraud, or
clear
mistake
of
law
or
fact.
WHEREFORE, we GRANT the petition for review on certiorari, and
REVERSE the October 30, 2008 decision of the Regional Trial Court of
Laoag City, Branch 11, as well as its February 17, 2009 order. We order
the REMAND of the case to the trial court for further proceedings in
accordance with our ruling above. Let a copy of this Decision be
furnished
the
Civil
Registrar
General.
No
costs.
SO

ORDERED.

Carpio Morales, (Chairperson), Bersamin, *Abad, and Villarama, Jr., JJ.,

concur.

In the first, a petition for certiorari[1] under Rule 65 and docketed as

G.R. No. 155635,Rebeccaassails and seeks to nullify the April 30, 2002
Resolution[2] of the CA, as reiterated in another Resolution of
September 2, 2002,[3] granting a writ of preliminary injunction in favor
of private respondent Vicente Madrigal Bayot staving off the trial
court's
grant
of
support
pendente
lite
to
Rebecca.
The second, a petition for review under Rule 45,[4] docketed G.R. No.
163979, assails the March 25, 2004 Decision[5] of the CA, (1) dismissing
Civil Case No. 01-094, a suit for declaration of absolute nullity of
marriage with application for support commenced by Rebecca against
Vicente before the Regional Trial Court (RTC) in Muntinlupa City; and
(2) setting aside certain orders and a resolution issued by the RTC in
the
said
case.
Per its Resolution of August
consolidation of both cases.

11,

2004,

the

Court

ordered

the

The Facts
9. Bayot vs CA
SECOND DIVISION
[ G.R. No. 155635, November 07, 2008 ]
MARIA
REBECCA
MAKAPUGAY
BAYOT,
PETITIONER,
VS.
THE
HONORABLE COURT OF APPEALS AND VICENTE MADRIGAL BAYOT,
RESPONDENTS.
[G.R.
MARIA REBECCA
MADRIGAL

NO.
MAKAPUGAY BAYOT,
BAYOT,

163979]
PETITIONER,

VS. VICENTE
RESPONDENT.

DECISION
VELASCO JR., J.:
The Case

Before us are these two petitions interposed by petitioner Maria

Rebecca Makapugay Bayot impugning certain issuances handed out by
the
Court
of
Appeals
(CA)
in
CA-G.R.
SP
No.
68187.

Vicente and Rebecca were married on April 20, 1979 in Sanctuario de

San Jose, Greenhills, Mandaluyong City. On its face, the Marriage
Certificate[6] identified Rebecca, then 26 years old, to be an American
citizen[7] born in Agaa, Guam, USA to Cesar Tanchiong Makapugay,
American,
and
Helen
Corn
Makapugay,
American.
On November 27, 1982 in San Francisco, California, Rebecca gave birth
to Marie Josephine Alexandra or Alix. From then on, Vicente and
Rebecca's marital relationship seemed to have soured as the latter,
sometime in 1996, initiated divorce proceedings in the Dominican
Republic. Before the Court of the First Instance of the Judicial District of
Santo Domingo, Rebecca personally appeared, while Vicente was duly
represented by counsel. On February 22, 1996, the Dominican court
issued Civil Decree No. 362/96,[8] ordering the dissolution of the
couple's marriage and "leaving them to remarry after completing the
legal requirements," but giving them joint custody and guardianship
over Alix. Over a year later, the same court would issue CivilDecree No.
406/97,[9] settling the couple's property relations pursuant to an
Agreement[10] they executed on December 14, 1996. Said agreement
specifically stated that the "conjugal property which they acquired
during their marriage consist[s] only of the real property and all the
improvements and personal properties therein contained at 502 Acacia
Avenue,
Alabang,
Muntinlupa."[11]
Meanwhile, on March 14, 1996, or less than a month from the issuance

of Civil Decree No. 362/96, Rebecca filed with the Makati City RTC a
petition[12] dated January 26, 1996, with attachments, for declaration of
nullity of marriage, docketed as Civil Case No. 96-378. Rebecca,
however, later moved[13] and secured approval[14] of the motion to
withdraw
the
petition.
On May 29, 1996, Rebecca executed an Affidavit of Acknowledgment[15]
stating under oath that she is an American citizen; that, since 1993, she
and Vicente have been living separately; and that she is carrying a child
not
of
Vicente.
On March 21, 2001, Rebecca filed another petition, this time before the
Muntinlupa City RTC, for declaration of absolute nullity of marriage [16]
on the ground of Vicente's alleged psychological incapacity. Docketed
as Civil Case No. 01-094 and entitled as Maria Rebecca Makapugay
Bayot v. Vicente Madrigal Bayot, the petition was eventually raffled to
Branch 256 of the court. In it, Rebecca also sought the dissolution of
the conjugal partnership of gains with application for support pendente
lite for her and Alix. Rebecca also prayed that Vicente be ordered to pay
a permanent monthly support for their daughter Alix in the amount of
PhP
220,000.

Wherefore, premises considered, the Motion to Dismiss filed by the

respondent is DENIED. Petitioner's Application in Support of the Motion
for Support Pendente Lite is hereby GRANTED. Respondent is hereby
ordered to remit the amount of TWO HUNDRED AND TWENTY
THOUSAND PESOS (Php 220,000.00) a month to Petitioner as support
for the duration of the proceedings relative to the instant Petition.
SO ORDERED.[19]
The RTC declared, among other things, that the divorce judgment
invoked by Vicente as bar to the petition for declaration of absolute
nullity of marriage is a matter of defense best taken up during actual
trial. As to the grant of support pendente lite, the trial court held that a
mere allegation of adultery against Rebecca does not operate to
preclude
her
from
receiving
legal
support.
Following the denial[20] of his motion for reconsideration of the above
August 8, 2001 RTC order, Vicente went to the CA on a petition for
certiorari, with a prayer for the issuance of a temporary restraining
order (TRO) and/or writ of preliminary injunction.[21] His petition was
docketed as CA-G.R. SP No. 68187.

On June 8, 2001, Vicente filed a Motion to Dismiss[17] on, inter alia, the
grounds of lack of cause of action and that the petition is barred by the
prior judgment of divorce. Earlier, on June 5, 2001, Rebecca filed and
moved for the allowance of her application for support pendente lite.

Grant of Writ of Preliminary Injunction by the CA

To the motion to dismiss, Rebecca interposed an opposition, insisting

on her Filipino citizenship, as affirmed by the Department of Justice
(DOJ), and that, therefore, there is no valid divorce to speak of.

On January 9, 2002, the CA issued the desired TRO.[22] On April 30,

2002, the appellate court granted, via a Resolution, the issuance of a
writ of preliminary injunction, the decretal portion of which reads:

Meanwhile, Vicente, who had in the interim contracted another

marriage, and Rebecca commenced several criminal complaints against
each other. Specifically, Vicente filed adultery and perjury complaints
against Rebecca. Rebecca, on the other hand, charged Vicente with
bigamy and concubinage.

IN VIEW OF ALL THE FOREGOING, pending final resolution of the

petition at bar, let the Writ of Preliminary Injunction be ISSUED in this
case, enjoining the respondent court from implementing the assailed
Omnibus Order dated August 8, 2001 and the Order dated November
20, 2001, and from conducting further proceedings in Civil Case No. 01094, upon the posting of an injunction bond in the amount of
P250,000.00.

Ruling
of
the
RTC
on
and Motion for Support Pendente Lite

the

Motion

[18]

to

Dismiss

On August 8, 2001, the RTC issued an Order

denying Vicente's
motion to dismiss Civil Case No. 01-094 and granting Rebecca's
application for support pendente lite, disposing as follows:

SO ORDERED.[23]
Rebecca
moved[24]
but
was
denied
reconsideration
of
the
aforementioned April 30, 2002 resolution. In the meantime, on May
20, 2002, the preliminary injunctive writ[25] was issued. Rebecca also
moved for reconsideration of this issuance, but the CA, by Resolution
dated
September
2,
2002,
denied
her
motion.

The adverted CA resolutions of April 30, 2002 and September 2, 2002

are presently being assailed in Rebecca's petition for certiorari,
docketed under G.R. No. 155635.

Ruling of the CA

having professed to have that nationality status and having made

representations to that effect during momentous events of her life, such
as: (a) during her marriage; (b) when she applied for divorce; and (c)
when she applied for and eventually secured an American passport on
January 18, 1995, or a little over a year before she initiated the first but
later withdrawn petition for nullity of her marriage (Civil Case No. 96378)
on
March
14,
1996.

Pending resolution of G.R. No. 155635, the CA, by a Decision dated

March 25, 2004, effectively dismissed Civil Case No. 01-094, and set
aside incidental orders the RTC issued in relation to the case. The fallo
of the presently assailed CA Decision reads:

(5) Assuming that she had dual citizenship, being born of a purportedly
Filipino father in Guam, USA which follows the jus soli principle,
Rebecca's representation and assertion about being an American citizen
when she secured her foreign divorce precluded her from denying her
citizenship
and
impugning
the
validity
of
the
divorce.

IN VIEW OF THE FOREGOING, the petition is GRANTED. The Omnibus

Order dated August 8, 2001 and the Order dated November 20, 2001
are REVERSED and SET ASIDE and a new one entered DISMISSING Civil
Case No. 01-094, for failure to state a cause of action. No
pronouncement
as
to
costs.

Rebecca seasonably filed a motion for reconsideration of the above

Decision, but this recourse was denied in the equally assailed June 4,
2004 Resolution.[29] Hence, Rebecca's Petition for Review on Certiorari
under Rule 45, docketed under G.R. No. 163979.

SO ORDERED.[26]
To the CA, the RTC ought to have granted Vicente's motion to dismiss
on
the
basis
of
the
following
premises:
(1) As held in China Road and Bridge Corporation v. Court of Appeals,
the hypothetical-admission rule applies in determining whether a
complaint or petition states a cause of action.[27] Applying said rule in
the light of the essential elements of a cause of action,[28] Rebecca had
no cause of action against Vicente for declaration of nullity of marriage.
(2) Rebecca no longer had a legal right in this jurisdiction to have her
marriage with Vicente declared void, the union having previously been
dissolved on February 22, 1996 by the foreign divorce decree she
personally secured as an American citizen. Pursuant to the second
paragraph of Article 26 of the Family Code, such divorce restored
Vicente's
capacity
to
contract
another
marriage.
(3) Rebecca's contention about the nullity of a divorce, she being a
Filipino citizen at the time the foreign divorce decree was rendered, was
dubious. Her allegation as to her alleged Filipino citizenship was also
doubtful as it was not shown that her father, at the time of her birth,
was still a Filipino citizen. The Certification of Birth of Rebecca issued
by the Government of Guam also did not indicate the nationality of her
father.
(4) Rebecca was estopped from denying her American citizenship,

The Issues

In G.R. No. 155635, Rebecca raises four (4) assignments of errors as

grounds for the allowance of her petition, all of which converged on the
proposition that the CA erred in enjoining the implementation of the
RTC's orders which would have entitled her to support pending final
resolution
of
Civil
Case
No.
01-094.
In G.R. No. 163979, Rebecca urges the reversal of the assailed CA
decision submitting as follows:
I

THE COURT OF APPEALS GRAVELY ERRED IN NOT MENTIONING AND

NOT TAKING INTO CONSIDERATION IN ITS APPRECIATION OF THE
FACTS THE FACT OF PETITIONER'S FILIPINO CITIZENSHIP AS
CATEGORICALLY STATED AND ALLEGED IN HER PETITION BEFORE THE
COURT A QUO.
II

THE COURT OF APPEALS GRAVELY ERRED IN RELYING ONLY ON

ANNEXES TO THE PETITION IN RESOLVING THE MATTERS BROUGHT
BEFORE IT.

III

Rebecca an American Citizen in the Purview of This Case

THE COURT OF APPEALS GRAVELY ERRED IN FAILING TO CONSIDER

THAT RESPONDENT IS ESTOPPED FROM CLAIMING THAT HIS MARRIAGE
TO PETITIONER HAD ALREADY BEEN DISSOLVED BY VIRTUE OF HIS
SUBSEQUENT AND CONCURRENT ACTS.

There can be no serious dispute that Rebecca, at the time she applied
for and obtained her divorce from Vicente, was an American citizen and
remains to be one, absent proof of an effective repudiation of such
citizenship. The following are compelling circumstances indicative of
her American citizenship: (1) she was born in Agaa, Guam, USA; (2)
the principle of jus soli is followed in this American territory granting
American citizenship to those who are born there; and (3) she was, and
may
still
be,
a
holder
of
an
American
passport.[33]

IV

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THERE WAS

ABUSE OF DISCRETION ON THE PART OF THE TRIAL COURT, MUCH LESS
A GRAVE ABUSE.[30]
We shall first address the petition in G.R. No. 163979, its outcome being
determinative of the success or failure of the petition in G.R. No.
155635.
Three legal premises need to be underscored at the outset. First, a
divorce obtained abroad by an alien married to a Philippine national
may be recognized in the Philippines, provided the decree of divorce is
valid according to the national law of the foreigner.[31]Second, the
reckoning point is not the citizenship of the divorcing parties at birth or
at the time of marriage, but their citizenship at the time a valid divorce
is obtained abroad. And third, an absolute divorce secured by a Filipino
married to another Filipino is contrary to our concept of public policy
and morality and shall not be recognized in this jurisdiction. [32]
Given the foregoing perspective, the determinative issue tendered in
G.R. No. 155635, i.e., the propriety of the granting of the motion to
dismiss by the appellate court, resolves itself into the questions of:
first, whether petitioner Rebecca was a Filipino citizen at the time the
divorce judgment was rendered in the Dominican Republic on February
22, 1996; and second, whether the judgment of divorce is valid and, if
so, what are its consequent legal effects?

The Court's Ruling

The petition is bereft of merit.

And as aptly found by the CA, Rebecca had consistently professed,

asserted, and represented herself as an American citizen, particularly:
(1) during her marriage as shown in the marriage certificate; (2) in the
birth certificate of Alix; and (3) when she secured the divorce from the
Dominican Republic. Mention may be made of the Affidavit of
Acknowledgment[34] in which she stated being an American citizen.
It is true that Rebecca had been issued by the Bureau of Immigration
(Bureau) of Identification (ID) Certificate No. RC 9778 and a Philippine
Passport. On its face, ID Certificate No. RC 9778 would tend to show
that she has indeed been recognized as a Filipino citizen. It cannot be
over-emphasized, however, that such recognition was given only on
June 8, 2000 upon the affirmation by the Secretary of Justice of
Rebecca's recognition pursuant to the Order of Recognition issued by
Bureau
Associate
Commissioner
Edgar
L.
Mendoza.
For clarity, we reproduce in full the contents of ID Certificate No. RC
9778:
To

Whom

It

May

Concern:

This is to certify that *MARIA REBECCA MAKAPUGAY BAYOT* whose

photograph and thumbprints are affixed hereto and partially covered by
the seal of this Office, and whose other particulars are as follows:
Place of Birth:
Guam, USA
Date of Birth:
March 5, 1953
Sex:
female
Civil Status:
married
Color of Hair:
brown
Color of Eyes: brown Distinguishing marks on face: none

was - r e c o g n i z e d - as a citizen of the Philippines as per pursuant

to Article IV, Section 1, Paragraph 3 of the 1935 Constitution per order
of Recognition JBL 95-213 signed by Associate Commissioner Jose B.

Lopez dated October 6, 1995, and duly affirmed by Secretary of Justice

Artemio G. Tuquero in his 1st Indorsement dated June 8, 2000.
Issued for identification purposes only. NOT VALID for travel purposes.
Given under my hand and seal this 11th day of October, 1995

(SGD)
EDGAR
ASSO. COMMISSIONER

L.

MENDOZA

Official Receipt No. 5939988

issued
dated Oct. 10, 1995 for P 2,000

at

Manila

From the text of ID Certificate No. RC 9778, the following material facts
and dates may be deduced: (1) Bureau Associate Commissioner Jose B.
Lopez issued the Order of Recognition on October 6, 1995; (2) the 1st
Indorsement of Secretary of Justice Artemio G. Tuquero affirming
Rebecca's recognition as a Filipino citizen was issued on June 8, 2000
or almost five years from the date of the order of recognition; and (3)
ID Certificate No. RC 9778 was purportedly issued on October 11, 1995
after the payment of the PhP 2,000 fee on October 10, 1995 per OR No.
5939988.
What begs the question is, however, how the above certificate could
have been issued by the Bureau on October 11, 1995 when the
Secretary of Justice issued the required affirmation only on June 8,
2000. No explanation was given for this patent aberration. There
seems to be no error with the date of the issuance of the 1 st
Indorsement by Secretary of Justice Tuquero as this Court takes judicial
notice that he was the Secretary of Justice from February 16, 2000 to
January 22, 2001. There is, thus, a strong valid reason to conclude that
the
certificate
in
question
must
be
spurious.
Under extant immigration rules, applications for recognition of Filipino
citizenship require the affirmation by the DOJ of the Order of
Recognition issued by the Bureau. Under Executive Order No. 292, also
known as the 1987 Administrative Code, specifically in its Title III,
Chapter 1, Sec. 3(6), it is the DOJ which is tasked to "provide
immigration and naturalization regulatory services and implement the
laws governing citizenship and the admission and stay of aliens." Thus,
the confirmation by the DOJ of any Order of Recognition for Filipino

citizenship

issued

by

the

Bureau

is

required.

Pertinently, Bureau Law Instruction No. RBR-99-002[35] on Recognition

as a Filipino Citizen clearly provides:
The Bureau [of Immigration] through its Records Section shall
automatically furnish the Department of Justice an official copy of its
Order of Recognition within 72 days from its date of approval by the
way of indorsement for confirmation of the Order by the Secretary of
Justice pursuant to Executive Order No. 292. No Identification
Certificate shall be issued before the date of confirmation by the
Secretary of Justice and any Identification Certificate issued by the
Bureau pursuant to an Order of Recognition shall prominently indicate
thereon the date of confirmation by the Secretary of Justice. (Emphasis
ours.)
Not lost on the Court is the acquisition by Rebecca of her Philippine
passport only on June 13, 2000, or five days after then Secretary of
Justice Tuquero issued the 1st Indorsement confirming the order of
recognition. It may be too much to attribute to coincidence this
unusual sequence of close events which, to us, clearly suggests that
prior to said affirmation or confirmation, Rebecca was not yet
recognized as a Filipino citizen. The same sequence would also imply
that ID Certificate No. RC 9778 could not have been issued in 1995, as
Bureau Law Instruction No. RBR-99-002 mandates that no identification
certificate shall be issued before the date of confirmation by the
Secretary of Justice.
Logically, therefore, the affirmation or
confirmation of Rebecca's recognition as a Filipino citizen through the
1st Indorsement issued only on June 8, 2000 by Secretary of Justice
Tuquero corresponds to the eventual issuance of Rebecca's passport a
few days later, or on June 13, 2000 to be exact.

When
Divorce
Was
Granted
Rebecca,
She
Filipino Citizen and Was not Yet Recognized as One

Was

not

The Court can assume hypothetically that Rebecca is now a Filipino

citizen. But from the foregoing disquisition, it is indubitable that
Rebecca did not have that status of, or at least was not yet recognized
as, a Filipino citizen when she secured the February 22, 1996 judgment
of
divorce
from
the
Dominican
Republic.
The Court notes and at this juncture wishes to point out that Rebecca
voluntarily withdrew her original petition for declaration of nullity (Civil
Case No. 96-378 of the Makati City RTC) obviously because she could

not show proof of her alleged Filipino citizenship then. In fact, a perusal
of that petition shows that, while bearing the date January 26, 1996, it
was only filed with the RTC on March 14, 1996 or less than a month
after Rebecca secured, on February 22, 1996, the foreign divorce decree
in question. Consequently, there was no mention about said divorce in
the petition. Significantly, the only documents appended as annexes to
said original petition were: the Vicente-Rebecca Marriage Contract
(Annex "A") and Birth Certificate of Alix (Annex "B"). If indeed ID
Certificate No. RC 9778 from the Bureau was truly issued on October
11, 1995, is it not but logical to expect that this piece of document be
appended to form part of the petition, the question of her citizenship
being
crucial
to
her
case?
As may be noted, the petition for declaration of absolute nullity of
marriage under Civil Case No. 01-094, like the withdrawn first petition,
also did not have the ID Certificate from the Bureau as attachment.
What were attached consisted of the following material documents:
Marriage Contract (Annex "A") and Divorce Decree. It was only through
her Opposition (To Respondent's Motion to Dismiss dated 31 May
2001)[36] did Rebecca attach as Annex "C" ID Certificate No. RC 9778.
At any rate, the CA was correct in holding that the RTC had sufficient
basis to dismiss the petition for declaration of absolute nullity of
marriage as said petition, taken together with Vicente's motion to
dismiss and Rebecca's opposition to motion, with their respective
attachments, clearly made out a case of lack of cause of action, which
we will expound later.

Validity of Divorce Decree

Going to the second core issue, we find Civil Decree Nos. 362/96 and
406/97
valid.
First, at the time of the divorce, as above elucidated, Rebecca was still
to be recognized, assuming for argument that she was in fact later
recognized, as a Filipino citizen, but represented herself in public
documents as an American citizen. At the very least, she chose, before,
during, and shortly after her divorce, her American citizenship to
govern her marital relationship. Second, she secured personally said
divorce as an American citizen, as is evident in the text of the Civil
Decrees, which pertinently declared:
IN THIS ACTION FOR DIVORCE in which the parties expressly submit to
the jurisdiction of this court, by reason of the existing incompatibility of
temperaments x x x. The parties MARIA REBECCA M. BAYOT, of United

States nationality, 42 years of age, married, domiciled and residing at

502 Acacia Ave., Ayala Alabang, Muntin Lupa, Philippines, x x x, who
personally appeared before this court, accompanied by DR. JUAN
ESTEBAN OLIVERO, attorney, x x x and VICENTE MADRIGAL BAYOT, of
Philippine nationality, of 43 years of age, married and domiciled and
residing at 502 Acacia Ave., Ayala Alabang, Muntin Lupa, Filipino,
appeared before this court represented by DR. ALEJANDRO TORRENS,
attorney, x x x, revalidated by special power of attorney given the 19th
of February of 1996, signed before the Notary Public Enrico L. Espanol
of the City of Manila, duly legalized and authorizing him to subscribe all
the acts concerning this case.[37] (Emphasis ours.)
Third, being an American citizen, Rebecca was bound by the national
laws of the United States of America, a country which allows divorce.
Fourth, the property relations of Vicente and Rebecca were properly
adjudicated through their Agreement[38] executed on December 14,
1996 after Civil Decree No. 362/96 was rendered on February 22, 1996,
and duly affirmed by Civil Decree No. 406/97 issued on March 4, 1997.
Veritably, the foreign divorce secured by Rebecca was valid.
To be sure, the Court has taken stock of the holding in Garcia v. Recio
that a foreign divorce can be recognized here, provided the divorce
decree is proven as a fact and as valid under the national law of the
alien spouse.[39] Be this as it may, the fact that Rebecca was clearly an
American citizen when she secured the divorce and that divorce is
recognized and allowed in any of the States of the Union,[40] the
presentation of a copy of foreign divorce decree duly authenticated by
the foreign court issuing said decree is, as here, sufficient.
It bears to stress that the existence of the divorce decree has not been
denied, but in fact admitted by both parties. And neither did they
impeach the jurisdiction of the divorce court nor challenge the validity
of its proceedings on the ground of collusion, fraud, or clear mistake of
fact or law, albeit both appeared to have the opportunity to do so. The
same holds true with respect to the decree of partition of their conjugal
property. As this Court explained in Roehr v. Rodriguez:
Before our courts can give the effect of res judicata to a foreign
judgment [of divorce] x x x, it must be shown that the parties opposed
to the judgment had been given ample opportunity to do so on grounds
allowed under Rule 39, Section 50 of the Rules of Court (now Rule 39,
Section 48, 1997 Rules of Civil Procedure), to wit:
SEC. 50. Effect of foreign judgments.The effect of a judgment of a
tribunal of a foreign country, having jurisdiction to pronounce the
judgment
is
as
follows:

(a) In case of a judgment upon a specific thing, the judgment is

conclusive
upon
the
title
to
the
thing;
(b) In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title; but the judgment may be
repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.

Consequent to the dissolution of the marriage, Vicente could no longer

be subject to a husband's obligation under the Civil Code. He cannot,
for instance, be obliged to live with, observe respect and fidelity, and
render
support
to
Rebecca.[44]
The divorce decree in question also brings into play the second
paragraph of Art. 26 of the Family Code, providing as follows:

It is essential that there should be an opportunity to challenge the

foreign judgment, in order for the court in this jurisdiction to properly
determine its efficacy. In this jurisdiction, our Rules of Court clearly
provide that with respect to actions in personam, as distinguished from
actions in rem, a foreign judgment merely constitutes prima facie
evidence of the justness of the claim of a party and, as such, is subject
to proof to the contrary.[41]

Art.

As the records show, Rebecca, assisted by counsel, personally secured

the foreign divorce while Vicente was duly represented by his counsel, a
certain Dr. Alejandro Torrens, in said proceedings. As things stand, the
foreign divorce decrees rendered and issued by the Dominican Republic
court are valid and, consequently, bind both Rebecca and Vicente.

In Republic v. Orbecido III, we spelled out the twin elements for the
applicability of the second paragraph of Art. 26, thus:

Finally, the fact that Rebecca may have been duly recognized as a
Filipino citizen by force of the June 8, 2000 affirmation by Secretary of
Justice Tuquero of the October 6, 1995 Bureau Order of Recognition will
not, standing alone, work to nullify or invalidate the foreign divorce
secured by Rebecca as an American citizen on February 22, 1996. For as
we stressed at the outset, in determining whether or not a divorce
secured abroad would come within the pale of the country's policy
against absolute divorce, the reckoning point is the citizenship of the
parties at the time a valid divorce is obtained.[42]

Legal Effects of the Valid Divorce

Given the validity and efficacy of divorce secured by Rebecca, the same
shall be given a res judicata effect in this jurisdiction. As an obvious
result of the divorce decree obtained, the marital vinculum between
Rebecca and Vicente is considered severed; they are both freed from
the bond of matrimony. In plain language, Vicente and Rebecca are no
longer husband and wife to each other. As the divorce court formally
pronounced: "[T]hat the marriage between MARIA REBECCA M. BAYOT
and VICENTE MADRIGAL BAYOT is hereby dissolved x x xleaving them
free to remarry after completing the legal requirements."[43]

26.

Where a marriage between a Filipino citizen and a foreigner is validly

celebrated and a divorce is thereafter validly obtained abroad by the
alien spouse capacitating him or her to remarry, the Filipino spouse
shall likewise have capacity to remarry under Philippine law. (As
amended by E.O. 227)

x x x [W]e state the twin elements for the application of Paragraph 2 of

Article 26 as follows:
1. There is a valid marriage that has been celebrated between a
Filipino citizen and a foreigner; and
2. A valid divorce is obtained abroad by the alien spouse
capacitating him or her to remarry.
The reckoning point is not the citizenship of the parties at the time of
the celebration of the marriage, but their citizenship at the time a valid
divorce is obtained abroad by the alien spouse capacitating the latter to
remarry.[45]
Both elements obtain in the instant case. We need not belabor further
the fact of marriage of Vicente and Rebecca, their citizenship when they
wed, and their professed citizenship during the valid divorce
proceedings.
Not to be overlooked of course is the fact that Civil Decree No. 406/97
and the Agreement executed on December 14, 1996 bind both Rebecca
and Vicente as regards their property relations. The Agreement
provided that the ex-couple's conjugal property consisted only their
family home, thus:

9. That the parties stipulate that the conjugal property which they
acquired during their marriage consists only of the real property
and all the improvements and personal properties therein
contained at 502 Acacia Avenue, Ayala Alabang, Muntinlupa,
covered by TCT No. 168301 dated Feb. 7, 1990 issued by the
Register of Deeds of Makati, Metro Manila registered in the name
of Vicente M. Bayot, married to Rebecca M. Bayot, x x x.[46]
(Emphasis ours.)
This property settlement embodied in the Agreement was affirmed by
the divorce court which, per its second divorce decree, Civil Decree No.
406/97 dated March 4, 1997, ordered that, "THIRD: That the
agreement entered into between the parties dated 14th day of
December 1996 in Makati City, Philippines shall survive in this
Judgment of divorce by reference but not merged and that the parties
are hereby ordered and directed to comply with each and every
provision
of
said
agreement."[47]
Rebecca has not repudiated the property settlement contained in the
Agreement. She is thus estopped by her representation before the
divorce court from asserting that her and Vicente's conjugal property
was not limited to their family home in Ayala Alabang.[48]
No Cause of Action in the Petition for Nullity of Marriage

Upon the foregoing disquisitions, it is abundantly clear to the Court that

Rebecca lacks, under the premises, cause of action. Philippine Bank of
Communications v. Trazo explains the concept and elements of a cause
of action, thus:
A cause of action is an act or omission of one party in violation of the
legal right of the other. A motion to dismiss based on lack of cause of
action hypothetically admits the truth of the allegations in the
complaint. The allegations in a complaint are sufficient to constitute a
cause of action against the defendants if, hypothetically admitting the
facts alleged, the court can render a valid judgment upon the same in
accordance with the prayer therein. A cause of action exists if the
following elements are present, namely: (1) a right in favor of the
plaintiff by whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named defendant to
respect or not to violate such right; and (3) an act or omission on the
part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff
for which the latter may maintain an action for recovery of damages.[49]

One thing is clear from a perusal of Rebecca's underlying petition

before the RTC, Vicente's motion to dismiss and Rebecca's opposition
thereof, with the documentary evidence attached therein: The
petitioner lacks a cause of action for declaration of nullity of marriage, a
suit
which
presupposes
the
existence
of
a
marriage.
To sustain a motion to dismiss for lack of cause of action, the movant
must show that the claim for relief does not exist rather than that a
claim has been defectively stated or is ambiguous, indefinite, or
uncertain.[50] With the valid foreign divorce secured by Rebecca, there
is no more marital tie binding her to Vicente. There is in fine no more
marriage
to
be
dissolved
or
nullified.
The Court to be sure does not lose sight of the legal obligation of
Vicente and Rebecca to support the needs of their daughter, Alix. The
records do not clearly show how he had discharged his duty, albeit
Rebecca alleged that the support given had been insufficient. At any
rate, we do note that Alix, having been born on November 27, 1982,
reached the majority age on November 27, 2000, or four months before
her mother initiated her petition for declaration of nullity. She would
now be 26 years old. Hence, the issue of back support, which allegedly
had been partly shouldered by Rebecca, is best litigated in a separate
civil action for reimbursement. In this way, the actual figure for the
support of Alix can be proved as well as the earning capacity of both
Vicente and Rebecca. The trial court can thus determine what Vicente
owes, if any, considering that support includes provisions until the child
concerned
shall
have
finished
her
education.
Upon the foregoing considerations, the Court no longer need to delve
into the issue tendered in G.R. No. 155635, that is, Rebecca's right to
support pendente lite. As it were, her entitlement to that kind of
support hinges on the tenability of her petition under Civil Case No. 01094 for declaration of nullity of marriage. The dismissal of Civil Case No.
01-094 by the CA veritably removed any legal anchorage for, and
effectively
mooted,
the
claim
for
support
pendente
lite.
WHEREFORE, the petition for certiorari in G.R. No. 155635 is hereby
DISMISSED on the ground of mootness, while the petition for review in
G.R. No. 163979 is hereby DENIED for lack of merit. Accordingly, the
March 25, 2004 Decision and June 4, 2004 Resolution of the CA in CAG.R. SP No. 68187 are hereby AFFIRMED. Costs against petitioner.
SO

ORDERED.

Quisumbing, (Chairperson), Carpio-Morales, Tinga, and Brion, JJ.,

concur.

10. Rep Vs. Orbecido

In view of the foregoing, we state the twin elements for the application
of Paragraph 2 of Article 26 as follows:

Rep. v. Orbecido G.R. No. 154380 / Oct. 05, 2005 472 SCRA 114

There is a valid marriage that has been celebrated between a Filipino

citizen and a foreigner; and

FACTS: On May 24, 1981, Cipriano Orbecido III married Lady Myros M.
Villanueva. Their marriage was blessed with a son and a daughter. In
1986, Cipriano's wife left for the United States bringing along their son
Kristoffer. A few years later, Cipriano discovered that his wife had been
naturalized as an American citizen.Sometime in 2000, Cipriano learned
from his son that his wife had obtained a divorce decree and then
married a certain Innocent Stanley. Cipriano thereafter filed with the
trial court a petition for authority to remarry invoking Paragraph 2 of
Article 26 of the Family Code.

A valid divorce is obtained abroad by the alien spouse capacitating him

or her to remarry.

HELD: The jurisprudential answer lies latent in the 1998 case of Quita v.
Court of Appeals. In Quita, the parties were, as in this case, Filipino
citizens when they got married. The wife became a naturalized
American citizen in 1954 and obtained a divorce in the same year. The
Court therein hinted, by way of obiter dictum, that a Filipino divorced by
his naturalized foreign spouse is no longer married under Philippine law
and
can
thus
remarry.
Thus, taking into consideration the legislative intent and applying the
rule of reason, we hold that Paragraph 2 of Article 26 should be
interpreted to include cases involving parties who, at the time of the
celebration of the marriage were Filipino citizens, but later on, one of
them becomes naturalized as a foreign citizen and obtains a divorce
decree. The Filipino spouse should likewise be allowed to remarry as if
the other party were a foreigner at the time of the solemnization of the
marriage. To rule otherwise would be to sanction absurdity and
injustice. Where the interpretation of a statute according to its exact
and literal import would lead to mischievous results or contravene the
clear purpose of the legislature, it should be construed according to its
spirit and reason, disregarding as far as necessary the letter of the law.
A statute may therefore be extended to cases not within the literal
meaning of its terms, so long as they come within its spirit or intent. [12]
If we are to give meaning to the legislative intent to avoid the absurd
situation where the Filipino spouse remains married to the alien spouse
who, after obtaining a divorce is no longer married to the Filipino
spouse, then the instant case must be deemed as coming within the
contemplation
of
Paragraph
2
of
Article
26.

The reckoning point is not the citizenship of the parties at the time of
the celebration of the marriage, but their citizenship at the time a valid
divorce is obtained abroad by the alien spouse capacitating the latter to
remarry.
In this case, when Cipriano's wife was naturalized as an American
citizen, there was still a valid marriage that has been celebrated
between her and Cipriano. As fate would have it, the naturalized alien
wife subsequently obtained a valid divorce capacitating her to remarry.
Clearly, the twin requisites for the application of Paragraph 2 of Article
26 are both present in this case. Thus Cipriano, the "divorced" Filipino
spouse,
should
be
allowed
to
remarry.
x
x
x
However, we note that the records are bereft of competent evidence
duly submitted by respondent concerning the divorce decree and the
naturalization of respondent's wife. It is settled rule that one who
alleges a fact has the burden of proving it and mere allegation is not
evidence.
Accordingly, for his plea to prosper, respondent herein must prove his
allegation that his wife was naturalized as an American citizen.
Likewise, before a foreign divorce decree can be recognized by our own
courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it. Such foreign
law must also be proved as our courts cannot take judicial notice of
foreign laws. Like any other fact, such laws must be alleged and proved.
Furthermore, respondent must also show that the divorce decree allows
his former wife to remarry as specifically required in Article 26.
Otherwise, there would be no evidence sufficient to declare that he is
capacitated
to
enter
into
another
marriage.
Nevertheless, we are unanimous in our holding that Paragraph 2 of
Article 26 of the Family Code (E.O. No. 209, as amended by E.O. No.
227), should be interpreted to allow a Filipino citizen, who has been
divorced by a spouse who had acquired foreign citizenship and
remarried, also to remarry. However, considering that in the present
petition there is no sufficient evidence submitted and on record, we are

unable to declare, based on respondent's bare allegations that his wife,

who was naturalized as an American citizen, had obtained a divorce
decree and had remarried an American, that respondent is now
capacitated to remarry. Such declaration could only be made properly
upon respondent's submission of the aforecited evidence in his favor.
ACCORDINGLY, the petition by the Republic of the Philippines is
GRANTED. The assailed Decision dated May 15, 2002, and Resolution
dated July 4, 2002, of the Regional Trial Court of Molave, Zamboanga
del
Sur,
Branch
23,
are
hereby
SET
ASIDE.

Catalan v. Catalan G.R. No. 183622 / Feb. 08, 2012 665 SCRA 487

FACTS: Orlando B. Catalan was a naturalized American citizen. After

allegedly obtaining a divorce in the United States from his first wife,
Felicitas Amor, he contracted a second marriage with petitioner herein.
Orlando died intestate in the Philippines, thereafter, petitioner filed
with the Regional Trial Court (RTC) of Dagupan City a Petition for the
issuance of letters of administration for her appointment as
administratrix of the intestate estate of Orlando, while Spec. Proc. No.
228 was pending, respondent Louella A. Catalan-Lee, one of the
children of Orlando from his first marriage, filed a similar petition with
the RTC docketed as Spec. Proc. No. 232.

HELD: It is true that owing to the nationality principle embodied in

Article 15 of the Civil Code, only Philippine nationals are covered by the
policy against absolute divorces[,] the same being considered contrary
to our concept of public policy and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. In this case, the divorce
in Nevada released private respondent from the marriage from the
standards of American law, under which divorce dissolves the marriage.
x
x
x
x
x
It appears that the trial court no longer required petitioner to prove the
validity of Orlando's divorce under the laws of the United States and the
marriage between petitioner and the deceased. Thus, there is a need to
remand the proceedings to the trial court for further reception of
evidence
to
establish
the
fact
of
divorce.
Should petitioner prove the validity of the divorce and the subsequent
marriage, she has the preferential right to be issued the letters of

administration over the estate. Otherwise, letters of administration may

be issued to respondent, who is undisputedly the daughter or next of
kin of the deceased, in accordance with Sec. 6 of Rule 78 of the Revised
Rules
of
Court.
x
x
x
x
Thus, it is imperative for the trial court to first determine the validity of
the divorce to ascertain the rightful party to be issued the letters of
administration
over
the
estate
of
Orlando
B.
Catalan.
WHEREFORE, premises considered, the Petition is hereby PARTIALLY
GRANTED. The Decision dated 18 October 2007 and the Resolution
dated 20 June 2008 of the Court of Appeals are hereby REVERSED and
SET ASIDE. Let this case be REMANDED to Branch 70 of the Regional
Trial Court of Burgos, Pangasinan for further proceedings in accordance
with this Decision.
RA 9262- Law on Violation against Women and their Children; Support;
Art. 213 FC

FACTS:On April 18, 1999, Sharica Mari L. Go-Tan (petitioner) and

Steven L. Tan (Steven) were married. Out of this union, two female
children were born. On January 12, 2005, barely six years into the
marriage, petitioner filed a Petition with Prayer for the Issuance of a
TemporaryProtective Order (TPO) against Steven and her parents-inlaw, Spouses Perfecto C. Tan and Juanita L. Tan (respondents) before
the RTC. She alleged that Steven, in conspiracy with respondents, were
causing verbal, psychological and economic abuses upon her in
violation of Section 5, paragraphs (e)(2)(3)(4), (h)(5), and (i) of
Republic Act (R.A.) No. 9262, otherwise known as the "Anti-Violence
Against Women and Their Children Act of 2004."RTC granted
petitioner's
prayer
for
a
TPO.
Respondents filed a Motion to Dismiss with Opposition to the Issuance
of Permanent ProtectionOrder Ad Cautelam and Comment on the
Petition,contending that the RTC lacked jurisdiction over their persons
since, as parents-in-law of the petitioner, they were not covered by
R.A. No. 9262. The RTC dismissed the case and decidedunder the wellknown rule of law "expressio unius est exclusio alterius."

ISSUE: WHETHER OR NOT RESPONDENTS-SPOUSES PERFECTO &

JUANITA, PARENTS-IN-LAW OF SHARICA, MAY BE INCLUDED IN THE
PETITION FOR THE ISSUANCE OF A PROTECTIVE ORDER, IN

ACCORDANCE WITH REPUBLIC ACT NO. 9262, OTHERWISE KNOWN AS

THE "ANTI-VIOLENCE AGAINST WOMEN AND THEIR CHILDREN ACT OF
2004".

Irish by cellphone message the picture with her face pasted on the body
of a nude woman, inflicting anguish, psychological distress, and
humiliation on her in violation of Section 5(h) of R.A. 9262.
The

HELD:

The

Court

rules

in

favor

of

the

petitioner.

Section 3 of R.A. No. 9262 defines ''[v]iolence against women and their
children'' as "any act or a series of acts committed by any person
against a woman who is his wife, former wife, or against a woman with
whom the person has or had a sexual or dating relationship, or with
whom he has a common child, or against her child whether legitimate
or illegitimate, within or without the family abode, which result in or is
likely to result in physical, sexual, psychological harm or suffering, or
economic abuse including threats of such acts, battery, assault,
coercion,
harassment
or
arbitrary
deprivation
of
liberty."
While the said provision provides that the offender be related or
connected to the victim by marriage, former marriage, or a sexual or
dating relationship, it does not preclude the application of the principle
of
conspiracy
under
the
RPC.
Indeed, Section 47 of R.A. No. 9262 expressly provides for the
suppletory application of the RPC xxx Hence, legal principles developed
from the Penal Code may be applied in a supplementary capacity to
crimes punished under special laws, such as R.A. No. 9262, in which the
special
law
is
silent
on
a
particular
matter.
It must be further noted that Section 5 of R.A. No. 9262 expressly
recognizes that the acts of violence against women and their children
may be committed by an offender through another,
Finally, Section 4 of R.A. No. 9262 calls for a liberal construction of the
law

Ang v. CA/ Sagud G.R. No.182835 / Apr. 20, 2010 618 SCRA 592

The Issues Presented

The principal issue in this case is whether or not accused Rustan sent

subordinate

issues

are:

1. Whether or not a "dating relationship" existed between Rustan and

Irish
as
this
term
is
defined
in
R.A.
9262;
2. Whether or not a single act of harassment, like the sending of the
nude picture in this case, already constitutes a violation of Section 5(h)
of
R.A.
9262;
3. Whether or not the evidence used to convict Rustan was obtained
from
him
in
violation
of
his
constitutional
rights;
and
4. Whether or not the RTC properly admitted in evidence the obscene
picture presented in the case.
The Court's Rulings

Section 3(a) of R.A. 9262 provides that violence against women

includes an act or acts of a person against a woman with whom he has
or had a sexual or dating relationship. Thus:
SEC.

3.

Definition

of

Terms.

As

used

in

this

Act,

(a) "Violence against women and their children" refers to any act or a
series of acts committed by any person against a woman who is his
wife, former wife, or against a woman with whom the person has or had
a sexual or dating relationship, or with whom he has a common child, or
against her child whether legitimate or illegitimate, within or without
the family abode, which result in or is likely to result in physical, sexual,
psychological harm or suffering, or economic abuse including threats of
such acts, battery, assault, coercion, harassment or arbitrary
deprivation
of
liberty.
xxxx

Section 5 identifies the act or acts that constitute violence against

women and these include any form of harassment that causes
substantial emotional or psychological distress to a woman. Thus:

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

Comprehensive Dictionary Encyclopedia Edition which provides a

colloquial or informal meaning to the word "romance" used as a verb,
i.e., "to make love; to make love to" as in "He romanced her."

But it seems clear that the law did not use in its provisions the
colloquial verb "romance" that implies a sexual act. It did not say that
the offender must have "romanced" the offended woman. Rather, it
used the noun "romance" to describe a couple's relationship, i.e., "a
love
affair."

h. Engaging in purposeful, knowing, or reckless conduct, personally or

through another, that alarms or causes substantial emotional or
psychological distress to the woman or her child. This shall include, but
not
be
limited
to,
the
following
acts:
x

5. Engaging in any form of harassment or violence;

The above provisions, taken together, indicate that the elements of the
crime of violence against women through harassment are:
1. The offender has or had a sexual or dating relationship with the
offended
woman;
2. The offender, by himself or through another, commits an act or series
of
acts
of
harassment
against
the
woman;
and
3. The harassment alarms
psychological distress to her.

or

causes

substantial

emotional

or

One. The parties to this case agree that the prosecution needed to
prove that accused Rustan had a "dating relationship" with Irish.
Section 3(e) provides that a "dating relationship" includes a situation
where the parties are romantically involved over time and on a
continuing basis during the course of the relationship. Thus:
(e) "Dating relationship" refers to a situation wherein the parties live
as husband and wife without the benefit of marriage or are romantically
involved over time and on a continuing basis during the course of the
relationship. A casual acquaintance or ordinary socialization between
two individuals in a business or social context is not a dating
relationship.

Here, Rustan claims that, being "romantically involved," implies that

the offender and the offended woman have or had sexual relations.
According to him, "romance" implies a sexual act. He cites Webster's

R.A. 9262 provides in Section 3 that "violence against women x x x

refers to any act or a series of acts committed by any person against a
woman x x x with whom the person has or had a sexual or dating
relationship." Clearly, the law itself distinguishes a sexual relationship
from a dating relationship. Indeed, Section 3(e) above defines "dating
relationship" while Section 3(f) defines "sexual relations." The latter
"refers to a single sexual act which may or may not result in the
bearing of a common child." The dating relationship that the law
contemplates can, therefore, exist even without a sexual intercourse
taking
place
between
those
involved.
Rustan also claims that since the relationship between Irish and him
was of the "on-and-off" variety (away-bati), their romance cannot be
regarded as having developed "over time and on a continuing basis."
But the two of them were romantically involved, as Rustan himself
admits, from October to December of 2003. That would be time enough
for
nurturing
a
relationship
of
mutual
trust
and
love.
An "away-bati" or a fight-and-kiss thing between two lovers is a
common occurrence. Their taking place does not mean that the
romantic relation between the two should be deemed broken up during
periods of misunderstanding. Explaining what "away-bati" meant, Irish
explained that at times, when she could not reply to Rustan's messages,
he would get angry at her. That was all.Indeed, she characterized their
three-month
romantic
relation
as
continuous.
Two. Rustan argues that the one act of sending an offensive picture
should not be considered a form of harassment. He claims that such
would unduly ruin him personally and set a very dangerous precedent.
But Section 3(a) of R.A. 9262 punishes "any act or series of acts" that
constitutes violence against women. This means that a single act of
harassment, which translates into violence, would be enough. The
object of the law is to protect women and children. Punishing only
violence that is repeatedly committed would license isolated ones.
Rustan alleges that today's women, like Irish, are so used to obscene
communications that her getting one could not possibly have produced

alarm in her or caused her substantial emotional or psychological

distress. He claims having previously exchanged obscene pictures with
Irish
such
that
she
was
already
desensitized
by
them.
But, firstly, the RTC which saw and heard Rustan and his wife give their
testimonies was not impressed with their claim that it was Irish who
sent the obscene pictures of herself (Exhibits 2-7). It is doubtful if the
woman in the picture was Irish since her face did not clearly show on
them.
Michelle, Rustan's wife, claimed that she deleted several other pictures
that Irish sent, except Exhibits 2 to 7. But her testimony did not make
sense. She said that she did not know that Exhibits 2 to 7 had remained
saved after she deleted the pictures. Later, however, she said that she
did not have time to delete them. And, if she thought that she had
deleted all the pictures from the memory card, then she had no reason
at all to keep and hide such memory card. There would have been
nothing to hide. Finally, if she knew that some pictures remained in the
card, there was no reason for her to keep it for several years, given that
as she said she was too jealous to want to see anything connected to
Irish. Thus, the RTC was correct in not giving credence to her
testimony.
Secondly, the Court cannot measure the trauma that Irish experienced
based on Rustan's low regard for the alleged moral sensibilities of
today's youth. What is obscene and injurious to an offended woman can
of course only be determined based on the circumstances of each case.
Here, the naked woman on the picture, her legs spread open and
bearing Irish's head and face, was clearly an obscene picture and, to
Irish a revolting and offensive one. Surely, any woman like Irish, who is
not in the pornography trade, would be scandalized and pained if she
sees herself in such a picture. What makes it further terrifying is that,
as Irish testified, Rustan sent the picture with a threat to post it in the
internet for all to see. That must have given her a nightmare.
Three. Rustan argues that, since he was arrested and certain items
were seized from him without any warrant, the evidence presented
against him should be deemed inadmissible. But the fact is that the
prosecution did not present in evidence either the cellphone or the SIM
cards that the police officers seized from him at the time of his arrest.
The prosecution did not need such items to prove its case.xxx

But, firstly, Rustan is raising this objection to the admissibility of the

obscene picture, Exhibit A, for the first time before this Court. The
objection is too late since he should have objected to the admission of
the picture on such ground at the time it was offered in evidence. He
should be deemed to have already waived such ground for objection.
Besides, the rules he cites do not apply to the present criminal action.
The Rules on Electronic Evidence applies only to civil actions, quasijudicial
proceedings,
and
administrativeproceedings.
In conclusion, this Court finds that the prosecution has proved each and
every element of the crime charged beyond reasonable doubt.

11. MOrigo vs People

SECOND DIVISION
[ G.R. No. 145226, February 06, 2004 ]
LUCIO MORIGO
PHILIPPINES,

CACHO,

PETITIONER,

VS.

PEOPLE OF THE
RESPONDENT.

DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse the decision [1]
dated October 21, 1999 of the Court of Appeals in CA-G.R. CR No.
20700, which affirmed the judgment[2] dated August 5, 1996 of the
Regional Trial Court (RTC) of Bohol, Branch 4, in Criminal Case No.
8688. The trial court found herein petitioner Lucio Morigo y Cacho guilty
beyond reasonable doubt of bigamy and sentenced him to a prison term
of seven (7) months of prision correccional as minimum to six (6) years
and one (1) day of prision mayor as maximum. Also assailed in this
petition is the resolution[3] of the appellate court, dated September 25,
2000, denying Morigos motion for reconsideration.
The facts of this case, as found by the court a quo, are as follows:

Four. Rustan claims that the obscene picture sent to Irish through a
text message constitutes an electronic document. Thus, it should be
authenticated by means of an electronic signature, as provided under
Section 1, Rule 5 of the Rules on Electronic Evidence (A.M. 01-7-01-SC).

Appellant Lucio Morigo and Lucia Barrete were boardmates at the house
of Catalina Tortor at Tagbilaran City, Province of Bohol, for a period of
four
(4)
years
(from
1974-1978).

After school year 1977-78, Lucio Morigo and Lucia Barrete lost contact
with
each
other.
In 1984, Lucio Morigo was surprised to receive a card from Lucia
Barrete from Singapore. The former replied and after an exchange of
letters,
they
became
sweethearts.
In 1986, Lucia returned to the Philippines but left again for Canada to
work there. While in Canada, they maintained constant communication.
In 1990, Lucia came back to the Philippines and proposed to petition
appellant to join her in Canada. Both agreed to get married, thus they
were married on August 30, 1990 at the Iglesia de Filipina Nacional at
Catagdaan,
Pilar,
Bohol.
On September 8, 1990, Lucia reported back to her work in Canada
leaving
appellant
Lucio
behind.
On August 19, 1991, Lucia filed with the Ontario Court (General
Division) a petition for divorce against appellant which was granted by
the court on January 17, 1992 and to take effect on February 17, 1992.
On October 4, 1992, appellant Lucio Morigo married Maria Jececha
Lumbago[4] at the Virgen sa Barangay Parish, Tagbilaran City, Bohol.
On September 21, 1993, accused filed a complaint for judicial
declaration of nullity of marriage in the Regional Trial Court of Bohol,
docketed as Civil Case No. 6020. The complaint seek (sic) among
others, the declaration of nullity of accuseds marriage with Lucia, on
the ground that no marriage ceremony actually took place.
On October 19, 1993, appellant was charged with Bigamy in an
Information[5] filed by the City Prosecutor of Tagbilaran [City], with the
Regional Trial Court of Bohol.[6]
The petitioner moved for suspension of the arraignment on the ground
that the civil case for judicial nullification of his marriage with Lucia
posed a prejudicial question in the bigamy case. His motion was
granted, but subsequently denied upon motion for reconsideration by
the prosecution. When arraigned in the bigamy case, which was
docketed as Criminal Case No. 8688, herein petitioner pleaded not
guilty
to
the
charge.
Trial
thereafter
ensued.
On August 5, 1996, the RTC of Bohol handed down its judgment in
Criminal Case No. 8688, as follows:

WHEREFORE, foregoing premises considered, the Court finds accused

Lucio Morigo y Cacho guilty beyond reasonable doubt of the crime of
Bigamy and sentences him to suffer the penalty of imprisonment
ranging from Seven (7) Months of Prision Correccional as minimum to
Six (6) Years and One (1) Day of Prision Mayor as maximum.
SO ORDERED.[7]
In convicting herein petitioner, the trial court discounted petitioners
claim that his first marriage to Lucia was null and void ab initio.
Following Domingo v. Court of Appeals,[8] the trial court ruled that want
of a valid marriage ceremony is not a defense in a charge of bigamy.
The parties to a marriage should not be allowed to assume that their
marriage is void even if such be the fact but must first secure a judicial
declaration of the nullity of their marriage before they can be allowed to
marry
again.
Anent the Canadian divorce obtained by Lucia, the trial court cited
Ramirez v. Gmur,[9] which held that the court of a country in which
neither of the spouses is domiciled and in which one or both spouses
may resort merely for the purpose of obtaining a divorce, has no
jurisdiction to determine the matrimonial status of the parties. As such,
a divorce granted by said court is not entitled to recognition anywhere.
Debunking Lucios defense of good faith in contracting the second
marriage, the trial court stressed that following People v. Bitdu,[10]
everyone is presumed to know the law, and the fact that one does not
know that his act constitutes a violation of the law does not exempt him
from
the
consequences
thereof.
Seasonably, petitioner filed an appeal with the Court of Appeals,
docketed
as
CA-G.R.
CR
No.
20700.
Meanwhile, on October 23, 1997, or while CA-G.R. CR No. 20700 was
pending before the appellate court, the trial court rendered a decision
in Civil Case No. 6020 declaring the marriage between Lucio and Lucia
void ab initio since no marriage ceremony actually took place. No
appeal was taken from this decision, which then became final and
executory.
On October 21, 1999, the appellate court decided CA-G.R. CR No. 20700
as follows:
WHEREFORE, finding no error in the appealed decision, the same is
hereby
AFFIRMED
in
toto.
SO ORDERED.[11]

In affirming the assailed judgment of conviction, the appellate court

stressed that the subsequent declaration of nullity of Lucios marriage
to Lucia in Civil Case No. 6020 could not acquit Lucio. The reason is
that what is sought to be punished by Article 349[12] of the Revised
Penal Code is the act of contracting a second marriage before the first
marriage had been dissolved. Hence, the CA held, the fact that the first
marriage was void from the beginning is not a valid defense in a bigamy
case.
The Court of Appeals also pointed out that the divorce decree obtained
by Lucia from the Canadian court could not be accorded validity in the
Philippines, pursuant to Article 15[13] of the Civil Code and given the
fact that it is contrary to public policy in this jurisdiction. Under Article
17[14] of the Civil Code, a declaration of public policy cannot be rendered
ineffectual by a judgment promulgated in a foreign jurisdiction.
Petitioner moved for reconsideration of the appellate courts decision,
contending that the doctrine in Mendiola v. People,[15] allows mistake
upon a difficult question of law (such as the effect of a foreign divorce
decree)
to
be
a
basis
for
good
faith.
On September 25, 2000, the appellate court denied the motion for lack
of merit.[16] However, the denial was by a split vote. The ponente of the
appellate courts original decision in CA-G.R. CR No. 20700, Justice
Eugenio S. Labitoria, joined in the opinion prepared by Justice Bernardo
P. Abesamis. The dissent observed that as the first marriage was
validly declared void ab initio, then there was no first marriage to speak
of. Since the date of the nullity retroacts to the date of the first
marriage and since herein petitioner was, in the eyes of the law, never
married, he cannot be convicted beyond reasonable doubt of bigamy.
The present petition raises the following issues for our resolution:

A.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FAILING TO

APPLY THE RULE THAT IN CRIMES PENALIZED UNDER THE REVISED
PENAL CODE, CRIMINAL INTENT IS AN INDISPENSABLE REQUISITE.
COROLLARILY, WHETHER OR NOT THE COURT OF APPEALS ERRED IN
FAILING TO APPRECIATE [THE] PETITIONERS LACK OF CRIMINAL
INTENT WHEN HE CONTRACTED THE SECOND MARRIAGE.

B.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT

THE RULING IN PEOPLE VS. BITDU (58 PHIL. 817) IS APPLICABLE TO
THE CASE AT BAR.
C.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FAILING TO

APPLY THE RULE THAT EACH AND EVERY CIRCUMSTANCE FAVORING
THE INNOCENCE OF THE ACCUSED MUST BE TAKEN INTO ACCOUNT.[17]
To our mind, the primordial issue should be whether or not petitioner
committed bigamy and if so, whether his defense of good faith is valid.
The petitioner submits that he should not be faulted for relying in good
faith upon the divorce decree of the Ontario court. He highlights the
fact that he contracted the second marriage openly and publicly, which
a person intent upon bigamy would not be doing. The petitioner further
argues that his lack of criminal intent is material to a conviction or
acquittal in the instant case. The crime of bigamy, just like other
felonies punished under the Revised Penal Code, is mala in se, and
hence, good faith and lack of criminal intent are allowed as a complete
defense. He stresses that there is a difference between the intent to
commit the crime and the intent to perpetrate the act. Hence, it does
not necessarily follow that his intention to contract a second marriage
is
tantamount
to
an
intent
to
commit
bigamy.
For the respondent, the Office of the Solicitor General (OSG) submits
that good faith in the instant case is a convenient but flimsy excuse.
The Solicitor General relies upon our ruling in Marbella-Bobis v.
Bobis,[18] which held that bigamy can be successfully prosecuted
provided all the elements concur, stressing that under Article 40[19] of
the Family Code, a judicial declaration of nullity is a must before a party
may re-marry. Whether or not the petitioner was aware of said Article
40 is of no account as everyone is presumed to know the law. The OSG
counters that petitioners contention that he was in good faith because
he relied on the divorce decree of the Ontario court is negated by his
act of filing Civil Case No. 6020, seeking a judicial declaration of nullity
of
his
marriage
to
Lucia.
Before we delve into petitioners defense of good faith and lack of
criminal intent, we must first determine whether all the elements of
bigamy are present in this case. In Marbella-Bobis v. Bobis,[20] we laid
down the elements of bigamy thus:

(1)

the

offender

has

been

legally

married;

(2) the first marriage has not been legally dissolved, or in case his or
her spouse is absent, the absent spouse has not been judicially declared
presumptively
dead;
(3)

he

contracts

subsequent

marriage;

and

(4) the subsequent marriage would have been valid had it not been for
the existence of the first.
Applying the foregoing test to the instant case, we note that during the
pendency of CA-G.R. CR No. 20700, the RTC of Bohol Branch 1, handed
down the following decision in Civil Case No. 6020, to wit:
WHEREFORE, premises considered, judgment is hereby rendered
decreeing the annulment of the marriage entered into by petitioner
Lucio Morigo and Lucia Barrete on August 23, 1990 in Pilar, Bohol and
further directing the Local Civil Registrar of Pilar, Bohol to effect the
cancellation
of
the
marriage
contract.
SO ORDERED.[21]
The trial court found that there was no actual marriage ceremony
performed between Lucio and Lucia by a solemnizing officer. Instead,
what transpired was a mere signing of the marriage contract by the
two, without the presence of a solemnizing officer. The trial court thus
held that the marriage is void ab initio, in accordance with Articles 3[22]
and 4[23] of the Family Code. As the dissenting opinion in CA-G.R. CR No.
20700, correctly puts it, This simply means that there was no marriage
to begin with; and that such declaration of nullity retroacts to the date
of the first marriage. In other words, for all intents and purposes,
reckoned from the date of the declaration of the first marriage as void
ab initio to the date of the celebration of the first marriage, the accused
was, under the eyes of the law, never married.[24] The records show
that no appeal was taken from the decision of the trial court in Civil
Case No. 6020, hence, the decision had long become final and
executory.
The first element of bigamy as a crime requires that the accused must
have been legally married. But in this case, legally speaking, the
petitioner was never married to Lucia Barrete. Thus, there is no first
marriage to speak of. Under the principle of retroactivity of a marriage
being declared void ab initio, the two were never married from the
beginning. The contract of marriage is null; it bears no legal effect.
Taking this argument to its logical conclusion, for legal purposes,
petitioner was not married to Lucia at the time he contracted the

marriage with Maria Jececha. The existence and the validity of the first
marriage being an essential element of the crime of bigamy, it is but
logical that a conviction for said offense cannot be sustained where
there is no first marriage to speak of. The petitioner, must, perforce be
acquitted
of
the
instant
charge.
The present case is analogous to, but must be distinguished from
Mercado v. Tan.[25] In the latter case, the judicial declaration of nullity
of the first marriage was likewise obtained after the second marriage
was already celebrated. We held therein that:
A judicial declaration of nullity of a previous marriage is necessary
before a subsequent one can be legally contracted. One who enters into
a subsequent marriage without first obtaining such judicial declaration
is guilty of bigamy. This principle applies even if the earlier union is
characterized by statutes as void.[26]
It bears stressing though that in Mercado, the first marriage was
actually solemnized not just once, but twice: first before a judge where
a marriage certificate was duly issued and then again six months later
before a priest in religious rites. Ostensibly, at least, the first marriage
appeared to have transpired, although later declared void ab initio.
In the instant case, however, no marriage ceremony at all was
performed by a duly authorized solemnizing officer. Petitioner and
Lucia Barrete merely signed a marriage contract on their own. The mere
private act of signing a marriage contract bears no semblance to a valid
marriage and thus, needs no judicial declaration of nullity. Such act
alone, without more, cannot be deemed to constitute an ostensibly valid
marriage for which petitioner might be held liable for bigamy unless he
first secures a judicial declaration of nullity before he contracts a
subsequent
marriage.
The law abhors an injustice and the Court is mandated to liberally
construe a penal statute in favor of an accused and weigh every
circumstance in favor of the presumption of innocence to ensure that
justice is done. Under the circumstances of the present case, we held
that petitioner has not committed bigamy. Further, we also find that
we need not tarry on the issue of the validity of his defense of good
faith or lack of criminal intent, which is now moot and academic.
WHEREFORE, the instant petition is GRANTED. The assailed decision,
dated October 21, 1999 of the Court of Appeals in CA-G.R. CR No.
20700, as well as the resolution of the appellate court dated September
25, 2000, denying herein petitioners motion for reconsideration, is
REVERSED and SET ASIDE. The petitioner Lucio Morigo y Cacho is
ACQUITTED from the charge of BIGAMY on the ground that his guilt has

not

been

proven

SO

with

moral

certainty.
ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

12. Roehr v Rodriguez

SECOND DIVISION

On August 28, 1996, private respondent filed a petition[5] for

declaration of nullity of marriage before the Regional Trial Court (RTC)
of Makati City. On February 6, 1997, petitioner filed a motion to
dismiss,[6] but it was denied by the trial court in its order[7] dated May
28,
1997.
On June 5, 1997, petitioner filed a motion for reconsideration, but was
also denied in an order[8] dated August 13, 1997. On September 5,
1997, petitioner filed a petition for certiorari with the Court of Appeals.
On November 27, 1998, the appellate court denied the petition and
remanded
the
case
to
the
RTC.

[ G.R. No. 142820, June 20, 2003 ]

Meanwhile, petitioner obtained a decree of divorce from the Court of

First Instance of Hamburg-Blankenese, promulgated on December 16,
1997. The decree provides in part:

WOLFGANG O. ROEHR, PETITIONER, VS. MARIA CARMEN D.

RODRIGUEZ, HON. JUDGE JOSEFINA GUEVARA-SALONGA, PRESIDING
JUDGE
OF
MAKATI
RTC,
BRANCH
149,
RESPONDENTS.

[T]he Court of First Instance, Hamburg-Blankenese, Branch 513, has

ruled through Judge van Buiren of the Court of First Instance on the
basis
of
the
oral
proceedings
held
on
4
Nov.
1997:

DECISION

The marriage of the Parties contracted on 11 December 1980 before the

Civil
Registrar
of
Hamburg-Altona
is
hereby
dissolved.

QUISUMBING, J.:
At the core of the present controversy are issues of (a) grave abuse of
discretion allegedly committed by public respondent and (b) lack of
jurisdiction of the regional trial court, in matters that spring from a
divorce
decree
obtained
abroad
by
petitioner.
In this special civil action for certiorari, petitioner assails (a) the
order[1] dated September 30, 1999 of public respondent Judge Josefina
Guevara-Salonga, Presiding Judge of Makati Regional Trial Court,[2]
Branch 149, in Civil Case No. 96-1389 for declaration of nullity of
marriage, and (b) the order[3] dated March 31, 2000 denying his motion
for reconsideration. The assailed orders partially set aside the trial
court's order dismissing Civil Case No. 96-1389, for the purpose of
resolving issues relating to the property settlement of the spouses and
the
custody
of
their
children.
Petitioner Wolfgang O. Roehr, a German citizen and resident of
Germany, married private respondent Carmen Rodriguez, a Filipina, on
December 11, 1980 in Hamburg, Germany. Their marriage was
subsequently ratified on February 14, 1981 in Tayasan, Negros
Oriental.[4] Out of their union were born Carolynne and Alexandra
Kristine on November 18, 1981 and October 25, 1987, respectively.

The

parental

Carolynne
Alexandra
is

custody

Roehr,
Kristine

for

born
Roehr,

granted

the

18
born

on

to

children

November
25

1981

October

the

1987
father.

The litigation expenses shall be assumed by the Parties.[9]

In view of said decree, petitioner filed a Second Motion to Dismiss on
May 20, 1999 on the ground that the trial court had no jurisdiction over
the subject matter of the action or suit as a decree of divorce had
already been promulgated dissolving the marriage of petitioner and
private
respondent.
On July 14, 1999, Judge Guevara-Salonga issued an order granting
petitioner's motion to dismiss. Private respondent filed a Motion for
Partial Reconsideration, with a prayer that the case proceed for the
purpose of determining the issues of custody of children and the
distribution of the properties between petitioner and private
respondent.
On

August

18,

1999,

an

Opposition

to

the

Motion

for

Partial

Reconsideration was filed by the petitioner on the ground that there is

nothing to be done anymore in the instant case as the marital tie
between petitioner Wolfgang Roehr and respondent Ma. Carmen D.
Rodriguez had already been severed by the decree of divorce
promulgated by the Court of First Instance of Hamburg, Germany on
December 16, 1997 and in view of the fact that said decree of divorce
had already been recognized by the RTC in its order of July 14, 1999,
through the implementation of the mandate of Article 26 of the Family
Code,[10] endowing the petitioner with the capacity to remarry under
the
Philippine
law.
On September 30, 1999, respondent judge issued the assailed order
partially setting aside her order dated July 14, 1999 for the purpose of
tackling the issues of property relations of the spouses as well as
support and custody of their children. The pertinent portion of said
order provides:
Acting on the Motion for Partial Reconsideration of the Order dated July
14, 1999 filed by petitioner thru counsel which was opposed by
respondent and considering that the second paragraph of Article 26 of
the Family Code was included as an amendment thru Executive Order
227, to avoid the absurd situation of a Filipino as being still married to
his or her alien spouse though the latter is no longer married to the
Filipino spouse because he/she had obtained a divorce abroad which is
recognized by his/her national law, and considering further the effects
of the termination of the marriage under Article 43 in relation to Article
50 and 52 of the same Code, which include the dissolution of the
property relations of the spouses, and the support and custody of their
children, the Order dismissing this case is partially set aside with
respect to these matters which may be ventilated in this Court.

3. There is nothing left to be tackled by the Honorable Court as

there are no conjugal assets alleged in the Petition for
Annulment of Marriage and in the Divorce petition, and the
custody of the children had already been awarded to Petitioner
Wolfgang Roehr.[15]
Pertinent in this case before us are the following issues:
1. Whether or not respondent judge gravely abused her discretion
in issuing her order dated September 30, 1999, which partially
modified her order dated July 14, 1999; and
2. Whether or not respondent judge gravely abused her discretion
when she assumed and retained jurisdiction over the present
case despite the fact that petitioner has already obtained a
divorce decree from a German court.
On the first issue, petitioner asserts that the assailed order of
respondent judge is completely inconsistent with her previous order
and is contrary to Section 3, Rule 16, Rules of Civil Procedure, which
provides:
Sec. 3. Resolution of motion After the hearing, the court may dismiss
the action or claim, deny the motion, or order the amendment of the
pleading.
The court shall not defer the resolution of the motion for the reason
that
the
ground
relied
upon
is
not
indubitable.
In every case, the resolution shall state clearly and distinctly the
reasons therefor. (Emphasis supplied.)

SO ORDERED.[11] (Emphasis supplied.)

Petitioner filed a timely motion for reconsideration on October 19,
1999, which was denied by respondent judge in an order dated March
31,
2000.[12]
Petitioner ascribes lack of jurisdiction of the trial court and grave abuse
of discretion on the part of respondent judge. He cites as grounds for
his petition the following:
1. Partially setting aside the order dated July 14, 1999 dismissing
the instant case is not allowed by 1997 Rules of Civil
Procedure.[13]
2. Respondent Maria Carmen Rodriguez by her motion for Partial
Reconsideration had recognized and admitted the Divorce
Decision obtained by her ex-husband in Hamburg, Germany.[14]

Petitioner avers that a court's action on a motion is limited to

dismissing the action or claim, denying the motion, or ordering the
amendment
of
the
pleading.
Private respondent, on her part, argues that the RTC can validly
reconsider its order dated July 14, 1999 because it had not yet attained
finality, given the timely filing of respondent's motion for
reconsideration.
Pertinent to this issue is Section 3 in relation to Section 7, Rule 37 of
the 1997 Rules of Civil Procedure, which provides:
Sec. 3. Action upon motion for new trial or reconsideration.The trial
court may set aside the judgment or final order and grant a new trial,
upon such terms as may be just, or may deny the motion. If the court

finds that excessive damages have been awarded or that the judgment
or final order is contrary to the evidence or law, it may amend such
judgment
or
final
order
accordingly.

private respondent the capacity to remarry. Thus, the present

controversy mainly relates to the award of the custody of their two
children,
Carolynne
and
Alexandra
Kristine,
to
petitioner.

Sec. 7. Partial new trial or reconsideration.If the grounds for a motion

under this Rule appear to the court to affect the issues as to only a part,
or less than all of the matters in controversy, or only one, or less than
all, of the parties to it, the court may order a new trial or grant
reconsideration as to such issues if severable without interfering with
the judgment or final order upon the rest. (Emphasis supplied.)

As a general rule, divorce decrees obtained by foreigners in other

countries are recognizable in our jurisdiction, but the legal effects
thereof, e.g. on custody, care and support of the children, must still be
determined by our courts.[23] Before our courts can give the effect of res
judicata to a foreign judgment, such as the award of custody to
petitioner by the German court, it must be shown that the parties
opposed to the judgment had been given ample opportunity to do so on
grounds allowed under Rule 39, Section 50 of the Rules of Court (now
Rule 39, Section 48, 1997 Rules of Civil Procedure), to wit:

It is clear from the foregoing rules that a judge can order a partial
reconsideration of a case that has not yet attained finality. Considering
that private respondent filed a motion for reconsideration within the
reglementary period, the trial court's decision of July 14, 1999 can still
be modified. Moreover, in Saado v. Court of Appeals,[16] we held that
the court could modify or alter a judgment even after the same has
become executory whenever circumstances transpire rendering its
decision unjust and inequitable, as where certain facts and
circumstances justifying or requiring such modification or alteration
transpired after the judgment has become final and executory[17] and
when it becomes imperative in the higher interest of justice or when
supervening events warrant it.[18] In our view, there are even more
compelling reasons to do so when, as in this case, judgment has not yet
attained
finality.
Anent the second issue, petitioner claims that respondent judge
committed grave abuse of discretion when she partially set aside her
order dated July 14, 1999, despite the fact that petitioner has already
obtained a divorce decree from the Court of First Instance of Hamburg,
Germany.
In Garcia v. Recio,[19] Van Dorn v. Romillo, Jr.,[20] and Llorente v. Court
of Appeals,[21] we consistently held that a divorce obtained abroad by
an alien may be recognized in our jurisdiction, provided such decree is
valid according to the national law of the foreigner. Relevant to the
present case is Pilapil v. Ibay-Somera,[22] where this Court specifically
recognized the validity of a divorce obtained by a German citizen in his
country, the Federal Republic of Germany. We held in Pilapil that a
foreign divorce and its legal effects may be recognized in the
Philippines insofar as respondent is concerned in view of the nationality
principle
in
our
civil
law
on
the
status
of
persons.
In this case, the divorce decree issued by the German court dated
December 16, 1997 has not been challenged by either of the parties. In
fact, save for the issue of parental custody, even the trial court
recognized said decree to be valid and binding, thereby endowing

SEC. 50. Effect of foreign judgments. The effect of a judgment of a

tribunal of a foreign country, having jurisdiction to pronounce the
judgment
is
as
follows:
(a) In case of a judgment upon a specific thing, the judgment is
conclusive
upon
the
title
to
the
thing;
(b) In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title; but the judgment may be
repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.
It is essential that there should be an opportunity to challenge the
foreign judgment, in order for the court in this jurisdiction to properly
determine its efficacy. In this jurisdiction, our Rules of Court clearly
provide that with respect to actions in personam, as distinguished from
actions in rem, a foreign judgment merely constitutes prima facie
evidence of the justness of the claim of a party and, as such, is subject
to
proof
to
the
contrary.[24]
In the present case, it cannot be said that private respondent was given
the opportunity to challenge the judgment of the German court so that
there is basis for declaring that judgment as res judicata with regard to
the rights of petitioner to have parental custody of their two children.
The proceedings in the German court were summary. As to what was
the extent of private respondent's participation in the proceedings in
the German court, the records remain unclear. The divorce decree itself
states that neither has she commented on the proceedings[25] nor has
she given her opinion to the Social Services Office.[26] Unlike petitioner
who was represented by two lawyers, private respondent had no
counsel to assist her in said proceedings.[27] More importantly, the
divorce judgment was issued to petitioner by virtue of the German Civil

Code provision to the effect that when a couple lived separately for
three years, the marriage is deemed irrefutably dissolved. The decree
did not touch on the issue as to who the offending spouse was. Absent
any finding that private respondent is unfit to obtain custody of the
children, the trial court was correct in setting the issue for hearing to
determine the issue of parental custody, care, support and education
mindful of the best interests of the children. This is in consonance with
the provision in the Child and Youth Welfare Code that the child's
welfare is always the paramount consideration in all questions
[28]
concerning
his
care
and
custody.
On the matter of property relations, petitioner asserts that public
respondent exceeded the bounds of her jurisdiction when she claimed
cognizance of the issue concerning property relations between
petitioner and private respondent. Private respondent herself has
admitted in Par. 14 of her petition for declaration of nullity of marriage
dated August 26, 1996 filed with the RTC of Makati, subject of this case,
that: "[p]etitioner and respondent have not acquired any conjugal or
community property nor have they incurred any debts during their
marriage."[29] Herein petitioner did not contest this averment. Basic is
the rule that a court shall grant relief warranted by the allegations and
the proof.[30] Given the factual admission by the parties in their
pleadings that there is no property to be accounted for, respondent
judge has no basis to assert jurisdiction in this case to resolve a matter
no
longer
deemed
in
controversy.
In sum, we find that respondent judge may proceed to determine the
issue regarding the custody of the two children born of the union
between petitioner and private respondent. Private respondent erred,
however, in claiming cognizance to settle the matter of property
relations
of
the
parties,
which
is
not
at
issue.
WHEREFORE, the orders of the Regional Trial Court of Makati, Branch
149, issued on September 30, 1999 and March 31, 2000 are AFFIRMED
with MODIFICATION. We hereby declare that the trial court has
jurisdiction over the issue between the parties as to who has parental
custody, including the care, support and education of the children,
namely Carolynne and Alexandra Kristine Roehr. Let the records of this
case be remanded promptly to the trial court for continuation of
appropriate
proceedings.
No
pronouncement
as
to
costs.
SO
Bellosillo,

ORDERED.
(Chairman),

Austria-Martinez,

and
J.,

Callejo,

Sr.,

on

official

JJ.,

concur.
leave.

13. Recio vs Recio

THIRD DIVISION
[ G.R. No. 138322, October 02, 2001 ]
GRACE J. GARCIA, A.K.A. GRACE J. GARCIA-RECIO, PETITIONER,VS.
REDERICK
A.
RECIO,
RESPONDENT.
DECISION
PANGANIBAN, J.:
A divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided such decree is valid according to the national law
of the foreigner. However, the divorce decree and the governing
personal law of the alien spouse who obtained the divorce must be
proven. Our courts do not take judicial notice of foreign laws and
judgments; hence, like any other facts, both the divorce decree and the
national law of the alien must be alleged and proven according to our
law on evidence.
The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court,

seeking to nullify the January 7, 1999 Decision[1] and the March 24,
1999 Order[2] of the Regional Trial Court of Cabanatuan City, Branch 28,
in Civil Case No. 3026-AF. The assailed Decision disposed as follows:
"WHEREFORE, this Court declares the marriage between Grace J. Garcia
and Rederick A. Recio solemnized on January 12, 1994 at Cabanatuan
City as dissolved and both parties can now remarry under existing and
applicable
laws
to
any
and/or
both
parties."[3]
The assailed
Decision.

Order

denied

reconsideration

of

the

above-quoted

The Facts

Rederick A. Recio, a Filipino, was married to Editha Samson, an

Australian citizen, in Malabon, Rizal, on March 1, 1987.[4] They lived

together as husband and wife in Australia. On May 18, 1989, [5] a

decree of divorce, purportedly dissolving the marriage, was issued by
an
Australian
family
court.
On June 26, 1992, respondent became an Australian citizen, as shown
by a "Certificate of Australian Citizenship" issued by the Australian
government.[6] Petitioner -- a Filipina -- and respondent were married
on January 12, 1994 in Our Lady of Perpetual Help Church in
Cabanatuan City.[7] In their application for a marriage license,
respondent
was
declared
as
"single"
and
"Filipino."[8]
Starting October 22, 1995, petitioner and respondent lived separately
without prior judicial dissolution of their marriage. While the two were
still in Australia, their conjugal assets were divided on May 16, 1996, in
accordance with their Statutory Declarations secured in Australia.[9]
On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity
of Marriage[10] in the court a quo, on the ground of bigamy -respondent allegedly had a prior subsisting marriage at the time he
married her on January 12, 1994. She claimed that she learned of
respondent's marriage to Editha Samson only in November, 1997.
In his Answer, respondent averred that, as far back as 1993, he had
revealed to petitioner his prior marriage and its subsequent
dissolution.[11] He contended that his first marriage to an Australian
citizen had been validly dissolved by a divorce decree obtained in
Australia in 1989;[12] thus, he was legally capacitated to marry
petitioner
in
1994.
On July 7, 1998 -- or about five years after the couple's wedding and
while the suit for the declaration of nullity was pending -- respondent
was able to secure a divorce decree from a family court in Sydney,
Australia because the "marriage ha[d] irretrievably broken down."[13]

It deemed the marriage ended, but not on the basis of any defect in an
essential element of the marriage; that is, respondent's alleged lack of
legal capacity to remarry. Rather, it based its Decision on the divorce
decree obtained by respondent. The Australian divorce had ended the
marriage; thus, there was no more marital union to nullify or annul.
Hence, this Petition.[18]
Issues

Petitioner submits the following issues for our consideration:

"1

The trial court gravely erred in finding that the divorce decree obtained
in Australia by the respondent ipso facto terminated his first marriage
to Editha Samson thereby capacitating him to contract a second
marriage with the petitioner.
"2

The failure of the respondent, who is now a naturalized Australian, to

present a certificate of legal capacity to marry constitutes absence of a
substantial requisite voiding the petitioner's marriage to the
respondent
"3

Respondent prayed in his Answer that the Complaint be dismissed on

the ground that it stated no cause of action.[14] The Office of the
Solicitor General agreed with respondent.[15] The court marked and
admitted the documentary evidence of both parties. [16] After they
submitted their respective memoranda, the case was submitted for
resolution.[17]

The trial court seriously erred in the application of Art. 26 of the Family
Code in this case.

Thereafter, the trial court rendered the assailed Decision and Order.

The trial court patently and grievously erred in disregarding Arts. 11,
13, 21, 35, 40, 52 and 53 of the Family Code as the applicable
provisions in this case.

Ruling

of

the

Trial

Court

The trial court declared the marriage dissolved on the ground that the
divorce issued in Australia was valid and recognized in the Philippines.

"4

"5

The trial court gravely erred in pronouncing that the divorce decree
obtained by the respondent in Australia ipso facto capacitated the
parties to remarry, without first securing a recognition of the judgment
granting the divorce decree before our courts." [19]

The Petition raises five issues, but for purposes of this Decision, we
shall concentrate on two pivotal ones: (1) whether the divorce between
respondent and Editha Samson was proven, and (2) whether
respondent was proven to be legally capacitated to marry petitioner.
Because of our ruling on these two, there is no more necessity to take
up the rest.
The Court's Ruling

A comparison between marriage and divorce, as far as pleading and

proof are concerned, can be made. Van Dorn v. Romillo Jr. decrees that
"aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national law."[28]
Therefore, before a foreign divorce decree can be recognized by our
courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it.[29]
Presentation
solely
of
the
divorce
decree
is
insufficient.
Divorce

The Petition is partly meritorious.

as

Question

of

Fact

Petitioner insists that before a divorce decree can be admitted in

evidence, it must first comply with the registration requirements under
Articles 11, 13 and 52 of the Family Code. These articles read as
follows:

First Issue:
Proving
the
Respondent and Editha Samson

Family Code allows the former to contract a subsequent marriage in

case the divorce is "validly obtained abroad by the alien spouse
capacitating him or her to remarry."[26] A divorce obtained abroad by a
couple, who are both aliens, may be recognized in the Philippines,
provided it is consistent with their respective national laws. [27]

Divorce

Between

Petitioner assails the trial court's recognition of the divorce between

respondent and Editha Samson. Citing Adong v. Cheong Seng Gee,[20]
petitioner argues that the divorce decree, like any other foreign
judgment, may be given recognition in this jurisdiction only upon proof
of the existence of (1) the foreign law allowing absolute divorce and (2)
the alleged divorce decree itself. She adds that respondent miserably
failed
to
establish
these
elements.
Petitioner adds that, based on the first paragraph of Article 26 of the
Family Code, marriages solemnized abroad are governed by the law of
the place where they were celebrated (the lex loci celebrationis). In
effect, the Code requires the presentation of the foreign law to show
the conformity of the marriage in question to the legal requirements of
the
place
where
the
marriage
was
performed.
At the outset, we lay the following basic legal principles as the take-off
points for our discussion. Philippine law does not provide for absolute
divorce; hence, our courts cannot grant it.[21] A marriage between two
Filipinos cannot be dissolved even by a divorce obtained abroad,
because of Articles 15[22] and 17[23] of the Civil Code.[24] In mixed
marriages involving a Filipino and a foreigner, Article 26[25] of the

"ART. 11. Where a marriage license is required, each of the contracting

parties shall file separately a sworn application for such license with
the proper local civil registrar which shall specify the following:
x x x
"(5)
marriage
x x x

x x x

x x x

If previously married, how, when and where the previous

was
dissolved
or
annulled;
x x x

x x x"

"ART. 13. In case either of the contracting parties has been previously
married,
the
applicant
shall
be
required
to
"ART. 13. In case either of the contracting parties has been previously
married, the applicant shall be required to furnish, instead of the birth
or baptismal certificate required in the last preceding article, the death
certificate of the deceased spouse or the judicial decree of the absolute
divorce, or the judicial decree of annulment or declaration of nullity of
his
or
her
previous
marriage.
x
x
x.
"ART. 52. The judgment of annulment or of absolute nullity of the
marriage, the partition and distribution of the properties of the spouses,
and the delivery of the children's presumptive legitimes shall be

recorded in the appropriate civil registry and registries of property;

otherwise, the same shall not affect their persons."

attires of their adoptive countries. By becoming an Australian,

respondent severed his allegiance to the Philippines and the vinculum
juris
that
had
tied
him
to
Philippine
personal
laws.

Respondent, on the other hand, argues that the Australian divorce

decree is a public document -- a written official act of an Australian
family court. Therefore, it requires no further proof of its authenticity
and
due
execution.

Burden

Respondent is getting ahead of himself. Before a foreign judgment is

given presumptive evidentiary value, the document must first be
presented and admitted in evidence.[30] A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best evidence of a
judgment is the judgment itself.[31] The decree purports to be a written
act or record of an act of an official body or tribunal of a foreign
country.[32]
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or
document may be proven as a public or official record of a foreign
country by either (1) an official publication or (2) a copy thereof
attested[33] by the officer having legal custody of the document. If the
record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign
country in which the record is kept and (b) authenticated by the seal of
[34]
his
office.
The divorce decree between respondent and Editha Samson appears to
be an authentic one issued by an Australian family court.[35] However,
appearance is not sufficient; compliance with the aforementioned rules
on
evidence
must
be
demonstrated.
Fortunately for respondent's cause, when the divorce decree of May 18,
1989 was submitted in evidence, counsel for petitioner objected, not to
its admissibility, but only to the fact that it had not been registered in
the Local Civil Registry of Cabanatuan City.[36] The trial court ruled that
it was admissible, subject to petitioner's qualification.[37] Hence, it was
admitted in evidence and accorded weight by the judge. Indeed,
petitioner's failure to object properly rendered the divorce decree
admissible as a written act of the Family Court of Sydney, Australia.[38]
Compliance with the quoted articles (11, 13 and 52) of the Family Code
is not necessary; respondent was no longer bound by Philippine
personal laws after he acquired Australian citizenship in 1992. [39]
Naturalization is the legal act of adopting an alien and clothing him with
the political and civil rights belonging to a citizen.[40] Naturalized
citizens, freed from the protective cloak of their former states, don the

of

Proving

Australian

Law

Respondent contends that the burden to prove Australian divorce law

falls upon petitioner, because she is the party challenging the validity of
a foreign judgment. He contends that petitioner was satisfied with the
original of the divorce decree and was cognizant of the marital laws of
Australia, because she had lived and worked in that country for quite a
long time. Besides, the Australian divorce law is allegedly known by
Philippine courts; thus, judges may take judicial notice of foreign laws
in
the
exercise
of
sound
discretion.
We are not persuaded. The burden of proof lies with "the party who
alleges the existence of a fact or thing necessary in the prosecution or
defense of an action."[41] In civil cases, plaintiffs have the burden of
proving the material allegations of the complaint when those are denied
by the answer; and defendants have the burden of proving the material
allegations in their answer when they introduce new matters.[42] Since
the divorce was a defense raised by respondent, the burden of proving
the pertinent Australian law validating it falls squarely upon him.
It is well-settled in our jurisdiction that our courts cannot take judicial
notice of foreign laws.[43] Like any other facts, they must be alleged and
proved. Australian marital laws are not among those matters that
judges are supposed to know by reason of their judicial function. [44] The
power of judicial notice must be exercised with caution, and every
reasonable doubt upon the subject should be resolved in the negative.
Second
Respondent's
to Remarry

Legal

Issue:
Capacity

Petitioner contends that, in view of the insufficient proof of the divorce,

respondent was legally incapacitated to marry her in 1994. Hence, she
concludes
that
their
marriage
was
void
ab
initio.
Respondent replies that the Australian divorce decree, which was
validly admitted in evidence, adequately established his legal capacity
to
marry
under
Australian
law.
Respondent's contention is untenable. In its strict legal sense, divorce
means the legal dissolution of a lawful union for a cause arising after
marriage. But divorces are of different types. The two basic ones are

(1) absolute divorce or a vinculo matrimonii and (2) limited divorce or a

mensa et thoro. The first kind terminates the marriage, while the
second suspends it and leaves the bond in full force.[45] There is no
showing in the case at bar which type of divorce was procured by
respondent.
Respondent presented a decree nisi or an interlocutory decree -- a
conditional or provisional judgment of divorce. It is in effect the same
as a separation from bed and board, although an absolute divorce may
follow after the lapse of the prescribed period during which no
reconciliation
is
effected.[46]
Even after the divorce becomes absolute, the court may under some
foreign statutes and practices, still restrict remarriage. Under some
other jurisdictions, remarriage may be limited by statute; thus, the
guilty party in a divorce which was granted on the ground of adultery
may be prohibited from marrying again. The court may allow a
remarriage
only
after
proof
of
good
behavior.[47]
On its face, the herein Australian divorce decree contains a restriction
that reads:
"1.
A party to a marriage who marries again before this decree
becomes absolute (unless the other party has died) commits the
offence of bigamy."[48]

This quotation bolsters our contention that the divorce obtained by

respondent may have been restricted. It did not absolutely establish
his legal capacity to remarry according to his national law. Hence, we
find no basis for the ruling of the trial court, which erroneously
assumed that the Australian divorce ipso facto restored respondent's
capacity to remarry despite the paucity of evidence on this matter.
We also reject the claim of respondent that the divorce decree raises a
disputable presumption or presumptive evidence as to his civil status
based on Section 48, Rule 39[49] of the Rules of Court, for the simple
reason that no proof has been presented on the legal effects of the
divorce
decree
obtained
under
Australian
laws.
Significance
of

of

the
Legal

Certificate
Capacity

Petitioner argues that the certificate of legal capacity required by

Article 21 of the Family Code was not submitted together with the
application for a marriage license. According to her, its absence is

proof

that

respondent

did

not

have

legal

capacity

to

remarry.

We clarify. To repeat, the legal capacity to contract marriage is

determined by the national law of the party concerned. The certificate
mentioned in Article 21 of the Family Code would have been sufficient
to establish the legal capacity of respondent, had he duly presented it in
court. A duly authenticated and admitted certificate is prima facie
evidence of legal capacity to marry on the part of the alien applicant for
a
marriage
license.[50]
As it is, however, there is absolutely no evidence that proves
respondent's legal capacity to marry petitioner. A review of the records
before this Court shows that only the following exhibits were presented
before the lower court: (1) for petitioner: (a) Exhibit "A" Complaint;[51] (b) Exhibit "B" - Certificate of Marriage Between Rederick
A. Recio (Filipino-Australian) and Grace J. Garcia (Filipino) on January
12, 1994 in Cabanatuan City, Nueva Ecija;[52] (c) Exhibit "C" - Certificate
of Marriage Between Rederick A. Recio (Filipino) and Editha D. Samson
(Australian) on March 1, 1987 in Malabon, Metro Manila;[53] (d) Exhibit
"D" - Office of the City Registrar of Cabanatuan City Certification that no
information of annulment between Rederick A. Recio and Editha D.
Samson was in its records;[54] and (e) Exhibit "E" - Certificate of
Australian Citizenship of Rederick A. Recio;[55] (2) for respondent: (a)
Exhibit "1" -- Amended Answer;[56] (b) Exhibit "2" - Family Law Act
1975 Decree Nisi of Dissolution of Marriage in the Family Court of
Australia;[57] (c) Exhibit "3" - Certificate of Australian Citizenship of
Rederick A. Recio;[58] (d) Exhibit "4" - Decree Nisi of Dissolution of
Marriage in the Family Court of Australia Certificate;[59] and Exhibit "5"
-- Statutory Declaration of the Legal Separation Between Rederick A.
Recio and Grace J. Garcia Recio since October 22, 1995. [60]
Based on the above records, we cannot conclude that respondent, who
was then a naturalized Australian citizen, was legally capacitated to
marry petitioner on January 12, 1994. We agree with petitioner's
contention that the court a quo erred in finding that the divorce decree
ipso facto clothed respondent with the legal capacity to remarry
without requiring him to adduce sufficient evidence to show the
Australian personal law governing his status; or at the very least, to
prove his legal capacity to contract the second marriage.
Neither can we grant petitioner's prayer to declare her marriage to
respondent null and void on the ground of bigamy. After all, it may turn
out that under Australian law, he was really capacitated to marry
petitioner as a direct result of the divorce decree. Hence, we believe
that the most judicious course is to remand this case to the trial court
to receive evidence, if any, which show petitioner's legal capacity to
marry petitioner. Failing in that, then the court a quo may declare a

nullity of the parties' marriage on the ground of bigamy, there being

already in evidence two existing marriage certificates, which were both
obtained in the Philippines, one in Malabon, Metro Manila dated March
1, 1987 and the other, in Cabanatuan City dated January 12, 1994.
WHEREFORE, in the interest of orderly procedure and substantial
justice, we REMAND the case to the court a quo for the purpose of
receiving evidence which conclusively show respondent's legal capacity
to marry petitioner; and failing in that, of declaring the parties'
marriage void on the ground of bigamy, as above discussed. No costs.
SO
Melo,

ORDERED.
(Chairman),

Vitug,

and

Sandoval-Gutierrez,

JJ.,

concur.

14. Pilapil vs Ibay Somera

of the latter against the former, provides Us the opportunity to lay

down a decisional rule on what hitherto appears to be an unresolved
jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino
citizen, and private respondent Erich Ekkehard Geiling, a German
national, were married before the Registrar of Births, Marriages and
Deaths at Friedensweiler in the Federal Republic of Germany. The
marriage started auspiciously enough, and the couple lived together for
some time in Malate, Manila where their only child, Isabella Pilapil
Geiling, was born on April 20, 1980. 1
Thereafter, marital discord set in, with mutual recriminations between
the spouses, followed by a separation de facto between them.
After about three and a half years of marriage, such connubial
disharmony eventuated in private respondent initiating a divorce
proceeding against petitioner in Germany before the Schoneberg Local
Court in January, 1983. He claimed that there was failure of their
marriage and that they had been living apart since April, 1982. 2
Petitioner, on the other hand, filed an action for legal separation,
support and separation of property before the Regional Trial Court of
Manila, Branch XXXII, on January 23, 1983 where the same is still
pending as Civil Case No. 83-15866. 3

SECOND DIVISION
G.R. No. 80116 June 30, 1989
IMELDA
MANALAYSAY
PILAPIL,
petitioner,
-versusHON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the
Regional Trial Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in
his capacity as the City Fiscal of Manila; and ERICH EKKEHARD GEILING,
respondents.

REGALADO, J.:
An ill-starred marriage of a Filipina and a foreigner which ended in a
foreign absolute divorce, only to be followed by a criminal infidelity suit

On January 15, 1986, Division 20 of the Schoneberg Local Court,

Federal Republic of Germany, promulgated a decree of divorce on the
ground of failure of marriage of the spouses. The custody of the child
was granted to petitioner. The records show that under German law
said court was locally and internationally competent for the divorce
proceeding and that the dissolution of said marriage was legally
founded on and authorized by the applicable law of that foreign
jurisdiction. 4
On June 27, 1986, or more than five months after the issuance of the
divorce decree, private respondent filed two complaints for adultery
before the City Fiscal of Manila alleging that, while still married to said
respondent, petitioner "had an affair with a certain William Chia as
early as 1982 and with yet another man named Jesus Chua sometime in
1983". Assistant Fiscal Jacinto A. de los Reyes, Jr., after the
corresponding investigation, recommended the dismissal of the cases
on the ground of insufficiency of evidence. 5 However, upon review, the
respondent city fiscal approved a resolution, dated January 8, 1986,
directing the filing of two complaints for adultery against the petitioner.
6
The complaints were accordingly filed and were eventually raffled to

two branches of the Regional Trial Court of Manila. The case entitled
"People of the Philippines vs. Imelda Pilapil and William Chia",
docketed as Criminal Case No. 87-52435, was assigned to Branch XXVI
presided by the respondent judge; while the other case, "People of the
Philippines vs. Imelda Pilapil and James Chua", docketed as Criminal
Case No. 87-52434 went to the sala of Judge Leonardo Cruz, Branch
XXV, of the same court. 7
On March 14, 1987, petitioner filed a petition with the Secretary of
Justice asking that the aforesaid resolution of respondent fiscal be set
aside and the cases against her be dismissed. 8 A similar petition was
filed by James Chua, her co-accused in Criminal Case No. 87-52434. The
Secretary of Justice, through the Chief State Prosecutor, gave due
course to both petitions and directed the respondent city fiscal to
inform the Department of Justice "if the accused have already been
arraigned and if not yet arraigned, to move to defer further
proceedings" and to elevate the entire records of both cases to his
office for review. 9
Petitioner thereafter filed a motion in both criminal cases to defer her
arraignment and to suspend further proceedings thereon. 10 As a
consequence, Judge Leonardo Cruz suspended proceedings in Criminal
Case No. 87-52434. On the other hand, respondent judge merely reset
the date of the arraignment in Criminal Case No. 87-52435 to April 6,
1987. Before such scheduled date, petitioner moved for the cancellation
of the arraignment and for the suspension of proceedings in said
Criminal Case No. 87-52435 until after the resolution of the petition for
review then pending before the Secretary of Justice. 11 A motion to
quash was also filed in the same case on the ground of lack of
jurisdiction, 12 which motion was denied by the respondent judge in an
order dated September 8, 1987. The same order also directed the
arraignment of both accused therein, that is, petitioner and William
Chia. The latter entered a plea of not guilty while the petitioner refused
to be arraigned. Such refusal of the petitioner being considered by
respondent judge as direct contempt, she and her counsel were fined
and the former was ordered detained until she submitted herself for
arraignment. 13 Later, private respondent entered a plea of not guilty. 14
On October 27, 1987, petitioner filed this special civil action for
certiorari and prohibition, with a prayer for a temporary restraining
order, seeking the annulment of the order of the lower court denying
her motion to quash. The petition is anchored on the main ground that
the court is without jurisdiction "to try and decide the charge of
adultery, which is a private offense that cannot be prosecuted de officio
(sic), since the purported complainant, a foreigner, does not qualify as
an offended spouse having obtained a final divorce decree under his
national law prior to his filing the criminal complaint." 15

On October 21, 1987, this Court issued a temporary restraining order

enjoining the respondents from implementing the aforesaid order of
September 8, 1987 and from further proceeding with Criminal Case No.
87-52435. Subsequently, on March 23, 1988 Secretary of Justice
Sedfrey A. Ordoez acted on the aforesaid petitions for review and,
upholding petitioner's ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the complaints
against the petitioner. 16
We find this petition meritorious. The writs prayed for shall accordingly
issue.
Under Article 344 of the Revised Penal Code, 17 the crime of adultery, as
well as four other crimes against chastity, cannot be prosecuted except
upon a sworn written complaint filed by the offended spouse. It has
long since been established, with unwavering consistency, that
compliance with this rule is a jurisdictional, and not merely a formal,
requirement. 18 While in point of strict law the jurisdiction of the court
over the offense is vested in it by the Judiciary Law, the requirement for
a sworn written complaint is just as jurisdictional a mandate since it is
that complaint which starts the prosecutory proceeding 19 and without
which the court cannot exercise its jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for adultery and
concubinage the person who can legally file the complaint should be the
offended spouse, and nobody else. Unlike the offenses of seduction,
abduction, rape and acts of lasciviousness, no provision is made for the
prosecution of the crimes of adultery and concubinage by the parents,
grandparents or guardian of the offended party. The so-called exclusive
and successive rule in the prosecution of the first four offenses above
mentioned do not apply to adultery and concubinage. It is significant
that while the State, as parens patriae, was added and vested by the
1985 Rules of Criminal Procedure with the power to initiate the criminal
action for a deceased or incapacitated victim in the aforesaid offenses
of seduction, abduction, rape and acts of lasciviousness, in default of
her parents, grandparents or guardian, such amendment did not include
the crimes of adultery and concubinage. In other words, only the
offended spouse, and no other, is authorized by law to initiate the
action therefor.
Corollary to such exclusive grant of power to the offended spouse to
institute the action, it necessarily follows that such initiator must have
the status, capacity or legal representation to do so at the time of the
filing of the criminal action. This is a familiar and express rule in civil
actions; in fact, lack of legal capacity to sue, as a ground for a motion to

dismiss in civil cases, is determined as of the filing of the complaint or

petition.

unsevered and existing at the time of the institution of the action by the
former against the latter.

The absence of an equivalent explicit rule in the prosecution of criminal

cases does not mean that the same requirement and rationale would
not apply. Understandably, it may not have been found necessary since
criminal actions are generally and fundamentally commenced by the
State, through the People of the Philippines, the offended party being
merely the complaining witness therein. However, in the so-called
"private crimes" or those which cannot be prosecuted de oficio, and the
present prosecution for adultery is of such genre, the offended spouse
assumes a more predominant role since the right to commence the
action, or to refrain therefrom, is a matter exclusively within his power
and option.

American jurisprudence, on cases involving statutes in that jurisdiction

which are in pari materia with ours, yields the rule that after a divorce
has been decreed, the innocent spouse no longer has the right to
institute proceedings against the offenders where the statute provides
that the innocent spouse shall have the exclusive right to institute a
prosecution for adultery. Where, however, proceedings have been
properly commenced, a divorce subsequently granted can have no legal
effect on the prosecution of the criminal proceedings to a conclusion. 22

This policy was adopted out of consideration for the aggrieved party
who might prefer to suffer the outrage in silence rather than go through
the scandal of a public trial. 20 Hence, as cogently argued by petitioner,
Article 344 of the Revised Penal Code thus presupposes that the marital
relationship is still subsisting at the time of the institution of the
criminal action for, adultery. This is a logical consequence since the
raison d'etre of said provision of law would be absent where the
supposed offended party had ceased to be the spouse of the alleged
offender at the time of the filing of the criminal case. 21
In these cases, therefore, it is indispensable that the status and
capacity of the complainant to commence the action be definitely
established and, as already demonstrated, such status or capacity must
indubitably exist as of the time he initiates the action. It would be
absurd if his capacity to bring the action would be determined by his
status before or subsequent to the commencement thereof, where such
capacity or status existed prior to but ceased before, or was acquired
subsequent to but did not exist at the time of, the institution of the
case. We would thereby have the anomalous spectacle of a party
bringing suit at the very time when he is without the legal capacity to
do so.
To repeat, there does not appear to be any local precedential
jurisprudence on the specific issue as to when precisely the status of a
complainant as an offended spouse must exist where a criminal
prosecution can be commenced only by one who in law can be
categorized as possessed of such status. Stated differently and with
reference to the present case, the inquiry ;would be whether it is
necessary in the commencement of a criminal action for adultery that
the marital bonds between the complainant and the accused be

In the cited Loftus case, the Supreme Court of Iowa held that
'No prosecution for adultery can be commenced except on the
complaint of the husband or wife.' Section 4932, Code. Though Loftus
was husband of defendant when the offense is said to have been
committed, he had ceased to be such when the prosecution was begun;
and appellant insists that his status was not such as to entitle him to
make the complaint. We have repeatedly said that the offense is against
the unoffending spouse, as well as the state, in explaining the reason
for this provision in the statute; and we are of the opinion that the
unoffending spouse must be such when the prosecution is commenced.
(Emphasis supplied.)
We see no reason why the same doctrinal rule should not apply in this
case and in our jurisdiction, considering our statutory law and jural
policy on the matter. We are convinced that in cases of such nature, the
status of the complainant vis-a-vis the accused must be determined as
of the time the complaint was filed. Thus, the person who initiates the
adultery case must be an offended spouse, and by this is meant that he
is still married to the accused spouse, at the time of the filing of the
complaint.
In the present case, the fact that private respondent obtained a valid
divorce in his country, the Federal Republic of Germany, is admitted.
Said divorce and its legal effects may be recognized in the Philippines
insofar as private respondent is concerned 23 in view of the nationality
principle in our civil law on the matter of status of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24 after a
divorce was granted by a United States court between Alice Van Dornja
Filipina, and her American husband, the latter filed a civil case in a trial
court here alleging that her business concern was conjugal property
and praying that she be ordered to render an accounting and that the
plaintiff be granted the right to manage the business. Rejecting his

pretensions, this Court perspicuously demonstrated the error of such

stance, thus:
There can be no question as to the validity of that Nevada divorce in
any of the States of the United States. The decree is binding on private
respondent as an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of the Union. ...
It is true that owing to the nationality principle embodied in Article 15
of the Civil Code, only Philippine nationals are covered by the policy
against absolute divorces the same being considered contrary to our
concept of public policy and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. ...
Thus, pursuant to his national law, private respondent is no longer the
husband of petitioner. He would have no standing to sue in the case
below as petitioner's husband entitled to exercise control over conjugal
assets. ... 25
Under the same considerations and rationale, private respondent, being
no longer the husband of petitioner, had no legal standing to commence
the adultery case under the imposture that he was the offended spouse
at the time he filed suit.
The allegation of private respondent that he could not have brought this
case before the decree of divorce for lack of knowledge, even if true, is
of no legal significance or consequence in this case. When said
respondent initiated the divorce proceeding, he obviously knew that
there would no longer be a family nor marriage vows to protect once a
dissolution of the marriage is decreed. Neither would there be a danger
of introducing spurious heirs into the family, which is said to be one of
the reasons for the particular formulation of our law on adultery, 26
since there would thenceforth be no spousal relationship to speak of.
The severance of the marital bond had the effect of dissociating the
former spouses from each other, hence the actuations of one would not
affect or cast obloquy on the other.
The aforecited case of United States vs. Mata cannot be successfully
relied upon by private respondent. In applying Article 433 of the old
Penal Code, substantially the same as Article 333 of the Revised Penal
Code, which punished adultery "although the marriage be afterwards
declared void", the Court merely stated that "the lawmakers intended
to declare adulterous the infidelity of a married woman to her marital
vows, even though it should be made to appear that she is entitled to
have her marriage contract declared null and void, until and unless she

actually secures a formal judicial declaration to that effect". Definitely,

it cannot be logically inferred therefrom that the complaint can still be
filed after the declaration of nullity because such declaration that the
marriage is void ab initio is equivalent to stating that it never existed.
There being no marriage from the beginning, any complaint for adultery
filed after said declaration of nullity would no longer have a leg to stand
on. Moreover, what was consequently contemplated and within the
purview of the decision in said case is the situation where the criminal
action for adultery was filed before the termination of the marriage by a
judicial declaration of its nullity ab initio. The same rule and requisite
would necessarily apply where the termination of the marriage was
effected, as in this case, by a valid foreign divorce.
Private respondent's invocation of Donio-Teves, et al. vs. Vamenta,
hereinbefore cited, 27 must suffer the same fate of inapplicability. A
cursory reading of said case reveals that the offended spouse therein
had duly and seasonably filed a complaint for adultery, although an
issue was raised as to its sufficiency but which was resolved in favor of
the complainant. Said case did not involve a factual situation akin to the
one at bar or any issue determinative of the controversy herein.
WHEREFORE, the questioned order denying petitioner's motion to quash
is SET ASIDE and another one entered DISMISSING the complaint in
Criminal Case No. 87-52435 for lack of jurisdiction. The temporary
restraining order issued in this case on October 21, 1987 is hereby
made permanent.
SO ORDERED.
Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

15. Van dorn vs Romillo

FIRST DIVISION
G.R. No. L-68470 October 8, 1985
ALICE
REYES
VAN
DORN,
petitioner,
-versusHON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch CX,
Regional Trial Court of the National Capital Region Pasay City and
RICHARD UPTON respondents.

MELENCIO-HERRERA, J.:\
In this Petition for certiorari and Prohibition, petitioner Alice Reyes Van
Dorn seeks to set aside the Orders, dated September 15, 1983 and
August 3, 1984, in Civil Case No. 1075-P, issued by respondent Judge,
which denied her Motion to Dismiss said case, and her Motion for
Reconsideration of the Dismissal Order, respectively.
The basic background facts are that petitioner is a citizen of the
Philippines while private respondent is a citizen of the United States;
that they were married in Hongkong in 1972; that, after the marriage,
they established their residence in the Philippines; that they begot two
children born on April 4, 1973 and December 18, 1975, respectively;
that the parties were divorced in Nevada, United States, in 1982; and
that petitioner has re-married also in Nevada, this time to Theodore Van
Dorn.
Dated June 8, 1983, private respondent filed suit against petitioner in
Civil Case No. 1075-P of the Regional Trial Court, Branch CXV, in Pasay
City, stating that petitioner's business in Ermita, Manila, (the Galleon
Shop, for short), is conjugal property of the parties, and asking that
petitioner be ordered to render an accounting of that business, and that
private respondent be declared with right to manage the conjugal
property. Petitioner moved to dismiss the case on the ground that the
cause of action is barred by previous judgment in the divorce
proceedings before the Nevada Court wherein respondent had
acknowledged that he and petitioner had "no community property" as
of June 11, 1982. The Court below denied the Motion to Dismiss in the
mentioned case on the ground that the property involved is located in
the Philippines so that the Divorce Decree has no bearing in the case.
The denial is now the subject of this certiorari proceeding.

Generally, the denial of a Motion to Dismiss in a civil case is

interlocutory and is not subject to appeal. certiorari and Prohibition are
neither the remedies to question the propriety of an interlocutory order
of the trial Court. However, when a grave abuse of discretion was
patently committed, or the lower Court acted capriciously and
whimsically, then it devolves upon this Court in a certiorari proceeding
to exercise its supervisory authority and to correct the error committed
which, in such a case, is equivalent to lack of jurisdiction. 1 Prohibition
would then lie since it would be useless and a waste of time to go ahead
with the proceedings. 2Weconsider the petition filed in this case within
the exception, and we have given it due course.
For resolution is the effect of the foreign divorce on the parties and
their alleged conjugal property in the Philippines.
Petitioner contends that respondent is estopped from laying claim on
the alleged conjugal property because of the representation he made in
the divorce proceedings before the American Court that they had no
community of property; that the Galleon Shop was not established
through conjugal funds, and that respondent's claim is barred by prior
judgment.
For his part, respondent avers that the Divorce Decree issued by the
Nevada Court cannot prevail over the prohibitive laws of the Philippines
and its declared national policy; that the acts and declaration of a
foreign Court cannot, especially if the same is contrary to public policy,
divest Philippine Courts of jurisdiction to entertain matters within its
jurisdiction.
For the resolution of this case, it is not necessary to determine whether
the property relations between petitioner and private respondent, after
their marriage, were upon absolute or relative community property,
upon complete separation of property, or upon any other regime. The
pivotal fact in this case is the Nevada divorce of the parties.
The Nevada District Court, which decreed the divorce, had obtained
jurisdiction over petitioner who appeared in person before the Court
during the trial of the case. It also obtained jurisdiction over private
respondent who, giving his address as No. 381 Bush Street, San
Francisco, California, authorized his attorneys in the divorce case, Karp
&Gradt Ltd., to agree to the divorce on the ground of incompatibility in
the understanding that there were neither community property nor
community obligations. 3As explicitly stated in the Power of Attorney he
executed in favor of the law firm of KARP & GRAD LTD., 336 W. Liberty,
Reno, Nevada, to represent him in the divorce proceedings:

xxxxxxxxx
You are hereby authorized to accept service of Summons, to file an
Answer, appear on my behalf and do an things necessary and proper to
represent me, without further contesting, subject to the following:
1. That my spouse seeks a divorce on the ground of incompatibility.
2. That there is no community of property to be adjudicated by the
Court.
3. 'I'hat there are no community obligations to be adjudicated by the
court.
xxxxxxxxx4
There can be no question as to the validity of that Nevada divorce in
any of the States of the United States. The decree is binding on private
respondent as an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of the Union. What
he is contending in this case is that the divorce is not valid and binding
in this jurisdiction, the same being contrary to local law and public
policy.
It is true that owing to the nationality principle embodied in Article 15
of the Civil Code, 5 only Philippine nationals are covered by the policy
against absolute divorces the same being considered contrary to our
concept of public police and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. 6 In this case, the divorce
in Nevada released private respondent from the marriage from the
standards of American law, under which divorce dissolves the marriage.
As stated by the Federal Supreme Court of the United States in Atherton
vs. Atherton, 45 L. Ed. 794, 799:
The purpose and effect of a decree of divorce from the bond of
matrimony by a court of competent jurisdiction are to change the
existing status or domestic relation of husband and wife, and to free
them both from the bond. The marriage tie when thus severed as to one
party, ceases to bind either. A husband without a wife, or a wife
without a husband, is unknown to the law. When the law provides, in
the nature of a penalty.that the guilty party shall not marry again, that
party, as well as the other, is still absolutely freed from the bond of the
former marriage.

Thus, pursuant to his national law, private respondent is no longer the

husband of petitioner. He would have no standing to sue in the case
below as petitioner's husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own country's Court, which
validly exercised jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before said Court
from asserting his right over the alleged conjugal property.
To maintain, as private respondent does, that, under our laws,
petitioner has to be considered still married to private respondent and
still subject to a wife's obligations under Article 109, et. seq. of the Civil
Code cannot be just. Petitioner should not be obliged to live together
with, observe respect and fidelity, and render support to private
respondent. The latter should not continue to be one of her heirs with
possible rights to conjugal property. She should not be discriminated
against in her own country if the ends of justice are to be served.
WHEREFORE, the Petition is granted, and respondent Judge is hereby
ordered to dismiss the Complaint filed in Civil Case No. 1075-P of his
Court.
Without costs.
SO ORDERED.
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., De la Fuente and
Patajo, JJ., concur.