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Sec.

4 Rule 129
1. Republic Glass vs. Qua 435 SCRA 480 (July 30, 2004)
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the 6 March 2000
Decision[2] and the 26 July 2000 Resolution of the Court of Appeals in CAG.R. CV No. 54737. The Court of Appeals set aside the Order [3] of 3 May
1996 of the Regional Trial Court of Makati, Branch 63 (RTC-Branch 63), in
Civil Case No. 88-2643 and reinstated the Decision [4] of 12 January 1996 in
respondents favor.
The Facts
Petitioners Republic Glass Corporation (RGC) and Gervel, Inc.
(Gervel) together with respondent Lawrence C. Qua (Qua) were
stockholders of Ladtek, Inc. (Ladtek). Ladtek obtained loans from
Metropolitan Bank and Trust Company (Metrobank)[5] and Private
Development Corporation of the Philippines [6] (PDCP) with RGC, Gervel
and Qua as sureties. Among themselves, RGC, Gervel and Qua executed
Agreements for Contribution, Indemnity and Pledge of Shares of Stocks
(Agreements).[7]
The Agreements all state that in case of default in the payment of
Ladteks loans, the parties would reimburse each other the proportionate
share of any sum that any might pay to the creditors. [8] Thus, a common
provision appears in the Agreements:
RGC, GERVEL and QUA each covenant that each will
respectively reimburse the party made to pay the Lenders
to the extent and subject to the limitations set forth herein,
all sums of money which the party made to pay the
Lenders shall pay or become liable to pay by reason of any
of the foregoing, and will make such payments within five
(5) days from the date that the party made to pay the
Lenders gives written notice to the parties hereto that it
shall have become liable therefor and has advised the
Lenders of its willingness to pay whether or not it shall
have already paid out such sum or any part thereof to
the Lenders or to the persons entitled thereto. (Emphasis
supplied)

Ladtek defaulted on its loan obligations to Metrobank and PDCP.


Hence, Metrobank filed a collection case against Ladtek, RGC, Gervel and
Qua docketed as Civil Case No. 8364 (Collection Case No. 8364) which
was raffled to the Regional Trial Court of Makati, Branch 149 (RTC-Branch
149). During the pendency of Collection Case No. 8364, RGC and Gervel
paid Metrobank P7 million. Later, Metrobank executed a waiver and
quitclaim dated 7 September 1988 in favor of RGC and Gervel. Based on
this waiver and quitclaim,[9] Metrobank, RGC and Gervel filed on 16
September 1988 a joint motion to dismiss Collection Case No. 8364 against
RGC and Gervel. Accordingly, RTC-Branch 149 dismissed the case against
RGC and Gervel, leaving Ladtek and Qua as defendants. [10]
In a letter dated 7 November 1988, RGC and Gervels counsel, Atty.
Antonio C. Pastelero, demanded that Qua pay P3,860,646, or 42.22%
of P8,730,543.55,[11] as reimbursement of the total amount RGC and Gervel
paid to Metrobank and PDCP. Qua refused to reimburse the amount to RGC
and Gervel. Subsequently, RGC and Gervel furnished Qua with notices of
foreclosure of Quas pledged shares.
Qua filed a complaint for injunction and damages with application
for a temporary restraining order, docketed as Civil Case No. 88-2643
(Foreclosure Case No. 88-2643), with RTC-Branch 63 to prevent RGC and
Gervel from foreclosing the pledged shares. Although it issued a
temporary restraining order on 9 December 1988, RTC-Branch 63 denied
on 2 January 1989 Quas Urgent Petition to Suspend Foreclosure
Sale. RGC and Gervel eventually foreclosed all the pledged shares of
stock at public auction. Thus, Quas application for the issuance of a
preliminary injunction became moot.[12]
Trial in Foreclosure Case No. 88-2643 ensued. RGC and Gervel
offered Quas Motion to Dismiss[13] in Collection Case No. 8364 as basis for
the foreclosure of Quas pledged shares. Quas Motion to Dismiss states:
8.

The foregoing facts show that the


payment of defendants Republic Glass
Corporation and Gervel, Inc. was for the
entire obligation covered by the Continuing
Surety Agreements which were Annexes B and
C of the Complaint, and that the same naturally
redound[ed] to the benefit of defendant Qua
herein, as provided for by law, specifically Article
1217 of the Civil Code, which states that:
xxx

Under the same Agreements, Qua pledged 1,892,360 common


shares of stock of General Milling Corporation (GMC) in favor of RGC and
Gervel. The pledged shares of stock served as security for the payment of
any sum which RGC and Gervel may be held liable under the Agreements.

10.

It is very clear that the payment of defendants


Republic Glass Corporation and Gervel, Inc. was
much more than the amount stipulated in the
Continuing Surety Agreement which is the basis for
the action against them and defendant Qua, which
was just SIX MILLION TWO HUNDRED [THOUSAND]

PESOS (P6,200,000.00), hence, logically the said


alleged obligation must now be considered as fully
paid and extinguished.
RGC and Gervel likewise offered as evidence in Foreclosure
Case No. 88-2643 the Order dismissing Collection Case No. 8364, [14] which
RTC-Branch 149 subsequently reversed on Metrobanks motion for
reconsideration. Thus, RTC-Branch 149 reinstated Collection Case
No.
8364 against Qua.
On 12 January 1996, RTC-Branch 63 rendered a Decision in
Foreclosure Case No. 88-2643 (12 January 1996 Decision) ordering RGC
and Gervel to return the foreclosed shares of stock to Qua. The dispositive
portion of the 12 January 1996 Decision reads:
WHEREFORE, premises considered, this Court
hereby renders judgment ordering defendants jointly and
severally liable to return to plaintiff the 1,892,360 shares of
common stock of General Milling Corporation which they
foreclosed on December 9, 1988, or should the return of
these shares be no longer possible then to pay to plaintiff
the amount of P3,860,646.00 with interest at 6% per
annum from December 9, 1988 until fully paid and to pay
plaintiff P100,000.00 as and for attorneys fees. The costs
will be for defendants account.
SO ORDERED.[15]
However, on RGC and Gervels Motion for Reconsideration, RTCBranch 63 issued its Order of 3 May 1996 (3 May 1996 Order)
reconsidering and setting aside the 12 January 1996 Decision. The 3 May
1996 Order states:
After a thorough review of the records of the case,
and an evaluation of the evidence adduced by the parties
as well as their contentions, the issues to be resolved boil
down to the following:
1. Whether or not the parties obligation to
reimburse, under the Indemnity Agreements was
premised on the payment by any of them of the
entire obligation;
2. Whether or not there is basis to
plaintiffs apprehension that he would be made to
pay twice for the single obligation; and
3. Whether or not plaintiff was benefited
by the payments made by defendants.

Regarding the first issue, a closer scrutiny of the


pertinent provisions of the Indemnity Agreements executed
by the parties would not reveal any significant indication
that the parties liabilities are indeed premised on the
payment by any of them of the entire obligation. These
agreements clearly provide that the parties obligation to
reimburse accrues upon mere advice that one of them has
paid or will so pay the obligation. It is not specified
whether the payment is for the entire obligation or not.
Accordingly, the Court stands corrected in this
regard. The obvious conclusion that can be seen now
is that payment of the entire obligation is not a
condition sine qua non for the paying party to
demand reimbursement. The parties have expressly
contracted that each will reimburse whoever is made to
pay the obligation whether entirely or just a portion
thereof.
On the second issue, plaintiffs apprehension that
he would be made to pay twice for the single obligation is
unfounded. Under
the
above-mentioned
Indemnity
Agreements, in the event that the creditors are able to
collect from him, he has the right to ask defendants to pay
their proportionate share, in the same way defendants had
collected from the plaintiff, by foreclosing his pledged
shares of stock, his proportionate share, after they had
made payments. From all indications, the provisions of the
Indemnity Agreements have remained binding between the
parties.
On the third issue, there is merit to defendants
assertion that plaintiff has benefited from the payments
made by defendants. As alleged by defendants, and
this has not been denied by plaintiff, in Civil Case
No. 8364 filed before Branch 149 of this Court,
where the creditors were enforcing the parties
liabilities as sureties, plaintiff succeeded in having
the case dismissed by arguing that defendants
payments [were] for the entire obligation, hence,
the obligation should be considered fully paid and
extinguished. With the dismissal of the case, the
indications are that the creditors are no longer running
after plaintiff to enforce his liabilities as surety of Ladtek.
Whether or not the surety agreements signed by
the parties and the creditors were novated is not material
in this controversy. The fact is that there was payment of
the obligation. Hence, the Indemnity Agreements govern.

In the final analysis, defendants payments gave


rise
to
plaintiffs
obligation
to
reimburse
the
former. Having failed to do so, upon demand, defendants
were justified in foreclosing the pledged shares of stocks.

The Counterclaims of the defendants Ladtek, Inc.


and Lawrence C. Qua against the plaintiff are hereby
dismissed.
Likewise, the cross-claims of the defendants are
dismissed.

xxx
WHEREFORE, premises considered, the decision
dated January 12, 1996 is reconsidered and set aside. The
above-entitled complaint against defendants is DISMISSED.
Likewise,
dismissed.

defendants

counterclaim

is

also

SO ORDERED.[19] (Emphasis supplied)


On 6 March 2000, the Court of Appeals rendered the questioned
Decision setting aside the 3 May 1996 Order of RTC-Branch 63 and
reinstating the 12 January 1996 Decision ordering RGC and Gervel to return
the foreclosed shares of stock to Qua.[20]

SO ORDERED.[16] (Emphasis supplied)


Hence, this petition.
The Ruling of the Court of Appeals
Qua filed a motion for reconsideration of the 3 May 1996 Order
which RTC-Branch 63 denied.
Aggrieved, Qua appealed to the Court of Appeals. During the
pendency of the appeal, Qua filed a Manifestation [17] with the Court of
Appeals attaching the Decision[18]of 21 November 1996 rendered in
Collection Case No. 8364. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is
hereby rendered ordering defendants Ladtek, Inc. and
Lawrence C. Qua:
1.
To pay, jointly and severally, the
plaintiff the amount of P44,552,738.34 as of October 31,
1987 plus the stipulated interest of 30.73% per annum and
penalty charges of 12% per annum from November 1, 1987
until the whole amount is fully paid, less P7,000,000.00
paid by defendants Republic Glass Corporation and Gervel,
Inc., but the liability of defendant Lawrence C. Qua
should
be
limited
only
to P5,000,000.00
and P1,200,000.00, the amount stated in the
Continuing Suretyship dated June 15, 1983, Exh. D
and Continuing Suretyship dated December 14,
1981, Exh. D-1, respectively, plus the stipulated
interest and expenses incurred by the plaintiff.
2.
To pay, jointly and severally, the
plaintiff an amount equivalent to ten (10%) percent of the
total amount due as and by way of attorneys fees;
3.

To pay the cost of suit.

In reversing the 3 May 1996 Order and reinstating the 12 January


1996 Decision, the appellate court quoted the RTC-Branch 63s 12 January
1996 Decision:
The liability of each party under the indemnity
agreements therefore is premised on the payment by any
of them of the entire obligation. Without such payment,
there
would
be
no
corresponding
share
to
reimburse. Payment of the entire obligation naturally
redounds to the benefit of the other solidary debtors who
must then reimburse the paying co-debtors to the extent of
his corresponding share.
In the case at bar, Republic Glass and Gervel made
partial payments only, and so they did not extinguish the
entire obligation. But Republic Glass and Gervel
nevertheless obtained quitclaims in their favor and so they
ceased to be solidarily liable with plaintiff for the balance
of the debt (Exhs. D, E, and I). Plaintiff thus became
solely liable for the unpaid portion of the debt even as he is
being held liable for reimbursement on the said portion.
What happened therefore, was that Metrobank and
PDCP in effect enforced the Suretyship Agreements jointly
as against plaintiff and defendants. Consequently, the
solidary obligation under the Suretyship Agreements was
novated by the substantial modification of its principal
conditions. xxx The resulting change was from one with
three solidary debtors to one in which Lawrence Qua
became the sole solidary co-debtor of Ladtek.

Defendants cannot simply pay off a portion of the


debt and then absolve themselves from any further liability
when the obligation has not been totally extinguished.

The Issues
RGC and Gervel raise the following issues for resolution:

xxx
In the final reckoning, this Court finds that the
foreclosure and sale of the shares pledged by plaintiff was
totally unjustified and without basis because the obligation
secured by the underlying pledge had been extinguished
by novation. xxx[21]

The Court of Appeals further held that there was an implied novation
or substantial incompatibility in the suretys mode or manner of payment
from one for the entire obligation to one merely of proportionate share. The
appellate court ruled that RGC and Gervels payment to the creditors only
amounted to their proportionate shares of the obligation, considering the
following evidence:
The letter of the Republic to the appellant, Exhibit
G, dated June 25, 1987, which mentioned the letter from
PDCP confirming its willingness to release the joint and
solidary obligation of the Republic and Gervel subject to
some terms and conditions, one of which is the appellants
acceptable repayment plan of his pro-rata share; and the
letter of PDCP to the Republic, Exhibit H, mentioning full
payment of the pro rata share of the Republic and
Gervel, and the need of the appellant to submit an
acceptable repayment plan covering his pro-rata share,
the release from solidary liability by PDCP, Exhibit J,
mentioning full payment by the Republic and Gervel of
their pro rata share in the loan, as solidary obligors,
subject however to the terms and conditions of the hold
out agreement; and the non-payment in full of the loan,
subject of the May 10, 1984 Promissory Note, except the 7
million payment by both Republic and Gervel, as
mentioned in the Decision (Case No. 8364, Metrobank vs.
Ladtek, et al). Precisely, Ladtek and the appellant, in said
Decision were directed to pay Metrobank the balance
ofP9,560,798, supposedly due and unpaid.
Thus, the payment did not extinguish the entire obligation and did not
benefit Qua. Accordingly, RGC and Gervel cannot demand reimbursement.
The Court of Appeals also held that Qua even became solely answerable
for the unpaid balance of the obligations by virtue of the quitclaims
executed by Metrobank and PDCP in favor of RGC and Gervel. RGC and
Gervel ceased to be solidarily liable for Ladteks loan obligations. [22]

I.
WHETHER THE PRINCIPLE OF ESTOPPEL APPLIES TO QUAS
JUDICIAL STATEMENTS THAT RGC AND GERVEL PAID THE
ENTIRE OBLIGATION.
II.
WHETHER PAYMENT OF THE ENTIRE OBLIGATION IS A
CONDITION SINE QUA NON FOR RGC AND GERVEL TO
DEMAND REIMBURSEMENT FROM QUA UNDER THE
INDEMNITY AGREEMENTS EXECUTED BY THEM AFTER RGC
AND GERVEL PAID METROBANK UNDER THE SURETY
AGREEMENT.
III.
ASSUMING ARGUENDO THAT THERE WAS NOVATION OF
THE SURETY AGREEMENTS SIGNED BY THE PARTIES AND
THE CREDITORS, WHETHER THE NOVATION IS MATERIAL IN
THIS CASE.[23]
The Courts Ruling
We deny the petition.
Whether Qua was in estoppel
RGC and Gervel contend that Qua is in estoppel for making
conflicting statements in two different and separate cases. Qua cannot now
claim
that
the
payment
made
to
Metrobank
was not for
the entire obligation because of his Motion to Dismiss Collection Case No.
8364 where he stated that RGC and Gervels payment was for
the entireobligation.
The essential elements of estoppel in pais are considered in
relation to the party to be estopped, and to the party invoking the estoppel
in his favor. On the party to be estopped, such party (1) commits
conduct amounting to false representation or concealment of material
facts or at least calculated to convey the impression that the facts are
inconsistent with those which the party subsequently attempts to assert;
(2) has the intent, or at least expectation that his conduct shall at least
influence the other party; and
(3) has knowledge, actual or
constructive, of the real facts. On the party claiming the estoppel, such
party (1) has lack of knowledge and of the means of knowledge of the
truth on the facts in question; (2) has relied, in good faith, on the conduct
or statements of the party to be estopped; (3) has acted or refrained from
acting based on such conduct or statements as to change the position or

status of the party claiming the estoppel, to his injury, detriment or


prejudice.[24]
In this case, the essential elements of estoppel are inexistent.
While Quas statements in Collection Case No. 8364 conflict with
his statements in Foreclosure Case No. 88-2643, RGC and Gervel miserably
failed to show that Qua, in making those statements, intended to falsely
represent or conceal the material facts. Both parties undeniably know the
real facts.
Nothing in the records shows that RGC and Gervel relied on Quas
statements in Collection Case No. 8364 such that they changed their
position or status, to their injury, detriment or prejudice. RGC and Gervel
repeatedly point out that it was the presiding judge [25] in Collection Case
No. 8364 who relied on Quas statements in Collection Case No. 8364. RGC
and Gervel claim that Qua deliberately led the Presiding Judge to believe
that their payment to Metrobank was for the entire obligation. As a result,
the presiding judge ordered the dismissal of Collection Case No. 8364
against Qua.[26]
RGC and Gervel further invoke Section 4 of Rule 129 of the Rules of
Court to support their stance:
Sec. 4. Judicial admissions. An admission, verbal
or written, made by a party in the course of the
proceedings in the same case, does not require
proof. The admission may be contradicted only by showing
that it was made through palpable mistake or that no such
admission was made.
A party may make judicial admissions in (a) the pleadings filed by the
parties, (b) during the trial either by verbal or written manifestations or
stipulations, or (c) in other stages of the judicial proceeding. [27]

The elements of judicial admissions are absent in this case. Qua


made conflicting statements in Collection Case No. 8364 and in Foreclosure
Case No. 88-2643, and not in the same case as required in Section 4 of
Rule 129. To constitute judicial admission, the admission must be made in
the same case in which it is offered. If made in another case or in another
court, the fact of such admission must be proved as in the case of any
other fact, although if made in a judicial proceeding it is entitled to greater
weight.[28]
RGC and Gervel introduced Quas Motion to Dismiss and the Order
dismissing Collection Case No. 8364 to prove Quas claim that the payment
was for the entire obligation. Qua does not deny making such statement
but explained that he honestly believed and pleaded in the lower court
and in CA-G.R. CV No. 58550 that the entire debt was fully extinguished
when the petitioners paid P7 million to Metrobank.[29]
We find Quas explanation substantiated by the evidence on
record. As stated in the Agreements, Ladteks original loan from Metrobank
was only P6.2 million. Therefore, Qua reasonably believed that RGC and
Gervels P7 million payment to Metrobank pertained to the entire
obligation. However, subsequent facts indisputably show that RGC and
Gervels payment was not for the entire obligation. RTC-Branch 149
reinstated Collection Case No. 8364 against Qua and ruled in Metrobanks
favor, ordering Qua to pay P6.2 million.
Whether payment of the entire obligation is an
essential condition for reimbursement
RGC and Gervel assail the Court of Appeals ruling that the parties
liabilities under the Agreements depend on the full payment of the
obligation. RGC and Gervel insist that it is not an essential condition that
the entire obligation must first be paid before they can seek
reimbursement from Qua. RGC and Gervel contend that Qua should pay
42.22% of any amount which they paid or would pay Metrobank and
PDCP.
RGC and Gervels contention is partly meritorious.
Payment of the entire obligation by one or some of the solidary
debtors results in a corresponding obligation of the other debtors to
reimburse the paying debtor.[30]However, we agree with RGC and Gervels
contention that in this case payment of the entire obligation is not an
essential condition before they can seek reimbursement from Qua. The
words of the Agreements are clear.
RGC, GERVEL and QUA each covenant that each
will respectively reimburse the party made to pay the
Lenders to the extent and subject to the limitations set
forth herein, all sums of money which the party made

to pay the Lenders shall pay or become liable to


pay by reason of any of the foregoing, and will make such
payments within five (5) days from the date that the party
made to pay the Lenders gives written notice to the parties
hereto that it shall have become liable therefor and has
advised the Lenders of its willingness to pay whether or not
it shall have already paid out such sum or any part
thereof to the Lenders or to the persons entitled thereto.
(Emphasis supplied)
The Agreements are contracts of indemnity not only against actual
loss but against liability as well. In Associated Insurance & Surety Co.,
Inc. v. Chua,[31] we distinguished between a contract of indemnity against
loss and a contract of indemnity against liability, thus: [32]
The agreement here sued upon is not only one of
indemnity against loss but of indemnity against
liability. While the first does not render the indemnitor
liable until the person to be indemnified makes payment or
sustains loss, the second becomes operative as soon
as the liability of the person indemnified arises
irrespective of whether or not he has suffered actual
loss. (Emphasis supplied)
Therefore, whether the solidary debtor has paid the creditor, the other
solidary debtors should indemnify the former once his liability becomes
absolute. However, in this case, the liability of RGC, Gervel and Qua
became absolute simultaneously when Ladtek defaulted in its loan
payment. As a result, RGC, Gervel and Qua all became directly liable at the
same time to Metrobank and PDCP. Thus, RGC and Gervel cannot
automatically claim for indemnity from Qua because Qua himself is liable
directly to Metrobank and PDCP.
If we allow RGC and Gervel to collect from Qua his proportionate
share, then Qua would pay much more than his stipulated liability under
the Agreements. In addition to the P3,860,646 claimed by RGC and
Gervel, Qua would have to pay his liability of P6.2 million to Metrobank and
more than P1 million to PDCP. Since Qua would surely exceed his
proportionate share, he would then recover from RGC and Gervel the
excess payment. This situation is absurd and circuitous.
Contrary to RGC and Gervels claim, payment of any amount will
not automatically result in reimbursement. If a solidary debtor pays the
obligation in part, he can recover reimbursement from the co-debtors only
in so far as his payment exceeded his share in the obligation. [33] This is
precisely because if a solidary debtor pays an amount equal to his
proportionate share in the obligation, then he in effect pays only what is
due from him. If the debtor pays less than his share in the obligation, he
cannot demand reimbursement because his payment is less than his actual
debt.

To determine whether RGC and Gervel have a right to


reimbursement, it is indispensable to ascertain the total obligation of the
parties. At this point, it becomes necessary to consider the decision in
Collection Case No. 8364 on the parties obligation to Metrobank. To
repeat, Metrobank filed Collection Case No. 8364 against Ladtek, RGC,
Gervel and Qua to collect Ladteks unpaid loan.
RGC and Gervel assail the Court of Appeals consideration of the
decision in Collection Case No. 8364 [34] because Qua did not offer the
decision in evidence during the trial in Foreclosure Case No. 88-2643
subject of this petition. RTC-Branch 62[35] rendered the decision in
Collection Case No. 8364 on 21 November 1996 while Qua filed his Notice
of Appeal of the 3 May 1996 Order on 19 June 1996. Qua could not have
possibly offered in evidence the decision in Collection Case No. 8364
because RTC-Branch 62 rendered the decision only after Qua elevated the
present case to the Court of Appeals. Hence, Qua submitted the decision in
Collection Case No. 8364 during the pendency of the appeal of Foreclosure
Case No. 88-2643 in the Court of Appeals.
As found by RTC-Branch 62, RGC, Gervel and Quas total obligation
was P14,200,854.37 as of 31 October 1987. [36] During the pendency of
Collection Case No. 8364, RGC and Gervel paid Metrobank P7 million.
Because of the payment, Metrobank executed a quitclaim[37] in favor of
RGC and Gervel. By virtue of Metrobanks quitclaim, RTC-Branch 62
dismissed Collection Case No. 8364 against RGC and Gervel, leaving
Ladtek and Qua as defendants. Considering that RGC and Gervel paid
only P7 million out of the total obligation of P14,200,854.37, which
payment was less than RGC and Gervels combined shares in the
obligation,[38] it was clearly partial payment. Moreover, if it were full
payment, then the obligation would have been extinguished. Metrobank
would have also released Qua from his obligation.
RGC and Gervel also made partial payment to PDCP. Proof of this is
the Release from Solidary Liability that PDCP executed in RGC and Gervels
favor which stated that their payment of P1,730,543.55 served as full
payment of their corresponding proportionate share in Ladteks foreign
currency loan.[39] Moreover, PDCP filed a collection case against Qua alone,
docketed as Civil Case No. 2259, in the Regional Trial Court of Makati,
Branch 150.[40]
Since they only made partial payments, RGC and Gervel should
clearly and convincingly show that their payments to Metrobank and PDCP
exceeded their proportionate shares in the obligations before they can
seek reimbursement from Qua. This RGC and Gervel failed to do. RGC and
Gervel, in fact, never claimed that their payments exceeded their shares in
the obligations. Consequently, RGC and Gervel cannot validly seek
reimbursement from Qua.
Whether there was novation of the Agreements

RGC and Gervel contend that there was no novation of the


Agreements. RGC and Gervel further contend that any novation of the
Agreements is immaterial to this case. RGC and Gervel disagreed with the
Court of Appeals on the effect of the implied novation which supposedly
transpired in this case. The Court of Appeals found that there was an
implied novation or substantial incompatibility in the mode or manner of
payment by the surety from the entire obligation, to one merely of
proportionate share. RGC and Gervel claim that if it is true that an implied
novation occurred, then the effect would be to release respondent (Qua)
as the entire obligation is considered extinguished by operation of
law. Thus, Qua should now reimburse RGC and Gervel his proportionate
share under the surety agreements.
Novation extinguishes an obligation by (1) changing its object or
principal conditions; (2) substituting the person of the debtor;
and
(3) subrogating a third person in the rights of the
creditor. Article 1292 of the Civil Code clearly provides that in order that
an obligation may be extinguished by another which substitutes the same,
it should be declared in unequivocal terms, or that the old and new
obligations be on every point incompatible with each other. [41] Novation
may either be extinctive or modificatory. Novation is extinctive when an old
obligation is terminated by the creation of a new obligation that takes the
place of the former. Novation is merely modificatory when the old
obligation subsists to the extent it remains compatible with the
amendatory agreement.[42]
We find that there was no novation of the Agreements. The parties
did not constitute a new obligation to substitute the Agreements. The
terms and conditions of the Agreements remain the same. There was also
no showing of complete incompatibility in the manner of payment of the
parties obligations. Contrary to the Court of Appeals ruling, the mode or
manner of payment by the parties did not change from one for the entire
obligation to one merely of proportionate share. The creditors, namely
Metrobank and PDCP, merely proceeded against RGC and Gervel for their
proportionate shares only.[43] This preference is within the creditors
discretion which did not necessarily affect the nature of the obligations as
well as the terms and conditions of the Agreements. A creditor may
choose to proceed only against some and not all of the solidary
debtors. The creditor may also choose to collect part of the debt from
some of the solidary debtors, and the remaining debt from the other
solidary debtors.
In sum, RGC and Gervel have no legal basis to seek reimbursement
from Qua. Consequently, RGC and Gervel cannot validly foreclose the
pledge of Quas GMC shares of stock which secured his obligation to
reimburse.[44] Therefore, the foreclosure of the pledged shares of stock has
no leg to stand on.
WHEREFORE, we DENY the petition. The Decision dated 6 March
2000 of the Court of Appeals in CA-G.R. CV No. 54737 is AFFIRMED. Costs
against petitioners.

SO ORDERED.
2. Republic vs. Sandiganbayan G.R. 166859 (April 12, 2000)
FACTS
A complaint was filed against the defendants Eduardo Cojuangco Jr., the
ACCRA lawyers, Danilo Ursua and 71 corporations by the Presidential
Commission on Good Government (PCGG) referred here as Republic of the
Philippines with regard to a block of San Miguel Corporation (SMC) stock
which were allegedly bought through the CIIF Holding Companies and
funded by the coconut levy fund passing through the Unicom Oil Mills and
directly from UCPB. The coconut levy funds were considered as
government funds since this came from contributions from the coconut
farmers with the purpose of improving and stabilizing the coconut farming
industry, however these were said to be privatized under presidential
directives of then Pres. Marcos. Defendant Cojuangco Jr., being close with
the Marcoses is said to have taken undue advantage of his association,
influence and connection, embarked upon different devices and schemes
including the use of the ACCRA Lawyers as nominee shareholders and
the defendant corporations as fronts to unjustly enrich themselves at the
expense of the Filipino people when he misused the coconut levy fund,
amounting to $150 million, to purchase 33 million shares of the SMC
through the holding companies. Hence with the allegations mentioned and
with different cases and issues which remain unresolved, the block of
shares representing 20% of the outstanding capital stock of SMC remained
sequestered by the government.
During the pre-trial brief, the Sandiganbayan sought clarification from the
parties, particularly the Republic, on their respective positions, but at the
end it found the clarifications "inadequately" enlightening. To resolve
various pending motions and pleadings, Sandiganbayan lifted and declared
the Writs of Sequestration null and void.
Despite the lifting of the writs of sequestration, since the Republic
continues to hold a claim on the shares which is yet to be resolved, it is
hereby ordered that the following shall be annotated in the relevant
corporate books of San Miguel Corporation:
(1) any sale, pledge, mortgage or other disposition of any of the shares of
the Defendants Eduardo Cojuangco, et al. shall be subject to the outcome
of this case;
(2) the Republic through the PCGG shall be given twenty (20) days written
notice by Defendants Eduardo Cojuangco, et al. prior to any sale, pledge,
mortgage or other disposition of the shares;

(3) in the event of sale, mortgage or other disposition of the shares, by the
Defendants Cojuangco, et al., the consideration therefore, whether in cash
or in kind, shall be placed in escrow with Land Bank of the Philippines,
subject to disposition only upon further orders of this Court; and

(4) any cash dividends that are declared on the shares shall be placed in
escrow with the Land Bank of the Philippines, subject to disposition only
upon further orders of this Court. If in case stock dividends are declared,
the conditions on the sale, pledge, mortgage and other disposition of any
of the shares as above-mentioned in conditions 1, 2 and 3, shall likewise
apply.
Sandiganbayan denied both Motion for Reconsideration and Motion for
Modification but eventually reduced its resolution deleting the last 2
provisions. Cojuangco, et al. filed a Motion for Authority to Sell San Miguel
Corporation (SMC) shares, praying for leave to allow the sale of SMC shares
and Sandiganbayan granted the motion. Cojuangco, et al. later rendered a
complete accounting of the proceeds from the sale of the Cojuangco block
of shares of SMC stock, informing that a total amount of P
4,786,107,428.34 had been paid to the UCPB as loan repayment.
ISSUE
Whether or not Sandiganbayan has committed grave abuse of dicretion in:
(a) in lifting the Writ of Sequestrations on the sequestered SMC shares.
(c) in deleting the last two conditions the Sandiganbayan had earlier
imposed on the subject shares of stock.
RULING
Among the WOS issued, only one writ WOS 87-0218 complied with PCGG
Rules and Regulations requirement that the issuance be made by at least
two Commissioners. However, even if Writ of Sequestration No. 87-0218
complied with the requirement that the same be issued by at least two
Commissioners, the records fail to show that it was issued with factual
basis or with factual foundation. It is the absence of a prima facie basis for
the issuance of a writ of sequestration and not the lack of authority of two
(2) Commissioners which renders the said writ void ab initio. Thus, being
the case, Writ of Sequestration No. 87-0218 must be automatically lifted.
Consequently, the writs of sequestration nos. 86-0062, 86-0069, 86-0085,
86-0095, 86-0096, 86-0097 and 86-0098 must be lifted for not having
complied with the pertinent provisions of the PCGG Rules and Regulations,
all of which were issued by only one Commissioner.
Nor did the Sandiganbayan gravely abuse its discretion in reducing from
four to only two the conditions imposed for the lifting of the WOS. The
Sandiganbayan thereby acted with the best of intentions, being all too

aware that the claim of the Republic to the sequestered assets and
properties might be prejudiced or harmed pendente lite unless the
protective conditions were annotated in the corporate books of SMC.
Moreover, the issue became academic following the Sandiganbayans
promulgation of its decision dismissing the Republic's Amended Complaint,
which thereby removed the stated reason - "the Republic continues to hold
a claim on the shares which is yet to be resolved" - underlying the need for
the annotation of the conditions (whether four or two).

G.R. No. 110844

April 27, 2000

ALFREDO CHING, petitioner,


vs.
HON. COURT OF APPEALS, HON. ZOSIMO Z. ANGELES, RTC- BR. 58,
MAKATI, METRO MANILA, PEOPLE OF THE PHILIPPINES AND ALLIED
BANKING CORPORATION, respondents.
Confronting the Court in this instant petition for review on certiorari under
Rule 45 is the task of resolving the issue of whether the pendency of a civil
action for damages and declaration of nullity of documents, specifically
trust receipts, warrants the suspension of criminal proceedings instituted
for violation of Article 315 1(b) of the Revised Penal Code, in relation to P.D.
115, otherwise known as the "Trust Receipts Law".
Petitioner Alfredo Ching challenges before us the decision 1 of the Court of
Appeals promulgated on 27 January 1993 in CA G.R. SP No. 28912,
dismissing his "Petition for Certiorari and Prohibition with Prayer for
Issuance of Temporary Restraining Order/ Preliminary Injunction", on the
ground of lack of merit.
Assailed similarly is the resolution2 of the Court of Appeals dated 28 June
1993 denying petitioner's motion for reconsideration.
As borne by the records, the controversy arose from the following facts:
On 04 February 1992,3 petitioner was charged before the Regional Trial
Court of Makati (RTC-Makati), Branch 58, with four counts of estafa
punishable under Article 315 par. 1(b) of the Revised Penal Code, in
relation to Presidential Decree 115, otherwise known as the "Trust Receipts
Law".
The four separate informations4 which were couched in similar language
except for the date, subject goods and amount thereof, charged herein
petitioner in this wise:

That on or about the (18th day of May 1981; 3rd day of June 1981;
24th day of June 1981 and 24th day of June 1981), in the
Municipality of Makati, Metro Manila, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused
having executed a trust receipt agreement in favor of Allied
Banking Corporation in consideration of the receipt by the said
accused of goods described as "12 Containers (200 M/T) Magtar
Brand Dolomites"; "18 Containers (Zoom M/T) Magtar Brand
Dolomites"; "High Fired Refractory Sliding Nozzle Bricks"; and "High
Fired Refractory Sliding Nozzle Bricks" for which there is now due
the sum of (P278, 917.80; P419,719.20; P387, 551. 95; and
P389,085.14 respectively) under the terms of which the accused
agreed to sell the same for cash with the express obligation to
remit to the complainant bank the proceeds of the sale and/or to
turn over the goods, if not sold, on demand, but the accused, once
in possession of said goods, far from complying with his obligation
and with grave abuse of confidence, did then and there, willfully,
unlawfully and feloniously misappropriate, misapply and convert to
his own personal use and benefit the said goods and/or the
proceeds of the sale thereof, and despite repeated demands, failed
and refused and still fails and refuses, to account for and/or remit
the proceeds of sale thereof to the Allied Banking Corporation to
the damage and prejudice of the said complainant bank in the
aforementioned amount of (P278,917.80; P419,719.20;
P387,551.95; and P389,085.14).

On 26 August 1992, the RTC-Makati issued an order9 which denied the


petition for suspension and scheduled the arraignment and pre-trial of the
criminal cases. As a result, petitioner moved to reconsider10 the order to
which the prosecution filed an opposition.
In an order11 dated 04 September 1992, the RTC-Makati, before which the
criminal cases are pending, denied petitioner's motion for reconsideration
and set the criminal cases for arraignment and pre-trial.
Aggrieved by these orders12 of the lower court in the criminal cases,
petitioner brought before the Court of Appeals a petition for certiorari and
prohibition which sought to declare the nullity of the aforementioned
orders and to prohibit the RTC-Makati from conducting further proceedings
in the criminal cases.
In denying the petition,13 the Court of Appeals, in CA G.R. SP No. 28912,
ruled:
. . . Civil Case No. 90-60600 pending before the Manila Regional
Trial Court seeking (sic) the declaration of nullity of the trust
receipts in question is not a prejudicial question to Criminal Case
Nos. 92-0934 to 37 pending before the respondent court charging
the petitioner with four counts of violation of Article 315, par. 1(b),
RPC, in relation to PD 115 as to warrant the suspension of the
proceedings in the latter . . . .

On 10 February 1992, an "Omnibus Motion 5 to Strike Out Information, or in


the Alternative to Require Public Prosecutor to Conduct Preliminary
Investigation, and to Suspend in the Meantime Further Proceedings in
these Cases," was filed by the petitioner.

Consequently, petitioner filed a motion for reconsideration of the decision


which the appellate court denied for lack of merit, via a resolution 14 dated
28 June 1993.

In an order dated 13 February 1992, the Regional Trial Court of Makati,


Branch 58, acting on the omnibus motion, required the prosecutor's office
to conduct a preliminary investigation and suspended further proceedings
in the criminal cases.

Notwithstanding the decision rendered by the Court of Appeals, the RTCManila, Branch 53 in an order dated 19 November 1993 in Civil Case No.
92-60600, admitted petitioner's amended complaint15 which, inter alia,
prayed the court for a judgment:

On 05 March 1992, petitioner Ching, together with Philippine Blooming


Mills Co. Inc., filed a case6 before the Regional Trial Court of Manila (RTCManila), Branch 53, for declaration of nullity of documents and for
damages docketed as Civil Case No. 92-60600, entitled "Philippine
Blooming Mills, Inc. et. al. vs. Allied Banking Corporation.
On 07 August 1992, Ching filed a petition7 before the RTC-Makati, Branch
58, for the suspension of the criminal proceedings on the ground of
prejudicial question in a civil action.
The prosecution then filed an opposition to the petition for suspension,
against which opposition, herein petitioner filed a reply. 8

xxx

xxx

xxx

1. Declaring the 'Trust Receipts," annexes D, F, H and J hereof, null


and void, or otherwise annulling the same, for failure to express
the true intent and agreement of the parties;
2. Declaring the transaction subject hereof as one of pure and
simple loan without any trust receipt agreement and/or not one
involving a trust receipt, and accordingly declaring all the
documents annexed hereto as mere loan documents . . . (emphasis
ours).

In its amended answer,16 herein private respondent Allied Banking


Corporation submitted in riposte that the transaction applied for was a
"letter of credit/trust receipt accommodation" and not a "pure and simple
loan with the trust receipts as mere additional or side documents", as
asserted by herein petitioner in its amended complaint. 17
Through the expediency of Rule 45, petitioner seeks the intervention of this
Court and prays:
After due consideration, to render judgment reversing the decision
and resolution, Annexes A and B hereof, respectively, and ordering
the suspension of Criminal Cases (sic) Nos. 92-0934 to 92-0937,
inclusive, entitled "People of the Philippines vs. Alfredo Ching"
pending before Branch 58 of the Regional Trial Court of Makati,
Metro Manila, until final determination of Civil Case No. 92-600
entitled Philippine Blooming Mills Co. Inc. and Alfredo Ching vs.
Allied Banking Corporation" pending before Branch 53 of the
Regional Trial Court of Manila.
The instant petition is bereft of merit.
We agree with the findings of the trial court, as affirmed by the Court of
Appeals, that no prejudicial question exists in the present case.
As defined, a prejudicial question is one that arises in a case the resolution
of which is a logical antecedent of the issue involved therein, and the
cognizance of which pertains to another tribunal. The prejudicial question
must be determinative of the case before the court but the jurisdiction to
try and resolve the question must be lodged in another court or tribunal. 18
It is a question based on a fact distinct and separate from the crime but so
intimately connected with it that it determines the guilt or innocence of the
accused, and for it to suspend the criminal action, it must appear not only
that said case involves facts intimately related to those upon which the
criminal prosecution would be based but also that in the resolution of the
issue or issues raised in the civil case, the guilt or innocence of the
accused would necessarily be determined. 19 It comes into play generally in
a situation where a civil action and a criminal action are both pending and
there exists in the former an issue which must be preemptively resolved
before the criminal action may proceed, because howsoever the issue
raised in the civil action is resolved would be determinative juris et de
jure of the guilt or innocence of the accused in the criminal case. 20
More simply, for the court to appreciate the pendency of a prejudicial
question, the law,21 in no uncertain terms, requires the concurrence of two
essential requisites, to wit:

a) The civil action involves an issue similar or intimately related to


the issue raised in the criminal action; and
b) The resolution of such issue determines whether or not the
criminal action may proceed.
Verily, under the prevailing circumstances, the alleged prejudicial question
in the civil case for declaration of nullity of documents and for damages,
does not juris et de jure determine the guilt or innocence of the accused in
the criminal action for estafa. Assuming arguendo that the court hearing
the civil aspect of the case adjudicates that the transaction entered into
between the parties was not a trust receipt agreement, nonetheless the
guilt of the accused could still be established and his culpability under
penal laws determined by other evidence. To put it differently, even on the
assumption that the documents are declared of null, it does not ipso
facto follow that such declaration of nullity shall exonerate the accused
from criminal prosecution and liability.
Accordingly, the prosecution may adduce evidence to prove the criminal
liability of the accused for estafa, specifically under Article 315 1(b) of the
Revised Penal Code which explicitly provides that said crime is committed:
. . . (b) By misappropriating or converting, to the prejudice of
another, money; goods, or any other personal property received by
the offender in trust or on commission, or for administration, or any
other obligation involving the duty to make delivery of or to return
the same, even though such obligation be totally or partially
guaranteed by a bond; or by denying having received such money,
goods, or other property.
Applying the foregoing principles, the criminal liability of the accused for
violation of Article 315 1(b) of the Revised Penal Code, may still be shown
through the presentation of evidence to the effect that: (a) the accused
received the subject goods in trust or under the obligation to sell the same
and to remit the proceeds thereof to Allied Banking Corporation, or to
return the goods, if not sold; (b) that accused Ching misappropriated or
converted the goods and/or the proceeds of the sale; (c) that accused
Ching performed such acts with abuse of confidence to the damage and
prejudice of Allied Banking Corporation; and (d) that demand was made by
the bank to herein petitioner.
Presidential Decree 115, otherwise known as the "Trust Receipts Law",
specifically Section 13 thereof, provides:
The failure of an entrustee to turn over the proceeds of the sale of
the goods, documents or instruments covered by a trust receipt to
the extent of the amount owing to the entruster or as appears in
the trust receipt or to return said goods, documents or instruments
if they were not sold or disposed of in accordance with the terms of
the trust receipt shall constitute the crime of estafa, punishable

under the provisions of Article Three hundred fifteen, paragraph


one (b) of Act Numbered Three thousand eight hundred and fifteen,
as amended, otherwise known as the Revised Penal Code.
We must stress though, that an act violative of a trust receipt agreement is
only one mode of committing estafa under the abovementioned provision
of the Revised Penal Code. Stated differently, a violation of a trust receipt
arrangement is not the sole basis for incurring liability under Article 315 1
(b) of the Code.
In Jimenez vs. Averia,22 where the accused was likewise charged with
estafa, this Court had occasion to rule that a civil case contesting the
validity of a certain receipt is not a prejudicial question that would warrant
the suspension of criminal proceedings for estafa.1wphi1.nt
In the abovementioned case, a criminal charge for estafa was filed in the
Court of First Instance of Cavite against the two accused. The information
alleged that the accused, having received the amount of P20,000.00 from
Manuel Jimenez for the purchase of a fishing boat, with the obligation on
the part of the former to return the money in case the boat was not
purchased, misappropriated the said amount to the damage and prejudice
of Jimenez.23
Before arraignment, the accused filed a civil case contesting the validity of
a certain receipt signed by them. In the receipt, the accused acknowledged
having received the aforesaid sum, in addition to the amount of P240.00 as
agent's commission. The complaint, however, alleged that the accused
never received any amount from Jimenez and that the signatures on the
questioned receipt were secured by means of fraud, deceit and
intimidation.
In ruling out the existence of prejudicial question, we declared:
. . . It will be readily seen that the alleged prejudicial question is
not determinative of the guilt or innocence of the parties charged
with estafa, because even on the assumption that the execution of
the receipt whose annulment they sought in the civil case was
vitiated by fraud, duress or intimidation, their guilt could still be
established by other evidence showing, to the degree required by
law, that they had actually received from the complainant the sum
of P20,000,00 with which to buy for him a fishing boat, and that,
instead of doing so, they misappropriated the money and refused
or otherwise failed to return it to him upon demand. . . .
Furthermore, petitioner submits that the truth or falsity of the parties'
respective claims as regards the true nature of the transactions and of the
documents, shall have to be first determined by the Regional Trial Court of
Manila, which is the court hearing the civil case.

While this may be true, it is no less true that the Supreme Court may, on
certain exceptional instances, resolve the merits of a case on the basis of
the records and other evidence before it, most especially when the
resolution of these issues would best serve the ends of justice and promote
the speedy disposition of cases.
Thus, considering the peculiar circumstances attendant in the instant case,
this Court sees the cogency to exercise its plenary power:
It is a rule of procedure for the Supreme Court to strive to settle
the entire controversy in a single proceeding leaving no root or
branch to bear the seeds of future litigation. No useful purpose will
be served if a case or the determination of an issue in a case is
remanded to the trial court only to have its decision raised again to
the Court of Appeals and from there to the Supreme Court
(citing Board of Commissioners vs. Judge Joselito de la Rosa and
Judge Capulong, G.R. Nos. 95122-23).
We have laid down the rule that the remand of the case or of an
issue to the lower court for further reception of evidence is not
necessary where the Court is in position to resolve the dispute
based on the records before it and particularly where the ends of
justice would not be subserved by the remand thereof (Escudero
vs. Dulay, 158 SCRA 69). Moreover, the Supreme Court is clothed
with ample authority to review matters, even those not raised on
appeal if it finds that their consideration is necessary in arriving at
a just disposition of the case. 24
On many occasions, the Court, in the public interest and for the
expeditious administration of justice, has resolved actions on the merits
instead of remanding them to the trial court for further proceedings, such
as where the ends of justice would not be subserved by the remand of the
case.25
Inexorably, the records would show that petitioner signed and executed an
application and agreement for a commercial letter of credit to finance the
purchase of imported goods. Likewise, it is undisputed that petitioner
signed and executed trust receipt documents in favor of private
respondent Allied Banking Corporation.
In its amended complaint, however, which notably was filed only after the
Court of Appeals rendered its assailed decision, petitioner urges that the
transaction entered into between the parties was one of "pure loan without
any trust receipt agreement". According to petitioner, the trust receipt
documents were intended merely as "additional or side documents
covering the said loan" contrary to petitioner's allegation in his original
complaint that the trust receipts were executed as collateral or security.

We do not agree. As Mr. Justice Story succinctly puts it: "Naked statements
must be entitled to little weight when the parties hold better evidence
behind the scenes. 26
Hence, with affirmance, we quote the findings of the Court of Appeals:
The concept in which petitioner signed the trust receipts, that is
whether he signed the trust receipts as such trust receipts or as a
mere evidence of a pure and simple loan transaction is not decisive
because precisely, a trust receipt is a security agreement of an
indebtedness.
Contrary to petitioner's assertions and in view of jurisprudence established
in this jurisdiction, a trust receipt is not merely an additional or side
document to a principal contract, which in the instant case is alleged by
petitioner to be a pure and simple loan.
As elucidated in Samo vs. People,27 a trust receipt is considered a security
transaction intended to aid in financing importers and retail dealers who do
not have sufficient funds or resources to finance the importation or
purchase of merchandise, and who may not be able to acquire credit
except through utilization, as collateral, of the merchandise imported or
purchased.
Further, a trust receipt is a document in which is expressed a security
transaction whereunder the lender, having no prior title in the goods on
which the lien is to be given and not having possession which remains in
the borrower, lends his money to the borrower on security of the goods
which the borrower is privileged to sell clear of the lien with an agreement
to pay all or part of the proceeds of the sale to the lender. 28 It is a security
agreement pursuant to which a bank acquires a "security interest" in the
goods. It secures an indebtedness and there can be no such thing as
security interest that secures no obligation.29
Clearly, a trust receipt partakes the nature of a security transaction. It
could never be a mere additional or side document as alleged by
petitioner. Otherwise, a party to a trust receipt agreement could easily
renege on its obligations thereunder, thus undermining the importance and
defeating with impunity the purpose of such an indispensable tool in
commercial transactions.
Of equal importance is the fact that in his complaint in Civil Case No. 9260600, dated 05 March 1992, petitioner alleged that the trust receipts
were executed and intended as collateral or security. Pursuant to the rules,
such particular allegation in the complaint is tantamount to a judicial
admission on the part of petitioner Ching to which he must be bound.

Thus, the Court of Appeals in its resolution dated 28 June 1993, correctly
observed:
It was petitioner himself who acknowledged the trust receipts as
mere collateral and security for the payment of the loan but kept
on insisting that the real and true transaction was one of pure loan.
...
In his present motion, the petitioner alleges that the trust receipts
are evidence of a pure loan or that the same were additional or
side documents that actually stood as promissory notes and not a
collateral or security agreement. He cannot assume a position
inconsistent with his previous allegations in his civil complaint that
the trust receipts were intended as mere collateral or security . . . .
Perhaps, realizing such flaw, petitioner, in a complete turn around, filed a
motion to admit amended complaint before the RTC-Manila. Among others,
the amended complaint alleged that the trust receipts stood as additional
or side documents, the real transaction between the parties being that of a
pure loan without any trust receipt agreement.
In an order dated 19 November 1993, the RTC-Manila, Branch 53, admitted
the amended complaint. Accordingly, with the lower court's admission of
the amended complaint, the judicial admission made in the original
complaint was, in effect, superseded.
Under the Rules, pleadings superseded or amended disappear from the
record, lose their status as pleadings and cease to be judicial admissions.
While they may nonetheless be utilized against the pleader as extrajudicial
admissions, they must, in order to have such effect, be formally offered in
evidence. If not offered in evidence, the admission contained therein will
not be considered.30
Consequently, the original complaint, having been amended, lost its
character as a judicial admission, which would have required no proof, and
became merely an extrajudicial admission, the admissibility of which, as
evidence, required its formal offer.31
In virtue thereof, the amended complaint takes the place of the original.
The latter is regarded as abandoned and ceases to perform any further
function as a pleading. The original complaint no longer forms part of the
record.32
Thus, in the instant case, the original complaint is deemed superseded by
the amended complaint. Corollarily, the judicial admissions in the original
complaint are considered abandoned. Nonetheless, we must stress that the
actuations of petitioner, as sanctioned by the RTC-Manila, Branch 53
through its order admitting the amended complaint, demands stern rebuke
from this Court.
Certainly, this Court is not unwary of the tactics employed by the petitioner
specifically in filing the amended complaint only after the promulgation of

the assailed decision of the Court of Appeals. It bears noting that a lapse of
almost eighteen months (from March 1992 to September 1993), from the
filing of the original complaint to the filing of the amended complaint, is
too lengthy a time sufficient to enkindle suspicion and enflame doubts as
to the true intentions of petitioner regarding the early disposition of the
pending cases.
Although the granting of leave to file amended pleadings is a matter
peculiarly within the sound discretion of the trial court and such discretion
would not normally be disturbed on appeal, it is also well to mention that
this rule is relaxed when evident abuse thereof is apparent. 33
Hence, in certain instances we ruled that amendments are not proper and
should be denied when delay would arise,34 or when the amendments
would result in a change of cause of action or defense or change the
theory of the case, 35 or would be inconsistent with the allegations in the
original complaint.36
Applying the foregoing rules, petitioner, by filing the amended complaint,
in effect, altered the theory of his case. Likewise, the allegations embodied
in the amended complaint are inconsistent with that of the original
complaint inasmuch as in the latter, petitioner alleged that the trust
receipts were intended as mere collateral or security, the principal
transaction being one of pure loan.
Yet, in the amended complaint, petitioner argued that the said trust
receipts were executed as additional or side documents, the transaction
being strictly one of pure loan without any trust receipt arrangement.
Obviously these allegations are in discord in relation to each other and
therefore cannot stand in harmony.
These circumstances, taken as a whole, lead this Court to doubt the
genuine purpose of petitioner in filing the amended
complaint.1wphi1 Again, we view petitioner's actuations with abhorrence
and displeasure.
Moreover, petitioner contends that the transaction between Philippine
Blooming Mills (PBM) and private respondent Allied Banking Corporation
does not fall under the category of a trust receipt arrangement claiming
that the goods were not to be sold but were to be used, consumed and
destroyed by the importer PBM.
To our mind, petitioner's contention is a stealthy attempt to circumvent the
principle enunciated in the case ofAlied Banking Corporation vs.
Ordonez, 37 thus:
. . . In an attempt to escape criminal liability, private respondent
claims P.D. 115 covers goods which are ultimately destined for sale
and not goods for use in manufacture. But the wording of Section
13 covers failure to turn over the proceeds of the sale of the

entrusted goods, or to return said goods if unsold or disposed of in


accordance with the terms of the trust receipts. Private respondent
claims that at the time of PBM's application for the issuance of the
LC's, it was not represented to the petitioner that the items were
intended for sale, hence, there was no deceit resulting in a
violation of the trust receipts which would constitute a criminal
liability. Again we cannot uphold this contention. The non-payment
of the amount covered by a trust receipt is an act violative of the
entrustee's obligation to pay. There is no reason why the law
should not apply to all transactions covered by trust receipts,
except those expressly excluded (68 Am.Jur. 125).
The Court takes judicial notice of customary banking and business
practices where trust receipts are used for importation of heavy
equipment, machineries and supplies used in manufacturing
operations. We are perplexed by the statements in the assailed DOJ
resolution that the goods subject of the instant case are outside
the ambit of the provisions of PD 115 albeit covered by trust
receipt agreements (17 February 1988 resolution) and that not all
transactions covered by trust receipts may be considered as trust
receipt transactions defined and penalized under P.D. 115 (11
January 1988 resolution). A construction should be avoided when it
affords an opportunity to defeat compliance with the terms of a
statute.
xxx
xxx
xxx
The penal provision of P.D. 115 encompasses any act violative of
an obligation covered by the trust receipt; it is not limited to
transactions in goods which are to be sold (retailed), reshipped,
stored or processed as a component of a product ultimately sold.
An examination of P.D. 115 shows the growing importance of trust receipts
in Philippine business, the need to provide for the rights and obligations of
parties to a trust receipt transaction, the study of the problems involved
and the action by monetary authorities, and the necessity of regulating the
enforcement of rights arising from default or violations of trust receipt
agreements. The legislative intent to meet a pressing need is clearly
expressed. 38
In fine, we reiterate that the civil action for declaration of nullity of
documents and for damages does not constitute a prejudicial question to
the criminal cases for estafa filed against petitioner Ching.
WHEREFORE, premises considered, the assailed decision and resolution of
the Court of Appeals are hereby AFFIRMED and the instant petition is
DISMISSED for lack of merit. Accordingly, the Regional Trial Court of Makati,
Branch 58, is hereby directed to proceed with the hearing and trial on the
merits of Criminal Case Nos. 92-0934 to 92-0937, inclusive, and to
expedite proceedings therein, without prejudice to the right of the accused
to due process.1wphi1.nt
SO ORDERED.

G.R. No. L-20745

September 2, 1966

DOLORES GRANADA and ESTRELLA GRANADA, ET AL., petitioners,


vs.
PHILIPPINE NATIONAL BANK, ET AL., respondents.
Petitioners herein seek to review the decision of the Court of Appeals
reversing that of the Court of First Instance of Negros Occidental, and
sentencing petitioners to pay the respondent Philippine National Bank the
of P1,982.24 with interest thereon at 5% per annum from August 20, 1940
and 10% on the principal as attorneys' fees; and the sum of P1,349.90 with
interest at 5% per annum, from September 20, 1941, and 10% on the
principal as attorneys' fees, and costs.
There is no dispute as to the amounts involved; that they represent the
balances they represent the balances due and unpaid on sugar crop loans
applied from and granted by the PNB to Dolores, Estrella, 1 Feliza, and
Corazon, all surnamed Granada; that said loans were personally received
by the petitioners for which the corresponding promissory notes were
principally executed and signed by them, uniformly worded as follows:
On demand after date, for value received, I promise to pay to the
order of the Philippine National Bank at its office in Bacolod or
Manila, the sum of (amount in pesos stated), Philippine currency,
with interest at the rate of 5% per annum from date until paid.
In case of judicial execution of this obligation or any part of it, the
debtor waives his right under the provisions of Rule 39, Section 12
of the Rules of Court.
In case it is necessary to collect this note by or through an
attorney-at-law, the makers and indorsers shall pay, 10% of the
amount due on the notes as attorney's fee. Demand and dishonor
waived. Holder may accept partial payment reserving his right of
recourse against each and all indorsers.
The only issue raised by petitioners emanated from an amended complaint
filed by the attorney of the PNB branch in Bacolod, Occidental Negros,
wherein it was alleged that
defendants Dolores Granada and Estrella Granada, together with
their sisters Feliza Granada and Corazon Granada, who are now
dead, as representative of their parents, Cristeta Granada and

Matias Granada, borrowed from and were granted by, the


plaintiff ... sugar crop loan .. for the cultivation and production of
sugar canes in hacienda Cristeta.
that said ... loan ... was released to, and received by, defendants
Dolores Granada and Estrella Granada and their sisters Feliza
Granada and Corazon Granada, as representatives of their parents
Cristeta Granada and Matias Granada, as evidenced by promissory
notes hereto attached as Exhibit A, B,C, ... etc., and made integral
parts hereof.
Solely on the strength of the phrase "as representatives of their parents,
etc." inserted in the amended complaint, the petitioners contended, and
that trial court sustained the contention, that they are not liable personally
as they merely acted as agents of a disclosed principal.
The Court of Appeals, however, reversed the decision of the court a
quo after reviewing the facts and antecedents of the case.
It appears that in the original complaint filed by the plaintiff bank, it was
alleged that the defendants Dolores, Estrella, Feliza, and Corazon, all
surnamed Granada, secured sugar crop loans for the crop year 1940-41
and 1941-42 from the plaintiff and received the money as evidenced by
various promissory notes attached to said original complaint marked as
Exhibits "A" to "F" and "G" to "P" that the balances of said crop loans in the
sum of P1,982.24 and P1,349.90 were not paid; hence, it was prayed that
the defendants be sentenced to pay the same, plus interest and costs. 2
A motion to dismiss the complaint was filed by the defendants alleging
prescription and that the signers of the promissory notes have secured and
received the amounts of the loans as "mere representatives of the parents
Matias and Cristeta Granada," who were the owners of Hda. Cristeta, and
that the money was used for maintenance and support of the said spouses
and their children Dolores, Estrella, Feliza and Corazon, who were then still
single and living with their parents.
In answer to the motion, plaintiff reiterated that the documents covering
that loans were signed and executed by Dolores Granada, for herself and
as attorney-in-fact of Estrella, Feliza and Corazon, by virtue of a duly
notarized power of attorney, and that plaintiff has no documents or
evidence in its possession to hold the spouses Matias and Cristeta Granada
liable for the payment of the accounts. The motion to dismiss was denied.

Thereafter, the defendants filed their answer, again alleging that the
promissory notes were signed by them as mere representatives and
administrators of their parents and that the plaintiff has been informed by
Cristeta Granada and her attorney-in-fact, Jose Granada that the so-called
accounts of "Granada Hermanas" were the accounts of the spouses Matias
and Cristeta and could be charged against their properties known as Hda.
Cristeta.
Subsequently, the defendants filed another motion calling attention to
their defense alleged in their answer and praying that in view thereof "the
plaintiff be given leave of court to amend the complaint and include as
principal party defendants Cristeta Granada, and the defendants be
allowed to file their answer, if they so desire." The motion was granted in
an order of the following tenor, "... por el presente si les concede a ambas
partes autorizacion para presentar los escritos enmendados que deseen
presentar dentro del plazo reglamentario."
Accordingly, the plaintiff filed an amended complaint, this time impleading
Cristeta Granada, together with the original defendants, and it was in this
amended complaint that for the first time, the phrase "as representatives
of their parents" was inserted. There was no other amendment in the
complaint, and in the prayer, the plaintiff insisted that judgment be
rendered ordering defendants Dolores Granada, Estrella Granada and
Cristeta Granada to pay the plaintiff the amounts claimed in the complaint,
and granting such other relief as the court may deem just and
equitable.1awphl.nt
In their answer to the amended complaint, defendants Dolores and Estrella
Granada reproduced and reiterated their allegations in their answer to the
original complaint.
Cristeta Granada, in his answer under oath, significantly denied that she
has given or granted any authority to Dolores, Estrella, Feliza and Corazon,
or to any of them, to borrow money or secure a loan in her behalf from the
bank.
Replying to the answer to the amended complaint of the defendants
Dolores and Estrella Granada, the plaintiff again averred that as alleged in
the original complaint, Dolores, Estrella, Feliza and Corazon
were personally, jointly and severally liable to the plaintiff for the payment
of the amount of the loans, as that is what appears in the promissory notes
and the borrowers did not inform the bank when they applied for and
secured the loan that they were acting as agents for and in behalf of their
parents, and the filing of the amended complaint joining Cristeta Granada

as a party defendant was in obedience to the order of the court issued


upon motion of the original defendants, and "in order to be relieved of any
liability it is incumbent upon defendants Dolores and Estrella to prove or
help the plaintiff prove that they acted as representatives of their parents."
Thereafter, trial was held and plaintiff presented the promissory notes
whose genuineness and due execution were unquestioned; proof of the
receipt of the loans by defendants and the amounts still unpaid thereon in
spite of demands. All this evidence was admitted without objection on the
part of the defendants.
Upon these facts, the Court of Appeals, as already stated, reversed the
decision of the court a quo and rendered judgment in favor of the plaintiff,
reasoning thus:
As a general rule, facts alleged in a party's pleading are deemed
admissions of that party and binding upon it. However, that is not
an absolute and inflexible rule. Every admission is to be taken as
an entirety of the fact which makes for the one side with the
qualifications which limit, modify or destroy its effect on the other
side. The reason for this is that, where part of a statement of a
party is used against him as an admission, the court should
consider and weigh any other portions connected with the
statement which tend to neutralize or explain the portion which is
against interest. In other words, while the admission is admissible
in evidence, its probative value is to be determined from the whole
statement and others intimately related or connected therewith as
an integrated unit for, as said by the Supreme Court, although acts
or facts admitted do not require proof and cannot be contradicted,
however, evidence aliunde can be presented to show that the
admission was made through palpable mistake. (Irlanda vs.
Pitargue, 22 Phil. 383.)
From the pleadings filed by the parties it clearly appears that the
cause of action stated in the original complaint was against
Dolores, Estrella, Felisa and Corazon, surnamed Granada, for the
payment of the loans which they obtained from the bank in their
individual and personal capacity, as evidenced by the promissory
notes in question.1awphl.nt
The foregoing facts called from the pleadings of the parties have
persuaded us to believe, and we so hold, that in filing the amended
complaint containing the allegation which has become the bone of
contention on this appeal, the plaintiff had acted through a

mistaken belief that the adverted allegation in the amended


complaint did not constitute an amendment of its cause of action,
and this matter was made known to the court and the defendants
when in its reply to the motion to dismiss it stated that it has no
document or evidence in its possession to hold the spouses Matias
and Cristeta Granada liable to the payment of the account; and it
honestly relied on the belief that the defendants, Dolores and
Estrella, surnamed Granada, had the necessary evidence to
establish the fact. At any rate, guided by the provisions of the rules
of court that "These rules shall be liberally construed in order to
promote their object and to assist the parties in obtaining just,
speedy, and inexpensive determination of every action and
proceeding"; the amended complaint may be treated as stating
two or more statements of a claim in a single cause of action,
which is permitted under Section 9, Rule 15, or it may be
considered as including several defendants in the alternative
against any of which plaintiff may be entitled to relief, a course of
action sanctioned by Section 13, Rule 3. There are cases where the
facts essential to the party's claim or defense are within the
knowledge of the adverse party, as to be unable to state them with
certainty. He may, however, know that one out of two or more sets
of facts is true, without knowing which. In such a case, plaintiff is
allowed to make alternative statements of his claim under Section
9, Rule 15. (Everett vs. Asia Banking Corporation, 59 Phil. 512, 526,
cited in 1 Moran 235, 1957 ed.) On the other hand, Section 13 of
Rule 3 "gives the plaintiff the right to include alternatively several
possible defendants when he is uncertain against which of them he
is entitled to relief, as ... where a defendant may have been acting
either as an agent or a principal." ... And the above provision is
applicable, although the right to relief alleged to exist against one
of the defendants may be inconsistent with the right to relief
against the other, as where A is sued as principal and B is joined in
the alternative, if A should be found to have been B's agents. (1
Moran 71, 1957 ed.) The amended complaint in the instant case
may not be a model pleading for an alternative statements of the
claim or against two or more defendants in the alternative;
however, judging the said complaint from a liberal standpoint as
ordained by the Rules and considering that in the prayer judgment
is asked against all the defendants, Dolores Granada, Estrella
Granada and Cristeta Granada, it is within the jurisdiction of the
court to render such judgment as the facts warrant against all or
some of the defendants for the payment of the amount claimed by
the plaintiff.

Taking into account the circumstances of this case, we find no error


committed by the Court of Appeals, both in the assessment of the facts
and the application of the law on the matter in dispute. It is evident that
the plaintiff bank, in amending the complaint conformably with the order of
the trial court, never intended to change the cause of action which was
embodied in the original complaint.
WHEREFORE, this petition is hereby dismissed, with costs against the
petitioners. So ordered.

Sec. 2-3 Rule 131


G.R. No. 174436

January 23, 2013

JUANITA ERMITAO, represented by her Attorney-in-Fact, ISABELO


ERMITAO, Petitioner,
vs.
LAILANIE M. PAGLAS, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to reverse and set aside the Decision 1 and
Resolution2 dated September 8, 2004 and August 16, 2006, respectively, of
the Court of Appeals (CA) in CA-G.R. SP No. 77617.
On November 5, 1999, herein respondent and petitioner, through her
representative, lsabelo R. Ermitao, executed a Contract of Lease wherein
petitioner leased in favor of respondent a 336 square meter residential lot
and a house standing thereon located at No. 20 Columbia St., Phase l,
Doa Vicenta Village, Davao City. The contract period is one (1) year, which
commenced on November 4, 1999, with a monthly rental rate
ofP13,500.00. Pursuant to the contract, respondent paid
petitioner P2,000.00 as security deposit to answer for unpaid rentals and
damage that may be cause to the leased unit.
Subsequent to the execution of the lease contract, respondent received
information that sometime in March 1999, petitioner mortgaged the
subject property in favor of a certain Charlie Yap (Yap) and that the same

was already foreclosed with Yap as the purchaser of the disputed lot in an
extra-judicial foreclosure sale which was registered on February 22, 2000.
Yap's brother later offered to sell the subject property to respondent.
Respondent entertained the said offer and negotiations ensued. On June 1,
2000, respondent bought the subject property from Yap for P950,000.00. A
Deed of Sale of Real Property was executed by the parties as evidence of
the contract. However, it was made clear in the said Deed that the
property was still subject to petitioner's right of redemption.

she is entitled to receive the rents, earnings and income derived from the
property.

Prior to respondent's purchase of the subject property, petitioner filed a


suit for the declaration of nullity of the mortgage in favor of Yap as well as
the sheriff's provisional certificate of sale which was issued after the
disputed house and lot were sold on foreclosure.

WHEREFORE, premises considered, the assailed Decision of the Regional


Trial Court, Branch 16, 11th Judicial Region, Davao City is AFFIRMED with
the MODIFICATIONS as follows:

Meanwhile, on May 25, 2000, petitioner sent a letter demanding


respondent to pay the rentals which are due and to vacate the leased
premises. A second demand letter was sent on March 25, 2001.
Respondent ignored both letters.
On August 13, 2001, petitioner filed with the Municipal Trial Court in Cities
(MTCC), Davao City, a case of unlawful detainer against respondent.
In its Decision dated November 26, 2001, the MTCC, Branch 6, Davao City
dismissed the case filed by petitioner and awarded respondent the
amounts of P25,000.00 as attorney's fees and P2,000.00 as appearance
fee.
Petitioner filed an appeal with the Regional Trial Court (RTC) of Davao City.
On February 14, 2003, the RTC rendered its Decision, the dispositive
portion of which reads as follows:
WHEREFORE, PREMISES CONSIDERED, the assailed Decision is AFFIRMED
with MODIFICATION. AFFIRMED insofar as it dismissed the case for unlawful
detainer but modified in that the award of attorney's fees in defendant's
herein respondent's favor is deleted and that the defendant respondent is
ordered to pay plaintiff herein petitioner the equivalent of ten months
unpaid rentals on the property or the total sum of P135,000.00.
SO ORDERED.3
The RTC held that herein respondent possesses the right to redeem the
subject property and that, pending expiration of the redemption period,

Aggrieved by the Decision of the RTC, petitioner filed a petition for review
with the CA.
On September 8, 2004, the CA rendered its assailed Decision disposing,
thus:

(a) Private respondent's obligation to pay the petitioner the


amount of ONE HUNDRED THIRTY-FIVE THOUSAND PESOS
(P135,000.00) equivalent of ten (10) months is hereby DELETED;
(b) Attorney's fees and litigation expenses were correctly awarded
by the trial court having compelled the private respondent to
litigate and incur expenses to protect her interests by reason of the
unjustified act of petitioner (Producers Bank of the Philippines vs.
Court of Appeals, 365 SCRA 326), Thus: litigation expenses of only
TEN THOUSAND PESOS (P10,000.00) not TWENTY-FIVE THOUSAND
PESOS (P25,000.00); and
(c) Attorney's fees REI NSTAT ED in the amount of TEN THOUSAND
PESOS (P10,000.00) instead of only TWO THOUSAND PESOS
(P2,000.00).
SO ORDERED.4
Quoting extensively from the decision of the MTCC as well as on
respondent's comment on the petition for review, the CA ruled that
respondent did not act in bad faith when she bought the property in
question because she had every right to rely on the validity of the
documents evidencing the mortgage and the foreclosure proceedings.
Petitioner filed a Motion for Reconsideration, but the CA denied it in its
Resolution dated August 16, 2006.
Hence, the instant petition for review on certiorari raising the following
assignment of errors:

A.WHETHER OR NOT THE COURT OF APPEALS ERRED IN


DISMISSING THE UNLAWFUL DETAINER CASE BY RULING THAT A
SHERIFF'S FINAL CERTIFICATE OF SALE WAS ALREADY ISSUED
WHICH DECISION IS NOT BASED ON THE EVIDENCE AND IN
ACCORDANCE WITH THE APPLICABLE LAWS AND JURISPRUDENCE.
B. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT
RULED THAT PRIVATE RESPONDENT WAS A BUYER IN GOOD FAITH
EVEN IF SHE WAS INFORMED BY PETITIONER THROUGH A LETTER
ADVISING HER THAT THE REAL ESTATE MORTGAGE CONTRACT WAS
SHAM, FICTITIOUS AS IT WAS A PRODUCT OF FORGERY BECAUSE
PETITIONER'S PURPORTED SIGNATURE APPEARING THEREIN WAS
SIGNED AND FALSIFIED BY A CERTAIN ANGELA CELOSIA.
C. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT
AWARDED ATTORNEY'S FEES WHICH WAS DELETED BY RTCBRANCH 16 OF DAVAO CITY DESPITE THE ABSENCE OF ANY
EXPLANATION AND/OR JUSTIFICATION IN THE BODY OF THE
DECISION.5

the issue as to who between petitioner and respondent is entitled to


possess the subject property, this presumption stands.
Going to the main issue in the instant petition, it is settled that in unlawful
detainer, one unlawfully withholds possession thereof after the expiration
or termination of his right to hold possession under any contract, express
or implied.11 In such case, the possession was originally lawful but became
unlawful by the expiration or termination of the right to possess; hence,
the issue of rightful possession is decisive for, in such action, the
defendant is in actual possession and the plaintiffs cause of action is the
termination of the defendants right to continue in possession. 12
In the instant petition, petitioner's basic postulate in her first and second
assigned errors is that she remains the owner of the subject property.
Based on her contract of lease with respondent, petitioner insists that
respondent is not permitted to deny her title over the said property in
accordance with the provisions of Section 2 (b), Rule 131 of the Rules of
Court.
The Court does not agree.

At the outset, it bears to reiterate the settled rule that the only question
that the courts resolve in ejectment proceedings is: who is entitled to the
physical possession of the premises, that is, to the possession de facto and
not to the possession de jure.6 It does not even matter if a party's title to
the property is questionable.7 In an unlawful detainer case, the sole issue
for resolution is the physical or material possession of the property
involved, independent of any claim of ownership by any of the party
litigants.8 Where the issue of ownership is raised by any of the parties, the
courts may pass upon the same in order to determine who has the right to
possess the property.9 The adjudication is, however, merely provisional and
would not bar or prejudice an action between the same parties involving
title to the property.10
In the instant case, pending final resolution of the suit filed by petitioner
for the declaration of nullity of the real estate mortgage in favor of Yap, the
MTCC, the RTC and the CA were unanimous in sustaining the presumption
of validity of the real estate mortgage over the subject property in favor of
Yap as well as the presumption of regularity in the performance of the
duties of the public officers who subsequently conducted its foreclosure
sale and issued a provisional certificate of sale. Based on the presumed
validity of the mortgage and the subsequent foreclosure sale, the MTCC,
the RTC and the CA also sustained the validity of respondent's purchase of
the disputed property from Yap. The Court finds no cogent reason to depart
from these rulings of the MTCC, RTC and CA. Thus, for purposes of resolving

The conclusive presumption found in Section 2 (b), Rule 131 of the Rules of
Court, known as estoppel against tenants, provides as follows:
Sec. 2. Conclusive presumptions. The following are instances of
conclusive presumptions:
xxxx
(b) The tenant is not permitted to deny the title of his landlord at the time
of the commencement of the relation of landlord and tenant between
them. (Emphasis supplied).
It is clear from the abovequoted provision that what a tenant is estopped
from denying is the title of his landlord at the time of the commencement
of the landlord-tenant relation.13 If the title asserted is one that is alleged
to have been acquired subsequent to the commencement of that relation,
the presumption will not apply. 14 Hence, the tenant may show that the
landlord's title has expired or been conveyed to another or himself; and he
is not estopped to deny a claim for rent, if he has been ousted or evicted
by title paramount.15 In the present case, what respondent is claiming is
her supposed title to the subject property which she acquired subsequent
to the commencement of the landlord-tenant relation between her and

petitioner. Hence, the presumption under Section 2 (b), Rule 131 of the
Rules of Court does not apply.
The foregoing notwithstanding, even if respondent is not estopped from
denying petitioner's claim for rent, her basis for such denial, which is her
subsequent acquisition of ownership of the disputed property, is
nonetheless, an insufficient excuse from refusing to pay the rentals due to
petitioner.
There is no dispute that at the time that respondent purchased Yap's rights
over the subject property, petitioner's right of redemption as a mortgagor
has not yet expired. It is settled that during the period of redemption, it
cannot be said that the mortgagor is no longer the owner of the foreclosed
property, since the rule up to now is that the right of a purchaser at a
foreclosure sale is merely inchoate until after the period of redemption has
expired without the right being exercised.16 The title to land sold under
mortgage foreclosure remains in the mortgagor or his grantee until the
expiration of the redemption period and conveyance by the master's
deed.17 Indeed, the rule has always been that it is only upon the expiration
of the redemption period, without the judgment debtor having made use of
his right of redemption, that the ownership of the land sold becomes
consolidated in the purchaser.18
Stated differently, under Act. No. 3135, the purchaser in a foreclosure sale
has, during the redemption period, only an inchoate right and not the
absolute right to the property with all the accompanying incidents. 19 He
only becomes an absolute owner of the property if it is not redeemed
during the redemption period.20
Pending expiration of the period of redemption, Section 7 of Act No.
3135,21 as amended, provides:
Sec. 7. In any sale made under the provisions of this Act, the purchaser
may petition the Court of First Instance of the province or place where the
property or any part thereof is situated, to give him possession thereof
during the redemption period, furnishing bond in an amount equivalent to
the use of the property for a period of twelve months, to indemnify the
debtor in case it be shown that the sale was made without violating the
mortgage or without complying with the requirements of this Act. Such
petition shall be made under oath and filed in [the] form of an ex parte
motion in the registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of property registered
under the Mortgage Law or under section one hundred and ninety-four of
the Administrative Code, or of any other real property encumbered with a

mortgage duly registered in the office of any register of deeds in


accordance with any existing law, and in each case the clerk of the court
shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act Numbered
Four hundred and ninety-six, as amended by Act Numbered Twenty-eight
hundred and sixty-six, and the court shall, upon approval of the bond,
order that a writ of possession issue, addressed to the sheriff of the
province in which the property is situated, who shall execute said order
immediately.
Thus, it is clear from the abovequoted provision of law that, as a
consequence of the inchoate character of the purchaser's right during the
redemption period, Act. No. 3135, as amended, allows the purchaser at the
foreclosure sale to take possession of the property only upon the filing of a
bond, in an amount equivalent to the use of the property for a period of
twelve (12) months, to indemnify the mortgagor in case it be shown that
the sale was made in violation of the mortgage or without complying with
the requirements of the law. In Cua Lai Chu v. Laqui,22 this Court reiterated
the rule earlier pronounced in Navarra v. Court of Appeals 23 that the
purchaser at an extrajudicial foreclosure sale has a right to the possession
of the property even during the one-year redemption period provided the
purchaser files an indemnity bond. That bond, nonetheless, is not required
after the purchaser has consolidated his title to the property following the
mortgagor's failure to exercise his right of redemption for in such a case,
the former has become the absolute owner thereof.24
It, thus, clearly follows from the foregoing that, during the period of
redemption, the mortgagor, being still the owner of the foreclosed
property, remains entitled to the physical possession thereof subject to the
purchaser's right to petition the court to give him possession and to file a
bond pursuant to the provisions of Section 7 of Act No. 3135, as amended.
The mere purchase and certificate of sale alone do not confer any right to
the possession or beneficial use of the premises. 25
In the instant case, there is neither evidence nor allegation that
respondent, as purchaser of the disputed property, filed a petition and
bond in accordance with the provisions of Section 7 of Act No. 3135. In
addition, respondent defaulted in the payment of her rents. Thus, absent
respondent's filing of such petition and bond prior to the expiration of the
period of redemption, coupled with her failure to pay her rent, she did not
have the right to possess the subject property.
On the other hand, petitioner, as mortgagor and owner, was entitled not
only to the possession of the disputed house and lot but also to the rents,

earnings and income derived therefrom. In this regard, the RTC correctly
cited Section 32, Rule 39 of the Rules of Court which provides as follows:

the award of attorney' and litigation expenses to respondent should be


deleted.

Sec. 32. Rents, earnings and income of property pending redemption. The
purchaser or a redemptioner shall not be entitled to receive the rents,
earnings and income of the property sold on execution, or the value of the
use and occupation thereof when such property is in the possession of a
tenant. All rents, earnings and income derived from the property pending
redemption shall belong to the judgment obligor until the expiration of his
period of redemption. (Emphasis supplied)

WHEREFORE, the Decision and Resolution of the Court of Appeals in CAG.R. SP No. 77617, dated September 8, 2004 and August 16, 2006,
respectively, are AFFIRMED with the following MODIFICATIONS: (1)
respondent is ORDERED to pay petitioner P108,000.00 as and for unpaid
rentals; (2) the award of attorneys fees and litigation expenses to
respondent is DELETED.
SO ORDERED.

While the above rule refers to execution sales, the Court finds no cogent
reason not to apply the same principle to a foreclosure sale, as in this case.
The situation became different, however, after the expiration of the
redemption period on February 23, 2001. Since there is no allegation,
much less evidence, that petitioner redeemed the subject property within
one year from the date of registration of the certificate of sale, respondent
became the owner thereof. Consolidation of title becomes a right upon the
expiration of the redemption period.26 Having become the owner of the
disputed property, respondent is then entitled to its possession.
As a consequence, petitioner's ejectment suit filed against respondent was
rendered moot when the period of redemption expired on February 23,
2001 without petitioner having redeemed the subject property, for upon
expiration of such period petitioner lost his possessory right over the same.
Hence, the only remaining right that petitioner can enforce is his right to
the rentals during the time that he was still entitled to physical possession
of the subject property that is from May 2000 until February 23,
2001.1wphi1
In this regard, this Court agrees with the findings of the MTCC that, based
on the evidence and the pleadings filed by petitioner, respondent is liable
for payment of rentals beginning May 2000 until February 2001, or for a
period of ten (10) months. However, it is not disputed that respondent
already gave to petitioner the sum of P27,000.00, which is equivalent to
two (2) months rental, as deposit to cover for any unpaid rentals. It is only
proper to deduct this amount from the rentals due to petitioner, thus
leaving P108,000.00 unpaid rentals.
As to attorneys fees and litigation expenses, the Court agrees with the RTC
that since petitioner is, in entitled to unpaid rentals, her complaint which,
among others, prays for the payment of unpaid rentals, is justified. Thus,

marijuana dried leaves weighing approximately fifteen (15)


grams which is a prohibited drug.
Petitioner Gina Sahagun was working as an entertainer at the Aztec Club in
Olongapo City at the time of the alleged incident, which according to the
prosecution happened thus: 4
Two or three days before August 6, 1981, Capt. Arturo
Castillo, Commanding Officer of the Task Force Bagong
Buhay Constabulary Anti-Narcotics Unit in Olongapo City
received information from an unnamed American
serviceman that marijuana is being used and being
peddled at the Aztec Club in Olongapo City (TSN, Dec. 21,
1981, p. 5). Upon receiving the information, they
conducted a surveillance inside the Club (TSN, Dec. 21,
1981, p. 1).

G.R. No. L-62024 February 12, 1990


PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
GINA SAHAGUN y MENDOZA, accused-appellant.
Courts must be extra vigilant in trying drug charges lest an innocent
person is made to suffer the unusually severe penalties for drug offenses. 1
Gina Sahagun was convicted by the Regional Trial Court of Zambales and
Olongapo City, Branch Ill, for violation of Sec. 4, Republic Act No. 6425
(Dangerous Drugs Act of 1972, as amended by Presidential Decree No.
1675) and sentenced to suffer imprisonment for life and to pay a fine of
twenty thousand (P20,000.00) pesos. She now appeals for the reversal of
this decision. 2
The information against the accused reads:

That on or about the 6th day of August, 1981 in the City of


Olongapo, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, without being
lawfully authorized, did then and there wilfully, unlawfully
and knowingly attempt to sell, deliver and give away to
another and distribute one (1) aluminum tin foil of

In the evening of August 6,1981 between 11:35 and 12:00


o'clock, while seated three chairs (TSN, December 21,
1981, p. 2) or five (5) meters from where the accused and
his American serviceman informer were (TSN, December
21, 1981, p. 6), he saw accused handed (sic) to his
American informer marijuana dried leaves wrapped in tin
foil (Exh. "B-l"). He thereupon arrested the accused and
confiscated the marijuana (Exh. "B-2") from the American
serviceman. The scene where the incident took place was
dimly lighted (TSN, December 21, 1981, p. 2). In order to
be sure, he, Capt. Castillo and his companion conducted a
body search of the American serviceman informer.
Accused, on the other hand, presented the following version in her
defense. 5
Inside the Aztec Bar at 11:00 o'clock in the evening of
August 6, 1981, she met an unnamed American customer.
She joined the American at his table. The American ordered
drinks for her and a beer for him (sic). While thus seated,
obviously drinking their drinks, the American asked if he
(sic) was selling marijuana. She told the American that she
was not. While thus talking, the American drew from his
pocket marijuana wrapped in tin foil and handed it to her.
The American asked if the same can be sold.

While in the possession of the tin-foil, Capt. Arturo Castillo


arrested her. She told Capt. Castillo that the marijuana was
shown to her by the American. The American asked her to
hold it. But she was brought to the CANU office. She did not
know where the American was when she was brought to
the CANU office.
Having been found guilty by the court a quo,
verdict.

the appellant questions said

A careful scrutiny of the evidence shows that the guilt of the accused has
not been proven beyond reasonable doubt.
The American serviceman who was alleged to be the informer was not
presented before the trial court. Without his testimony, the conclusion of
the court that the accused was seen delivering marijuana wrapped in a tin
foil to the American is not supported by the evidence on hand. Who was
delivering the marijuana and who was selling it? The accused pointed to
the American as the one selling the prohibited goods. Such testimony was
not rebutted by the prosecution since the American informer was never
presented as a witness. Captain Arturo Castillo, the apprehending officer,
was not in a position to see or hear the goings-on at the table of the
American and the accused. The officer was five meters away from the two
persons. The place where the event took place was dimly lighted. And with
all that noise, it would be impossible for him to hear the transactions
happening at the table five meters away. There is thus a hiatus to the
evidence fatal to a finding of guilt. 7
In the case of People v. Ale, 8 this Court held that the identity of the poseurbuyer is vital where the accused denies having sold marijuana to anyone.
The failure to present the American is, to our mind, fatal to the
prosecution's case for it is presumed that evidence wilfully suppressed
would be adverse if produced. 9
The prosecution's evidence leaves much to be desired. If the inculpatory
facts and circumstances are capable of two or more explanations, one of
which is consistent with the innocence of the accused and the other
consistent with his guilt, then the evidence does not fulfill the test of moral
certainty and is not sufficient to support a conviction. 10 The constitutional
presumption of innocence stands until overthrown by strong and
convincing evidence, one which will prove guilt beyond reasonable
doubt. 11

WHEREFORE, the appealed decision of the Regional Trial Court is reversed


and the appellant is acquitted on the ground of failure of the prosecution to
prove her guilt beyond reasonable doubt.
SO ORDERED.
G.R. No. L-48548 January 27, 1981
PEOPLE OF THE, PHILIPPINES, plaintiff-appellee,
vs.
BIENVENIDO HINLO Y CANALIJA defendant-appellant.
DE CASTRO,* J.:
Appeal from the decision of the Court of First Instance of Rizal, finding
Bienvenido Hinlo y Canalija guilty of murder for the killing of Hilarion Martin
and sentencing him to reclusion perpetua, and to indemnify the heirs of
the victim in the amount of P12,000.00 and to pay costs. 1
As proven by the evidence of the prosecution the crime was committed as
follows, quoting from the People's brief.2
This incident happened on the evening of May 8, 1977 at
Almanza, Las Pinas Metro Manila. Earlier that evening,
accused appellant must have had a quarrel with his wife,
because he was seen by his neighbors slapping the latter.
No one dared to pacify him accused-appellant), as he
threatened to stab anyone who came to intervene. In fact,
even Saturnina Petilla, aunt of the owner of the house
where accused-appellant was residing, was almost stabbed
when she went there to intervene, as she was chased by
the accused-appellant with a knife, shouting: Ikaw isa ka
rin! (pp. 22-25, t.s.n., De Guzman.)
Luckily, accused-appellant did not continue chasing her
(Petilla). Instead, he (accused-appellant) proceeded
towards the house of Lotita Manalili. which was formerly
used as a store. Inside the house were the victim Hilarion
Martin, together with one Benjamin Dayuta and the latter's
helper. They were fetching water from the artesian well just
opposite the street, and were resting inside the house
while waiting for their containers to be filled, when all of a
sudden accused- appellant entered and, without warning,

started stabbing the victim twice and Dayuta once. The


victim was hit twice at the back penetrating the posterior
aspect of his chest, as he was then sitting with his back
towards the door, busy conversing with Dayuta, when the
accused-appellant unexpectedly stabbed him (victim) from
behind unnoticed; thus, giving the latter no opportunity to
defend himself and/or escape injury. In the case of Dayuta,
he was hit on the right upper arm as he was able to
instinctively parry accused-appellant's thrust. (pp. 8-12,
24-25, Ibid).
Thereafter, the three stepped out and ran. Neighbors who
came to their rescue carried the victim and helped Dayuta
board a jeep that brought them to the Perpetual Help
Medical Center in Pamplona, Las Pinas Metro Manila, where
the victim expired shortly after arrival (pp. 5-6, 13-14,Ibid).
A request to autopsy the victim's body was then made to
the NBI (Exhibit "A"). Accordingly, an autopsy was
conducted on the cadaver of the victim by Dr. Virgilio
Gernale, a medico-legal officer of the NBI, after the victim's
body was Identified by his brother at the Funeraria Rizal
where it was brought (Exhibit "B"). After taking pictures of
the victim's wounds (Exhibits "C-1" to "C-3" Dr. Gernale
examined the same. He then issued a necropsy report
(Exhibit " D ") wherein he described the two stab wounds
and stated the cause of death of the victim as:
"Hemorrhage. severe, secondary to stab wound of the
chest, right side, posterior aspect." According to him, (Dr.
Gernale the Assailant must be standing behind the victim
when the wounds were inflicted with the use of a sharp
edge, single bladed instrument (pp. 2-9, Ibid).
Meanwhile, after stabbing the victim and Dayuta inside the
house of Manalili accused-appellant escaped towards an
alley where he met and also stabbed a certain Juan
Padayao. By this time, news of the stabbing incident
reached the relatives of the victim as they started looking
for the accused-appellant (pp. 25-26, Ibid), who was later
arrested by a policeman and a barangay official. They
brought him to the municipal hall of Las Pinas Metro Manila
where he was detained (pp. 13-14, t.s.n., Cruz).
Appellant would impute error to the trial court in giving credence to the
two eye-witnesses of the prosecution, Benjamin Dayuta and Saturnina

Petilla, alleging that not only are their testimonies inconsistent with each
other, but also that each testimony is self-contradictory and improbable,
and in addition, witnesses who could have given more reliable testimony
were not presented, thereby demonstrating further, by this supposed
suppression of evidence, the untrustworthiness of the aforementioned
state witnesses' testimony. Appellant has pointed out where the alleged
inconsistencies, self-contradictions and improbabilities lie. Going over how
each and every one of them were shown by the Solicitor General not to be
such as claimed by the appellant, We find the efforts of the said counsel to
have convincingly achieved his ends, as can best be demonstrated by
quoting from appellee's brief 3 the following:
(a) The fact that Saturnina Petilla testified that only the
victim and Benjamin Dayuta were inside the house of Lolita
Manalili when the incident happened does not necessarily
contradict the testimony of Dayuta that, aside from them
(Dayuta and victim), they had a third companion (Dayuta's
helper). True, there was no barrier between her (Petilla)
and the place of the incident, which was about five arms
length away. But the fact, however, is that she was outside
looking through the door which was partly opened.
Naturally, she could not have seen the four corners of the
room where the incident happened as the partly opened
door reveals only a portion of the room. And, being a mere
helper, it is safe to assume that this third companion was
sitting at a corner a little bit farther from the two (Dayuta
and victim). This explains why Petilla only saw Dayuta and
the victim at the time of the incident;
(b) There is actually no real inconsistency between
Dayuta's testimony that the victim when stabbed was
sitting with his back towards the door from that of Petilla
that the accused-appellant stabbed the victim when the
latter already fell on the floor. It will be recalled that
accused- appellant stabbed the victim twice. Hence, it
could be that Petilla was describing the position of the
victim at the time he was stabbed the second time when
he was already felled by the first stab. In the case of
Dayuta, he was describing the position of the victim at the
time accused- appellant started to stab him (victim);
(c) The testimonies of prosecution witnesses Benjamin
Dayuta, Saturnina Petilla and Lolita Manalili complement
rather than contradict each other as alleged (p. 8,

Appellant's Brief). Thus, when Manalili, owner of the house,


left a short while before the incident, she closed the door,
which the accused-appellant opened when he entered;
hence, the testimony of Petilla that the door was partly
opened at the time of the incident. In the case of Dayuta
he could not say whether or not the door was closed at the
time of the incident because he did not notice the entry of
accused- appellant as he was then busy conversing with
the victim;
(d) There is no material contradiction between the
testimony of Dayuta to the incident occurred at about 9:00
o'clock in the evening of May 8, 1977 and that of the
testimony of Petilla that it occurred at around 9:30 o'clock
that same evening. For, the testimonies of both witnesses,
as to the time of the incident, are only their estimates and,
both cannot be expected to estimate time with exact
mathematical precision. if at all, it demonstrates that
neither witness was coached or rehearsed before they
testified;
(e) Petilla's testimony that the only things inside Manalili's
house were a set and a table, does not necessarily
contradict that of Dayuta that there was jukebox inside the
house where the stabbing took place. Considering that the
place was no longer used as a store, the jukebox must
have been placed in a secluded corner of the house;
hence, the same might not have been seen by Petilla, who
was looking only through the door, which was partly
opened by accused-appellant;
(f) This is also true in the case of Dayuta's stabbing. The
fact that Petilla did not see the stabbing does not
necessarily contradict the testimony of Dayuta that he
(Dayuta) was also stabbed by the accused-appellant before
he stepped out of the house. For, it was possible for Petilla
not to have seen the stabbing of Dayuta through the door,
which was only partly opened;
(g) The testimonies of both Petilla and Manalili that
accused-appellant also stabbed a certain Juan Padayao
after stabbing the victim, does not in any way contradict
Dayuta's testimony that he was also stabbed by the
accused-appellant. As heretofore discussed, Petilla could

not have seen the stabbing of Dayuta through the partly


opened door. In fact, the stabbing of Padayao even
confirms Dayuta's claim that he was also stabbed by
accused-appellant, because it demonstrate, the fact that
the latter was indiscriminately stabbing anyone who came
his way;
(h) Petilla's testimony that she only noticed the accusedappellant running out of the house of Manalili after the
stabbing, is not a contradiction of Dayuta's testimony that
they also ran out of the house after he and the victim were
stabbed. Having been almost a victim herself of accusedappellant immediately prior to the incident when she tried
to intervene to stop him (accused-appellant) from slapping
his wife, it was but natural for Petilla to focus her attention
on the accused-appellant to see to it that the latter would
not come her way and, therefore, she (Petilla) could not be
expected to observe what the victim of accused-appellant
did after the incident.
If the foregoing clearly shows how actually non-existent are the alleged
inconsistencies between the testimony of Dayuta and Petilla as the
principal state witnesses, the absence of self-contradictions and
improbabilities in the testimony of each of them which appellant claims
said testimony to be riddled with, is as convincingly demonstrated with the
Solicitor General correctly observing as follows:
(a) There is nothing improbable in the testimony of Dayuta
that he did not notice the entry of accused-appellant. The
place where the incident occurred was used as a resting
place by some people fetching water from the artesian well
just opposite the street. Hence, people just come and go
unnoticed. Besides, there was no time for Dayuta to
observe the entry of accused-appellant because it was so
sudden and unexpected.
(b) The testimony of Manalili that prior to the incident she
left her (Manalili children listening to the jukebox, does not
render improbable Dayuta's testimony that he and the
victim were telling stories before the stabbing. It could be
that, after Manalili left, the victim stopped listening to the
jukebox and went near Dayuta to converse with him.
Besides, the victim can converse with Dayuta while the
jukebox was playing.

(c) The fact that Dayuta could not tell the kind of weapon
used by accused-appellant in stabbing to death the victim,
does not affect the credibility of his (Dayuta) testimony.
The incident is a startling occurrence which was so sudden
and unexpected that one witnessing the same, especially if
he himself is involved, cannot be expected to watch it with
sobriety as to be able to observe even the kind of weapon
used.
(d) We see nothing incredible in the testimony of Dayuta
regarding his whereabouts, as well as that of the victim,
after the stabbing incident (pp. 10-11, Appellant's Brief.
The fact that he (Dayuta) saw the victim running towards
the alley leading to a house while he was running towards
the waiting shed, does not contradict his other statement
that the victim was ahead of him in the waiting shed. It
could be that the victim, while running towards the alley
was helped by neighbors who learned of the incident and
rushed him to the waiting shed where he could be brought
to the hospital. That explains why the victim was even
ahead of Dayuta at the waiting shed.
(e) Petilla's testimony regarding the victim's age, as well as
the time when she came to know the latter, are merely
based on her estimates and recollection. Consequently,
their inaccuracy win not affect the credibility of her
testimony. Besides, these are insignificant and immaterial
matters, as the Identity of the victim is not disputed.
(f) It is not unnatural for petilla to have followed
theaccused-appellant to where the crime was committed,
despite the danger to her life. In fact, not a few people died
because of curiosity. This is demonstrated time and again
when policemen had to drive away people who
unnecessarily expose themselves to dangers, like fires and
quarrels, just to satisfy their curiosity.
(g) Petilla's testimony is not rendered incredible simply
because she did not know what the accused-appellant used
in stabbing the victim. As already stated, the incident was
a startling occurrence and, therefore, people watching it,
especially a woman cannot be expected to observe such
minor details as the kind of weapon used by the assailant.

(h) The testimony of Reynaldo Martin regarding the


position of his brother, the victim when stabbed is hearsay
because he was not an eyewitness to the incident and,
therefore, the trial court did not err in not considering it to
discredit the testimonies of Dayuta and Petilla
In any case, if some inconsistencies, improbabilities and self-contradictions
may be said to manifest themselves somehow, as laboriously pointed out
by appellant, they refer to minor and inconsequential details in the
testimony of the prosecution witnesses whom appellant has picked out for
concentrated attack on their credibility, which would thus be unavailing;
for this kind of flaws in one's testimony, far from weakening its credibility,
actually strengthens it, for they deflect suspicion of coaching or rehearsal
of the witnesses 4 whose testimonies thus remain unaffected in the
strength of their appeal for truth and belief. 5
Pursuing its effort to discredit the testimony of the state witnesses to which
the trial court accorded well-deserved credence, which act of said court he
has assigned as error, appellant would try to make something out of the
non-presentation as witnesses of the "helper" and Juan Padayao, the
former having been present with Dayuta at the scene of the stabbing as
eye-witness, and the latter having also been stabbed by appellant, as a
case of suppression of evidence.
The helper's testimony, with Dayuta and Petilla already presented to testify
on seeing appellant stab the deceased, would be entirely unnecessary
being only commulative in effect. The adverse presumption against the
prosecution as appellant would invoke cannot, therefore, arise from the
failure of the prosecution to present the "helper" as a witness. Moreover,
as a mere "helper" at the time, he may have been no longer available to
testify, as he might have left for another job elsewhere not known at the
time of the hearing.
With more reason will no such adverse presumption against the
prosecution arise with the non-presentation of Juan Padayao as witness. His
testimony would be only as to his having been stabbed by appellant, which
is beyond the scope of the present inquiry as to appellant's guilt only for
the killing of Hilarion Martin. If some relevance might be found in the
stabbing of Padayao on the same occasion, it is in how it would show that
appellant was evidently seized by a fit of violence that drove him into a
stabbing spree, as it were, contrary to his pretension of denying the
stabbing of the deceased. But without need of Padayao's personal
testimony, the fact that appellant also stabbed him after stabing Dayuta
and Martin, the latter fatally, because the assault on him was so sudden

and unexpected, and from behind as to deny the victim any chance at
defense by evading or parrying the blow, was positively established with
the testimony of Saturnina Petilla and Lolita Manalili on this particular fact,
which was unrebutted.
By this fact alone that he stabbed Juan Padayao, appellant's testimony on
the only incident in which he is supposed to have been involved his
having been hit with a "pingga" by Dayuta when he (appellant) merely
tried to pacify Leodegario Petilla who, armed with a knife, was engaged in
a street quarrel with 6 or 7 men, and went home thereafter, inferentially
denying even having laid a hand or touched the victim, is rendered
unbelievable. In effect, his defense is that of alibi which is totally
unavailing against his having been positively Identified 6 by witnesses as
the assailant of the victim, one of whom is Saturnina Petilla, the mother of
Leodegario Petilla whom he allegedly approached as a friend to pacify him
in his quarrel against persons who overwhelmingly outnumbered him.
Appellant allegedly went to Saturnina to report that his son was involved in
that street quarrel. With Saturnina Petilla testifying that appellant even
chased her when she tried to intervene when appellant slapped his wife
during a quarrel, threatening anyone who would dare intervene, the
testimony of appellant as to his friendly mission in seeing Saturnina
becomes totally unworthy of belief, for if the testimony were true, what
motive has Saturnina to testify falsely against appellant.
As the trial court also observed, appellant's testimony suffers from
improbability because
... Admitting that on the date and time of the stabbing, he
was merely to approach the quarreling group and
Leodegario Petilla; attempted to pacify Leodegario Petilla,
and ran away when he was hit on the head with a 'pingga'
by Benjamin Dayuta. The version of accused Hinlo suffers
with so many improbabilities. He claims that he saw his
friend Leodegario Petilla armed with a knife, 7 inches long
facing a group of 6 to 7 men. It was a situation fraught with
dangers. Yet, accused Hinlo approached the group and his
friend Leodegario Petilla, merely to pacify them. Even
granting this extraordinary course of action to be true, yet
when accused Hinlo again asserts that when he was hit on
the head with a 'pingga', he ran away, leaving his friend
alone, it is hard to believe him. Not only that. After
informing Saturnina Petilla, mother of Leodegario Petilla,
that her son was quarreling with a group of men, he just
went home, again, leaving his friend to his fate. What is

more, he never called the police who could have provided


the more effective help to his friend. Then, there is the
question as to what happened to Leodegario Petilla faced
by 6 or 7 men. Obviously, nothing happened. What is
significant, is the fact that Saturnina Petilla, mother of
Leodegario Petilla, even testified for the prosecution. All
these circumstances, considered fairly and with
unprejudiced mind, lead to the conclusion that there never
was a quarrel between the group of 6 or 7 men and
Leodegario Petilla. (Decision, pp. 75-76, Record.)
It would seem that appellant hints at the possibility of Leodegario Petilla
being the assailant when he pictured him as engaged in a quarrel with six
or seven persons, armed with a knife and poised to strike. If this were so,
witnesses from among the several adversaries of Leodegario would have
been easily available to testify against the latter as the real culprit. The
fact is even the brother of the deceased, Reynaldo Martin, testified against
appellant which he should not have done unless he was convinced, from
his own investigation, if not personal knowledge, that appellant is his
brother's killer and not someone else. He certainly desires to make sure
that the real culprit is brought to justice and not given immunity from
punishment instead, as would happen if he pointed an accusing finger at
the wrong man.
WHEREFORE, the judgment appealed from being in accordance with law
and the evidence, with treachery proven to qualify the crime of murder as
charged, but not evident premeditation as alleged in the information, is
affirmed in toto, with costs.
SO ORDERED.

Savings Account No. 26580, with the Security Bank and Trust Company,
Escolta St., Manila, hereinafter called SBTC in short, with an initial deposit
of P500.00, made on 21 Feb. 1973, for which he was given a pass book in
his name of Tomas P. Flores (see Exh. C). He made a second deposit of
P400.00 then a withdrawal of P500.00 then a deposit of P775.00, and then
a withdrawal of P1,000.00 (Entries on Exh. C).
"On 13 March (sic, August) accused went to SBTC and filled up or
accomplished and signed a deposit slip (Exh. B) for a deposit of P18,060.00
in check. With the deposit slip, he submitted to Urbana Ramos de Ferrer,
Teller No. 2 of SBTC, his pass book (Exh. C) and a Philippine Bank of
Communications Check No. U-186378, dated August 9, 1973 (Exh. A) for
P18,060.00, appearing to have been signed and issued by `F. Dycaico',
who was then maintaining with the Philippine Bank of Communications,
hereinafter referred also as PBC, a checking account No. 13360. This check
was signed and indorsed by the accused. Upon deposit of this check for
P18,060.00, the said sum was posted in the pass book (Exh. C), as shown
in Exhibit C-1. (T.S.N., pp. 5-15, Oct. 10, 1973, hearing).:-cralaw

[G.R. Nos. 48535-36 : December 21, 1990.]


192 SCRA 533
KOH TIECK HENG, Petitioner, vs. PEOPLE OF THE PHILIPPINES and
COURT OF APPEALS, Respondents.

DECISION
REGALADO, J.:

This petition for review on Certiorari impugns the decision of the Court of
Appeals in CA-G.R. No. 16246-47-CR 1 which affirmed the judgment of the
former Court of First Instance of Manila in Criminal Cases Nos. 15006 and
15007 convicting herein accused-petitioner of estafa and attempted
estafa, respectively.
The facts as found by the trial court and adopted by respondent court are
as follows:
"From the evidence extant on the record, the following facts appear
undisputed: That accused Koh Tieck Heng, alias Tomas P. Flores opened

"On 16 August 1973, the accused withdrew from this Savings Account No.
26580, the sum of P10,000.00 upon submission to Margarita Tiongson,
Teller No. 3, of a withdrawal slip (Exh. E) accomplished and signed by him.
Such withdrawal was posted in the pass book (Exh. C), shown by Exhibit C2. Upon receipt of the amount withdrawn, the teller caused the accused to
sign at the back of the withdrawal slip and which signature is marked
Exhibit E-1. On the next day, 17 August 1973, the accused withdrew
another amount of P5,500.00 upon defendant's submission to Teller No. 3
of a withdrawal slip (Exh. F) and the pass book. The withdrawal was posted
in the pass book as shown by Exhibit C-3. Upon receipt of the sum
withdrawn, the teller caused the accused to sign at the back of the
withdrawal slip and which signature is marked Exhibit F-1. (T.S.N., pp. 2130; 32-39, id.).
"On 18 August 1973, the accused went again to the SBTC to deposit
another Philippine Bank of Communications Check No. U-186414 (Exh. H),
dated 11 August 1973 for P18,060.00 which appears to be signed by 'F.
Dycaico' against Checking Account No. 13360. Accused, therefore, filled up
and accomplished a deposit slip (Exh. I) for P18,060.00. After
accomplishing Exhibit I, accused submitted the check (Exh. H), the pass
book (Exh. C) and the deposit slip (Exh. I) to Candida Abella Villanueva,
Teller No. 5. The deposit of P18,060.00 was thus posted at the pass book
(Exh. C), as shown by Exh. C-4 (T.S.N., pp. 60-70, Id.).
"Sometime in that month of August 1973, Florencio Dycaico, who
maintains the Checking Account No. 13360 with the Philippine Bank of
Communications saw his Statement of Account and came upon an amount
of P18,060.00 debited against his account. He complained to the PBC that
he never issued a check for that much. With this information PBC informed
SBTC that the check, Exh. A, was a spurious check. So, SBTC officials
instructed their bank tellers to watch for Tomas P. Flores. NBI agent
Mamerto Espartero was also assigned to crack down on check forgers or
passers in company with an informer, at the premises of SBTC, in

coordination with SBTC officials (T.S.N., pp. 3-7, 12, 16-17, Nov. 12, 1973,
hearing).
"Then, came the pay off. The accused appeared in the SBTC premises on
22 August 1973. He filled up, accomplished and signed a withdrawal slip
(Exh. K) for P15,500.00, and after that he submitted his passbook (Exh. C)
with the withdrawal slip to Maria Victoria Soriano, SBTC Teller No. 7.
Forewarned to watch for the accused Tomas P. Flores, she asked the
accused to sign his name in Exh. K, and he did sign it as requested. He
signed his name of Koh Tieck Heng (See Exh. K-3). After that, Teller No. 7
brought the slip and the pass book of Tomas P. Flores. Teller No. 7 returned
to her cage and then called up for Tomas P. Flores. The accused went to
Teller No. 7. Teller No. 7 asked the accused to sign his name at the back,
and which signature is marked Exh. K-2. After he signed Exh. K-2, the NBI
agent Espartero swooped down on the accused and apprehended him. The
accused was brought inside the Cashier's Office. He was interviewed and
then later brought to the NBI office where he was investigated. In the
course of his investigation, he executed a written statement now marked
Exh. M. (T.S.N., pp. 3-20, Oct. 22, 1973, hearing)." 2
Based on the facts narrated, appellant Koh Tieck Heng, alias Teddy Koh,
alias Tomas P. Flores, was charged in Criminal Case No. 15006 before the
then Court of First Instance of Manila, Branch XII, with the crime of estafa
thru falsification of a commercial document in an information which reads:
"That on or about and during the period comprised between August 13,
1973 and August 17, 1973, inclusive, in the City of Manila, Philippines, the
said accused, conspiring and confederating with one whose true name,
identity and present whereabouts are still unknown and mutually helping
each other, did then and there wilfully, unlawfully and feloniously, with
intent to defraud, commit acts of falsification on a commercial document in
the following manner, to wit: the said accused, after opening a savings
account with the Security Bank and Trust Company, under Savings Account
No. 26580 in the name of Tomas P. Flores, and having somehow illegally
obtained possession of Philippine Bank of Communications Check No. U186378, dated July 14, 1973, pay to cash, in the amount of P225.00, issued
by F. DYCAICO, and therefore a commercial document, did then and there
wilfully, unlawfully and feloniously forge and falsify and/or cause to be
forged and falsified the aforesaid check by then and there erasing and
altering and/or causing to be erased and altered the date and amount of
said check and superimposing or causing to be superimposed over the
original date and amount of said check the following: 'Aug. 9' after the
printed word 'MANILA', the figures '73' after the figures '19', the figures
'P18,060.00' after the sign 'P' and the words 'Eighteen Thousand Sixty
Only' after the printed word 'PESOS', thus causing it to appear as it did
appear that said check was issued on August 9, 1973, for the amount of
P18,060.00, when in truth and in fact as the said accused well knew, the
correct date of said check is July 14, 1973, and the real amount of the
check so drawn and issued by said F. DYCAICO is only for P225.00, thereby
making or causing to be made alterations and changes in a genuine
document which altered or changed its meaning: that once the aforesaid
check had been forged and falsified, altered or otherwise changed in the

manner above set forth, said accused affixed the signature Tomas P. Flores
at the back thereof and deposited said check in his account with the
Security Bank and Trust Company, Escolta Branch, this City, which check
was cleared by the Philippine Bank of Communications upon presentation
thereof believing that said check is genuine; and thereafter, said accused,
with intent to defraud, withdrew from said account the amounts of
P10,000.00 and P5,500.00 on August 16, 1973 and August 17, 1973
respectively, or a total of P15,500.00, which amount, once in his
possession, said accused misappropriated, misapplied and converted to his
own personal use and benefit, to the damage and prejudice of the Security
Bank and Trust Company and/or the Philippine Bank of Communications in
the aforesaid amount of P15,500.00, Philippine currency." (Emphasis
supplied.) 3
On the same date, appellant was also charged in Criminal Case No. 15007
with attempted estafa thru falsification of a commercial document before
the same court under the following information:
"That on or about and during the period comprised between August 18,
1973 and `August 22, 1973, inclusive, in the City of Manila, Philippines, the
said accused, being then a depositor of the Security Bank and Trust
Company, Escolta Branch, this City, under Savings Account No. 26580,
conspiring and confederating together with one whose true name, identity
and present whereabouts are still unknown and mutually helping each
other, with intent to defraud, commenced the commission of the crime of
estafa thru falsification of commercial document directly by overt acts, to
wit: the said accused having somehow obtained possession of Philippine
Bank of Communications Check No. U-186414, dated August 11, 1973, pay
to cash, in the amount of P2,030.00 issued by F. DYCAICO, and therefore a
commercial document, did then and there wilfully, unlawfully and
feloniously forge and falsify and or cause to be forged and falsified the
aforesaid check by then and there erasing and altering and/or causing to
be erased and altered the amount of said check and superimposing or
causing to be superimposed over the original amount of said check the
figures 'P18,060.00' after the sign 'P' and the words 'Eighteen Thousand
Sixty Only' after the printed word 'Pesos', thus causing it to appear, as in
fact it did appear, that said check was issued for the amount of
P18,060.00, when in truth and in fact as the accused well knew, the correct
and real amount of the check so drawn and issued by said F. DYCAICO is
only for P2,030.00 thereby making or causing to be made alterations and
changes in a genuine document which altered or changed its meaning;
that once the aforesaid check had been forged and falsified, altered or
otherwise changed in the manner above set forth, said accused affixed the
signature Tomas P. Flores at the back of said check and deposited the same
in his account with the Security Bank and Trust Company, the latter
believing that said check is genuine, accepted the same for deposit, and
thereafter, the said accused with intent to defraud, accomplished a
withdrawal slip for the sum of P15,500.00 and presented the same to the
teller of the Security Bank and Trust Company for the purpose of
withdrawing the said amount, but the said accused did not perform all the
acts of execution which should have produced the crime of estafa thru
falsification of a commercial document by reason of some cause other than

his own spontaneous desistance, that is, by the timely discovery made by
the officials and/or employees of said bank of the forgery and falsification
made on the aforesaid check before payment could be made which led
then and there to the apprehension of said accused." (Emphasis ours.) 4
Appellant pleaded not guilty when arraigned in both cases, which were
subsequently ordered consolidated. In his defense at the trial, and later
adopted for the same purpose in his brief, appellant claims::-cralaw
"That on August 9, 1973, he went to the Supersonic Auto Supply, situated
at the corner of Espaa and P. Leoncio Sts., Sampaloc, Manila. He went
there to buy auto spare parts as he is engaged in the buying and selling of
auto spare parts. When he was at this store, a person whom accused
claimed to know later as Jimmy Go, was also buying tires. The store did not
have tires for sale, and so the tire salesman pointed to the accused as one
who is selling such stuff. So, this man went to the accused and asked him if
he had tires for sale. Accused asked the man who introduced himself to the
accused as Jimmy Go, how many tires he needed. This man told the
accused he needed twenty-four (24) pieces of tires. Accused told this
`Jimmy Go' that he had the 24 tires but that he needed cash. Accused told
`Jimmy Go' that he does not accept checks for payment, especially he did
not know him. Accused claims that was the first time he had met this man
'Jimmy Go'. 'Jimmy Go', however, told the accused that he can issue the
check and he can deliver the tires only after having encashed the same. To
this proposition, the accused agreed. 'Jimmy Go', therefore, brought out a
check, now Exh. A, and then signed it in his presence. He signed the name
'F. Dycaico'. He then crossed the check at the upper left hand corner of the
check. Accused claims that except the signature and the lines used to
cross the check as aforementioned all the other handwritten portions of the
check were already there when 'Jimmy Go' signed it.
"After signing Exh. A, 'Jimmy Go' handed it to the accused. Seeing the
amount to be big, as the cost price of the 24 pieces of tires was only about
P3,000.00, more or less, the accused told, 'Jimmy Go' that he has no cash
to return for the difference. 'Jimmy Go' told him to just deliver the
difference after he has encashed it. So the accused got the check and they
parted.
"He claimed he went to the SBTC on 13 August 1973 as he deposited the
check (Exh. A) in his bank account (passbook, Exh. C), filling up therefor a
deposit slip (Exh. B.). The accused claimed that on 13 August 1973, he
went to withdraw P10,000.00, accomplishing Exh. E. After withdrawing
P10,000.00, the accused went to Espaa St. and delivered to 'Jimmy Go'
the P10,000.00. He delivered the tires in the afternoon. On that same day,
'Jimmy Go' told the accused that he needed the balance of the money and
so he said that he delivered the balance of P5,500.00 on 16 August 1973.
On this date, 16 Aug. 1973, as per his claim, 'Jimmy Go' again delivered to
him another check (Exh. H) as 'Jimmy Go' was buying another fifty (50)
pieces of tires. So, he took the check and deposited it with SBTC on his
account (passbook, Exh. C). He claims he could not get the proceeds of the
checks because at the time he was withdrawing from his deposit, two men
approached him and immediately handcuffed him" 5

On November 26, 1973 the trial court rendered judgment 6 finding


appellant guilty beyond reasonable doubt of the felonies charged in both
cases, the decretal portion of its decision reading as follows:
"IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court finding the guilt
of the accused for the crime charged in both cases (No. 15006 and 15007)
to have been proved beyond reasonable doubt, and there being neither
mitigating nor aggravating circumstances to affect his penal liability,
hereby imposes upon the accused and sentences him to suffer:
(a) In Crim. Case. No. 15006
an indeterminate penalty of from FOUR (4) years and TWO (2) months of
prision correccional, as minimum, to EIGHT (8) years and ONE (1) day of
prision mayor, as maximum, with all the accessory penalties of the law,
and to indemnify the Security Bank and Trust Company the sum of
P18,060.00, sans subsidiary imprisonment in case of insolvency, and to
pay the costs; and
(b) In Crim. Case No. 15007
an indeterminate penalty of from TWO (2) years, FOUR (4) months of
prision correccional, as minimum, to six (6) years of prision correccional as
maximum, with all the accessory penalties of the law, and to pay a fine of
P5,000.00 and to suffer a subsidiary imprisonment in case of insolvency at
the rate of P8.00 a day, but in no case shall it exceed one-third (1/3) of the
term of the sentence nor shall it continue for more than one year, and to
pay the costs.
"The accused shall first serve the sentence imposed in Crim. Case No.
15006, to which shall be credited four-fifths (4/5) of his preventive
imprisonment in the service of his sentence.: rd
SO ORDERED." 7
Not satisfied therewith, petitioner interposed an appeal with respondent
Court of Appeals, docketed therein as CA-G.R. No. 16246-47-Cr.
Respondent court, in a decision promulgated on September 26, 1977,
affirmed the judgment of conviction but modified the penalties in both
cases as follows:
"In Criminal Case No. 15006
to suffer an indeterminate penalty of four (4) years and two (2) months of
prision correccional, as minimum, to six (6) years, eight (8) months and
twenty (20) days of prision mayor, as maximum, with all the accessory
penalties of the law; to indemnify the Security Bank and Trust Company in
the sum of P18,060.00, without subsidiary imprisonment in case of
insolvency; and to pay the costs; and
In Criminal Case No. 15007
to suffer the penalty of four (4) months and twenty (20) days of arresto
mayor, and to pay the costs.
"The Accused shall first serve the sentence imposed in Criminal Case No.
15006 and shall be credited with the term of his preventive imprisonment

in accordance with Article 29 of the Revised Penal Code, as amended by


R.A. No. 6127.
SO ORDERED." 8
Culled from the submissions of both parties in the present appeal and the
established facts of these cases, the issues raised and submitted for
determination by us may be synthesized into whether or not respondent
court erred
(1) In supposedly changing the tenor and or nature of the accusation and
convicting appellant on the basis of this new accusation without having
informed him of the nature and cause of the accusation;
(2) In holding that there is a crime of attempted estafa and convicting
appellant of such crime in the absence of the essential elements of deceit
and damage; and
(3) In arriving at a conclusion of guilt of the crimes of attempted estafa and
estafa, both thru falsification of commercial documents, on the basis
merely of a presumption of law, despite the absence of evidence showing
that appellant committed, or had knowledge of, the crimes charged, in
violation of the constitutional presumption of innocence and doctrinal
jurisprudence on proof beyond reasonable doubt in favor of appellant.
Parenthetically, this petition for review on Certiorari was formerly denied in
a Resolution of this Court, dated August 18, 1978, 9 but was later on given
due course on a Motion for Reconsideration and/or for New Trial, 10 based
inter alia, on an alleged letter of one Jimmy Go dated August 14, 1978,
which appellant supposedly received on August 21, 1978 and which he
claims he could not have discovered and produced during the trial of the
cases despite diligent efforts to produce the same. Mere zerox copies of
the supposed letter and the mailing envelope were appended to said
motion.
We do not, however, deem it proper to include the aforesaid matter in the
issues above enumerated considering that the requirement in the 1964
Rules of Court 11 , which was then in force, to the effect that a motion for
new trial must be supported by affidavits of the witnesses by whom such
evidence is expected to be given, has not been complied with; and (b) the
judgment of conviction will not in any way be affected by such evidence
the authenticity and credibility whereof have not been established, aside
from the obvious fact that the tenor thereof is inherently improbable and
such a letter could easily be concocted.: nad
Coming now to the first issue, appellant alleges that there is a variance
between the allegations in the information and the evidence adduced,
thereby depriving him of the right to be informed of the nature and cause
of the accusation against him.
The rule that an accused cannot be convicted of an offense not charged or
included in the information is based upon the right to be informed of the
true nature and cause of the accusation against him. 12 However,
respondent court exhaustively discussed this issue and lucidly explained
the facts upon which its judgment of conviction was predicated, thus:

"It is a fact that under the two informations, the mode of falsification
attributed to the Accused is that of having erased and altered the dates
and amounts of the checks in question, and superimposing or causing to
be superimposed over the original dates and amount of said checks other
dates and amounts, thereby making alterations and changes in genuine
documents which changed their meaning. Clearly, therefore, the offense
charged is that penalized under Article 172 in relation to Article 171 (6) of
the Revised Penal Code.
"It is to be noted, however, that presented in evidence by the prosecution
for the First Case were two checks, Exhs. 'A' and `O', which both bear the
identical Check No. U-186378 but the former bears the amount of P225.00,
while the latter that of P18,060.00, both drawn and issued by 'F. Dycaico'.
For the Second Case, two checks were likewise presented, Exhs. 'H' and 'P'
which bear the identical Check No. U-186414, but the former bears the
amount of P2,030.00 while the latter that of P18,060.00, both drawn and
issued by 'F. Dycaico'.
"Prosecution witness, Florencio Dycaico, admitted that he issued the
checks, Exhs. 'O' and 'P', in the amounts of P225.00 and P2,030.00
respectively, but denied having issued at all the checks, Exhibits 'A' and
'H', both in the respective amounts of P18,060.00.
"It has to be conceded, therefore, as alleged by the defense, and likewise
admitted by the People, that considering the evidence adduced, there were
no erasures nor alterations nor superimpositions as alleged in both
Informations, but that Exhibits 'A' and 'H' were forgeries in toto. In other
words, while the Accused has been charged of Estafa and Attempted Estafa
thru Falsification of a commercial document under Article 172 in relation to
Article 171, paragraph 6 the Revised Penal Code, reading
'Art. 171. . . . shall falsify a document by committing any of the following
acts:
xxx
'6. Making any alterations or intercalation in a genuine document which
changes its meaning,'
based on the evidence, the accusation would fall under either paragraph 1
or 2 of Article 171 of the same Code which reads:
'1. Counterfeiting or imitating any handwriting, signature or rubric;
'2. Causing it to appear that persons have participated in any act or
proceeding when they did not in fact so participate.'
"Be that as it may, as pointed out by the State, the aforementioned
variance affects solely the charge of Falsification, of which the Accused
should not have been convicted under the time-honored rule that an
Accused should be informed of the true nature and cause of the accusation
against him. However, with respect to the charges of Estafa and Attempted
Estafa, respectively, (complexed under the two Informations with
Falsification of a Commercial Document) conviction would still be proper,

the two essential requisites of Estafa, namely fraud or deceit and damage
to another, having been charged and proven." 13
On the second issue, appellant contends that respondent court erred in
convicting him of attempted estafa in Criminal Case No. 15007 when it
admitted in its decision that appellant was not able to withdraw the value
of the second check as he was apprehended in the act of withdrawing the
same. From this, he argues that having failed to withdraw the sum as part
value of the second check, no amount whatsoever was taken by him,
hence no damage or prejudice was suffered by the bank. Absent such
damage, he concludes, he cannot be convicted of attempted estafa.: nad
This is specious argumentation.
Basically, the two essential requisites of fraud or deceit and damage or
injury must be established by sufficient and competent evidence in order
that the crime of estafa may be established. 14 Deceit is the false
representation of a matter of fact (whether by words or conduct, by false or
misleading allegations, or by concealment of that which should have been
disclosed) which deceives or is intended to deceive another so that he shall
act upon it to his legal injury. 15 The fact that appellant was the possessor
and utterer of the checks in question (Exhibits "A" and "H") and having
benefited from the subsequent withdrawals, as well as having attempted to
gain by trying to withdraw an amount thereon, the inevitable conclusion
would be that he was the one who falsified said Exhibits "A" and "H".
Ineluctably, the use of the spurious checks is by itself fraud or deceit.
Although one of the essential elements of estafa is damage or prejudice to
the offended party, 16 in the absence of proof thereof the offender would
at least be guilty of attempted estafa. Appellant commenced the
commission of the crime of estafa but he failed to perform all the acts of
execution which would produce the crime, not by reason of his own
spontaneous desistance but because of his apprehension by the authorities
before he could obtain the amount. Since only the intent to cause damage
and not the damage itself has been shown, respondent court correctly
convicted appellant of attempted estafa.
Lastly, appellant insists that there is no evidence whatsoever pointing to
him as the person who falsified the two checks in question (Exhs. "A" and
"H"), as the prosecution failed to refute his version regarding the
circumstances under which he allegedly took possession of the said
checks. He further posits the view that while the courts may apply the
presumptions of law in some cases, the presumption that the possessor of
a falsified document is presumed to be the forger does not constitute proof
beyond reasonable doubt and cannot be applied in his case, allegedly
because the provisions not only of the Constitution but also of the Rules of
Court must be the basis of the judgment.
We disagree.
While it may appear that the prosecution failed to directly contradict the
claim of appellant as to how he came into possession of the two checks, it
is understandable that the prosecution would not always have the means
for obtaining such direct evidence to confute acts contrived clandestinely.

Undoubtedly, too, as a general rule, positive testimony as to a particular


fact, uncontradicted by anyone, should control the decision of the court.
Where, however, there is such an inherent improbability in the testimony
or theory of the witness, the court may properly disregard such evidence,
even in the absence of any direct conflicting testimony. We agree with
respondent court that the People's version of the facts deserves more
credence and it is more in consonance with human experience.
As repeatedly expounded by this Court, evidence to be worthy of credit,
must not only proceed from a credible source but must, in addition, be
credible in itself. And by this is meant that it shall be natural, reasonable
and probable as to make it easy to believe. 17 No better test has yet been
found to determine the value of the testimony of a witness than its
conformity to the knowledge and common experience of mankind. 18 As
bewailed by the court below, the theory espoused by appellant "is taxing
too much the credulity of this Court, an insult to the humble intelligence
and the common sense of this Court." 19
The checks in question (Exhibits "A" and "H") were undeniably spurious, or
were forgeries in toto. Prosecution witness Florencio Dycaico categorically
testified that he did not issue said checks but only those checks in the
amount of P225.00 and P2,030.00 (Exhibits "O" and "P"). The disclaimer by
Dycaico of his alleged signatures on the aforesaid checks is prima facie
evidence of falsification and consequently shifts the burden of evidence to
appellant to prove otherwise, but which burden appellant has not
discharged.:-cralaw
The court a quo, as well as respondent court, posed the question as to the
identity of the forger, and we are satisfied that both courts did not err in
relying upon the presumption that the possessor of a falsified document is
presumed to be the author thereof. It is an established rule that when it is
proved that a person has in his possession a falsified document and makes
use of the same, the presumption or inference is justified that such person
is the forger. 20 The petitioner has been shown to have been the possessor
and utterer of the two checks (Exhibits "A" and "H") when he made use of
and benefited therefrom by his withdrawals of and attempt to withdraw
funds through said checks. The circumstance, therefore, that appellant
made use of and benefited from the falsified document is a strong
evidence that he either himself falsified it or caused the same to be
falsified, 21 he being criminally responsible in either case. 22 Since
appellant is the only person who stood to be benefited by the falsification
of the document that was found in his possession, it is presumed that he is
the material author of such falsification. 23
It is thus apparent that the refusal of respondent Court of Appeals to give
credence to the theory of the defense is substantially supported by the
ambient circumstances and the evidence on record. Besides, this being a
petition for review on Certiorari of a decision of respondent court rendered
in the exercise of its exclusive appellate jurisdiction over the decision of
the trial court, said decision of respondent court is "final", subject only to
our power of review on questions of law. 24

WHEREFORE, the petition is DENIED and the appealed judgment of


respondent Court of Appeals is hereby AFFIRMED in toto.
SO ORDERED.

G.R. No. L-31911 July 20, 1979


THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
BENITO DE LA CRUZ and CIPRING DE LA CRUZ, defendants-appellants.
Buenaventura A. Reposar for appellant.
Solicitor General Felix Q. Antonio, Assistant Solicitor General Cirspin V.
Bautista and Solicitor Eulogio Raquel-Santos for appellee.

MELENCIO-HERRERA, J:
This is an automatic review of the Decision of the Court of First Instance of
Samar, Branch IX, convicting Benito de la Cruz and Cipring de la Cruz of
the crime of Robbery in Band with Double Homicide and imposing upon
them the capital punishment.
The prosecution narrates the occurrence as follows:
Melchor Bago, 64 years of age, was the light-house keeper at Hinamok
Island, Salvacion, Basey, Western Samar. On October 29, 1968, at about
5:00 o'clock in the afternoon, he was proceeding to light the lamp at the
said light-house, which is about two-thirds of a kilometer away from his
house on the seashore, where he and his wife, Adriana Bago, lived. On the
way, he met Elmerio Banasan, a fisherman who had just arrived from
fishing, and who informed him that he saw some persons disembark from a
motorized banca (referred to in the transcript as a "pumpboat"). Looking
towards the sea, Melchor saw a "pumpboat" anchored at about "40 brazas"
from the "beach of the light-house." It was painted green and yellow with a
roof covering the boat so that when someone enters, he cannot be
seen. 1 Noting nothing unusual, he proceeded on his way. Upon reaching
the base of the light-house, he saw a person crouching behind the cogon

grass about four arm's-lengths away. He called out saying "who are you,
what are you doing there?" The man stood up, followed by four others.
They were all armed, two with revolvers, one with a rifle and still another
with a homemade shotgun or "paltik." All of them encircled him. One of the
men who was carrying a revolver and whom he came to know later as the
accused, Benito de la Cruz, ordered the others to hogtie him, warning him
not to shout and resist otherwise he would be killed; while another, whose
name he knew later as Cipring de la Cruz, took his bolo away. Then Benito
de la Cruz inquired where he kept the .38 Cal. rifle and .45 Cal. pistol
issued by the Government to him. Melchor denied having those firearms.
He was then taken by Benito, Cipring and another companion to a nearby
cemetery. After being made to sit, his upper arms were tied to the post of a
tomb with his feet likewise tied to the fence. Cipring tied Melchor's arms
loosely but Benito told him to tighten it in order to prevent escape. Then
Benito de la Cruz asked Melchor which part of his house was open and
Melchor replied that it was the door and window facing the sea. The group
then stuffed Melchor's mouth with a piece of cloth and a handkerchief, and
before leaving, Benito told him that they would kill his wife and would
return to kill him too.
At about 9:00 o'clock in the evening of that same day, Camilo Saborrido, a
fisherman, whose house is near that of Melchor, was unloading coconut
shells from his banca and carrying them to his house. While doing so, he
noticed a motorized banca, which had come from the direction of the lighthouse, drop anchor in front of Melchor's house. That banca was about fifty
meters away from where he was. Then he saw seven men disembark and
proceed uphill towards, the direction of Melchor's house. He did not bother
to see what those persons were up to as he was far from them. It was only
the next day that he saw the dead body of one Edilberto Estriber on the
beach about 30 meters away from where he was unloading coconut shells
the night before. He also saw the dead body of Melchor's wife, with hands
and legs tied to a piece of wood, lying face up, with a strip of rattan tied
tightly around her neck.
Melchor remained tied at the cemetery until 10:00 o'clock the next
morning when the barrio teenagers found and untied him and informed
him that his wife and Edilberto Estriber had been killed. Reaching home, he
saw the dead body of his wife about three arm's lengths from their abode.
Inside his house, things were in disarray, and the following were missing:
radio, cash, flashlight, one can of rice, canned goods, three pairs of
earrings, two gold necklaces, three suitcases and a trunk of clothes, all
valued at P1,313.00.
The dead body of Edilberto Estriber was found on the beach in front of
Melchor's house, with wounds on the left and right breast. Dr. Harry S.
Marabut Municipal Health Officer of Basey, Samar, performed the autopsy
on the cadavers of Adriana Bago and Edilberto Estriber on October 30,
1968. His findings were reflected in the postmortem reports he issued, to
wit: t.hqw

Adriana Bago
xxx xxx xxx
III External and internal Findings:
A. Head and Neck - Presence of multiple abrasions at the
Muchal area (semi circular) with the fracture of the hyoid
bone, blocking the air passage producing asphyxia.
B. Thorax - Hypersthenic Type - Opening of thoracic cavity lungs expanded.
C. Upper Extremities - presence of abrasions at both wristjoints.
D. Lower Extremities - presence of abrasions at both ankle
joints.
IV Cause of Death: Asphyxia due to Strangulation (fracture
of hyoid bone). 2
xxx xxx xxx
Edilberto Estriber:
xxx xxx xxx
III External and lnternal Findings:
A. Head and Neck - presence of multiple abrasions at the
frontal and maxillary areas with compacted sand particles.
B. Thorax
1) Presence of thru-thru wound at Right supra- mamary
area traversing the right lung making an exit at right
scapular angle (1" x 1/3" x 9").
2) Presence of thru-thru wound at Right Infra-Mamary area
hitting the right lung making an exit at Right infra-capular
area (1" x 1/3" x 9").
3) Presence of three (3) penetrating wounds (1" x 1/3" x
6") at Right Mamary area hitting the Right Lung.

4) Four (4) Penetrating wounds (1" x 1/3" x 5") at left


mamary area hitting the heart and left lung.
5) Presence of Penetrating wound at left Infra-mamary area
(1" x 1/3 " x 4") hitting the lower lobe of left lung.
6) Presence of Penetrating wound (1" x1/3 "x 1/2") left
supra scapular area hitting the left lung.
7) Penetrating wound (1" x 1/3" x 6") at left infra scapular
area hitting the left lung.
8) Penetrating wound # 4- (1" x l/3 " x 4") at right scapular
area and right para vertibral areas.
opening of the thorax-presence of blood approximately
one and a half (1-1/2) liters
NOTE - All injuries are fatal.
IV Cause of Death: Shock due to injury of the heart and
Right and Left Lungs. 3
Melchor Bago was also examined by Dr. Marabut and according to the
medical certificate issued to him, dated December 12, 1968, he sustained
the following injuries, which would heal from ten (10) to eleven (11) days
barring complications, namely: t.hqw
1) Abrasions (5 cm. diameter) superficial right and left
lower jaw.
2) Multiple abrasions, around right and left wrist joints.
3) Multiple abrasions, superficial, left and tight arms.
4) Multiple abrasions, around right and left ankle joints.
(Exh. F)
Investigation by the authorities ensued. A few days before December 12,
1968, the Chief of Police of Basey, Western Samar, sent Melchor with some
policeman and a PC constable to try and trace the motorboat used in the
commission of the offense by walking along the shore starting from San
Jose, Tacloban City. Note may be taken of the fact that only a relatively
narrow strip of water separates the southwestern part of Samar from the
northeastern coast of Leyte.

Upon arriving at the beach at San Roque, Tanauan, Leyte, on December 11,
1968, Melchor Bago Identified a boat thereat as the very same boat he saw
at Hinamok Island on October 29, 1968, except that it was painted
differently in blue. A police sergeant of Tanauan, Leyte, who was with them
called the owners of said boat, and when the two appellants appeared, one
after the other, and came face to face with Melchor, the latter "had a
certain unusual feeling and his hair stood on its ends 4 as he recognized
them to be those who had tied him that fateful evening. Parenthetically, at
that point of his testimony, the Fiscal placed on record "the reaction of this
witness when answering the question of the Court with respect to the
spontaneous Identity of the accused, because the witness jerked and
demonstrating spontaneity as if he saw a long lost friend." Melchor, at the
time, was wearing sunglasses so he himself would not be recognized.
Melchor then informed the police "secretly" of the Identity of his assailants
but since the police were not armed with warrants of arrest, they all
returned home to Basey, Western Samar.
The appellants were arrested on December 12, 1968 and were brought to
Basey, Samar, where they were investigated by the Chief of Police. The
latter likewise filed the corresponding Complaint for Robbery in Band with
Double Homicide before the Municipal Court of Basey on the same day.
During the investigation, both appellants denied participation in the
commission of the robbery-homicide on October 29, 1968. However, on
December 14, 1968, a Saturday, the Chief of Police was informed by one of
the jailers that Cipring de la Cruz wanted to confide something to him
about the incident, He was thereupon investigated anew by the Chief of
Police. The investigation, which was reduced to writing, was finished at
past 12:00 o'clock noon but Cipring de la Cruz was unable to sign the same
because the Municipal Judge before whom the Chief of Police believed it
should be signed had already gone home. The following Monday,
December 16, 1968, Cipring de la Cruz, accompanied by his counsel was
taken to the Municipal Judge but at that time he refused to sign and
confirm the statement he had given.
On February 26, 1969, the corresponding Information charging appellants
and three Does with the crime of Robbery in Band with Double Homicide
was filed before the Court of First Instance of Western Samar, Branch IV,
reading as follows: t.hqw
That on or about the 29th day of October, 1968, in the
Municipality of Basey, Western Samar, Philippines, and
within the jurisdiction of this Honorable Court, the abovenamed accused conspiring and confederating together and
mutually helping one another with John Doe, Peter Doe,
and Paul Doe who are all still at large and while armed with
firearms and deadly weapons with intent of gain, with
violence against and intimidation of persons did then and
there wilfully, unlawfully, and feloniously hogtie one
Melchor Bago with a piece of rope after which they forcibly
entered the dwelling of said Melchor Bago and once inside

take, steal, rob, and carry away the following personal


properties, to wit:

ARTICLES

WORTH
OF
VALUE

RadioTransistor(Maharl
ika)

P
170.00

Cash

8.50

Flashlight

4.50

Rice,one tin can full

15.00

Canned Goods

15.00

Three suitcases

50.00

One Chest box or


trunk with clothes

550.50

Total amount

P1,313.
00

without and against the consent of the said Melchor Bago


valued in the totality of Pl,313.00 to the damage and
prejudice of said owner in the aforementioned amount and
in pursuance of their criminal conspiracy and during or on
the occasion of the robbery with deliberate intent to kill
Edilberto Estriber and Adriana Bago with treachery, evident
premeditation, and with abuse of superior strength did
then and there wilfully, unlawfully, and feloniously hog-tie
and strangle Adriana Bago, assault, attack, stab, and hack
Edilberto Estriber with the weapon which they provided
themselves for the purpose which strangling resulted in
-the death of Adriana Bago and inflicting multiple wounds
on the different parts of the body of Edilberto Estriber
which injuries directly caused their death.
That in the commission of the crime, the following
aggravating circumstances were present:

Revolver, Cal. 38, Colt

300.00

1. Nocturnity;
2. Use of Motor Boat;

Three pairs of gold


earrings

150.00

3. That the crime was committed in the dwelling of the


complaining witness Melchor Bago;
4. That in the commission of the crime, unlicensed firearms
were used band.

Two gold necklace

50.00

CONTRARY TO LAW.

Appellants denied participation in the commission of the offense charged.


They maintained that at about 4:00 o'clock in the afternoon of October 29,
1968, both of them, with other persons, beached their own fishing boat
and that of Victoriano Mansalay as it was the end of the fishing season.
Thereafter, they were in the house of Victoriano Mansalay at San Roque,
Tanauan, Leyte, from 5:00 o'clock in the afternoon until 12:00 o'clock
midnight because they helped in the preparation of the food for the
merrymaking held in the house of Victoriano on which occasion profits at
the end of the fishing season were to be distributed. Later, they also
helped in serving food to the guests. They argue then that as they did not
leave that place at all, they could not have been at the scene of the crime
on the date in question. Their testimonies were corroborated by Julian
Sanches, Victoriano Mansalay Benedicto Campos and Francisco Mendiola.

4. The lower Court erred in finding both accused responsible for the death
of Edilberto Estriber.

Unconvinced, the trial Court, after hearing, convicted the appellants as


follows: t.hqw

Circumstantial evidence is considered sufficient for conviction if the


following circumstances are present: a) there is more than one
circumstance; b) the facts from which the inferences are derived are
proven; and c) the combination of all the circumstances is such as to
produce conviction beyond reasonable doubt. 5

WHEREFORE, premises above considered, the Court finds


the two accused herein Benito de la Cruz and Cipring de la
Cruz guilty beyond reasonable doubt as principals of the
consummated crime of robbery with double homicide
defined and penalized under Article 294, paragraph 1 of
the Revised Penal Code, and considering the two
aggravating circumstances aforementioned (in band, and
use of a motor vehicle) and without any mitigating
circumstance to offset the same, hereby sentences each of
the herein accused to DEATH, to pay the costs of this case
and jointly and severally to indemnify each of the heirs of
Adriana Bago and Edilberto Estriber in the amount of
P12,000.00 for each death.
xxx xxx xxx
In this appeal, appellants attribute the following errors to the trial Court:
1. The lower Court erred in giving credence and weight to the testimony of
Melchor Bago as a whole especially on the point that he recognized and
Identified both accused in Bo. San Roque, Tanauan, Leyte on December 11,
1968, a period of 43 days after the alleged incident on October 29, 1968.
2. The lower Court erred in giving much credence and weight to the
testimony of the Chief of Police of Basey, Samar, Antonio Tabuac to the
effect that he investigated Cipring de la Cruz and that he reduced the
same to writing and which later Cipring de la Cruz refused to sign.
3. The lower Court erred in giving much weight to the unsigned alleged
statement of Cipring de la Cruz against said Cipring de la Cruz and against
his co-accused. Benito de la Cruz.

5. The lower Court erred in disregarding the defense of both accused and
instead of acquitting them, the Court convicted them and imposed the
penalty of death.
6. The lower Court erred in not acquitting both accused on reasonable
doubt.
Fundamentally, appellants assail the judgment of conviction of the lower
Court on the ground that it was based on circumstantial evidence.

There is, indeed, no direct evidence that both deceased were killed by
appellants and their companions. We find, however, that the combination
of all circumstances in this case is sufficient to warrant conviction with
moral certainty.
Melchor Bago testified that after being encircled by the group of five armed
men, appellant Benito de la Cruz inquired from him regarding the firearms
issued to him by the Government. Thereafter, while he was being tied in
the cemetery, Benito also asked "what portion of your house is open?" And
he answered "the door facing the sea is now open. 6 Subsequently, Benito
de la Cruz told him before they left him tied to a post in the cemetery that
they would kill his wife. 7
At around 9:00 o'clock in the evening, Camilo Saborrido a fisherman,
whose house was near that of Melchor Bago, testified that he saw a
"pumpboat" anchor in front of the latter's house. And more significantly,
that it had come from the direction of the light-house. He declared that he
could see it clearly because it was a moonlight night. Then he saw seven
men disembark from the boat and proceed uphill towards the house of
Melchor. The next day, he found the dead bodies of Adriana Bago and
Edilberto Estriber. 8
The foregoing chain of circumstances, pieced together, in point of time and
by sequence of events, point to one conclusion that appellants and their
companions were the ones who tied up Melchor in the cemetery; hence,
they proceeded to Melchor's house, as they themselves had categorically
told Melchor. In the latter place, they must still have looked for the firearms
issued to Melchor, as shown by the fact that Melchor found things in the
House in disarray. Thereafter, they robbed the house and on that occasion

killed Adriana Bago and Edilberto Estriber. That Adriana was bound hand
and foot is characteristic of the same maltreatment that Melchor received
in the cemetery when his arms, his hands and his feet were also bound and
tied by appellants and their companions.
Additionally, after a search along the northeastern coast of Leyte, Melchor
accompanied by the police, chanced upon a motorized banca which
Melchor readily Identified as that which was anchored fifty yards away from
the lighthouse in the afternoon of October 29, 1968. And when he saw the
owners thereof upon being summoned by the police, he readily recognized
them to be the culprits. If they did not recognize him nor suspected that
the police were tracking them, it was because the police disguised their
mission by inviting people to drink in a store by the seashore. 9
Appellants, however, assail Melchor's testimony in that being an old man,
64 years of age, he already had a faulty memory as shown by the fact that
he could not even remember the names of the policemen who
accompanied him during the search. 10 While this may be so, it does not
necessarily follow that he would have the same difficulty recognizing the
faces of persons who had maltreated him and who had killed his wife. The
passage of forty-three days from the commission of the robbery and
homicide up to the date the appellants were Identified and arrested would
neither dim his memory after having undergone such a harrowing and
traumatic experience.
Appellants further contend that during the months of October, November
and December, it is of common knowledge that the days are shorter and
the night longer so that at 5:25 P.M., Melchor Bago could no longer have
seen clearly the faces of appellants. Note can be taken of the fact,
however, that at that hour in October, objects and people are still readily
discernible especially at short distances. It must be recalled that appellants
not only came very near to Melchor, but they even tied him and talked to
him. They came close enough and stayed long enough with him to enable
him to see and remember their faces.
The inconsistencies in Melchor's testimony, such as the time he was
released from the cemetery as compared to the hour the autopsies were
conducted, is a minor detail that does not affect his basic credibility, but on
the contrary, enhances it for it belies that his version of the incident has
been concocted or rehearsed.
The trial Court neither erred in giving credence and weight to the
testimony of the Chief of Police of Basey, Samar, to the effect that he had
investigated appellant Cipring de la Cruz and had reduced it to writing, but
that the latter changed his mind and refused to sign it two days later. The
defense has not presented any convincing reason that would impel us to
disregard his testimony. As Chief of Police, he acted in the performance of
his official duty, and the legal presumption remains that official duty has
been regularly performed. 11 In regards the unsigned statement of Cipring

de la Cruz, taken on December 14, 1968, we find no error on the part of


the trial Court in admitting it as part of the Chief of Police's testimony. In
that affidavit, Cipring admitted having been with a group at the lighthouse
at Hinamok Island, having tied an old man, having gone to the latter's
house, and having left that place with loot, except that he claimed that he
and his brother had been merely forced to go with them under duress and
at the point of a gun. Considering, therefore, that the general tenor of the
affidavit was exculpatory, the defense cannot successfully allege that it
was a mere fabrication of the Chief of Police, besides the fact that it listed
names of people from Tanauan, Leyte, unknown to the Chief of Police. And
more importantly, that affidavit was not the sole basis of conviction. It was
the combination of circumstances surrounding the occurrence which
convinced the trial Court to adjudge the appellants guilty: thus, t.
hqw
It is true that there is no direct evidence as to who robbed
the house of Melchor Bago and who killed his wife Adriana
and one Edilberto Estriber, but the Court is fully convinced
by the circumstantial evidence on record that the two
accused herein and their three unidentified companions
were the ones who robbed and killed Adriana Bago and
Edilberto Estriber. It has been proved that the persons who
disembarked from an anchored motorboat near the
lighthouse and who later tied Melchor Bago inside the
cemetery were the very persons who later in that evening
disembarked from the same motorboat near the house of
Melchor Bago. Likewise, it was proved that Benito de la
Cruz, accused herein, revealed their intention to rob and
kill Adriana when he asked Melchor in the cemetery which
part of his house was opened, and then when they
demanded from him where his two pistols were being kept.
And before they left Melchor in the cemetery, they
informed him that they are going to kill his wife. The Court
entertains no doubt that these two accused herein and
their three companions conspired and confederated and
were the ones who robbed the house of Melchor Bago and
killed Adriana and one Edilberto Estriber. 12
The defense of alibi is bereft of merit. It has been completely overthrown
by the testimony of Melchor Bago and by the chain of circumstantial
evidence herein. Moreover, it takes only about two hours to negotiate the
distance between the house of Victoriano Mansalay at Barrio San Roque,
Tanauan, Leyte, where the appellants allegedly were, to Hinamok Island
where the crime was committed. 13 It is settled jurisprudence that for the
defense of alibi to prosper, it is not enough to prove that the accused were
somewhere else when the crime was committed but it must likewise be
demonstrated that it was physically impossible for them to have been at
the situs of the crime at the time. 14

Upon the foregoing premises, conviction for the crime of Robbery with
Double Homicide is warranted, with the aggravating circumstances of
nighttime, and of having been committed by a band being present, and
with no mitigating circumstance to offset them.
The crime of Robbery with Homicide is punishable by reclusion perpetua to
death. 15 In consonance with Article 63(l) of the same Code, appellants
should be sentenced to the capital punishment. However, for lack of the
required number of votes, the penalty to be imposed is the next lower in
degree or reclusion perpetua.
WHEREFORE, as thus modified, the judgment appealed from is hereby
affirmed, with the additional modification that the accused, jointly and
severally, shall indemnify Melchor Bago in the amount of P1,313.00, the
value of the articles stolen.
Costs against accused-appellants.
SO ORDERED.

said respondent's "Omnibus Motion for Relief of Judgment, New Trial, to


Recall the Writ of Execution and to Suspend Execution", pursuant to
Section 1 of Rule 45 of the Revised Rules of Court.
On December 11, 1964 petitioner ITT Philippines, Inc. filed in the Court of
First Instance of Rizal (Pasig Branch) an action (Civil Case No. 8503)
against private respondent Erdulfo C. Boiser to collect payment of the
latter's alleged indebtedness. Private respondent filed his answer on
February 15, 1965. Petitioner then moved to declare private respondent in
default but his motion was denied as private respondent has already filed
his answer.
On the scheduled pre-trial of the case on August 24, 1965, private
respondent failed to appear. It was reset for September 30, 1965 since
private respondent was not duty notified of the scheduled pre-trial. Again,
it was postponed as there was no showing that the notice thereof was
received by private respondent. Once more, the pre-trial for November 23,
1965 reset for January 6, 1966.

G.R. No. L-30810 October 29, 1975

With the appointment of Judge Samuel F. Reyes as Immigration


Commissioner, Judge Herminio C. Mariano took over the case and set the
case again for another pre-trial for September 6, 1966. When private
respondent failed to appear, the lower court ordered the Deputy Clerk of
Court to determine whether private respondent was duly served with
notice of the pre-trial on September 6, 1966. Upon verification, the lower
court found no report of the Deputy Clerk in the expediente of the case.

ITT PHILIPPINES, INC., petitioner,


vs.
COURT OF APPEALS and ERDULFO C. BOISER, respondents.

On February 20, 1967, the petitioner through counsel filed a motion to


declare private respondent in default. Acting on said motion, the lower
court on March 4, 1967, issued the following order:

Nestor E. Nicolas for petitioner.


Erlinda Boiser Ramos for private respondent.

MARTIN, J.:
This is a petition for review of the decision of the respondent Court of
Appeals in CA-G.R. No. 42895-R 1 issuing a Writ of Mandamus to the Court
of First Instance of Rizal commanding it to give due course to the appeal of
private respondent Erdulfo C. Boiser, from the order of said court denying

Finding the Motion dated February 20, 1967 filed by the


plaintiff to declare defendant Erdulfo C. Boiser in default to
be well taken, it appearing that said defendant failed to file
his answer within the reglementary period, said defendant
is hereby declared in default. 2
On July 27, 1967, the lower court rendered judgement on the case and
upon motion of the petitioner issued its order of April 24, 1968 authorizing
the execution of the judgment.
On July 10, 1968 private respondent filed an "Urgent Omnibus Motion for
Relief of Judgment, New Trial, to Recall the Writ of Execution and to

Suspend Execution," claiming that he came to know of the order declaring


him in default only on July 5, 1968 when the Special Sheriff left a copy of
the writ of execution in his residence in Tagbilaran, Bohol. In support of his
motion private respondent brought to the attention of the trial court an
affidavit alleging "that the Postmaster of Tagbilaran, Bohol, with malice and
fraud aforethought, deliberately withheld from him ... all and every
information about the receipt of his mail by that post office, particularly the
one containing the decision of the court in Civil Case No. 8503, and instead
he, the Postmaster, unceremoniously returned as unclaimed by the
addressee the said mail containing the decision notwithstanding the fact
that the required number of notices usually sent to addressees of
registered mails were never sent" which "may be attributed to the critical
comments made" by private respondent who is a radio commentator in
Tagbilaran against the alleged mismanagement by the Postmaster of the
official business of the post office.
On July 22, 1968, the aforesaid "Urgent Omnibus Motion for Relief of
Judgment, New Trial, to Recall the Writ of Execution and to Suspend
Execution" was denied.
On August 10, 1968, private respondent filed his Notice of Appeal from the
decision of the lower court and from the order denying his "Urgent
Omnibus Motion for Relief of Judgment, New Trial, to Recall the Writ of
Execution and to Suspend Execution". The record on appeal and the appeal
bond were subsequently filed on August 24, 1968.
In due time petitioner riled an urgent motion to dismiss the appeal filed by
private respondent from the decision of the lower court and the order
denying the aforesaid omnibus motion. The lower court granted the motion
to dismiss appeal. Private respondent moved for reconsideration of the
order of dismissal of his appeal but the motion for reconsideration was
denied.
Private respondent took the case to the Court of Appeals on a petition for
"Mandamus with Preliminary Injunction" praying, among others, for the
issuance of a "writ of preliminary injunction restraining the respondent
Judge and Special sheriff and all other officers of the law ..., from carrying
out or threatening to carry out the order of execution," ..."ordering the
respondent Judge to give due course to the appeal perfected on time" ...
"and to elevate to this Honorable Court the record on appeal, notice of
appeal, appeal bond and the entire evidence, oral and documentary,
submitted in said Civil Case No. 8503." The respondent Court of Appeals
granted the petition for private respondent and issued the writ
of mandamus commanding the lower court to give due course to the

appeal of private respondent from the order denying his Urgent Omnibus
Motion for Relief of Judgment, New Trial, to Recall the Writ of Execution and
to Suspend Execution. Petitioner filed a motion for reconsideration of the
decision of the respondent Court of Appeals but said motion was denied.
Hence, this petition for review on certiorari of the decision of the
respondent Court of Appeals, pressing upon the following errors:
I
IN NOT HOLDING THAT A WRIT OF MANDAMUS IS NOT
AVAILABLE TO COMPEL THE TRIAL COURT TO GIVE DUE
COURSE TO THE PATENTLY FRIVOLOUS AND DILATORY
APPEAL OF RESPONDENT BOISER.
II
IN DISREGARDING THE FACT CONCLUSIVELY ESTABLISHED
IN THE RECORDS THAT RESPONDENT BOISER FILED HIS
PETITION FOR RELIEF MORE THAN SIXTY (60) DAYS FROM
SERVICE OF THE DECISION UPON HIM.
III
IN NOT HOLDING THAT RESPONDENT BOISER IS NOT
ENTITLED TO RELIEF FROM THE JUDGMENT, BECAUSE IN
HIS ANSWER HE ADMITTED EVERY ALLEGATION IN THE
COMPLAINT AND PRESENTED NO DEFENSE WHATSOEVER.
IV
IN NOT HOLDING THAT RELIEF FROM JUDGMENT IS NOT
AVAILABLE TO RESPONDENT BOISER BECAUSE IT WAS DUE
TO HIS OWN INEXCUSABLE NEGLIGENCE THAT HE LOST HIS
RIGHT TO AVAIL HIMSELF OF OTHER REMEDIES.
V
IN NOT HOLDING THAT RESPONDENT BOISER WAS NOT
DENIED DUE PROCESS OF LAW.
Initially, the petitioner questions the priority of the grant of the writ
of mandamus by the respondent Court of Appeals compelling the trial

court to give due course to the appeal of private respondent which


according to it is patently frivolous and dilatory. Well established is the
doctrine that under Sections 13 and 14 of Rule 41 of the Revised Rules of
Court 3 unless the appeal is abandoned, the only ground for dismissing an
appeal in the trial court is the failure of the appellant to file on time the
notice of appeal, appeal bond, or record on appeal. 4 This is not, however,
the ground upon which petitioner has predicated his motion to dismiss the
appeal in question. What petitioner claims in its motion to dismiss private
respondent's appeal is that the same presents no justiciable controversy
and therefore frivolous. In several cases 5 this Court has consistently held
that the question as to whether or not the appeal is frivolous is not within
the jurisdiction of the trial courts but for the appellate court to determine.
Otherwise, it would be easy for trial courts to frustrate meritorious appeals
by the simple expedient of dismissing them on the pretext that they are
frivolous or dilatory.
Petitioner further claims that the respondent Court of Appeals erred in
disregarding the fact that private respondent filed his petition for relief
from the judgment of default against him more than sixty (60) days from
services of the decision upon him. Petitioner submits that private
respondent was deemed to have been properly served with the copies of
the questioned decision and order of default of the trial court after he
failed to claim his mail from the post office within five (5) days from the
date of the first notice of the postmaster to private respondent pursuant to
Section 8, Rule 13, Revised Rules of Court. 6 Petitioner relies heavily on the
presumption that the postmaster had discharged properly and regularly his
duties or performed acts required by law, in accordance with the law and
the authority conferred on him which had not been allegedly rebutted even
by the affidavit executed by private respondent alleging fraud on the part
of the postmaster.
It is true that under the Revised Rules of Court, it is presumed that official
duty has been regularly performed; 7that a public official has properly and
regularly discharged his duties, or performs acts required by law, in
accordance with the law and the authority conferred on him, and that he
will not do any act contrary to his official duty or omit to do anything which
such duty may require. 8 This presumption, however, cannot apply to the
case at bar. In one case, 9 this Court had occasion to review the prevailing
jurisprudence on the matter and after going over several relevant
cases 10 finally arrived at the conclusion that
Consequently, it cannot be too much to expect that when
the post office makes a certification regarding delivery of
registered mail, such certification should include the date

not only as to whether or not the corresponding notices


were issued or sent but also as to how, when and to whom
the delivery thereof was made. Accordingly, the
certification in the case at bar that the first and second
notices addressed to Atty. Narvasa had been "issued" can
hardly suffice to requirements of equity and justice. It was
incumbent upon the post office to further certify that said
notices were reportedly received. When there are several
related acts supposed to be performed by a public officer
or employee in regard to a particular matter, the
presumption of regularity in the performance of official
functions would not arise and be considered as
comprehending all the required acts, if the certification
issued by the proper office refers only to some of such
acts, particularly in instances wherein proof of whether or
not all of them have been performed is available under the
law or office regulations to the officer making the
certification. In other words, the omission of some of the
acts in the certification may justify the inference that from
the proof available to the officer there is no showing that
they have also been performed. Of course, where the
certification is worded in general terms that reasonably
comprehend performance of all the related acts, the
presumption of regularity holds as to all of them.
In the case before Us, there is nothing in the records to show as to how,
when and to whom the delivery of the registry notices of the registered
mails of private respondent was made and as to whether said registry
notices were received by private respondent. It was incumbent upon the
postmaster to make a certification that the registry notices were issued or
sent to private respondent and that the latter had received them. Thus,
when the postmaster failed to make such certification, the presumption of
regularity in the performance of his official functions would not lie. Hence,
it was a grave error on the part of the lower court to consider private
respondent to have been duly served with the copies of the questioned
decision and order of default of the trial court by applying to him Section 8,
Rule 13 of the Revised Rules of Court which provides:
... Service by registered mail is completed upon actual
receipt by the addressee; but if he fails to claim his mail
from the post office within five (5) days from the date of
the first notice of the postmaster, service shall take effect
at the expiration of such time.

Furthermore, the affidavit of private respondent pointing to the fraud


allegedly committed by the postmaster refutes the presumption of
regularity of official functions relied upon by the trial court. Said affidavit
reads:
... that the Postmaster of Tagbilaran, Bohol, with malice and
fraud aforethought, deliberately withhold from defendant,
who is herein petitioner, all and every information about
the receipt of his mail by that post office, particularly the
one containing the decision of the court below in the
above-mentioned Civil Case No. 8503, and instead he, the
postmaster, unceremoniously returned as unclaimed by
the addressee the said mail containing the decision
notwithstanding the fact that the required number of
notices usually sent to addressees of registered mails were
sent to petitioner "which may be attributed to the critical
comments made by said petitioner who is a radio
commentator in Tagbilaran, in the recent past about the
nasty, inept and corrupt method by which the said
postmaster mismanages the official business of the post
office in Tagbilaran. Hence, in retaliation, he purposely kept
the petitioner ignorant of his mails in the post office.
With the presentation of the foregoing affidavit, the burden has shifted to
the petitioner to prove that there was no such fraud committed by the
postmaster in the handling of the registered mails of private respondent
and in the sending of the corresponding registry notices to the latter
regarding them, by producing the postmaster personally in court to belie
the charge against him or at the very least by presenting counter affidavits
refuting the claim of the latter. Petitioner could have even cited the
postmaster to testify on the manner the registered mails of private
respondent were handled by his office, whether the corresponding registry
notices were sent to him and whether said registry notices were actually
received by the latter. In the absence of any proof that the registry notices
regarding the "unclaimed" registered letters addressed to private
respondent were actually received by him and in the face of his submission
that he received the copy of the decision and the order of default against
him only on July 5, 1968 when a Special Sheriff left a copy of the writ of
execution on the case at his residence in Tagbilaran, Bohol, it is evident
that when private respondent filed his "Urgent Omnibus Motion for Relief of
Judgment, New Trial, To recall the Writ of Execution and to Suspend
Execution", he was well within the reglementary period within which to file
petition for relief from judgment provided by Section 2, Rule 38 of the
Rules of Court and the trial court was therefore in error in dismissing the

appeal of private respondent from the order denying his "Omnibus Motion
for Relief of Judgment, New Trial, to Recall the Writ of Execution and to
Suspend Execution." Consequently, the respondent Court of Appeals acted
correctly in issuing the writ of mandamus to compel the trial court to give
due course to the appeal of private respondent for under Section 15, Rule
41 of the Revised Rules of Court "when erroneously a motion to dismiss an
appeal is granted or a record on appeal is disallowed by the trial court, a
proper petition for mandamus may be filed in the appellate court."
IN VIEW OF THE FOREGOING, the judgment of the respondent Court of
Appeals is hereby affirmed. With costs against petitioner.
SO ORDERED.

G.R. No. 179010

April 11, 2011

ELENITA M. DEWARA, epresented by her Attorney-in-Fact,


FERDINAND MAGALLANES, Petitioner,
vs.
SPOUSES RONNIE AND GINA LAMELA and STENILE
ALVERO, Respondents.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court, assailing the Decision 1dated November 6, 2006 and the
Resolution2 dated July 10, 2007 of the Court of Appeals (CA) in CA-G.R. CV
No. 64936, which reversed and set aside the Decision3 dated September 2,
1999 of the Regional Trial Court (RTC), Branch 54, Bacolod City, in Civil
Case No. 93-7942.

The Facts
Eduardo Dewara (Eduardo) and petitioner Elenita Magallanes Dewara
(Elenita) were married before the enactment of the Family Code. Thus, the
Civil Code governed their marital relations. Husband and wife were
separated-in-fact because Elenita went to work in California, United States
of America, while Eduardo stayed in Bacolod City.
On January 20, 1985, Eduardo, while driving a private jeep registered in the
name of Elenita,4 hit respondent Ronnie Lamela (Ronnie). Ronnie filed a
criminal case for serious physical injuries through reckless
imprudence5against Eduardo before the Municipal Trial Court in Cities
(MTCC), Branch IV, Bacolod City. The MTCC found Eduardo guilty of the
charge and sentenced him to suffer the penalty of imprisonment of two (2)
months and one (1) day to (3) months, and to pay civil indemnity of SixtyTwo Thousand Five Hundred Ninety-Eight Pesos and Seventy Centavos
(P62,598.70) as actual damages and Ten Thousand Pesos (P10,000.00) as
moral damages. On appeal, the RTC6 affirmed the decision of the
MTCC7 and it became final and executory.8

paraphernal or exclusive property and could not be made to answer for the
personal liability of her husband. Furthermore, as the registered owner of
the property, she received no notice of the execution sale. She sought the
annulment of the sale and the annulment of the issuance of the new TCT in
the name of respondent spouses.12
On the other hand, respondent spouses averred that the subject lot was
the conjugal property of petitioner Elenita and Eduardo. They asserted that
the property was acquired by Elenita during her marriage to Eduardo; that
the property was acquired with the money of Eduardo because, at the time
of the acquisition of the property, Elenita was a plain housewife; that the
jeep involved in the accident was registered in the name of petitioner; and
that Elenita did not interpose any objection pending the levy on execution
of the property.13
On September 2, 1999, the RTC rendered a decision in favor of petitioner,
the fallo of which reads:
WHEREFORE, judgment is hereby rendered in favor of the [petitioner] and
against the [respondents]:

The writ of execution on the civil liability was served on Eduardo, but it was
returned unsatisfied because he had no property in his name. Ronnie
requested the City Sheriff, respondent Stenile Alvero, to levy on Lot No.
234-C, Psd. 26667 of the Bacolod Cadastre, with an area of One Thousand
Four Hundred Forty (1,440) square meters (sq m), under Transfer
Certificate of Title (TCT) No. T-80054, in the name of "ELENITA M. DEWARA,
of legal age, Filipino, married to Eduardo Dewara, and resident of Bacolod
City," to satisfy the judgment on the civil liability of Eduardo. The City
Sheriff served a notice of embargo on the title of the lot and subsequently
sold the lot in a public auction. In the execution sale, there were no
interested buyers other than Ronnie. The City Sheriff issued a certificate of
sale to spouses Ronnie and Gina Lamela to satisfy the civil liability in the
decision against Eduardo.9Ronnie then caused the consolidation of title in a
Cadastral Proceeding before the RTC, which ordered the cancellation of TCT
No. T-80054 in the name of Elenita and the issuance of a new certificate of
title in the name of respondent spouses.10

SO ORDERED.14

The levy on execution, public auction, issuance of certificate of sale, and


cancellation of title of the lot in the name of Elenita were done while
Elenita was working in California.11 Thus, Elenita, represented by her
attorney-in-fact, Ferdinand Magallanes, filed a case for annulment of sale
and for damages against respondent spouses and ex-officio sheriff Stenile
Alvero before the RTC of Bacolod City. Petitioner claimed that the levy on
execution of Lot No. 234-C was illegal because the said property was her

The RTC declared that said property was paraphernal in nature. It arrived at
this conclusion by tracing how Elenita acquired the subject property. Based
on the documentary evidence submitted, Elenitas grandfather, Exequiel
Magallanes, originally owned Lot No. 234-C. Upon his demise, his children,
Jesus (Elenitas father), Salud, and Concepcion, inherited the property,
each entitled to a share equal to one-third (1/3) of the total area of the
land. They were issued a new title (TCT No. T-17541) for the property. On

1. The levy on execution on Lot No. 234-C of the Bacolod Cadastre


covered by TCT No. 80054 in the name of [petitioner] Elenita M.
Dewara, the public auction of the property, and the consolidation
of the title and issuance of new TCT No. 167403 in the name of
[respondent] Ronnie Lamela, are hereby declared null and void;
2. The Register of Deeds of Bacolod City is ordered to cancel TCT
No. 167403 in the name of [respondent] Ronnie Lamela and TCT
No. 80054 be reinstated or a new one issued in the name of
[petitioner] Elenita M. Dewara;
3. There is no pronouncement on damages with cost de officio.

July 6, 1966, petitioners aunt, Salud, executed a waiver of rights duly


registered with the Office of the Register of Deeds under Entry No. 76392,
thereby waiving her rights and participation over her 1/3 share of the
property in favor of her siblings, Jesus and Concepcion. The two siblings
then became the owners of the property, each owning one-half (1/2) of the
property. Jesus subsequently sold his share to his daughter, Elenita, for the
sum of Five Thousand Pesos (P5,000.00), based on the deed of sale dated
March 26, 1975. The deed of sale was duly registered with the Register of
Deeds under Entry No. 76393. Concepcion also sold her share to her niece,
Elenita, for the sum of Ten Thousand Pesos (P10,000.00), based on the
deed of sale dated April 29, 1975, which was duly registered with the
Register of Deeds under Entry No. 76394. By virtue of the sale
transactions, TCT No. T-17541 was cancelled and a new title, TCT No. T80054, was issued in the name of Elenita.15

In reversing the decision of the RTC, the CA elucidated that the gross
inadequacy of the price alone does not affect a contract of sale, except
that it may indicate a defect in the consent, or that the parties really
intended a donation or some other act or contract. Except for the
assertions of Elenita, there was nothing in the records that would indicate a
defect in Jesus and Concepcion Magallanes consent to the sale. 19 The CA
ruled that Elenita and Eduardo acquired the property by onerous title
during their marriage through their common fund. Thus, it belonged to the
conjugal partnership of gains and might be levied upon to answer for civil
liabilities adjudged against Eduardo.20

The RTC gave credence to the testimony of Elenita on the circumstances


surrounding the sale of the property. First, it was sold to her by her father
and her aunt so that the family would remain on the lot. Second, the
minimal and inadequate consideration for the 1,440 sq m property was for
the purpose of helping her expand her capital in her business at the time.
Thus, the sale was essentially a donation and was therefore gratuitous in
character.16

The sole issue for resolution is whether the subject property is the
paraphernal/exclusive property of Elenita or the conjugal property of
spouses Elenita and Eduardo.

Having declared that the property was the paraphernal property of Elenita,
the RTC ruled that the civil liability of Eduardo, which was personal to him,
could not be charged to the exclusive property of his wife. 17
On appeal, the CA reversed the decision of the RTC. The dispositive portion
of the Decision reads:
WHEREFORE, in view of all the foregoing, the instant appeal is GRANTED.
The assailed decision of the Regional Trial Court of Bacolod City, Branch 54,
dated September 2, 1999, in Civil Case No. 93-7942 is hereby REVERSED
and SET ASIDE, and a new Decision is entered DISMISSING the complaint
for lack of merit. Let a copy of this Decision be furnished to the Office of
the Register of Deeds of Bacolod City, Negros Occidental [which] is hereby
ordered to cancel Transfer Certificate of Title No. T-80054 or any transfer
certificate of title covering Lot No. 234-C issued in the name of Elenita M.
Dewara, and reinstate Transfer Certificate of Title No. 167403 or issue a
new transfer certificate of title covering Lot No. 234-C in the name of
Ronnie Lamela. No pronouncement as to costs.
SO ORDERED.18

Hence, this petition.


The Issue

The answer to this question will define whether the property may be
subject to levy and execution sale to answer for the civil liability adjudged
against Eduardo in the criminal case for serious physical injuries, which
judgment had already attained finality.
The Ruling of the Court
All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the husband
or to the wife.21 Registration in the name of the husband or the wife alone
does not destroy this presumption.22 The separation-in-fact between the
husband and the wife without judicial approval shall not affect the conjugal
partnership. The lot retains its conjugal nature.23 Moreover, the
presumption of conjugal ownership applies even when the manner in which
the property was acquired does not appear. The use of the conjugal funds
is not an essential requirement for the presumption to arise. 24
There is no dispute that the subject property was acquired by spouses
Elenita and Eduardo during their marriage. It is also undisputed that their
marital relations are governed by the conjugal partnership of gains, since
they were married before the enactment of the Family Code and they did
not execute any prenuptial agreement as to their property relations. Thus,
the legal presumption of the conjugal nature of the property applies to the
lot in question. The presumption that the property is conjugal property may

be rebutted only by strong, clear, categorical, and convincing evidence


there must be strict proof of the exclusive ownership of one of the spouses,
and the burden of proof rests upon the party asserting it. 25
Aside from the assertions of Elenita that the sale of the property by her
father and her aunt was in the nature of a donation because of the alleged
gross disparity between the actual value of the property and the monetary
consideration for the sale, there is no other evidence that would convince
this Court of the paraphernal character of the property. Elenita proffered no
evidence of the market value or assessed value of the subject property in
1975. Thus, we agree with the CA that Elenita has not sufficiently proven
that the prices involved in the sales in question were so inadequate for the
Court to reach a conclusion that the transfers were in the nature of a
donation rather than a sale.
Furthermore, gross inadequacy of the price does not affect a contract of
sale, except as it may indicate a defect in the consent, or that the parties
really intended a donation or some other act or contract. 26 The records are
bereft of proof that the consent of petitioners father and her aunt were
vitiated or that, in reality, they intended the sale to be a donation or some
other contract. Inadequacy of the price per se will not rule out the
transaction as one of sale; the price must be grossly inadequate or
shocking to the conscience, such that the mind would revolt at it and such
that a reasonable man would neither directly nor indirectly consent to it. 27
However, even after having declared that Lot No. 234-C is the conjugal
property of spouses Elenita and Eduardo, it does not necessarily follow that
it may automatically be levied upon in an execution to answer for debts,
obligations, fines, or indemnities of one of the spouses. Before debts and
obligations may be charged against the conjugal partnership, it must be
shown that the same were contracted for, or the debts and obligations
should have redounded to, the benefit of the conjugal partnership. Fines
and pecuniary indemnities imposed upon the husband or the wife, as a
rule, may not be charged to the partnership. However, if the spouse who is
bound should have no exclusive property or if the property should be
insufficient, the fines and indemnities may be enforced upon the
partnership assets only after the responsibilities enumerated in Article 161
of the Civil Code have been covered.
In this case, it is just and proper that Ronnie be compensated for the
serious physical injuries he suffered. It should be remembered that even
though the vehicle that hit Ronnie was registered in the name of Elenita,
she was not made a party in the said criminal case. Thus, she may not be
compelled to answer for Eduardos liability. Nevertheless, their conjugal

partnership property may be held accountable for it since Eduardo has no


property in his name. The payment of indemnity adjudged by the RTC of
Bacolod City in Criminal Case No. 7155 in favor of Ronnie may be enforced
against the partnership assets of spouses Elenita and Eduardo after the
responsibilities enumerated under Article 161 of the Civil Code have been
covered. This remedy is provided for under Article 163 of the Civil Code,
viz.:
Art. 163. The payment of debts contracted by the husband or the wife
before the marriage shall not be charged to the conjugal
partnership.1wphi1
Neither shall the fines and pecuniary indemnities imposed upon them be
charged to the partnership.
However, the payment of debts contracted by the husband or the wife
before the marriage, and that of fines and indemnities imposed upon them,
may be enforced against the partnership assets after the responsibilities
enumerated in Article 161 have been covered, if the spouse who is bound
should have no exclusive property or if it should be insufficient; but at the
time of the liquidation of the partnership such spouse shall be charged for
what has been paid for the purposes above-mentioned.28
Article 161 of the Civil Code enumerates the obligations which the conjugal
partnership may be held answerable, viz.:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the
benefit of the conjugal partnership, and those contracted by the
wife, also for the same purpose, in the cases where she may
legally bind the partnership;
(2) Arrears or income due, during the marriage, from obligations
which constitute a charge upon property of either spouse or of the
partnership;
(3) Minor repairs or for mere preservation made during the
marriage upon the separate property of either the husband or the
wife; major repairs shall not be charged to the partnership;
(4) Major or minor repairs upon the conjugal partnership property;

(5) The maintenance of the family and the education of the


children of both the husband and wife, and of legitimate children of
one of the spouses;
(6) Expenses to permit the spouses to complete a professional,
vocational or other course.
The enumeration above-listed should first be complied with before the
conjugal partnership may be held to answer for the liability adjudged
against Eduardo.
Finally, the indemnity imposed against Eduardo shall earn an interest at
the rate of twelve percent per annum, in accordance with our ruling in
Eastern Shipping Lines, Inc. v. Court of Appeals. 29

WHEREFORE, in view of the foregoing, the Decision dated November 6,


2006 and the Resolution dated July 10, 2007 of the Court of Appeals in CAG.R. CV No. 64936 are hereby ANNULLED and SET ASIDE. The decision
dated September 2, 1999 of the Regional Trial Court of Bacolod City in Civil
Case No. 93-7942 is hereby REINSTATED WITH MODIFICATION that the
conjugal properties of spouses Elenita Dewara and Eduardo Dewara shall
be held to answer for the judgment of Seventy-Two Thousand Five Hundred
Ninety-Eight Pesos and Seventy Centavos (P72,598.70), plus an interest
rate of twelve (12) percent per annum from the date of finality of the
decision of the Regional Trial Court of Bacolod City in Criminal Case No.
7155, after complying with the provisions of Article 161 of the Civil Code.
SO ORDERED.