Republic of the Philippines Again, on 7 January 1986, President Marcos issued Proclamation No.

2476, further
SUPREME COURT amending Proclamation No. 423, which excluded barangaysLower Bicutan, Upper
Manila Bicutan and Signal Village from the operation of Proclamation No. 423 and declared it
open for disposition under the provisions of Republic Act Nos. (R.A.) 274 and 730.
FIRST DIVISION
At the bottom of Proclamation No. 2476, President Marcos made a handwritten
G.R. No. 187587 June 5, 2013 addendum, which reads:

NAGKAKAISANG MARALITA NG SITIO MASIGASIG, INC., Petitioner, "P.S. This includes Western Bicutan
vs.
MILITARY SHRINE SERVICES - PHILIPPINE VETERANS AFFAIRS OFFICE, (SGD.) Ferdinand E. Marcos"2
DEPARTMENT OF NATIONAL DEFENSE, Respondent.
The crux of the controversy started when Proclamation No. 2476 was published in the
x-----------------------x Official Gazette3 on 3 February 1986, without the above-quoted addendum.

G.R. No. 187654
WESTERN BICUTAN LOT OWNERS ASSOCIATION, INC., represented by its
Board of Directors, Petitioner,
vs.
MILITARY SHRINE SERVICES - PHILIPPINE VETERANS AFFAIRS OFFICE,
DEPARTMENT OF NATIONAL DEFENSE, Respondent.
DECISION
SERENO, CJ.:
Before us are consolidated Petitions for Review under Rule 45 of the Rules of Court
assailing the Decision1promulgated on 29 April 2009 of the Court of Appeals in CA-
G.R. SP No. 97925.
THE FACTS
The facts, as culled from the records, are as follows:
On 12 July 1957, by virtue of Proclamation No. 423, President Carlos P. Garcia
reserved parcels of land in the Municipalities of Pasig, Taguig, Paraaque, Province
of Rizal and Pasay City for a military reservation. The military reservation, then known
as Fort William McKinley, was later on renamed Fort Andres Bonifacio (Fort
Bonifacio).
On 28 May 1967, President Ferdinand E. Marcos (President Marcos) issued
Proclamation No. 208, amending Proclamation No. 423, which excluded a certain
area of Fort Bonifacio and reserved it for a national shrine. The excluded area is now
known as Libingan ng mga Bayani, which is under the administration of herein
respondent Military Shrine Services Philippine Veterans Affairs Office (MSS-PVAO).
Years later, on 16 October 1987, President Corazon C. Aquino (President Aquino)
issued Proclamation No. 172 which substantially reiterated Proclamation No. 2476, as
published, but this time excluded Lots 1 and 2 of Western Bicutan from the operation
of Proclamation No. 423 and declared the said lots open for disposition under the
provisions of R.A. 274 and 730.
Memorandum Order No. 119, implementing Proclamation No. 172, was issued on the
same day.
Through the years, informal settlers increased and occupied some areas of Fort
Bonifacio including portions of the Libingan ng mga Bayani. Thus, Brigadier General
Fredelito Bautista issued General Order No. 1323 creating Task Force Bantay (TFB),
primarily to prevent further unauthorized occupation and to cause the demolition of
illegal structures at Fort Bonifacio.
On 27 August 1999, members of petitioner Nagkakaisang Maralita ng Sitio Masigasig,
Inc. (NMSMI) filed a Petition with the Commission on Settlement of Land Problems
(COSLAP), where it was docketed as COSLAP Case No. 99-434. The Petition prayed
for the following: (1) the reclassification of the areas they occupied, covering Lot 3 of
SWO-13-000-298 of Western Bicutan, from public land to alienable and disposable
land pursuant to Proclamation No. 2476; (2) the subdivision of the subject lot by the
Director of Lands; and (3) the Land Management Bureaus facilitation of the
distribution and sale of the subject lot to its bona fide occupants. 4
On 1 September 2000, petitioner Western Bicutan Lot Owners Association, Inc.
(WBLOAI) filed a Petition-in-Intervention substantially praying for the same reliefs as
those prayed for by NMSMI with regard to the area the former then occupied covering
Lot 7 of SWO-00-001302 in Western Bicutan.5
Thus, on 1 September 2006, COSLAP issued a Resolution 6 granting the Petition and
declaring the portions of land in question alienable and disposable, with Associate
Commissioner Lina Aguilar-General dissenting.7
The COSLAP ruled that the handwritten addendum of President Marcos was an
integral part of Proclamation No. 2476, and was therefore, controlling. The intention of
the President could not be defeated by the negligence or inadvertence of others.
Further, considering that Proclamation
No. 2476 was done while the former President was exercising legislative powers, it
could not be amended, repealed or superseded, by a mere executive enactment.
Thus, Proclamation No. 172 could not have superseded much less displaced
Proclamation No. 2476, as the latter was issued on October 16, 1987 when President
Aquinos legislative power had ceased.
In her Dissenting Opinion, Associate Commissioner Lina AguilarGeneral stressed that
pursuant to Article 2 of the Civil Code, publication is indispensable in every case.
Likewise, she held that when the provision of the law is clear and unambiguous so
that there is no occasion for the court to look into legislative intent, the law must be
taken as it is, devoid of judicial addition or subtraction.8 Finally, she maintained that
the Commission had no authority to supply the addendum originally omitted in the
published version of Proclamation No. 2476, as to do so would be tantamount to
encroaching on the field of the legislature.
Herein respondent MSS-PVAO filed a Motion for Reconsideration,9 which was denied
by the COSLAP in a Resolution dated 24 January 2007.10
MSS-PVAO filed a Petition with the Court of Appeals seeking to reverse the COSLAP
Resolutions dated 1 September 2006 and 24 January 2007.
Thus, on 29 April 2009, the then Court of Appeals First Division rendered the assailed
Decision granting MSS-PVAOs Petition, the dispositive portion of which reads:
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby GRANTED. The
Resolutions dated September 1, 2006 and January 24, 2007 issued by the
Commission on the Settlement of Land Problems in COSLAP Case No. 99-434 are
hereby REVERSED and SET ASIDE. In lieu thereof, the petitions of respondents in
COSLAP Case No. 99-434 are DISMISSED, for lack of merit, as discussed herein.
Further, pending urgent motions filed by respondents are likewise
DENIED. SO ORDERED.11 (Emphasis in the original)
Both NMSMI12 and WBLOAI13 appealed the said Decision by filing their respective
Petitions for Review with this Court under Rule 45 of the Rules of Court.
THE ISSUES
Petitioner NMSMI raises the following issues:
I Proclamation No. 2476 was published in the Official Gazette.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN RULING THAT PROCLAMATION NO. 2476 DID NOT INCLUDE ANY
PORTION OF WESTERN BICUTAN AS THE HANDWRITTEN NOTATION BY
PRESIDENT MARCOS ON THE SAID PROCLAMATION WAS NOT PUBLISHED IN
THE OFFICIAL GAZETTE.
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN RULING THAT PROCLAMATION NO. 172 LIKEWISE EXCLUDED THE
PORTION OF LAND OCCUPIED BY MEMBER OF HEREIN PETITIONER.
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN NOT
CONSIDERING THAT THE HON. COSLAP HAS BROAD POWERS TO
RECOMMEND TO THE PRESIDENT >INNOVATIVE MEASURES TO RESOLVE
EXPEDITIOUSLY VARIOUS LAND CASES.14
On the other hand, petitioner WBLOAI raises this sole issue:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THAT THE SUBJECT PROPERTY WAS NOT DECLARED ALIENABLE
AND DISPOSABLE BY VIRTUE OF PROCLAMATION NO. 2476 BECAUSE THE
HANDWRITTEN ADDENDUM OF PRESIDENT FERDINAND E. MARCOS
INCLUDING WESTERN BICUTAN IN PROCLAMATION NO. 2476 WAS NOT
INCLUDED IN THE PUBLICATION.15
Both Petitions boil down to the principal issue of whether the Court of Appeals erred
in ruling that the subject lots were not alienable and disposable by virtue of
Proclamation No. 2476 on the ground that the handwritten addendum of President
Marcos was not included in the publication of the said law.
THE COURTS RULING
We deny the Petitions for lack of merit.
Considering that petitioners were occupying Lots 3 and 7 of Western Bicutan (subject
lots), their claims were anchored on the handwritten addendum of President Marcos
to Proclamation No. 2476. They allege that the former President intended to include
all Western Bicutan in the reclassification of portions of Fort Bonifacio as disposable
public land when he made a notation just below the printed version of Proclamation
No. 2476.
However, it is undisputed that the handwritten addendum was not included when
The resolution of whether the subject lots were declared as reclassified and
disposable lies in the determination of whether the handwritten addendum of
President Marcos has the force and effect of law. In relation thereto, Article 2 of the
Civil Code expressly provides:
ART. 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided. This Code shall
take effect one year after such publication.
Under the above provision, the requirement of publication is indispensable to give
effect to the law, unless the law itself has otherwise provided. The phrase "unless
otherwise provided" refers to a different effectivity date other than after fifteen days
following the completion of the laws publication in the Official Gazette, but does not
imply that the requirement of publication may be dispensed with. The issue of the
requirement of publication was already settled in the landmark case Taada v. Hon.
Tuvera,16 in which we had the occasion to rule thus:
Publication is indispensable in every case, but the legislature may in its discretion
provide that the usual fifteen-day period shall be shortened or extended. An example,
as pointed out by the present Chief Justice in his separate concurrence in the original
decision, is the Civil Code which did not become effective after fifteen days from its
publication in the Official Gazette but "one year after such publication." The general
rule did not apply because it was "otherwise provided."
It is not correct to say that under the disputed clause publication may be dispensed
with altogether. The reason is that such omission would offend due process insofar as
it would deny the public knowledge of the laws that are supposed to govern it. Surely,
if the legislature could validly provide that a law shall become effective immediately
upon its approval notwithstanding the lack of publication (or after an unreasonably
short period after publication), it is not unlikely that persons not aware of it would be
prejudiced as a result; and they would be so not because of a failure to comply with it
but simply because they did not know of its existence. Significantly, this is not true
only of penal laws as is commonly supposed. One can think of many non-penal
measures, like a law on prescription, which must also be communicated to the
persons they may affect before they can begin to operate.
xxxx
The term "laws" should refer to all laws and not only to those of general application,
for strictly speaking all laws relate to the people in general albeit there are some that
do not apply to them directly. An example is a law granting citizenship to a particular
individual, like a relative of President Marcos who was decreed instant naturalization.
It surely cannot be said that such a law does not affect the public although it
unquestionably does not apply directly to all the people. The subject of such law is a
matter of public interest which any member of the body politic may question in the
political forums or, if he is a proper party, even in the courts of justice. In fact, a law
without any bearing on the public would be invalid as an intrusion of privacy or as
class legislation or as an ultra vires act of the legislature. To be valid, the law must
invariably affect the public interest even if it might be directly applicable only to one
individual, or some of the people only, and not to the public as a whole.
We hold therefore that all statutes, including those of local application and private
laws, shall be published as a condition for their effectivity, which shall begin fifteen
days after publication unless a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by
the President in the exercise of legislative powers whenever the same are validly
delegated by the legislature or, at present, directly conferred by the Constitution.
Administrative rules and regulations must also be published if their purpose is to
enforce or implement existing law pursuant also to a valid delegation.
xxxx
Accordingly, even the charter of a city must be published notwithstanding that it
applies to only a portion of the national territory and directly affects only the
inhabitants of that place. All presidential decrees must be published, including even,
say, those naming a public place after a favored individual or exempting him from
certain prohibitions or requirements. The circulars issued by the Monetary Board must
be published if they are meant not merely to interpret but to "fill in the details" of the
Central Bank Act which that body is supposed to enforce.
xxxx
We agree that the publication must be in full or it is no publication at all since its
purpose is to inform the public of the contents of the laws. As correctly pointed out by
the petitioners, the mere mention of the number of the presidential decree, the title of
such decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date of
effectivity, and in a mere supplement of the Official Gazette cannot satisfy the
publication requirement.1wphi1 This is not even substantial compliance. This was
the manner, incidentally, in which the General Appropriations Act for FY 1975, a
presidential decree undeniably of general applicability and interest, was "published"
by the Marcos administration. The evident purpose was to withhold rather than
disclose information on this vital law.
xxxx
Laws must come out in the open in the clear light of the sun instead of skulking in the
shadows with their dark, deep secrets. Mysterious pronouncements and rumored
rules cannot be recognized as binding unless their existence and contents are
confirmed by a valid publication intended to make full disclosure and give proper
notice to the people. The furtive law is like a scabbarded saber that cannot feint, parry
or cut unless the naked blade is drawn. (Emphases supplied)
Applying the foregoing ruling to the instant case, this Court cannot rely on a
handwritten note that was not part of Proclamation No. 2476 as published. Without
publication, the note never had any legal force and effect.
Furthermore, under Section 24, Chapter 6, Book I of the Administrative Code, "the
publication of any law, resolution or other official documents in the Official Gazette
shall be prima facie evidence of its authority." Thus, whether or not President Marcos
intended to include Western Bicutan is not only irrelevant but speculative. Simply put,
the courts may not speculate as to the probable intent of the legislature apart from the
words appearing in the law.17 This Court cannot rule that a word appears in the law
when, evidently, there is none. In Pagpalain Haulers, Inc. v. Hon. Trajano, 18 we ruled
that "under Article 8 of the Civil Code, 'judicial decisions applying or interpreting the
laws or the Constitution shall form a part of the legal system of the Philippines.' This
does not mean, however, that courts can create law. The courts exist for interpreting
the law, not for enacting it. To allow otherwise would be violative of the principle of
separation of powers, inasmuch as the sole function of our courts is to apply or
interpret the laws, particularly where gaps or lacunae exist or where ambiguities
becloud issues, but it will not arrogate unto itself the task of legislating." The remedy
sought in these Petitions is not judicial interpretation, but another legislation that
would amend the law to include petitioners' lots in the reclassification.

WHEREFORE, in view of the foregoing, the instant petitions are hereby DENIED for
lack of merit. The assailed Decision of the Court of Appeals in CA-G.R. CV No. 97925
dated 29 April 2009 is AFFIRMED in toto. Accordingly, this Court's status quo order
dated 17 June 2009 is hereby LIFTED. Likewise, all pending motions to cite
respondent in contempt is DENIED, having been rendered moot. No costs.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Chief Justice, Chairperson

WE CONCUR:

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in
the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice

Republic of the Philippines

SUPREME COURT
Manila
 EN BANC of the sequestered 753,848,312 Class "A" and "B" common shares of San Miguel
Corporation (SMC), registered in the name of Coconut Industry Investment Fund
G.R. Nos. 177857-58 February 11, 2010 (CIIF) Holding Companies (hereunder referred to as SMC Common Shares), into
753,848,312 SMC Series 1 Preferred Shares.
PHILIPPINE COCONUT PRODUCERS FEDERATION, INC. (COCOFED), MANUEL
V. DEL ROSARIO, DOMINGO P. ESPINA, SALVADOR P. BALLARES, JOSELITO Oppositors-intervenors Salonga, et al. anchor their plea for reconsideration on the
A. MORALEDA, PAZ M. YASON, VICENTE A. CADIZ, CESARIA DE LUNA following submission or issues:
TITULAR, and RAYMUNDO C. DE VILLA, Petitioners,
vs. 1
REPUBLIC OF THE PHILIPPINES, Respondent.
JOVITO R. SALONGA, WIGBERTO E. TAADA, OSCAR F. SANTOS, ANA The conversion of the shares is patently disadvantageous to the government and the
THERESIA HONTIVEROS, and TEOFISTO L. GUINGONA III, Oppositors- coconut farmers, given that SMCs option to redeem ensures that the shares will be
Intervenors. bought at less than their market value.
WIGBERTO E. TAADA, OSCAR F. SANTOS, SURIGAO DEL SUR FEDERATION
OF AGRICULTURAL COOPERATIVES (SUFAC) and MORO FARMERS
ASSOCIATION OF ZAMBOANGA DEL SUR (MOFAZS), represented by ROMEO 2
C. ROYANDOYAN; and PAMBANSANG KILUSAN NG MGA SAMAHAN NG
MAGSASAKA (PAKISAMA), represented by VICENTE FABE, Movants- The honorable court overlooks the value of the fact that the government, as opposed
Intervenors. to the current administration, is the winning party in the case below and thus has no
incentive to convert.2
x - - - - - - - - - - - - - - - - - - - - - - -x
The Court is not inclined to reconsider.
G.R. No. 178193
The two (2) issues and the arguments and citations in support thereof are, for the
DANILO B. URUSA, Petitioner, most part and with slight variations, clearly replications of oppositors-intervenors
vs. previous position presented in opposition to COCOFEDs motion for approval of the
REPUBLIC OF THE PHILIPPINES, Respondent. conversion in question. They have been amply considered, discussed at length, and
found to be bereft of merit.
x - - - - - - - - - - - - - - - - - - - - - - -x
Oppositors-intervenors harp on the perceived economic disadvantages and harm that
the government would likely suffer by the approval of the proposed conversion.
G.R. No. 180705 Pursuing this point, it is argued that the Court missed the fact that the current value of
the shares in question is increasing and the "perceived advantages of pegging the
EDUARDO M. COJUANGCO, JR., Petitioner, issue price at PhP 75 are dwindling on a daily basis."3
vs.
REPUBLIC OF THE PHILIPPINES, Respondent. Oppositors-intervenors concerns, encapsulated above, have been adequately
addressed in some detail in the resolution subject of this motion. For reference we
RESOLUTION reproduce what we wrote:

VELASCO, JR., J.:
Before us is the motion for reconsideration1 of the Resolution of the Court dated
September 17, 2009, interposed by oppositors-intervenors Jovito R. Salonga,
Wigberto E. Taada, Oscar F. Santos, Ana Theresa Hontiveros, and Teofisto L.
Guingona III.
As may be recalled, the Court, in its resolution adverted to, approved, upon motion of
petitioner Philippine Coconut Producers Federation, Inc. (COCOFED), the conversion
Salonga, et al. also argue that the proposed redemption is a right to buy the preferred
shares at less than the market value. That the market value of the preferred
shares may be higher than the issue price of PhP 75 per share at the time of
redemption is possible. But then the opposite scenario is also possible. Again,
the Court need not delve into policy decisions of government agencies because of
their expertise and special knowledge of these matters. Suffice it to say that all
indications show that SMC will redeem said preferred shares in the third year and not
later because the dividend rate of 8% it has to pay on said shares is higher than the
interest it will pay to the banks in case it simply obtains a loan. When market prices of
shares are low, it is possible that interest rate on loans will likewise be low. On the
other hand, if SMC has available cash, it would be prudent for it to use such cash to
redeem the shares than place it in a regular bank deposit which will earn lower
interests. It is plainly expensive and costly for SMC to keep on paying the 8%
dividend rate annually in the hope that the market value of the shares will go up
before it redeems the shares. Likewise, the conclusion that respondent Republic will
suffer a loss corresponding to the difference between a high market value and the
issue price does not take into account the dividends to be earned by the preferred
shares for the three years prior to redemption. The guaranteed PhP 6 per share
dividend multiplied by three years will amount to PhP 18. If one adds PhP 18 to the
issue price of PhP 75, then the holders of the preferred shares will have actually
attained a price of PhP 93 which hews closely to the speculative PhP 100 per share
price indicated by movants-intervenors.4 (Emphasis added.)
Elaborating on how the value of the sequestered shares will be preserved and
conserved, we said:
Moreover, the conversion may be viewed as a sound business strategy to preserve
and conserve the value of the governments interests in CIIF SMC shares.
Preservation is attained by fixing the value today at a significant premium over the
market price and ensuring that such value is not going to decline despite negative
market conditions. Conservation is realized thru an improvement in the earnings
value via the 8% per annum dividends versus the uncertain and most likely lower
dividends on common shares.
In this recourse, it would appear that oppositors-intervenors seem unable to accept, in
particular, the soundness angle of the conversion. But as we have explained, the
conversion of the shares along with the safeguards attached thereto will ensure that
the value of the shares will be preserved. In effect, due to the nature of stocks in
general and the prevailing business conditions, the government, through the
Presidential Commission on Good Government (PCGG), chose not to speculate with
the CIIF SMC shares, as prima facie public property, in the hope that there would be
a brighter economy in the future, and that the value of the shares would increase. We
must respect the decision of the executive department, absent a clear showing of
grave abuse of discretion.
Next, oppositors-intervenors argue that:
The very reason why the PCGG and the OSG [Office of Solicitor General] are before
this Honorable Court is precisely because, on their own, they have no authority to
alter the nature of the sequestered shares. This fact ought not to be novel to this
Honorable Court because it is the Court itself that established such jurisprudence.
Thus, the reference to separation of powers is rather gratuitous. 5
The Court to be sure agrees with the thesis that, under present state of things, the
PCGG and the Office of the Solicitor General have no power, by themselves, to
convert the sequestered shares of stock. That portion, however, about the reference
to the separation of powers being gratuitous does not commend itself for
concurrence. As may be noted, the reference to the separation of powers concept
was made in the context that the ownership of the subject sequestered shares is the
subject of a case before this Court; hence, the need of the Courts approval for the
desired conversion is effected.
Apropos the separation of powers doctrine and its relevance to this case, it may well
be appropriate to again quote the following excerpts from our decision in JG Summit
Holdings, Inc. v. Court of Appeals,6 to wit:
The role of the Courts is to ascertain whether a branch or instrumentality of the
Government has transgressed its constitutional boundaries. But the Courts will not
interfere with executive or legislative discretion exercised within those boundaries.
Otherwise, it strays into the realm of policy decision-making.
and our complementary holding in Ledesma v. Court of Appeals,7 thus:
x x x [A] court is without power to directly decide matters over which full discretionary
authority has been delegated to the legislative or executive branch of the government.
It is not empowered to substitute its judgment for that of Congress or of the President.
It may, however, look into the question of whether such exercise has been made in
grave abuse of discretion.
The point, in fine, is: while it may, in appropriate cases, look into the question of
whether or not the PCGG acted in grave abuse of discretion, the Court is not
empowered to review and go into the wisdom of the policy decision or choices of
PCGG and other executive agencies of the government. This is the limited mandate
of this Court. And as we have determined in our Resolution, the PCGG thoroughly
studied and considered the effects of conversion and, based upon such study,
concluded that it would best serve the purpose of maintaining and preserving the
value of the shares of stock to convert the same. It was proved that the PCGG had
exercised proper diligence in reviewing the pros and cons of the conversion. The
efforts PCGG have taken with respect to the desired stock conversion argue against
the notion of grave abuse of discretion.1avvphi1
Anent the second issue that it is the government, as opposed to the current
administration of President Gloria Macapagal-Arroyo, that is the winning party in the
case below and has no incentive to convert, the Court finds that this argument has no
merit.
The current administration, or any administration for that matter, cannot be detached
from the government. In the final analysis, the seat of executive powers is located in
the sitting President who heads the government and/or the "administration." Under
the government established under the Constitution, it is the executive branch, either
pursuant to the residual power of the President or by force of her enumerated powers
under the laws, that has control over all matters pertaining to the disposition of
government property or, in this case, sequestered assets under the administration of
the PCGG. Surely, such control is neither legislative nor judicial. As the Court aptly
held in Springer v. Government of the Philippine Islands,8 resolving the issue as to
which between the Governor-General, as head of the executive branch, and the
Legislature may vote the shares of stock held by the government:
It is clear that they are not legislative in character, and still more clear that they are
not judicial. The fact that they do not fall within the authority of either of these two
constitutes legal ground for concluding that they do fall within that of the remaining
one among which the powers of the government are divided.
The executive branch, through the PCGG, has given its assent to the conversion and
such decision may be deemed to be the decision of the government. The notion
suggested by oppositors-intervenors that the current administration, thru the PCGG,
is without power to decide and act on the conversion on the theory that the head of
the current administration is not government, cannot be sustained for lack of legal
basis.
Likewise, before the Court is the Motion to Admit Motion for Reconsideration with
Motion for Reconsideration [Re: Conversion of SMC Shares] dated October 16,
20099 filed by movants-intervenors Wigberto E. Taada; Oscar F. Santos; Surigao del
Sur Federation of Agricultural Cooperatives (SUFAC) and Moro Farmers Association
of Zamboanga del Sur (MOFAZS); and Pambansang Kilusan ng mga Samahan ng
Magsasaka (PAKISAMA).
In filing their motion, movants-intervenors explain that:
Messrs. Taada and Santos earlier joined an opposition filed by a group led by former
Senate President Jovito R. Salonga, by way of solidarity and without desire or intent
of trifling with judicial processes as, in fact, the instant Motion for Reconsideration is
filed by herein movants-intervenors, through counsel, Atty. Taada, and also by way
of supplement and support to the Opposition earlier filed by Salonga, et al., and the
Opposition originally intended to be filed by herein Movants-intervenors.10 (Emphasis
supplied.)
Movants-intervenors argue further that the Court allowed them to intervene in a
Resolution in G.R. No. 180702, which also arose from Sandiganbayan Civil Case No.
0033-F and, thus, should similarly be allowed to intervene in the instant case. 11
This motion of Taada, et al. must fail.
As it were, Atty. Taada and Oscar Santos admit having joined oppositors-intervenors
Salonga, et al. in the latters October 7, 2009 motion for reconsideration. Accordingly,
they should have voiced out all their arguments in the Salonga motion for
reconsideration following the Omnibus Motion Rule. The filing of yet another motion
for reconsideration by way of supplement to the Salonga motion for reconsideration is
a clear deviation from the Omnibus Motion Rule and cannot be countenanced.
Even the joinder of SUFAC, MOFAZS, and PAKISAMA with co-intervenors Taada
and Santos will not cure the flawed motion. In Heirs of Geronimo Restrivera v. De
Guzman,12 the Court explained why:
Indeed, the right of intervention should be accorded to any one having title to property
"which is the subject of litigation, provided that his right will be substantially affected
by the direct legal operation and effect of the decision, and provided also that it is
reasonably necessary for him to safeguard an interest of his own which no other party
on record is interested in protecting." (Emphasis supplied.)
SUFAC, MOFAZS, and PAKISAMA all failed to demonstrate that none of the existing
parties, that are similarly situated as they, would not defend their common interest. In
the instant case, COCOFED, the federation of farmers associations recognized by
the Philippine Coconut Authority, has actively participated in the instant case,
vigorously defending their rights and those of all the coconut farmers who are
supposedly stockholders of SMC.
The Court can extend to the instant motion of Taada, et al. the benefit of the liberal
application of procedural rules and entertain the motion and resolve the issues
therein. Nonetheless, an examination of the issues raised in the Taada motion for
reconsideration would show that the same have been more than adequately
addressed in our Resolution of September 19, 2009.
Movants-intervenors contend that the challenged resolution violates the Courts
holding in San Miguel Corporation v. Sandiganbayan, 13 as the conversion of the
sequestered common shares into treasury shares would destroy the character of the
shares of stock.
The invocation of San Miguel Corporation is quite misplaced, it being inapplicable
since it is not on all fours factually with the instant case.
San Miguel Corporation involved the sale by the 14 CIIF Companies, through the
United Coconut Planters Bank (UCPB), of 33,133,266 SMC shares, to the SMC.
Before the perfection of the sale, however, the said shares were sequestered. Thus,
the SMC group suspended payment of the purchase price of the shares, while the
UCPB group rescinded the sale. Later, the SMC and UCPB groups entered into a
Compromise Agreement and Amicable Settlement, whereby they undertook to
continue with the sale of the subject shares of stock. The parties, over the opposition
of both the Republic and the COCOFED, then moved for the approval of this
agreement by the Sandiganbayan where the case was then pending. Later, UCPB
and the SMC groups implemented their agreement extra-judicially, withdrawing, at the
same time, their petition for the approval of their aforementioned compromise
agreement. Thereafter, the Sandiganbayan issued an Order dated August 5, 1991,
directing the SMC to deliver to the graft court the sequestered SMC shares that it
bought from UCPB. This was followed by another Order dated March 18, 1992, for
the delivery to the court of dividends pertaining to the subject SMC shares. It was
these two delivery Orders that were submitted for the consideration of the Court.
An examination of the facts of San Miguel Corporation would show the factual
dissimilarities of such case to the instant controversy. First, in San Miguel
Corporation, the Court did not even pass upon the validity of the Compromise
Agreement, while, in the instant case, the Court approved the conversion. Second, in
the instant case, court approval was sought before the execution of the conversion,
while in San Miguel Corporation, no court approval was sought for the Compromise
Agreement. And third, in San Miguel Corporation, both the Republic and COCOFED
opposed the Compromise Agreement, while, in the instant case, they both agreed to
the conversion. Clearly, San Miguel Corporation finds no application to the instant
case.
Moreover, our ruling in San Miguel Corporation did not per se forbid the conversion of
sequestered common shares into preferred/treasury shares. As we held thereat, the
changes that are unacceptable are those "of any permanent character that will alter
their being sequestered shares and, therefore, in custodia legis, that is to say, under
the control and disposition of this Court." Here, the SMC Series 1 Preferred Shares
will also be sequestered in exchange for the common shares originally sequestered.
Thus, the approval of the conversion of the subject SMC shares in the instant case
does not run counter, as movants insist otherwise, to the ruling in San Miguel
Corporation.
Movants-intervenors also assail the conversion of the SMC shares from common to
preferred on another angle, thus:
Simply, there is no right to vote: There is no greater alteration of the very nature of a
common share. In a very real sense, therefore, a common share with all its rights, is
reduced to a mere promissory note; worse, an unsecured and conditional promissory
note, the returns on which is dependent on available retained earnings and the over-
all viability of SMC.14
The assault is without merit.
Again, by their very nature, shares of common stock, while giving the stockholder the
right to vote, do not guarantee that the vote of the stockholder will prevail. That is non
sequitur. This we explained in the Resolution subject of reconsideration:
The mere presence of four (4) PCGG nominated directors in the SMC Board does not
mean it can prevent board actions that are viewed to fritter away the company assets.
Even under the status quo, PCGG has no controlling sway in the SMC Board, let
alone a veto power at 24% of the stockholdings. In relinquishing the voting rights, the
government, through the PCGG, is not in reality ceding control.
Moreover, PCGG has ample powers to address alleged strategies to thwart recovery
of ill-gotten wealth. Thus, the loss of voting rights has no significant effect on PCGGs
function to recover ill-gotten wealth or prevent dissipation of sequestered
assets.151avvphi1
Movants-intervenors likewise challenge the legality of the conversion in light of
Commission on Audit (COA) Circular No. 89-296, which provides that the divestment
or disposal of government property shall be undertaken primarily through public
auction.
The postulation has no merit, for there is, in the first place, no divestment or disposal
of the SMC shares. The CIIF companies shall remain the registered owners of the
SMC Series 1 Preferred Shares after conversion, although the shares are still subject
of sequestration. To state the obvious, these SMC shares are not yet government
assets as ownership thereof are still to be peremptorily determined. Hence, COA
Circular No. 89-296, which covers only the disposition of government property, cannot
plausibly be made to govern the conversion of the SMC shares in question, assuming
for the nonce that the challenged conversion is equivalent to disposition. As explained
in the September 17, 2009 Resolution, the sequestered assets are akin to property
subject of preliminary attachment or receivership. As stated in the assailed resolution,
the Court is authorized to allow the conversion of the subject shares under Rule 57,
Sec. 11, in relation to Rule 59, Sec. 6 of the Rules of Court. And as may be recalled,
the Court, in Palm Avenue Realty Development Corporation v. PCGG,16 allowed the
sale of sequestered properties without an auction sale given that, as here, the
sequestered assets would not have fetched the correct market price. In the instant
case, the same is also true. It is highly doubtful that anyone other than SMC would
purchase the sequestered shares at market value.
Finally, Taada, et al. posit the view that the conversion of shares needs the
acquiescence of the 14 CIIF companies.
The contention is untenable.
It should be remembered that the SMC shares allegedly owned by the CIIF
companies are sequestered assets under the control and supervision of the PCGG
pursuant to Executive Order No. 1, Series of 1986. Be that as it may, it is the duty of
the PCGG to preserve the sequestered assets and prevent their dissipation. In the
exercise of its powers, the PCGG need not seek or obtain the consent or even the
acquiescence of the sequestered assets owner with respect to any of its acts
intended to preserve such assets. Otherwise, it would be well-nigh impossible for
PCGG to perform its duties and exercise its powers under existing laws, for the owner
of the sequestered assets will more often than not oppose or resist PCGGs actions if
their consent is a condition precedent. The act of PCGG of proposing the conversion
of the sequestered SMC shares to Series 1 Preferred Shares was clearly an exercise
of its mandate under existing laws, where the consent of the CIIF Companies is
rendered unnecessary.
Additionally, the above contention has been rendered moot with the filing on October
26, 2009 of the Manifestation dated October 23, 2009. Attached to such Manifestation
is the Secretarys Certificate of the 14 CIIF companies approving the conversion of
the SMC Common Shares into Series 1 Preferred Shares.17
As a final consideration, the Court also takes note of the Motion for Leave to
Intervene and to File and Admit Attached Motion for Partial Reconsideration dated
October 5, 2009 and the Motion for Partial Reconsideration dated October 6, 2009
filed by movant-intervenor UCPB. UCPB claims to have direct interest in the SMC
shares subject of the instant case, being the statutory administrator, pursuant to
Presidential Decree No. (PD) 1468, of the Coconut Industry Investment Fund and as
an investor in the CIIF companies.
UCPB argues that, as the statutory administrator of the CIIF, the proceeds of the net
dividend earnings of, and/or redemption proceeds from, the Series 1 Preferred
Shares of SMC should be deposited in escrow with it rather than, as directed by the
Court in its September 17, 2009 Resolution, with the Development Bank of the
Philippines (DBP) or the Land Bank of the Philippines (LBP).
Concededly, UCPB is the administrator of the CIIF, which invested in the subject
Series 1 Preferred Shares of SMC. UCPBs legal authority as such administrator does
not, however, include its being made the exclusive depository bank of the proceeds of
dividends, interest, or income from the investments solely with UCPB. To be sure, the
relevant decrees, PD Nos. 775, 961, and 1468, did not constitute UCPBthe bank
acquired for the coconut farmers under PD 755to be the sole depositary of the
proceeds of the returns of the investments authorized under Sec. 9, Art. III of PD
1468.

Besides, since the subject sequestered SMC shares are under custodia legis, the
Court has certain control over them and their fruits. Nonetheless, the PCGG, having
administrative control over the subject sequestered shares pending resolution of the
actual ownership thereof, possesses discretion, taking into account the greater
interest of the government and the farmers, to decide on where to deposit on escrow
the net dividend earnings of, and/or redemption proceeds from, the Series 1 Preferred
Shares of SMC. The depository bank may be the DBP/LBP or the UCPB.

WHEREFORE, the Court resolves to DENY for lack of merit the: (1) Motion for
Reconsideration dated October 7, 2009 filed by oppositors-intervenors Jovito R.
Salonga, Wigberto E. Taada, Oscar F. Santos, Ana Theresa Hontiveros, and
Teofisto L. Guingona III; and (2) Motion to Admit Motion for Reconsideration with
Motion for Reconsideration [Re: Conversion of SMC Shares] dated October 16, 2009
filed by movants-intervenors Wigberto E. Taada, Oscar F. Santos, SUFAC,
MOFAZS, represented by Romeo C. Royandoyan, and PAKISAMA, represented by
Vicente Fabe.

The Court PARTIALLY GRANTS the Motion for Leave to Intervene and to File and
Admit Attached Motion for Partial Reconsideration dated October 5, 2009, and the
Motion for Partial Reconsideration dated October 6, 2009 filed by movant-intervenor
UCPB.

The Court AMENDS its Resolution dated September 17, 2009 to give to the PCGG
the discretion in depositing on escrow the net dividend earnings on, and/or
redemption proceeds from, the Series 1 Preferred Shares of SMC, either with the
Development Bank of the Philippines/Land Bank of the Philippines or with the United
Coconut Planters Bank, having in mind the greater interest of the government and the
coconut farmers.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

Republic of the Philippines

SUPREME COURT
Manila
 SECOND DIVISION
G.R. No. 164026 December 23, 2008
SECURITIES AND EXCHANGE COMMISSION, petitioner,
vs.
GMA NETWORK, INC., respondent.
DECISION
TINGA, J.:
Petitioner Securities and Exchange Commission (SEC) assails the Decision1
dated
February 20, 2004 of the Court of Appeals in CA-G.R. SP No. 68163, which directed
that SEC Memorandum Circular No. 1, Series of 1986 should be the basis for
computing the filing fee relative to GMA Network, Inc.s (GMAs) application for the
amendment of its articles of incorporation for purposes of extending its corporate
term.
The undisputed facts as narrated by the appellate court are as follows:
On August 19, 1995, the petitioner, GMA NETWORK, INC., (GMA, for
brevity), a domestic corporation, filed an application for collective approval of
various amendments to its Articles of Incorporation and By-Laws with the
respondent Securities and Exchange Commission, (SEC, for brevity). The
amendments applied for include, among others, the change in the corporate
name of petitioner from "Republic Broadcasting System, Inc." to "GMA
Network, Inc." as well as the extension of the corporate term for another fifty
(50) years from and after June 16, 2000.
Upon such filing, the petitioner had been assessed by the SECs Corporate
and Legal Department a separate filing fee for the application for extension
of corporate term equivalent to 1/10 of 1% of its authorized capital stock plus
20% thereof or an amount of P1,212,200.00.
On September 26, 1995, the petitioner informed the SEC of its intention to
contest the legality and propriety of the said assessment. However, the
petitioner requested the SEC to approve the other amendments being
requested by the petitioner without being deemed to have withdrawn its
application for extension of corporate term.
On October 20, 1995, the petitioner formally protested the assessment
amounting to P1,212,200.00 for its application for extension of corporate
term.
On February 20, 1996, the SEC approved the other amendments to the
petitioners Articles of Incorporation, specifically Article 1 thereof referring to
the corporate name of the petitioner as well as Article 2 thereof referring to
the principal purpose for which the petitioner was formed.
On March 19, 1996, the petitioner requested for an official opinion/ruling
from the SEC on the validity and propriety of the assessment for application
for extension of its corporate term.
Consequently, the respondent SEC, through Associate Commissioner Fe
Eloisa C. Gloria, on April 18, 1996, issued its ruling upholding the validity of
the questioned assessment, the dispositive portion of which states:
"In light of the foregoing, we believe that the questioned assessment is
in accordance with law. Accordingly, you are hereby required to
comply with the required filing fee."
An appeal from the aforequoted ruling of the respondent SEC was
subsequently taken by the petitioner on the ground that the assessment of
filing fees for the petitioners application for extension of corporate term
equivalent to 1/10 of 1% of the authorized capital stock plus 20% thereof is
not in accordance with law.
On September 26, 2001, following three (3) motions for early resolution filed
by the petitioner, the respondent SEC En Banc issued the assailed order
dismissing the petitioners appeal, the dispositive portion of which provides
as follows:
WHEREFORE, for lack of merit, the instant Appeal is hereby dismissed.
SO ORDERED.2
In its petition for review3 with the Court of Appeals, GMA argued that its application
for the extension of its corporate term is akin to an amendment and not to a filing of
new articles of incorporation. It further averred that SEC Memorandum Circular No. 2,
Series of 1994, which the SEC used as basis for assessing P1,212,200.00 as filing
fee for the extension of GMAs corporate term, is not valid.
The appellate court agreed with the SECs submission that an extension of the
corporate term is a grant of a fresh license for a corporation to act as a juridical being
endowed with the powers expressly bestowed by the State. As such, it is not an
ordinary amendment but is analogous to the filing of new articles of incorporation.
However, the Court of Appeals ruled that Memorandum Circular No. 2, Series of 1994
is legally invalid and ineffective for not having been published in accordance with law.
The challenged memorandum circular, according to the appellate court, is not merely
an internal or interpretative rule, but affects the public in general. Hence, its
publication is required for its effectivity.
The appellate court denied reconsideration in a Resolution4 dated June 9, 2004.
In its Memorandum5 dated September 6, 2005, the SEC argues that it issued the
questioned memorandum circular in the exercise of its delegated legislative power to
fix fees and charges. The filing fees required by it are allegedly uniformly imposed on
the transacting public and are essential to its supervisory and regulatory functions.
The fees are not a form of penalty or sanction and, therefore, require no publication.
For its part, GMA points out in its Memorandum,6 dated September 23, 2005, that
SEC Memorandum Circular No. 1, Series of 1986 refers to the filing fees for amended
articles of incorporation where the amendment consists of extending the term of
corporate existence. The questioned circular, on the other hand, refers only to filing
fees for articles of incorporation. Thus, GMA argues that the former circular, being the
one that specifically treats of applications for the extension of corporate term, should
apply to its case.
Assuming that Memorandum Circular No. 2, Series of 1994 is applicable, GMA avers
that the latter did not take effect and cannot be the basis for the imposition of the fees
stated therein for the reasons that it was neither filed with the University of the
Philippines Law Center nor published either in the Official Gazette or in a newspaper
of general circulation as required under existing laws.
It should be mentioned at the outset that the authority of the SEC to collect and
receive fees as authorized by law is not in question.7 Its power to collect fees for
examining and filing articles of incorporation and by-laws and amendments thereto,
certificates of increase or decrease of the capital stock, among others, is recognized.
Likewise established is its power under Sec. 7 of P.D. No. 902-A to recommend to the
President the revision, alteration, amendment or adjustment of the charges which it is
authorized to collect.
The subject of the present inquiry is not the authority of the SEC to collect and
receive fees and charges, but rather the validity of its imposition on the basis of a
memorandum circular which, the Court of Appeals held, is ineffective.
Republic Act No. 3531 (R.A. No. 3531) provides that where the amendment consists
in extending the term of corporate existence, the SEC "shall be entitled to collect and
receive for the filing of the amended articles of incorporation the same fees collectible
under existing law as the filing of articles of incorporation." 8 As is clearly the import of
this law, the SEC shall be entitled to collect and receive the same fees it assesses
and collects both for the filing of articles of incorporation and the filing of an amended
articles of incorporation for purposes of extending the term of corporate existence.
The SEC, effectuating its mandate under the aforequoted law and other pertinent
laws,9 issued SEC Memorandum Circular No. 1, Series of 1986, imposing the filing
fee of 1/10 of 1% of the authorized capital stock but not less than P300.00 nor more
than P100,000.00 for stock corporations, and 1/10 of 1% of the authorized capital
stock but not less than P200.00 nor more than P100,000.00 for stock corporations
without par value, for the filing of amended articles of incorporation where the
amendment consists of extending the term of corporate existence.
Several years after, the SEC issued Memorandum Circular No. 2, Series of 1994,
imposing new fees and charges and deleting the maximum filing fee set forth in SEC
Circular No. 1, Series of 1986, such that the fee for the filing of articles of
incorporation became 1/10 of 1% of the authorized capital stock plus 20% thereof but
not less thanP500.00.
A reading of the two circulars readily reveals that they indeed pertain to different
matters, as GMA points out. SEC Memorandum Circular No. 1, Series of 1986 refers
to the filing fee for the amendment of articles of incorporation to extend corporate life,
while Memorandum Circular No. 2, Series of 1994 pertains to the filing fee for articles
of incorporation. Thus, as GMA argues, the former circular, being squarely applicable
and, more importantly, being more favorable to it, should be followed.
What this proposition fails to consider, however, is the clear directive of R.A. No. 3531
to impose the same fees for the filing of articles of incorporation and the filing of
amended articles of incorporation to reflect an extension of corporate term. R.A. No.
3531 provides an unmistakable standard which should guide the SEC in fixing and
imposing its rates and fees. If such mandate were the only consideration, the Court
would have been inclined to rule that the SEC was correct in imposing the filing fees
as outlined in the questioned memorandum circular, GMAs argument
notwithstanding.
However, we agree with the Court of Appeals that the questioned memorandum
circular is invalid as it does not appear from the records that it has been published in
the Official Gazette or in a newspaper of general circulation. Executive Order No.
200, which repealed Art. 2 of the Civil Code, provides that "laws shall take effect after
fifteen days following the completion of their publication either in the Official Gazette
or in a newspaper of general circulation in the Philippines, unless it is otherwise
provided."
In Taada v. Tuvera,10 the Court, expounding on the publication requirement, held:
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which shall
begin fifteen days after publication unless a different effectivity date is fixed
by the legislature.
Covered by this rule are presidential decrees and executive orders
promulgated by the President in the exercise of legislative powers whenever
the same are validly delegated by the legislature, or, at present, directly
conferred by the Constitution. Administrative rules and regulations must also
be published if their purpose is to enforce or implement existing law pursuant
also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is,
regulating only the personnel of the administrative agency and not the
public, need not be published. Neither is publication required of the so-called
letters of instructions issued by administrative superiors concerning the rules
 or guidelines to be followed by their subordinates in the performance of their
duties.11

The questioned memorandum circular, furthermore, has not been filed with the Office
of the National Administrative Register of the University of the Philippines Law Center
as required in the Administrative Code of 1987.12

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

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

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

as simply interpretative of R.A. No. 3531. This administrative issuance is an
implementation of the mandate of R.A.

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

A related factor which precludes consideration of the questioned issuance as

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

Rate-fixing is a legislative function which concededly has been delegated to the SEC
by R.A. No. 3531 and other pertinent laws. The due process clause, however, permits
the courts to determine whether the regulation issued by the SEC is reasonable and
within the bounds of its rate-fixing authority and to strike it down when it arbitrarily
infringes on a persons right to property.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-
G.R. SP No. 68163, dated February 20, 2004, and its Resolution, dated June 9, 2004,
are AFFIRMED. No pronouncement as to costs.

SO ORDERED.

DANTE O. TINGA
Associate Justice
 Republic of the Philippines
SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 189649 April 20, 2015
ADORACION CARO LINO (spouse and in substitution of the deceased
JEREMIAS A. CAROLINO),Petitioner,
vs.
GEN. GENEROSO SENGA, as Chief of Staff of the Armed Forces of the
Philippines (AFP); BRIG GEN. FERNANDO ZABAT, as Chief of the AFP Finance
Center; COMMO. REYNALDO BASILIO, as Chief of the AFP-GHQ Management
and Fiscal Office; and COMMO. EMILIO MARAYAG, Pension and Gratuity
Officer, Pension and Gratuity Management Center, AFP Finance
Center, Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review under Rule 45 seeking to reverse and set aside the
Decision1 dated May 25, 2009 of the Court of Appeals (CA) in CA-G.R. SP No.
103502 and the Resolution2 dated September 10, 2009 denying reconsideration
thereof.
The factual and legal antecedents are as follows:
On December 1, 1976, Jeremias A. Carolino, petitioner's husband, Retired3 from the
Armed Forces of the Philippines (AFP) with the rank of Colonel under General Order
No. 1208 dated November 29, 1976, pursuant to the provisions of Sections 1(A) and
10 of Republic Act (RA) No. 340,4 as amended. He started receiving his monthly
retirement pay in the amount of P18,315.00 in December 1976 until the same was
withheld by respondents in March 2005. On June 3, 2005, Jeremias wrote a
letter5 addressed to the AFP Chief of Staff asking for the reasons of the withholding of
his retirement pay. In a letter reply,6 Myrna F. Villaruz, LTC (FS) PA, Pension and
Gratuity Officer of the AFP Finance Center, informed Jeremias that his loss of Filipino
citizenship caused the deletion of his name in the alpha list of the AFP Pensioners
Payroll effective March 5, 2005; and that he could avail of re-entitlement to his
retirement benefits and the restoration of his name in the AFP Pensioners' Master list
Payroll by complying with the requirements prescribed under RA No. 9225, or the
Dual Citizenship Act.
It appeared that the termination of Jeremias' pension was done pursuant to
Disposition Form7 dated October 29, 2004,which was approved by the Chief of Staff
and made effective in January 2005. In the said Disposition Form, the AFP Judge
Advocate General opined that under the provisions of Sections 4, 5, and 6 of RA No.
340, retired military personnel are disqualified from receiving pension benefits once
incapable to render military service as a result of his having sworn allegiance to a
foreign country. It was also mentioned that termination of retirement benefits of
pensioner of the AFP could be done pursuant to the provisions of Presidential Decree
(PD) No. 16388which provides that the name of a retiree who loses his Filipino
citizenship shall be removed from the retired list and his retirement benefits
terminated upon such loss. It being in consonance with the policy consideration that
all retirement laws inconsistent with the provisions of PD No. 1638 are repealed and
modified accordingly.
On August 24, 2006, Jeremias filed with the Regional Trial Court (RTC) of Quezon
City, a Petition for Mandamus9against Gen. Generoso Senga, as Chief of Staff of the
AFP, Brig. Gen. Fernando Zabat, as Chief of the AFP Finance Center, Comm.
Reynaldo Basilio, as Chief of the AFP- GHQ Management and Fiscal Office, and
Comm. Emilio Marayag, Pension and Gratuity Management Officer, Pension and
Gratuity Management Center, AFP Finance Center, seeking reinstatement of his
name in the list of the AFP retired officers, resumption of payment of his retirement
benefits under RA No. 340, and the reimbursement of all his retirement pay and
benefits which accrued from March 5, 2005 up to the time his name is reinstated and,
thereafter, with claim for damages and attorney's fees. The case was docketed as
Civil Case No. Q-06-58686, and raffled off to Branch 220.
On February 26, 2007, the RTC rendered its Decision10 granting the petition for
mandamus, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering General Hermogenes Esperon,
Jr., as Chief of Staff of the AFP, Brigadier General Fernando Zabat, as the
Commanding Officer of the AFP Finance Center, Commodore Reynaldo Basilio, as
Chief of the AFP-GHQ Management and Fiscal Office, and Captain Theresa M.
Nicdao, as Pension and Gratuity Officer of the Pension and Gratuity Management
Center, or any of their respective successors and those taking instructions from them
as agents or subordinates, to:
a. immediately reinstate the name of petitioner in the list of retired AFP
Officers, and to resume payment of his retirement benefits under RA 340;
and
b. release to [petitioner] all retirement benefits due him under RA 340 which
accrued to him from March 2005 continuously up to the time his name is
reinstated in the list of AFP retired officers.11
The RTC found that the issue for resolution is the applicability of RA No. 340 and PD
No. 1638 upon Jeremias' retirement benefits. It found that he retired as a
commissioned officer of the AFP in 1976; thus, RA No. 340 is the law applicable in
determining his entitlement to his retirement benefits and not PD No. 1638 which was
issued only in 1979. Article 4 of the Civil Code provides that "laws shall have no
retroactive effect unless the contrary is provided." PD No. 1638 does not provide for
such retroactive application. Also, it could not have been the intendment of PD No.
1638 to deprive its loyal soldiers of a monthly pension during their old age especially
where, as here, the right had been vested to them through time. RA No. 340 does not
provide that the loss of Filipino citizenship would terminate one's retirement benefits;
and that PD No. 1638 does not reduce whatever benefits that any person has already
been receiving under existing law.
Respondents sought reconsideration,12 but the RTC denied the same in an
Order13 dated May 25, 2007, the decretal portion of which reads:
WHEREFORE, premises considered, the instant Motion for Reconsideration is
hereby DENIED, considering that the questioned decision has not yet attained its
finality. The Motion for Execution in the meantime is hereby DENIED. 14
Aggrieved, respondents elevated the case to the CA. After the submission of the
parties' respective memoranda, the case was submitted for decision.
Jeremias died on September 30, 200715 and was substituted by his wife, herein
petitioner. On May 25, 2009, the CA granted respondents' appeal. The dispositive
portion of the CA decision reads:
WHEREFORE, premises considered, the instant appeal is GRANTED. The appealed
decision is REVOKED and SET ASIDE.16
In so ruling, the CA found that while it is true that Jeremias retired in 1976 under the
provisions of RA No. 340, as amended, which does not contain any provision anent
cessation or loss of retirement benefits upon acquiring another citizenship, PD No.
1638, which was signed in 1979, effectively repealed RA No. 340, as amended.
Section 27 of PD No. 1638, which provides that the name of a retiree who loses his
Filipino citizenship shall be removed from the retired list and his retirement benefits
terminated upon such loss, was correctly made applicable to Jeremias' retirement
benefits. Logic dictates that since Jeremias had already renounced his allegiance to
the Philippines, he cannot now be compelled by the State to render active service and
to render compulsory military service when the need arises. The CA found that for the
writ of mandamus to lie, it is essential that Jeremias should have a clear legal right to
the thing demanded and it must be the imperative duty of respondents to perform the
act required which petitioner failed to show; thus, mandamus will not lie.
Petitioner's motion for reconsideration was denied in a Resolution dated September
10, 2009.
Hence, this petition raising the following:
RESPONDENT COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR
IN RENDERING THE ASSAILED DECISION AND RESOLUTION WHICH SET
ASIDE AND REVERSED THE 26 FEBRUARY 2007 DECISION OF THE QC RTC
BECAUSE:
PD 1638 should not have been applied and cannot be used against petitioner as her
husband's retirement and pension were granted to him by the AFP under RA 340
which was not superseded by PD 1638, a later statute.
Petitioner correctly availed of the remedy of mandamus to compel the reinstatement
of his pension and benefits from the AFP under RA 340 as PD 1638 was not
applicable to him. Petitioner contends that her husband's retirement from the active
service in 1976 was pursuant to the provisions of RA No. No. 340 as PD No. 1638
was not yet in existence then, and there was nothing in RA No. 340 that disqualifies a
retired military personnel from receiving retirement benefits after acquiring foreign
citizenship. The concept of retirement benefits is such that one is entitled to them for
services already rendered and not for those to be made at a future time. Retirement
benefits due petitioner's husband under RA No. 340, is an acquired right which
cannot be taken away by a subsequent law. PD No. 1638 does not expressly provide
for its retroactive application. Respondents, being officers of the AFP tasked to
implement the provisions of RA No. 340 have neglected their function thereunder by
delisting petitioner's husband as a retiree, thus, mandamus is proper.
In his Comment, the Solicitor General argues that PD No. 1638 applies to all military
personnel in the service of the AFP whether active or retired; hence, it applies
retroactively to petitioner's husband. Even when a retiree is no longer in the active
service, his being a Filipino still makes him a part of the Citizen Armed Forces; that
whether a military personnel retires under the provisions of RA No. 340 or under PD
No. 1638, he is still in the service of the military and/or the State only that he is
retired, thus, they should not be treated differently upon the loss of Filipino
citizenship. He argues when there is an irreconcilable conflict between the two laws of
different vintages, i.e., RA No. 340 and PD No. 1638, the latter enactment prevails.
The Solicitor General argues that mandamus will not issue to enforce a right to
compel compliance with a duty which is questionable or over which a substantial
doubt exists. In this case, petitioner's husband does not have a well-defined, clear
and certain legal right to continuously receive retirement benefits after becoming an
American citizen. Likewise, the AFP does not have a clear and imperative duty to
grant the said benefits considering that Section 27 of PD No. 1638 provides that the
name of a retiree who loses his Filipino citizenship shall be removed from the retired
list and his retirement benefits terminated upon such loss.
Petitioner filed her reply thereto.
We find merit in the petition.
Petitioner's husband retired in1976 under RA No. 340. He was already receiving his
monthly retirement benefit in the amount of P18,315.00 since December 1976 until it
was terminated in March 2005. Section 5, RA No. 340 provides:
Sec. 5. Officers and enlisted men placed in the retired list shall be subject to the rules
and articles of war and to trial by court-martial for any breach thereof. At any time said
officers and enlisted men may be called to active service by the President. Refusal on
the part of any officer or enlisted man to perform such services shall terminate his
right to further participation in the benefits of this Act provided he resides in the
Philippines and is physically fit for service. Such fitness for service shall be
determined by applicable regulations.
The afore-quoted provision clearly shows how a retiree's retirement benefits may be
terminated, i.e., when the retiree refuses to perform active service when called to do
so provided that (1) the retiree resides in the Philippines and (2) is physically fit for
service. There is no other requirement found in the law which would be the reason for
the termination of a retiree's retirement benefits. Petitioner's husband was never
called to perform active service and refused to do so, however, his retirement benefit
was terminated. The reason for such termination was his loss of Filipino citizenship
based on Section 27 of PD No. 1638, to wit:
Section 27. Military personnel retired under Sections 4, 5, 10, 11 and 12 shall be
carried in the retired list of the Armed Forces of the Philippines. The name of a retiree
who loses his Filipino citizenship shall be removed from the retired list and his
retirement benefits terminated upon such loss.
We find that the CA erred in applying PD No. 1638 to the retirement benefits of
petitioner's husband.
Firstly, PD No. 1638 was signed by then President Ferdinand Marcos on September
10, 1979. Under Article 4 of the Civil Code, it is provided that laws shall have no
retroactive effect, unless the contrary is provided. It is said that the law looks to the
future only and has no retroactive effect unless the legislator may have formally given
that effect to some legal provisions;17 that all statutes are to be construed as having
only prospective operation, unless the purpose and intention of the legislature to give
them a retrospective effect is expressly declared or is necessarily implied from the
language used; and that every case of doubt must be resolved against retrospective
effect.18 These principles also apply to amendments of statutes.
PD No. 1638 does not contain any provision regarding its retroactive application, nor
the same may be implied from its language. In fact, Section 36 of PD No. 1638 clearly
provides that the decree shall take effect upon its approval. As held in Parreo v.
COA,19 there is no question that PD No. 1638, as amended, applies prospectively.
Since PD No. 1638, as amended, is about the new system of retirement and
separation from service of military personnel, it should apply to those who were in the
service at the time of its approval.20 Conversely, PD No. 1638 is not applicable to
those who retired before its effectivity in 1979. The rule is familiar that after an act is
amended, the original act continues to be in force with regard to all rights that had
accrued prior to such amendment.21
Moreover, Section 27 of PD No. 1638 specifically provides for the retirees to whom
the law shall be applied, to wit:
Section 27. Military personnel retired under Sections 4, 5, 10, 11 and 12 shall be
carried in the retired list of the Armed Forces of the Philippines. The name of a retiree
who loses his Filipino citizenship shall be removed from the retired list and his
retirement benefits terminated upon such loss. (emphasis supplied)
Notably, petitioner's husband did not retire under those above-enumerated Sections
of PD No. 1638 as he retired under RA No. 340.
Secondly, it has been held that before a right to retirement benefits or pension vests
in an employee, he must have met the stated conditions of eligibility with respect to
the nature of employment, age, and length of service.22Undeniably, petitioner's
husband had complied with the conditions of eligibility to retirement benefits as he
was then receiving his retirement benefits on a monthly basis until it was terminated.
Where the employee retires and meets the eligibility requirements, he acquires a
vested right to the benefits that is protected by the due process clause. 23 It is only
upon retirement that military personnel acquire a vested right to retirement
benefits.24 Retirees enjoy a protected property interest whenever they acquire a right
to immediate payment under pre-existing law.25
In Ayog v. Cusi,26 we expounded the nature of a vested right, thus:
"A right is vested when the right to enjoyment has become the property of some
particular person or persons as a present interest" (16 C.J.S. 1173).1wphi1 It is "the
privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of
property conferred by the existing law" (12 C.J.S. 955, Note 46, No. 6) or "some right
or interest in property which has become fixed and established and is no longer open
to doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa vs.
Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. "A state may not
impair vested rights by legislative enactment, by the enactment or by the subsequent
repeal of a municipal ordinance, or by a change in the constitution of the State,
except in a legitimate exercise of the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses the concept of
present fixed interest, which in right reason and natural justice should be protected
against arbitrary State action, or an innately just and imperative right which an
enlightened free society, sensitive to inherent and irrefragable individual rights,
cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines,
Inc. vs. Rosenthal, 192 Atl. 2nd 587).27
Petitioner's husband acquired vested right to the payment of his retirement benefits
which must be respected and cannot be affected by the subsequent enactment of PD
No. 1638 which provides that loss of Filipino citizenship terminates retirement
benefits. Vested rights include not only legal or equitable title to the enforcement of a
demand, but also an exemption from new obligations after the right has vested. 28
In fact, Sections 33 and 35 of PD No.1638 recognize such vested right, to wit:
Section 33. Nothing in this Decree shall be construed in any manner to reduce
whatever retirement and separation pay or gratuity or other monetary benefits which
any person is heretofore receiving or is entitled to receive under the provisions of
existing law.
xxxx
Section. 35. Except those necessary to give effect to the provisions of this Decree
and to preserve the rights granted to retired or separated military personnel, all laws,
rules and regulations inconsistent with the provisions of this Decree are hereby
repealed or modified accordingly.
Section 33 of PD No. 1638 is clear that the law has no intention to reduce or to
revoke whatever retirement benefits being enjoyed by a retiree at the time of its
passage. Hence, Section 35 provides for an exception to what the decree repealed or
modified, i.e., except those necessary to preserve the rights granted to retired or
separated military personnel.
We also find that the CA erred in finding that mandamus will not lie.
Section 3, Rule 65 of the Rules of Court lay down under what circumstances petition
for mandamus may be filed, to wit:
their jurisdiction before the same may be elevated to the courts of justice for
review.34 However, the principle of exhaustion of administrative remedies need not be
adhered to when the question is purely legal.35 This is because issues of law cannot
be resolved with finality by the administrative officer.36 Appeal to the administrative
officer would only be an exercise in futility.37 Here, the question raised is purely legal,
i.e., what law should be applied in the payment of retirement benefits of petitioner's
husband. Thus, there was no need to exhaust all administrative remedies before a
judicial relief can be sought.
WHEREFORE, the petition is GRANTED. The Decision dated May 25, 2009 and the
Resolution dated September 10, 2009 of the Court of Appeals are hereby
REVERSED and SET ASIDE. The Decision dated February 26, 2007 of the Regional
Trial Court of Quezon City, Branch 220, is AFFIRMED.
SO ORDERED.

SEC. 3. Petition for mandamus. When any tribunal, corporation, board, officer or DIOSDADO M. PERALTA
person unlawfully neglects the performance of an act which the law specifically Associate Justice
enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes
another from the use and enjoyment of a right or office to which such other is entitled,
and there is no other plain, speedy and adequate remedy in the ordinary course of
law, the person aggrieved thereby may file a verified petition in the proper court,
alleging the facts with certainty and praying that judgment be rendered commanding
the respondent, immediately or at some other time to be specified by the court, to do
the act required to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of the
respondent.

A writ of mandamus can be issued only when petitioners legal right to the
performance of a particular act which is sought to be compelled is clear and
complete. A clear legal right is a right which is indubitably granted by law or is
inferable as a matter of law.29 A doctrine well-embedded in our jurisprudence is that
mandamus will issue only when the petitioner has a clear legal right to the
performance of the act sought to be compelled and the respondent has an imperative
duty to perform the same.30 The remedy of mandamus lies to compel the
performance of a ministerial duty.31 A purely ministerial act or duty is one that an
officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of its
own judgment upon the propriety or impropriety of the act done. 32 If the law imposes a
duty upon a public officer, and gives him the right to decide how or when the duty
shall be performed, such duty is discretionary and not ministerial. 33

The petition for mandamus filed by petitioner's husband with the RTC was for the
payment of his terminated retirement benefits, which has become vested, and being a
ministerial duty on the part of the respondents to pay such claim, mandamus is the
proper remedy to compel such payment.

The doctrine of exhaustion of administrative remedies calls for resort first to the
appropriate administrative authorities in the resolution of a controversy falling under
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 173632 September 29, 2014
AMBROSIO ROTAIRO (substituted by his spouse MARIA RONSA YRO
ROTAIRO, and his children FELINA ROTAIRO, ERLINDA ROTAIRO CRUZ,
EUDOSIA ROTAIRO CRIZALDO, NIEVES ROTAIRO TUBIG, REMEDIOS
ROTAIRO MACAHILIG, FELISA ROTAIRO LEGASPI, JOSEFINA ROTAIRO
TORREVILLAS, and CRISENCIO R. ROTAIRO, MARCIANA TIBAY, EUGENIO
PUNZALAN, and VICENTE DEL ROSARIO, Petitioners,
vs.
ROVIRA ALCANTARA and VICTOR ALCANTARA, Respondents.
DECISION
REYES, J.:
For review is the Decision1 dated July 21, 2005 and Resolution2 dated July 7, 2006 of
the Court of Appeals (CA) in CA-G.R. CV No. 58455, which set aside the
Decision3 dated December 27, 1996 of the Regional Trial Court (RTC) of Antipolo,
Rizal, Branch 71 in Civil Case No. 672.
Civil Case No. 672 was filed by the respondent Rovira Alcantara (Rovira) for the
recovery of possession of a parcel of land in Barangay San Andres, Cainta, Rizal,
measuring 2,777 square meters and originally titled under Transfer Certificate of Title
(TCT) No. 481018. Said property was formerly owned by Roviras father, Victor C.
Alcantara (Alcantara), and Alfredo C. Ignacio (Ignacio), who mortgaged the property
to Pilipinas Bank and Trust Company (Pilipinas Bank) in 1968. Two years after, the
property was parcelled out by Alcantara and Ignacio, through their firm Wilfredo S.
Ignacio & Company (Ignacio & Co.), and separately sold to different buyers. One of
the buyers was Ambrosio Rotairo (Rotairo) who bought a 200-square meter portion
on installment basis. Rotairo constructed his house on the property identified as Lot
C-1, and after completing payments, a Deed of Absolute Sale was executed on
September 25, 1979 in his favor by Ignacio & Co.4
In the meantime, Alcantara and Ignacio defaulted in their loan obligations causing
Pilipinas Bank to foreclose the mortgage on the entire property. Without redemption
being made by Alcantara and Ignacio, title was consolidated in the name of Pilipinas
Bank, being the highest bidder during the auction sale. Pilipinas Bank then sold the
property in a Deed of Absolute Sale dated June 6, 1975 to Rovira, who happens to be
Alcantaras daughter.5
In 1988, Rovira filed her Amended Complaint in Civil Case No. 672 for recovery of
possession and damages.After trial, the RTC dismissed Civil Case No. 672. The
Decision dated December 27, 1996 provides for the following dispositive portion:
WHEREFORE, judgment is hereby rendered dismissing the complaint and
defendants counterclaim; and plaintiff, being the successor-in-interest of the
subdivision owner, Wilfredo S. Ignacio, is ordered to issue the corresponding transfer
certificate of title to defendant Ambrosio Rotairo pursuant to the provisions of PD [No.]
957.
SO ORDERED.6
The RTC ruled that the transaction between Ignacio & Co. and Rotairo was covered
by Presidential Decree (P.D.) No. 957.7 Rovira, as "successor-in-interest of Wilfredo
S.Ignacio [and Victor Alcantara] was well aware of the condition of the property which
she bought from the Pilipinas Bank, because she lives near the land, and at the time
she purchased it she was aware of the existing houses or structures on the
land."8 She was, therefore, not entitled to the relief prayed for in her complaint.
On appeal, the CA set aside the RTC decision and ordered the turnover of
possession of the property to Rovira. The dispositive portion of the assailed CA
Decision dated July 21, 2005 provides:
WHEREFORE, the decision appealed from is SET ASIDE. The Heirs of Ambrosio
Rotairo and their assigns, are ORDERED to turn over possession of Lot C-1 to Rovira
Alcantara. Third party defendants, William [sic] Ignacio and Victor Alcantara, are
ORDERED to return the purchase price of P10,000.00 to the Heirs of Ambrosio
Rotairo, with interest at the rate of 6% per annum until finality of this decision, and at
the rate of 12% per annum thereafter until fully paid.
SO ORDERED.9
Petitioners sought reconsideration, which was denied by the CA in the assailed
Resolution10 dated July 7, 2006.
In granting possession in favor of Rovira, the CA held that P.D. No. 957 is not
applicable since the mortgagewas constituted prior to the sale to Rotairo. According
to the CA, Section 1811 of P.D. No. 957 protects innocent lot buyers, and where there
is a prior registered mortgage, the buyer purchases it with knowledge of the
mortgage. In the caseof Rotairo, P.D. No. 957 does not confer "more" rights to an
unregistered buyer like him, as against a registered prior mortgagee like Pilipinas
Bank and its buyer, Rovira.12 Hence, the present petition.
Petitioners raise the following issues:
1. Whether or not, notwithstanding that the subject land is subdivision lot,
Ambrosio Rotairo (father of the Petitioners), [a] buyer and builder in good
faith should suffer, while the seller in bad faith Victor Alcantara should be
benefited by his malicious acts.
 2. Whether or not, Ambrosio Rotairo (father of the Petitioners), a buyer and
builder in good faith should suffer while the seller in bad faith Victor
Alcantara should be benefited by his malicious acts.13
Petitioners insist on the applicabilityof P.D. No. 957 in this case, and that the
transaction between Rotairo and Ignacio & Co. should fall within the protection of the
law. On the other hand, Rovira principally relies on the prior registration of the
mortgage and the sale in her favor vis--visthe petitioners unregistered transactions.
The first issue then that must be resolved is whether P.D. No. 957 is applicable in this
case. But the more crucial issue before the Court is who, as between the petitioners
and Rovira, has better right to the property in dispute?
Retroactive application of P.D. No. 957
The retroactive application of P.D. No. 957 to transactions entered into prior to its
enactment in 1976 is already settled.1wphi1 In Eugenio v. Exec. Sec. Drilon,14 which
involved a land purchase agreement entered into in 1972, the Court stated that the
unmistakeable intent of the legislature is to have P.D. No. 957 operate
retrospectively. Moreover, the specific terms of P.D. No. 957 provide for its retroactive
effect even to contracts and transactions entered into prior to its enactment. In
particular, Section 21 of P.D. No. 957 provides:
Sec. 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold
or disposed of prior to the effectivity of this Decree, it shall be incumbent upon the
owner or developer of the subdivision or condominium project to complete
compliance with his or its obligations as provided in the preceding section within two
years from the date of this Decree unless otherwise extended by the Authority or
unless an adequate performance bond isfiled in accordance with Section 6 hereof.
Failure of the owner or developer to comply with the obligations under this and the
preceding provisions shall constitute a violation punishable under Section 38 and 39
ofthis Decree. (Emphasis ours)
In this case, the contract to sell between Rotairo and Ignacio & Co. was entered into
in 1970, and the agreement was fully consummated with Rotairos completion of
payments and the execution of the Deed of Sale in his favor in 1979. Clearly, P.D.
No. 957 is applicable in this case.
It was error for the CA to rule thatthe retroactive application of P.D. No. 957 is
"warranted only where the subdivision is mortgaged after buyers have purchased
individual lots."15 According to the CA, the purpose of Section 18 requiring notice of
the mortgage to the buyers is to give the buyer the option to pay the instalments
directly to the mortgagee; hence, if the subdivision is mortgaged before the lots are
sold, then there are no buyers to notify.16 What the CA overlooked is that Section 21
requires the owner or developer of the subdivision project to complete compliance
with its obligations within two years from 1976.The two-year compliance provides the
developer the opportunity to comply with its obligation to notify the buyers of the
existence of the mortgage, and consequently, for the latter to exercise their option to
pay the instalments directly to the mortgagee.
Nevertheless, such concomitant obligation of the developer under Section 21 did not
arise in this case. It must be noted that at the time of the enactment of P.D. No. 957 in
1976 and asearly as 1974, Pilipinas Bank had already foreclosed the mortgage and
bought the properties in the foreclosure sale. There was, thus, no mortgage to speak
of such that Rotairo should be notified thereof so that he could properly exercise his
option to pay the instalments directly to Pilipinas Bank.
Rovira is not a buyer in good faith
Notwithstanding the preceding discussion, the Court finds that Rovira cannot claim a
better right to the property because she is not a buyer in good faith. Initially, it must be
stated that the determination of whether one is a buyer in good faith is a factual issue,
which generally cannotbe determined by the Court in a petition for review filed under
Rule 45.17 The rule, nonetheless, admits of exceptions, someof which are when the
judgment of the CA is based on a misapprehension offacts or when the CA
overlooked undisputed facts which, if properly considered, would justify a different
conclusion.18 A review of this case shows that the CA failed to appreciate the
relevance of certain undisputed facts, thus giving rise to its erroneous conclusion that
Rovira has a better right to the property in dispute.
Rovira contended that the registered mortgage between Pilipinas Bank and Alcantara
and Ignacio is superior to the unregistered contract to sell between Ignacio & Co. and
Rotairo, which was sustained by the CA. The CA applied Section 50 of Act No. 496 or
the Land Registration Act and ruled that since the sale to Rotairo was unregistered
and subsequent to the registered mortgage, the latter was obligated to respect the
foreclosure and eventual sale of the property in dispute, among others.19
Indeed, the rule is that as "[b]etween two transactions concerning the same parcel of
land, the registered transaction prevails over the earlier unregistered right." 20 This is
in accord with Section 50 of the Land Registration Act,21 which provides:
Sec. 50. An owner of registered land may convey, mortgage, lease, charge, or
otherwise deal with the same as fully as if it had not been registered. He may use
forms of deeds, mortgages[,] leases, or other voluntary instruments like those now in
use and sufficient in law for the purpose intended. But no deed, mortgage, lease, or
other voluntary instrument, except a will purporting to convey or affect registered land,
shall take effect as a conveyance or bind the land, but shall operate only as a contract
between the parties and as evidence of authority to the clerk or register of deeds to
make registration. The act of registration shall be the operative act to convey and
affect the land, and in all cases under this Act the registration shall be made inthe
office of register of deeds for the province or provinces or city where the land lies.
(Emphasis ours)
Section 51 of the Land Registration Act further states that "[e]very conveyance,
mortgage, lease, lien, attachment, order, decree, instrument, or entry affecting
registered land x x x, if registered x x x be notice to all persons from the time of such
registeringx x x." "The principal purpose of registration is merely to notify other
persons not parties to a contract that a transaction involving the property has been
entered into."22 Thus, it has been held that "registration in a publicregistry creates
constructive notice to the whole world."23 Moreover, "[a] person dealing with
registered land may safely rely on the correctness of the certificate of title issued
therefor, and he is not required to go beyond the certificate to determine the condition
of the property."24
The rule, however, is not without recognized exceptions. "The conveyance shall not
be valid against any person unless registered, except (1) the grantor, (2) his heirs and
devisees, and (3) third persons having actual notice or knowledge
thereof."25 Moreover, "when the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make such inquiry or
when the purchaser has knowledge of a defect or the lack of title in his vendor or of
sufficient facts to induce a reasonably prudent man to inquire into the status of the
title of the property in litigation,26 he cannot find solace in the protection afforded by a
prior registration. Neither can such person be considered an innocent purchaser for
value nor a purchaser in good faith.27
In this case, two factors work against Rovira as a buyer in good faith. One, she
cannot be considered a third person for purposes of applying the rule. Rovira does
not deny that she is the daughter and an heir of Victor C. Alcantara, one of the parties
to the contract to sell (and the contract of sale) executed in favor of Rotairo. "The
vendors heirs are his privies."28 Based on such privity, Rovira is charged with
constructive knowledge of prior dispositions or encumbrances affecting the subject
property made by her father.29 The fact that the contract to sell was unregistered
became immaterial and she is, therefore, bound by the provisions of the contract to
sell and eventually, the contract of sale, executed by her father in favor of Rotairo.
"[I]t is a settled rule that the Land Registration Act protects only holders of title in good
faith, and does not permit its provision to be used as a shield for the commission of
fraud, or as a means to enrich oneself at the expense of others. " 36
Under different circumstances, the prior registration of the mortgage between
Pilipinas Bank and Alcantara and Ignacio, and Rovira's subsequent purchase of the
subject property would have been valid and binding, and could have defeated
Rotairo's unregistered claim over it. But given Rovira's privity with her father Victor C.
Alcantara and the fact that she had actual knowledge of the disposition of the
property and Rotairo's possession thereof, her acquisition of the property cannot be
upheld.
WHEREFORE, the petition is GRANTED. The Decision dated July 21, 2005 and
Resolution dated July 7, 2006 of the Court of Appeals in CA-G.R. CV No. 58455 are
SET ASIDE. The Decision dated December 27, 1996 of the Regional Trial Court of
Antipolo, Rizal, Branch 71, dismissing Civil Case No. 672 is REINSTATED.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice

Further, more than the chargeof constructive knowledge, the surrounding

circumstances of this case show Roviras actual knowledgeof the disposition of the
subject property and Rotairos possession thereof. It is undisputed that after the
contract to sell was executed in April 1970, Rotairo immediately secured a mayors
permit in September 28, 1970 for the construction of his residential house on the
property.30 Rotairo, and subsequently, his heirs, has been residing on the property
since then. Rovira, who lives only fifty (50) meters away from the subject property, in
fact, knew that there were "structures built on the property." 31 Rovira, however, claims
that "she did not bother to inquire as to the legitimacy of the rights of the occupants,
because she was assured by the bank of its title to the property." 32 But Rovira cannot
rely solely on the title and assurances of Pilipinas Bank; it was incumbent upon her to
look beyond the title and make necessary inquiries because the bank was not in
possession of the property. "Where the vendor is not in possession of the property,
the prospective vendees are obligated to investigate the rights of one in
possession."33 A purchaser cannot simply close his eyes to facts which should put a
reasonable man on guard,34 and thereafter claim that he acted in good faith under the
belief that there was no defect in the title of the vendor.35 Hence, Rovira cannot claim
a right better than that of Rotairo' s as she is not a buyer in good faith.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 149417 June 4, 2004
GLORIA SANTOS DUEAS, petitioner,
vs.
SANTOS SUBDIVISION HOMEOWNERS ASSOCIATION, respondent.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision1 dated December 29, 2000, of the Court of
Appeals in CA-G.R. SP No. 51601, setting aside the Decision2 of the Housing and
Land Use Regulatory Board (HLURB) in HLURB Case No. REM-A-980227-0032
which earlier affirmed the Decision3 of the HLURB-NCR Regional Field Office in
HLURB Case No. REM-070297-9821. Said Regional Field Office dismissed the
petition of herein respondent Santos Subdivision Homeowners Association (SSHA)
seeking to require herein petitioner, Gloria Santos Dueas, to provide for an open
space in the subdivision for recreational and community activities. In its assailed
decision, the CA remanded the case to the HLURB for determination of a definitive
land area for open space.4 Petitioner assails also the Court of Appeals
Resolution5 dated July 31, 2001, denying her motion for reconsideration.
The facts of this case are as follows:
Petitioner Gloria Santos Dueas is the daughter of the late Cecilio J. Santos
who, during his lifetime, owned a parcel of land with a total area of 2.2
hectares located at General T. De Leon, Valenzuela City, Metro Manila. In
1966, Cecilio had the realty subdivided into smaller lots, the whole forming
the Cecilio J. Santos Subdivision (for brevity, Santos Subdivision). The then
Land Registration Commission (LRC) approved the project and the National
Housing Authority (NHA) issued the required Certificate of Registration and
License to Sell. At the time of Cecilios death in 1988, there were already
several residents and homeowners in Santos Subdivision.
Sometime in 1997, the members of the SSHA submitted to the petitioner a resolution
asking her to provide within the subdivision an open space for recreational and other
community activities, in accordance with the provisions of P.D. No. 957,6 as amended
by P.D. No. 1216.7 Petitioner, however, rejected the request, thus, prompting the
members of SSHA to seek redress from the NHA.
On April 25, 1997, the NHA General Manager forwarded the SSHA resolution to
Romulo Q. Fabul, Commissioner and Chief Executive Officer of the HLURB in
Quezon City.8
In a letter dated May 29, 1997, the Regional Director of the Expanded NCR Field
Office, HLURB, opined that the open space requirement of P.D. No. 957, as amended
by P.D. No. 1216, was not applicable to Santos Subdivision.9
SSHA then filed a petition/motion for reconsideration,10 docketed as HLURB Case
No. REM-070297-9821, which averred among others that: (1) P.D. No. 957 should
apply retroactively to Santos Subdivision, notwithstanding that the subdivision plans
were approved in 1966 and (2) Gloria Santos Dueas should be bound by the verbal
promise made by her late father during his lifetime that an open space would be
provided for in Phase III of Santos Subdivision, the lots of which were at that time
already for sale.
Petitioner denied any knowledge of the allegations of SSHA. She stressed that she
was not a party to the alleged transactions, and had neither participation nor
involvement in the development of Santos Subdivision and the sale of the
subdivisions lots. As affirmative defenses, she raised the following: (a) It was her late
father, Cecilio J. Santos, who owned and developed the subdivision, and she was
neither its owner nor developer; (b) that this suit was filed by an unauthorized entity
against a non-existent person, as SSHA and Santos Subdivision are not juridical
entities, authorized by law to institute or defend against actions; (c) that P.D. No. 957
cannot be given retroactive effect to make it applicable to Santos Subdivision as the
law does not expressly provide for its retroactive applicability; and (d) that the present
petition is barred by laches.
On January 14, 1998, HLURB-NCR disposed of HLURB Case No. REM-070297-
9821 in this wise:
In view of the foregoing, the complaint is hereby dismissed.
It is So Ordered.11
In dismissing the case, the HLURB-NCR office ruled that while SSHA failed to
present evidence showing that it is an association duly organized under Philippine law
with capacity to sue, nonetheless, the suit could still prosper if viewed as a suit filed
by all its members who signed and verified the petition. However, the petition failed to
show any cause of action against herein petitioner as (1) there is no evidence
showing Santos-Dueas as the owner/developer or successor-in-interest of Cecilio
Santos, who was the owner/developer and sole proprietor of Santos Subdivision; (2)
the LRC-approved subdivision plan was bereft of any proviso indicating or identifying
an open space, as required by P.D. No. 957, as amended, hence there was no legal
basis to compel either Cecilio or his daughter Santos-Dueas, as his purported
successor, to provide said space; and (3) the alleged verbal promise of the late
Cecilio Santos was inadmissible as evidence under the dead mans statute.12
SSHA then appealed the NCR offices ruling to the HLURB Board of Commissioners.
The latter body, however, affirmed the action taken by the HLURB-NCR office,
concluding thus:
WHEREFORE, premises considered, the Petition for Review is hereby
DISMISSED and the decision of the Office below is hereby AFFIRMED IN
TOTO.
SO ORDERED.13
The HLURB Board decreed that there was no basis to compel the petitioner to
provide an open space within Santos Subdivision, inasmuch as the subdivision plans
approved on July 8, 1966, did not provide for said space and there was no law
requiring the same at that time. It further ruled that P.D. No. 957 could not be given
retroactive effect in the absence of an express provision in the law. Finally, it found
the action time-barred since it was filed nine (9) years after the death of Cecilio. The
Board noted that SSHA sought to enforce an alleged oral promise of Cecilio, which
should have been done within the six-year prescriptive period provided for under
Article 114514 of the Civil Code.
Dissatisfied, respondent sought relief from the Court of Appeals via a petition for
review under Rule 43 of the 1997 Rules of Civil Procedure. The petition, docketed as
CA-G.R. SP No. 51601, was decided by the appellate court in this manner:
WHEREFORE, the petition is GRANTED--and the decision, dated January
20, 1999, of the Housing and Land Use Regulatory Board (HLURB) in
HLURB Case No. REM-A-980227-0032 is hereby REVERSED and SET
ASIDE. Accordingly, this case is ordered REMANDED to the HLURB for the
determination of the definitive land area that shall be used for open space in
accordance with law and the rules and standards prescribed by the HLURB.
No pronouncement as to costs.
SO ORDERED.15
In finding for SSHA, the appellate court relied upon Eugenio v. Exec. Sec.
Drilon,16 which held that while P.D. No. 957 did not expressly provide for its
retroactive application, nonetheless, it can be plainly inferred from its intent that it was
to be given retroactive effect so as to extend its coverage even to those contracts
executed prior to its effectivity in 1976. The Court of Appeals also held that the action
was neither barred by prescription nor laches as the obligation of a subdivision
developer to provide an open space is not predicated upon an oral contract, but
mandated by law, hence, an action may be brought within ten (10) years from the
time the right of action accrues under Article 114417 of the Civil Code. Moreover, the
equitable principle of laches will not apply when the claim was filed within the
reglementary period.
Petitioner duly moved for reconsideration, which the Court of Appeals denied on July
31, 2001.
Hence, this petition grounded on the following assignment of errors:
I. THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW BY
TAKING COGNIZANCE OF RESPONDENTS PETITION (WHICH ASSAILS
THE DECISION OF THE BOARD OF COMMISSIONERS OF THE HLURB)
WHEN JURISDICTION THEREON IS WITH THE OFFICE OF THE
PRESIDENT, AS CLEARLY MANDATED BY SEC. 2, RULE XVIII OF THE
1996 RULES OF PROCEDURE OF THE HOUSING AND LAND USE
REGULATORY BOARD.
II. IT WAS GRAVE ERROR FOR THE COURT OF APPEALS TO HAVE
ASSUMED JURISDICTION OVER THE PETITION BELOW WHEN
RESPONDENTS CLEARLY FAILED TO EXHAUST THE ADMINISTRATIVE
REMEDIES AVAILABLE TO THEM UNDER THE LAW.
III. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
RESPONDENT SANTOS SUBDIVISION HOMEOWNERS ASSOCIATION,
A NON-REGISTERED ORGANIZATION, LACKED THE LEGAL
PERSONALITY TO SUE.
IV. THE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING
THAT RESPONDENT SANTOS SUBDIVISION HOMEOWNERS
ASSOCIATION HAS NO CAUSE OF ACTION AGAINST PETITIONER;
NEITHER WAS SANTOS SUBDIVISION, A NON-ENTITY, POSSESSED
WITH CAPACITY TO BE SUED NOR IS PETITIONER GLORIA SANTOS-
DUEAS A PROPER PARTY TO THE CASE, THE LATTER NOT BEING
THE OWNER OR DEVELOPER OF SANTOS SUBDIVISION.
V. THE COURT OF APPEALS SERIOUSLY ERRED IN SUBSTITUTING
ITS FINDINGS WITH THAT OF THE ADJUDICATION BOARD AND
BOARD OF COMMISSIONERS OF THE HLURB WHEN THEIR DECISION
IS BASED ON SUBSTANTIAL EVIDENCE AND NO GRAVE ABUSE OF
DISCRETION CAN BE ATTRIBUTED TO THEM.
VI. THE COURT OF APPEALS DEVIATED FROM THE EXISTING LAW
AND JURISPRUDENCE WHEN IT RULED THAT P.D. 957 HAS
RETROACTIVE APPLICATION -- WHEN THE LAW ITSELF DOES NOT
PROVIDE FOR ITS RETROACTIVITY AND THE EXISTING
JURISPRUDENCE THEREON CLEARLY PRONOUNCED THAT IT HAS
NO RETROACTIVE APPLICATION. TO PROVIDE RETROACTIVITY TO
P.D. 957 WOULD CAUSE IMPAIRMENT OF VESTED RIGHTS.
VII. WHILE AS A GENERAL RULE, THE FACTUAL FINDINGS OF THE
COURT OF APPEALS IS BINDING ON THE SUPREME COURT, THE
SAME IS NOT TRUE WHEN THE FORMERS CONCLUSION IS BASED
ON SPECULATION, SURMISES AND CONJECTURES, THE INFERENCE
MADE IS MANIFESTLY MISTAKEN OR ABSURD, THERE IS GRAVE
ABUSE OF DISCRETION, JUDGMENT IS BASED ON
MISAPPREHENSION OF FACTS CONTRARY TO THOSE OF THE
 ADMINISTRATIVE AGENCY CONCERNED, AND IT WENT BEYOND THE
ISSUES OF THE CASE AND THE SAME IS CONTRARY TO THE
ADMISSIONS OF BOTH PARTIES.18
To our mind, the foregoing may be reduced into the following issues: (1) the
applicability of the doctrine of non-exhaustion of administrative remedies; (2) the legal
capacity of respondent to sue the petitioner herein; and (3) the retroactivity of P.D.
No. 957, as amended by P.D. No. 1216.
On the first issue, the petitioner contends that the filing of CA-G.R. SP No. 51601 was
premature as SSHA failed to exhaust all administrative remedies. Petitioner submits
that since Section 1,19 Rule 43 of the 1997 Rule of Civil Procedure does not mention
the HLURB, the respondent should have appealed the decision of the HLURB Board
in HLURB Case No. REM-A-980227-0032 to the Office of the President prior to
seeking judicial relief. In other words, it is the decision of the Office of the
President,20 and not that of the HLURB Board, which the Court of Appeals may
review.
We find petitioners contentions bereft of merit. The principle of non-exhaustion of
administrative remedies is, under the factual circumstances of this case, inapplicable.
While this Court has held that before a party is allowed to seek intervention of the
courts, it is a pre condition that he avail himself of all administrative processes
afforded him,21 nonetheless, said rule is not without exceptions.22 The doctrine is a
relative one and is flexible depending on the peculiarity and uniqueness of the factual
and circumstantial settings of each case.23
In the instant case, the questions posed are purely legal, namely: (1) whether the
respondent had any right to demand an open space and the petitioner had any legal
obligation to provide said open space within Santos Subdivision under P.D. No. 957,
as amended by P.D. No. 1216, and (2) whether the action had already prescribed
under Article 1145 of the Civil Code. Moreover, the Court of Appeals found that SSHA
had sought relief from the Office of the President, but the latter forwarded the case to
the HLURB. In view of the foregoing, we find that in this particular case, there was no
need for SSHA to exhaust all administrative remedies before seeking judicial relief.
On the second issue, the petitioner claims that respondent SSHA failed to present
any evidence showing that it is a legally organized juridical entity, authorized by law to
sue or be sued in its own name. Thus, pursuant to Section 1, Rule 324 of the 1997
Rules of Civil Procedure, it has no legal capacity to file this suit before the HLURB
and the Court of Appeals.
SSHA counters that it has the capacity to sue as an association, since it is a member
of the Federation of Valenzuela Homeowners Association, Inc., which is registered
with the Securities and Exchange Commission. In the alternative, the individual
members of SSHA who signed both the resolution and the complaint in this case
may, as natural persons, pursue the action.
There is merit in petitioners contention. Under Section 1, Rule 3 of the Revised Rules
of Court, only natural or juridical persons, or entities authorized by law may be parties
in a civil action. Article 4425 of the Civil Code enumerates the various classes of
juridical persons. Under said Article, an association is considered a juridical person if
the law grants it a personality separate and distinct from that of its members.26 The
records of the present case are bare of any showing by SSHA that it is an association
duly organized under Philippine law. It was thus an error for the HLURB-NCR Office
to give due course to the complaint in HLURB Case No. REM-070297-9821, given
the SSHAs lack of capacity to sue in its own name. Nor was it proper for said agency
to treat the complaint as a suit by all the parties who signed and verified the
complaint. The members cannot represent their association in any suit without valid
and legal authority. Neither can their signatures confer on the association any legal
capacity to sue. Nor will the fact that SSHA belongs to the Federation of Valenzuela
Homeowners Association, Inc., suffice to endow SSHA with the personality and
capacity to sue. Mere allegations of membership in a federation are insufficient and
inconsequential. The federation itself has a separate juridical personality and was not
impleaded as a party in HLURB Case No. REM-070297-9821 nor in this case. Neither
was it shown that the federation was authorized to represent SSHA. Facts showing
the capacity of a party to sue or be sued or the authority of a party to sue or be sued
in a representative capacity or the legal existence of an organized association of
persons that is made a party, must be averred.27 Hence, for failing to show that it is a
juridical entity, endowed by law with capacity to bring suits in its own name, SSHA is
devoid of any legal capacity, whatsoever, to institute any action.
Anent the third issue, the petitioner ascribes error to the appellate court for holding
that P.D. No. 957 has retroactive application. She points out that there is no
retroactivity provision in the said decree. Hence, it cannot be applied retroactively
pursuant to Article 428 of the Civil Code of the Philippines. The same holds true for
P.D. No. 1216, which amended Section 31 of P.D. No. 957 and imposed the open
space requirement in subdivisions. Petitioner stresses that P.D. No. 1216 only took
effect on October 14, 1977 or more than ten (10) years after the approval of the
subdivision plans of Cecilio Santos.
Although it may seem that this particular issue, given our ruling on the first issue
regarding the lack of capacity of SSHA to bring any action in its name, is now moot
and academic, we are constrained to still address it.
This petition was brought to us not by respondent SSHA but by Gloria Santos Dueas
who assails the appellate courts finding that our ruling in Eugenio v. Exec. Sec.
Drilon29 allows P.D. No. 957, as amended, to apply retroactively.
We find merit in petitioners contention.
Eugenio v. Exec. Sec. Drilon is inapplicable. It is not on all fours with the instant case.
The issue in Eugenio was the applicability of P.D. No. 957 to purchase agreements
on lots entered into prior to its enactment where there was non-payment of
amortizations, and failure to develop the subdivision. We held therein that although
P.D. No. 957 does not provide for any retroactive application, nonetheless, the intent
of the law of protecting the helpless citizens from the manipulations and machinations
of unscrupulous subdivision and condominium sellers justify its retroactive application
to contracts entered into prior to its enactment. Hence, we ruled that the non-payment
of amortizations was justified under Section 23 of the said decree in view of the failure
of the subdivision owner to develop the subdivision project.

Unlike Eugenio, non-development of the subdivision is not present in this case, nor
any allegation of non-payment of amortizations. Further, we have held in a
subsequent case30 that P.D. No. 957, as amended, cannot be applied retroactively in
view of the absence of any express provision on its retroactive application. Thus:

Article 4 of the Civil Code provides that laws shall have no retroactive
effect, unless the contrary is provided. Thus, it is necessary that an express
provision for its retroactive application must be made in the law. There being
no such provision in both P.D. Nos. 957 and 1344, these decrees cannot be
applied to a situation that occurred years before their promulgation.

At any rate, our principal concern in this case is Section 31 of P.D. No. 957,
an amendment introduced by P.D. No. 1216. Properly, the question should
focus on the retroactivity of P.D. No. 1216 and not P.D. No. 957 per se.

We have examined the text of P.D. No. 1216 and nowhere do we find any clause or
provision expressly providing for its retroactive application. Basic is the rule that no
statute, decree, ordinance, rule or regulation shall be given retrospective effect unless
explicitly stated.31 Hence, there is no legal basis to hold that P.D. No. 1216 should
apply retroactively.

WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of

the Court of Appeals in CA-G.R. SP No. 51601 are REVERSED and SET ASIDE.
The Decision of the HLURB dated January 20, 1999 sustaining that of its Regional
Office is AFFIRMED and REINSTATED. No pronouncement as to costs.

SO ORDERED.

Puno, Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
 THIRD DIVISION
G.R. No. 158298 August 11, 2010
ISIDRO ABLAZA, Petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION
BERSAMIN, J.:
Whether a person may bring an action for the declaration of the absolute nullity of the
marriage of his deceased brother solemnized under the regime of the old Civil Code
is the legal issue to be determined in this appeal brought by the petitioner whose
action for that purpose has been dismissed by the lower courts on the ground that he,
not being a party in the assailed marriage, had no right to bring the action.
Antecedents
On October 17, 2000, the petitioner filed in the Regional Trial Court (RTC) in
Cataingan, Masbate a petition for the declaration of the absolute nullity of the
marriage contracted on December 26, 1949 between his late brother Cresenciano
Ablaza and Leonila Honato.1 The case was docketed as Special Case No. 117
entitled In Re: Petition for Nullification of Marriage Contract between Cresenciano
Ablaza and Leonila Honato; Isidro Ablaza, petitioner.
The petitioner alleged that the marriage between Cresenciano and Leonila had been
celebrated without a marriage license, due to such license being issued only on
January 9, 1950, thereby rendering the marriage void ab initio for having been
solemnized without a marriage license. He insisted that his being the surviving
brother of Cresenciano who had died without any issue entitled him to one-half of the
real properties acquired by Cresenciano before his death, thereby making him a real
party in interest; and that any person, himself included, could impugn the validity of
the marriage between Cresenciano and Leonila at any time, even after the death of
Cresenciano, due to the marriage being void ab initio.2
Ruling of the RTC
On October 18, 2000, 3 the RTC dismissed the petition, stating:
Considering the petition for annulment of marriage filed, the Court hereby resolved to
DISMISS the petition for the following reasons: 1) petition is filed out of time (action
had long prescribed) and 2) petitioner is not a party to the marriage (contracted
between Cresenciano Ablaza and Leonila Nonato on December 26, 1949 and
solemnized by Rev. Fr. Eusebio B. Calolot).
SO ORDERED.
The petitioner seasonably filed a motion for reconsideration, but the RTC denied the
motion for reconsideration on November 14, 2000.
Ruling of the Court of Appeals
The petitioner appealed to the Court of Appeals (CA), assigning the lone error that:
The trial court erred in dismissing the petition for being filed out of time and that the
petitioner is not a party to the marriage.
In its decision dated January 30, 2003,4 however, the CA affirmed the dismissal order
of the RTC, thus:
While an action to declare the nullity of a marriage considered void from the
beginning does not prescribe, the law nonetheless requires that the same action must
be filed by the proper party, which in this case should be filed by any of the parties to
the marriage. In the instant case, the petition was filed by Isidro Ablaza, a brother of
the deceased-spouse, who is not a party to the marriage contracted by Cresenciano
Ablaza and Leonila Honato. The contention of petitioner-appellant that he is
considered a real party in interest under Section 2, Rule 3 of the 1997 Rules of Civil
Procedure, as he stands to be benefited or injured by the judgment in the suit, is
simply misplaced. Actions for annulment of marriage will not prosper if persons other
than those specified in the law file the case.
Certainly, a surviving brother of the deceased spouse is not the proper party to file the
subject petition. More so that the surviving wife, who stands to be prejudiced, was not
even impleaded as a party to said case.
WHEREFORE, finding no reversible error therefrom, the Orders now on appeal are
hereby AFFIRMED. Costs against the petitioner-appellant.
SO ORDERED.5
Hence, this appeal.
Issues
The petitioner raises the following issues:
I.
WHETHER OR NOT THE DECISION OF THIS HONORABLE COURT OF
APPEALS IN CA-G.R. CV. NO. 69684 AFFIRMING THE ORDER OF
DISMISSAL OF THE REGIONAL TRIAL COURT, BRANCH 49 AT
 CATAINGAN, MASBATE IN SPECIAL PROCEEDING NO. 117 IS IN
ACCORDANCE WITH APPLICABLE LAWS AND JURISPRUDENCE;
II.
WHETHER OR NOT THE DECISION OF THE HONORABLE COURT OF
APPEALS IN CA-G.R. CV NO. 69684 (SHOULD) BE REVERSED BASED
ON EXECUTIVE ORDER NO. 209 AND EXISTING JURISPRUDENCE.
The issues, rephrased, boil down to whether the petitioner is a real party in interest in
the action to seek the declaration of nullity of the marriage of his deceased brother.
Ruling
The petition is meritorious.
A valid marriage is essential in order to create the relation of husband and wife and to
give rise to the mutual rights, duties, and liabilities arising out of such relation. The
law prescribes the requisites of a valid marriage. Hence, the validity of a marriage is
tested according to the law in force at the time the marriage is contracted.6 As a
general rule, the nature of the marriage already celebrated cannot be changed by a
subsequent amendment of the governing law.7 To illustrate, a marriage between a
stepbrother and a stepsister was void under the Civil Code, but is not anymore
prohibited under the Family Code; yet, the intervening effectivity of the Family Code
does not affect the void nature of a marriage between a stepbrother and a stepsister
solemnized under the regime of the Civil Code. The Civil Code marriage remains
void, considering that the validity of a marriage is governed by the law in force at the
time of the marriage ceremony.8
Before anything more, the Court has to clarify the impact to the issue posed herein of
Administrative Matter (A.M.) No. 02-11-10-SC (Rule on Declaration of Absolute Nullity
of Void Marriages and Annulment of Voidable Marriages), which took effect on March
15, 2003.
Section 2, paragraph (a), of A.M. No. 02-11-10-SC explicitly provides the limitation
that a petition for declaration of absolute nullity of void marriage may be filed solely by
the husband or wife. Such limitation demarcates a line to distinguish between
marriages covered by the Family Code and those solemnized under the regime of the
Civil Code.9 Specifically, A.M. No. 02-11-10-SC extends only to marriages covered by
the Family Code, which took effect on August 3, 1988, but, being a procedural rule
that is prospective in application, is confined only to proceedings commenced after
March 15, 2003.10
Based on Carlos v. Sandoval,11the following actions for declaration of absolute nullity
of a marriage are excepted from the limitation, to wit:
1. Those commenced before March 15, 2003, the effectivity date of A.M. No.
02-11-10-SC; and
2. Those filed vis--vis marriages celebrated during the effectivity of the Civil
Code and, those celebrated under the regime of the Family Code prior to
March 15, 2003.
Considering that the marriage between Cresenciano and Leonila was contracted on
December 26, 1949, the applicable law was the old Civil Code, the law in effect at the
time of the celebration of the marriage. Hence, the rule on the exclusivity of the
parties to the marriage as having the right to initiate the action for declaration of nullity
of the marriage under A.M. No. 02-11-10-SC had absolutely no application to the
petitioner.
The old and new Civil Codes contain no provision on who can file a petition to declare
the nullity of a marriage, and when. Accordingly, in Nial v. Bayadog,12 the children
were allowed to file after the death of their father a petition for the declaration of the
nullity of their fathers marriage to their stepmother contracted on December 11, 1986
due to lack of a marriage license. There, the Court distinguished between a void
marriage and a voidable one, and explained how and when each might be impugned,
thuswise:
Jurisprudence under the Civil Code states that no judicial decree is necessary in
order to establish the nullity of a marriage. "A void marriage does not require a judicial
decree to restore the parties to their original rights or to make the marriage void but
though no sentence of avoidance be absolutely necessary, yet as well for the sake of
good order of society as for the peace of mind of all concerned, it is expedient that the
nullity of the marriage should be ascertained and declared by the decree of a court of
competent jurisdiction." "Under ordinary circumstances, the effect of a void marriage,
so far as concerns the conferring of legal rights upon the parties, is as though no
marriage had ever taken place. And therefore, being good for no legal purpose, its
invalidity can be maintained in any proceeding in which the fact of marriage may be
material, either direct or collateral, in any civil court between any parties at any time,
whether before or after the death of either or both the husband and the wife, and
upon mere proof of the facts rendering such marriage void, it will be disregarded or
treated as non-existent by the courts." It is not like a voidable marriage which cannot
be collaterally attacked except in direct proceeding instituted during the lifetime of the
parties so that on the death of either, the marriage cannot be impeached, and is
made good ab initio. But Article 40 of the Family Code expressly provides that there
must be a judicial declaration of the nullity of a previous marriage, though void, before
a party can enter into a second marriage and such absolute nullity can be based only
on a final judgment to that effect. For the same reason, the law makes either the
action or defense for the declaration of absolute nullity of marriage imprescriptible.
Corollarily, if the death of either party would extinguish the cause of action or the
ground for defense, then the same cannot be considered imprescriptible.
However, other than for purposes of remarriage, no judicial action is necessary to
declare a marriage an absolute nullity. For other purposes, such as but not limited to
determination of heirship, legitimacy or illegitimacy of a child, settlement of estate,
dissolution of property regime, or a criminal case for that matter, the court may pass
upon the validity of marriage even in a suit not directly instituted to question the same
so long as it is essential to the determination of the case. This is without prejudice to
any issue that may arise in the case. When such need arises, a final judgment of
declaration of nullity is necessary even if the purpose is other than to remarry. The
clause "on the basis of a final judgment declaring such previous marriage void" in
Article 40 of the Family Code connotes that such final judgment need not be obtained
only for purpose of remarriage.13
It is clarified, however, that the absence of a provision in the old and new Civil Codes
cannot be construed as giving a license to just any person to bring an action to
declare the absolute nullity of a marriage. According toCarlos v. Sandoval,14 the
plaintiff must still be the party who stands to be benefited by the suit, or the party
entitled to the avails of the suit, for it is basic in procedural law that every action must
be prosecuted and defended in the name of the real party in interest. 15 Thus, only the
party who can demonstrate a "proper interest" can file the action. 16 Interest within the
meaning of the rule means material interest, or an interest in issue to be affected by
the decree or judgment of the case, as distinguished from mere curiosity about the
question involved or a mere incidental interest. One having no material interest to
protect cannot invoke the jurisdiction of the court as plaintiff in an action. When the
plaintiff is not the real party in interest, the case is dismissible on the ground of lack of
cause of action.17
Here, the petitioner alleged himself to be the late Cresencianos brother and surviving
heir. Assuming that the petitioner was as he claimed himself to be, then he has a
material interest in the estate of Cresenciano that will be adversely affected by any
judgment in the suit. Indeed, a brother like the petitioner, albeit not a compulsory heir
under the laws of succession, has the right to succeed to the estate of a deceased
brother under the conditions stated in Article 1001 and Article 1003 of the Civil Code,
as follows:
Article 1001. Should brothers and sisters or their children survive with the widow or
widower, the latter shall be entitled to one half of the inheritance and the brothers and
sisters or their children to the other half.
Article 1003. If there are no descendants, ascendants, illegitimate children, or a
surviving spouse, the collateral relatives shall succeed to the entire estate of the
deceased in accordance with the following articles.
Pursuant to these provisions, the presence of descendants, ascendants, or
illegitimate children of the deceased excludes collateral relatives like the petitioner
from succeeding to the deceaseds estate.18 Necessarily, therefore, the right of the
petitioner to bring the action hinges upon a prior determination of whether
Cresenciano had any descendants, ascendants, or children (legitimate or illegitimate),
and of whether the petitioner was the late Cresencianos surviving heir. Such prior
determination must be made by the trial court, for the inquiry thereon involves
questions of fact.
As can be seen, both the RTC and the CA erroneously resolved the issue presented
in this case. We reverse their error, in order that the substantial right of the petitioner,
if any, may not be prejudiced.
Nevertheless, we note that the petitioner did not implead Leonila, who, as the late
Cresencianos surviving wife,19stood to be benefited or prejudiced by the nullification
of her own marriage. It is relevant to observe, moreover, that not all marriages
celebrated under the old Civil Code required
a marriage license for their validity;20 hence, her participation in this action is made all
the more necessary in order to shed light on whether the marriage had been
celebrated without a marriage license and whether the marriage might have been a
marriage excepted from the requirement of a marriage license. She was truly an
indispensable party who must be joined herein:
xxx under any and all conditions, [her] presence being a sine qua non for the exercise
of judicial power.1avvphi1 It is precisely "when an indispensable party is not before
the court [that] the action should be dismissed." The absence of an indispensable
party renders all subsequent actions of the court null and void for want of authority to
act, not only as to the absent parties but even as to those present.21
We take note, too, that the petitioner and Leonila were parties in C.A.-G.R. CV No.
91025 entitled Heirs of Cresenciano Ablaza, namely: Leonila G. Ablaza and Leila
Ablaza Jasul v. Spouses Isidro and Casilda Ablaza, an action to determine who
between the parties were the legal owners of the property involved therein.
Apparently, C.A.-G.R. CV No. 91025 was decided on November 26, 2009, and the
petitioners motion for reconsideration was denied on June 23, 2010. As a defendant
in that action, the petitioner is reasonably presumed to have knowledge that the
therein plaintiffs, Leonila and Leila, were the wife and daughter, respectively, of the
late Cresenciano. As such, Leila was another indispensable party whose substantial
right any judgment in this action will definitely affect. The petitioner should likewise
implead Leila.
The omission to implead Leonila and Leila was not immediately fatal to the present
action, however, considering that Section 11,22 Rule 3, Rules of Court, states that
neither misjoinder nor non-joinder of parties is a ground for the dismissal of an action.
The petitioner can still amend his initiatory pleading in order to implead her, for under
the same rule, such amendment to implead an indispensable party may be made "on
motion of any party or on (the trial courts) own initiative at any stage of the action and
on such terms as are just."
WHEREFORE, the petition for review on certiorari is granted.
We reverse and set aside the decision dated January 30, 2003 rendered by the Court
of Appeals.
Special Case No. 117 entitled In Re: Petition for Nullification of Marriage Contract
between Cresenciano Ablaza and Leonila Honato; Isidro Ablaza, petitioner, is
reinstated, and its records are returned to the Regional Trial Court, Branch 49, in
Cataingan, Masbate, for further proceedings, with instructions to first require the
petitioner to amend his initiatory pleading in order to implead Leonila Honato and her
daughter Leila Ablaza Jasul as parties-defendants; then to determine whether the late
Cresenciano Ablaza had any ascendants, descendants, or children (legitimate or
illegitimate) at the time of his death as well as whether the petitioner was the brother
and surviving heir of the late Cresenciano Ablaza entitled to succeed to the estate of
said deceased; and thereafter to proceed accordingly.

No costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 163707 September 15, 2006
MICHAEL C. GUY, petitioner,
vs.
HON. COURT OF APPEALS, HON. SIXTO MARELLA, JR., Presiding Judge, RTC,
Branch 138, Makati City and minors, KAREN DANES WEI and KAMILLE DANES
WEI, represented by their mother, REMEDIOS OANES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the January 22, 2004 Decision 1 of the
Court of Appeals in CA-G.R. SP No. 79742, which affirmed the Orders dated July 21,
20002 and July 17, 20033 of the Regional Trial Court of Makati City, Branch 138 in SP
Proc. Case No. 4549 denying petitioner's motion to dismiss; and its May 25, 2004
Resolution4 denying petitioner's motion for reconsideration.
The facts are as follows:
On June 13, 1997, private respondent-minors Karen Oanes Wei and Kamille Oanes
Wei, represented by their mother Remedios Oanes (Remedios), filed a petition for
letters of administration5 before the Regional Trial Court of Makati City, Branch 138.
The case was docketed as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima
Wei (a.k.a. Rufino Guy Susim).
Private respondents alleged that they are the duly acknowledged illegitimate children
of Sima Wei, who died intestate in Makati City on October 29, 1992, leaving an estate
valued at P10,000,000.00 consisting of real and personal properties. His known heirs
are his surviving spouse Shirley Guy and children, Emy, Jeanne, Cristina, George
and Michael, all surnamed Guy. Private respondents prayed for the appointment of a
regular administrator for the orderly settlement of Sima Wei's estate. They likewise
prayed that, in the meantime, petitioner Michael C. Guy, son of the decedent, be
appointed as Special Administrator of the estate. Attached to private respondents'
petition was a Certification Against Forum Shopping6 signed by their counsel, Atty.
Sedfrey A. Ordoez.
In his Comment/Opposition,7 petitioner prayed for the dismissal of the petition. He
asserted that his deceased father left no debts and that his estate can be settled
without securing letters of administration pursuant to Section 1, Rule 74 of the Rules
of Court. He further argued that private respondents should have established their
status as illegitimate children during the lifetime of Sima Wei pursuant to Article 175
of the Family Code.
The other heirs of Sima Wei filed a Joint Motion to Dismiss 8 on the ground that the
certification against forum shopping should have been signed by private respondents
and not their counsel. They contended that Remedios should have executed the
certification on behalf of her minor daughters as mandated by Section 5, Rule 7 of the
Rules of Court.
In a Manifestation/Motion as Supplement to the Joint Motion to Dismiss, 9 petitioner
and his co-heirs alleged that private respondents' claim had been paid, waived,
abandoned or otherwise extinguished by reason of Remedios' June 7, 1993 Release
and Waiver of Claim stating that in exchange for the financial and educational
assistance received from petitioner, Remedios and her minor children discharge the
estate of Sima Wei from any and all liabilities.
The Regional Trial Court denied the Joint Motion to Dismiss as well as the
Supplemental Motion to Dismiss. It ruled that while the Release and Waiver of Claim
was signed by Remedios, it had not been established that she was the duly
constituted guardian of her minor daughters. Thus, no renunciation of right occurred.
Applying a liberal application of the rules, the trial court also rejected petitioner's
objections on the certification against forum shopping.
Petitioner moved for reconsideration but was denied. He filed a petition for certiorari
before the Court of Appeals which affirmed the orders of the Regional Trial Court in
its assailed Decision dated January 22, 2004, the dispositive portion of which states:
WHEREFORE, premises considered, the present petition is hereby DENIED
DUE COURSE and accordingly DISMISSED, for lack of merit.
Consequently, the assailed Orders dated July 21, 2000 and July 17, 2003
are hereby both AFFIRMED. Respondent Judge is hereby DIRECTED to
resolve the controversy over the illegitimate filiation of the private
respondents (sic) minors [-] Karen Oanes Wei and Kamille Oanes Wei who
are claiming successional rights in the intestate estate of the deceased Sima
Wei, a.k.a. Rufino Guy Susim.
SO ORDERED.10
The Court of Appeals denied petitioner's motion for reconsideration, hence, this
petition.
Petitioner argues that the Court of Appeals disregarded existing rules on certification
against forum shopping; that the Release and Waiver of Claim executed by Remedios
released and discharged the Guy family and the estate of Sima Wei from any claims
or liabilities; and that private respondents do not have the legal personality to institute
the petition for letters of administration as they failed to prove their filiation during the
lifetime of Sima Wei in accordance with Article 175 of the Family Code.
Private respondents contend that their counsel's certification can be considered
substantial compliance with the rules on certification of non-forum shopping, and that
the petition raises no new issues to warrant the reversal of the decisions of the
Regional Trial Court and the Court of Appeals.
The issues for resolution are: 1) whether private respondents' petition should be
dismissed for failure to comply with the rules on certification of non-forum shopping;
2) whether the Release and Waiver of Claim precludes private respondents from
claiming their successional rights; and 3) whether private respondents are barred by
prescription from proving their filiation.
The petition lacks merit.
Rule 7, Section 5 of the Rules of Court provides that the certification of non-forum
shopping should be executed by the plaintiff or the principal party. Failure to comply
with the requirement shall be cause for dismissal of the case. However, a liberal
application of the rules is proper where the higher interest of justice would be served.
InSy Chin v. Court of Appeals,11 we ruled that while a petition may have been flawed
where the certificate of non-forum shopping was signed only by counsel and not by
the party, this procedural lapse may be overlooked in the interest of substantial
justice.12 So it is in the present controversy where the merits 13 of the case and the
absence of an intention to violate the rules with impunity should be considered as
compelling reasons to temper the strict application of the rules.
As regards Remedios' Release and Waiver of Claim, the same does not bar private
respondents from claiming successional rights. To be valid and effective, a waiver
must be couched in clear and unequivocal terms which leave no doubt as to the
intention of a party to give up a right or benefit which legally pertains to him. A waiver
may not be attributed to a person when its terms do not explicitly and clearly evince
an intent to abandon a right.14
In this case, we find that there was no waiver of hereditary rights. The Release and
Waiver of Claim does not state with clarity the purpose of its execution. It merely
states that Remedios received P300,000.00 and an educational plan for her minor
daughters "by way of financial assistance and in full settlement of any and all claims
of whatsoever nature and kind x x x against the estate of the late Rufino Guy
Susim."15 Considering that the document did not specifically mention private
respondents' hereditary share in the estate of Sima Wei, it cannot be construed as a
waiver of successional rights.
Moreover, even assuming that Remedios truly waived the hereditary rights of private
respondents, such waiver will not bar the latter's claim. Article 1044 of the Civil Code,
provides:
ART. 1044. Any person having the free disposal of his property may accept
or repudiate an inheritance.
Any inheritance left to minors or incapacitated persons may be
accepted by their parents or guardians. Parents or guardians may
repudiate the inheritance left to their wards only by judicial
authorization.
The right to accept an inheritance left to the poor shall belong to the persons
designated by the testator to determine the beneficiaries and distribute the
property, or in their default, to those mentioned in Article 1030. (Emphasis
supplied)
Parents and guardians may not therefore repudiate the inheritance of their wards
without judicial approval. This is because repudiation amounts to an alienation of
property16 which must pass the court's scrutiny in order to protect the interest of the
ward. Not having been judicially authorized, the Release and Waiver of Claim in the
instant case is void and will not bar private respondents from asserting their rights as
heirs of the deceased.
Furthermore, it must be emphasized that waiver is the intentional relinquishment of a
known right. Where one lacks knowledge of a right, there is no basis upon which
waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot
be established by a consent given under a mistake or misapprehension of fact. 17
In the present case, private respondents could not have possibly waived their
successional rights because they are yet to prove their status as acknowledged
illegitimate children of the deceased. Petitioner himself has consistently denied that
private respondents are his co-heirs. It would thus be inconsistent to rule that they
waived their hereditary rights when petitioner claims that they do not have such right.
Hence, petitioner's invocation of waiver on the part of private respondents must fail.
Anent the issue on private respondents' filiation, we agree with the Court of Appeals
that a ruling on the same would be premature considering that private respondents
have yet to present evidence. Before the Family Code took effect, the governing law
on actions for recognition of illegitimate children was Article 285 of the Civil Code, to
wit:
ART. 285. The action for the recognition of natural children may be brought only
during the lifetime of the presumed parents, except in the following cases:
(1) If the father or mother died during the minority of the child, in which case
the latter may file the action before the expiration of four years from the
attainment of his majority;
(2) If after the death of the father or of the mother a document should appear of
which nothing had been heard and in which either or both parents recognize the
child.
In this case, the action must be commenced within four years from the finding of
the document. (Emphasis supplied)
We ruled in Bernabe v. Alejo18 that illegitimate children who were still minors at the
time the Family Code took effect and whose putative parent died during their minority
are given the right to seek recognition for a period of up to four years from attaining
majority age. This vested right was not impaired or taken away by the passage of the
Family Code.19
On the other hand, Articles 172, 173 and 175 of the Family Code, which superseded
Article 285 of the Civil Code, provide:
ART. 172. The filiation of legitimate children is established by any of the following:
(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten
instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be proved by:
(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.
ART. 173. The action to claim legitimacy may be brought by the child during his or
her lifetime and shall be transmitted to the heirs should the child die during minority
or in a state of insanity. In these cases, the heirs shall have a period of five years
within which to institute the action.
The action already commenced by the child shall survive notwithstanding the death
of either or both of the parties.
ART. 175. Illegitimate children may establish their illegitimate filiation in the same
way and on the same, evidence as legitimate children.
The action must be brought within the same period specified in Article 173, except
when the action is based on the second paragraph of Article 172, in which case the
action may be brought during the lifetime of the alleged parent.
Under the Family Code, when filiation of an illegitimate child is established by a
record of birth appearing in the civil register or a final judgment, or an admission of
filiation in a public document or a private handwritten instrument signed by the parent
concerned, the action for recognition may be brought by the child during his or her
lifetime. However, if the action is based upon open and continuous possession of the
status of an illegitimate child, or any other means allowed by the rules or special laws,
it may only be brought during the lifetime of the alleged parent.
It is clear therefore that the resolution of the issue of prescription depends on the type
of evidence to be adduced by private respondents in proving their filiation. However, it
would be impossible to determine the same in this case as there has been no
reception of evidence yet. This Court is not a trier of facts. Such matters may be
resolved only by the Regional Trial Court after a full-blown trial.
While the original action filed by private respondents was a petition for letters of
administration, the trial court is not precluded from receiving evidence on private
respondents' filiation. Its jurisdiction extends to matters incidental and collateral to the
exercise of its recognized powers in handling the settlement of the estate, including
the determination of the status of each heir.20 That the two causes of action, one to
compel recognition and the other to claim inheritance, may be joined in one complaint
is not new in our jurisprudence.21 As held in Briz v. Briz:22
The question whether a person in the position of the present plaintiff can in any
event maintain a complex action to compel recognition as a natural child and at the
same time to obtain ulterior relief in the character of heir, is one which in the
opinion of this court must be answered in the affirmative, provided always that the
conditions justifying the joinder of the two distinct causes of action are present in
the particular case. In other words, there is no absolute necessity requiring that the
action to compel acknowledgment should have been instituted and prosecuted to a
successful conclusion prior to the action in which that same plaintiff seeks
additional relief in the character of heir. Certainly, there is nothing so peculiar to the
action to compel acknowledgment as to require that a rule should be here applied
different from that generally applicable in other cases. x x x
The conclusion above stated, though not heretofore explicitly formulated by this
court, is undoubtedly to some extent supported by our prior decisions. Thus, we
have held in numerous cases, and the doctrine must be considered well settled,
that a natural child having a right to compel acknowledgment, but who has not been
in fact acknowledged, may maintain partition proceedings for the division of the
inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5; Tiamson vs.
Tiamson, 32 Phil., 62); and the same person may intervene in proceedings for the
distribution of the estate of his deceased natural father, or mother (Capistrano vs.
Fabella, 8 Phil., 135; Conde vs. Abaya, 13 Phil., 249; Ramirez vs. Gmur, 42 Phil.,
855). In neither of these situations has it been thought necessary for the plaintiff to
show a prior decree compelling acknowledgment. The obvious reason is that in
partition suits and distribution proceedings the other persons who might take by
inheritance are before the court; and the declaration of heirship is appropriate to
such proceedings.
WHEREFORE, the instant petition is DENIED. The Decision dated January 22, 2004
of the Court of Appeals in CA-G.R. SP No. 79742 affirming the denial of petitioner's
motion to dismiss; and its Resolution dated May 25, 2004 denying petitioner's motion
for reconsideration, are AFFIRMED. Let the records be REMANDED to the Regional
Trial Court of Makati City, Branch 138 for further proceedings.
SO ORDERED.
Panganiban, C.J., Chairperson, Austria-Martinez, Callejo, Sr., Chico-Nazario,
J.J., concur.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 140500 January 21, 2002
ERNESTINA BERNABE, petitioner,
vs.
CAROLINA ALEJO as guardian ad litem for the minor ADRIAN
BERNABE, respondent.
DECISION
PANGANIBAN, J.:
The right to seek recognition granted by the Civil Code to illegitimate children who
were still minors at the time the Family Code took effect cannot be impaired or taken
away. The minors have up to four years from attaining majority age within which to file
an action for recognition.
Statement of the Case
Before us is a Petition1 for Review on Certiorari under Rule 45 of the Rules of Court,
praying for (1) the nullification of the July 7, 1999 Court of Appeals 2 (CA) Decision3 in
CA-GR CV No. 51919 and the October 14, 1999 CA Resolution 4 denying petitioners
Motion for Reconsideration, as well as (2) the reinstatement of the two Orders issued
by the Regional Trial Court (RTC) of Pasay City (Branch 109) concerning the same
case. The dispositive portion of the assailed Decision reads as follows:
"WHEREFORE, premises considered, the order of the lower court dismissing Civil
Case No. 94-0562 is REVERSED and SET ASIDE. Let the records of this case be
remanded to the lower court for trial on the merits."5
The Facts
The undisputed facts are summarized by the Court of Appeals in this wise:
"The late Fiscal Ernesto A. Bernabe allegedly fathered a son with his secretary of
twenty-three (23) years, herein plaintiff-appellant Carolina Alejo. The son was born on
September 18, 1981 and was named Adrian Bernabe. Fiscal Bernabe died on August
13, 1993, while his wife Rosalina died on December 3 of the same year, leaving
Ernestina as the sole surviving heir.
"On May 16, 1994, Carolina, in behalf of Adrian, filed the aforesaid complaint praying
that Adrian be declared an acknowledged illegitimate son of Fiscal Bernabe and as
such he (Adrian) be given his share in Fiscal Bernabes estate, which is now being
held by Ernestina as the sole surviving heir.
"On July 16, 1995, the Regional Trial Court dismissed the complaint, ruling that under
the provisions of the Family Code as well as the case of Uyguangco vs. Court of
Appeals, the complaint is now barred x x x."6
Orders of the Trial Court
In an Order dated July 26, 1995, the trial court granted Ernestina Bernabes Motion
for Reconsideration of the trial courts Decision and ordered the dismissal of the
Complaint for recognition. Citing Article 175 of the Family Code, the RTC held that the
death of the putative father had barred the action.
In its Order dated October 6, 1995, the trial court added that since the putative father
had not acknowledged or recognized Adrian Bernabe in writing, the action for
recognition should have been filed during the lifetime of the alleged father to give him
the opportunity to either affirm or deny the childs filiation.
Ruling of the Court of Appeals
On the other hand, the Court of Appeals ruled that in the interest of justice, Adrian
should be allowed to prove that he was the illegitimate son of Fiscal Bernabe.
Because the boy was born in 1981, his rights are governed by Article 285 of the Civil
Code, which allows an action for recognition to be filed within four years after the child
has attained the age of majority. The subsequent enactment of the Family Code did
not take away that right.
Hence, this appeal.7
Issues
In her Memorandum,8 petitioner raises the following issues for our consideration:
I
"Whether or not respondent has a cause of action to file a case against petitioner, the
legitimate daughter of the putative father, for recognition and partition with accounting
after the putative fathers death in the absence of any written acknowledgment of
paternity by the latter.
II
"Whether or not the Honorable Court of Appeals erred in ruling that respondents had
four years from the attainment of minority to file an action for recognition as provided
in Art. 285 of the Civil Code, in complete disregard of its repeal by the [express]
provisions of the Family Code and the applicable jurisprudence as held by the
Honorable Court of Appeals.
III
"Whether or not the petition for certiorari filed by the petition[er] is fatally defective for
failure to implead the Court of Appeals as one of the respondents."9
The Courts Ruling
The Petition has no merit.
First and Second Issues: Period to File Action for Recognition
Because the first and the second issues are interrelated, we shall discuss them
jointly.
Petitioner contends that respondent is barred from filing an action for recognition,
because Article 285 of the Civil Code has been supplanted by the provisions of the
Family Code. She argues that the latter Code should be given retroactive effect, since
no vested right would be impaired. We do not agree.
Article 285 of the Civil Code provides the period for filing an action for recognition as
follows:
"ART. 285. The action for the recognition of natural children may be brought only
during the lifetime of the presumed parents, except in the following cases:
(1) If the father or mother died during the minority of the child, in which case
the latter may file the action before the expiration of four years from the
attainment of his majority;
(2) If after the death of the father or of the mother a document should appear
of which nothing had been heard and in which either or both parents
recognize the child.
"In this case, the action must be commenced within four years from the finding of the
document."
The two exceptions provided under the foregoing provision, have however been
omitted by Articles 172, 173 and 175 of the Family Code, which we quote:
"ART. 172. The filiation of legitimate children is established by any of the following:
(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned.
"In the absence of the foregoing evidence, the legitimate filiation shall be proved by:
(1) The open and continuous possession of the status of a legitimate child;
or
(2) Any other means allowed by the Rules of Court and special laws."
"ART. 173. The action to claim legitimacy may be brought by the child during his or
her lifetime and shall be transmitted to the heirs should the child die during minority or
in a state of insanity. In these cases, the heirs shall have a period of five years within
which to institute the action.
"The action already commenced by the child shall survive notwithstanding the death
of either or both of the parties."
"ART. 175. Illegitimate children may establish their illegitimate filiation in the same
way and on the same, evidence as legitimate children.
"The action must be brought within the same period specified in Article 173, except
when the action is based on the second paragraph of Article 172, in which case the
action may be brought during the lifetime of the alleged parent."
Under the new law, an action for the recognition of an illegitimate child must be
brought within the lifetime of the alleged parent. The Family Code makes no
distinction on whether the former was still a minor when the latter died. Thus, the
putative parent is given by the new Code a chance to dispute the claim, considering
that "illegitimate children are usually begotten and raised in secrecy and without the
legitimate family being aware of their existence. x x x The putative parent should thus
be given the opportunity to affirm or deny the childs filiation, and this, he or she
cannot do if he or she is already dead."10
Nonetheless, the Family Code provides the caveat that rights that have already
vested prior to its enactment should not be prejudiced or impaired as follows:
"ART. 255. This Code shall have retroactive effect insofar as it does not prejudice or
impair vested or acquired rights in accordance with the Civil Code or other laws."
The crucial issue to be resolved therefore is whether Adrians right to an action for
recognition, which was granted by Article 285 of the Civil Code, had already vested
prior to the enactment of the Family Code. Our answer is affirmative.
A vested right is defined as "one which is absolute, complete and unconditional, to the
exercise of which no obstacle exists, and which is immediate and perfect in itself and
not dependent upon a contingency x x x."11Respondent however contends that the
filing of an action for recognition is procedural in nature and that "as a general rule, no
vested right may attach to [or] arise from procedural laws."12
Bustos v. Lucero13 distinguished substantive from procedural law in these words:
"x x x. Substantive law creates substantive rights and the two terms in this respect
may be said to be synonymous. Substantive rights is a term which includes those
rights which one enjoys under the legal system prior to the disturbance of normal
relations. Substantive law is that part of the law which creates, defines and regulates
rights, or which regulates the rights and duties which give rise to a cause of action;
that part of the law which courts are established to administer; as opposed to
adjective or remedial law, which prescribes the method of enforcing rights or obtains
redress for their invasion."14 (Citations omitted)
Recently, in Fabian v. Desierto,15 the Court laid down the test for determining whether
a rule is procedural or substantive:
"[I]n determining whether a rule prescribed by the Supreme Court, for the practice and
procedure of the lower courts, abridges, enlarges, or modifies any substantive right,
the test is whether the rule really regulates procedure, that is, the judicial process for
enforcing rights and duties recognized by substantive law and for justly administering
remedy and redress for a disregard or infraction of them. If the rule takes away a
vested right, it is not procedural. If the rule creates a right such as the right to appeal,
it may be classified as a substantive matter; but if it operates as a means of
implementing an existing right then the rule deals merely with procedure." 16
Applying the foregoing jurisprudence, we hold that Article 285 of the Civil Code is a
substantive law, as it gives Adrian the right to file his petition for recognition within
four years from attaining majority age. Therefore, the Family Code cannot impair or
take Adrians right to file an action for recognition, because that right had already
vested prior to its enactment.
Uyguangco v. Court of Appeals17 is not applicable to the case at bar, because the
plaintiff therein sought recognition as an illegitimate child when he was no longer a
minor. On the other hand, in Aruego Jr. v. Court of Appeals18 the Court ruled that an
action for recognition filed while the Civil Code was in effect should not be affected by
the subsequent enactment of the Family Code, because the right had already vested.
Not Limited to Natural Children
To be sure, Article 285 of the Civil Code refers to the action for recognition of
"natural" children. Thus, petitioner contends that the provision cannot be availed of by
respondent, because at the time of his conception, his parents were impeded from
marrying each other. In other words, he is not a natural child.
A "natural child" is one whose parents, at the time of conception, were not disqualified
by any legal impediment from marrying each other. Thus, in De Santos v.
Angeles,19 the Court explained:
"A childs parents should not have been disqualified to marry each other at the time of
conception for him to qualify as a natural child."20
A strict and literal interpretation of Article 285 has already been frowned upon by this
Court in the aforesaid case of Aruego, which allowed minors to file a case for
recognition even if their parents were disqualified from marrying each other. There,
the Complaint averred that the late Jose Aruego Sr., a married man, had an
extramarital liason with Luz Fabian. Out of this relationship were born two illegitimate
children who in 1983 filed an action for recognition. The two children were born in
1962 and 1963, while the alleged putative father died in 1982. In short, at the time of
their conception, the two childrens parents were legally disqualified from marrying
each other. The Court allowed the Complaint to prosper, even though it had been
filed almost a year after the death of the presumed father. At the time of his death,
both children were still minors.
Moreover, in the earlier case Divinagracia v. Rovira,21 the Court said that the rules on
voluntary and compulsory acknowledgment of natural children, as well as the
prescriptive period for filing such action, may likewise be applied to spurious children.
Pertinent portions of the case are quoted hereunder:
"The so-called spurious children, or illegitimate children other than natural children,
commonly known as bastards, include those adulterous children or those born out of
wedlock to a married woman cohabiting with a man other than her husband or to a
married man cohabiting with a woman other than his wife. They are entitled to support
and successional rights. But their filiation must be duly proven.
"How should their filiation be proven? Article 289 of the Civil Code allows the
investigation of the paternity or maternity or spurious children under the
circumstances specified in articles 283 and 284 of the Civil Code. The implication is
that the rules on compulsory recognition of natural children are applicable to spurious
children.
"Spurious children should not be in a better position than natural children. The rules
on proof of filiation of natural children or the rules on voluntary and compulsory
acknowledgment for natural children may be applied to spurious children.
"That does not mean that spurious children should be acknowledged, as that term is
used with respect to natural children. What is simply meant is that the grounds or
instances for the acknowledgment of natural children are utilized to establish the
filiation of spurious children.
"A spurious child may prove his filiation by means of a record of birth, a will, a
statement before a court of record, or in any authentic writing. These are the modes
of voluntary recognition of natural children.
"In case there is no evidence on the voluntary recognition of the spurious child, then
his filiation may be established by means of the circumstances or grounds for
compulsory recognition prescribed in the aforementioned articles 283 and 284.
"The prescriptive period for filing the action for compulsory recognition in the case of
natural children, as provided for in article 285 of the Civil Code, applies to spurious
children."22 (Citations omitted, italics supplied)

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

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

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

Third Issue: Failure to Implead the CA

Under Section 4(a) of Rule 45 of the current Rules of Court, it is no longer required to
implead "the lower courts or judges x x x either as petitioners or respondents." Under
Section 3, however, the lower tribunal should still be furnished a copy of the petition.
Hence, the failure of petitioner to implead the Court of Appeals as a party is not a
reversible error; it is in fact the correct procedure.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision and
Resolution AFFIRMED. Costs against petitioner.

SO ORDERED.

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

Vitug, J., no part. Relationship with family.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 127406 November 27, 2000
OFELIA P. TY, petitioner,
vs.
THE COURT OF APPEALS, and EDGARDO M. REYES, respondents.
DECISION
QUISUMBING, J.:
This appeal seeks the reversal of the decision dated July 24, 1996, of the Court of
Appeals in C.A. G.R. CV 37897, which affirmed the decision of the Regional Trial
Court of Pasig, Branch 160, declaring the marriage contract between private
respondent Edgardo M. Reyes and petitioner Ofelia P. Ty null and void ab initio. It
also ordered private respondent to pay P15,000.00 as monthly support for their
children Faye Eloise Reyes and Rachel Anne Reyes.
As shown in the records of the case, private respondent married Anna Maria Regina
Villanueva in a civil ceremony on March 29, 1977, in Manila. Then they had a church
wedding on August 27, 1977. However, on August 4, 1980, the Juvenile and
Domestic Relations Court of Quezon City declared their marriage null and voidab
initio for lack of a valid marriage license. The church wedding on August 27, 1977,
was also declared null andvoid ab initio for lack of consent of the parties.
Even before the decree was issued nullifying his marriage to Anna Maria, private
respondent wed Ofelia P. Ty, herein petitioner, on April 4, 1979, in ceremonies
officiated by the judge of the City Court of Pasay. On April 4, 1982, they also had a
church wedding in Makati, Metro Manila.
On January 3, 1991, private respondent filed a Civil Case 1853-J with the RTC of
Pasig, Branch 160, praying that his marriage to petitioner be declared null and void.
He alleged that they had no marriage license when they got married. He also averred
that at the time he married petitioner, he was still married to Anna Maria. He stated
that at the time he married petitioner the decree of nullity of his marriage to Anna
Maria had not been issued. The decree of nullity of his marriage to Anna Maria was
rendered only on August 4, 1980, while his civil marriage to petitioner took place on
April 4, 1979.
Petitioner, in defending her marriage to private respondent, pointed out that his claim
that their marriage was contracted without a valid license is untrue. She submitted
their Marriage License No. 5739990 issued at Rosario, Cavite on April 3, 1979, as
Exh. 11, 12 and 12-A. He did not question this document when it was submitted in
evidence. Petitioner also submitted the decision of the Juvenile and Domestic
Relations Court of Quezon City dated August 4, 1980, which declared null
and void his civil marriage to Anna Maria Regina Villanueva celebrated on March 29,
1977, and his church marriage to said Anna Maria on August 27, 1977. These
documents were submitted as evidence during trial and, according to petitioner, are
therefore deemed sufficient proof of the facts therein. The fact that the civil marriage
of private respondent and petitioner took place on April 4, 1979, before the judgment
declaring his prior marriage as null and void is undisputed. It also appears
indisputable that private respondent and petitioner had a church wedding ceremony
on April 4, 1982.1
The Pasig RTC sustained private respondents civil suit and declared his marriage to
herein petitioner null andvoid ab initio in its decision dated November 4, 1991. Both
parties appealed to respondent Court of Appeals. On July 24, 1996, the appellate
court affirmed the trial courts decision. It ruled that a judicial declaration of nullity of
the first marriage (to Anna Maria) must first be secured before a subsequent marriage
could be validly contracted. Said the appellate court:
We can accept, without difficulty, the doctrine cited by defendants counsel that no
judicial decree is necessary to establish the invalidity of void marriages. It does not
say, however, that a second marriage may proceed even without a judicial decree.
While it is true that if a marriage is null and void, ab initio, there is in fact no subsisting
marriage, we are unwilling to rule that the matter of whether a marriage is valid or not
is for each married spouse to determine for himself for this would be the
consequence of allowing a spouse to proceed to a second marriage even before a
competent court issues a judicial decree of nullity of his first marriage. The results
would be disquieting, to say the least, and could not have been the intendment of
even the now-repealed provisions of the Civil Code on marriage.
xxx
WHEREFORE, upon the foregoing ratiocination, We modify the appealed Decision in
this wise:
1. The marriage contracted by plaintiff-appellant [herein private respondent]
Eduardo M. Reyes and defendant-appellant [herein petitioner] Ofelia P. Ty is
declared null and void ab initio;
2. Plaintiff-appellant Eduardo M. Reyes is ordered to give monthly support in
the amount of P15,000.00 to his children Faye Eloise Reyes and Rachel
Anne Reyes from November 4, 1991; and
3. Cost against plaintiff-appellant Eduardo M. Reyes.
SO ORDERED.2
Petitioners motion for reconsideration was denied. Hence, this instant petition
asserting that the Court of Appeals erred:
 I.
BOTH IN THE DECISION AND THE RESOLUTION, IN REQUIRING FOR
THE VALIDITY OF PETITIONERS MARRIAGE TO RESPONDENT, A
JUDICIAL DECREE NOT REQUIRED BY LAW.
II
IN THE RESOLUTION, IN APPLYING THE RULING IN DOMINGO VS.
COURT OF APPEALS.
III
IN BOTH THE DECISION AND RESOLUTION IN NOT CONSIDERING THE
CIVIL EFFECTS OF THE RELIGIOUS RATIFICATION WHICH USED THE
SAME MARRIAGE LICENSE.
IV
IN THE DECISION NOT GRANTING MORAL AND EXEMPLARY
DAMAGES TO THE DEFENDANT-APPELLANT.
The principal issue in this case is whether the decree of nullity of the first marriage is
required before a subsequent marriage can be entered into validly? To resolve this
question, we shall go over applicable laws and pertinent cases to shed light on the
assigned errors, particularly the first and the second which we shall discuss jointly.
In sustaining the trial court, the Court of Appeals declared the marriage of petitioner to
private respondent null and void for lack of a prior judicial decree of nullity of the
marriage between private respondent and Villanueva. The appellate court rejected
petitioners claim that People v. Mendoza3 and People v. Aragon4 are applicable in
this case. For these cases held that where a marriage is void from its performance,
no judicial decree is necessary to establish its invalidity. But the appellate court said
these cases, decided before the enactment of the Family Code (E.O. No. 209 as
amended by E.O No. 227), no longer control. A binding decree is now needed and
must be read into the provisions of law previously obtaining.5
In refusing to consider petitioners appeal favorably, the appellate court also said:
Terre v. Attorney Terre, Adm. Case No. 2349, 3 July 1992 is mandatory precedent for
this case. Although decided by the High Court in 1992, the facts situate it within the
regime of the now-repealed provisions of the Civil Code, as in the instant case.
xxx
For purposes of determining whether a person is legally free to contract a second
marriage, a judicial declaration that the first marriage was null and void ab initio is
essential. . . .6
At the outset, we must note that private respondents first and second marriages
contracted in 1977 and 1979, respectively, are governed by the provisions of the Civil
Code. The present case differs significantly from the recent cases of Bobis v.
Bobis7 and Mercado v. Tan,8 both involving a criminal case for bigamy where the
bigamous marriage was contracted during the effectivity of the Family Code, 9 under
which a judicial declaration of nullity of marriage is clearly required.
Pertinent to the present controversy, Article 83 of the Civil Code provides that:
Art. 83. Any marriage subsequently contracted by any person during the lifetime of
the first spouse of such person with any person other than such first spouse shall be
illegal and void from its performance, unless:
(1) The first marriage was annulled or dissolved; or
(2) The first spouse had been absent for seven consecutive years at the time
of the second marriage without the spouse present having news of the
absentee being alive, or if the absentee, though he has been absent for less
than seven years, is generally considered as dead and before any person
believed to be so by the spouse present at the time of contracting such
subsequent marriage, or if the absentee is presumed dead according to
articles 390 and 391. The marriage so contracted shall be valid in any of the
three cases until declared null and void by a competent court.
As to whether a judicial declaration of nullity of a void marriage is necessary, the Civil
Code contains no express provision to that effect. Jurisprudence on the matter,
however, appears to be conflicting.
Originally, in People v. Mendoza,10 and People v. Aragon,11 this Court held that no
judicial decree is necessary to establish the nullity of a void marriage. Both cases
involved the same factual milieu. Accused contracted a second marriage during the
subsistence of his first marriage. After the death of his first wife, accused contracted a
third marriage during the subsistence of the second marriage. The second wife
initiated a complaint for bigamy. The Court acquitted accused on the ground that the
second marriage is void, having been contracted during the existence of the first
marriage. There is no need for a judicial declaration that said second marriage is void.
Since the second marriage is void, and the first one terminated by the death of his
wife, there are no two subsisting valid marriages. Hence, there can be no bigamy.
Justice Alex Reyes dissented in both cases, saying that it is not for the spouses but
the court to judge whether a marriage is void or not.
In Gomez v. Lipana,12 and Consuegra v. Consuegra,13 however, we recognized the
right of the second wife who entered into the marriage in good faith, to share in their
acquired estate and in proceeds of the retirement insurance of the husband. The
Court observed that although the second marriage can be presumed to be void ab
initio as it was celebrated while the first marriage was still subsisting, still there was a
need for judicial declaration of such nullity (of the second marriage). And since the
death of the husband supervened before such declaration, we upheld the right of the
second wife to share in the estate they acquired, on grounds of justice and equity.14
But in Odayat v. Amante (1977),15 the Court adverted to Aragon and Mendoza as
precedents. We exonerated a clerk of court of the charge of immorality on the ground
that his marriage to Filomena Abella in October of 1948 was void, since she was
already previously married to one Eliseo Portales in February of the same year. The
Court held that no judicial decree is necessary to establish the invalidity of void
marriages. This ruling was affirmed in Tolentino v. Paras.16
Yet again in Wiegel v. Sempio-Diy (1986),17 the Court held that there is a need for a
judicial declaration of nullity of a void marriage. In Wiegel, Lilia married Maxion in
1972. In 1978, she married another man, Wiegel. Wiegel filed a petition with the
Juvenile Domestic Relations Court to declare his marriage to Lilia as void on the
ground of her previous valid marriage. The Court, expressly relying on Consuegra,
concluded that:18
There is likewise no need of introducing evidence about the existing prior marriage of
her first husband at the time they married each other, for then such a marriage though
void still needs according to this Court a judicial declaration (citing Consuegra) of
such fact and for all legal intents and purposes she would still be regarded as a
married woman at the time she contracted her marriage with respondent Karl Heinz
Wiegel; accordingly, the marriage of petitioner and respondent would be regarded
VOID under the law. (Emphasis supplied).
In Yap v. Court of Appeals,19 however, the Court found the second marriage void
without need of judicial declaration, thus reverting to the Odayat,
Mendoza and Aragon rulings.
At any rate, the confusion under the Civil Code was put to rest under the Family
Code. Our rulings in Gomez, Consuegra, and Wiegel were eventually embodied in
Article 40 of the Family Code.20 Article 40 of said Code expressly required a judicial
declaration of nullity of marriage
Art. 40. The absolute nullity of a previous marriage may be invoked for purposes of
remarriage on the basis solely of a final judgment declaring such previous marriage
void.
In Terre v. Terre (1992)21 the Court, applying Gomez,
Consuegra and Wiegel, categorically stated that a judicial declaration of nullity of a
void marriage is necessary. Thus, we disbarred a lawyer for contracting a bigamous
marriage during the subsistence of his first marriage. He claimed that his first
marriage in 1977 was void since his first wife was already married in 1968. We held
that Atty. Terre should have known that the prevailing case law is that "for purposes
of determining whether a person is legally free to contract a second marriage, a
judicial declaration that the first marriage was null and void ab initio is essential."
The Court applied this ruling in subsequent cases. In Domingo v. Court of
Appeals (1993),22 the Court held:
Came the Family Code which settled once and for all the conflicting jurisprudence on
the matter. A declaration of absolute nullity of marriage is now explicitly required
either as a cause of action or a ground for defense. (Art. 39 of the Family Code).
Where the absolute nullity of a previous marriage is sought to be invoked for
purposes of contracting a second marriage, the sole basis acceptable in law for said
projected marriage to be free from legal infirmity is a final judgment declaring the
previous marriage void. (Family Code, Art. 40; See also arts. 11, 13, 42, 44, 48, 50,
52, 54, 86, 99, 147, 148).23
However, a recent case applied the old rule because of the peculiar circumstances of
the case. In Apiag v. Cantero, (1997)24 the first wife charged a municipal trial judge of
immorality for entering into a second marriage. The judge claimed that his first
marriage was void since he was merely forced into marrying his first wife whom he
got pregnant. On the issue of nullity of the first marriage, we
applied Odayat, Mendoza and Aragon. We held that since the second marriage took
place and all the children thereunder were born before the promulgation ofWiegel and
the effectivity of the Family Code, there is no need for a judicial declaration of nullity
of the first marriage pursuant to prevailing jurisprudence at that time.
Similarly, in the present case, the second marriage of private respondent was entered
into in 1979, before Wiegel. At that time, the prevailing rule was found in Odayat,
Mendoza and Aragon. The first marriage of private respondent being void for lack of
license and consent, there was no need for judicial declaration of its nullity before he
could contract a second marriage. In this case, therefore, we conclude that private
respondents second marriage to petitioner is valid.
Moreover, we find that the provisions of the Family Code cannot be retroactively
applied to the present case, for to do so would prejudice the vested rights of petitioner
and of her children. As held in Jison v. Court of Appeals,25the Family Code has
retroactive effect unless there be impairment of vested rights. In the present case,
that impairment of vested rights of petitioner and the children is patent. Additionally,
we are not quite prepared to give assent to the appellate courts finding that despite
private respondents "deceit and perfidy" in contracting marriage with petitioner, he
could benefit from her silence on the issue. Thus, coming now to the civil effects of
the church ceremony wherein petitioner married private respondent using the
marriage license used three years earlier in the civil ceremony, we find that petitioner
now has raised this matter properly. Earlier petitioner claimed as untruthful private
respondents allegation that he wed petitioner but they lacked a marriage license.
Indeed we find there was a marriage license, though it was the same license issued
on April 3, 1979 and used in both the civil and the church rites. Obviously, the church
ceremony was confirmatory of their civil marriage. As petitioner contends, the
appellate court erred when it refused to recognize the validity and salutary effects of
said canonical marriage on a technicality, i.e. that petitioner had failed to raise this
matter as affirmative defense during trial. She argues that such failure does not
prevent the appellate court from giving her defense due consideration and weight.
She adds that the interest of the State in protecting the inviolability of marriage, as a
legal and social institution, outweighs such technicality. In our view, petitioner and
private respondent had complied with all the essential and formal requisites for a valid
marriage, including the requirement of a valid license in the first of the two
ceremonies. That this license was used legally in the celebration of the civil ceremony
does not detract from the ceremonial use thereof in the church wedding of the same
parties to the marriage, for we hold that the latter rites served not only to ratify but
also to fortify the first. The appellate court might have its reasons for brushing aside
this possible defense of the defendant below which undoubtedly could have tendered
a valid issue, but which was not timely interposed by her before the trial court. But we
are now persuaded we cannot play blind to the absurdity, if not inequity, of letting the
wrongdoer profit from what the CA calls "his own deceit and perfidy."

On the matter of petitioners counterclaim for damages and attorneys

fees.1wphi1 Although the appellate court admitted that they found private
respondent acted "duplicitously and craftily" in marrying petitioner, it did not award
moral damages because the latter did not adduce evidence to support her claim. 26

Like the lower courts, we are also of the view that no damages should be awarded in
the present case, but for another reason. Petitioner wants her marriage to private
respondent held valid and subsisting. She is suing to maintain her status as legitimate
wife. In the same breath, she asks for damages from her husband for filing a baseless
complaint for annulment of their marriage which caused her mental anguish, anxiety,
besmirched reputation, social humiliation and alienation from her parents. Should we
grant her prayer, we would have a situation where the husband pays the wife
damages from conjugal or common funds. To do so, would make the application of
the law absurd. Logic, if not common sense, militates against such incongruity.
Moreover, our laws do not comprehend an action for damages between husband and
wife merely because of breach of a marital obligation.27 There are other remedies.28

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of

Appeals dated July 24, 1996 and its Resolution dated November 7, 1996, are
reversed partially, so that the marriage of petitioner Ofelia P. Ty and private
respondent Edgardo M. Reyes is hereby DECLARED VALID AND SUBSISTING; and
the award of the amount of P15,000.00 is RATIFIED and MAINTAINED as monthly
support to their two children, Faye Eloise Reyes and Rachel Anne Reyes, for as long
as they are of minor age or otherwise legally entitled thereto. Costs against private
respondent.

SO ORDERED.

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

 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 125932 April 21, 1999
REPUBLIC OF THE PHILIPPINES, petitioners
vs.
CLAUDE A. MILLER and JUMRUS S. MILLER, respondents.
PARDO, J
The Republic of the Philippines, through the Solicitor General, appealed originally to
the Court of Appeals from a decision of the Regional Trial Court, Branch 59, Angeles
City, granting the petition of respondent spouses to adopt the minor Michael Magno
Madayag.
In its decision promulgated on April 17, 1996, the Court of Appeals certified the case
to the Supreme Court because the petition raised only questions of law.
By resolution adopted on September 23, 1996, we accepted the appeal. We shall
treat the appeal as one via certiorari from a decision of the regional trial court under
Supreme Court Circular 2-90, dated March 9, 1990, on pure questions of law.
The facts are undisputed and may be related as follows:
On July 29, 1988, the spouses Claude A. Miller and Jumrus S. Miller, filed with the
Regional Trial Court, Branch 59, Angeles City, a verified petition to adopt the minor
Michael Magno Madayag.
The trial court scheduled the petition for hearing on September 9, 1988, at 9:00 in the
morning. At the hearing, with the attendance of an assistant city fiscal of Angeles City,
in representation of the Solicitor General, respondents adduced evidence showing
that:
Claude A. Miller, 38 years old and Jumrus S. Miller, 40 years of
age, both American citizens, are husband and wife, having been
married on June 21, 1982.
They were childless and "do not expect to have sibling out of their
union on account of a medical problem of the wife."
Claude A. Miller was a member of the United States Air Force, as
airman first class, assigned at Clark Air Base since January 26,
1985.
The family maintains their residence at Don Bonifacio Subdivision,
Balibago, Angeles City, since 1985. 1
The minor Michael Magno Madayag is the legitimate son of
Marcelo S. Madayag, Jr. and Zenaida Magno. Born on July 14,
1987, at San Fernando, La Union, the minor has been in the
custody of respondents since the first week of August 1987.
Poverty and deep concern for the future of their son prompted the
natural parents who have no visible means of livelihood to have
their child adopted by respondents. They executed affidavits giving
their irrevocable consent to the adoption by respondents.
The Department of Social Welfare and Development, through its
Regional office at San Fernando, Pampanga, recommended
approval of the petition on the basis of its evaluation that
respondents were morally, emotionally and financially fit to be
adoptive parents and that the adoption would be to the minor's best
interest and welfare. 2
On May 12, 1989, the trial court rendered decision granting the petition for adoption,
the dispositive portion of which reads as follows:
WHEREFORE, finding that petitioners possess all the qualifications
and none of the disqualifications for adoption, the instant petition is
hereby Granted, and this Court decrees the minor MICHAEL
MAGNO MADAYAG freed from all obligation of obedience and
support with respect to natural parents and is hereby declared the
child of the herein petitioners by adoption. The minor's surname
shall be changed from "MADAYAG" to "MILLER", which is the
surname of the herein
petitioners. 3
In due time, the Solicitor General, in behalf of the Republic, interposed an appeal to
the Court of Appeals. As heretofore stated, the Court of Appeals certified the case to
this Court.
The issue raised is whether the court may allow aliens to adopt a Filipino child despite
the prohibition under the Family Code, 4 effective on August 3, 1988 5 when the
petition for adoption was filed on July 29, 1988, under the provision of the Child and
Youth Welfare Code 6 which allowed aliens to adopt.
The issue is not new. This Court has ruled that an alien qualified to adopt under the
Child and Youth Welfare Code, which was in force at the time of the filing of the
petition, acquired a vested right which could not be affected by the subsequent
enactment of a new law disqualifying him. 7
Consequently, the enactment of the Family Code, effective August 3, 1988, will not
impair the right of respondents who are aliens to adopt a Filipino child because the
right has become vested at the time of filing of the petition for adoption and shall be
governed by the law then in force. "A vested right is one whose existence, effectivity
and extent does not depend upon events foreign to the will of the holder. The term
expresses the concept of present fixed interest which in right reason and natural
justice should be protected against arbitrary State action, or an innately just and
imperative right which enlightened free society, sensitive to inherent and irrefragable
individual rights, cannot deny." 8 "Vested rights include not only legal or equitable title
to the enforcement of a demand, but also an exemption from new obligations created
after the right has vested. 9

As long as the petition for adoption was sufficient in form and substance in
accordance with the law in governance at the time it was filed, the court acquires
jurisdiction and retains it until it fully disposes of the case. To repeat, the jurisdiction of
the court is determined by the statute in force at the time of the commencement of the
action. Such jurisdiction of a court, whether in criminal or civil cases, once it attaches
cannot be ousted by a subsequent happenings or events, although of a character
which would have prevented jurisdiction from attaching in the first instance. 10

Therefore, an alien who filed a petition for adoption before the effective of the Family
Code, although denied the right to adopt under Art. 184 of said Code, may continue
with his petition under the law prevailing before the Family Code. 11

Adoption statutes, being humane and salutary, hold the interests and welfare of the
child to be of paramount consideration. They are designed to provide homes, parental
care and education for unfortunate, needy or orphaned children and give them the
protection of society and family in the person of the adopter, as well as childless
couples or persons to experience the joy of parenthood and give them legally a child
in the person of the adopted for the manifestation of their natural parent instincts.
Every reasonable intendment should be sustained to promote and fulfill these noble
and compassionate objective of the law. 12

WHEREFORE, we hereby AFFIRM the appealed decision of the Regional Trial Court,
Branch 59, Angeles City, in SP. Proc. No. 3562.1wphi1.nt

No costs.

SO ORDERED.

Davide, Jr., C.J., Melo, Kapunan and Nares-Santiago, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
A.M. No. MTJ-92-706 March 29, 1995
LUPO ALMODIEL ATIENZA, complainant,
vs.
JUDGE FRANCISCO F. BRILLANTES, JR., Metropolitan Trial Court, Branch 28,
Manila, respondent.
QUIASON, J.:
This is a complaint by Lupo A. Atienza for Gross Immorality and Appearance of
Impropriety against Judge Francisco Brillantes, Jr., Presiding Judge of the
Metropolitan Trial Court, Branch 20, Manila.
Complainant alleges that he has two children with Yolanda De Castro, who are living
together at No. 34 Galaxy Street, Bel-Air Subdivision, Makati, Metro Manila. He stays
in said house, which he purchased in 1987, whenever he is in Manila.
In December 1991, upon opening the door to his bedroom, he saw respondent
sleeping on his (complainant's) bed. Upon inquiry, he was told by the houseboy that
respondent had been cohabiting with De Castro. Complainant did not bother to wake
up respondent and instead left the house after giving instructions to his houseboy to
take care of his children.
Thereafter, respondent prevented him from visiting his children and even alienated
the affection of his children for him.
Complainant claims that respondent is married to one Zenaida Ongkiko with whom he
has five children, as appearing in his 1986 and 1991 sworn statements of assets and
liabilities. Furthermore, he alleges that respondent caused his arrest on January 13,
1992, after he had a heated argument with De Castro inside the latter's office.
For his part, respondent alleges that complainant was not married to De Castro and
that the filing of the administrative action was related to complainant's claim on the
Bel-Air residence, which was disputed by De Castro.
Respondent denies that he caused complainant's arrest and claims that he was even
a witness to the withdrawal of the complaint for Grave Slander filed by De Castro
against complainant. According to him, it was the sister of De Castro who called the
police to arrest complainant.
Respondent also denies having been married to Ongkiko, although he admits having
five children with her. He alleges that while he and Ongkiko went through a marriage
ceremony before a Nueva Ecija town mayor on April 25, 1965, the same was not a
valid marriage for lack of a marriage license. Upon the request of the parents of
Ongkiko, respondent went through another marriage ceremony with her in Manila on
June 5, 1965. Again, neither party applied for a marriage license. Ongkiko abandoned
respondent 17 years ago, leaving their children to his care and custody as a single
parent.
Respondent claims that when he married De Castro in civil rites in Los Angeles,
California on December 4, 1991, he believed, in all good faith and for all legal intents
and purposes, that he was single because his first marriage was solemnized without
a license.
Under the Family Code, there must be a judicial declaration of the nullity of a previous
marriage before a party thereto can enter into a second marriage. Article 40 of said
Code provides:
The absolute nullity of a previous marriage may be invoked for the
purposes of remarriage on the basis solely of a final judgment
declaring such previous marriage void.
Respondent argues that the provision of Article 40 of the Family Code does not apply
to him considering that his first marriage took place in 1965 and was governed by the
Civil Code of the Philippines; while the second marriage took place in 1991 and
governed by the Family Code.
Article 40 is applicable to remarriages entered into after the effectivity of the Family
Code on August 3, 1988 regardless of the date of the first marriage. Besides, under
Article 256 of the Family Code, said Article is given "retroactive effect insofar as it
does not prejudice or impair vested or acquired rights in accordance with the Civil
Code or other laws." This is particularly true with Article 40, which is a rule of
procedure. Respondent has not shown any vested right that was impaired by the
application of Article 40 to his case.
The fact that procedural statutes may somehow affect the litigants' rights may not
preclude their retroactive application to pending actions. The retroactive application of
procedural laws is not violative of any right of a person who may feel that he is
adversely affected (Gregorio v. Court of Appeals, 26 SCRA 229 [1968]). The reason
is that as a general rule no vested right may attach to, nor arise from, procedural laws
(Billones v. Court of Industrial Relations, 14 SCRA 674 [1965]).
Respondent is the last person allowed to invoke good faith. He made a mockery of
the institution of marriage and employed deceit to be able to cohabit with a woman,
who beget him five children.
Respondent passed the Bar examinations in 1962 and was admitted to the practice of
law in 1963. At the time he went through the two marriage ceremonies with Ongkiko,
he was already a lawyer. Yet, he never secured any marriage license. Any law
student would know that a marriage license is necessary before one can get married.
Respondent was given an opportunity to correct the flaw in his first marriage when he
and Ongkiko were married for the second time. His failure to secure a marriage
license on these two occasions betrays his sinister motives and bad faith.

It is evident that respondent failed to meet the standard of moral fitness for
membership in the legal profession.

While the deceit employed by respondent existed prior to his appointment as a

Metropolitan Trial Judge, his immoral and illegal act of cohabiting with De Castro
began and continued when he was already in the judiciary.

The Code of Judicial Ethics mandates that the conduct of a judge must be free of a
whiff of impropriety, not only with respect to his performance of his judicial duties but
also as to his behavior as a private individual. There is no duality of morality. A public
figure is also judged by his private life. A judge, in order to promote public confidence
in the integrity and impartiality of the judiciary, must behave with propriety at all times,
in the performance of his judicial duties and in his everyday life. These are judicial
guideposts too self-evident to be overlooked. No position exacts a greater demand on
moral righteousness and uprightness of an individual than a seat in the judiciary
(Imbing v. Tiongzon, 229 SCRA 690 [1994]).

WHEREFORE, respondent is DISMISSED from the service with forfeiture of all leave
and retirement benefits and with prejudice to reappointment in any branch,
instrumentality, or agency of the government, including government-owned and
controlled corporations. This decision is immediately executory.

SO ORDERED.

Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo,
Melo, Puno, Vitug, Kapunan, Mendoza and Francisco, JJ., concur.
 Republic of the Philippines CA-G.R. SP No. 61516 dismissing FBDC's Petition for Review with regard to the
SUPREME COURT Decision of the Court of Ta:x Appeals (CTA) dated October 13, 2000 in CTA Case
Manila No. 5885, and from (b) the Court of Appeals Resolution 3 dated November 30, 2006
denying its Motion for Reconsideration.
FIRST DIVISION
G.R. No. 180035 is likewise an appeal by certiorari pursuant to Rule 45 from (a) the
G.R. No. 175707 November 19, 2014 Court of Appeals Decision4dated April 30, 2007 in CAG.R. SP No. 76540 denying
FBDCs Petition for Review with respect to the CTA Resolution5 dated March 28,
2003 in CTA Case No. 6021, and from (b) the Court of Appeals Resolution 6 dated
FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner, October 8, 2007 denying its Motion for Reconsideration.
vs.
COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER,
REVENUE DISTRICT NO. 44, TAGUIG and PATEROS, BUREAU OF INTERNAL The CTA Resolution reconsidered and reversed its earlier Decision 7 dated January
REVENUE, Respondents. 30, 2002 ordering respondents in CTA Case No. 6021 to refund or issue a tax credit
certificate infavor of petitioner in the amount ofP77,151,020.46, representing "VAT
erroneously paid by or illegally collected from petitioner for the first quarter of 1998,
x-----------------------x and instead denied petitioners Claim for Refund therefor." 8

G.R. No. 180035 G.R. No. 181092 is also an appeal by certiorari pursuant to Rule 45 from the Court of
Appeals Decision9 dated December 28, 2007 in CA-G.R. SP No. 61158 dismissing
FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner, FBDCs petition for review with respect to the CTA Decision10 dated September 29,
vs. 2000 in CTA Case No. 5694. The aforesaid CTA Decision, which the Court of
COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER, Appeals affirmed, denied petitioners Claim for Refund in the amount
REVENUE DISTRICT NO. 44, TAGUIG and PATEROS, BUREAU OF INTERNAL of P269,340,469.45, representing "VAT erroneously paid by or illegally collected from
REVENUE, Respondents. petitioner for the fourth quarter of 1996."11

x-----------------------x The facts are not in dispute.

G.R. No. 181092
FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner,
vs.
COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER,
REVENUE DISTRICT NO. 44, TAGUIG and PATEROS, BUREAU OF INTERNAL
REVENUE, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
The Court has consolidated these three petitions as they involve the same parties,
similar facts and common questions of law. This is not the first time that Fort
Bonifacio Development Corporation (FBDC) has come to this Court about these
issues against the very same respondents, and the Court En Banc has resolved them
in two separate, recent cases1 that are applicable here for reasons to be discussed
below.
G.R. No. 175707 is an appeal by certiorari pursuant to Rule 45 of the 1997 Rules of
Civil Procedure from (a) the Decision2 dated April 22, 2003 of the Court of Appeals in
Petitioner FBDC (petitioner) is a domestic corporation duly registered and existing
under Philippine laws. Its issued and outstanding capital stock is owned in part by the
Bases Conversion Development Authority, a wholly owned government corporation
created by Republic Act No. 7227 for the purpose of "accelerating the conversion of
military reservations into alternative productive uses and raising funds through the
sale of portions of said military reservationsin order to promote the economic and
social development of the country in general."12 The remaining fifty-five per cent
(55%) is owned by Bonifacio Land Corporation, a consortium of private domestic
corporations.13
Respondent Commissioner of Internal Revenue is the head of the Bureau of Internal
Revenue (BIR). Respondent Revenue District Officer, Revenue District No. 44,
Taguig and Pateros, BIR, is the chief of the aforesaid District Office.
The parties entered into a Stipulation of Facts, Documents, and Issue14 before the
CTA for each case. It was established before the CTA that petitioner is engaged in
the development and sale of real property. It is the owner of, and is developing and
selling, parcels of land within a "newtown" development area known as the Fort
Bonifacio Global City (the Global City), located within the former military camp known
as Fort Bonifacio, Taguig, Metro Manila.15 The National Government, by virtue of
Republic Act No. 722716 and Executive Order No. 40,17was the one that conveyed to
petitioner these parcels of land on February 8, 1995.
In May 1996, petitioner commenced developing the Global City, and since October
1996, had been selling lots to interested buyers.18 At the time of acquisition, value-
added tax (VAT) was not yet imposed on the sale of real properties. Republic Act No.
7716(the Expanded Value-Added Tax [E-VAT] Law),19 which took effect on January
1, 1996, restructured the VAT system by further amending pertinent provisions of the
National Internal Revenue Code (NIRC). Section 100 of the old NIRC was so
amended by including "real properties" in the definition of the term "goods or
properties," thereby subjecting the sale of "real properties" to VAT. The provision, as
amended, reads:
SEC. 100. Value-Added Tax on Sale of Goods or Properties. (a) Rate and Base of
Tax. There shall be levied, assessed and collected on every sale, barter or
exchange of goods or properties, a value-added tax equivalent to 10% of the gross
selling price or gross value in money of the goods or properties sold, bartered or
exchanged, such tax to be paid by the seller or transferor.
(1) The term "goods or properties" shall mean all tangible and intangible objects
which are capable of pecuniary estimation and shall include:
(A) Real properties held primarily for sale to customers or held for lease in the
ordinary course of trade or business[.]
While prior to Republic Act No. 7716, real estate transactions were not subject to
VAT, they became subject to VAT upon the effectivity of said law. Thus, the sale of
the parcels of land by petitioner became subject to a 10% VAT, and this was later
increased to 12%, pursuant to Republic Act No. 9337.20 Petitioner afterwards
becamea VAT-registered taxpayer.
On September 19, 1996, in accordance with Revenue Regulations No. 7-95
(Consolidated VAT Regulations), petitioner submitted to respondent BIR, Revenue
District No. 44, Taguig and Pateros, an inventory list of its properties as of February
29, 1996. The total book value of petitioners land inventory amounted
toP71,227,503,200.00.21
On the basis of Section 105 of the NIRC,22 petitioner claims a transitional or
presumptive input tax creditof 8% ofP71,227,503,200.00, the total value of the real
properties listed in its inventory, or a total input tax credit ofP5,698,200,256.00.23 After
the value of the real properties was reduced dueto a reconveyance by petitioner to
BCDA of a parcel of land, petitioner claims that it is entitled to input tax credit in the
reduced amountofP4,250,475,000.48.24
What petitioner seeks to be refunded are the actual VAT payments made by it in
cash, which it claims were either erroneously paid by or illegally collected from
it.25 Each Claim for Refund is based on petitioners position that it is entitled to a
transitional input tax credit under Section 105 of the old NIRC, which more than
offsets the aforesaid VAT payments.
G.R. No. 175707
Petitioners VAT returns filed with the BIR show that for the second quarter of 1997,
petitioner received the total amount of P5,014,755,287.40 from its sales and lease of
lots, on which the output VAT payable wasP501,475,528.74.26 The VAT returns
likewise show that petitioner made cash payments totaling P486,355,846.78 and
utilized its input tax credit of P15,119,681.96 on purchases of goods and services.27
On February 11, 1999, petitioner filed with the BIR a claim for refundof the amount
of P486,355,846.78 which it paid in cash as VAT for the second quarter of 1997.28
On May 21, 1999, petitioner filed with the CTA a petition for review29 by way of
appeal, docketed as CTA Case No. 5885, from the alleged inaction by respondents of
petitioners claim for refund with the BIR. On October 1, 1999, the parties submitted
tothe CTA a Stipulation of Facts, Documents and Issue.30 On October 13, 2000, the
CTA issued its Decision31 in CTA Case No. 5885 denying petitioners claim for refund
for lack of merit.
On November 23, 2000, petitioner filed with the Court of Appeals a Petition for
Review of the aforesaid CTA Decision, which was docketed as CA-G.R SP No.
61516. On April 22, 2003, the CA issued its Decision 32dismissing the Petition for
Review. On November 30, 2006, the Court of Appeals issued its Resolution 33 denying
petitioners Motion for Reconsideration.
On December 21, 2006, this Petition for Review was filed.
Petitioner submitted its Memorandum34 on November 7, 2008 while respondents filed
their "Comment"35 on May 4, 2009.36
On December 2, 2009, petitioner submitted a Supplement37 to its Memorandum dated
November 6, 2008,stating that the said case is intimately related to the cases of Fort
Bonifacio Development Corporation v. Commissioner of Internal Revenue, G.R. No.
158885, and Fort Bonifacio Development Corporation v. Commissioner of Internal
Revenue," G.R. No. 170680, which were already decided by this Court, and which
involve the same parties and similar facts and issues.38
Except for the amounts of tax refund being claimed and the periods covered for each
claim, the facts in this case and in the other two consolidated cases below are
thesame. The parties entered into similar Stipulations in the other two cases
consolidated here.39
G.R. No. 180035
We quote relevant portions of the parties Stipulation of Facts, Documents and Issue
in CTA Case No. 602140below:
1.11. Per VAT returns filed by petitioner with the BIR, for the second quarter
of 1998, petitioner derived the total amount of P903,427,264.20 from its
sales and lease of lots, on which the output VAT payable to the Bureau of
Internal Revenue was P90,342,726.42.
 1.12. The VAT returns filed by petitioner likewise show that to pay said
amount of P90,342,726.42 due to the BIR, petitioner made cash payments
totalling P77,151,020.46 and utilized its regular input tax credit
ofP39,878,959.37 on purchases of goods and services.
1.13. On November 22, 1999, petitioner filed with the BIR a claim for refund
of the amount ofP77,151,020.46 which it paid as valueadded tax for the first
quarter of 1998.
1.14. Earlier, on October 8, 1998 and November 17, 1998, February 11,
1999, May 11, 1999, and September 10, 1999, based on similar grounds,
petitioner filed with the BIR claims for refund of the amounts
of P269,340,469.45, P359,652,009.47, P486,355,846.78, P347,741,695.74,
and P15,036,891.26, representing value-added taxes paid by it on proceeds
derived from its sales and lease of lots for the quarters ended December 31,
1996, March 31, 1997, June 30, 1997, September 30, 1997, and December
31, 1997, respectively. After deducting these amounts
of P269,340,469.45, P359,652,009.47,P486,355,846.78, P347,741,695.74,
and P15,036,891.26 from the total amount of P5,698,200,256.00 claimed by
petitioner as input tax credit, the remaining input tax credit more than
sufficiently covers the amount of P77,151,020.46 subject of petitioners claim
for refund of November 22, 1999.
1.15. As of the date of the Petition, no action had been taken by respondents
on petitioners claim for refund of November 22, 1999.41 (Emphases ours.)
The petition in G.R. No. 180035 "seeks to correct the unauthorized limitation of the
term real properties to improvements thereon by Revenue Regulations 7-95 and the
error of the Court of Tax Appeals and Court of Appeals in sustaining the aforesaid
Regulations."42 This theory of petitioner is the same for all three cases now before us.
On March 14, 2013, petitioner filed a Motion for Consolidation 43 of G.R. No. 180035
with G.R. No. 175707.
Petitioner submitted itsMemorandum44 on September 15, 2009 while respondents
filed theirson September 22, 2009.45
G.R. No. 181092
The facts summarized below are found in the parties Stipulation of Facts, Documents
and Issue in CTA Case No. 569446:
1.09. Per VAT returns filed by petitioner with the BIR, for the fourth quarter of
1996, petitioner derived the total amount of P3,498,888,713.60 from its sales
and lease of lots, on which the output VAT payableto the Bureau of Internal
Revenue wasP318,080,792.14.
1.10. The VAT returns filed by petitioner likewise show that to pay said
amount of P318,080,792.14 due to the BIR, petitioner made cash payments
totalling P269,340,469.45 and utilized (a) part of the total
transitional/presumptive input tax credit of P5,698,200,256.00 being claimed
by it to the extent ofP28,413,783.00; and (b) its regular input tax credit
of P20,326,539.69 on purchases of goods and services.
1.11. On October 8, 1998 petitioner filed with the BIR a claim for refund of
the amounts ofP269,340,469.45, which it paid as valueadded tax.
1.12. As of the date of the Petition, no action had been taken by respondents
on petitioners claim for refund.47 (Emphases ours.)
Petitioner submitted its Memorandum48 on January 18, 2010 while respondents filed
theirs on October 14, 2010.49
On March 14, 2013, petitioner filed a Motion for Consolidation 50 of G.R. No. 181092
with G.R. No. 175707.
On January 23, 2014, petitioner filed a Motion to Resolve 51 these consolidated cases,
alleging that the parties had already filed their respective memoranda; and, more
importantly, that the principal issue in these cases, whether petitioner is entitled to the
8% transitional input tax granted in Section 105 (now Section 111[A]) of the NIRC
based on the value of its inventory of land, and as a consequence, to a refund of the
amounts it paid as VAT for the periods in question, had already been resolved by the
Supreme Court En Bancin its Decision dated April 2, 2009 in G.R. Nos. 158885 and
170680, as well as its Decision dated September 4, 2012 in G.R. No. 173425.
Petitioner further alleges that said decided cases involve the same parties, facts, and
issues as the cases now before this Court.52
THEORY OF PETITIONER
Petitioner claims that "the 10% value-added tax is based on the gross selling price or
gross value in money of the goods sold, bartered or exchanged."53 Petitioner
likewise claims thatby definition, the term "goods" was limited to "movable, tangible
objects which is appropriable or transferable" and that said term did not originally
include "real property."54 It was previously defined as follows under Revenue
Regulations No. 5-87:
(p) "Goods" means any movable, tangible objects which is appropriable or
transferrable. Republic Act No. 7716 (E-VAT Law, January 1, 1996) expanded the
coverage of the original VAT Law (Executive Order No. 273), specifically Section 100
of the old NIRC. According to petitioner, while under Executive Order No. 273, the
term "goods" did not include real properties, Republic Act No. 7716, in amending
Section 100, explicitly included in the term "goods" "real properties held primarily for
sale to customers or held for lease in the ordinary course of trade or business."
Consequently, the sale, barter, or exchange of real properties was made subject to a
VAT equivalent to 10% (later increased to 12%, pursuant to Republic Act No. 9337) of
the gross selling price of real properties.
Among the new provisions included by Executive Order No. 273 in the NIRC was the
following: SEC. 105. Transitional Input Tax Credits. A person who becomes liable
to value-added tax orany person who elects to be a VAT registered person shall,
subject to the filing of an inventory as prescribed by regulations, be allowed input tax
on his beginning inventory of goods, materials and supplies equivalent to 8%of the
value of such inventory or the actual value-added tax paid on such goods, materials
and supplies, whichever is higher, which shall be creditable against the output tax.
According to petitioner, the E-VAT Law, Republic Act No. 7716, did not amend
Section 105. Thus, Section 105, as quoted above, remained effective even after the
enactment of Republic Act No. 7716.
Previously, or on December 9, 1995, the Secretary of Finance and the Commissioner
of Internal Revenue issued Revenue Regulations No. 7-95, which included the
following provisions: SECTION 4.100-1. Value-added tax on sale of goods or
properties. VAT is imposed and collected on every sale, barter or exchange or
transactions "deemed sale" of taxable goods or properties at the rate of 10% of the
gross selling price.
"Gross selling price" means the total amount of money or its equivalent which the
purchaser pays or is obligated to pay to the seller in consideration of the sale, barter
or exchange of the goods or properties, excluding the value-added tax. The excise
tax, if any, on such goods or properties shall form part of the gross selling price. In the
case of sale, barter or exchange of real property subject to VAT, gross selling price
shall mean the consideration stated in the sales document or the zonal value
whichever is higher. Provided however, in the absence of zonal value, gross selling
price refers to the market value shown in the latest declaration or the consideration
whichever is higher.
"Taxable sale" refers to the sale, barter, exchange and/or lease of goods or
properties, including transactions "deemed sale" and the performance of service for a
consideration, all of which are subject to tax under Sections 100 and 102 of the Code.
Any person otherwise required to register for VAT purposes who fails to register shall
also be liable to VAT on his sale of taxable goods or properties as defined in the
preceding paragraph. The sale of goods subject to excise tax is also subject to VAT,
except manufactured petroleum products (other than lubricating oil, processed gas,
grease, wax and petrolatum).
"Goods or properties" refer to all tangible and intangible objects which are capable of
pecuniary estimation and shall include:
1. Real properties held primarily for sale to customers or held for lease in the ordinary
course of trade or business.
xxxx
SECTION 4.104-1. Credits for input tax.
"Input tax"means the value-added tax due from or paid by a VAT registered person
on importation of goodsor local purchases of goods or services, including lease or
use of property, from another VAT-registered person in the course ofhis trade or
business. It shall also include the transitional or presumptive input tax determined in
accordance with Section 105 of the Code.
xxxx
SECTION 4.105-1. Transitional input tax on beginning inventories. Taxpayers who
became VAT-registered persons upon effectivity of RA No. 7716 who have exceeded
the minimum turnover of P500,000.00 or who voluntarily register even if their turnover
does not exceed P500,000.00 shall be entitled to a presumptive input tax on the
inventory on hand as of December 31, 1995 on the following; (a) goods purchased for
sale in their present condition; (b) materials purchased for further processing, but
which have not yet undergone processing; (c) goods which have been manufactured
by the taxpayer; (d) goods in process and supplies, all of which are for sale or for use
in the course of the taxpayer's trade or business as a VAT-registered person.
However, in the case of real estate dealers, the basis of the presumptive input tax
shall be the improvements, such as buildings, roads, drainage systems, and other
similar structures, constructed on or after effectivity of E.O. 273 (January 1, 1988).
The transitional input tax shall be 8% of the value of the inventory or actual VAT paid,
whichever is higher, which amount may be allowed as tax credit against the output
tax of the VAT-registered person.
The value allowed for income tax purposes on inventories shall be the basis for the
computation of the 8% excluding goods that are exempt from VAT under SECTION
103. Only VAT-registered persons shall be entitled to presumptive input tax credits.
xxxx
TRANSITORY PROVISIONS
(a) Presumptive Input Tax Credits
(i) For goods, materials or supplies not for sale but purchased for use in
business in their present condition, which are not intended for further
processing and are on hand as of December 31, 1995, a presumptive input
tax equivalent to 8% of the value of the goods or properties shall be allowed.
(ii) For goods or properties purchased with the object of resale in their
present condition, the same presumptive input tax equivalent to 8% of the
value of the goods unused as of December 31, 1995 shall be allowed, which
amount may also be credited against the output tax of a VAT-registered
person.
 (iii) For real estate dealers, the presumptive input tax of 8% of the book
value of improvements constructed on or after January 1, 1988 (the
effectivityof E.O. 273) shall be allowed.
For purposes of sub-paragraph (i), (ii) and (iii) above, an inventory as of December
31, 1995 of such goods or properties and improvements showing the quantity,
description, and amount should be filed with the RDO not later than January 31,
1996. (Emphases supplied.)
Petitioner argues that Section 4.100-1 of Revenue Regulations No. 7-95 explicitly
limited the term "goods" as regards real properties to "improvements, such as
buildings, roads, drainage systems, and other similar structures," thereby excluding
the real property itself from the coverage of the term "goods" as it is used in Section
105 of the NIRC. This has brought about, as a consequence, the issues involved in
the instant case.
Petitioner claims that the "Court of Appeals erred in not holding that Revenue
Regulations No. 6-97 has effectively repealed or repudiated Revenue Regulations
No. 7-95 insofar as the latter limited the transitional/presumptive input tax credit which
may be claimed under Section 105 of the NIRC to the improvements on real
properties."55Petitioner argues that the provision in Section 4.105-1 of Revenue
Regulations No. 7-95 stating that in the case of real estate dealers, the basis of the
input tax credit shall be the improvements, has been deleted by Revenue Regulations
No. 6-97, dated January 2, 1997,which amended Revenue Regulations No. 7-95.
Revenue Regulations No. 6-97 was issued to implement Republic Act No. 8241 (the
law amending Republic Act No. 7716, the E-VAT Law), which took effect on January
1, 1997. Petitioner notes that Section 4.105-1 of Revenue Regulations No. 6-97 is but
a reenactment of Section 4.105-1 of Revenue Regulations No. 7-95, with the only
difference being that the following paragraph in Revenue Regulations No. 7-95 was
deleted:
However, in the case of real estate dealers, the basis of the presumptive input tax
shall be the improvements, such as buildings, roads, drainage systems, and other
similar structures, constructed on or after the effectivity of E.O. 273 (January 1, 1988).
Petitioner calls this an express repeal, and with the deletion of the above paragraph,
what stands and should be applied "is the statutory definition in Section 100 of the
NIRC of the term goods in Section 105 thereof."56
Petitioner contends that the relevant provision now states that "[t]he transitional input
tax credit shall be eight percent (8%) of the value of the beginning inventory x x x on
such goods, materials and supplies." It no longer limits the allowable transitional input
tax credit to "improvements" on the real properties. The amendment recognizes that
the basis of the 8% input tax credit should not be confinedto the value of the
improvements. Petitioner further contends that the Commissioner of Internal Revenue
has in fact corrected the mistake in Revenue Regulations No. 7-95.57
Petitioner argues that Revenue Regulations No. 6-97, being beneficial to the
taxpayer, should be given a retroactive application. 58 Petitioner states that the
transactions involved inthese consolidated cases took place after Revenue
Regulations No. 6-97 took effect, under the provisions of which the transitional input
tax credit with regardto real properties would be based on the value of the land
inventory and not limited to the value of the improvements.
Petitioner assigns another error: the Court of Appeals erred in holding that Revenue
Regulations No. 7-95 isa valid implementation of the NIRC and in according it great
respect, and should have held that the same is invalid for being contrary to the
provisions of Section 105 of the NIRC.59 Petitioner contends that Revenue
Regulations No. 7-95 is not valid for being contrary to the express provisions of
Section 105 of the NIRC, and in fact amends the same, for it limited the scope of
Section 105 "to less than what the law provides."60 Petitioner elaborates:
[Revenue Regulations No. 7-95] illegally constricted the provisions of the aforesaid
section. It delimited the coverage of Section 105 and practically amended it in
violation of the fundamental principle that administrative regulations are subordinate
to the law. Based on the numerous authorities cited above, Section 4.105-1 and the
Transitory Provisions of Revenue Regulations No. 7-95 are invalid and ineffective
insofar as they limit the input tax credit to 8% of the value of the "improvements" on
land, for being contrary to the express provisions of Section 105, in relation to Section
100, of the NIRC, and the Court of Appeals should have so held.61 Petitioner likewise
raises the following arguments:
The rule that the construction given by the administrative agency charged with the
enforcement of the law should be accorded great weight by the courts, does not apply
here.62 x x x Section 4.105-1 of Revenue Regulations No. 7-95 neither exclude[s]
nor prohibit[s] that the 8% input tax credit may also [be] based on the taxpayers
inventory of land.63
The issuance of Revenue Regulations No. 7-95 by the [BIR], which changed the
statutory definition of "goods" with regard to the application of Section 105 of the
NIRC, and the declaration of validity of said regulations by the Court of Appeals and
Court of Tax Appeals, was in violation of the fundamental principle of separation of
powers.64
xxxx
Insofar, therefore, as Revenue Regulation[s] No. 7-95 limited the scope of the term
"goods" under Section 105, to "improvements" on real properties, contrary to the
definition of "goods" in Section 100, [RR] No. 7-95 decreed "what the law shall be",
now "how the law may be enforced", and is, consequently, of no effect because it
constitutes undue delegation of legislative power.
xxxx
[T]he transgression by the BIR and the CTA and CA of the basic principle of
separation of powers, including the fundamental rule of nondelegation of legislative
power, is clear.65 Furthermore, petitioner claims that:
 SINCE THE PROVISIONS OF SECTION 105 OF THE [NIRC] IN RELATION
TO SECTION 100 THEREOF, ARE CLEAR, THERE WAS NO BASIS AND
NECESSITY FOR THE BUREAU OF INTERNAL REVENUE AND THE
COURT OF APPEALS AND THE COURT OF TAX APPEALS TO
INTERPRET AND CONSTRUE THE SAME.66
PETITIONER IS CLEARLY ENTITLED TO THE
TRANSITIONAL/PRESUMPTIVE INPUT TAX CREDIT GRANTED IN
SECTION 105 OF THE NIRCAND HENCE TO A REFUND OF THE VALUE-
ADDED TAX PAID BY IT FOR THE SECOND QUARTER OF 1997.67
Petitioner insists that there was no basis and necessity for the BIR, the CTA, and the
Court of Appeals to interpret and construe Sections 100 and 105 of the NIRC
because "where the law speaks in clear and categorical language, or the terms of the
statute are clear and unambiguous and free from doubt, there is no room for
interpretation or construction and no interpretation or construction is called for; there
is only room for application."68 Petitioner asserts that legislative intent is determined
primarily from the language of the statute; legislative intent has to be discovered from
the four corners of the law; and thus, where no ambiguity appears, it may be
presumed conclusivelythat the clear and explicit terms of a statute express the
legislative intention.69
So looking at the cases now before us, petitioner avers that the Court of Appeals, the
CTA, and the BIR did not merely interpret and construe Section 105, and that they
virtually amended the said section, for it is allegedly clear from Section 105 of the old
NIRC, in relation to Section 100, that "legislative intent is to the effect that the
taxpayer is entitled to the input tax credit based on the value of the beginning
inventory of land, not merely on the improvements thereon, and irrespective of any
prior payment of sales tax or VAT."70
THEORY OF RESPONDENTS
Petitioners claims for refund were consistently denied in the three cases now before
us. Even if inone case, G.R. No. 180035, petitioner succeeded in getting a favorable
decision from the CTA, the grant of refund or tax credit was subsequently reversed on
respondents Motion for Reconsideration, and such denial ofpetitioners claim was
affirmed by the Court of Appeals. Respondents reasons for denying petitioners
claims are summarized in their Comment in G.R. No. 175707, and we quote:
REASONS WHY PETITION SHOULD BE DENIED OR DISMISSED
1. The 8% input tax credit provided for in Section 105 of the NIRC, in relation
to Section 100 thereof, is based on the value of the improvements on the
land.
2. The taxpayer is entitled to the input tax credit provided for in Section 105
of the NIRC only if it has previously paid VAT or sales taxes on its inventory
of land.
3. Section 4.105-1 of Revenue Regulations No. 7-95 of the BIR is valid,
effective and has the force and effect of law, which implemented Section 105
of the NIRC.71
In respondents Comment72 dated November 3, 2008 in G.R. No. 180035, they
averred that petitioners claim for the 8% transitional/presumptive input tax is
"inconsistent with the purpose and intent of the law in granting such tax refund or tax
credit."73 Respondents raise the following arguments:
1. The transitional input tax provided under Section 105 in relation to Section
100 of the Tax Code, as amended by EO No. 273 effective January 1, 1988,
is subject to certain conditions which petitioner failed to meet.74
2. The claim for petitioner for transitional input tax is in the nature of a tax
exemption which should be strictly construed against it. 75
3. Revenue Regulations No. 7-95 is valid and consistent with provisions of
the NIRC.76 Moreover, respondents contend that:
"[P]etitioner is not legally entitled to any transitional input tax credit, whether it be the
8% presumptive inputtax credit or any actual input tax credit in respect of its inventory
of land brought into the VAT regime beginning January 1, 1996, in view of the
following:
1. VAT free acquisition of the raw land. petitioner purchased and acquired, from the
Government, the aforesaid raw land under a VAT free sale transaction. The
Government, as a vendor, was tax-exempt and accordingly did not pass on any VAT
or sales tax as part of the price paid therefor by the petitioner.
2. No transitory input tax on inventory of land is allowed. Section 105 of the Code, as
amended by Republic Act No. 7716, and as implemented by Section 4.105-1 of
Revenue Regulations No. 7-95, expressly provides that no transitional input tax credit
shall be allowed to real estate dealers in respect of their beginning inventory of land
brought into the VAT regime beginning January 1, 1996 (supra). Likewise, the
Transitory Provisions [(a) (iii)] of Revenue Regulations No. 7-95 categorically states
that "for real estate dealers, the presumptive input tax of 8% of the book value of
improvements constructed on or after January 1, 1998 (effectivity of E.O. 273) shall
be allowed." For purposes of subparagraphs (i), (ii) and (iii) above, an inventory as of
December 31, 1995 ofsuch goods or properties and improvements showing the
quantity, description, and amount should be filed with the RDO not later than January
31, 1996. It is admitted that petitioner filed its inventory listing of real properties on
September 19, 1996 or almost nine (9) months late in contravention [of] the
requirements in Revenue Regulations No. 7-95."77
Respondents, quoting the Civil Code,78 argue that Section 4.105-1 of Revenue
Regulations No. 7-95 has the force and effect of a law since it is not contrary to any
law or the Constitution. Respondents add that "[w]hen the administrative agency
promulgates rules and regulations, it makes a new law with the force and effect of a
valid law x x x."79
 ISSUES
The main issue before us now is whether or not petitioner is entitled to a refund of the
amounts of: 1)P486,355,846.78 in G.R. No. 175707, 2) P77,151,020.46 for G.R. No.
180035, and 3) P269,340,469.45 in G.R. No. 181092, which it paid as value-added
tax, or to a tax credit for said amounts.
To resolve the issue stated above, it is also necessary to determine:
Whether the transitional/presumptive input tax credit under Section 105 of the NIRC
may be claimed only on the "improvements" on real properties;
Whether there must have been previous payment of sales tax or value added tax by
petitioner on its land before it may claim the input tax credit granted by Section 105 of
the NIRC;
Whether Revenue Regulations No. 7-95 is a valid implementation of Section 105 of
the NIRC; and
Whether the issuance of Revenue Regulations No. 7-95 by the BIR, and declaration
of validity of saidRegulations by the Court of Tax Appeals and the Court of Appeals,
was in violation of the fundamental principle of separation of powers.
THE RULINGS BELOW
A. G.R. No. 175707
1. CTA Case No. 5885 Decision (October 13, 2000)
The CTA traced the history of "transitional input tax credit" from the original VAT Law
of 1988 (Executive Order No. 273) up to the Tax Reform Act of 1997 and looked into
Section 105 of the Tax Code. According to the CTA, the BIR issued Revenue
Regulations No. 5-87, specifically Section 26(b),80 to implement the provisions of
Section 105. The CTA concluded from these provisions that "the purpose of granting
transitional input tax credit to be utilized as payment for output VAT is primarily to give
recognition to the sales tax component of inventories which would qualify as input tax
credit had such goods been acquired during the effectivity of the VAT Law of
1988."81The CTA stated that the purpose of transitional input tax credit remained the
same even after the amendments introduced by the E-VAT Law.82 The CTA held that
"the rationale in granting the transitional input tax credit also serves as its condition
for its availment as a benefit"83 and that "[i]nherent in the law is the condition of prior
payment of VAT or sales taxes."84 The CTA excluded petitioner from availing of the
transitional input tax credit provided by law, reasoning that "to base the 8%
transitional input tax on the book value of the land isto negate the purpose of the law
in granting such benefit. It would be tantamount to giving an undeserved bonus to real
estate dealers similarly situated as petitioner which the Government cannot afford to
provide."85 Furthermore, the CTA held that respondent was correct in basing the 8%
transitional input tax credit on the value of the improvements on the land, citing
Section 4.105-1 of Revenue Regulations No. 7-95, which the CTA claims is
consistent and in harmony with the law it seeks to implement. Thus, the CTA denied
petitioners claim for refund.86
2. CA-G.R. No. 61516 Decision (April 22, 2003)
The Court of Appeals affirmed the CTA and ruled that petitioner is not entitled to
refund or tax credit in the amount of P486,355,846.78 and stated that "Revenue
Regulations No. 7-95 is a valid implementation of the NIRC."87 According to the
Court of Appeals:
"[P]etitioner acquired the contested property from the National Government under a
VAT-free transaction. The Government, as a vendor was outside the operation of the
VATand ergo, could not possibly have passed on any VAT or sales tax as part of the
purchase price to the petitioner as vendee."88
x x x [T]he grant of transitional input tax credit indeed presupposes that the
manufacturers, producers and importers should have previously paid sales taxes on
their inventories. They were given the benefit of transitional input tax credits,
precisely, to make up for the previously paid sales taxes which were now abolished
by the VAT Law. It bears stressing that the VAT Law took the place of privilege taxes,
percentage taxes and sales taxes on original or subsequent sale of articles. These
taxes were substituted by the VAT at the constant rate of 0% or 10%. 89
3. CA-G.R. No. 61516 Resolution (November 30, 2006)
Upon petitioners Motion for Reconsideration, the Court of Appeals affirmed its
decision, but we find the following statement by the appellate court worthy of note:
We concede that the inventory restrictions under Revenue Regulation No. 7-95
limiting the coverage of the inventory only to acquisition cost of the materials used in
building "improvements" has already been deleted by Revenue Regulation 6-97. This
notwithstanding, we are poised to sustain our earlier ruling as regards the refund
presently claimed.90
B. G.R. No. 180035
1. CTA Case No. 6021 Decision (January 30, 2002)
The CTA sustained petitioners position and held that respondent erred in basing the
transitional input tax credit of real estate dealers on the value of the
improvements.91 The CTA ratiocinated as follows:
This Court, in upholding the position taken by the petitioner, is convinced that Section
105 of the Tax Code is clear in itself. Explicit therefrom is the fact that a taxpayer shall
be allowed a transitional/presumptive input tax credit based on the value of its
beginning inventory of goods which is defined in Section 100 as to encompass even
real property. x x x.92
The CTA went on to point out inconsistencies it had found between the transitory
provisions of Revenue Regulations No. 7-95 and the law it sought to implement, in
the following manner:
Notice that letter (a)(ii) of the x x x transitory provisions 93 states that goods or
properties purchased with the object of resalein their present condition comes with
the corresponding 8% presumptive input tax of the value of the goods, which amount
may alsobe credited against the output tax of a VAT-registered person. It must be
remembered that Section 100 as amended by Republic Act No. 7716 extends the
term "goods or properties" to real properties held primarily for sale to customers or
held for lease in the ordinary course of trade or business. This provision alone entitles
Petitioner to the 8%presumptive input tax of the value of the land (goods or
properties) sold. However in letter (a)(iii) of the same Transitory Provisions,
Respondent apparently changed his (sic) course when it declared that real estate
dealers are only entitled to the 8% of the value of the improvements. This glaring
inconsistency between the two provisions prove that Revenue Regulations No. 7-95
was not a result of an intensive study and analysis and may have been haphazardly
formulated.94
The CTA held that the implementing regulation, which provides that the 8%
transitional input tax shall bebased on the improvements only of the real properties, is
neither valid nor effective.95 The CTA also sustained petitioners argument that
Revenue Regulations No. 7-95 provides no specific date as to when the inventory list
should be submitted. The relevant portion of the CTA decision reads:
The only requirement is that the presumptive input tax shall be supported by an
inventory of goods asshown in a detailed list to be submitted to the BIR. Moreover,
the requirement of filing an inventory of goods not later than January 31, 1996 inthe
transitory provision of the same regulation refers to the recognition of presumptive
input tax on goods or properties on hand as of December 31, 1995 of taxpayers
already liable to VAT as of that date.
Clearly, Petitioner is entitled to the presumptive input tax in the amount
of P5,698,200,256.00, computed as follows:
Book Value of Inventory x x x P71,227,503,200.00
Multiply by Presumptive
Input Tax rate _____ 8%
Available Presumptive Input Tax P5,698,200,256.00
The failure of the Petitioner to consider the presumptive input tax in the computation
of its output tax liability for the 1st quarter of 1998 results to overpayment of the VAT
for the same period.
To prove the fact of overpayment, Petitioner presented the original Monthly VAT
Declaration for the month of January 1998 showing the amount of P77,151,020.46 as
the cash component of the value-added taxes paid (Exhibits E-14 & E-14-A) which is
the subject matter of the instant claim for refund.
In Petitioners amended quarterly VAT return for the 1st quarter of 1998 (Exhibit D-1),
Petitioner deducted the amount of P77,151,020.46 from the total available input tax
toshow that the amount being claimed would no longer be available as input tax
credit.
In conclusion, the Petitioner has satisfactorily proven its entitlement to the refund of
value-added taxes paid for the first quarter of taxable year 1998.
WHEREFORE, in view of the foregoing, the Petition for Review is GRANTED.
Respondents are hereby ORDERED to REFUND or issue a TAX CREDIT
CERTIFICATE in favor of the Petitioner the total amount of P77,151,020.46
representing the erroneously paid value-added tax for the first quarter of 1998.96
2. CTA Case No. 6021 Resolution (March 28, 2003)
The CTA reversedits earlier ruling upon respondents motion for reconsideration and
thus denied petitioners claim for refund. The CTA reasoned and concluded as
follows:
The vortex of the controversy in the instant case actually involves the question of
whether or not Section 4.105-1 of Revenue Regulations No. 7-95, issued by the
Secretary of Finance upon recommendation of the Commissioner of Internal
Revenue, is valid and consistent with and not violative of Section 105 of the Tax
Code, in relation to Section 100 (a)(1)(A).
xxxx
We agree with the position taken by the respondents that Revenue Regulations No.
7-95 is not contrary to the basic law which it seeks to implement. As clearly worded,
Section 105 of the Tax Code provides that a person who becomes liable to value-
added tax or any person who elects to be a VAT-registered person shall be allowed
8% transitional input tax subject to the filing of an inventory as prescribed by
regulations.
Section 105, which requires the filing of an inventory for the grant of the transitional
input tax, is couched in a manner where there is a need for an implementing rule or
regulation tocarry its intendment. True to its wordings, the BIR issued Revenue
Regulations No. 7-95 (specifically Section 4.105-1) which succinctly mentioned that
the basis of the presumptive input tax shall be the improvements in case of real
estate dealers.97
xxxx
WHEREFORE, in view of the foregoing, the instant Motion for Reconsideration filed
by respondents is hereby GRANTED. Accordingly, petitioners claim for refund of the
alleged overpaid Value-Added Tax in the amount ofP77,151,020.46 covering the first
quarter of 1998 is hereby DENIEDfor lack of merit.98
3. CA-G.R. SP No. 76540 Decision (April 30, 2007)
The Court of Appeals affirmed the CTAs Resolution denying petitioners claim for
refund, and we quote portions of the discussion from the Court of Appeals decision
below:
To Our mind, the key to resolving the jugular issue of this controversy involves a
deeper analysis on how the much-contested transitional input tax credit has been
encrypted in the countrys valueadded tax (VAT) system.
xxxx
x x x [T]he Commissioner of Internal Revenue promulgated Revenue Regulations No.
7-95which laid down, among others, the basis of the transitional input tax credit for
real estate dealers:99 x x x x
The Regulation unmistakably allows credit for transitional input tax of any person who
becomes liable to VAT or who elects to be a VAT registered person. More
particularly, real estate dealers who were beforehand not subject to VAT are allowed
a tax credit to cushion the staggering effect of the newly imposed 10% output VAT
liability under RA No. 7716.
Bearing in mind the purpose of the transitional input tax credit under the VAT system,
We find it incongruous to grant petitioners claim for tax refund. We take note of the
fact that petitioner acquired the Global City lots from the National Government. The
transaction was not subject to any sales or business tax. Since the seller did not pass
on any tax liability to petitioner, the latter may not claim tax credit. Clearly then,
petitioner cannot simply demand that it is entitled to the transitional input tax credit.
xxxx
Another point.Section 105 of the National Internal Revenue Code, as amended by EO
No. 273, explicitly provides that the transitional input tax credit shall be based on "the
beginning inventory of goods, materials and supplies orthe actual value-added tax
paid on such goods, materials and supplies, whichever is higher." Note that the law
did not simply say the transitional input tax credit shall be 8% of the beginning
inventory of goods, materials and supplies.
Instead, lawmakers went on to say that the creditable input tax shall be whichever is
higher between the value of the inventory and the actual VAT paid. Necessarily then,
a comparison of these two figures would have to be made. This strengthens Our view
that previous payment of the VAT is indispensable to determine the actual value of
the input tax creditable against the output tax. So too, this is in consonance with the
present tax credit method adopted in this jurisdiction whereby an entity can credit
against or subtract from the VAT charged on its sales or outputs the VAT paid on its
purchases, inputs and imports.
We proceed to traverse another argument raised in this controversy. Petitioner insists
that the term "goods" which was one of the bases in computing the transitional
inputtax credit must be construed so as to include real properties held primarily for
sale to customers. Petitioner posits that respondent Commissioner practically rewrote
the law when it issued Revenue Regulations No. 7-95 which limited the basis of the
8% transitional input tax credit to the value of improvements alone.
Petitioner is clearly mistaken.
The term "goods" has been defined to mean any movable or tangible objects which
are appreciable or tangible. More specifically, the word "goods" is always used to
designate wares, commodities, and personal chattels; and does not include chattels
real."Real property" on the other hand, refers to land, and generally whatever is
erected or growing upon or affixed to land. It is therefore quite absurd to equate
"goods" as being synonymous to "properties". The vast difference between the terms
"goods" and "real properties" is so obvious that petitioners assertion must be
struckdown for being utterly baseless and specious.
Along this line, We uphold the validity of Revenue Regulations No. 7-95. The
authority of the Secretary of Finance, in conjunction with the Commissioner of Internal
Revenue, to promulgate all needful rules and regulations for the effective
enforcement of internal revenue laws cannot be controverted. Neither can it be
disputed that such rules and regulations, as well as administrative opinions and
rulings, ordinarily should deserve weight and respect by the courts. Much more
fundamental than either of the above, however, is that all such issuances must not
override, but must remain consistent and in harmony with, the law they seek to apply
and implement. Administrative rules and regulations are intended to carry out, neither
to supplant nor to modify, the law. Revenue Regulations No. 7-95 is clearly not
inconsistent with the prevailing statute insofar as the provision on transitional inputtax
credit is concerned.100
4. CA-G.R. SP No. 76540 Resolution (October 8, 2007)
In this Resolution, the Court of Appeals denied petitioners Motion for Reconsideration
of its Decision dated April 30, 2007.
C. G.R. No. 181092
1. CTA Case No. 5694 Decision (September 29, 2000)
The CTA ruled that petitioner is not automatically entitled to the 8% transitional input
tax allowed under Section 105 of the Tax Code based solely on its inventory of real
properties, and cited the rule on uniformity in taxation duly enshrined in the
Constitution.101 According to the CTA:
As defined under the above Section 104 of the Tax Code, an "input tax" means the
VAT paid by a VAT-registered person in the course of his trade or business on
importation ofgoods or services from a VAT registered person; and that such tax shall
include the transitional input tax determined in accordance with Section 105 of the
Tax Code,supra.102
Applying the rule on statutory construction that particular words, clauses and phrases
should not be studied as detached and isolated expressions, but the whole and every
part of the statute must be considered in fixing the meaning of any of its parts in order
to produce a harmonious whole, the phrase "transitional input tax" found in Section
105 should be understood to encompass goods, materials and supplies which are
subject to VAT, in line with the context of "input tax" as defined in Section 104, most
especially that the latter includes, and immediately precedes, the former under its
statutory meaning. Petitioners contention that the 8% transitional input tax is
statutorily presumed to the extent that its real properties which have not been
subjected to VAT are entitled thereto, would directly contradict "input tax" as defined
in Section 104 and would invariably cause disharmony.103
The CTA held that the 8% transitional input tax should not be viewed as an outright
grant or presumption without need of prior taxes having been paid. Expounding on
this, the CTA said: The simple instance in the aforesaid paragraphs of requiring the
tax on the materials, supplies or goods comprising the inventory to be currently
unutilized as deferred sales tax credit before the 8% presumptive input tax can be
enjoyed readily leads to the inevitable conclusion that such 8% tax cannot be just
granted toany VAT liable person if he has no priorly paid creditable sales taxes.
Legislative intent thus clearly points to priorly paid taxes on goods, materials and
supplies before a VAT registered person can avail of the 8% presumptive input tax. 104
Anent the applicability to petitioners case of the requirement under Article VI, Section
28, par. 1 of the Constitution that the rule of taxation shall be uniform and equitable,
the CTA held thus: Granting arguendo that Petitioner is statutorily presumed to be
entitled to the 8% transitional input tax as provided in Section 105, even without
having previously paid any tax on its inventory of goods, Petitioner would be placed at
a more advantageous position than a similar VAT-registered person who also
becomes liable to VAT but who has actually paid VAT on his purchases of goods,
materials and supplies. This is evident from the alternative modes of acquiring the
proper amount of transitional input tax under Section 105, supra. One is by getting the
equivalent amount of 8% tax based on the beginning inventory of goods, materials
and supplies and the other is by the actual VAT paid on such goods, materials and
supplies, whichever is higher.
As it is supposed to work, the transitional input tax should answer for the 10% output
VAT liability thata VAT-registered person will incur once he starts business
operations. While a VAT-registered person who is allowed a transitional input tax
based on his actual payment of 10% VAT on his purchases can utilize the same to
pay for his output VAT liability, a similar VAT-registered person like herein Petitioner,
when allowed the alternative 8% transitional input tax, can offset his output VAT
liability equally through such 8% tax even without having paid any previous tax. This
obvious inequity that may arise could not have been the intention and purpose of the
lawmakers in granting the transitional input tax credit. x x x105
Evidently, Petitioner is not similarly situated both as to privileges and liabilities to that
of a VAT-registered person who has paid actual 10% input VAT on his purchases of
goods, materials and supplies. The latter person will not earn anything from his
transitional input tax which, to emphasize, has been paid by him because the same
will just offset his 10% output VAT liability. On the other hand, herein Petitioner will
earn gratis the amount equivalent to 10% output VAT it has passed on to buyers for
the simple reason that it has never previously paid any input tax on its goods. Its gain
will be facilitated by herein claim for refund if ever granted. This is the reason why we
do not see any incongruity in Section 4.105-1 of Revenue Regulations No. 7-95 as it
relates to Section 105 of the 1996 Tax Code, contrary to the contention of Petitioner.
Section 4.105-1 (supra), which bases the transitional input tax credit on the value of
the improvements, is consistent with the purpose of the law x x x. 106
2. CA-G.R. SP No. 61158 Decision (December 28, 2007) The Court of Appeals
affirmed the CTAs denial of petitioners claim for refund and upheld the validity of the
questioned Revenue Regulation issued by respondent Commissioner ofInternal
Revenue, reasoning as follows:
Sec. 105 of the NIRC, as amended, provides that the allowance for the 8% input tax
on the beginning inventory of a VAT-covered entity is "subject to the filing of an
inventory as prescribed by regulations." This means that the legislature left to the BIR
the determination of what will constitute the beginning inventory ofgoods, materials
and supplies which will, in turn, serve as the basis for computing the 8% input tax.
While the power to tax cannot be delegated to executive agencies, details as to the
enforcement and administration of an exercise of such power may be left to them,
including the power to determine the existence of facts on which its operation
depends x x x. Hence, there is no gainsaying that the CIR and the Secretary of
Finance, in limiting the application of the input tax of real estate dealers to
improvements constructed on or after January 1, 1988, merely exercised their
delegated authority under Sec. 105, id., to promulgate rules and regulations defining
what should be included in the beginning inventory of a VAT-registered entity.
xxxx
In the instant case, We find that, contrary to petitioners attacks against its validity, the
limitation on the beginning inventory of real estate dealers contained in Sec. 4.105-1
of RR No. 7-95 is reasonable and consistent with the natureof the input VAT. x x x.
Based on the foregoing antecedents, it is clear why the second paragraph of Sec.
4.105-1 of RR No. 7-95 limits the transitional input taxes of real estate dealers to the
value of improvements constructed on or after January 1, 1988. Since the sale of the
land was not subject to VAT or other sales taxes prior to the effectivity of Rep. Act No.
7716, real estate dealers at that time had no input taxes to speak of. With this in
mind, the CIR correctly limited the application of the 8% transitional input tax to
improvements on real estate dealers constructed on or after January 1, 1988 when
the VAT was initially implemented. This is, as it should be, for to grant petitioner a
refund or credit for input taxes it never paid would be tantamount to unjust
enrichment.
As petitioner itself observes, the input tax credit provided for by Sec. 105 of the NIRC
is a mechanism used to grant some relief from burden some taxes. It follows,
therefore, that not having been burdened by VAT or any other sales tax on its
inventory of land prior to the effectivity of Rep. Act No. 7716, petitioner is not entitled
to the relief afforded by Sec. 105, id.107
The Court of Appeals ruled that petitioner is not similarly situated as those business
entities which previously paid taxes on their inputs, and stressed that "a tax refund or
credit x x x is in the nature of a tax exemption which must be construed strictissimi
juris against the taxpayer x x x."108
THIS COURTS RULING
As previously stated, the issues here have already been passed upon and resolved
by this Court En Banc twice, in decisions that have reached finality, and we are bound
by the doctrine of stare decisis to apply those decisions to these consolidated cases,
for they involve the same facts, issues, and even parties.
Thus, we find for the petitioner.
DISCUSSION
The errors assigned by petitioner to the Court of Appeals and the arguments offered
by respondents to support the denial of petitioners claim for tax refund have already
been dealt with thoroughly by the Court En Banc in Fort Bonifacio Development
Corporation v. Commissioner of Internal Revenue, G.R. Nos. 158885 and 170680
(Decision - April 2, 2009; Resolution - October 2, 2009); and Fort Bonifacio
Development Corporation v. Commissioner of Internal Revenue, G.R. No. 173425
(Decision - September 4, 2012; Resolution - January 22, 2013).
The Court En Bancdecided on the following issues in G.R. Nos. 158885 and 170680:
1. In determining the 10% value-added tax in Section 100 of the [Old NIRC]
on the sale of real properties by real estate dealers, is the 8% transitional
input tax credit in Section 105 applied only to the improvements on the real
property or is it applied on the value of the entire real property?
2. Are Section 4.105.1 and paragraph (a)(III) of the Transitory Provisions of
Revenue Regulations No. 7-95 valid in limiting the 8% transitional input tax
to the improvements on the real property?
Subsequently, in G.R. No. 173425, the Court resolved issues that are identical to the
ones raised here by petitioner,109 thus:
3.05.a. Whether Revenue Regulations No. 6-97 effectively repealed or
repudiated Revenue Regulations No. 7-95 insofar as the latter limited the
transitional/presumptive input tax credit which may be claimed under Section
105 of the National Internal Revenue Code to the "improvements" on real
properties.
3.05.b. Whether Revenue Regulations No. 7-95 is a valid implementation of
Section 105 of the National Internal Revenue Code.
3.05.c. Whether the issuance of Revenue Regulations No. 7-95 by the
Bureau of Internal Revenue, and declaration of validity of said Regulations
by the Court of Tax Appeals and Court of Appeals, [were] in violation of the
fundamental principle of separation of powers.
3.05.d. Whether there is basis and necessity to interpret and construe the
provisions of Section 105 of the National Internal Revenue Code.
3.05.e. Whether there must have been previous payment of business tax
[sales tax or value-added tax]110by petitioner on its land before it may claim
the input tax credit granted by Section 105 of the National Internal Revenue
Code.
3.05.f. Whether the Court of Appeals and Court of Tax Appeals merely
speculated on the purpose of the transitional/presumptive input tax provided
for in Section 105 of the National Internal Revenue Code.
3.05.g. Whether the economic and socialobjectives in the acquisition of the
subject property by petitioner from the Government should be taken into
consideration.111
The Courts pronouncements in the decided cases regarding these issues are
discussed below. The doctrine of stare decisis et non quieta movere, which means "to
abide by, or adhere to, decided cases,"112 compels us to apply the rulings by the
Court tothese consolidated cases before us. Under the doctrine of stare decisis,
"when this Court has once laid down a principle of law as applicable to a certainstate
of facts, it will adhere to that principle, and apply it to all future cases, where facts are
substantially the same; regardless of whether the parties and property are the
same."113 This is to provide stability in judicial decisions, as held by the Court in a
previous case:
Stand by the decisions and disturb not what is settled. Stare decisis simply means
that for the sake of certainty, a conclusion reached in one case should be applied to
those that follow if the facts are substantially the same, even though the parties may
be different. It proceeds from the first principle of justice that, absent any powerful
countervailing considerations, like cases ought to be decided alike. 114
More importantly, we cannot depart from the legal precedents as laid down by the
Court En Banc. It is provided in the Constitution that "no doctrine or principle of law
laid down by the court in a decision rendered en bancor in division may be modified
or reversed except by the court sitting en banc." 115
What is left for this Court to do is to reiterate the rulings in the aforesaid legal
precedents and apply them to these consolidated cases.
As regards the main issue, the Court conclusively held that petitioner is entitled to the
8% transitional input tax on its beginning inventory of land, which is granted in Section
105 (nowSection 111[A]) of the NIRC, and granted the refund of the amounts
petitioner had paid as output VAT for the different tax periods in question. 116
Whether the transitional/presumptive
input tax credit under Section 105 of the
NIRC may be claimed only on the
"improvements" on real properties.
The Court held in the earlier consolidated decision, G.R. Nos. 158885 and 170680, as
follows: On its face, there is nothing in Section 105 of the Old NIRC that prohibits the
inclusion of real properties, together with the improvements thereon, in the beginning
inventory of goods, materials and supplies, based on which inventory the transitional
input tax credit is computed. It can be conceded that when it was drafted Section 105
could not have possibly contemplated concerns specific to real properties, as real
estate transactions were not originally subject to VAT. At the same time, when
transactions on real properties were finally made subject to VAT beginning withRep.
Act No. 7716, no corresponding amendment was adopted as regards Section 105 to
provide for a differentiated treatment in the application of the transitional input tax
credit with respect to real properties or real estate dealers.
It was Section 100 of the Old NIRC, as amended by Rep. Act No. 7716, which made
real estate transactions subject to VAT for the first time. Prior to the amendment,
Section 100 had imposed the VAT "on every sale, barter or exchange of goods",
without however specifying the kind of properties that fall within or under the generic
class "goods" subject to the tax.
Rep. Act No. 7716, which significantly is also known as the Expanded Value-Added
Tax (EVAT) law, expanded the coverage of the VAT by amending Section 100 of the
Old NIRC in several respects, some of which we will enumerate. First, it made every
sale, barter or exchange of "goods or properties" subject to VAT. Second, it generally
defined "goods or properties" as "all tangible and intangible objects which are capable
of pecuniary estimation." Third, it included a non-exclusive enumeration of various
objects that fall under the class "goods or properties" subject to VAT, including "[r]eal
properties held primarily for sale to customers or held for lease in the ordinary
courseof trade or business."
From these amendments to Section 100, is there any differentiated VAT treatment on
realproperties or real estate dealers that would justify the suggested limitations on the
application of the transitional input tax on them? We see none.
Rep. Act No. 7716 clarifies that it is the real properties "held primarily for sale to
customers or held for lease in the ordinary course of trade or business" that are
subject to the VAT, and not when the real estate transactions are engaged in by
persons who do not sell or lease properties in the ordinary course of trade or
business. It is clear that those regularly engaged in the real estate business are
accorded the same treatment as the merchants of other goods or properties available
in the market. In the same way that a milliner considers hats as his goods and a
rancher considers cattle as his goods, a real estate dealer holds real property,
whether ornot it contains improvements, as his goods.117 (Citations omitted, emphasis
added.)
xxxx
Under Section 105, the beginning inventory of "goods" forms part of the valuation of
the transitional input tax credit. Goods, as commonly understood in the business
sense, refers to the product which the VAT registered person offers for sale to the
public. With respect to real estate dealers, it is the real properties themselves which
constitute their "goods". Such real properties are the operating assets of the real
estate dealer.
Section 4.100-1 of RR No. 7-95 itself includes in its enumeration of "goods or
properties" such "real properties held primarily for sale to customers or held for lease
in the ordinary course of trade or business." Said definition was taken from the very
statutory language of Section 100 of the Old NIRC. By limiting the definition of goods
to "improvements" in Section 4.105-1, the BIR not only contravened the definition of
"goods" as provided in the Old NIRC, but also the definition which the same revenue
regulation itself has provided.118 (Emphasis added.)
The Court then emphasized in its Resolution in G.R. No. 158885 and G.R. No.
170680 that Section 105 of the old NIRC, on the transitional input tax credit, remained
intact despite the enactment of Republic Act No. 7716. Section 105 was amended by
Republic Act No. 8424, and the provisions on the transitional input tax credit are now
embodied in Section 111(A) of the new NIRC, which reads:
Section 111. Transitional/Presumptive Input Tax Credits.
(A) Transitional Input Tax Credits. A person who becomes liable to value-added tax
or any person who elects to be a VAT-registered person shall, subject to the filing of
an inventory according to rules and regulations prescribed by the Secretary of
[F]inance, upon recommendation of the Commissioner, be allowed input tax on his
beginning inventory of goods, materials and supplies equivalent for 8% of the value of
such inventory or the actual value-added tax paid on such goods, materials and
supplies, whichever is higher, which shall be creditable against the output tax.119
In G.R. Nos. 158885 and 170680, the Court asked, "If the plain text of Republic Act
No. 7716 fails to supply any apparent justification for limiting the beginning inventory
of real estate dealers only to the improvements on their properties, how then were the
Commissioner of Internal Revenue and the courts a quoable to justify such a
view?"120 The Court then answered this question in this manner:
IV.
The fact alone that the denial of FBDC's claims is in accord with Section 4.105-1 of
RR 7-95 does not, of course, put this inquiry to rest. If Section 4.105-1 is itself
incongruent to Rep. Act No. 7716, the incongruence cannot by itself justify the denial
of the claims. We need to inquire into the rationale behind Section 4.105-1, as well as
the question whether the interpretation of the law embodied therein is validated by the
law itself.
xxxx
It is correct, as pointed out by the CTA, that upon the shift from sales taxes to VAT in
1987 newly-VAT registered people would have been prejudiced by the inability to
credit against the output VAT their payments by way of sales tax on their existing
stocks in trade. Yet that inequity was precisely addressed by a transitory provision in
E.O. No. 273 found in Section 25 thereof. The provision authorized VAT-registered
persons to invoke a "presumptive input tax equivalent to 8% of the value of the
inventory as of December 31, 1987 of materials and supplies which are not for sale,
the tax on which was not taken up or claimed as deferred sales tax credit," and a
similar presumptive input tax equivalent to 8% of the value of the inventory as of
December 31, 1987 of goods for sale, the tax on which was not taken up or claimed
as deferred sales tax credit.121 (Emphasis ours.)
Whether there must have been previous
payment of sales tax or value-added tax
by petitioner on its land before petitioner
may claim the input tax credit granted by
Section 105 (now Section 111[A]) of the NIRC.
The Court discussed this matter lengthily in its Decision in G.R. Nos. 158885 and
170680, and we quote:
Section 25 of E.O. No. 273 perfectly remedies the problem assumed by the CTA as
the basis for the introduction of transitional input tax credit in 1987. If the core
purpose of the tax credit is only, as hinted by the CTA, to allow for some mode of
accreditation of previously-paid sales taxes, then Section 25 alone would have
sufficed. Yet E.O. No. 273 amended the Old NIRC itself by providing for the
transitional input tax credit under Section 105, thereby assuring that the tax credit
would endure long after the last goods made subject to sales tax have been
consumed.
If indeed the transitional input tax credit is integrally related to previously paid sales
taxes, the purported causal link between those two would have been nonetheless
extinguished long ago. Yet Congress has reenacted the transitional input tax credit
several times; that fact simply belies the absence of any relationship between such
tax credit and the long-abolished sales taxes. Obviously then, the purpose behind the
transitional input tax credit is not confined to the transition from sales tax to VAT.
x x x Section 105 states that the transitional input tax credits become available either
to (1) a person who becomes liable to VAT; or (2) any person who elects to be VAT-
registered. The clear language of the law entitles new trades or businesses to avail of
the tax credit once they become VAT-registered. The transitional input tax credit,
whether under the Old NIRC or the New NIRC, may be claimed by a newly-VAT
registered person such as when a business as it commences operations.
x x x [I]t is not always true that the acquisition of such goods, materials and supplies
entail the payment of taxes on the part of the new business. In fact, this could occur
as a matter of course by virtue of the operation of various provisions of the NIRC, and
not only on account of a specially legislated exemption.
xxxx
The interpretation proffered by the CTA would exclude goods and properties which
are acquired through sale not in the ordinary course of trade or business, donation or
through succession, from the beginning inventory on which the transitional input tax
credit is based. This prospect all but highlights the ultimate absurdity of the
respondents' position. Again, nothing in the Old NIRC (or even the New NIRC)
speaks of such a possibility or qualifies the previous payment of VAT or any other
taxes on the goods, materials and supplies as a pre-requisite for inclusion in the
beginning inventory.
It is apparent that the transitional input tax credit operates to benefit newly VAT-
registered persons, whether or not they previously paid taxes in the acquisition of
their beginning inventory of goods, materials and supplies. During that period of
transition from non-VAT to VAT status, the transitional input tax credit serves to
alleviate the impact of the VAT on the taxpayer. At the very beginning, the VAT-
registered taxpayer is obliged to remit a significant portion of the income it derived
from its sales as output VAT. The transitional input tax credit mitigates this initial
diminution of the taxpayer's income by affording the opportunity to offset the losses
incurred through the remittance of the output VAT at a stage when the person is yet
unable to credit input VAT payments.
There is another point that weighs against the CTA's interpretation. Under Section
105 of the Old NIRC, the rate of the transitional input tax credit is "8% of the value of
such inventory or the actual value-added tax paid on such goods, materials and
supplies, whichever is higher." If indeed the transitional input tax credit is premised on
the previous payment of VAT, then it does not make sense to afford the taxpayer the
benefit of such credit based on "8% of the value of such inventory" should the same
prove higher than the actual VAT paid. This intent that the CTA alluded to could have
been implemented with ease had the legislature shared such intent by providing the
actual VAT paid as the sole basis for the rate of the transitional input tax credit.
The CTA harped on the circumstance that FBDC was excused from paying any tax
on the purchase of its properties from the national government, even claiming that to
allow the transitional input tax credit is "tantamount to giving an undeserved bonusto
real estate dealers similarly situated as [FBDC] which the Government cannot afford
to provide." Yet the tax laws in question, and all tax laws in general, are designed to
enforce uniform tax treatment to persons or classes of persons who share minimum
legislated standards. The common standard for the application of the transitional input
tax credit, as enacted by E.O. No. 273 and all subsequent tax laws which reinforced
or reintegrated the tax credit, is simply that the taxpayer in question has become
liable to VAT or has elected to be a VAT-registered person. E.O. No. 273 and the
subsequent tax laws are all decidedly neutral and accommodating in ascertaining
who should be entitled to the tax credit, and it behooves the CIR and the CTA to
adopt a similarly judicious perspective.122 (Citations omitted, emphases ours.)
The Court En Bancin its Resolution in G.R. No. 173425 likewise discussed the
question of prior payment of taxes as a prerequisite before a taxpayer could avail of
the transitional input tax credit. The Court found that petitioner is entitled to the 8%
transitional input tax credit, and clearly said that the fact that petitioner acquired the
Global City property under a tax-free transaction makes no difference as prior
payment of taxes is not a prerequisite.123 We quote pertinent portions of the resolution
below:
This argument has long been settled. To reiterate, prior payment of taxes is not
necessary before a taxpayer could avail of the 8% transitional input tax credit. This
position is solidly supported by law and jurisprudence, viz.:
First.Section 105 of the old National Internal Revenue Code (NIRC) clearly provides
that for a taxpayer to avail of the 8% transitional input tax credit, all that is required
from the taxpayer is to file a beginning inventory with the Bureau of Internal Revenue
(BIR). It was never mentioned in Section 105 that prior payment of taxes is a
requirement. x x x.
xxxx
Second. Since the law (Section 105 of the NIRC) does not provide for prior payment
of taxes, to require it now would be tantamount to judicial legislation which, to state
the obvious, is not allowed.
Third. A transitional input tax credit is not a tax refund per se but a tax credit.
Logically, prior payment of taxes is not required before a taxpayer could avail of
transitional input tax credit. As we have declared in our September 4, 2012 Decision,
"[t]ax credit is not synonymous to tax refund. Tax refund is defined as the money that
a taxpayer overpaid and is thus returned by the taxing authority. Tax credit, on the
other hand, is an amount subtracted directly from one's total tax liability. It is any
amount given to a taxpayer as a subsidy, a refund, or an incentive to encourage
investment."
Fourth. The issue of whether prior payment of taxes is necessary to avail of
transitional input tax credit is no longer novel. It has long been settled by
jurisprudence. x x x.
Fifth. Moreover, in Commissioner of Internal Revenue v. Central Luzon Drug Corp.,
this Court had already declared that prior payment of taxes is not required in order
toavail of a tax credit. x x x124 (Citations omitted, emphases ours.)
The Court has thus categorically ruled that prior payment of taxes is not required for a
taxpayer toavail of the 8% transitional input tax credit provided in Section 105 of the
old NIRC and that petitioner is entitled to it, despite the fact that petitioner acquired
the Global City property under a tax-free transaction.125 The Court En Banc held:
Contrary to the view of the CTA and the CA, there is nothing in the abovequoted
provision to indicate that prior payment of taxes is necessary for the availment of the
8% transitional input tax credit. Obviously, all that is required is for the taxpayerto file
a beginning inventory with the BIR.
To require prior payment of taxes x x x is not only tantamount to judicial legislation but
would also render nugatory the provision in Section 105 of the old NIRC that the
transitional input tax credit shall be "8% of the value of [the beginning] inventory or the
actual [VAT] paid on such goods, materials and supplies, whichever is higher"
because the actual VAT (now 12%) paid on the goods, materials, and supplies would
always be higher than the 8% (now 2%) of the beginning inventory which, following
the view of Justice Carpio, would have to exclude all goods, materials, and supplies
where no taxes were paid. Clearly, limiting the value of the beginning inventory only
to goods, materials, and supplies, where prior taxes were paid, was not the intention
of the law. Otherwise, it would have specifically stated that the beginning inventory
excludes goods, materials, and supplies where no taxes were paid.126
Whether Revenue Regulations No. 7-95 is
a valid implementation of Section 105 of
the NIRC.
In the April 2, 2009 Decision inG.R. Nos. 158885 and 170680, the Court struck down
Section 4.105-1 ofRevenue Regulations No. 7-95 for being in conflict with the
law.127 The decision reads in part as follows:
[There] is no logic that coheres with either E.O. No. 273 or Rep. Act No. 7716 which
supports the restriction imposed on realestate brokers and their ability to claim the
transitional input tax credit based on the value of their real properties. In addition, the
very idea of excluding the real properties itself from the beginning inventory simply
runs counter to what the transitional input tax credit seeks to accomplish for persons
engaged in the sale of goods, whether or not such "goods" take the form of real
properties or more mundane commodities.
Under Section 105, the beginning inventory of "goods" forms part of the valuation of
the transitional input tax credit. Goods, as commonly understood in the business
sense, refers to the product which the VAT registered person offers for sale to the
public. With respect to real estate dealers, it is the real properties themselves which
constitute their "goods". Such real properties are the operating assets of the real
estate dealer.
Section 4.100-1 of RR No. 7-95 itself includes in its enumeration of "goods or
properties" such "real properties held primarily for sale to customers or held for lease
in the ordinary course of trade or business." Said definition was taken from the very
statutory language of Section 100 of the Old NIRC. By limiting the definition of goods
to "improvements" in Section 4.105-1, the BIR not only contravened the definition of
"goods" as provided in the Old NIRC, but also the definition which the same revenue
regulation itself has provided.
The Court of Tax Appeals claimed that under Section 105 of the Old NIRC the basis
for the inventory of goods, materials and supplies upon which the transitional input
VAT would be based "shall be left to regulation by the appropriate administrative
authority". This is based on the phrase "filing of an inventory as prescribed by
regulations" found in Section 105. Nonetheless, Section 105 does include the
particular properties to be included in the inventory, namely goods, materials and
supplies. It is questionable whether the CIR has the power to actually redefine the
concept of "goods", as she did when she excluded real properties from the class of
goods which real estate companies in the business of selling real properties may
include in their inventory. The authority to prescribe regulations can pertain to more
technical matters, such as how to appraise the value of the inventory or what papers
need to be filed to properly itemize the contents of such inventory. But such authority
cannot go as far as to amend Section 105 itself, which the Commissioner had
unfortunately accomplished in this case.
It is of course axiomatic that a rule or regulation must bear upon, and be consistent
with, the provisions of the enabling statute if such rule or regulation is to be valid. In
case of conflict between a statute and an administrative order, the former must
prevail. Indeed, the CIR has no power to limit the meaning and coverage of the term
"goods" in Section 105 of the Old NIRC absent statutory authority or basis to make
and justify such limitation. A contrary conclusion would mean the CIR could very well
moot the law or arrogate legislative authority unto himself by retaining sole discretion
to provide the definition and scope of the term "goods." 128 (Emphasis added.)
Furthermore, in G.R. No. 173425, the Court held:
Section 4.105-1 of RR 7-95 is
inconsistent with Section 105 of the
old NIRC
As regards Section 4.105-1 ofRR 7-95 which limited the 8% transitional input tax
credit to the value of the improvements on the land, the same contravenes the
provision of Section 105 of the old NIRC, in relation to Section 100 of the same Code,
as amended by RA 7716, which defines "goods or properties," to wit:
xxxx
In fact, in our Resolution dated October 2, 2009, in the related case of Fort Bonifacio,
we ruled that Section 4.105-1 of RR 7-95, insofar as it limits the transitional input tax
credit to the value of the improvement of the real properties, is a nullity. Pertinent
portions of the Resolution read:
As mandated by Article 7 of the Civil Code, an administrative rule or regulation cannot
contravene the law on which it is based. RR 7-95 is inconsistent with Section 105
insofar as the definition of the term "goods" is concerned. This is a legislative act
beyond the authority of the CIR and the Secretary of Finance. The rules and
regulations that administrative agencies promulgate, which are the product of a
delegated legislative power to create new and additional legal provisions that have
the effect of law, should be within the scope of the statutory authority granted by the
legislature to the objects and purposes of the law, and should not be in contradiction
to, but in conformity with, the standards prescribed by law.
To be valid, an administrative rule or regulation must conform, not contradict, the
provisions of the enabling law. An implementing rule or regulation cannot modify,
expand, or subtract from the law it is intended to implement. Any rule that is not
consistent with the statute itself is null and void.
While administrative agencies, such as the Bureau of Internal Revenue, may issue
regulations to implement statutes, they are without authority to limit the scope of the
statute to less than what it provides, or extend or expand the statute beyond itsterms,
or in any way modify explicit provisions of the law. Indeed, a quasi-judicial body or an
administrative agency for that matter cannot amend an act of Congress. Hence, in
case of a discrepancy between the basic law and an interpretative or administrative
ruling, the basic law prevails.
To recapitulate, RR 7-95, insofar as it restricts the definition of "goods" as basis of
transitional input tax credit under Section 105 is a nullity.
As we see it then, the 8% transitional input tax creditshould not be limited to the value
of the improvements on the real properties but should include the value of the real
properties as well.129 (Citations omitted, emphasis ours.)
Whether the issuance of Revenue
Regulations No. 7-95 by the BIR, and
declaration of validity of said Regulations
by the CTA and the Court of Appeals,
was in violation of the fundamental
principle of separation of powers.
In the Resolution dated October 2, 2009 in G.R. Nos. 158885 and 170680 the Court
denied the respondents Motion for Reconsideration with finality and held:
[The April 2, 2009 Decision] held that the CIR had no power to limit the meaning and
coverage of the term "goods" in Section 105 of the Old NIRC sans statutory authority
or basis and justification to make such limitation. This it did when it restrictedthe
application of Section 105 in the case of real estate dealers only to improvements on
the real property belonging to their beginning inventory.
xxxx
The statutory definition of the term "goods or properties" leaves no room for doubt. It
states: "Sec. 100. Value-added tax on sale of goods or properties. (a) Rate and
base of tax. x x x (1) The term goods or properties shall mean all tangible and
intangible objects which are capable of pecuniary estimation and shall include:
(A) Real properties held primarily for sale to customers or held for lease in the
ordinary course of trade or business; x x x."
The amendatory provision of Section 105 of the NIRC, as introduced by RA 7716,
states:
"Sec. 105. Transitional Input [T]ax Credits. A person who becomes liable to value-
added tax or any person who elects to be a VAT-registered person shall, subject to
the filing of an inventory as prescribed by regulations, be allowed input tax on his
beginning inventory of goods, materials and supplies equivalent to 8% of the value of
such inventory or the actual value-added tax paid on such goods, materials and
supplies, whichever is higher, which shall be creditable against the output tax."
The term "goods or properties" by the unambiguous terms of Section 100 includes
"real properties held primarily for sale to c[u]st[o]mers or held for lease in the ordinary
course of business." Having been defined in Section 100 of the NIRC, the term
"goods" as used in Section 105 of the same code could not have a different meaning.
This has been explained in the Decision dated April 2, 2009, thus:
xxxx
Section 4.105-1 of RR 7-95 restricted the definition of "goods," viz.:
"However, in the case of real estate dealers, the basis of the presumptive input tax
shall be the improvements, such as buildings, roads, drainage systems, and other
similar structures, constructed on or after the effectivity of EO 273 (January 1, 1988)."
As mandated by Article 7 of the Civil Code, an administrative rule or regulation cannot
contravene the law on which it is based. RR 7-95 is inconsistent with Section 105
insofar as the definition of the term"goods" is concerned. This is a legislative act
beyond the authority of the CIR and the Secretary of Finance. The rules and
regulations that administrative agencies promulgate, which are the product of a
delegated legislative power to create new and additional legal provisions that have
the effect of law, should be within the scope of the statutory authority granted bythe
legislature to the objects and purposes of the law, and should not be in contradiction
to, but in conformity with, the standards prescribed by law.
To be valid, an administrative ruleor regulation must conform, not contradict, the
provisions of the enabling law. An implementing rule or regulation cannot modify,
expand, or subtract from the law itis intended to implement. Any rule that is not
consistent with the statute itself is null and void. While administrative agencies, such
as the Bureau of Internal Revenue, may issue regulations to implement statutes, they
are without authority to limit the scope of the statute to less than what it provides, or
extend or expand the statute beyond itsterms, or in any way modify explicit provisions
of the law. Indeed, a quasi-judicial body or an administrative agency for that
mattercannot amend an act of Congress. Hence, in case of a discrepancy between
the basic law and an interpretative or administrative ruling, the basic law prevails.
To recapitulate, RR 7-95, insofar as it restricts the definition of "goods" as basis of
transitional inputtax credit under Section 105 is a nullity.
On January 1, 1997, RR 6-97 was issued by the Commissioner of Internal
Revenue.1wphi1 RR 6-97 was basically a reiteration of the same Section 4.105-1 of
RR 7-95, except that the RR 6-97 deleted the following paragraph:
"However, in the case of real estate dealers, the basis of the presumptive input tax
shall be the improvements, such as buildings, roads, drainage systems, and other
similar structures, constructed on or after the effectivity of E.O. 273 (January 1,
1988)."
It is clear, therefore, that under RR 6-97, the allowable transitional input tax credit is
not limited to improvements on real properties. The particular provision of RR 7-95
has effectively been repealed by RR 6-97 which is now in consonance with Section
100 of the NIRC, insofar as the definition of real properties as goods is concerned.
The failure to add a specific repealing clause would not necessarily indicate that there
was no intent to repeal RR 7-95. The fact that the aforequoted paragraph was deleted
created an irreconcilable inconsistency and repugnancy between the provisions of RR
6-97 and RR 7-95.
xxxx
As pointed out in Our Decision ofApril 2, 2009, to give Section 105 a restrictive
construction that transitional input tax credit applies only when taxes were previously
paid on the properties in the beginning inventory and there is a law imposing the tax
which is presumed to have been paid, is to impose conditions or requisites to the
application of the transitional tax input credit which are not found in the law. The
courts must not read into the law what is not there. To do so will violate the principle
of separation of powers which prohibits this Court from engaging in judicial
legislation.130 (Emphases added.)
As the Court En Banc held in G.R. No. 173425, the issues in this case are not novel.
These same issues have been squarely ruled upon by this Court in the earlier
decided casesthat have attained finality.131
It is now this Courts duty to apply the previous rulings to the present case. Once a
case has been decided one way, any other case involving exactly the same point at
issue, as in the present case, should be decided in the same manner. 132
Thus, we find that petitioner is entitled to a refund of the amounts of:
1) P486,355,846.78 in G.R. No. 175707, 2)P77,151,020.46 in G.R. No. 180035, and
3) P269,340,469.45 in G.R. No. 181092, which petitioner paid as value-added tax, or
toa tax credit for said amounts. WHEREFORE, in view of the foregoing, the
consolidated petitions are hereby GRANTED. The following are REVERSED and SET
ASIDE:
 1) Under G.R. No. 175707, the Decisiondated April 22, 2003 of the Court of
Appeals in CA-G.R. SP No. 61516 and its subsequent Resolution dated
November 30, 2006;

2) Under G.R. No. 180035, the Decisiondated April 30, 2007 of the Court of
Appeals in CA-G.R. SP No. 76540 and its subsequent Resolution dated
October 8, 2007; and

3) Under G.R. No. 181092, the Decisiondated December 28, 2007 of the
Court of Appeals in CA-G.R. SP No. 61158.

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

ALTERNATIVE, TO ISSUE A TAX CREDIT CERTIFICATE to petitioner Fort
Bonifacio Development Corporation, the following amounts:

1) P486,355,846. 78 paid as output value-added tax for the second quarter

of 1997 (G.R. No. 175707);

2) P77,151,020.46 paid as output value-added tax for the first quarter of

1998 (G.R. No. 180035); and

3) P269,340,469.45 paid as output value-added tax for the fourth quarter of

1996 (G.R. No. 181092).

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice
 SECOND DIVISION
G.R. No. 179408, March 05, 2014
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, v. ABIGAIL R.
RAZON ALVAREZ AND VERNON R. RAZON, Respondents.
DECISION
BRION, J.:
Before the Court is a petition for review on certiorari1 assailing the decision2 dated
August 11, 2006 and the resolution3 dated August 22, 2007 of the Court of Appeals
(CA) in CAG.R. SP No. 89213 on the validity of the four search warrants issued by
the Regional Trial Court (RTC) of Pasay City, Branch 115.
The CA rulings (i) quashed the first two search warrants, similarly docketed as Search
Warrant No. 03063, issued for violation of Article 308, in relation to Article 309, of
the Revised Penal Code (RPC), and (ii) declared void paragraphs 7, 8 and 9 of the
other two search warrants, also similarly docketed as Search Warrant No. 03064,
issued for violation of Presidential Decree (PD) No. 401.4
FACTUAL ANTECEDENTS
Philippine Long Distance Telephone Company (PLDT) is the grantee of a legislative
franchise5 which authorizes it to carry on the business of providing basic and
enhanced telecommunications services in and between areas in the Philippines and
between the Philippines and other countries and territories,6and, accordingly, to
establish, operate, manage, lease, maintain and purchase telecommunications
system for both domestic and international calls.7 Pursuant to its franchise, PLDT
offers to the public wide range of services duly authorized by the National
Telecommunications Commission (NTC).
PLDTs network is principally composed of the Public Switch Telephone Network,
telephone handsets and/or telecommunications equipment used by its subscribers,
the wires and cables linking these handsets and/or equipment, antennae,
transmission facilities, the international gateway facility (IGF) and other
telecommunications equipment providing interconnections. 8 To safeguard the integrity
of its network, PLDT regularly conducts investigations on various prepaid cards
marketed and sold abroad to determine alternative calling patterns (ACP) and
network fraud that are being perpetrated against it.
To prevent or stop network fraud, PLDTs ACP Detection Division (ACPDD) regularly
visits foreign countries to conduct market research on various prepaid phone cards
offered abroad that allow their users to make overseas calls to PLDT subscribers in
the Philippines at a cheaper rate.
The ACPDD bought The Number One prepaid card a card principally marketed to
Filipinos residing in the United Kingdom for calls to the Philippines to make test
calls using two telephone lines: the dialing phone an IDDcapable9 telephone line
which makes the call and through which the access number and the PIN number
printed at the back of the card are entered; and the receiving phone a caller
identification (caller id) unitequipped telephone line which would receive the call and
reflect the incoming callers telephone number.
During a test call placed at the PLDTACPDD office, the receiving phone reflected a
PLDT telephone number (28243285) as the calling number used, as if the call was
originating from a local telephone in Metro Manila. Upon verification with the PLDTs
Integrated Customer Management (billing) System, the ACPDD learned that the
subscriber of the reflected telephone number is Abigail R. Razon Alvarez, with
address at 17 Dominic Savio St., Savio Compound, Barangay Don Bosco, Paraaque
City. It further learned that several lines are installed at this address with Abigail and
Vernon R. Razon (respondents), among others, as subscribers.10
To validate its findings, the ACPDD conducted the same test calls on November 5,
2003 at the premises of the NTC in Quezon City (and in the presence of an NTC
representative11) using the same prepaid card (validation test). The receiving phone
at the NTC premises reflected the telephone numbers registered in the name of
Abigail as the calling number from the United Kingdom.12
Similar test calls subsequently conducted using the prepaid cards Unity Card and IDT
Supercalling Card revealed the same results. The calleridequipped receiving phone
reflected telephone numbers13 that are in the names of Experto Enterprises and
Experto Phils, as subscribers, with a common address at No. 38 Indonesia St., Better
Living Subdivision, Barangay Don Bosco, Paraaque City. It turned out that the actual
occupant of these premises is also Abigail. Subsequently, a validation test was also
conducted, yielding several telephone numbers registered in the name of Experto
Phils./Experto Enterprises as the calling numbers supposedly from the United
Kingdom.14
According to PLDT, had an ordinary and legitimate call been made, the screen of the
calleridequipped receiving phone would not reflect a local number or any number at
all. In the cards they tested, however, once the caller enters the access and pin
numbers, the respondents would route the call via the internet to a local telephone
number (in this case, a PLDT telephone number) which would connect the call to the
receiving phone. Since calls through the internet never pass the toll center of the
PLDTs IGF, users of these prepaid cards can place a call to any point in the
Philippines (provided the local line is NDDcapable) without the call appearing as
coming from abroad.15
On November 6, 2003 and November 19, 2003, Mr. Lawrence Narciso of the PLDTs
Quality Control Division, together with the operatives of the Philippine National Police
(PNP), conducted an ocular inspection at 17 Dominic Savio St., Savio Compound and
at No. 38 Indonesia St., Better Living Subdivision both in Barangay Don Bosco,
Paranaque City and discovered that PLDT telephone lines were connected to
several pieces of equipment.16 Mr. Narciso narrated the results of the inspection, thus
10. During [the] ocular inspection [at 17 Dominic Savio St., Savio Compound], Ms.
Abigail Razon Alvarez allowed us to gain entry and check the telephone installations
within their premises. First, we checked the location of the telephone protectors that
are commonly installed at a concrete wall boundary inside the compound. Some of
these protectors are covered with a fabricated wooden cabinet. Other protectors are
installed beside the said wooden cabinet, xxx. The inside wiring installations from
telephone protectors to connecting block were routed to the said adjacent room
passing through the house ceiling.
11. xxx. Upon entering the socalled adjacent room, we immediately noticed that the
PLDT telephone lines were connected to the equipment situated at multilayered
rack. The equipment room contains the following:
a. 6 Quintum router;
b. 13 Com router;
c. 1 Cisco 800 router;
d. 1 Nokia Modem for PLDT DSL;
e. 1 Meridian Subscribers Unit[;]
f. 5 Personal Computers[;]
g. 1 Computer Printer[; and]
h. 1 Flatbed Scanner[.]
12. We also noticed that these routers are connected to the Meridians subscriber
unit ("SU ) that has an outdoor antenna installed on the top of the roof. Meridians SU
and outdoor antenna are service components used to connect with wireless
broadband internet access service of Meridian Telekoms.
xxxx
18. During the site inspection [at No. 38 Indonesia St., Better Living Subdivision], we
noticed that the protector of each telephone line/number xxx were enclosed in a
fabricated wooden cabinet with safety padlock. Said wooden cabinet was situated on
the concrete wall inside the compound near the garage entrance gate. The telephone
inside the wiring installations from the protector to the connecting blocks were placed
in a plastic electrical conduit routed to the adjacent room at the second floor. 17
On December 3, 2003, Police Superintendent Gilbert C. Cruz filed a consolidated
application for a search warrant18 before Judge Francisco G. Mendiola of the RTC, for
the crimes of theft and violation of PD No. 401. According to PLDT, the respondents
are engaged in a form of network fraud known as International Simple Resale (ISR)
which amounts to theft under the RPC.
ISR is a method of routing and completing international long distance calls using
lines, cables, antennae and/or wave frequencies which are connected directly to the
domestic exchange facilities of the country where the call is destined (terminating
country); and, in the process, bypassing the IGF at the terminating country.19
Judge Mendiola found probable cause for the issuance of the search warrants applied
for. Accordingly, four search warrants20 were issued for violations of Article 308, in
relation to Article 309, of the RPC (SW A1 and SW A2) and of PD No. 401, as
amended (SW B1 and SW B2) for the ISR activities being conducted at 17 Dominic
Savio St., Savio Compound and at No. 38 Indonesia St., Better Living Subdivision,
both in Barangay Don Bosco, Paranaque City. The four search warrants enumerated
the objects to be searched and seized as follows:
1. MERIDIAN SUBSCRIBERS UNIT AND PLDT DSL LINES and/or CABLES AND
ANTENNAS and/or similar equipment or device capable of transmitting air waves or
frequency, such as a Meridian Subscribers Unit, Broadband DSL and telephone
lines;
2. PERSONAL COMPUTERS or any similar equipment or device capable of
accepting information applying the prescribed process of the information and
supplying the result of this process;
3. NOKIA MODEM or any similar equipment or device that enables data terminal
equipment such as computers to communicate with other data terminal equipment via
a telephone line;
4. QUINTUM Equipment or any similar equipment capable of receiving digital signals
from the internet and converting those signals to voice;
5. QUINTUM, 3COM AND CISCO Routers or any similar equipment capable of
switching packets of data to their assigned destination or addresses;
6. LINKS DSL SWITCH or any similar equipment capable of switching data;
7. COMPUTER PRINTERS AND SCANNERS or any similar equipment or device
used for copying and/or printing data and/or information;
8. SOFTWARE, DISKETTES, TAPES or any similar equipment or device used for
recording or storing information; and
9. Manuals, phone cards, access codes, billing statements, receipts, contracts,
checks, orders, communications and documents, lease and/or subscription
agreements or contracts, communications and documents relating to securing and
using telephone lines and/or equipment[.]21
On the same date, the PNP searched the premises indicated in the warrants. On
December 10, 2003, a return was made with a complete inventory of the items
seized.22 On January 14, 2004, the PLDT and the PNP filed with the Department of
Justice a joint complaintaffidavit for theft and for violation of PD No. 401 against the
respondents.23
On February 18, 2004, the respondents filed with the RTC a motion to quash 24 the
search warrants essentially on the following grounds: first, the RTC had no authority
to issue search warrants which were enforced in Paraaque City; second, the
enumeration of the items to be searched and seized lacked particularity; and third,
there was no probable cause for the crime of theft.
On March 12, 2004, PLDT opposed the respondents' motion.25
In a July 6, 2004 order,26 the RTC denied the respondents' motion to quash. Having
been rebuffed27in their motion for reconsideration,28 the respondents filed a petition
for certiorari with the CA. 29
 RULING OF THE CA
On August 11, 2006, the CA rendered the assailed decision and resolution, granting
the respondents' petition for certiorari. The CA quashed SW Al and SW A2 (for
theft) on the ground that they were issued for nonexistent crimes. 30 According to
the CA, inherent in the determination of probable cause for the issuance of search
warrant is the accompanying determination that an offense has been committed.
Relying on this Courts decision in Laurel v. Judge Abrogar,31 the CA ruled that the
respondents could not have possibly committed the crime of theft because PLDTs
business of providing telecommunication services and these services themselves are
not personal properties contemplated under Article 308 of the RPC.
With respect to SW Bl and SW B2 (for violation of PD No. 401), the CA upheld
paragraphs one to six of the enumeration of items subject of the search. The CA held
that the stock phrase or similar equipment or device found in paragraphs one to six
of the search warrants did not make it suffer from generality since each paragraphs
enumeration of items was sufficiently qualified by the citation of the specific objects to
be seized and by its functions which are inherently connected with the crime allegedly
committed.
The CA, however, nullified the ensuing paragraphs, 7, 8 and 9, for lack of particularity
and ordered the return of the items seized under these provisions. While the same
stock phrase appears in paragraphs 7 and 8, the properties described therein i.e.,
printer and scanner, software, diskette and tapes include even those for the
respondents' personal use, making the description of the things to be seized too
general in nature.
With the denial of its motion for reconsideration,32 PLDT went to this Court via this
Rule 45 petition.
THE PETITIONER'S ARGUMENTS
PLDT faults the CA for relying on Laurel on three grounds: first, Laurel cannot be
cited yet as an authority under the principle of stare decisis because Laurel is not yet
final and executory; in fact, it is the subject of a pending motion for reconsideration
filed by PLDT itself; second, even assuming that Laurel is already final, the facts
in Laurel vary from the present case. Laurel involves the quashalof an information on
the ground that the information does not charge any offense; hence, the
determination of the existence of the elements of the crime of theft is indispensable in
resolving the motion to quash. In contrast, the present case involves the quashal of a
search warrant. Third, accordingly, in resolving the motion, the issuing court only has
to be convinced that there is probable cause to hold that: (i) the items to be seized
are connected to a criminal activity; and (ii) these items are found in the place to be
searched. Since the matter of quashing a search warrant may be rooted on matters
extrinsic of the search warrant, 33 the issuing court does not need to look into the
elements of the crime allegedly committed in the same manner that the CA did
in Laurel.
PLDT adds that a finding of grave abuse of discretion in the issuance of search
warrant may be justified only when there is disregard of the requirements for the
issuance of a search warrant[.] 34In the present case, the CA did not find (and could
not have found) any grave abuse of discretion on the part of the RTC because at the
time the RTC issued the search warrants in 2003, Laurel had not yet been
promulgated.
In defending the validity of the nullified provisions of SW Bl and SW B2, PLDT
argues that PD No. 401 also punishes unauthorized installation of telephone
connections. Since the enumerated items are connected to the computers that are
illegally connected to PLDT telephone lines, then these items bear a direct relation to
the offense of violation of PD No. 401, justifying their seizure.
The enumeration in paragraph 8 is likewise a proper subject of seizure because they
are the fruits of the offense as they contain information on PLDTs business profit and
other information relating to the commission of violation of PD No. 401. Similarly,
paragraph 9 specifies the fruits and evidence of violation of PD No. 401 since it
supports PLDTs claim that the respondents have made a business out of their illegal
connections to PLDT lines.
THE RESPONDENTS' ARGUMENTS
The respondents counter that while Laurel may not yet be final, at least it has a
persuasive effect as the current jurisprudence on the matter. Even without Laurel, the
CAs nullification of SW Al and SW A2 can withstand scrutiny because of the
novelty of the issue presented before it. The nullification of paragraphs 7, 8 and 9 of
SW Bl and SW B2 must be upheld not only on the ground of broadness but for lack
of any relation whatsoever with PD No. 401 which punishes the theft of electricity.
OUR RULING
We partially grant the petition.
Laurel and its reversal by the Court En Banc
Before proceeding with the case, a review of Laurel is in order as it involves
substantially similar facts as in the present case.
Baynet Co., Ltd. (Baynet) sells prepaid cards, Bay Super Orient Card, that allow
their users to place a call to the Philippines from Japan. PLDT asserted that Baynet is
engaged in ISR activities by using an international private leased line (IPL) to course
Baynets incoming international long distance calls. The IPL is linked to a switching
equipment, which is then connected to PLDT telephone lines/numbers and
equipment, with Baynet as subscriber.
To establish its case, PLDT obtained a search warrant. On the strength of the items
seized during the search of Baynets premises, the prosecutor found probable cause
for theft against Luis Marcos Laurel (Laurel) and other Baynet officials. Accordingly,
an information was filed, alleging that the Baynet officials take, steal and use the
international long distance calls belonging to PLDT by [ISR activities] xxx effectively
stealing this business from PLDT while using its facilities in the estimated amount of
P20,370,651.92 to the damage and prejudice of PLDT[.] 35
Laurel moved to quash the information on the bold assertion that ISR activities do not
constitute a crime under Philippine law. Laurel argued that an ISR activity cannot
entail taking of personal property because the international long distance telephone Penal Code. The Legislature did not. In fact, the Revised Penal Code does not even
calls using PLDT telephone lines belong to the caller himself; the amount stated in the contain a definition of services.37
information, if at all, represents the rentals due PLDT for the callers usage of its
PLDT38 moved for reconsideration and referral of the case to the Court En Banc. The
facilities. Laurel argued that the business of providing international long distance
Courts First Division granted the referral.
calls, i.e., PLDTs service, and the revenue derived therefrom are not personal
property that can be appropriated.
On January 13, 2009 (or while the present petition was pending in court), the
Court En Bancunanimously granted PLDTs motion for reconsideration.39 The Court
Laurel went to the Court after failing to secure the desired relief from the trial and
ruled that even prior to the passage of the RPC, jurisprudence is settled that any
appellate courts,36raising the core issue of whether PLDTs business of providing
personal property, tangible or intangible, corporeal or incorporeal, capable of
telecommunication services for international long distance calls is a proper subject of
appropriation can be the object of theft. 40 This jurisprudence, in turn, applied the
theft under Article 308 of the RPC. The Courts First Division granted Laurels petition
prevailing legal meaning of the term personal property under the old Civil Code as
and ordered the quashal of the information.
anything susceptible of appropriation and not included in the foregoing chapter (not
real property). 41 PLDTs telephone service or its business of providing this was
Taking off from the basic rule that penal laws are construed strictly against the State,
appropriable personal property and was, in fact, the subject of appropriation in an ISR
the Court ruled that international long distance calls and the business of providing
operation, facilitated by means of the unlawful use of PLDTs facilities.
telecommunication or telephone services by PLDT are not personal properties that
In this regard, the Amended Information inaccurately describes the offense by making
can be the subject of theft.
it appear that what [Laurel] took were the international long distance telephone calls,
One is apt to conclude that personal property standing alone, covers both tangible
rather than respondent PLDTs business.
and intangible properties and are subject of theft under the Revised Penal Code. But
the words Personal property under the Revised Penal Code must be considered in
xxxx
tandem with the word take in the law. The statutory definition of taking and
movable property indicates that, clearly, not all personal properties may be the proper
Indeed, while it may be conceded that international long distance calls, the matter
subjects of theft. The general rule is that, only movable properties which have
alleged to be stolen xxx, take the form of electrical energy, it cannot be said that such
physical or material existence and susceptible of occupation by another are proper
international long distance calls were personal properties belonging to PLDT since
objects of theft, xxx.
the latter could not have acquired ownership over such calls. PLDT merely encodes,
augments, enhances, decodes and transmits said calls using its complex
xxxx
communications infrastructure and facilities. PLDT not being the owner of said
telephone calls, then it could not validly claim that such telephone calls were taken
xxx. Business, like services in business, although are properties, are not proper
without its consent. It is the use of these communications facilities without the consent
subjects of theft under the Revised Penal Code because the same cannot be taken
of PLDT that constitutes the crime of theft, which is the unlawful taking of the
or occupied. If it were otherwise, xxx there would be no juridical difference between
telephone services and business.
the taking of the business of a person or the services provided by him for gain, visa
vis, the taking of goods, wares or merchandise, or equipment comprising his
Therefore, the business of providing telecommunication and the telephone service
business. If it was its intention to include business as personal property under Article
are personal property under Article 308 of the Revised Penal Code, and the act of
308 of the Revised Penal Code, the Philippine Legislature should have spoken in
engaging in ISR is an act of subtraction penalized under said article.42
language that is clear and definite: that business is personal property under Article
308 of the Revised Penal Code. The Court En Bancs reversal of its Laurel Division ruling during the pendency of this
petition significantly impacts on how the Court should resolve the present case for two
xxxx reasons:chanRoblesvirtualLawlibrary

The petitioner is not charged, under the Amended Information, for theft of
telecommunication or telephone services offered by PLDT. Even if he is, the term
personal property under Article 308 of the Revised Penal Code cannot be
interpreted beyond its seams so as to include telecommunication or telephone
services or computer services for that matter. xxx. Even at common law, neither time
nor services may be taken and occupied or appropriated. A service is generally not
considered property and a theft of service would not, therefore, constitute theft since
there can be no caption or asportation. Neither is the unauthorized use of the
equipment and facilities of PLDT by [Laurel] theft under [Article 308].
If it was the intent of the Philippine Legislature, in 1930, to include services to be the
subject of theft, it should have incorporated the same in Article 308 of the Revised
First, the Laurel En Banc ruling categorically equated an ISR activity to theft under the
RPC. In so doing, whatever alleged factual variance there may be
between Laurel and the present case cannot render Laurel inapplicable.
Second, and more importantly, in a Rule 45 petition, the Court basically determines
whether the CA was legally correct in determining whether the RTC committed grave
abuse of discretion. Under this premise, the CA ordinarily gauges the grave abuse of
discretion at the time the RTC rendered its assailed resolution. In quashing SW Al
and SW A2, note that the CA relied on the Laurel Division ruling at the time when it
was still subject of a pending motion for reconsideration. The CA, in fact, did not
expressly impute grave abuse of discretion on the RTC when the RTC issued the
search warrants and later refused to quash these. Understandably, the CA could not
have really found the presence of grave abuse of discretion for there was
no Laurel ruling to speak of at the time the RTC issued the search warrants. In a certiorari proceeding, the determination translates to an inquiry on whether the
requirements and limitations provided under the Constitution and the Rules of Court
These peculiar facts require us to more carefully analyze our prism of review under were properly complied with, from the issuance of the warrant up to its
Rule 45. implementation. In view of the constitutional objective of preventing stealthy
encroachment upon or the gradual depreciation of the rights secured by the
Requisites for the issuance of search warrant; probable cause requires the Constitution, strict compliance with the constitutional and procedural requirements is
probable existence of an offense required. A judge who issues a search warrant without complying with these
requirements commits grave abuse of discretion.48
Section 2, Article III of the 1987 Constitution guarantees the right of persons to be
free from unreasonable searches and seizures. One of the constitutional requirements for the validity of a search warrant is that it
Section 2. The right of the people to be secure in their persons, houses, papers, and must be issued based on probable cause which, under the Rules, must be in
effects against unreasonable searches and seizures of whatever nature and for any connection with one specific offense. In search warrant proceedings, probable cause
purpose shall be inviolable, and no search warrant or warrant of arrest shall issue is defined as such facts and circumstances that would lead a reasonably discreet and
except upon probable cause to be determined personally by the judge after prudent man to believe that an offense has been committed and that the objects
examination under oath or affirmation of the complainant and the witnesses he may sought in connection with the offense are in the place sought to be searched. 49
produce, and particularly describing the place to be searched and the persons or
things to be seized. In the determination of probable cause, the court must necessarily determine whether
an offense exists to justify the issuance or quashal of the search warrant 50 because
The purposes of the constitutional provision against unlawful searches and seizures
the personal properties that may be subject of the search warrant are very much
are to: (i) prevent the officers of the law from violating private security in person and
intertwined with the one specific offense requirement of probable cause.51 Contrary
property and illegally invading the sanctity of the home; and (ii) give remedy against
to PLDTs claim, the only way to determine whether a warrant should issue in
such usurpations when attempted or committed.43
connection with one specific offense is to juxtapose the facts and circumstances
presented by the applicant with the elements of the offense that are alleged to
The constitutional requirement for the issuance of a search warrant is reiterated under
support the search warrant.
Sections 4 and 5, Rule 126 of the Revised Rules of Criminal Procedure. These
sections lay down the following requirements for the issuance of a search warrant: (1)
Reviewing the RTCs denial of the motion to quash SWAl and SW A2
the existence of probable cause; (2) the probable cause must be determined
personally by the judge; (3) the judge must examine, in writing and under oath or
a. From the prism of Rule 65
affirmation, the complainant and the witnesses he or she may produce; (4) the
applicant and the witnesses testify on the facts personally known to them; and (5) the
The facts of the present case easily call to mind the case of Columbia Pictures, Inc. v.
warrant specifically describes the place to be searched and the things to be
CA52 involving copyright infringement. In that case, the CA likewise voided the search
seized.44 Should any of these requisites be absent, the party aggrieved by the
warrant issued by the trial court by applying a doctrine that added a new requirement
issuance and enforcement of the search warrant may file a motion to quash the
(i.e., the production of the master tape for comparison with the allegedly pirate
search warrant with the issuing court or with the court where the action is
copies) in determining the existence of probable cause for the issuance of search
subsequently instituted.45
warrant in copyright infringement cases. The doctrine referred to was laid down
in 20th Century Fox Film Corporation v. Court of Appeals. 20th Century Fox, however,
A search warrant proceeding is a special criminal and judicial process akin to a writ of
was promulgated more than eight months after the search warrants were issued by
discovery. It is designed by the Rules of Criminal Procedure to respond only to an
the RTC. In reversing the CA, the Court ruled:chanRoblesvirtualLawlibrary
incident in the main case, if one has already been instituted, or in anticipation thereof.
Since it is at most incidental to the main criminal case, an order granting or denying a
Mindful as we are of the ramifications of the doctrine of stare decisis and the
motion to quash a search warrant may be questioned only via a petition
rudiments of fair play, it is our considered view that the 20th Century Fox ruling cannot
for certiorari under Rule 65.46
be retroactively applied to the instant case to justify the quashal of Search Warrant
No. 87053. [The] petitioners' consistent position that the order of the lower court[,]
When confronted with this petition, the higher court must necessarily determine the
xxx [which denied the respondents'] motion to lift the order of search warrant^] was
validity of the lower courts action from the prism of whether it was tainted with grave
properly issued, [because there was] satisfactory compliance with the then prevailing
abuse of discretion. By grave abuse of discretion, jurisprudence refers to the
standards under the law for determination of probable cause, is indeed well taken.
capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, or to
The lower court could not possibly have expected more evidence from petitioners in
the exercise of power in an arbitrary or despotic manner by reason of passion or
their application for a search warrant other than what the law and jurisprudence, then
personal hostility or in a manner so patent and gross as to amount to an invasion of
existing and judicially accepted, required with respect to the finding of probable
positive duty or to the virtual refusal to perform the duty enjoined or to act at all in
cause.53
contemplation of the law.47
Columbia could easily be cited in favor of PLDT to sustain the RTCs refusal to quash
the search warrant. Indeed, in quashing SW Al and SW A2, the CA never intimated
that the RTC disregarded any of the requisites for the issuance of a search warrant as
these requirements were interpreted and observed under the then
prevailing jurisprudence. The CA could not have done so because precisely the
issue of whether telephone services or the business of providing these services could
be the subject of theft under the RPC had not yet reached the Court when the search
warrants were applied for and issued.
However, what distinguishes Columbia from the present case is the focus
of Columbias legal rationale. Columbias focus was not on whether the facts and
circumstances would reasonably lead to the conclusion that an offense has been or is
being committed and that the objects sought in connection with the offense were in
the place to be searched the primary points of focus of the present
case. Columbias focus was on whether the evidence presented at the time the
search warrant was applied for was sufficient to establish the facts and
circumstances required for establishing probable cause to issue a search warrant.
Nonetheless, Columbia serves as a neat guide for the CA to decide the
respondents' certioraripetition. In Columbia, the Court applied the principle of non
retroactivity of its ruling in 20th Century Fox, whose finality was not an issue, in
reversing a CA ruling. The Courts attitude in that case should have been adopted by
the CA in the present case a fortiori since the ruling that the CA relied upon was not
yet final at the time the CA resolved to quash the search warrants.
b. Supervening events justifying a broader review under Rule 65
Ordinarily, the CAs determination under Rule 65 is limited to whether the RTC
gravely abused its discretion in granting or denying the motion to quash based on
facts then existing. Nonetheless, the Court recognizes that supervening facts may
transpire after the issuance and implementation of the search warrant that may
provide justification for the quashal of the search warrant via a petition forcertiorari.
For one, if the offense for which the warrant is issued is subsequently decriminalized
during the pendency of the petition for certiorari, then the warrant may be
quashed.54 For another, a subsequent ruling from the Court that a similar set of facts
and circumstances does not constitute an offense, as alleged in the search warrant
application, may be used as a ground to quash a warrant. 55In both instances, the
underlying reason for quashing the search warrant is the absence of probable cause
which can only possibly exist when the combination of facts and circumstances points
to the possible commission of an offense that may be evidenced by the personal
properties sought to be seized. To the CA, the second instance mentioned justified
the quashal of the search warrants.
We would have readily agreed with the CA if the Laurel Division ruling had not been
subsequently reversed. As things turned out, however, the Court granted PLDTs
motion for reconsideration of the Court First Divisions ruling in Laurel and ruled that
the act of engaging in ISR is xxx penalized under xxx article [308 of the RPC]. 56 As
the RTC itself found, PLDT successfully established in its application for a search
warrant a probable cause for theft by evidence that Laurels ISR activities deprived
PLDT of its telephone services and of its business of providing these services without
its consent.
b1. the stare decisis aspect
With the Court En Bancs reversal of the earlier Laurel ruling, then the CAs quashal
of these warrants would have no leg to stand on. This is the dire consequence of
failing to appreciate the full import of the doctrine of stare decisis that the CA ignored.
Under Article 8 of the Civil Code, the decisions of this Court form part of the countrys
legal system. While these decisions are not laws pursuant to the doctrine of
separation of powers, they evidence the laws' meaning, breadth, and scope and,
therefore, have the same binding force as the laws themselves. 57 Hence, the Courts
interpretation of a statute forms part of the law as of the date it was originally passed
because the Courts construction merely establishes the contemporaneous legislative
intent that the interpreted law carries into effect.58
Article 8 of the Civil Code embodies the basic principle of stare decisis et non quieta
movere (to adhere to precedents and not to unsettle established matters) that enjoins
adherence to judicial precedents embodied in the decision of the Supreme Court.
That decision becomes a judicial precedent to be followed in subsequent cases by all
courts in the land. The doctrine of stare decisis, in turn, is based on the principle that
once a question of law has been examined and decided, it should be deemed settled
and closed to further argument.59 The doctrine of (horizontal) stare decisisis one of
policy, grounded on the necessity of securing certainty and stability of judicial
decisions.60
In the field of adjudication, a case cannot yet acquire the status of a decided case
that is deemedsettled and closed to further argument if the Courts decision is still
the subject of a motion for reconsideration seasonably filed by the moving party.
Under the Rules of Court, a party is expressly allowed to file a motion for
reconsideration of the Courts decision within 15 days from notice. 61 Since the
doctrine of stare decisis is founded on the necessity of securing certainty and stability
in law, then these attributes will spring only once the Courts ruling has lapsed to
finality in accordance with law. In Ting v. VelezTing,62 we ruled that:
The principle of stare decisis enjoins adherence by lower courts to doctrinal rules
established by this Court in its final decisions. It is based on the principle that once a
question of law has been examined and decided, it should be deemed settled and
closed to further argument.
In applying Laurel despite PLDTs statement that the case is still subject of a pending
motion for reconsideration,63 the CA legally erred in refusing to reconsider its ruling
that largely relied on a nonfmal ruling of the Court. While the CAs dutiful desire to
apply the latest pronouncement of the Court in Laurel is expected, it should have
acted with caution, instead of excitement, on being informed by PLDT of its pending
motion for reconsideration; it should have then followed the principle of stare decisis.
The appellate courts application of an exceptional circumstance when it may order
the quashal of the search warrant on grounds not existing at the time the warrant was
issued or implemented must still rest on prudential grounds if only to maintain the
limitation of the scope of the remedy of certiorari as a writ to correct errors of
jurisdiction and not mere errors of judgment.
Still, the respondents attempt to justify the CAs action by arguing that the CA would
still rule in the way it did64 even without Laurel. As PLDT correctly pointed out, there is
simply nothing in the CAs decision that would support its quashal of the search
warrant independently of Laurel. We must bear in mind that the CAs quashal of SW
Al and SW A2 operated under the strictures of a certioraripetition, where the
presence of grave abuse of discretion is necessary for the corrective writ to issue
since the appellate court exercises its supervisory jurisdiction in this case. We simply
cannot secondguess what the CAs action could have been.
Lastly, the CAs reliance on Savage v. Judge Taypin65 can neither sustain the quashal
of SW Al and SW A2. In Savage, the Court granted the certiorari petition and
quashed the search warrant because the alleged crime (unfair competition involving
design patents) that supported the search warrant had already been repealed, and
the act complained of, if at all, gave rise only to civil liability (for patent infringement).
Having been decriminalized, probable cause for the crime alleged could not possibly
exist.
In the present case, the issue is whether the commission of an ISR activity, in the
manner that PLDTs evidence shows, sufficiently establishes probable cause for the
issuance of search warrants for the crime of theft. Unlike in Savage, the Court
in Laurel was not confronted with the issue of decriminalization (which is a legislative
prerogative) but whether the commission of an ISR activity meets the elements of the
offense of theft for purposes of quashing an information. Since the Court, in Laurel,
ultimately ruled then an ISR activity justifies the elements of theft that must
necessarily be alleged in the information a fortiori, the RTCs determination should be
sustained on certiorari.
The requirement of particularity in SWB1 and SWB2
On the issue of particularity in SW Bl and SW B2, we note that the respondents
have not appealed to us the CA ruling that sustained paragraphs 1 to 6 of the search
warrants. Hence, we shall limit our discussion to the question of whether the CA
correctly ruled that the RTC gravely abused its discretion insofar as it refused to
quash paragraphs 7 to 9 of SW Bl and SWB2.
Aside from the requirement of probable cause, the Constitution also requires that the
search warrant must particularly describe the place to be searched and the things to
be seized. This requirement of particularity in the description, especially of the things
to be seized, is meant to enable the law enforcers to readily identify the properties to
be seized and, thus, prevent the seizure of the wrong items. It seeks to leave the law
enforcers with no discretion at all regarding these articles and to give life to the
constitutional provision against unreasonable searches and seizures.66 In other
words, the requisite sufficient particularity is aimed at preventing the law enforcer
from exercising unlimited discretion as to what things are to be taken under the
warrant and ensure that only those connected with the offense for which the warrant
was issued shall be seized.67
The requirement of specificity, however, does not require technical accuracy in the
description of the property to be seized. Specificity is satisfied if the personal
properties' description is as far as the circumstances will ordinarily allow it to be so
described. The nature of the description should vary according to whether the identity
of the property or its character is a matter of concern.68 One of the tests to determine
the particularity in the description of objects to be seized under a search warrant
is when the things described are limited to those which bear direct relation to the
offense for which the warrant is being issued.69
Additionally, the Rules require that a search warrant should be issued in connection
with one specific offense to prevent the issuance of a scattershot warrant.70 The
onespecificoffense requirement reinforces the constitutional requirement that a
search warrant should issue only on the basis of probable cause. 71 Since the primary
objective of applying for a search warrant is to obtain evidence to be used in a
subsequent prosecution for an offense for which the search warrant was applied, a
judge issuing a particular warrant must satisfy himself that the evidence presented by
the applicant establishes the facts and circumstances relating to this specific offense
for which the warrant is sought and issued.72 Accordingly, in a subsequent challenge
against the validity of the warrant, the applicant cannot be allowed to maintain its
validity based on facts and circumstances that may be related to other search
warrants but are extrinsic to the warrant in question.
Under the Rules, the following personal property may be subject of search warrant: (i)
the subject of the offense; (ii) fruits of the offense; or (iii) those used or intended to be
used as the means of committing an offense. In the present case, we sustain the
CAs ruling nullifying paragraphs 7, 8 and 9 of SW Bl and SW B2 for failing the test
of particularity. More specifically, these provisions do not show how the enumerated
items could have possibly been connected with the crime for which the warrant was
issued, i.e., P.D. No. 401. For clarity, PD No. 401 punishes:
Section 1. Any person who installs any water, electrical, telephone or piped
gasconnection without previous authority from xxx the Philippine Long
Distance Telephone Company, xxx, tampers and/or uses tampered water, electrical
or gas meters, jumpers or other devices whereby water, electricity or piped gas is
stolen; steals or pilfers water, electric or piped gas meters, or water, electric and/or
telephone wires, or piped gas pipes or conduits; knowingly possesses stolen or
pilfered water, electrical or gas meters as well as stolen or pilfered water, electrical
and/or telephone wires, or piped gas pipes and conduits, shall, upon conviction, be
punished with prision correccional in its minimum period or a fine ranging from two
thousand to six thousand pesos, or both.73
Paragraphs 7 to 8 of SW Bl and SW B2 read as follows:
7. COMPUTER PRINTERS AND SCANNERS or any similar equipment or device
used for copying and/or printing data and/or information;
8. SOFTWARE, DISKETTES, TAPES or any similar equipment or device used for
recording or storing information; and
9. Manuals, phone cards, access codes, billing statements, receipts, contracts,
checks, orders, communications and documents, lease and/or subscription
agreements or contracts, communications and documents relating to securing and
using telephone lines and/or equipment[.]74
According to PLDT, the items in paragraph 7 have a direct relation to violation of PD
No. 401 because the items are connected to computers that, in turn, are linked to the
unauthorized connections to PLDT telephone lines. With regard to the software,
diskette and tapes in paragraph 8, and the items in paragraph 9, PLDT argues that
these items are fruits of the offense and that the information it contains constitutes
the business profit of PLDT. According to PLDT, it corroborates the fact that the
respondents have made a business out of their illegal connections to its telephone
lines.
We disagree with PLDT. The fact that the printers and scanners are or may be
connected to the other illegal connections to the PLDT telephone lines does not make
them the subject of the offense or fruits of the offense, much less could they become
a means of committing an offense.

It is clear from PLDTs submission that it confuses the crime for which SW Bl and
SW B2 were issued with the crime for which SW Al and SWA2 were issued: SW
Bl and SW B2 were issued for violation of PD No. 401, to be enforced in two
different places as identified in the warrants. The crime for which these search
warrants were issued does not pertain to the crime of theft where matters of
personal property and the taking thereof with intent to gain become significant but to
PD No. 401.

These items could not be the subject of a violation of PD No. 401 since PLDT itself
does not claim that these items themselves comprise the unauthorized installations.
For emphasis, what PD No. 401 punishes is the unauthorized installation of telephone
connection without the previous consent of PLDT. In the present case, PLDT has not
shown that connecting printers, scanners, diskettes or tapes to a computer, even if
connected to a PLDT telephone line, would or should require its prior authorization.

Neither could these items be a means of committing a violation of PD No. 401 since
these copying, printing and storage devices in no way aided the respondents in
making the unauthorized connections. While these items may be accessory to the
computers and other equipment linked to telephone lines, PD No. 401 does not cover
this kind of items within the scope of the prohibition. To allow the seizure of items
under the PLDTs interpretation would, as the CA correctly observed, allow the
seizure under the warrant of properties for personal use of the respondents.

If PLDT seeks the seizure of these items to prove that these installations contain the
respondents' financial gain and the corresponding business loss to PLDT, then that
purpose is served by SW Al and SW A2 since this is what PLDT essentially
complained of in charging the respondents with theft. However, the same reasoning
does not justify its seizure under a warrant for violation of PD No. 401 since these
items are not directly connected to the PLDT telephone lines and PLDT has not even
claimed that the installation of these items requires prior authorization from it.

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The

decision and the resolution of the Court of Appeals in CAG.R. SP No. 89213 are
hereby MODIFIED in that SW Al and SW A2 are hereby declared valid and
constitutional.

SO ORDERED.

Carpio, (Chairperson), Del Castillo, Perez, and PerlasBernabe, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 166562 March 31, 2009
BENJAMIN G. TING, Petitioner,
vs.
CARMEN M. VELEZ-TING, Respondent.
DECISION
NACHURA, J.:
Before us is a petition for review on certiorari seeking to set aside the November 17,
2003 Amended Decision1 of the Court of Appeals (CA), and its December 13, 2004
Resolution2 in CA-G.R. CV No. 59903. The appellate court, in its assailed decision
and resolution, affirmed the January 9, 1998 Decision 3 of the Regional Trial Court
(RTC), Branch 23, Cebu City, declaring the marriage between petitioner and
respondent null and void ab initio pursuant to Article 36 of the Family Code.4
The facts follow.
Petitioner Benjamin Ting (Benjamin) and respondent Carmen Velez-Ting (Carmen)
first met in 1972 while they were classmates in medical school. 5 They fell in love, and
they were wed on July 26, 1975 in Cebu City when respondent was already pregnant
with their first child.
At first, they resided at Benjamins family home in Maguikay, Mandaue City. 6 When
their second child was born, the couple decided to move to Carmens family home in
Cebu City.7 In September 1975, Benjamin passed the medical board
examinations8 and thereafter proceeded to take a residency program to become a
surgeon but shifted to anesthesiology after two years. By 1979, Benjamin completed
the preceptorship program for the said field9 and, in 1980, he began working for Velez
Hospital, owned by Carmens family, as member of its active staff,10 while Carmen
worked as the hospitals Treasurer.11
The couple begot six (6) children, namely Dennis, born on December 9, 1975; James
Louis, born on August 25, 1977; Agnes Irene, born on April 5, 1981; Charles
Laurence, born on July 21, 1986; Myles Vincent, born on July 19, 1988; and Marie
Corinne, born on June 16, 1991.12
On October 21, 1993, after being married for more than 18 years to petitioner and
while their youngest child was only two years old, Carmen filed a verified petition
before the RTC of Cebu City praying for the declaration of nullity of their marriage
based on Article 36 of the Family Code. She claimed that Benjamin suffered from
psychological incapacity even at the time of the celebration of their marriage, which,
however, only became manifest thereafter. 13
In her complaint, Carmen stated that prior to their marriage, she was already aware
that Benjamin used to drink and gamble occasionally with his friends. 14 But after they
were married, petitioner continued to drink regularly and would go home at about
midnight or sometimes in the wee hours of the morning drunk and violent. He would
confront and insult respondent, physically assault her and force her to have sex with
him. There were also instances when Benjamin used his gun and shot the gate of
their house.15 Because of his drinking habit, Benjamins job as anesthesiologist was
affected to the point that he often had to refuse to answer the call of his fellow doctors
and to pass the task to other anesthesiologists. Some surgeons even stopped calling
him for his services because they perceived petitioner to be unreliable. Respondent
tried to talk to her husband about the latters drinking problem, but Benjamin refused
to acknowledge the same.16
Carmen also complained that petitioner deliberately refused to give financial support
to their family and would even get angry at her whenever she asked for money for
their children. Instead of providing support, Benjamin would spend his money on
drinking and gambling and would even buy expensive equipment for his hobby. 17 He
rarely stayed home18 and even neglected his obligation to his children.19
Aside from this, Benjamin also engaged in compulsive gambling. 20 He would gamble
two or three times a week and would borrow from his friends, brothers, or from loan
sharks whenever he had no money. Sometimes, Benjamin would pawn his wifes own
jewelry to finance his gambling.21 There was also an instance when the spouses had
to sell their family car and even a portion of the lot Benjamin inherited from his father
just to be able to pay off his gambling debts.22 Benjamin only stopped going to the
casinos in 1986 after he was banned therefrom for having caused trouble, an act
which he said he purposely committed so that he would be banned from the gambling
establishments.23
In sum, Carmens allegations of Benjamins psychological incapacity consisted of the
following manifestations:
1. Benjamins alcoholism, which adversely affected his family relationship
and his profession;
2. Benjamins violent nature brought about by his excessive and regular
drinking;
3. His compulsive gambling habit, as a result of which Benjamin found it
necessary to sell the family car twice and the property he inherited from his
father in order to pay off his debts, because he no longer had money to pay
the same; and
4. Benjamins irresponsibility and immaturity as shown by his failure and
refusal to give regular financial support to his family.24
In his answer, Benjamin denied being psychologically incapacitated. He maintained
that he is a respectable person, as his peers would confirm. He said that he is an
active member of social and athletic clubs and would drink and gamble only for social
reasons and for leisure. He also denied being a violent person, except when
provoked by circumstances.25 As for his alleged failure to support his family
financially, Benjamin claimed that it was Carmen herself who would collect his
professional fees from Velez Hospital when he was still serving there as practicing
anesthesiologist.26 In his testimony, Benjamin also insisted that he gave his family
financial support within his means whenever he could and would only get angry at
respondent for lavishly spending his hard-earned money on unnecessary things.27 He
also pointed out that it was he who often comforted and took care of their children,
while Carmen played mahjong with her friends twice a week.28
During the trial, Carmens testimony regarding Benjamins drinking and gambling
habits and violent behavior was corroborated by Susana Wasawas, who served as
nanny to the spouses children from 1987 to 1992.29 Wasawas stated that she
personally witnessed instances when Benjamin maltreated Carmen even in front of
their children.30
Carmen also presented as witness Dr. Pureza Trinidad-Oate, a
psychiatrist.31 Instead of the usual personal interview, however, Dr. Oates
evaluation of Benjamin was limited to the transcript of stenographic notes taken
during Benjamins deposition because the latter had already gone to work as an
anesthesiologist in a hospital in South Africa. After reading the transcript of
stenographic notes, Dr. Oate concluded that Benjamins compulsive drinking,
compulsive gambling and physical abuse of respondent are clear indications that
petitioner suffers from a personality disorder.32
To refute Dr. Oates opinion, petitioner presented Dr. Renato D. Obra, a psychiatrist
and a consultant at the Department of Psychiatry in Don Vicente Sotto Memorial
Medical Center, as his expert witness.33 Dr. Obra evaluated Benjamins psychological
behavior based on the transcript of stenographic notes, as well as the psychiatric
evaluation report prepared by Dr. A.J.L. Pentz, a psychiatrist from the University of
Pretoria in South Africa, and his (Dr. Obras) interview with Benjamins
brothers.34 Contrary to Dr. Oates findings, Dr. Obra observed that there is nothing
wrong with petitioners personality, considering the latters good relationship with his
fellow doctors and his good track record as anesthesiologist. 35
On January 9, 1998, the lower court rendered its Decision 36 declaring the marriage
between petitioner and respondent null and void. The RTC gave credence to Dr.
Oates findings and the admissions made by Benjamin in the course of his
deposition, and found him to be psychologically incapacitated to comply with the
essential obligations of marriage. Specifically, the trial court found Benjamin an
excessive drinker, a compulsive gambler, someone who prefers his extra-curricular
activities to his family, and a person with violent tendencies, which character traits
find root in a personality defect existing even before his marriage to Carmen. The
decretal portion of the decision reads:
WHEREFORE, all the foregoing considered, judgment is hereby rendered declaring
the marriage between plaintiff and defendant null and void ab initio pursuant to Art. 36
of the Family Code. x x x
xxxx
SO ORDERED.37
Aggrieved, petitioner appealed to the CA. On October 19, 2000, the CA rendered a
Decision38 reversing the trial courts ruling. It faulted the trial courts finding, stating
that no proof was adduced to support the conclusion that Benjamin was
psychologically incapacitated at the time he married Carmen since Dr. Oates
conclusion was based only on theories and not on established fact, 39 contrary to the
guidelines set forth in Santos v. Court of Appeals40 and in Rep. of the Phils. v. Court
of Appeals and Molina.41
Because of this, Carmen filed a motion for reconsideration, arguing that the Molina
guidelines should not be applied to this case since the Molina decision was
promulgated only on February 13, 1997, or more than five years after she had filed
her petition with the RTC.42 She claimed that the Molina ruling could not be made to
apply retroactively, as it would run counter to the principle of stare decisis. Initially, the
CA denied the motion for reconsideration for having been filed beyond the prescribed
period. Respondent thereafter filed a manifestation explaining compliance with the
prescriptive period but the same was likewise denied for lack of merit. Undaunted,
respondent filed a petition for certiorari43 with this Court. In a Resolution44 dated
March 5, 2003, this Court granted the petition and directed the CA to resolve
Carmens motion for reconsideration.45 On review, the CA decided to reconsider its
previous ruling. Thus, on November 17, 2003, it issued an Amended
Decision46reversing its first ruling and sustaining the trial courts decision. 47
A motion for reconsideration was filed, this time by Benjamin, but the same was
denied by the CA in its December 13, 2004 Resolution.48
Hence, this petition.
For our resolution are the following issues:
I. Whether the CA violated the rule on stare decisis when it refused to follow
the guidelines set forth under the Santos and Molina cases;
II. Whether the CA correctly ruled that the requirement of proof of
psychological incapacity for the declaration of absolute nullity of marriage
based on Article 36 of the Family Code has been liberalized; and
III. Whether the CAs decision declaring the marriage between petitioner and
respondent null and void [is] in accordance with law and jurisprudence.
We find merit in the petition.
I. On the issue of stare decisis.
The principle of stare decisis enjoins adherence by lower courts to doctrinal rules
established by this Court in its final decisions. It is based on the principle that once a
question of law has been examined and decided, it should be deemed settled and
closed to further argument.49 Basically, it is a bar to any attempt to relitigate the same
issues,50 necessary for two simple reasons: economy and stability. In our jurisdiction,
the principle is entrenched in Article 8 of the Civil Code. 51
This doctrine of adherence to precedents or stare decisis was applied by the English
courts and was later adopted by the United States. Associate Justice (now Chief
Justice) Reynato S. Punos discussion on the historical development of this legal
principle in his dissenting opinion in Lambino v. Commission on Elections52 is
enlightening:
The latin phrase stare decisis et non quieta movere means "stand by the thing and do
not disturb the calm." The doctrine started with the English Courts. Blackstone
observed that at the beginning of the 18th century, "it is an established rule to abide
by former precedents where the same points come again in litigation." As the rule
evolved, early limits to its application were recognized: (1) it would not be followed if it
were "plainly unreasonable"; (2) where courts of equal authority developed conflicting
decisions; and, (3) the binding force of the decision was the "actual principle or
principles necessary for the decision; not the words or reasoning used to reach the
decision."
The doctrine migrated to the United States. It was recognized by the framers of the
U.S. Constitution. According to Hamilton, "strict rules and precedents" are necessary
to prevent "arbitrary discretion in the courts." Madison agreed but stressed that "x x x
once the precedent ventures into the realm of altering or repealing the law, it should
be rejected." Prof. Consovoy well noted that Hamilton and Madison "disagree about
the countervailing policy considerations that would allow a judge to abandon a
precedent." He added that their ideas "reveal a deep internal conflict between the
concreteness required by the rule of law and the flexibility demanded in error
correction. It is this internal conflict that the Supreme Court has attempted to deal with
for over two centuries."
Indeed, two centuries of American case law will confirm Prof. Consovoy's observation
although stare decisis developed its own life in the United States. Two strains of stare
decisis have been isolated by legal scholars. The first, known as vertical stare decisis
deals with the duty of lower courts to apply the decisions of the higher courts to cases
involving the same facts. The second, known as horizontal stare decisis requires that
high courts must follow its own precedents. Prof. Consovoy correctly observes that
vertical stare decisis has been viewed as an obligation, while horizontal stare decisis,
has been viewed as a policy, imposing choice but not a command. Indeed, stare
decisis is not one of the precepts set in stone in our Constitution.
It is also instructive to distinguish the two kinds of horizontal stare decisis
constitutional stare decisis and statutory stare decisis. Constitutional stare decisis
involves judicial interpretations of the Constitution while statutory stare decisis
involves interpretations of statutes. The distinction is important for courts enjoy more
flexibility in refusing to apply stare decisis in constitutional litigations. Justice Brandeis'
view on the binding effect of the doctrine in constitutional litigations still holds sway
today. In soothing prose, Brandeis stated: "Stare decisis is not . . . a universal and
inexorable command. The rule of stare decisis is not inflexible. Whether it shall be
followed or departed from, is a question entirely within the discretion of the court,
which is again called upon to consider a question once decided." In the same vein,
the venerable Justice Frankfurter opined: "the ultimate touchstone of constitutionality
is the Constitution itself and not what we have said about it." In contrast, the
application of stare decisis on judicial interpretation of statutes is more inflexible. As
Justice Stevens explains: "after a statute has been construed, either by this Court or
by a consistent course of decision by other federal judges and agencies, it acquires a
meaning that should be as clear as if the judicial gloss had been drafted by the
Congress itself." This stance reflects both respect for Congress' role and the need to
preserve the courts' limited resources.
In general, courts follow the stare decisis rule for an ensemble of reasons, viz.: (1) it
legitimizes judicial institutions; (2) it promotes judicial economy; and, (3) it allows for
predictability. Contrariwise, courts refuse to be bound by the stare decisis rule where
(1) its application perpetuates illegitimate and unconstitutional holdings; (2) it cannot
accommodate changing social and political understandings; (3) it leaves the power to
overturn bad constitutional law solely in the hands of Congress; and, (4) activist
judges can dictate the policy for future courts while judges that respect stare decisis
are stuck agreeing with them.
In its 200-year history, the U.S. Supreme Court has refused to follow the stare decisis
rule and reversed its decisions in 192 cases. The most famous of these reversals is
Brown v. Board of Education which junked Plessy v. Ferguson's "separate but equal
doctrine." Plessy upheld as constitutional a state law requirement that races be
segregated on public transportation. In Brown, the U.S. Supreme Court, unanimously
held that "separate . . . is inherently unequal." Thus, by freeing itself from the
shackles of stare decisis, the U.S. Supreme Court freed the colored Americans from
the chains of inequality. In the Philippine setting, this Court has likewise refused to be
straitjacketed by the stare decisis rule in order to promote public welfare. In La Bugal-
B'laan Tribal Association, Inc. v. Ramos, we reversed our original ruling that certain
provisions of the Mining Law are unconstitutional. Similarly, in Secretary of Justice v.
Lantion, we overturned our first ruling and held, on motion for reconsideration, that a
private respondent is bereft of the right to notice and hearing during the evaluation
stage of the extradition process.
An examination of decisions on stare decisis in major countries will show that courts
are agreed on the factors that should be considered before overturning prior rulings.
These are workability, reliance, intervening developments in the law and changes in
fact. In addition, courts put in the balance the following determinants: closeness of the
voting, age of the prior decision and its merits.
The leading case in deciding whether a court should follow the stare decisis rule in
constitutional litigations is Planned Parenthood v. Casey. It established a 4-pronged
test. The court should (1) determine whether the rule has proved to be intolerable
simply in defying practical workability; (2) consider whether the rule is subject to a
kind of reliance that would lend a special hardship to the consequences of overruling
and add inequity to the cost of repudiation; (3) determine whether related principles of
law have so far developed as to have the old rule no more than a remnant of an
abandoned doctrine; and, (4) find out whether facts have so changed or come to be
seen differently, as to have robbed the old rule of significant application or
justification.53
To be forthright, respondents argument that the doctrinal guidelines prescribed in
Santos and Molina should not be applied retroactively for being contrary to the
principle of stare decisis is no longer new. The same argument was also raised but
was struck down in Pesca v. Pesca,54 and again in Antonio v. Reyes.55 In these
cases, we explained that the interpretation or construction of a law by courts
constitutes a part of the law as of the date the statute is enacted. It is only when a
prior ruling of this Court is overruled, and a different view is adopted, that the new
doctrine may have to be applied prospectively in favor of parties who have relied on
the old doctrine and have acted in good faith, in accordance therewith under the
familiar rule of "lex prospicit, non respicit."
II. On liberalizing the required proof for the declaration of nullity of marriage under
Article 36.
Now, petitioner wants to know if we have abandoned the Molina doctrine.
We have not.
In Edward Kenneth Ngo Te v. Rowena Ong Gutierrez Yu-Te,56 we declared that, in
hindsight, it may have been inappropriate for the Court to impose a rigid set of rules,
as the one in Molina, in resolving all cases of psychological incapacity. We said that
instead of serving as a guideline, Molina unintentionally became a straightjacket,
forcing all cases involving psychological incapacity to fit into and be bound by it,
which is not only contrary to the intention of the law but unrealistic as well because,
with respect to psychological incapacity, no case can be considered as on "all fours"
with another.57
By the very nature of cases involving the application of Article 36, it is logical and
understandable to give weight to the expert opinions furnished by psychologists
regarding the psychological temperament of parties in order to determine the root
cause, juridical antecedence, gravity and incurability of the psychological incapacity.
However, such opinions, while highly advisable, are not conditions sine qua non in
granting petitions for declaration of nullity of marriage. 58 At best, courts must treat
such opinions as decisive but not indispensable evidence in determining the merits of
a given case. In fact, if the totality of evidence presented is enough to sustain a
finding of psychological incapacity, then actual medical or psychological examination
of the person concerned need not be resorted to.59 The trial court, as in any other
given case presented before it, must always base its decision not solely on the expert
opinions furnished by the parties but also on the totality of evidence adduced in the
course of the proceedings.
It was for this reason that we found it necessary to emphasize in Ngo Te that each
case involving the application of Article 36 must be treated distinctly and judged not
on the basis of a priori assumptions, predilections or generalizations but according to
its own attendant facts. Courts should interpret the provision on a case-to-case basis,
guided by experience, the findings of experts and researchers in psychological
disciplines, and by decisions of church tribunals.
Far from abandoning Molina, we simply suggested the relaxation of the stringent
requirements set forth therein, cognizant of the explanation given by the Committee
on the Revision of the Rules on the rationale of the Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-
SC), viz.:
To require the petitioner to allege in the petition the particular root cause of the
psychological incapacity and to attach thereto the verified written report of an
accredited psychologist or psychiatrist have proved to be too expensive for the
parties. They adversely affect access to justice o poor litigants. It is also a fact that
there are provinces where these experts are not available. Thus, the Committee
deemed it necessary to relax this stringent requirement enunciated in the Molina
Case. The need for the examination of a party or parties by a psychiatrist or clinical
psychologist and the presentation of psychiatric experts shall now be determined by
the court during the pre-trial conference.60
But where, as in this case, the parties had the full opportunity to present professional
and expert opinions of psychiatrists tracing the root cause, gravity and incurability of a
partys alleged psychological incapacity, then such expert opinion should be
presented and, accordingly, be weighed by the court in deciding whether to grant a
petition for nullity of marriage.
III. On petitioners psychological incapacity.
Coming now to the main issue, we find the totality of evidence adduced by
respondent insufficient to prove that petitioner is psychologically unfit to discharge the
duties expected of him as a husband, and more particularly, that he suffered from
such psychological incapacity as of the date of the marriage eighteen (18) years ago.
Accordingly, we reverse the trial courts and the appellate courts rulings declaring the
marriage between petitioner and respondent null and void ab initio.
The intendment of the law has been to confine the application of Article 36 to the
most serious cases of personality disorders clearly demonstrative of an utter
insensitivity or inability to give meaning and significance to the marriage. 61 The
psychological illness that must have afflicted a party at the inception of the marriage
should be a malady so grave and permanent as to deprive one of awareness of the
duties and responsibilities of the matrimonial bond he or she is about to
assume.621avvphi1.zw+
In this case, respondent failed to prove that petitioners "defects" were present at the
time of the celebration of their marriage. She merely cited that prior to their marriage,
she already knew that petitioner would occasionally drink and gamble with his friends;
but such statement, by itself, is insufficient to prove any pre-existing psychological
defect on the part of her husband. Neither did the evidence adduced prove such
"defects" to be incurable.

The evaluation of the two psychiatrists should have been the decisive evidence in
determining whether to declare the marriage between the parties null and void. Sadly,
however, we are not convinced that the opinions provided by these experts
strengthened respondents allegation of psychological incapacity. The two experts
provided diametrically contradicting psychological evaluations: Dr. Oate testified that
petitioners behavior is a positive indication of a personality disorder,63 while Dr. Obra
maintained that there is nothing wrong with petitioners personality. Moreover, there
appears to be greater weight in Dr. Obras opinion because, aside from analyzing the
transcript of Benjamins deposition similar to what Dr. Oate did, Dr. Obra also took
into consideration the psychological evaluation report furnished by another
psychiatrist in South Africa who personally examined Benjamin, as well as his (Dr.
Obras) personal interview with Benjamins brothers.64 Logically, therefore, the
balance tilts in favor of Dr. Obras findings.

Lest it be misunderstood, we are not condoning petitioners drinking and gambling

problems, or his violent outbursts against his wife. There is no valid excuse to justify
such a behavior. Petitioner must remember that he owes love, respect, and fidelity to
his spouse as much as the latter owes the same to him. Unfortunately, this court finds
respondents testimony, as well as the totality of evidence presented by the
respondent, to be too inadequate to declare him psychologically unfit pursuant to
Article 36.

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

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

WHEREFORE, premises considered, the petition for review on certiorari is

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

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 193707 December 10, 2014
NORMA A. DEL SOCORRO, for and in behalf of her minor child RODERIGO
NORJO VAN WILSEM,Petitioner,
vs.
ERNST JOHAN BRINKMAN VAN WILSEM, 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 Orders 1 dated February 19, 2010 and
September 1, 2010, respectively, of the Regional Trial Court of Cebu City (RTC-
Cebu), which dismissed the criminal case entitled People of the Philippines v. Ernst
Johan Brinkman Van Wilsem, docketed as Criminal Case No. CBU-85503, for
violation of Republic Act (R.A.) No. 9262, otherwise known as the Anti-Violence
Against Women and Their Children Act of 2004.
The following facts are culled from the records:
Petitioner Norma A. Del Socorro and respondent Ernst Johan Brinkman Van Wilsem
contracted marriage in Holland on September 25, 1990.2 On January 19, 1994, they
were blessed with a son named Roderigo Norjo Van Wilsem, who at the time of the
filing of the instant petition was sixteen (16) years of age. 3
Unfortunately, their marriage bond ended on July 19, 1995 by virtue of a Divorce
Decree issued by the appropriate Court of Holland.4 At that time, their son was only
eighteen (18) months old.5 Thereafter, petitioner and her son came home to the
Philippines.6
According to petitioner, respondentmade a promise to provide monthly support to
their son in the amount of Two Hundred Fifty (250) Guildene (which is equivalent to
Php17,500.00 more or less).7 However, since the arrival of petitioner and her son in
the Philippines, respondent never gave support to the son, Roderigo.8
Not long thereafter, respondent cameto the Philippines and remarried in
Pinamungahan, Cebu, and since then, have been residing thereat. 9 Respondent and
his new wife established a business known as Paree Catering, located at Barangay
Tajao, Municipality of Pinamungahan, Cebu City.10 To date, all the parties, including
their son, Roderigo, are presently living in Cebu City. 11
On August 28, 2009, petitioner, through her counsel, sent a letter demanding for
support from respondent. However, respondent refused to receive the letter.12
Because of the foregoing circumstances, petitioner filed a complaint affidavit with the
Provincial Prosecutor of Cebu City against respondent for violation of Section 5,
paragraph E(2) of R.A. No. 9262 for the latters unjust refusal to support his minor
child with petitioner.13 Respondent submitted his counter-affidavit thereto, to which
petitioner also submitted her reply-affidavit.14 Thereafter, the Provincial Prosecutor of
Cebu City issued a Resolution recommending the filing of an information for the crime
charged against herein respondent.
The information, which was filed with the RTC-Cebu and raffled to Branch 20 thereof,
states that:
That sometime in the year 1995 and up to the present, more or less, in the
Municipality of Minglanilla, Province of Cebu, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, did then and there wilfully,
unlawfully and deliberately deprive, refuse and still continue to deprive his son
RODERIGO NORJO VAN WILSEM, a fourteen (14) year old minor, of financial
support legally due him, resulting in economic abuse to the victim. CONTRARY TO
LAW.15
Upon motion and after notice and hearing, the RTC-Cebu issued a Hold Departure
Order against respondent.16Consequently, respondent was arrested and,
subsequently, posted bail.17 Petitioner also filed a Motion/Application of Permanent
Protection Order to which respondent filed his Opposition. 18 Pending the resolution
thereof, respondent was arraigned.19 Subsequently, without the RTC-Cebu having
resolved the application of the protection order, respondent filed a Motion to Dismiss
on the ground of: (1) lack of jurisdiction over the offense charged; and (2) prescription
of the crime charged.20
On February 19, 2010, the RTC-Cebu issued the herein assailed Order,21 dismissing
the instant criminal case against respondent on the ground that the facts charged in
the information do not constitute an offense with respect to the respondent who is
analien, the dispositive part of which states:
WHEREFORE, the Court finds that the facts charged in the information do not
constitute an offense with respect to the accused, he being an alien, and accordingly,
orders this case DISMISSED.
The bail bond posted by accused Ernst Johan Brinkman Van Wilsem for his
provisional liberty ishereby cancelled (sic) and ordered released.
SO ORDERED.
Cebu City, Philippines, February 19, 2010.22
Thereafter, petitioner filed her Motion for Reconsideration thereto reiterating
respondents obligation to support their child under Article 195 23 of the Family Code,
thus, failure todo so makes him liable under R.A. No. 9262 which "equally applies to
all persons in the Philippines who are obliged to support their minor children
regardless of the obligors nationality."24
On September 1, 2010, the lower court issued an Order25 denying petitioners Motion
for Reconsideration and reiterating its previous ruling. Thus:
x x x The arguments therein presented are basically a rehash of those advanced
earlier in the memorandum of the prosecution. Thus, the court hereby reiterates its
ruling that since the accused is a foreign national he is not subject to our national law
(The Family Code) in regard to a parents duty and obligation to givesupport to his
child. Consequently, he cannot be charged of violating R.A. 9262 for his alleged
failure to support his child. Unless it is conclusively established that R.A. 9262 applies
to a foreigner who fails to give support tohis child, notwithstanding that he is not
bound by our domestic law which mandates a parent to give such support, it is the
considered opinion of the court that no prima faciecase exists against the accused
herein, hence, the case should be dismissed.
WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.
SO ORDERED.
Cebu City, Philippines, September 1, 2010.26
Hence, the present Petition for Review on Certiorari raising the following issues:
1. Whether or not a foreign national has an obligation to support his minor
child under Philippine law; and
2. Whether or not a foreign national can be held criminally liable under R.A.
No. 9262 for his unjustified failure to support his minor child. 27
At the outset, let it be emphasized that We are taking cognizance of the instant
petition despite the fact that the same was directly lodged with the Supreme Court,
consistent with the ruling in Republic v. Sunvar Realty Development
Corporation,28 which lays down the instances when a ruling of the trial court may be
brought on appeal directly to the Supreme Court without violating the doctrine of
hierarchy of courts, to wit:
x x x Nevertheless, the Rules do not prohibit any of the parties from filing a Rule 45
Petition with this Court, in case only questions of law are raised or involved. This
latter situation was one that petitioners found themselves in when they filed the
instant Petition to raise only questions of law. In Republic v. Malabanan, the Court
clarified the three modes of appeal from decisions of the RTC, to wit: (1) by ordinary
appeal or appeal by writ of error under Rule 41, whereby judgment was rendered in a
civil or criminal action by the RTC in the exercise of its original jurisdiction; (2) by a
petition for review under Rule 42, whereby judgment was rendered by the RTC in the
exercise of its appellate jurisdiction; and (3) by a petition for review on certiorari
before the Supreme Court under Rule 45. "The first mode of appeal is taken to the
[Court of Appeals] on questions of fact or mixed questions of fact and law. The
second mode of appeal is brought to the CA on questions of fact, of law, or mixed
questions of fact and law. The third mode of appealis elevated to the Supreme Court
only on questions of law." (Emphasis supplied)
There is a question of law when the issue does not call for an examination of the
probative value of the evidence presented or of the truth or falsehood of the facts
being admitted, and the doubt concerns the correct application of law and
jurisprudence on the matter. The resolution of the issue must rest solely on what the
law provides on the given set of circumstances.29
Indeed, the issues submitted to us for resolution involve questions of law the
response thereto concerns the correct application of law and jurisprudence on a given
set of facts, i.e.,whether or not a foreign national has an obligation to support his
minor child under Philippine law; and whether or not he can be held criminally liable
under R.A. No. 9262 for his unjustified failure to do so.
It cannot be negated, moreover, that the instant petition highlights a novel question of
law concerning the liability of a foreign national who allegedly commits acts and
omissions punishable under special criminal laws, specifically in relation to family
rights and duties. The inimitability of the factual milieu of the present case, therefore,
deserves a definitive ruling by this Court, which will eventually serve as a guidepost
for future cases. Furthermore, dismissing the instant petition and remanding the same
to the CA would only waste the time, effort and resources of the courts. Thus, in the
present case, considerations of efficiency and economy in the administration of
justice should prevail over the observance of the hierarchy of courts.
Now, on the matter of the substantive issues, We find the petition meritorious.
Nonetheless, we do not fully agree with petitioners contentions.
To determine whether or not a person is criminally liable under R.A. No. 9262, it is
imperative that the legal obligation to support exists.
Petitioner invokes Article 19530 of the Family Code, which provides the parents
obligation to support his child. Petitioner contends that notwithstanding the existence
of a divorce decree issued in relation to Article 26 of the Family Code, 31 respondent is
not excused from complying with his obligation to support his minor child with
petitioner.
On the other hand, respondent contends that there is no sufficient and clear basis
presented by petitioner that she, as well as her minor son, are entitled to financial
support.32 Respondent also added that by reason of the Divorce Decree, he is not
obligated topetitioner for any financial support.33
On this point, we agree with respondent that petitioner cannot rely on Article 195 34 of
the New Civil Code in demanding support from respondent, who is a foreign citizen,
since Article 1535 of the New Civil Code stresses the principle of nationality. In other
words, insofar as Philippine laws are concerned, specifically the provisions of the
Family Code on support, the same only applies to Filipino citizens. By analogy, the
same principle applies to foreigners such that they are governed by their national law
with respect to family rights and duties.36
The obligation to give support to a child is a matter that falls under family rights and
duties. Since the respondent is a citizen of Holland or the Netherlands, we agree with
the RTC-Cebu that he is subject to the laws of his country, not to Philippinelaw, as to
whether he is obliged to give support to his child, as well as the consequences of his
failure to do so.37
In the case of Vivo v. Cloribel,38 the Court held that
Furthermore, being still aliens, they are not in position to invoke the provisions of the
Civil Code of the Philippines, for that Code cleaves to the principle that family rights
and duties are governed by their personal law, i.e.,the laws of the nation to which they
belong even when staying in a foreign country (cf. Civil Code, Article 15).39
It cannot be gainsaid, therefore, that the respondent is not obliged to support
petitioners son under Article195 of the Family Code as a consequence of the Divorce
Covenant obtained in Holland. This does not, however, mean that respondent is not
obliged to support petitioners son altogether.
In international law, the party who wants to have a foreign law applied to a dispute or
case has the burden of proving the foreign law.40 In the present case, respondent
hastily concludes that being a national of the Netherlands, he is governed by such
laws on the matter of provision of and capacity to support.41 While respondent
pleaded the laws of the Netherlands in advancing his position that he is not obliged to
support his son, he never proved the same.
It is incumbent upon respondent to plead and prove that the national law of the
Netherlands does not impose upon the parents the obligation to support their child
(either before, during or after the issuance of a divorce decree), because Llorente v.
Court of Appeals,42 has already enunciated that:
True, foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to takejudicial notice of them. Like any other fact, they must be alleged
and proved.43
In view of respondents failure to prove the national law of the Netherlands in his
favor, the doctrine of processual presumption shall govern. Under this doctrine, if the
foreign law involved is not properly pleaded and proved, our courts will presume that
the foreign law is the same as our local or domestic or internal law. 44 Thus, since the
law of the Netherlands as regards the obligation to support has not been properly
pleaded and proved in the instant case, it is presumed to be the same with Philippine
law, which enforces the obligation of parents to support their children and penalizing
the non-compliance therewith.
Moreover, while in Pilapil v. Ibay-Somera,45 the Court held that a divorce obtained in a
foreign land as well as its legal effects may be recognized in the Philippines in view of
the nationality principle on the matter of status of persons, the Divorce Covenant
presented by respondent does not completely show that he is notliable to give
support to his son after the divorce decree was issued. Emphasis is placed on
petitioners allegation that under the second page of the aforesaid covenant,
respondents obligation to support his child is specifically stated, 46which was not
disputed by respondent.
We likewise agree with petitioner that notwithstanding that the national law of
respondent states that parents have no obligation to support their children or that
such obligation is not punishable by law, said law would still not find applicability,in
light of the ruling in Bank of America, NT and SA v. American Realty Corporation,47 to
wit:
In the instant case, assuming arguendo that the English Law on the matter were
properly pleaded and proved in accordance with Section 24, Rule 132 of the Rules of
Court and the jurisprudence laid down in Yao Kee, et al. vs. Sy-Gonzales, said
foreign law would still not find applicability.
Thus, when the foreign law, judgment or contract is contrary to a sound and
established public policy of the forum, the said foreign law, judgment or order shall
not be applied.
Additionally, prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good customs shall not be
rendered ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.
The public policy sought to be protected in the instant case is the principle imbedded
in our jurisdiction proscribing the splitting up of a single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent
If two or more suits are instituted on the basis of the same cause of action, the filing
of one or a judgment upon the merits in any one is available as a ground for the
dismissal of the others. Moreover, foreign law should not be applied when its
application would work undeniable injustice to the citizens or residents of the forum.
To give justice is the most important function of law; hence, a law, or judgment or
contract that is obviously unjust negates the fundamental principles of Conflict of
Laws.48
Applying the foregoing, even if the laws of the Netherlands neither enforce a parents
obligation to support his child nor penalize the noncompliance therewith, such
obligation is still duly enforceable in the Philippines because it would be of great
injustice to the child to be denied of financial support when the latter is entitled
thereto.
We emphasize, however, that as to petitioner herself, respondent is no longer liable
to support his former wife, in consonance with the ruling in San Luis v. San Luis,49 to
wit:
As to the effect of the divorce on the Filipino wife, the Court ruled that she should no
longerbe considered marriedto the alien spouse. Further, she should not be required
to perform her marital duties and obligations. It held:
To maintain, as private respondent does, that, under our laws, petitioner has to be
considered still married to private respondent and still subject to a wife's obligations
under Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not be
obliged to live together with, observe respect and fidelity, and render support to
private respondent. The latter should not continue to be one of her heirs with possible
rights to conjugal property. She should not be discriminated against in her own
country if the ends of justice are to be served. (Emphasis added) 50
Based on the foregoing legal precepts, we find that respondent may be made liable
under Section 5(e) and (i) of R.A. No. 9262 for unjustly refusing or failing to give
support topetitioners son, to wit:
SECTION 5. Acts of Violence Against Women and Their Children.- The crime of
violence against women and their children is committed through any of the following
acts:
xxxx
(e) Attempting to compel or compelling the woman or her child to engage in conduct
which the woman or her child has the right to desist from or desist from conduct which
the woman or her child has the right to engage in, or attempting to restrict or
restricting the woman's or her child's freedom of movement or conduct by force or
threat of force, physical or other harm or threat of physical or other harm, or
intimidation directed against the woman or child. This shall include, butnot limited to,
the following acts committed with the purpose or effect of controlling or restricting the
woman's or her child's movement or conduct:
xxxx
(2) Depriving or threatening to deprive the woman or her children of financial support
legally due her or her family, or deliberately providing the woman's children
insufficient financial support; x x x x
(i) Causing mental or emotional anguish, public ridicule or humiliation to the woman or
her child, including, but not limited to, repeated verbal and emotional abuse, and
denial of financial support or custody of minor childrenof access to the woman's
child/children.51
Under the aforesaid special law, the deprivation or denial of financial support to the
child is considered anact of violence against women and children.
In addition, considering that respondent is currently living in the Philippines, we find
strength in petitioners claim that the Territoriality Principle in criminal law, in relation
to Article 14 of the New Civil Code, applies to the instant case, which provides that:
"[p]enal laws and those of public security and safety shall be obligatory upon all who
live and sojourn in Philippine territory, subject to the principle of public international
law and to treaty stipulations." On this score, it is indisputable that the alleged
continuing acts of respondent in refusing to support his child with petitioner is
committed here in the Philippines as all of the parties herein are residents of the
Province of Cebu City. As such, our courts have territorial jurisdiction over the offense
charged against respondent. It is likewise irrefutable that jurisdiction over the
respondent was acquired upon his arrest.
Finally, we do not agree with respondents argument that granting, but not admitting,
that there is a legal basis for charging violation of R.A. No. 9262 in the instant case,
the criminal liability has been extinguished on the ground of prescription of
crime52 under Section 24 of R.A. No. 9262, which provides that:
SECTION 24. Prescriptive Period. Acts falling under Sections 5(a) to 5(f) shall
prescribe in twenty (20) years. Acts falling under Sections 5(g) to 5(I) shall prescribe
in ten (10) years.
The act of denying support to a child under Section 5(e)(2) and (i) of R.A. No. 9262 is
a continuing offense,53which started in 1995 but is still ongoing at present.
Accordingly, the crime charged in the instant case has clearly not prescribed.
Given, however, that the issue on whether respondent has provided support to
petitioners child calls for an examination of the probative value of the evidence
presented, and the truth and falsehood of facts being admitted, we hereby remand
the determination of this issue to the RTC-Cebu which has jurisdiction over the case.
WHEREFORE, the petition is GRANTED. The Orders dated February 19, 2010 and
September 1, 2010, respectively, of the Regional Trial Court of the City of Cebu are
hereby REVERSED and SET ASIDE. The case is REMANDED to the same court to
conduct further proceedings based on the merits of the case.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 205487 November 12, 2014
ORION SAVINGS BANK, Petitioner,
vs.
SHIGEKANE SUZUKI, Respondent.
DECISION
BRION, J.:
Before us is the Petition for Review on Certiorari1 filed by petitioner Orion Savings
Bank (Orion) under Rule 45 of the Rules of Court, assailing the decision 2 dated
August 23, 2012 and the resolution3 dated January 25, 2013 of the Court of Appeals
(CA) in CA-G.R. CV No. 94104.
The Factual Antecedents
In the first week of August 2003, respondent Shigekane Suzuki (Suzuki), a Japanese
national, met with Ms. Helen Soneja (Soneja) to inquire about a condominium unit
and a parking slot at Cityland Pioneer, Mandaluyong City, allegedly owned by Yung
Sam Kang (Kang), a Korean national and a Special Resident Retiree's Visa (SRRV)
holder.
At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by Condominium
Certificate of Title (CCT) No. 18186]4 and Parking Slot No. 42 [covered by CCT No.
9118]5 were for sale for P3,000,000.00. Soneja likewise assured Suzuki that the titles
to the unit and the parking slot were clean. After a brief negotiation, the parties
agreed to reduce the price to P2,800,000.00. On August 5, 2003, Suzuki issued Kang
a Bank of the Philippine Island (BPI) Check No. 83349 6 for One Hundred Thousand
Pesos (P100,000.00) as reservation fee.7 On August 21, 2003, Suzuki issued Kang
another check, BPI Check No. 83350,8 this time for P2,700,000.00 representing the
remaining balance of the purchase price. Suzuki and Kang then executed a Deed of
Absolute Sale dated August 26, 20039 covering Unit No. 536 and Parking Slot No. 42.
Soon after, Suzuki took possession of the condominium unit and parking lot, and
commenced the renovation of the interior of the condominium unit.
Kang thereafter made several representations with Suzuki to deliver the titles to the
properties, which were then allegedly in possession of Alexander Perez (Perez,
Orions Loans Officer) for safekeeping. Despite several verbal demands, Kang failed
to deliver the documents. Suzuki later on learned that Kang had left the country,
prompting Suzuki to verify the status of the properties with the Mandaluyong City
Registry of Deeds.
Before long, Suzuki learned that CCT No. 9118 representing the title to the Parking
Slot No. 42 contained no annotations although it remained under the name of
Cityland Pioneer. This notwithstanding, Cityland Pioneer, through Assistant Vice
President Rosario D. Perez, certified that Kang had fully paid the purchase price of
Unit. No. 53610 and Parking Slot No. 42.11 CCT No. 18186 representing the title to the
condominium unit had no existing encumbrance, except for anannotation under Entry
No. 73321/C-10186 which provided that any conveyance or encumbrance of CCT No.
18186 shall be subject to approval by the Philippine Retirement Authority (PRA).
Although CCT No. 18186 contained Entry No. 66432/C-10186 dated February 2,
1999 representing a mortgage in favor of Orion for a P1,000,000.00 loan, that
annotation was subsequently cancelled on June 16, 2000 by Entry No. 73232/T. No.
10186. Despite the cancellation of the mortgage to Orion, the titles to the properties
remained in possession of Perez.
To protect his interests, Suzuki thenexecuted an Affidavit of Adverse Claim12 dated
September 8, 2003, withthe Registry of Deeds of Mandaluyong City, annotated as
Entry No. 3292/C-No. 18186 in CCT No. 18186. Suzuki then demanded the delivery
of the titles.13 Orion, (through Perez), however, refused to surrender the titles, and
cited the need to consult Orions legal counsel as its reason.
On October 14, 2003, Suzuki received a letter from Orions counsel dated October 9,
2003, stating that Kang obtained another loan in the amount of P1,800,000.00. When
Kang failed to pay, he executed a Dacion en Pagodated February 2, 2003, in favorof
Orion covering Unit No. 536. Orion, however, did not register the Dacion en Pago,
until October 15, 2003.
On October 28, 2003, Suzuki executed an Affidavit of Adverse Claim over Parking
Slot No. 42 (covered by CCT No. 9118) and this was annotated as Entry No. 4712/C-
No. 9118 in the parking lots title.
On January 27, 2004, Suzuki filed a complaint for specific performance and damages
against Kang and Orion. At the pre-trial, the parties made the following admissions
and stipulations:
1. That as of August 26, 2003, Kang was the registered owner of Unit No.
536 and Parking Slot No. 42;
2. That the mortgage in favor ofOrion supposedly executed by Kang, with
Entry No. 66432/C-10186 dated February 2, 1999, was subsequently
cancelled by Entry No. 73232/T No. 10186 dated June 16, 2000;
3. That the alleged Dacion en Pagowas never annotated in CCT Nos. 18186
and 9118;
4. That Orion only paid the appropriate capital gains tax and the
documentary stamp tax for the alleged Dacion en Pago on October 15,
2003;
 5. That Parking Slot No. 42, covered by CCT No. 9118, was never
mortgaged to Orion; and
6. That when Suzuki bought the properties, he went to Orion to obtain
possession of the titles.
The RTC Ruling
In its decision14 dated June 29, 2009, the Regional Trial Court (RTC), Branch 213,
Mandaluyong City ruled infavor of Suzuki and ordered Orion to deliver the CCT Nos.
18186 and 9118 to Suzuki.
The court found that Suzuki was an innocent purchaser for value whose rights over
the properties prevailed over Orions. The RTC further noted that Suzuki exerted
efforts to verify the status of the properties but he did not find any existing
encumbrance inthe titles. Although Orion claims to have purchased the property by
way of a Dacion en Pago, Suzuki only learned about it two (2) months after he bought
the properties because Orion never bothered to register or annotate the Dacion en
Pagoin CCT Nos. 18186 and 9116.
The RTC further ordered Orion and Kang to jointly and severally pay Suzuki moral
damages, exemplary damages, attorneys fees, appearance fees, expenses for
litigation and cost ofsuit. Orion timely appealed the RTC decision with the CA.
The CA Ruling
On August 23, 2012, the CA partially granted Orions appeal and sustained the RTC
insofar as it upheld Suzukis right over the properties. The CA further noted that Entry
No. 73321/C-10186 pertaining to the withdrawal of investment of an SRRV only
serves as a warning to an SRRV holder about the implications of a conveyance of a
property investment. It deviated from the RTC ruling, however, by deleting the award
for moral damages, exemplary damages, attorneys fees, expenses for litigation and
cost of suit.
Orion sought a reconsideration of the CA decision but the CA denied the motion in its
January 25, 2013 resolution. Orion then filed a petition for review on certiorariunder
Rule 45 with this Court.
The Petition and Comment
Orions petition is based on the following grounds/arguments: 15
1. The Deed of Sale executed by Kang in favor of Suzuki is null and void.
Under Korean law, any conveyance of a conjugal property should be made
with the consent of both spouses;
2. Suzuki is not a buyer in good faith for he failed to check the owners
duplicate copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No. 73321/C-10186, which
prohibits any conveyance or encumbrance of the property investment,
defeats the alleged claim of good faith by Suzuki; and
4. Orion should not be faulted for exercising due diligence.
In his Comment,16 Suzuki asserts that the issue on spousal consent was belatedly
raised on appeal. Moreover, proof of acquisition during the marital coverture is a
condition sine qua nonfor the operation of the presumption of conjugal
ownership.17 Suzuki additionally maintains that he is a purchaser in good faith, and is
thus entitled to the protection of the law.
The Courts Ruling
We deny the petition for lack of merit.
The Court may inquire into conclusions of fact when the inference made is manifestly
mistaken
In a Rule 45 petition, the latitude of judicial review generally excludes a factual and
evidentiary re-evaluation, and the Court ordinarily abides by the uniform factual
conclusions of the trial court and the appellate court. 18 In the present case, while the
courts below both arrived at the same conclusion, there appears tobe an
incongruence in their factual findings and the legal principle they applied to the
attendant factual circumstances. Thus, we are compelled to examine certain factual
issues in the exercise of our sound discretion to correct any mistaken inference that
may have been made.19
Philippine Law governs the transfer of real property
Orion believes that the CA erred in not ruling on the issue of spousal consent. We
cannot uphold this position, however, because the issue of spousal consent was only
raised on appeal to the CA. It is a well-settled principle that points of law, theories,
issues, and arguments not brought to the attention of the trial court cannot be raised
for the first time on appeal and considered by a reviewing court. 20 To consider these
belated arguments would violate basic principles of fairplay, justice, and due process.
Having said these, we shall nonetheless discuss the issues Orion belatedly raised, if
only to put an end to lingering doubts on the correctness of the denial of the present
petition.
It is a universal principle thatreal or immovable property is exclusively subject to the
laws of the country or state where it is located.21 The reason is found in the very
nature of immovable property its immobility. Immovables are part of the country
and so closely connected to it that all rights over them have their natural center of
gravity there.22
Thus, all matters concerning the titleand disposition ofreal property are determined by
what is known as the lex loci rei sitae, which can alone prescribe the mode by which a
title canpass from one person to another, or by which an interest therein can be
gained or lost.23 This general principle includes all rules governing the descent,
alienation and transfer of immovable property and the validity, effect and construction
of wills and other conveyances.24
This principle even governs the capacity of the person making a deed relating to
immovable property, no matter what its nature may be. Thus, an instrument will be
ineffective to transfer title to land if the person making it is incapacitated by the lex loci
rei sitae, even though under the law of his domicile and by the law of the place where
the instrument is actually made, his capacity is undoubted.25
On the other hand, property relations between spouses are governed principally by
the national law of the spouses.26 However, the party invoking the application of a
foreign law has the burden of proving the foreign law. The foreign law is a question of
fact to be properly pleaded and proved as the judge cannot take judicial notice of a
foreign law.27 He is presumed to know only domestic or the law of the forum. 28
To prove a foreign law, the party invoking it must present a copy thereof and comply
with Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. The record of public documents referred to in
paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by
an official publication thereof or by a copy attested by the officer having the legal
custody of the record, or by his deputy, and accompanied, if the record is not kept in
the Philippines, with a certificate that such officer has the custody. If the office in
which the record is kept is in a foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general, consul, vice consul, or consular
agent or by any officer in the foreign service of the Philippines stationed in the foreign
country inwhich the record is kept, and authenticated by the seal of his office.
(Emphasis supplied)
SEC. 25. What attestation ofcopy must state. Whenever a copy of a document or
record is attested for the purpose of the evidence, the attestation must state, in
substance, that the copy is a correct copy of the original, or a specific part thereof, as
the case may be. The attestation must be under the official seal of the attesting
officer, if there be any, or if he be the clerk of a court having a seal, under the seal of
such court.
Accordingly, matters concerning the title and disposition of real property shall be
governed by Philippine law while issues pertaining to the conjugal natureof the
property shall be governed by South Korean law, provided it is proven as a fact.
In the present case, Orion, unfortunately failed to prove the South Korean law on the
conjugal ownership ofproperty. It merely attached a "Certification from the Embassy
of the Republic of Korea"29 to prove the existence of Korean Law. This certification,
does not qualify as sufficient proof of the conjugal nature of the property for there is
no showing that it was properly authenticated bythe seal of his office, as required
under Section 24 of Rule 132.30
Accordingly, the International Law doctrine of presumed-identity approachor
processual presumption comes into play, i.e., where a foreign law is not pleaded or,
evenif pleaded, is not proven, the presumption is that foreign law is the same as
Philippine Law.31
Under Philippine Law, the phrase "Yung Sam Kang married to' Hyun Sook Jung" is
merely descriptive of the civil status of Kang.32 In other words, the import from the
certificates of title is that Kang is the owner of the properties as they are registered in
his name alone, and that he is married to Hyun Sook Jung.
We are not unmindful that in numerous cases we have held that registration of the
property in the name of only one spouse does not negate the possibility of it being
conjugal or community property.33 In those cases, however, there was proof that the
properties, though registered in the name of only one spouse, were indeed either
conjugal or community properties.34 Accordingly, we see no reason to declare as
invalid Kangs conveyance in favor of Suzuki for the supposed lack of spousal
consent.
The petitioner failed to adduce sufficient evidence to prove the due execution of the
Dacion en Pago
Article 1544 of the New Civil Codeof the Philippines provides that:
ART. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it
who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good
faith was first in the possession; and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith.
The application of Article 1544 of the New Civil Code presupposes the existence of
two or more duly executed contracts of sale. In the present case, the Deed of Sale
dated August 26, 200335 between Suzuki and Kang was admitted by Orion36 and was
properly identified by Suzukis witness Ms. Mary Jane Samin (Samin). 37
It is not disputed, too, that the Deed of Sale dated August 26, 2003 was
consummated. In a contract of sale, the seller obligates himself to transfer the
ownership of the determinate thing sold, and to deliver the same to the buyer, who
obligates himself to pay a price certain to the seller.38 The execution of the notarized
deed of saleand the actual transfer of possession amounted to delivery that produced
the legal effect of transferring ownership to Suzuki.39
On the other hand, although Orion claims priority in right under the principle of prius
tempore, potior jure (i.e.,first in time, stronger in right), it failedto prove the existence
and due execution of the Dacion en Pagoin its favor.
At the outset, Orion offered the Dacion en Pagoas Exhibit "5"with submarkings "5-a"
to "5-c" to prove the existence of the February 6, 2003 transaction in its Formal Offer
dated July 20, 2008. Orion likewise offered in evidence the supposed promissory note
dated September 4, 2002 as Exhibit "12"to prove the existence of the
additional P800,000.00 loan. The RTC, however, denied the admission of Exhibits "5"
and "12,"among others, in its order dated August 19, 2008 "since the same [were] not
identified in court by any witness."40
Despite the exclusion of its most critical documentary evidence, Orion failed to make
a tender ofexcluded evidence, as provided under Section 40, Rule 132 of the Rules of
Court. For this reason alone, we are prevented from seriously considering Exhibit "5"
and its submarkings and Exhibit "12" in the present petition.
Moreover, even if we consider Exhibit "5" and its submarkings and Exhibit "12" in the
present petition, the copious inconsistencies and contradictions in the testimonial and
documentary evidence of Orion, militate against the conclusion that the Dacion en
Pagowas duly executed. First, there appears to be no due and demandable obligation
when the Dacion en Pago was executed, contrary to the allegations of Orion. Orions
witness Perez tried to impress upon the RTC that Kang was in default in
his P1,800,000.00 loan. During his direct examination, he stated:
ATTY. CRUZAT:
Q: Okay, so this loan of P1.8 million, what happened to this loan, Mr.
Witness?
A: Well it became past due, there has been delayed interest payment by Mr.
Kangand...
Q: So what did you do after there were defaults[?]
A: We have to secure the money or the investment of the bank through
loans and we have executed a dacion en pagobecause Mr. Kang said he
has no money. So we just execute[d] the dacion en pago rather than going
through the Foreclosure proceedings.
xxxx
Q: Can you tell the court when was this executed?
A: February 6, 2003, your Honor.41
A reading of the supposed promissory note, however, shows that there was nodefault
to speak of when the supposed Dacion en Pagowas executed.
Based on the promissory note, Kangs loan obligation wouldmature only on August
27, 2003. Neither can Orion claim that Kang had been in default in his installment
payments because the wordings of the promissory note provide that "[t]he principal of
this loanand its interest and other charges shall be paid by me/us in accordance
hereunder: SINGLE PAYMENT LOANS.42 "There was thus no due and demandable
loan obligation when the alleged Dacion en Pago was executed.
Second, Perez, the supposed person who prepared the Dacion en Pago,appears to
only have a vague idea of the transaction he supposedly prepared. During his cross-
examination, he testified:
ATTY. DE CASTRO:
Q: And were you the one who prepared this [dacion en pago] Mr. witness?
A: Yes, sir. I personally prepared this.
xxxx
Q: So this 1.8 million pesos is already inclusive of all the penalties, interest
and surcharge due from Mr. Yung Sam Kang?
A: Its just the principal, sir.
Q: So you did not state the interest [and] penalties?
A: In the [dacion en pago], we do not include interest, sir. We may actually
includethat but....
Q: Can you read the Second Whereas Clause, Mr. Witness?
A: Whereas the first party failed to pay the said loan to the second party and
as of February 10, 2003, the outstanding obligation which is due and
demandable principal and interest and other charges included amounts
to P1,800,000.00 pesos, sir.
xxxx
Q: You are now changing your answer[.] [I]t now includes interest and other
charges, based on this document?
 A: Yes, based on that document, sir.43
Third, the Dacion en Pago,mentioned that the P1,800,000.00 loan was
secured by a real estate mortgage. However, no document was ever
presented to prove this real estate mortgage aside from it being mentioned
in the Dacion en Pago itself.
ATTY. DE CASTRO:
Q: Would you know if there is any other document like a supplement to that
Credit Line Agreement referring to this 1.8 million peso loan by Mr. Yung
Sam Kang which says that there was a subsequent collateralization or
security given by Mr. Yung [Sam]
Kang for the loan?
xxxx
A: The [dacion en pago], sir.44
Fourth,the Dacion en Pago was first mentioned only two (2) months after Suzuki and
Samin demanded the delivery of the titles sometime in August 2003,and after Suzuki
caused the annotation of his affidavit of adverse claim. Records show that it was only
on October 9, 2003, when Orion, through its counsel, Cristobal Balbin Mapile &
Associates first spoke of the Dacion en Pago.45 Not even Perez mentioned any
Dacion en Pago on October 1, 2003, when he personally received a letter demanding
the delivery of the titles.Instead, Perez refused to accept the letter and opted to first
consult with his lawyer.46
Notably, even the October 9, 2003 letter contained material inconsistencies in its
recital of facts surrounding the execution of the Dacion en Pago. In particular, it
mentioned that "on [September 4, 2002], after paying the original loan, [Kang] applied
and was granted a new Credit Line Facility by [Orion] x x x for ONE MILLION EIGHT
HUNDRED THOUSAND PESOS (P1,800,000.00)." Perez, however, testified that
there was "no cash movement" in the original P1,000,000.00 loan. In his testimony,
he said:
COURT:
xxxx
Q: Would you remember what was the subject matter of that real estate
mortgage for that firstP1,000,000.00 loan?
A: Its a condominium Unit in Cityland, sir.
xxxx
Q: Would you recall if there was any payment by Mr. Yung Sam Kang of
this P1,000,000.00 loan?
A: None sir.
Q: No payments?
A: None sir.
Q: And from 1999 to 2002, there was no payment, either by way of payment
to the principal, by way ofpayment of interest, there was no payment by Mr.
Yung Sam Kang of this loan?
A: Literally, there was no actual cash movement, sir.
Q: There was no actual cash?
A: Yes, sir.
Q: And yet despite no payment, the bank Orion Savings Bank still extended
an P800,000.00 additional right?
A: Yes, sir.47
Fifth, it is undisputed that notwithstanding the supposed execution of theDacion en
Pago on February 2, 2003, Kang remained in possession of the condominium unit. In
fact, nothing in the records shows that Orion even bothered to take possession of the
property even six (6) months after the supposed date of execution of the Dacion en
Pago. Kang was even able to transfer possession of the condominium unit to Suzuki,
who then made immediate improvements thereon. If Orion really purchased the
condominium unit on February 2, 2003 and claimed to be its true owner, why did it not
assert its ownership immediately after the alleged sale took place? Why did it have to
assert its ownership only after Suzuki demanded the delivery of the titles? These
gaps have remained unanswered and unfilled.
In Suntay v. CA,48 we held that the most prominent index of simulation is the
complete absence of anattempt on the part of the vendee to assert his rights of
ownership over the property in question. After the sale, the vendee should have
entered the land and occupied the premises. The absence of any attempt on the part
of Orion to assert its right of dominion over the property allegedly soldto it is a clear
badge of fraud. That notwithstanding the execution of the Dacion en Pago, Kang
remained in possession of the disputed condominium unit from the time of the
execution of the Dacion en Pagountil the propertys subsequent transfer to Suzuki
unmistakably strengthens the fictitious nature of the Dacion en Pago.
These circumstances, aside from the glaring inconsistencies in the documents and
testimony of Orions witness, indubitably prove the spurious nature of the Dacion en
Pago.
The fact that the Dacion en Pago
is a notarized document does not
support the conclusion that the
sale it embodies is a true
conveyance
Public instruments are evidence of the facts that gave rise to their execution and are
to be considered as containing all the terms of the agreement.49 While a notarized
document enjoys this presumption, "the fact that a deed is notarized is not a
guarantee of the validity of its contents."50 The presumption of regularity of notarized
documents is not absolute and may be rebutted by clear and convincing evidence to
the contrary.51
In the present case, the presumption cannot apply because the regularity in the
execution of the Dacion en Pago and the loan documents was challenged in the
proceedings below where their prima facievalidity was overthrown by the highly
questionable circumstances surrounding their execution. 52
Moreover, Orion should not be allowed to successfully assail the good faith of Suzuki
on the basis of the PRA restriction. Orion knew of the PRA restriction when it
transacted with Kang. Incidentally, Orion admitted accommodating Kangs request to
cancel the mortgage annotation despite the lack of payment to circumvent the PRA
restriction. Orion, thus, is estopped from impugning the validity of the conveyance in
favor of Suzuki on the basis of the PRA restriction that Orion itself ignored and
"attempted" to circumvent.
With the conclusion that Orion failed to prove the authenticity of the Dacion en Pago,
we see no reason for the application of the rules on double sale under Article 1544 of
the New Civil Code. Suzuki, moreover, successfully adduced sufficient evidence to
establish the validity of conveyance in his favor.
WHEREFORE, premises considered, we DENY the petition for lack of merit. Costs
against petitioner Orion Savings Bank.
SO ORDERED.
ARTURO D. BRION
Associate Justice

Effect of the PRA restriction on

the validity of Suzukis title to the
property

Orion argues that the PRA restriction in CCT No. 18186 affects the conveyance to
Suzuki. In particular, Orion assails the status of Suzuki as a purchaser in good faith in
view of the express PRA restriction contained in CCT No. 18186.53

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

x x x the annotation merely servesas a warning to the owner who holds a Special
Resident Retirees Visa(SRRV) that he shall lose his visa if he disposes his property
which serves as his investment in order to qualify for such status. Section 14 of the
Implementing Investment Guidelines under Rule VIII-A of the Rules and Regulations
Implementing Executive Order No. 1037, Creating the Philippine Retirement Park
System Providing Funds Therefor and For Other Purpose ( otherwise known as the
Philippine Retirement Authority) states:

Section 14. Should the retiree-investor withdraw his investment from the Philippines,
or transfer the same to another domestic enterprise, orsell, convey or transfer his
condominium unit or units to another person, natural or juridical without the prior
approval of the Authority, the Special Resident Retirees Visa issued to him, and/or
unmarried minor child or children[,] may be cancelled or revoked by the Philippine
Government, through the appropriate government department or agency, upon
recommendation of the Authority.54
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 195432 August 27, 2014
EDELINA T. ANDO, Petitioner,
vs.
DEPARTMENT OF FOREIGN AFFAIRS, Respondent.
DECISION
SERENO, CJ:
This is a Petition for Review under Rule 45 of the Rules of Court, seeking the
nullification of the Orders dated 14 January and 8 February 2011 issued by the
Regional Trial Court (R TC), Third Judicial Region, Branch 45, 1 City of San Fernando,
Pampanga, in Civil Case No. 137, which dismissed the Petition for Declaratory Relief
filed therein.
STATEMENT OF THE FACTS AND OF THE CASE
The pertinent facts of the case, as alleged by petitioner, are as follows:
3. On 16 September 2001, petitioner married Yuichiro Kobayashi, a Japanese
National, in a civil wedding solemnized at Candaba, Pampanga. A copy of their
Certificate of Marriage is hereto attached as Annex 'A' and made an integral part
hereof.
4. On 16 September 2004, Yuichiro Kobayashi sought in Japan, and was validly
granted under Japaneselaws, a divorce in respect of his marriage with petitioner.
A copy of the Divorce Certificate duly issued by the Consulate-General of Japan
and duly authenticated by the Department of Foreign Affairs, Manila, is heretoas
Annex B and made an integral part hereof. 5. Said Divorce Certificate was duly
registered with the Office of the Civil Registry of Manila. A copy of the
Certification dated 28 October 2005 is hereto attached as Annex C and made
an integral part hereof.
6. Believing in good faith that said divorce capacitated her to remarry and that by
such she reverted to her single status, petitioner married Masatomi Y. Ando on
13 September 2005 in a civil wedding celebrated in Sta. Ana, Pampanga. A copy
of their Certificate of Marriage is hereto attached as Annex D and made an
integral part hereof.
7. In the meantime, Yuichiro Kobayashi married Ryo Miken on 27 December
2005. A copy of the JapaneseFamily Registry Record of Kobayashi showing the
divorce he obtained and his remarriage with Ryo Miken, duly authenticated by
the Consulate-General of Japan and the Department of Foreign Affairs, Manila, is
hereto attached as Annex E and made an integral part hereof.
8. Recently, petitioner applied for the renewal of her Philippine passport to
indicate her surname withher husband Masatomi Y. Ando but she was told at the
Department of Foreign Affairs that the same cannot be issued to her until she
can prove bycompetent court decision that her marriage with her said husband
Masatomi Y. Ando is valid until otherwise declared.
xxxx
12. Prescinding from the foregoing, petitioners marriage with her said husband
Masatomi Y. Ando musttherefore be honored, considered and declared valid,
until otherwise declared by a competent court. Consequently, and until then,
petitioner therefore is and must be declared entitled to the issuance of a
Philippine passport under the name Edelina Ando y Tungol. Hence, this
petitioner pursuant to Rule 63 of the Rules of Court. 2
On 29 October 2010, petitioner filed with the RTC a Petition for Declaratory Relief,
which was later raffled off to Branch 46. She impleaded the Department of Foreign
Affairs (DFA) as respondent and prayed for the following reliefs before the lower
court:
WHEREFORE, petitioner most respectfully prays of this Honorable Court that after
proper proceedings, judgment be rendered, as follows:
(a) declaring as valid and subsisting the marriage between petitioner Edelina T.
Ando and her husband Masatomi Y. Ando until otherwise declared by a
competent court;
(b) declaring petitioner entitled to the issuance of a Philippine Passport under the
name "Edelina Ando y Tungol"; and
(c) directing the Department ofForeign Affairs to honor petitioners marriage to
her husband Masatomi Y. Ando and to issue a Philippine Passport to petitioner
under the name "Edelina Ando y Tungol".
Petitioner prays for such other just and equitable reliefs.3
On 15 November 2010, in an Order dismissing the Petition for want of cause and
action, as well as jurisdiction, the RTC held thus:
Records of the case would reveal that prior to petitioners marriage to Masatomi Y.
Ando, herein petitioner was married to Yuichiro Kobayashi, a Japanese National, in
Candaba, Pampanga, on September 16, 2001, and that though a divorce was
obtained and granted in Japan, with respect to the their (sic) marriage, there is no
showing that petitioner herein complied with the requirements set forth in Art. 13 of
the Family Code that is obtaining a judicial recognition of the foreign decree of
absolute divorce in our country.
It is therefore evident, under the foregoing circumstances, that herein petitioner does
not have any causeof action and/or is entitled to the reliefs prayed for under Rule 63
of the Rules of Court. In the same vein, though there is other adequate remedy
available to the petitioner, such remedy is however beyond the authority and
jurisdiction of this court to act upon and grant, as it isonly the family court which is
vested with such authority and jurisdiction.4
On 3 December 2010, petitioner filed an Ex ParteMotion for Reconsideration of the
Order dated 15 November 2010. In anOrder dated 14 December 2010, the RTC
granted the motion in this wise:
WHEREFORE, considering that the allegations and reliefs prayed for by the petitioner
in her petition and the instant Motion for Reconsideration falls within the jurisdiction of
the Special Family Court of this jurisdiction and for the interest ofsubstantial justice,
the Order of the Court dated November 15, 2010 is hereby reconsidered.
Let the record of this case be therefore referred back to the Office of the Clerk of
Court for proper endorsement to the Family Court of this jurisdiction for
appropriateaction and/or disposition.5 Thereafter, the case was raffled to Branch 45 of
the RTC. On 14 January 2011, the trial court dismissed the Petition anew on the
ground that petitioner had no cause of action. The Order reads thus:
The petition specifically admits that the marriage she seeks to be declared as valid is
already her second marriage, a bigamous marriage under Article 35(4) of the Family
Codeconsidering that the first one, though allegedly terminated by virtue of the
divorce obtained by Kobayashi, was never recognized by a Philippine court, hence,
petitioner is considered as still married to Kobayashi. Accordingly, the second
marriage with Ando cannot be honored and considered asvalid at this time.
Petitioners allegation of Sec. 2 (a) of A.M. No. 02-11-10-SC is misplaced. The fact
that no judicial declaration of nullity of her marriage with Ando was rendered does not
make the same valid because such declaration under Article 40 ofthe Family Code is
applicable onlyin case of re-marriage. More importantly, the absence of a judicial
declaration of nullity of marriage is not even a requisite to make a marriage valid.
In view of the foregoing, the dismissal of this case is imperative. 6
On 1 February 2011,petitioner filed an Ex ParteMotion for Reconsideration of the
Order dated 14 January 2011. The motion was denied by the RTC in open court on 8
February2011, considering that neither the Office of the Solicitor General (OSG) nor
respondent was furnished with copies of the motion.
On 24 March 2011, petitioner filed the instant Petition for Review, raising the sole
issue of whether or not the RTC erred in ruling that she had no cause of action.
Petitioner argues that under A.M. No. 02-11-10-SC, or the Rule on the Declaration of
Absolute Nullity of Void Marriages and Annulment of Voidable Marriages, it is solely
the wife or the husband who can file a petition for the declaration of the absolute
nullity of a void marriage. Thus, as the state is not even allowed to filea direct petition
for the declaration of the absolute nullity of a void marriage,with even more reason
can it not collaterally attack the validity of a marriage, as in a petition for declaratory
relief. Further, petitioner alleges that under the law, a marriage even one that is void
or voidable shall be deemed valid until declared otherwise in a judicial proceeding.
Petitioner also argues that assuming a court judgment recognizing a judicial decree of
divorce is required under Article 13 of the Family Code, noncompliance therewith is a
mere irregularity in the issuance of a marriage license. Any irregularity in the formal
requisites of marriage, such as with respect to the marriage license, shall notaffect
the legality of the marriage. Petitioner further claims that all the requisites for a
petition for declaratory relief have been complied with.
With respect to the failure to furnish a copy of the Ex ParteMotion for Reconsideration
to the OSG and the DFA, petitioner avers that at the time of the filing, the RTC had
yet to issue a summons to respondent; thus, it had yet to acquire jurisdiction over
them.
Thereafter, the DFA, through the OSG, filed a Comment on the Petition. The latter
raised the following arguments: (1) the Petition was improperly verified, as the juratin
the Verification thereof only stated that the affiant had exhibited "her currentand valid
proof of identity," which proof was not properly indicated, however; (2) prior judicial
recognition by a Philippine court of a divorce decree obtained by the alien spouse is
required before a Filipino spouse can remarry and be entitled to the legal effects of
remarriage; (3) petitioner failed to show that she had first exhausted all available
administrative remedies, such as appealing to the Secretary of the DFA under
Republic Act No. (R.A.) 8239, or the Philippine Passport Act of 1996, before resorting
to the special civil action of declaratory relief; and (4) petitioners Motion for
Reconsideration before the RTC was a mere scrap of paper and did not toll the
running of the period to appeal. Hence, the RTC Order dated 14 January 2011 is now
final.
On 29 November 2011, petitioner filed her Reply to the Comment, addressing the
issues raised therein.
THE COURTS RULING
The Court finds the Petition to be without merit.
First, with respect to her prayer tocompel the DFA to issue her passport, petitioner
incorrectly filed a petition for declaratory relief before the RTC. She should have first
appealed before the Secretary of Foreign Affairs, since her ultimate entreaty was
toquestion the DFAs refusal to issue a passport to her under her second husbands
name.
Under the Implementing Rules and Regulations (IRR) of R.A. 8239, which was
adopted on 25 February 1997, the following are the additional documentary
requirements before a married woman may obtain a passport under the name of her
spouse:
SECTION 2. The issuance of passports to married, divorced or widowed women shall
be made inaccordance with the following provisions:
a) In case of a woman who is married and who decides to adopt the surname of her
husband pursuant to Art. 370 of Republic Act No. 386, she must present the
original or certifiedtrue copy of her marriage contract, and one photocopy thereof.
In addition thereto, a Filipino who contracts marriage in the Philippines to a
foreigner, shall be required to present a Certificate of Attendance in a Guidance
and Counselling Seminar conducted by the CFO when applying for a passport for
the first time.
b) In case of annulment of marriage, the applicant must present a certified true
copy of her annotated Marriage Contract or Certificate of Registration and the Court
Order effecting the annulment.
c) In case of a woman who was divorced by her alien husband, she must present a
certified true copy of the Divorce Decree duly authenticated by the Philippine
Embassy or consular post which has jurisdiction over the place where the divorce is
obtained or by the concerned foreign diplomatic or consular mission in the
Philippines.
When the divorcee is a Filipino Muslim, she must present a certified true copy of the
Divorce Decree or a certified true copy of the Certificate of Divorce from the Shariah
Court or the OCRG. d) In the event that marriage is dissolved by the death of the
husband, the applicant must present the original or certified true copy of the Death
Certificate of the husband or the Declaration of Presumptive Death by a Civil or
Shariah Court, in which case the applicant may choose to continue to use her
husbands surname or resume the use of her maiden surname. From the above
provisions, it is clear that for petitioner to obtain a copy of her passport under her
married name, all she needed to present were the following: (1) the original or
certified true copyof her marriage contract and one photocopy thereof; (2) a
Certificate of Attendance in a Guidance and Counseling Seminar, if applicable; and
(3) a certified true copy of the Divorce Decree duly authenticated by the Philippine
Embassy or consular post that has jurisdiction over the place where the divorce is
obtained or by the concerned foreign diplomatic or consular mission in the
Philippines.
In this case, petitioner was allegedly told that she would not be issued a Philippine
passport under her second husbands name.1wphi1 Should her application for a
passport be denied, the remedies available to her are provided in Section 9 of R.A.
8239, which reads thus:
Sec. 9. Appeal. Any person who feels aggrieved as a result of the application of
this Act of the implementing rules and regulations issued by the Secretary shall have
the right to appeal to the Secretary of Foreign Affairs from whose decision judicial
review may be had to the Courts in due course.
The IRR further provides in detail:
ARTICLE 10
Appeal
In the event that an application for a passport is denied, or an existing one cancelled
or restricted, the applicant or holder thereof shall have the right to appeal in writing to
the Secretary within fifteen (15) days from notice of denial, cancellation or restriction.
Clearly, she should have filed anappeal with the Secretary of the DFA in the event of
the denial of her application for a passport, after having complied with the provisions
of R.A. 8239. Petitioners argument that her application "cannot be said to havebeen
either denied, cancelled or restricted by [the DFA ], so as to make her an aggrieved
party entitled to appeal",7 as instead she "was merely told"8 that her passport cannot
be issued, does not persuade. The law provides a direct recourse for petitioner in the
event of the denial of her application.
Second, with respect to her prayer for the recognition of her second marriage as
valid, petitioner should have filed, instead, a petition for the judicial recognition of her
foreign divorce from her first husband.
In Garcia v. Recio,9 we ruled that a divorce obtained abroad by an alien may be
recognized in our jurisdiction, provided the decree is valid according to the national
law of the foreigner. The presentation solely of the divorce decree is insufficient; both
the divorce decree and the governing personal law of the alien spouse who obtained
the divorce must be proven. Because our courts do not take judicial notice of foreign
laws and judgment, our law on evidence requires that both the divorce decree and the
national law of the alien must be alleged and proven and like any other fact. 10
While it has been ruled that a petition for the authority to remarry filed before a trial
court actually constitutes a petition for declaratory relief, 11 we are still unable to grant
the prayer of petitioner. As held by the RTC, there appears to be insufficient proof or
evidence presented on record of both the national law of her first husband,
Kobayashi, and of the validity of the divorce decree under that national law.12 Hence,
any declaration as to the validity of the divorce can only be made upon her complete
submission of evidence proving the divorce decree and the national law of her alien
spouse, in an action instituted in the proper forum.
WHEREFORE, the instant Petition is DENIED without prejudice to petitioner's
recourse to the proper remedies available.
SO ORDERED. MARIA LOURDES P. A. SERENO
Chief Justice, Chairperson
 Republic of the Philippines A parcel of land with an area of 175 sq.m. located at P175,000.00 3
SUPREME COURT Sabang Baler, Aurora
Manila
3-has. coconut plantation in San Joaquin Maria P750,000.00
SECOND DIVISION Aurora, Aurora
USA
G.R. No. 188289 August 20, 2014
PROPERTY FAIR MARKET VALUE
DAVID A. NOVERAS, Petitioner, House and Lot at 1155 Hanover Street, Daly City,
vs. California
LETICIA T. NOVERAS, Respondent.
$550,000.00
DECISION (unpaid debt of $285,000.00)
Furniture and furnishings $3,000
PEREZ, J.:
Jewelries (ring and watch) $9,000
Before the Court is a petition for review assailing the 9 May 2008 Decision 1 of the 2000 Nissan Frontier 4x4 pickup truck $13,770.00
Court of Appeals in CA-G.R .. CV No. 88686, which affirmed in part the 8 December
2006 Decision2 of the Regional Trial Court (RTC) of Baler, Aurora, Branch 96. Bank of America Checking Account $8,000
Bank of America Cash Deposit
The factual antecedents are as follow:
Life Insurance (Cash Value) $100,000.00
David A. Noveras (David) and Leticia T. Noveras (Leticia) were married on 3 Retirement, pension, profit-sharing, annuities $56,228.00 4
December 1988 in Quezon City, Philippines. They resided in California, United States
of America (USA) where they eventually acquired American citizenship. They then
begot two children, namely: Jerome T. The Sampaloc property used to beowned by Davids parents. The parties herein
secured a loan from a bank and mortgaged the property. When said property was
Noveras, who was born on 4 November 1990 and JenaT. Noveras, born on 2 May about to be foreclosed, the couple paid a total of P1.5 Million for the redemption of the
1993. David was engaged in courier service business while Leticia worked as a nurse same.
in San Francisco, California.
Due to business reverses, David left the USA and returned to the Philippines in 2001.
During the marriage, they acquired the following properties in the Philippines and in In December 2002,Leticia executed a Special Power of Attorney (SPA) authorizing
the USA: David to sell the Sampaloc property for P2.2 Million. According to Leticia, sometime in
September 2003, David abandoned his family and lived with Estrellita Martinez in
Aurora province. Leticia claimed that David agreed toand executed a Joint Affidavit
PHILIPPINES with Leticia in the presence of Davids father, Atty. Isaias Noveras, on 3 December
2003 stating that: 1) the P1.1Million proceeds from the sale of the Sampaloc property
PROPERTY FAIR MARKET VALUE shall be paid to and collected by Leticia; 2) that David shall return and pay to
LeticiaP750,000.00, which is equivalent to half of the amount of the redemption price
House and Lot with an area of 150 sq. m. located at P1,693,125.00 of the Sampaloc property; and 3) that David shall renounce and forfeit all his rights
1085 Norma Street, Sampaloc, Manila (Sampaloc and interest in the conjugal and real properties situated in the Philippines. 5 David was
property)
able to collect P1,790,000.00 from the sale of the Sampaloc property, leaving an
Agricultural land with an area of 20,742 sq. m. P400,000.00 unpaid balance of P410,000.00.
located at Laboy, Dipaculao, Aurora
Upon learning that David had an extra-marital affair, Leticia filed a petition for divorce
A parcel of land with an area of 2.5 hectares located P490,000.00 with the Superior Court of California, County of San Mateo, USA. The California court
at Maria Aurora, Aurora granted the divorce on 24 June 2005 and judgment was duly entered on 29 June
2005.6 The California court granted to Leticia the custody of her two children, as well
as all the couples properties in the USA.7
On 8 August 2005, Leticia filed a petition for Judicial Separation of Conjugal Property
before the RTC of Baler, Aurora. She relied on the 3 December 2003 Joint Affidavit
and Davids failure to comply with his obligation under the same. She prayed for: 1)
the power to administer all conjugal properties in the Philippines; 2) David and his
partner to cease and desist from selling the subject conjugal properties; 3) the
declaration that all conjugal properties be forfeited in favor of her children; 4) David to
remit half of the purchase price as share of Leticia from the sale of the Sampaloc
property; and 5) the payment ofP50,000.00 and P100,000.00 litigation expenses.8
In his Answer, David stated that a judgment for the dissolution of their marriage was
entered on 29 June 2005 by the Superior Court of California, County of San Mateo.
He demanded that the conjugal partnership properties, which also include the USA
properties, be liquidated and that all expenses of liquidation, including attorneys fees
of both parties be charged against the conjugal partnership.9
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras committed acts of
abandonment and marital infidelity which can result intothe forfeiture of the
parties properties in favor of the petitioner and their two (2) children.
2. Whether or not the Court has jurisdiction over the properties in California,
U.S.A. and the same can be included in the judicial separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by petitioner Leticia T.
Noveras and respondent David A. Noveras will amount to a waiver or
forfeiture of the latters property rights over their conjugal properties.
4. Whether or not Leticia T. Noveras isentitled to reimbursement of onehalf
of the P2.2 [M]illion sales proceeds of their property in Sampaloc, Manila
and one-half of the P1.5 [M]illion used to redeem the property of Atty. Isaias
Noveras, including interests and charges.
5. How the absolute community properties should be distributed.
6. Whether or not the attorneys feesand litigation expenses of the parties
were chargeable against their conjugal properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the parties are entitled to support and
presumptive legitimes.10
On 8 December 2006, the RTC rendered judgment as follows:
1. The absolute community of property of the parties is hereby declared
DISSOLVED;
2. The net assets of the absolute community of property ofthe parties in the
Philippines are hereby ordered to be awarded to respondent David A.
Noveras only, with the properties in the United States of America remaining
in the sole ownership of petitioner Leticia Noveras a.k.a. Leticia Tacbiana
pursuant to the divorce decree issuedby the Superior Court of California,
County of San Mateo, United States of America, dissolving the marriage of
the parties as of June 24, 2005. The titles presently covering said properties
shall be cancelled and new titles be issued in the name of the party to whom
said properties are awarded;
3. One-half of the properties awarded to respondent David A. Noveras in the
preceding paragraph are hereby given to Jerome and Jena, his two minor
children with petitioner LeticiaNoveras a.k.a. Leticia Tacbiana as their
presumptive legitimes and said legitimes must be annotated on the titles
covering the said properties.Their share in the income from these properties
shall be remitted to them annually by the respondent within the first half of
January of each year, starting January 2008;
4. One-half of the properties in the United States of America awarded to
petitioner Leticia Noveras a.k.a. Leticia Tacbiana in paragraph 2 are hereby
given to Jerome and Jena, her two minor children with respondent David A.
Noveras as their presumptive legitimes and said legitimes must be
annotated on the titles/documents covering the said properties. Their share
in the income from these properties, if any, shall be remitted to them
annually by the petitioner within the first half of January of each year, starting
January 2008;
5. For the support of their two (2) minor children, Jerome and Jena,
respondent David A. Noveras shall give them US$100.00 as monthly
allowance in addition to their income from their presumptive legitimes, while
petitioner Leticia Tacbiana shall take care of their food, clothing, education
and other needs while they are in her custody in the USA. The monthly
allowance due from the respondent shall be increased in the future as the
needs of the children require and his financial capacity can afford;
6. Of the unpaid amount of P410,000.00 on the purchase price of the
Sampaloc property, the Paringit Spouses are hereby ordered to
pay P5,000.00 to respondent David A. Noveras and P405,000.00 to the two
children. The share of the respondent may be paid to him directly but the
share of the two children shall be deposited with a local bank in Baler,
Aurora, in a joint account tobe taken out in their names, withdrawal from
which shall only be made by them or by their representative duly authorized
with a Special Power of Attorney. Such payment/deposit shall be made
withinthe period of thirty (30) days after receipt of a copy of this Decision,
with the passbook of the joint account to be submitted to the custody of the
Clerk of Court of this Court within the same period. Said passbook can be
 withdrawn from the Clerk of Court only by the children or their attorney-in-
fact; and
7. The litigation expenses and attorneys fees incurred by the parties shall be
shouldered by them individually.11
The trial court recognized that since the parties are US citizens, the laws that cover
their legal and personalstatus are those of the USA. With respect to their marriage,
the parties are divorced by virtue of the decree of dissolution of their marriage issued
by the Superior Court of California, County of San Mateo on 24June 2005. Under
their law, the parties marriage had already been dissolved. Thus, the trial court
considered the petition filed by Leticia as one for liquidation of the absolute
community of property regime with the determination of the legitimes, support and
custody of the children, instead of an action for judicial separation of conjugal
property.
With respect to their property relations, the trial court first classified their property
regime as absolute community of property because they did not execute any
marriage settlement before the solemnization of their marriage pursuant to Article 75
of the Family Code. Then, the trial court ruled that in accordance with the doctrine of
processual presumption, Philippine law should apply because the court cannot take
judicial notice of the US law since the parties did not submit any proof of their national
law. The trial court held that as the instant petition does not fall under the provisions
of the law for the grant of judicial separation of properties, the absolute community
properties cannot beforfeited in favor of Leticia and her children. Moreover, the trial
court observed that Leticia failed to prove abandonment and infidelity with
preponderant evidence.
The trial court however ruled that Leticia is not entitled to the reimbursements she is
praying for considering that she already acquired all of the properties in the USA.
Relying still on the principle of equity, the Court also adjudicated the Philippine
properties to David, subject to the payment of the childrens presumptive legitimes.
The trial court held that under Article 89 of the Family Code, the waiver or
renunciation made by David of his property rights in the Joint Affidavit is void.
On appeal, the Court of Appeals modified the trial courts Decision by directing the
equal division of the Philippine properties between the spouses. Moreover with
respect to the common childrens presumptive legitime, the appellate court ordered
both spouses to each pay their children the amount of P520,000.00, thus:
WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2, 4 and 6 of the
assailedDecision dated December 8, 2006 of Branch 96, RTC of Baler, Aurora
Province, in Civil Case No. 828 are hereby MODIFIED to read as follows:
2. The net assets of the absolute community of property of the parties in the
Philippines are hereby divided equally between petitioner Leticia Noveras
a.k.a. Leticia Tacbiana (sic) and respondent David A. Noveras;
xxx
4. One-half of the properties awarded to petitioner Leticia Tacbiana (sic) in
paragraph 2 shall pertain to her minor children, Jerome and Jena, as their
presumptive legitimes which shall be annotated on the titles/documents
covering the said properties. Their share in the income therefrom, if any,
shall be remitted to them by petitioner annually within the first half of
January, starting 2008;
xxx
6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic) are
each ordered to pay the amount ofP520,000.00 to their two children, Jerome
and Jena, as their presumptive legitimes from the sale of the Sampaloc
property inclusive of the receivables therefrom, which shall be deposited to a
local bank of Baler, Aurora, under a joint account in the latters names. The
payment/deposit shall be made within a period of thirty (30) days from
receipt ofa copy of this Decision and the corresponding passbook entrusted
to the custody ofthe Clerk of Court a quowithin the same period,
withdrawable only by the children or their attorney-in-fact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay petitioner Leticia
Tacbiana (sic) the amount ofP1,040,000.00 representing her share in the
proceeds from the sale of the Sampaloc property.
The last paragraph shall read as follows:
Send a copy of this Decision to the local civil registry of Baler, Aurora; the local civil
registry of Quezon City; the Civil RegistrarGeneral, National Statistics Office, Vibal
Building, Times Street corner EDSA, Quezon City; the Office of the Registry of Deeds
for the Province of Aurora; and to the children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.12
In the present petition, David insists that the Court of Appeals should have recognized
the California Judgment which awarded the Philippine properties to him because said
judgment was part of the pleading presented and offered in evidence before the trial
court. David argues that allowing Leticia to share in the Philippine properties is
tantamount to unjust enrichment in favor of Leticia considering that the latter was
already granted all US properties by the California court.
In summary and review, the basic facts are: David and Leticia are US citizens who
own properties in the USA and in the Philippines. Leticia obtained a decree of divorce
from the Superior Court of California in June 2005 wherein the court awarded all the
properties in the USA to Leticia. With respect to their properties in the Philippines,
Leticiafiled a petition for judicial separation ofconjugal properties.
At the outset, the trial court erred in recognizing the divorce decree which severed the
bond of marriage between the parties. In Corpuz v. Sto. Tomas,13 we stated that:
The starting point in any recognition of a foreign divorce judgment is the
acknowledgment that our courts do not take judicial notice of foreign judgments and
laws. Justice Herrera explained that, as a rule, "no sovereign is bound to give effect
within its dominion to a judgment rendered by a tribunal of another country." This
means that the foreign judgment and its authenticity must beproven as facts under
our rules on evidence, together with the aliens applicable national law to show the
effect of the judgment on the alien himself or herself. The recognition may be made in
an action instituted specifically for the purpose or in another action where a party
invokes the foreign decree as an integral aspect of his claim or defense. 14
The requirements of presenting the foreign divorce decree and the national law of the
foreigner must comply with our Rules of Evidence. Specifically, for Philippine courts to
recognize a foreign judgment relating to the status of a marriage, a copy of the foreign
judgment may be admitted in evidence and proven as a fact under Rule 132, Sections
24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court. 15
Under Section 24 of Rule 132, the record of public documents of a sovereign
authority or tribunal may be proved by: (1) an official publication thereof or (2) a copy
attested by the officer having the legal custody thereof. Such official publication or
copy must beaccompanied, if the record is not kept in the Philippines, with a
certificate that the attesting officer has the legal custody thereof. The certificate may
be issued by any of the authorized Philippine embassy or consular officials stationed
in the foreign country in which the record is kept, and authenticated by the seal of his
office. The attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, asthe case may be, and must be under the official
seal of the attesting officer.
Section 25 of the same Rule states that whenever a copy of a document or record is
attested for the purpose of evidence, the attestation must state, in substance, that the
copy is a correct copy of the original, or a specific part thereof, as the case may be.
The attestation must be under the official seal of the attesting officer, if there be any,
or if hebe the clerk of a court having a seal, under the seal of such court.
Based on the records, only the divorce decree was presented in evidence. The
required certificates to prove its authenticity, as well as the pertinent California law on
divorce were not presented.
It may be noted that in Bayot v. Court of Appeals,16 we relaxed the requirement on
certification where we held that "[petitioner therein] was clearly an American
citizenwhen she secured the divorce and that divorce is recognized and allowed in
any of the States of the Union, the presentation of a copy of foreign divorce decree
duly authenticatedby the foreign court issuing said decree is, as here, sufficient." In
this case however, it appears that there is no seal from the office where the divorce
decree was obtained.
Even if we apply the doctrine of processual presumption17 as the lower courts did with
respect to the property regime of the parties, the recognition of divorce is entirely a
different matter because, to begin with, divorce is not recognized between Filipino
citizens in the Philippines. Absent a valid recognition of the divorce decree, it follows
that the parties are still legally married in the Philippines. The trial court thus erred in
proceeding directly to liquidation.
As a general rule, any modification in the marriage settlements must be made before
the celebration of marriage. An exception to this rule is allowed provided that the
modification isjudicially approved and refers only to the instances provided in Articles
66,67, 128, 135 and 136 of the Family Code.18
Leticia anchored the filing of the instant petition for judicial separation of property on
paragraphs 4 and 6 of Article 135 of the Family Code, to wit:
Art. 135. Any of the following shall be considered sufficient cause for judicial
separation of property:
(1) That the spouse of the petitioner has been sentenced to a penalty which
carries with it civil interdiction;
(2) That the spouse of the petitioner has been judicially declared an
absentee;
(3) That loss of parental authority ofthe spouse of petitioner has been
decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter or failed to
comply with his or her obligations to the family as provided for in Article 101;
(5) That the spouse granted the power of administration in the marriage
settlements has abused that power; and
(6) That at the time of the petition, the spouses have been separated in fact
for at least one year and reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the presentation of the final
judgment against the guiltyor absent spouse shall be enough basis for the grant of the
decree ofjudicial separation of property. (Emphasis supplied).
The trial court had categorically ruled that there was no abandonment in this case to
necessitate judicial separation of properties under paragraph 4 of Article 135 of the
Family Code. The trial court ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code quoted above, must
be for a valid cause and the spouse is deemed to have abandoned the other when
he/she has left the conjugal dwelling without intention of returning. The intention of
not returning is prima facie presumed if the allegedly [sic] abandoning spouse failed
to give any information as to his or her whereabouts within the period of three months
from such abandonment.
In the instant case, the petitioner knows that the respondent has returned to and
stayed at his hometown in Maria Aurora, Philippines, as she even went several times
to visit him there after the alleged abandonment. Also, the respondent has been going
back to the USA to visit her and their children until the relations between them
worsened. The last visit of said respondent was in October 2004 when he and the
petitioner discussed the filing by the latter of a petition for dissolution of marriage with
the California court. Such turn for the worse of their relationship and the filing of the
saidpetition can also be considered as valid causes for the respondent to stay in the
Philippines.19
Separation in fact for one year as a ground to grant a judicial separation of property
was not tackled in the trial courts decision because, the trial court erroneously treated
the petition as liquidation of the absolute community of properties.
The records of this case are replete with evidence that Leticia and David had indeed
separated for more than a year and that reconciliation is highly improbable. First,
while actual abandonment had not been proven, it is undisputed that the spouses had
been living separately since 2003 when David decided to go back to the Philippines to
set up his own business. Second, Leticia heard from her friends that David has been
cohabiting with Estrellita Martinez, who represented herself as Estrellita Noveras.
Editha Apolonio, who worked in the hospital where David was once confined, testified
that she saw the name of Estrellita listed as the wife of David in the Consent for
Operation form.20 Third and more significantly, they had filed for divorce and it was
granted by the California court in June 2005.
Having established that Leticia and David had actually separated for at least one
year, the petition for judicial separation of absolute community of property should be
granted.
The grant of the judicial separation of the absolute community property automatically
dissolves the absolute community regime, as stated in the 4th paragraph of Article 99
ofthe Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under
Articles 134 to 138. (Emphasis supplied).
Under Article 102 of the same Code, liquidation follows the dissolution of the absolute
community regime and the following procedure should apply:
Art. 102. Upon dissolution of the absolute community regime, the following procedure
shall apply:
(1) An inventory shall be prepared, listing separately all the properties of the
absolute community and the exclusive properties of each spouse.
(2) The debts and obligations of the absolute community shall be paid out of
its assets. In case of insufficiency of said assets, the spouses shall be
solidarily liable for the unpaid balance with their separate properties in
accordance with the provisions of the second paragraph of Article 94.
(3) Whatever remains of the exclusive properties of the spouses shall
thereafter be delivered to each of them.
(4) The net remainder of the properties of the absolute community shall
constitute its net assets, which shall be divided equally between husband
and wife, unless a different proportion or division was agreed upon in the
marriage settlements, or unless there has been a voluntary waiver of such
share provided in this Code. For purposes of computing the net profits
subject to forfeiture in accordance with Articles 43, No. (2) and 63, No.
(2),the said profits shall be the increase in value between the market value
of the community property at the time of the celebration of the marriage and
the market value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall be delivered
upon partition, in accordance with Article 51.
(6) Unless otherwise agreed upon by the parties, in the partition of the
properties, the conjugal dwelling and the lot on which it is situated shall be
adjudicated tothe spouse with whom the majority of the common children
choose to remain. Children below the age of seven years are deemed to
have chosen the mother, unless the court has decided otherwise. In case
there is no such majority, the court shall decide, taking into consideration the
best interests of said children. At the risk of being repetitious, we will not
remand the case to the trial court. Instead, we shall adopt the modifications
made by the Court of Appeals on the trial courts Decision with respect to
liquidation.
We agree with the appellate court that the Philippine courts did not acquire jurisdiction
over the California properties of David and Leticia. Indeed, Article 16 of the Civil Code
clearly states that real property as well as personal property is subject to the law of
the country where it is situated. Thus, liquidation shall only be limited to the Philippine
properties.
We affirm the modification madeby the Court of Appeals with respect to the share of
the spouses in the absolutecommunity properties in the Philippines, as well as the
payment of their childrens presumptive legitimes, which the appellate court explained
in this wise:

Leticia and David shall likewise have an equal share in the proceeds of the Sampaloc
property.1wphi1 While both claimed to have contributed to the redemption of the
Noveras property, absent a clear showing where their contributions came from, the
same is presumed to have come from the community property. Thus, Leticia is not
entitled to reimbursement of half of the redemption money.

David's allegation that he used part of the proceeds from the sale of the Sampaloc
property for the benefit of the absolute community cannot be given full credence. Only
the amount of P120,000.00 incurred in going to and from the U.S.A. may be charged
thereto. Election expenses in the amount of P300,000.00 when he ran as municipal
councilor cannot be allowed in the absence of receipts or at least the Statement of
Contributions and Expenditures required under Section 14 of Republic Act No. 7166
duly received by the Commission on Elections. Likewise, expenses incurred to settle
the criminal case of his personal driver is not deductible as the same had not
benefited the family. In sum, Leticia and David shall share equally in the proceeds of
the sale net of the amount of P120,000.00 or in the respective amounts
of P1,040,000.00.

xxxx

Under the first paragraph of Article 888 of the Civil Code, "(t)he legitime of legitimate
children and descendants consists of one-half or the hereditary estate of the father
and of the mother." The children arc therefore entitled to half of the share of each
spouse in the net assets of the absolute community, which shall be annotated on the
titles/documents covering the same, as well as to their respective shares in the net
proceeds from the sale of the Sampaloc property including the receivables from Sps.
Paringit in the amount of P410,000.00. Consequently, David and Leticia should each
pay them the amount of P520,000.00 as their presumptive legitimes therefrom.21

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals
in CA G.R. CV No. 88686 is AFFIRMED.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 171914 July 23, 2014
SOLEDAD L. LAVADIA, Petitioner,
vs.
HEIRS OF JUAN LUCES LUNA, represented by GREGORIO Z. LUNA and
EUGENIA ZABALLERO-LUNA,Respondents.
DECISION
BERSAMIN, J.:
Divorce between Filipinos is void and ineffectual under the nationality rule adopted by
Philippine law. Hence, any settlement of property between the parties of the first
marriage involving Filipinos submitted as an incident of a divorce obtained in a foreign
country lacks competent judicial approval, and cannot be enforceable against the
assets of the husband who contracts a subsequent marriage.
The Case
The petitioner, the second wife of the late Atty. Juan Luces Luna, appeals the
adverse decision promulgated on November 11, 2005, 1 whereby the Court of Appeals
(CA) affirmed with modification the decision rendered on August 27, 2001 by the
Regional Trial Court (RTC), Branch 138, in Makati City.2 The CA thereby denied her
right in the 25/100 pro indiviso share of the husband in a condominium unit, and in the
law books of the husband acquired during the second marriage.
Antecedents
The antecedent facts were summarized by the CA as follows:
ATTY. LUNA, a practicing lawyer, was at first a name partner in the prestigious law
firm Sycip, Salazar, Luna, Manalo, Hernandez & Feliciano Law Offices at that time
when he was living with his first wife, herein intervenor-appellant Eugenia Zaballero-
Luna (EUGENIA), whom he initially married ina civil ceremony conducted by the
Justice of the Peace of Paraaque, Rizal on September 10, 1947 and later
solemnized in a church ceremony at the Pro-Cathedral in San Miguel, Bulacan on
September 12, 1948. In ATTY. LUNAs marriage to EUGENIA, they begot seven (7)
children, namely: Regina Maria L. Nadal, Juan Luis Luna, Araceli Victoria L. Arellano,
Ana Maria L. Tabunda, Gregorio Macario Luna, Carolina Linda L. Tapia, and Cesar
Antonio Luna. After almost two (2) decades of marriage, ATTY. LUNA and EUGENIA
eventually agreed to live apart from each other in February 1966 and agreed to
separation of property, to which end, they entered into a written agreement entitled
"AGREEMENT FOR SEPARATION AND PROPERTY SETTLEMENT" dated
November 12, 1975, whereby they agreed to live separately and to dissolve and
liquidate their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree of his marriage with
EUGENIA from the Civil and Commercial Chamber of the First Circumscription of the
Court of First Instance of Sto. Domingo, Dominican Republic. Also in Sto.Domingo,
Dominican Republic, on the same date, ATTY. LUNA contracted another marriage,
this time with SOLEDAD. Thereafter, ATTY. LUNA and SOLEDAD returned to the
Philippines and lived together as husband and wife until 1987.
Sometime in 1977, ATTY. LUNA organized a new law firm named: Luna, Puruganan,
Sison and Ongkiko (LUPSICON) where ATTY. LUNA was the managing partner.
On February 14, 1978, LUPSICON through ATTY. LUNA purchased from Tandang
Sora Development Corporation the 6th Floor of Kalaw-Ledesma Condominium
Project(condominium unit) at Gamboa St., Makati City, consisting of 517.52 square
meters, for P1,449,056.00, to be paid on installment basis for 36months starting on
April 15, 1978. Said condominium unit was to be usedas law office of LUPSICON.
After full payment, the Deed of Absolute Sale over the condominium unit was
executed on July 15, 1983, and CCT No. 4779 was issued on August 10, 1983, which
was registered bearing the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E. ONGKIKO,
married to Sonia P.G. Ongkiko (25/100); GREGORIO R. PURUGANAN, married to
Paz A. Puruganan (17/100); and TERESITA CRUZ SISON, married to Antonio J.M.
Sison (12/100) x x x" Subsequently, 8/100 share of ATTY. LUNA and 17/100 share of
Atty. Gregorio R. Puruganan in the condominium unit was sold to Atty. Mario E.
Ongkiko, for which a new CCT No. 21761 was issued on February 7, 1992 in the
following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E. ONGKIKO,
married to Sonia P.G. Ongkiko (50/100); TERESITA CRUZ SISON, married to
Antonio J.M. Sison (12/100) x x x"
Sometime in 1992, LUPSICON was dissolved and the condominium unit was
partitioned by the partners but the same was still registered in common under CCT
No. 21716. The parties stipulated that the interest of ATTY. LUNA over the
condominium unit would be 25/100 share. ATTY. LUNA thereafter established and
headed another law firm with Atty. Renato G. Dela Cruzand used a portion of the
office condominium unit as their office. The said law firm lasted until the death of
ATTY. JUAN on July 12, 1997.
After the death of ATTY. JUAN, his share in the condominium unit including the
lawbooks, office furniture and equipment found therein were taken over by Gregorio
Z. Luna, ATTY. LUNAs son of the first marriage. Gregorio Z. Luna thenleased out the
25/100 portion of the condominium unit belonging to his father to Atty. Renato G. De
la Cruz who established his own law firm named Renato G. De la Cruz & Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit as well as the
law books, office furniture and equipment became the subject of the complaint filed by
SOLEDAD against the heirs of ATTY. JUAN with the RTC of Makati City, Branch 138,
on September 10, 1999, docketed as Civil Case No. 99-1644. The complaint alleged
that the subject properties were acquired during the existence of the marriage
between ATTY. LUNA and SOLEDAD through their joint efforts that since they had no
children, SOLEDAD became co-owner of the said properties upon the death of ATTY.
LUNA to the extent of pro-indiviso share consisting of her share in the said
properties plus her share in the net estate of ATTY. LUNA which was bequeathed
to her in the latters last will and testament; and thatthe heirs of ATTY. LUNA through
Gregorio Z. Luna excluded SOLEDAD from her share in the subject properties. The
complaint prayed that SOLEDAD be declared the owner of the portion of the
subject properties;that the same be partitioned; that an accounting of the rentals on
the condominium unit pertaining to the share of SOLEDAD be conducted; that a
receiver be appointed to preserve ad administer the subject properties;and that the
heirs of ATTY. LUNA be ordered to pay attorneys feesand costs of the suit to
SOLEDAD.3
Ruling of the RTC
On August 27, 2001, the RTC rendered its decision after trial upon the
aforementioned facts,4 disposing thusly:
WHEREFORE, judgment is rendered as follows:
(a) The 24/100 pro-indiviso share in the condominium unit located at the
SIXTH FLOOR of the KALAW LEDESMA CONDOMINIUM PROJECT
covered by Condominium Certificate of Title No. 21761 consisting of FIVE
HUNDRED SEVENTEEN (517/100) SQUARE METERS is adjudged to have
been acquired by Juan Lucas Luna through his sole industry;
(b) Plaintiff has no right as owner or under any other concept over the
condominium unit, hence the entry in Condominium Certificate of Title No.
21761 of the Registry of Deeds of Makati with respect to the civil status of
Juan Luces Luna should be changed from "JUAN LUCES LUNA married to
Soledad L. Luna" to "JUAN LUCES LUNA married to Eugenia Zaballero
Luna";
(c) Plaintiff is declared to be the owner of the books Corpus Juris, Fletcher
on Corporation, American Jurisprudence and Federal Supreme Court
Reports found in the condominium unit and defendants are ordered to
deliver them to the plaintiff as soon as appropriate arrangements have been
madefor transport and storage.
No pronouncement as to costs.
SO ORDERED.5
Decision of the CA
Both parties appealed to the CA.6
On her part, the petitioner assigned the following errors to the RTC, namely:
I. THE LOWER COURT ERRED IN RULING THAT THE CONDOMINIUM
UNIT WAS ACQUIRED THRU THE SOLE INDUSTRY OF ATTY. JUAN
LUCES LUNA;
II. THE LOWER COURT ERRED IN RULING THAT PLAINTIFFAPPELLANT
DID NOT CONTRIBUTE MONEY FOR THE ACQUISITION OF THE
CONDOMINIUM UNIT;
III. THE LOWER COURT ERRED IN GIVING CREDENCE TO PORTIONS
OF THE TESTIMONY OF GREGORIO LUNA, WHO HAS NO ACTUAL
KNOWLEDGE OF THE ACQUISITION OF THE UNIT, BUT IGNORED
OTHER PORTIONS OF HIS TESTIMONY FAVORABLE TO THE
PLAINTIFF-APPELLANT;
IV. THE LOWER COURT ERRED IN NOT GIVING SIGNIFICANCE TO THE
FACT THAT THE CONJUGAL PARTNERSHIP BETWEEN LUNA AND
INTERVENOR-APPELLANT WAS ALREADY DISSOLVED AND
LIQUIDATED PRIOR TO THE UNION OF PLAINTIFF-APPELLANT AND
LUNA;
V. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO
THE ABSENCE OF THE DISPOSITION OF THE CONDOMINIUM UNIT IN
THE HOLOGRAPHIC WILL OF THE PLAINTIFF-APPELLANT;
VI. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO
THE FACTTHAT THE NAME OF PLAINTIFF-APPELLANT DID NOT
APPEAR IN THE DEED OF ABSOLUTE SALE EXECUTED BY TANDANG
SORA DEVELOPMENT CORPORATION OVER THE CONDOMINIUM
UNIT;
VII. THE LOWER COURT ERRED IN RULING THAT NEITHER ARTICLE
148 OF THE FAMILYCODE NOR ARTICLE 144 OF THE CIVIL CODE OF
THE PHILIPPINES ARE APPLICABLE;
VIII. THE LOWER COURT ERRED IN NOT RULING THAT THE CAUSE OF
ACTION OF THE INTERVENOR-APPELLANT HAS BEEN BARRED BY
PESCRIPTION AND LACHES; and
IX. THE LOWER COURT ERRED IN NOT EXPUNGING/DISMISSING THE
INTERVENTION FOR FAILURE OF INTERVENOR-APPELLANT TO PAY
FILING FEE.7
In contrast, the respondents attributedthe following errors to the trial court, to wit:
 I. THE LOWER COURT ERRED IN HOLDING THAT CERTAIN FOREIGN
LAW BOOKS IN THE LAW OFFICE OF ATTY. LUNA WERE BOUGHT
WITH THE USE OF PLAINTIFFS MONEY;
II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF PROVED
BY PREPONDERANCE OF EVIDENCE (HER CLAIM OVER) THE
SPECIFIED FOREIGN LAW BOOKS FOUND IN ATTY. LUNAS LAW
OFFICE; and
III. THE LOWER COURT ERRED IN NOT HOLDING THAT, ASSUMING
PLAINTIFF PAID FOR THE SAID FOREIGN LAW BOOKS, THE RIGHT TO
RECOVER THEM HAD PRESCRIBED AND BARRED BY LACHES AND
ESTOPPEL.8
On November 11, 2005, the CA promulgated its assailed modified decision,9 holding
and ruling:
EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA until the latters death
on July 12, 1997. The absolute divorce decree obtained by ATTY. LUNA inthe
Dominican Republic did not terminate his prior marriage with EUGENIA because
foreign divorce between Filipino citizens is not recognized in our jurisdiction. x x x10
xxxx
WHEREFORE, premises considered, the assailed August 27, 2001 Decision of the
RTC of MakatiCity, Branch 138, is hereby MODIFIEDas follows:
(a) The 25/100 pro-indiviso share in the condominium unit at the SIXTH
FLOOR of the KALAW LEDESMA CONDOMINIUM PROJECT covered by
Condominium Certificate of Title No. 21761 consisting of FIVE HUNDRED
SEVENTEEN (517/100) (sic) SQUARE METERS is hereby adjudged to
defendants-appellants, the heirs of Juan Luces Luna and Eugenia Zaballero-
Luna (first marriage), having been acquired from the sole funds and sole
industry of Juan Luces Luna while marriage of Juan Luces Luna and
Eugenia Zaballero-Luna (first marriage) was still subsisting and valid;
(b) Plaintiff-appellant Soledad Lavadia has no right as owner or under any
other concept over the condominium unit, hence the entry in Condominium
Certificate of Title No. 21761 of the Registry of Deeds ofMakati with respect
to the civil status of Juan Luces Luna should be changed from "JUAN
LUCES LUNA married to Soledad L. Luna" to "JUAN LUCES LUNA married
to Eugenia Zaballero Luna";
(c) Defendants-appellants, the heirs of Juan Luces Luna and Eugenia
Zaballero-Luna(first marriage) are hereby declared to be the owner of the
books Corpus Juris, Fletcher on Corporation, American Jurisprudence and
Federal Supreme Court Reports found in the condominium unit.
No pronouncement as to costs.
SO ORDERED.11
On March 13, 2006,12 the CA denied the petitioners motion for reconsideration. 13
Issues
In this appeal, the petitioner avers in her petition for review on certiorarithat:
A. The Honorable Court of Appeals erred in ruling that the Agreement for
Separation and Property Settlement executed by Luna and Respondent
Eugenia was unenforceable; hence, their conjugal partnership was not
dissolved and liquidated;
B. The Honorable Court of Appeals erred in not recognizing the Dominican
Republic courts approval of the Agreement;
C. The Honorable Court of Appeals erred in ruling that Petitioner failed to
adduce sufficient proof of actual contribution to the acquisition of purchase of
the subjectcondominium unit; and
D. The Honorable Court of Appeals erred in ruling that Petitioner was not
entitled to the subject law books.14
The decisive question to be resolved is who among the contending parties should be
entitled to the 25/100 pro indivisoshare in the condominium unit; and to the law books
(i.e., Corpus Juris, Fletcher on Corporation, American Jurisprudence and Federal
Supreme Court Reports).
The resolution of the decisive question requires the Court to ascertain the law that
should determine, firstly, whether the divorce between Atty. Luna and Eugenia
Zaballero-Luna (Eugenia) had validly dissolved the first marriage; and, secondly,
whether the second marriage entered into by the late Atty. Luna and the petitioner
entitled the latter to any rights in property. Ruling of the Court
We affirm the modified decision of the CA.
1. Atty. Lunas first marriage with Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia, both Filipinos, was solemnized in
the Philippines on September 10, 1947. The law in force at the time of the
solemnization was the Spanish Civil Code, which adopted the nationality rule. The
Civil Codecontinued to follow the nationality rule, to the effect that Philippine laws
relating to family rights and duties, or to the status, condition and legal capacity of
persons were binding upon citizens of the Philippines, although living
abroad.15 Pursuant to the nationality rule, Philippine laws governed thiscase by virtue
of bothAtty. Luna and Eugenio having remained Filipinos until the death of Atty. Luna
on July 12, 1997 terminated their marriage.
From the time of the celebration ofthe first marriage on September 10, 1947 until the
present, absolute divorce between Filipino spouses has not been recognized in the
Philippines. The non-recognition of absolute divorce between Filipinos has remained
even under the Family Code,16 even if either or both of the spouses are residing
abroad.17 Indeed, the only two types of defective marital unions under our laws have
beenthe void and the voidable marriages. As such, the remedies against such
defective marriages have been limited to the declaration of nullity ofthe marriage and
the annulment of the marriage.
It is true that on January 12, 1976, the Court of First Instance (CFI) of Sto. Domingo
in the Dominican Republic issued the Divorce Decree dissolving the first marriage of
Atty. Luna and Eugenia.18 Conformably with the nationality rule, however, the divorce,
even if voluntarily obtained abroad, did not dissolve the marriage between Atty. Luna
and Eugenia, which subsisted up to the time of his death on July 12, 1997. This
finding conforms to the Constitution, which characterizes marriage as an inviolable
social institution,19 and regards it as a special contract of permanent union between a
man and a woman for the establishment of a conjugal and family life. 20 The non-
recognition of absolute divorce in the Philippines is a manifestation of the respect for
the sanctity of the marital union especially among Filipino citizens. It affirms that the
extinguishment of a valid marriage must be grounded only upon the death of either
spouse, or upon a ground expressly provided bylaw. For as long as this public policy
on marriage between Filipinos exists, no divorce decree dissolving the marriage
between them can ever be given legal or judicial recognition and enforcement in this
jurisdiction.
2. The Agreement for Separation and Property Settlement
was void for lack of court approval
The petitioner insists that the Agreement for Separation and Property Settlement
(Agreement) that the late Atty. Luna and Eugenia had entered into and executed in
connection with the divorce proceedings before the CFI of Sto. Domingo in the
Dominican Republic to dissolve and liquidate their conjugal partnership was
enforceable against Eugenia. Hence, the CA committed reversible error in decreeing
otherwise.
The insistence of the petitioner was unwarranted.
Considering that Atty. Luna and Eugenia had not entered into any marriage
settlement prior to their marriage on September 10, 1947, the system of relative
community or conjugal partnership of gains governed their property relations. This is
because the Spanish Civil Code, the law then in force at the time of their marriage,
did not specify the property regime of the spouses in the event that they had not
entered into any marriage settlement before or at the time of the marriage. Article 119
of the Civil Codeclearly so provides, to wit:
Article 119. The future spouses may in the marriage settlements agree upon absolute
or relative community of property, or upon complete separation of property, or upon
any other regime. In the absence of marriage settlements, or when the same are void,
the system of relative community or conjugal partnership of gains as established in
this Code, shall govern the property relations between husband and wife.
Article 142 of the Civil Codehas defined a conjugal partnership of gains thusly:
Article 142. By means of the conjugal partnership of gains the husband and wife
place in a common fund the fruits of their separate property and the income from their
work or industry, and divide equally, upon the dissolution of the marriage or of the
partnership, the net gains or benefits obtained indiscriminately by either spouse
during the marriage.
The conjugal partnership of gains subsists until terminated for any of various causes
of termination enumerated in Article 175 of the Civil Code, viz:
Article 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article 191.
The mere execution of the Agreement by Atty. Luna and Eugenia did not per
sedissolve and liquidate their conjugal partnership of gains. The approval of the
Agreement by a competent court was still required under Article 190 and Article 191
of the Civil Code, as follows:
Article 190. In the absence of an express declaration in the marriage settlements, the
separation of property between spouses during the marriage shall not take place save
in virtue of a judicial order. (1432a)
Article 191. The husband or the wife may ask for the separation of property, and it
shall be decreed when the spouse of the petitioner has been sentenced to a penalty
which carries with it civil interdiction, or has been declared absent, or when legal
separation has been granted.
xxxx
The husband and the wife may agree upon the dissolution of the conjugal partnership
during the marriage, subject to judicial approval. All the creditors of the husband and
of the wife, as well as of the conjugal partnership shall be notified of any petition for
judicialapproval or the voluntary dissolution of the conjugal partnership, so that any
such creditors may appear atthe hearing to safeguard his interests. Upon approval of
the petition for dissolution of the conjugal partnership, the court shall take such
measures as may protect the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of articles 214 and 215
shall apply. The provisions of this Code concerning the effect of partition stated in
articles 498 to 501 shall be applicable. (1433a)
But was not the approval of the Agreement by the CFI of Sto. Domingo in the
Dominican Republic sufficient in dissolving and liquidating the conjugal partnership of
gains between the late Atty. Luna and Eugenia?
The query is answered in the negative. There is no question that the approval took
place only as an incident ofthe action for divorce instituted by Atty. Luna and Eugenia,
for, indeed, the justifications for their execution of the Agreement were identical to the
grounds raised in the action for divorce.21 With the divorce not being itself valid and
enforceable under Philippine law for being contrary to Philippine public policy and
public law, the approval of the Agreement was not also legally valid and enforceable
under Philippine law. Consequently, the conjugal partnership of gains of Atty. Luna
and Eugenia subsisted in the lifetime of their marriage.
3. Atty. Lunas marriage with Soledad, being bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership
What law governed the property relations of the second marriage between Atty. Luna
and Soledad?
The CA expressly declared that Atty. Lunas subsequent marriage to Soledad on
January 12, 1976 was void for being bigamous,22 on the ground that the marriage
between Atty. Luna and Eugenia had not been dissolved by the Divorce Decree
rendered by the CFI of Sto. Domingo in the Dominican Republic but had subsisted
until the death of Atty. Luna on July 12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous, polygamous, or incestuous are void.
Article 71 of the Civil Codeclearly states:
Article 71. All marriages performed outside the Philippines in accordance with the
laws in force in the country where they were performed, and valid there as such, shall
also be valid in this country, except bigamous, polygamous, or incestuous marriages
as determined by Philippine law.
Bigamy is an illegal marriage committed by contracting a second or subsequent
marriage before the first marriage has been legally dissolved, or before the absent
spouse has been declared presumptively dead by means of a judgment rendered in
the proper proceedings.23 A bigamous marriage is considered void ab initio.24
Due to the second marriage between Atty. Luna and the petitioner being void ab
initioby virtue of its being bigamous, the properties acquired during the bigamous
marriage were governed by the rules on co-ownership, conformably with Article 144
of the Civil Code, viz:
Article 144. When a man and a woman live together as husband and wife, but they
are not married, ortheir marriage is void from the beginning, the property acquired by
eitheror both of them through their work or industry or their wages and salaries shall
be governed by the rules on co-ownership.(n)
In such a situation, whoever alleges co-ownership carried the burden of proof to
confirm such fact.1wphi1 To establish co-ownership, therefore, it became imperative
for the petitioner to offer proof of her actual contributions in the acquisition of property.
Her mere allegation of co-ownership, without sufficient and competent evidence,
would warrant no relief in her favor. As the Court explained in Saguid v. Court of
Appeals:25
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue
of co-ownership ofproperties acquired by the parties to a bigamous marriage and an
adulterous relationship, respectively, we ruled that proof of actual contribution in the
acquisition of the property is essential. The claim of co-ownership of the petitioners
therein who were parties to the bigamous and adulterousunion is without basis
because they failed to substantiate their allegation that they contributed money in the
purchase of the disputed properties. Also in Adriano v. Court of Appeals, we ruled
that the fact that the controverted property was titled in the name of the parties to an
adulterous relationship is not sufficient proof of coownership absent evidence of
actual contribution in the acquisition of the property.
As in other civil cases, the burden of proof rests upon the party who, as determined
by the pleadings or the nature of the case, asserts an affirmative issue. Contentions
must be proved by competent evidence and reliance must be had on the strength of
the partys own evidence and not upon the weakness of the opponents defense. This
applies with more vigor where, as in the instant case, the plaintiff was allowed to
present evidence ex parte.1wphi1 The plaintiff is not automatically entitled to the
relief prayed for. The law gives the defendantsome measure of protection as the
plaintiff must still prove the allegations in the complaint. Favorable relief can be
granted only after the court isconvinced that the facts proven by the plaintiff warrant
such relief. Indeed, the party alleging a fact has the burden of proving it and a
mereallegation is not evidence.26
The petitioner asserts herein that she sufficiently proved her actual contributions in
the purchase of the condominium unit in the aggregate amount of at
least P306,572.00, consisting in direct contributions ofP159,072.00, and in repaying
the loans Atty. Luna had obtained from Premex Financing and Banco Filipino
totaling P146,825.30;27 and that such aggregate contributions of P306,572.00
corresponded to almost the entire share of Atty. Luna in the purchase of the
condominium unit amounting to P362,264.00 of the units purchase price
of P1,449,056.00.28 The petitioner further asserts that the lawbooks were paid for
solely out of her personal funds, proof of which Atty. Luna had even sent her a "thank
you" note;29 that she had the financial capacity to make the contributions and
purchases; and that Atty. Luna could not acquire the properties on his own due to the
meagerness of the income derived from his law practice.
Did the petitioner discharge her burden of proof on the co-ownership?
In resolving the question, the CA entirely debunked the petitioners assertions on her
actual contributions through the following findings and conclusions, namely:
SOLEDAD was not able to prove by preponderance of evidence that her own
independent funds were used to buy the law office condominium and the law books
subject matter in contentionin this case proof that was required for Article 144 of the
New Civil Code and Article 148 of the Family Code to apply as to cases where
properties were acquired by a man and a woman living together as husband and wife
but not married, or under a marriage which was void ab initio. Under Article 144 of the
New Civil Code, the rules on co-ownership would govern. But this was not readily
applicable to many situations and thus it created a void at first because it applied only
if the parties were not in any way incapacitated or were without impediment to marry
each other (for it would be absurd to create a co-ownership where there still exists a
prior conjugal partnership or absolute community between the man and his lawful
wife). This void was filled upon adoption of the Family Code. Article 148 provided that:
only the property acquired by both of the parties through their actual joint contribution
of money, property or industry shall be owned in common and in proportion to their
respective contributions. Such contributions and corresponding shares were prima
faciepresumed to be equal. However, for this presumption to arise, proof of actual
contribution was required. The same rule and presumption was to apply to joint
deposits of money and evidence of credit. If one of the parties was validly married to
another, his or her share in the co-ownership accrued to the absolute community or
conjugal partnership existing in such valid marriage. If the party who acted in bad faith
was not validly married to another, his or her share shall be forfeited in the manner
provided in the last paragraph of the Article 147. The rules on forfeiture applied even
if both parties were in bad faith. Co-ownership was the exception while conjugal
partnership of gains was the strict rule whereby marriage was an inviolable social
institution and divorce decrees are not recognized in the Philippines, as was held by
the Supreme Court in the case of Tenchavez vs. Escao, G.R. No. L-19671,
November 29, 1965, 15 SCRA 355, thus:
xxxx
As to the 25/100pro-indivisoshare of ATTY. LUNA in the condominium unit,
SOLEDAD failed to prove that she made an actual contribution to purchase the said
property. She failed to establish that the four (4) checks that she presented were
indeed used for the acquisition of the share of ATTY. LUNA in the condominium unit.
This was aptly explained in the Decision of the trial court, viz.:
"x x x The first check, Exhibit "M" for P55,000.00 payable to Atty. Teresita Cruz Sison
was issued on January 27, 1977, which was thirteen (13) months before the
Memorandum of Agreement, Exhibit "7" was signed. Another check issued on April
29, 1978 in the amount of P97,588.89, Exhibit "P" was payable to Banco Filipino.
According to the plaintiff, this was in payment of the loan of Atty. Luna. The third
check which was for P49,236.00 payable to PREMEX was dated May 19, 1979, also
for payment of the loan of Atty. Luna. The fourth check, Exhibit "M", forP4,072.00 was
dated December 17, 1980. None of the foregoing prove that the amounts delivered by
plaintiff to the payees were for the acquisition of the subject condominium unit. The
connection was simply not established. x x x"
SOLEDADs claim that she made a cash contribution of P100,000.00 is
unsubstantiated. Clearly, there is no basis for SOLEDADs claim of co-ownership over
the 25/100 portion of the condominium unit and the trial court correctly found that the
same was acquired through the sole industry of ATTY. LUNA, thus:
"The Deed of Absolute Sale, Exhibit "9", covering the condominium unit was in the
name of Atty. Luna, together with his partners in the law firm. The name of the plaintiff
does not appear as vendee or as the spouse of Atty. Luna. The same was acquired
for the use of the Law firm of Atty. Luna. The loans from Allied Banking Corporation
and Far East Bank and Trust Company were loans of Atty. Luna and his partners and
plaintiff does not have evidence to show that she paid for them fully or partially. x x x"
The fact that CCT No. 4779 and subsequently, CCT No. 21761 were in the name of
"JUAN LUCES LUNA, married to Soledad L. Luna" was no proof that SOLEDAD was
a co-owner of the condominium unit. Acquisition of title and registration thereof are
two different acts. It is well settled that registration does not confer title but merely
confirms one already existing. The phrase "married to" preceding "Soledad L. Luna" is
merely descriptive of the civil status of ATTY. LUNA.
SOLEDAD, the second wife, was not even a lawyer. So it is but logical that
SOLEDAD had no participation in the law firm or in the purchase of books for the law
firm. SOLEDAD failed to prove that she had anything to contribute and that she
actually purchased or paid for the law office amortization and for the law books. It is
more logical to presume that it was ATTY. LUNA who bought the law office space and
the law books from his earnings from his practice of law rather than embarrassingly
beg or ask from SOLEDAD money for use of the law firm that he headed. 30
The Court upholds the foregoing findings and conclusions by the CA both because
they were substantiated by the records and because we have not been shown any
reason to revisit and undo them. Indeed, the petitioner, as the party claiming the co-
ownership, did not discharge her burden of proof. Her mere allegations on her
contributions, not being evidence,31 did not serve the purpose. In contrast, given the
subsistence of the first marriage between Atty. Luna and Eugenia, the presumption
that Atty. Luna acquired the properties out of his own personal funds and effort
remained. It should then be justly concluded that the properties in litislegally pertained
to their conjugal partnership of gains as of the time of his death. Consequently, the
sole ownership of the 25/100 pro indivisoshare of Atty. Luna in the condominium unit,
and of the lawbooks pertained to the respondents as the lawful heirs of Atty. Luna.
WHEREFORE, the Court AFFIRMS the decision promulgated on November 11,
2005; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED. LUCAS P. BERSAMIN
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 189538 February 10, 2014
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
MERLINDA L. OLAYBAR, Respondent.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court
are the Regional Trial Court1(RTC) Decision2 dated May 5, 2009 and Order3 dated
August 25, 2009 in SP. Proc. No. 16519-CEB. The assailed decision granted
respondent Merlinda L. Olaybar's petition for cancellation of entries in the latter's
marriage contract; while the assailed order denied the motion for reconsideration filed
by petitioner Republic of the Philippines through the Office of the Solicitor General
(OSG).
The facts of the case are as follows:
Respondent requested from the National Statistics Office (NSO) a Certificate of No
Marriage (CENOMAR) as one of the requirements for her marriage with her boyfriend
of five years. Upon receipt thereof, she discovered that she was already married to a
certain Ye Son Sune, a Korean National, on June 24, 2002, at the Office of the
Municipal Trial Court in Cities (MTCC), Palace of Justice. She denied having
contracted said marriage and claimed that she did not know the alleged husband; she
did not appear before the solemnizing officer; and, that the signature appearing in the
marriage certificate is not hers.4 She, thus, filed a Petition for Cancellation of Entries
in the Marriage Contract, especially the entries in the wife portion
thereof.5 Respondent impleaded the Local Civil Registrar of Cebu City, as well as her
alleged husband, as parties to the case.
During trial, respondent testified on her behalf and explained that she could not have
appeared before Judge Mamerto Califlores, the supposed solemnizing officer, at the
time the marriage was allegedly celebrated, because she was then in Makati working
as a medical distributor in Hansao Pharma. She completely denied having known the
supposed husband, but she revealed that she recognized the named witnesses to the
marriage as she had met them while she was working as a receptionist in Tadels
Pension House. She believed that her name was used by a certain Johnny Singh,
who owned a travel agency, whom she gave her personal circumstances in order for
her to obtain a passport.6 Respondent also presented as witness a certain Eufrocina
Natinga, an employee of MTCC, Branch 1, who confirmed that the marriage of Ye
Son Sune was indeed celebrated in their office, but claimed that the alleged wife who
appeared was definitely not respondent.7 Lastly, a document examiner testified that
the signature appearing in the marriage contract was forged.8
On May 5, 2009, the RTC rendered the assailed Decision, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered, the petition is granted in favor of the
petitioner, Merlinda L. Olaybar. The Local Civil Registrar of Cebu City is directed to
cancel all the entries in the WIFE portion of the alleged marriage contract of the
petitioner and respondent Ye Son Sune.
SO ORDERED.9
Finding that the signature appearing in the subject marriage contract was not that of
respondent, the court found basis in granting the latters prayer to straighten her
record and rectify the terrible mistake.10
Petitioner, however, moved for the reconsideration of the assailed Decision on the
grounds that: (1) there was no clerical spelling, typographical and other innocuous
errors in the marriage contract for it to fall within the provisions of Rule 108 of the
Rules of Court; and (2) granting the cancellation of all the entries in the wife portion of
the alleged marriage contract is, in effect, declaring the marriage void ab initio.11
In an Order dated August 25, 2009, the RTC denied petitioners motion for
reconsideration couched in this wise:
WHEREFORE, the court hereby denies the Motion for Reconsideration filed by the
Republic of the Philippines. Furnish copies of this order to the Office of the Solicitor
General, the petitioners counsel, and all concerned government agencies.
SO ORDERED.12
Contrary to petitioners stand, the RTC held that it had jurisdiction to take cognizance
of cases for correction of entries even on substantial errors under Rule 108 of the
Rules of Court being the appropriate adversary proceeding required. Considering that
respondents identity was used by an unknown person to contract marriage with a
Korean national, it would not be feasible for respondent to institute an action for
declaration of nullity of marriage since it is not one of the void marriages under
Articles 35 and 36 of the Family Code.13
Petitioner now comes before the Court in this Petition for Review on Certiorari under
Rule 45 of the Rules of Court seeking the reversal of the assailed RTC Decision and
Order based on the following grounds:
I.
RULE 108 OF THE REVISED RULES OF COURT APPLIES ONLY WHEN THERE
ARE ERRORS IN THE ENTRIES SOUGHT TO BE CANCELLED OR CORRECTED.
II.
GRANTING THE CANCELLATION OF "ALL THE ENTRIES IN THE WIFE PORTION
OF THE ALLEGED MARRIAGE CONTRACT," IS IN EFFECT DECLARING THE
MARRIAGE VOID AB INITIO.14
Petitioner claims that there are no errors in the entries sought to be cancelled or
corrected, because the entries made in the certificate of marriage are the ones
provided by the person who appeared and represented herself as Merlinda L. Olaybar
and are, in fact, the latters personal circumstances.15 In directing the cancellation of
the entries in the wife portion of the certificate of marriage, the RTC, in effect,
declared the marriage null and void ab initio.16 Thus, the petition instituted by
respondent is actually a petition for declaration of nullity of marriage in the guise of a
Rule 108 proceeding.17
We deny the petition.
At the outset, it is necessary to stress that a direct recourse to this Court from the
decisions and final orders of the RTC may be taken where only questions of law are
raised or involved. There is a question of law when the doubt arises as to what the
law is on a certain state of facts, which does not call for the examination of the
probative value of the evidence of the parties.18 Here, the issue raised by petitioner is
whether or not the cancellation of entries in the marriage contract which, in effect,
nullifies the marriage may be undertaken in a Rule 108 proceeding. Verily, petitioner
raised a pure question of law.
Rule 108 of the Rules of Court sets forth the rules on cancellation or correction of
entries in the civil registry, to wit:
SEC. 1. Who may file petition. Any person interested in any act, event,
order or decree concerning the civil status of persons which has been
recorded in the civil register, may file a verified petition for the cancellation or
correction of any entry relating thereto, with the Regional Trial Court of the
province where the corresponding civil registry is located.
SEC. 2. Entries subject to cancellation or correction. Upon good and valid
grounds, the following entries in the civil register may be cancelled or
corrected: (a) births; (b) marriages; (c) deaths; (d) legal separations; (e)
judgments of annulments of marriage; (f) judgments declaring marriages
void from the beginning; (g) legitimations; (h) adoptions; (i)
acknowledgments of natural children; (j) naturalization; (k) election, loss or
recovery of citizenship; (l) civil interdiction; (m) judicial determination of
filiation; (n) voluntary emancipation of a minor; and (o) changes of name.
SEC. 3. Parties. When cancellation or correction of an entry in the civil
register is sought, the civil registrar and all persons who have or claim any
interest which would be affected thereby shall be made parties to the
proceeding.
SEC. 4. Notice and Publication. Upon the filing of the petition, the court
shall, by an order, fix the time and place for the hearing of the same, and
cause reasonable notice thereof to be given to the persons named in the
petition. The court shall also cause the order to be published once a week
for three (3) consecutive weeks in a newspaper of general circulation in the
province.
SEC. 5. Opposition. The civil registrar and any person having or claiming
any interest under the entry whose cancellation or correction is sought may,
within fifteen (15) days from notice of the petition, or from the last date of
publication of such notice, file his opposition thereto.
SEC. 6. Expediting proceedings. The court in which the proceedings is
brought may make orders expediting the proceedings, and may also grant
preliminary injunction for the preservation of the rights of the parties pending
such proceedings.
SEC. 7. Order. After hearing, the court may either dismiss the petition or
issue an order granting the cancellation or correction prayed for. In either
case, a certified copy of the judgment shall be served upon the civil registrar
concerned who shall annotate the same in his record.
Rule 108 of the Rules of Court provides the procedure for cancellation or correction of
entries in the civil registry. The proceedings may either be summary or adversary. If
the correction is clerical, then the procedure to be adopted is summary. If the
rectification affects the civil status, citizenship or nationality of a party, it is deemed
substantial, and the procedure to be adopted is adversary. Since the promulgation of
Republic v. Valencia19 in 1986, the Court has repeatedly ruled that "even substantial
errors in a civil registry may be corrected through a petition filed under Rule 108, with
the true facts established and the parties aggrieved by the error availing themselves
of the appropriate adversarial proceeding."20 An appropriate adversary suit or
proceeding is one where the trial court has conducted proceedings where all relevant
facts have been fully and properly developed, where opposing counsel have been
given opportunity to demolish the opposite partys case, and where the evidence has
been thoroughly weighed and considered.21
It is true that in special proceedings, formal pleadings and a hearing may be
dispensed with, and the remedy [is] granted upon mere application or motion.
However, a special proceeding is not always summary. The procedure laid down in
Rule 108 is not a summary proceeding per se. It requires publication of the petition; it
mandates the inclusion as parties of all persons who may claim interest which would
be affected by the cancellation or correction; it also requires the civil registrar and any
person in interest to file their opposition, if any; and it states that although the court
may make orders expediting the proceedings, it is after hearing that the court shall
either dismiss the petition or issue an order granting the same. Thus, as long as the
procedural requirements in Rule 108 are followed, it is the appropriate adversary
proceeding to effect substantial corrections and changes in entries of the civil
register.22
In this case, the entries made in the wife portion of the certificate of marriage are
admittedly the personal circumstances of respondent. The latter, however, claims that
her signature was forged and she was not the one who contracted marriage with the
purported husband. In other words, she claims that no such marriage was entered
into or if there was, she was not the one who entered into such contract. It must be
recalled that when respondent tried to obtain a CENOMAR from the NSO, it appeared
that she was married to a certain Ye Son Sune. She then sought the cancellation of
entries in the wife portion of the marriage certificate.
In filing the petition for correction of entry under Rule 108, respondent made the Local
Civil Registrar of Cebu City, as well as her alleged husband Ye Son Sune, as parties-
respondents. It is likewise undisputed that the procedural requirements set forth in
Rule 108 were complied with. The Office of the Solicitor General was likewise notified
of the petition which in turn authorized the Office of the City Prosecutor to participate
in the proceedings. More importantly, trial was conducted where respondent herself,
the stenographer of the court where the alleged marriage was conducted, as well as a
document examiner, testified. Several documents were also considered as evidence.
With the testimonies and other evidence presented, the trial court found that the
signature appearing in the subject marriage certificate was different from
respondents signature appearing in some of her government issued identification
cards.23 The court thus made a categorical conclusion that respondents signature in
the marriage certificate was not hers and, therefore, was forged. Clearly, it was
established that, as she claimed in her petition, no such marriage was celebrated.
only "evidence" of marriage which is the marriage certificate was a forgery. While we
maintain that Rule 108 cannot be availed of to determine the validity of marriage, we
cannot nullify the proceedings before the trial court where all the parties had been
given the opportunity to contest the allegations of respondent; the procedures were
followed, and all the evidence of the parties had already been admitted and
examined. Respondent indeed sought, not the nullification of marriage as there was
no marriage to speak of, but the correction of the record of such marriage to reflect
the truth as set forth by the evidence. Otherwise stated, in allowing the correction of
the subject certificate of marriage by cancelling the wife portion thereof, the trial court
did not, in any way, declare the marriage void as there was no marriage to speak of.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The
Regional Trial Court Decision dated May 5, 2009 and Order dated August 25, 2009 in
SP. Proc. No. 16519-CEB, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice

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

To be sure, a petition for correction or cancellation of an entry in the civil registry

cannot substitute for an action to invalidate a marriage. A direct action is necessary to
prevent circumvention of the substantive and procedural safeguards of marriage
under the Family Code, A.M. No. 02-11-10-SC and other related laws. Among these
safeguards are the requirement of proving the limited grounds for the dissolution of
marriage, support pendente lite of the spouses and children, the liquidation, partition
and distribution of the properties of the spouses and the investigation of the public
prosecutor to determine collusion. A direct action for declaration of nullity or
annulment of marriage is also necessary to prevent circumvention of the jurisdiction
of the Family Courts under the Family Courts Act of 1997 (Republic Act No. 8369), as
a petition for cancellation or correction of entries in the civil registry may be filed in the
Regional Trial Court where the corresponding civil registry is located. In other words,
a Filipino citizen cannot dissolve his marriage by the mere expedient of changing his
entry of marriage in the civil registry.

Aside from the certificate of marriage, no such evidence was presented to show the
existence of marriage.1wphi1Rather, respondent showed by overwhelming evidence
that no marriage was entered into and that she was not even aware of such
existence. The testimonial and documentary evidence clearly established that the
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 196049 June 26, 2013
MINORU FUJIKI, PETITIONER,
vs.
MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL
REGISTRAR OF QUEZON CITY, AND THE ADMINISTRATOR AND CIVIL
REGISTRAR GENERAL OF THE NATIONAL STATISTICS
OFFICE,RESPONDENTS.
DECISION
CARPIO, J.:
The Case
This is a direct recourse to this Court from the Regional Trial Court (RTC), Branch
107, Quezon City, through a petition for review on certiorari under Rule 45 of the
Rules of Court on a pure question of law. The petition assails the Order1 dated 31
January 2011 of the RTC in Civil Case No. Q-11-68582 and its Resolution dated 2
March 2011 denying petitioners Motion for Reconsideration. The RTC dismissed the
petition for "Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity
of Marriage)" based on improper venue and the lack of personality of petitioner,
Minoru Fujiki, to file the petition.
The Facts
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria
Paz Galela Marinay (Marinay) in the Philippines 2 on 23 January 2004. The marriage
did not sit well with petitioners parents. Thus, Fujiki could not bring his wife to Japan
where he resides. Eventually, they lost contact with each other.
In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the
first marriage being dissolved, Marinay and Maekara were married on 15 May 2008 in
Quezon City, Philippines. Maekara brought Marinay to Japan. However, Marinay
allegedly suffered physical abuse from Maekara. She left Maekara and started to
contact Fujiki.3
Fujiki and Marinay met in Japan and they were able to reestablish their relationship.
In 2010, Fujiki helped Marinay obtain a judgment from a family court in Japan which
declared the marriage between Marinay and Maekara void on the ground of
bigamy.4 On 14 January 2011, Fujiki filed a petition in the RTC entitled: "Judicial
Recognition of Foreign Judgment (or Decree of Absolute Nullity of Marriage)." Fujiki
prayed that (1) the Japanese Family Court judgment be recognized; (2) that the
bigamous marriage between Marinay and Maekara be declared void ab initio under
Articles 35(4) and 41 of the Family Code of the Philippines; 5 and (3) for the RTC to
direct the Local Civil Registrar of Quezon City to annotate the Japanese Family Court
judgment on the Certificate of Marriage between Marinay and Maekara and to
endorse such annotation to the Office of the Administrator and Civil Registrar General
in the National Statistics Office (NSO).6
The Ruling of the Regional Trial Court
A few days after the filing of the petition, the RTC immediately issued an Order
dismissing the petition and withdrawing the case from its active civil docket. 7 The RTC
cited the following provisions of the Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC):
Sec. 2. Petition for declaration of absolute nullity of void marriages.
(a) Who may file. A petition for declaration of absolute nullity of void marriage may
be filed solely by the husband or the wife.
xxxx
Sec. 4. Venue. The petition shall be filed in the Family Court of the province or city
where the petitioner or the respondent has been residing for at least six months prior
to the date of filing, or in the case of a non-resident respondent, where he may be
found in the Philippines, at the election of the petitioner. x x x
The RTC ruled, without further explanation, that the petition was in "gross violation" of
the above provisions. The trial court based its dismissal on Section 5(4) of A.M. No.
02-11-10-SC which provides that "[f]ailure to comply with any of the preceding
requirements may be a ground for immediate dismissal of the petition." 8 Apparently,
the RTC took the view that only "the husband or the wife," in this case either Maekara
or Marinay, can file the petition to declare their marriage void, and not Fujiki.
Fujiki moved that the Order be reconsidered. He argued that A.M. No. 02-11-10-SC
contemplated ordinary civil actions for declaration of nullity and annulment of
marriage. Thus, A.M. No. 02-11-10-SC does not apply. A petition for recognition of
foreign judgment is a special proceeding, which "seeks to establish a status, a right or
a particular fact,"9 and not a civil action which is "for the enforcement or protection of
a right, or the prevention or redress of a wrong." 10 In other words, the petition in the
RTC sought to establish (1) the status and concomitant rights of Fujiki and Marinay as
husband and wife and (2) the fact of the rendition of the Japanese Family Court
judgment declaring the marriage between Marinay and Maekara as void on the
ground of bigamy. The petitioner contended that the Japanese judgment was
consistent with Article 35(4) of the Family Code of the Philippines 11on bigamy and
was therefore entitled to recognition by Philippine courts. 12
In any case, it was also Fujikis view that A.M. No. 02-11-10-SC applied only to void
marriages under Article 36 of the Family Code on the ground of psychological
incapacity.13 Thus, Section 2(a) of A.M. No. 02-11-10-SC provides that "a petition for
declaration of absolute nullity of void marriages may be filed solely by the husband or
the wife." To apply Section 2(a) in bigamy would be absurd because only the guilty
parties would be permitted to sue. In the words of Fujiki, "[i]t is not, of course, difficult
to realize that the party interested in having a bigamous marriage declared a nullity
would be the husband in the prior, pre-existing marriage."14 Fujiki had material
interest and therefore the personality to nullify a bigamous marriage.
Fujiki argued that Rule 108 (Cancellation or Correction of Entries in the Civil Registry)
of the Rules of Court is applicable. Rule 108 is the "procedural implementation" of the
Civil Register Law (Act No. 3753)15 in relation to Article 413 of the Civil Code.16 The
Civil Register Law imposes a duty on the "successful petitioner for divorce or
annulment of marriage to send a copy of the final decree of the court to the local
registrar of the municipality where the dissolved or annulled marriage was
solemnized."17 Section 2 of Rule 108 provides that entries in the civil registry relating
to "marriages," "judgments of annulments of marriage" and "judgments declaring
marriages void from the beginning" are subject to cancellation or correction. 18 The
petition in the RTC sought (among others) to annotate the judgment of the Japanese
Family Court on the certificate of marriage between Marinay and Maekara.
Fujikis motion for reconsideration in the RTC also asserted that the trial court
"gravely erred" when, on its own, it dismissed the petition based on improper venue.
Fujiki stated that the RTC may be confusing the concept of venue with the concept of
jurisdiction, because it is lack of jurisdiction which allows a court to dismiss a case on
its own. Fujiki cited Dacoycoy v. Intermediate Appellate Court19 which held that the
"trial court cannot pre-empt the defendants prerogative to object to the improper
laying of the venue by motu proprio dismissing the case."20Moreover, petitioner
alleged that the trial court should not have "immediately dismissed" the petition under
Section 5 of A.M. No. 02-11-10-SC because he substantially complied with the
provision.
On 2 March 2011, the RTC resolved to deny petitioners motion for reconsideration. In
its Resolution, the RTC stated that A.M. No. 02-11-10-SC applies because the
petitioner, in effect, prays for a decree of absolute nullity of marriage.21 The trial court
reiterated its two grounds for dismissal, i.e. lack of personality to sue and improper
venue under Sections 2(a) and 4 of A.M. No. 02-11-10-SC. The RTC considered
Fujiki as a "third person"22 in the proceeding because he "is not the husband in the
decree of divorce issued by the Japanese Family Court, which he now seeks to be
judicially recognized, x x x."23 On the other hand, the RTC did not explain its ground
of impropriety of venue. It only said that "[a]lthough the Court cited Sec. 4 (Venue) x x
x as a ground for dismissal of this case[,] it should be taken together with the other
ground cited by the Court x x x which is Sec. 2(a) x x x." 24
The RTC further justified its motu proprio dismissal of the petition based on Braza v.
The City Civil Registrar of Himamaylan City, Negros Occidental. 25 The Court in Braza
ruled that "[i]n a special proceeding for correction of entry under Rule 108
(Cancellation or Correction of Entries in the Original Registry), the trial court has no
jurisdiction to nullify marriages x x x."26 Braza emphasized that the "validity of
marriages as well as legitimacy and filiation can be questioned only in a direct action
seasonably filed by the proper party, and not through a collateral attack such as [a]
petition [for correction of entry] x x x."27
The RTC considered the petition as a collateral attack on the validity of marriage
between Marinay and Maekara. The trial court held that this is a "jurisdictional
ground" to dismiss the petition.28 Moreover, the verification and certification against
forum shopping of the petition was not authenticated as required under Section 5 29 of
A.M. No. 02-11-10-SC. Hence, this also warranted the "immediate dismissal" of the
petition under the same provision.
The Manifestation and Motion of the Office of the Solicitor General and the
Letters of Marinay and Maekara
On 30 May 2011, the Court required respondents to file their comment on the petition
for review.30 The public respondents, the Local Civil Registrar of Quezon City and the
Administrator and Civil Registrar General of the NSO, participated through the Office
of the Solicitor General. Instead of a comment, the Solicitor General filed a
Manifestation and Motion.31
The Solicitor General agreed with the petition. He prayed that the RTCs
"pronouncement that the petitioner failed to comply with x x x A.M. No. 02-11-10-SC x
x x be set aside" and that the case be reinstated in the trial court for further
proceedings.32 The Solicitor General argued that Fujiki, as the spouse of the first
marriage, is an injured party who can sue to declare the bigamous marriage between
Marinay and Maekara void. The Solicitor General cited Juliano-Llave v.
Republic33 which held that Section 2(a) of A.M. No. 02-11-10-SC does not apply in
cases of bigamy. In Juliano-Llave, this Court explained:
[t]he subsequent spouse may only be expected to take action if he or she had only
discovered during the connubial period that the marriage was bigamous, and
especially if the conjugal bliss had already vanished. Should parties in a subsequent
marriage benefit from the bigamous marriage, it would not be expected that they
would file an action to declare the marriage void and thus, in such circumstance, the
"injured spouse" who should be given a legal remedy is the one in a subsisting
previous marriage. The latter is clearly the aggrieved party as the bigamous marriage
not only threatens the financial and the property ownership aspect of the prior
marriage but most of all, it causes an emotional burden to the prior spouse. The
subsequent marriage will always be a reminder of the infidelity of the spouse and the
disregard of the prior marriage which sanctity is protected by the Constitution. 34
The Solicitor General contended that the petition to recognize the Japanese Family
Court judgment may be made in a Rule 108 proceeding.35 In Corpuz v. Santo
Tomas,36 this Court held that "[t]he recognition of the foreign divorce decree may be
made in a Rule 108 proceeding itself, as the object of special proceedings (such as
that in Rule 108 of the Rules of Court) is precisely to establish the status or right of a
party or a particular fact."37 WhileCorpuz concerned a foreign divorce decree, in the
present case the Japanese Family Court judgment also affected the civil status of the
parties, especially Marinay, who is a Filipino citizen.
The Solicitor General asserted that Rule 108 of the Rules of Court is the procedure to
record "[a]cts, events and judicial decrees concerning the civil status of persons" in
the civil registry as required by Article 407 of the Civil Code. In other words, "[t]he law
requires the entry in the civil registry of judicial decrees that produce legal
consequences upon a persons legal capacity and status x x x." 38 The Japanese
Family Court judgment directly bears on the civil status of a Filipino citizen and should
therefore be proven as a fact in a Rule 108 proceeding.
Moreover, the Solicitor General argued that there is no jurisdictional infirmity in
assailing a void marriage under Rule 108, citing De Castro v. De Castro39 and Nial v.
Bayadog40 which declared that "[t]he validity of a void marriage may be collaterally
attacked."41
Marinay and Maekara individually sent letters to the Court to comply with the directive
for them to comment on the petition.42 Maekara wrote that Marinay concealed from
him the fact that she was previously married to Fujiki. 43Maekara also denied that he
inflicted any form of violence on Marinay.44 On the other hand, Marinay wrote that she
had no reason to oppose the petition.45 She would like to maintain her silence for fear
that anything she say might cause misunderstanding between her and Fujiki.46
The Issues
Petitioner raises the following legal issues:
(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages
and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) is applicable.
(2) Whether a husband or wife of a prior marriage can file a petition to
recognize a foreign judgment nullifying the subsequent marriage between
his or her spouse and a foreign citizen on the ground of bigamy.
(3) Whether the Regional Trial Court can recognize the foreign judgment in a
proceeding for cancellation or correction of entries in the Civil Registry under
Rule 108 of the Rules of Court.
The Ruling of the Court
We grant the petition.
The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to recognize
a foreign judgment relating to the status of a marriage where one of the parties is a
citizen of a foreign country. Moreover, in Juliano-Llave v. Republic,47 this Court held
that the rule in A.M. No. 02-11-10-SC that only the husband or wife can file a
declaration of nullity or annulment of marriage "does not apply if the reason behind
the petition is bigamy."48
I.
For Philippine courts to recognize a foreign judgment relating to the status of a
marriage where one of the parties is a citizen of a foreign country, the petitioner only
needs to prove the foreign judgment as a fact under the Rules of Court. To be more
specific, a copy of the foreign judgment may be admitted in evidence and proven as a
fact under Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the
Rules of Court.49 Petitioner may prove the Japanese Family Court judgment through
(1) an official publication or (2) a certification or copy attested by the officer who has
custody of the judgment. If the office which has custody is in a foreign country such
as Japan, the certification may be made by the proper diplomatic or consular officer of
the Philippine foreign service in Japan and authenticated by the seal of office. 50
To hold that A.M. No. 02-11-10-SC applies to a petition for recognition of foreign
judgment would mean that the trial court and the parties should follow its provisions,
including the form and contents of the petition,51 the service of summons,52 the
investigation of the public prosecutor,53 the setting of pre-trial,54 the trial55 and the
judgment of the trial court.56 This is absurd because it will litigate the case anew. It will
defeat the purpose of recognizing foreign judgments, which is "to limit repetitive
litigation on claims and issues."57 The interpretation of the RTC is tantamount to
relitigating the case on the merits. In Mijares v. Raada,58 this Court explained that
"[i]f every judgment of a foreign court were reviewable on the merits, the plaintiff
would be forced back on his/her original cause of action, rendering immaterial the
previously concluded litigation."59
A foreign judgment relating to the status of a marriage affects the civil status,
condition and legal capacity of its parties. However, the effect of a foreign judgment is
not automatic. To extend the effect of a foreign judgment in the Philippines, Philippine
courts must determine if the foreign judgment is consistent with domestic public policy
and other mandatory laws.60 Article 15 of the Civil Code provides that "[l]aws relating
to family rights and duties, or to the status, condition and legal capacity of persons
are binding upon citizens of the Philippines, even though living abroad." This is the
rule of lex nationalii in private international law. Thus, the Philippine State may
require, for effectivity in the Philippines, recognition by Philippine courts of a foreign
judgment affecting its citizen, over whom it exercises personal jurisdiction relating to
the status, condition and legal capacity of such citizen.
A petition to recognize a foreign judgment declaring a marriage void does not require
relitigation under a Philippine court of the case as if it were a new petition for
declaration of nullity of marriage. Philippine courts cannot presume to know the
foreign laws under which the foreign judgment was rendered. They cannot substitute
their judgment on the status, condition and legal capacity of the foreign citizen who is
under the jurisdiction of another state. Thus, Philippine courts can only recognize the
foreign judgment as a fact according to the rules of evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final
order against a person creates a "presumptive evidence of a right as between the
parties and their successors in interest by a subsequent title." Moreover, Section 48
of the Rules of Court states that "the judgment or final order may be repelled by
evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact." Thus, Philippine courts exercise limited review on foreign
judgments. Courts are not allowed to delve into the merits of a foreign judgment.
Once a foreign judgment is admitted and proven in a Philippine court, it can only be
repelled on grounds external to its merits, i.e. , "want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact." The rule on limited review
embodies the policy of efficiency and the protection of party expectations, 61 as well as
respecting the jurisdiction of other states.62
Since 1922 in Adong v. Cheong Seng Gee,63 Philippine courts have recognized
foreign divorce decrees between a Filipino and a foreign citizen if they are
successfully proven under the rules of evidence.64 Divorce involves the dissolution of
a marriage, but the recognition of a foreign divorce decree does not involve the
extended procedure under A.M. No. 02-11-10-SC or the rules of ordinary trial. While
the Philippines does not have a divorce law, Philippine courts may, however,
recognize a foreign divorce decree under the second paragraph of Article 26 of the
Family Code, to capacitate a Filipino citizen to remarry when his or her foreign
spouse obtained a divorce decree abroad.65
There is therefore no reason to disallow Fujiki to simply prove as a fact the Japanese
Family Court judgment nullifying the marriage between Marinay and Maekara on the
ground of bigamy. While the Philippines has no divorce law, the Japanese Family
Court judgment is fully consistent with Philippine public policy, as bigamous
marriages are declared void from the beginning under Article 35(4) of the Family
Code. Bigamy is a crime under Article 349 of the Revised Penal Code. Thus, Fujiki
can prove the existence of the Japanese Family Court judgment in accordance with
Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of
Court.
II.
Since the recognition of a foreign judgment only requires proof of fact of the
judgment, it may be made in a special proceeding for cancellation or correction of
entries in the civil registry under Rule 108 of the Rules of Court. Rule 1, Section 3 of
the Rules of Court provides that "[a] special proceeding is a remedy by which a party
seeks to establish a status, a right, or a particular fact." Rule 108 creates a remedy to
rectify facts of a persons life which are recorded by the State pursuant to the Civil
Register Law or Act No. 3753. These are facts of public consequence such as birth,
death or marriage,66 which the State has an interest in recording. As noted by the
Solicitor General, in Corpuz v. Sto. Tomas this Court declared that "[t]he recognition
of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the
object of special proceedings (such as that in Rule 108 of the Rules of Court) is
precisely to establish the status or right of a party or a particular fact."67
Rule 108, Section 1 of the Rules of Court states:
Sec. 1. Who may file petition. Any person interested in any act, event, order or
decree concerning the civil status of persons which has been recorded in the
civil register, may file a verified petition for the cancellation or correction of any entry
relating thereto, with the Regional Trial Court of the province where the corresponding
civil registry is located. (Emphasis supplied)
Fujiki has the personality to file a petition to recognize the Japanese Family Court
judgment nullifying the marriage between Marinay and Maekara on the ground of
bigamy because the judgment concerns his civil status as married to Marinay. For the
same reason he has the personality to file a petition under Rule 108 to cancel the
entry of marriage between Marinay and Maekara in the civil registry on the basis of
the decree of the Japanese Family Court.
There is no doubt that the prior spouse has a personal and material interest in
maintaining the integrity of the marriage he contracted and the property relations
arising from it. There is also no doubt that he is interested in the cancellation of an
entry of a bigamous marriage in the civil registry, which compromises the public
record of his marriage. The interest derives from the substantive right of the spouse
not only to preserve (or dissolve, in limited instances68) his most intimate human
relation, but also to protect his property interests that arise by operation of law the
moment he contracts marriage.69 These property interests in marriage include the
right to be supported "in keeping with the financial capacity of the family" 70 and
preserving the property regime of the marriage.71
Property rights are already substantive rights protected by the Constitution, 72 but a
spouses right in a marriage extends further to relational rights recognized under Title
III ("Rights and Obligations between Husband and Wife") of the Family Code. 73 A.M.
No. 02-11-10-SC cannot "diminish, increase, or modify" the substantive right of the
spouse to maintain the integrity of his marriage.74 In any case, Section 2(a) of A.M.
No. 02-11-10-SC preserves this substantive right by limiting the personality to sue to
the husband or the wife of the union recognized by law.
Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse of a subsisting
marriage to question the validity of a subsequent marriage on the ground of bigamy.
On the contrary, when Section 2(a) states that "[a] petition for declaration of absolute
nullity of void marriage may be filed solely by the husband or the wife"75it refers
to the husband or the wife of the subsisting marriage. Under Article 35(4) of the
Family Code, bigamous marriages are void from the beginning. Thus, the parties in a
bigamous marriage are neither the husband nor the wife under the law. The husband
or the wife of the prior subsisting marriage is the one who has the personality to file a
petition for declaration of absolute nullity of void marriage under Section 2(a) of A.M.
No. 02-11-10-SC.
Article 35(4) of the Family Code, which declares bigamous marriages void from the
beginning, is the civil aspect of Article 349 of the Revised Penal Code, 76 which
penalizes bigamy. Bigamy is a public crime. Thus, anyone can initiate prosecution for
bigamy because any citizen has an interest in the prosecution and prevention of
crimes.77If anyone can file a criminal action which leads to the declaration of nullity of
a bigamous marriage,78 there is more reason to confer personality to sue on the
husband or the wife of a subsisting marriage. The prior spouse does not only share in
the public interest of prosecuting and preventing crimes, he is also personally
interested in the purely civil aspect of protecting his marriage.
When the right of the spouse to protect his marriage is violated, the spouse is clearly
an injured party and is therefore interested in the judgment of the suit.79 Juliano-
Llave ruled that the prior spouse "is clearly the aggrieved party as the bigamous
marriage not only threatens the financial and the property ownership aspect of the
prior marriage but most of all, it causes an emotional burden to the prior
spouse."80 Being a real party in interest, the prior spouse is entitled to sue in order to
declare a bigamous marriage void. For this purpose, he can petition a court to
recognize a foreign judgment nullifying the bigamous marriage and judicially declare
as a fact that such judgment is effective in the Philippines. Once established, there
should be no more impediment to cancel the entry of the bigamous marriage in the
civil registry.
III.
In Braza v. The City Civil Registrar of Himamaylan City, Negros Occidental, this Court
held that a "trial court has no jurisdiction to nullify marriages" in a special proceeding
for cancellation or correction of entry under Rule 108 of the Rules of Court. 81 Thus,
the "validity of marriage[] x x x can be questioned only in a direct action" to nullify the
marriage.82 The RTC relied on Braza in dismissing the petition for recognition of
foreign judgment as a collateral attack on the marriage between Marinay and
Maekara.
Braza is not applicable because Braza does not involve a recognition of a foreign
judgment nullifying a bigamous marriage where one of the parties is a citizen of the
foreign country.
To be sure, a petition for correction or cancellation of an entry in the civil registry
cannot substitute for an action to invalidate a marriage. A direct action is necessary to
prevent circumvention of the substantive and procedural safeguards of marriage
under the Family Code, A.M. No. 02-11-10-SC and other related laws. Among these
safeguards are the requirement of proving the limited grounds for the dissolution of
marriage,83 support pendente lite of the spouses and children,84 the liquidation,
partition and distribution of the properties of the spouses, 85 and the investigation of
the public prosecutor to determine collusion.86 A direct action for declaration of nullity
or annulment of marriage is also necessary to prevent circumvention of the
jurisdiction of the Family Courts under the Family Courts Act of 1997 (Republic Act
No. 8369), as a petition for cancellation or correction of entries in the civil registry may
be filed in the Regional Trial Court "where the corresponding civil registry is
located."87 In other words, a Filipino citizen cannot dissolve his marriage by the mere
expedient of changing his entry of marriage in the civil registry.
However, this does not apply in a petition for correction or cancellation of a civil
registry entry based on the recognition of a foreign judgment annulling a marriage
where one of the parties is a citizen of the foreign country. There is neither
circumvention of the substantive and procedural safeguards of marriage under
Philippine law, nor of the jurisdiction of Family Courts under R.A. No. 8369. A
recognition of a foreign judgment is not an action to nullify a marriage. It is an action
for Philippine courts to recognize the effectivity of a foreign judgment, which
presupposes a case which was already tried and decided under foreign law.
The procedure in A.M. No. 02-11-10-SC does not apply in a petition to recognize a
foreign judgment annulling a bigamous marriage where one of the parties is a citizen
of the foreign country. Neither can R.A. No. 8369 define the jurisdiction of the foreign
court.
Article 26 of the Family Code confers jurisdiction on Philippine courts to extend the
effect of a foreign divorce decree to a Filipino spouse without undergoing trial to
determine the validity of the dissolution of the marriage. The second paragraph of
Article 26 of the Family Code provides that "[w]here a marriage between a Filipino
citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained
abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse
shall have capacity to remarry under Philippine law." InRepublic v. Orbecido,88 this
Court recognized the legislative intent of the second paragraph of Article 26 which is
"to avoid the absurd situation where the Filipino spouse remains married to the alien
spouse who, after obtaining a divorce, is no longer married to the Filipino
spouse"89 under the laws of his or her country. The second paragraph of Article 26 of
the Family Code only authorizes Philippine courts to adopt the effects of a foreign
divorce decree precisely because the Philippines does not allow divorce. Philippine
courts cannot try the case on the merits because it is tantamount to trying a case for
divorce.
The second paragraph of Article 26 is only a corrective measure to address the
anomaly that results from a marriage between a Filipino, whose laws do not allow
divorce, and a foreign citizen, whose laws allow divorce. The anomaly consists in the
Filipino spouse being tied to the marriage while the foreign spouse is free to marry
under the laws of his or her country. The correction is made by extending in the
Philippines the effect of the foreign divorce decree, which is already effective in the
country where it was rendered. The second paragraph of Article 26 of the Family
Code is based on this Courts decision in Van Dorn v. Romillo90 which declared that
the Filipino spouse "should not be discriminated against in her own country if the ends
of justice are to be served."91
The principle in Article 26 of the Family Code applies in a marriage between a Filipino
and a foreign citizen who obtains a foreign judgment nullifying the marriage on the
ground of bigamy. The Filipino spouse may file a petition abroad to declare the
marriage void on the ground of bigamy. The principle in the second paragraph of
Article 26 of the Family Code applies because the foreign spouse, after the foreign
judgment nullifying the marriage, is capacitated to remarry under the laws of his or
her country. If the foreign judgment is not recognized in the Philippines, the Filipino
spouse will be discriminatedthe foreign spouse can remarry while the Filipino
spouse cannot remarry.
Under the second paragraph of Article 26 of the Family Code, Philippine courts are
empowered to correct a situation where the Filipino spouse is still tied to the marriage
while the foreign spouse is free to marry. Moreover, notwithstanding Article 26 of the
Family Code, Philippine courts already have jurisdiction to extend the effect of a
foreign judgment in the Philippines to the extent that the foreign judgment does not
contravene domestic public policy. A critical difference between the case of a foreign
divorce decree and a foreign judgment nullifying a bigamous marriage is that bigamy,
as a ground for the nullity of marriage, is fully consistent with Philippine public policy
as expressed in Article 35(4) of the Family Code and Article 349 of the Revised Penal
Code. The Filipino spouse has the option to undergo full trial by filing a petition for
declaration of nullity of marriage under A.M. No. 02-11-10-SC, but this is not the only
remedy available to him or her. Philippine courts have jurisdiction to recognize a
foreign judgment nullifying a bigamous marriage, without prejudice to a criminal
prosecution for bigamy.
In the recognition of foreign judgments, Philippine courts are incompetent to
substitute their judgment on how a case was decided under foreign law. They cannot
decide on the "family rights and duties, or on the status, condition and legal capacity"
of the foreign citizen who is a party to the foreign judgment. Thus, Philippine courts
are limited to the question of whether to extend the effect of a foreign judgment in the
Philippines. In a foreign judgment relating to the status of a marriage involving a
citizen of a foreign country, Philippine courts only decide whether to extend its effect
to the Filipino party, under the rule of lex nationalii expressed in Article 15 of the Civil
Code.

For this purpose, Philippine courts will only determine (1) whether the foreign
judgment is inconsistent with an overriding public policy in the Philippines; and (2)
whether any alleging party is able to prove an extrinsic ground to repel the foreign
judgment, i.e. want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact. If there is neither inconsistency with public policy nor adequate
proof to repel the judgment, Philippine courts should, by default, recognize the foreign
judgment as part of the comity of nations. Section 48(b), Rule 39 of the Rules of Court
states that the foreign judgment is already "presumptive evidence of a right between
the parties." Upon recognition of the foreign judgment, this right becomes conclusive
and the judgment serves as the basis for the correction or cancellation of entry in the
civil registry. The recognition of the foreign judgment nullifying a bigamous marriage
is a subsequent event that establishes a new status, right and fact 92 that needs to be
reflected in the civil registry. Otherwise, there will be an inconsistency between the
recognition of the effectivity of the foreign judgment and the public records in the
Philippines.1wphi1

However, the recognition of a foreign judgment nullifying a bigamous marriage is

without prejudice to prosecution for bigamy under Article 349 of the Revised Penal
Code.93 The recognition of a foreign judgment nullifying a bigamous marriage is not a
ground for extinction of criminal liability under Articles 89 and 94 of the Revised Penal
Code. Moreover, under Article 91 of the Revised Penal Code, "[t]he term of
prescription [of the crime of bigamy] shall not run when the offender is absent from
the Philippine archipelago."

Since A.M. No. 02-11-10-SC is inapplicable, the Court no longer sees the need to
address the questions on venue and the contents and form of the petition under
Sections 4 and 5, respectively, of A.M. No. 02-11-10-SC.

WHEREFORE, we GRANT the petition. The Order dated 31 January 2011 and the
Resolution dated 2 March 2011 of the Regional Trial Court, Branch 107, Quezon City,
in Civil Case No. Q-11-68582 are REVERSED andSET ASIDE. The Regional Trial
Court is ORDERED to REINSTATE the petition for further proceedings in accordance
with this Decision.

SO ORDERED.

Brion, Del Castillo, Perez, and Perlas-Bernabe, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G. R. No. 183622 February 8, 2012
MEROPE ENRIQUEZ VDA. DE CATALAN, Petitioner,
vs.
LOUELLA A. CATALAN-LEE, Respondent.
RESOLUTION
SERENO, J.:
Before us is a Petition for Review assailing the Court of Appeals (CA) Decision 1 and
Resolution2 regarding the issuance of letters of administration of the intestate estate
of Orlando B. Catalan.
The facts are as follows:
Orlando B. Catalan was a naturalized American citizen. After allegedly obtaining a
divorce in the United States from his first wife, Felicitas Amor, he contracted a second
marriage with petitioner herein.
On 18 November 2004, Orlando died intestate in the Philippines.
Thereafter, on 28 February 2005, petitioner filed with the Regional Trial Court (RTC)
of Dagupan City a Petition for the issuance of letters of administration for her
appointment as administratrix of the intestate estate of Orlando. The case was
docketed as Special Proceedings (Spec. Proc.) No. 228.
On 3 March 2005, while Spec. Proc. No. 228 was pending, respondent Louella A.
Catalan-Lee, one of the children of Orlando from his first marriage, filed a similar
petition with the RTC docketed as Spec. Proc. No. 232.
The two cases were subsequently consolidated.
Petitioner prayed for the dismissal of Spec. Proc. No. 232 on the ground of litis
pendentia, considering that Spec. Proc. No. 228 covering the same estate was
already pending.
On the other hand, respondent alleged that petitioner was not considered an
interested person qualified to file a petition for the issuance of letters of administration
of the estate of Orlando. In support of her contention, respondent alleged that a
criminal case for bigamy was filed against petitioner before Branch 54 of the RTC of
Alaminos, Pangasinan, and docketed as Crim. Case No. 2699-A.
Apparently, Felicitas Amor filed a Complaint for bigamy, alleging that petitioner
contracted a second marriage to Orlando despite having been married to one
Eusebio Bristol on 12 December 1959.
On 6 August 1998, the RTC had acquitted petitioner of bigamy. 3 The trial court ruled
that since the deceased was a divorced American citizen, and since that divorce was
not recognized under Philippine jurisdiction, the marriage between him and petitioner
was not valid.
Furthermore, it took note of the action for declaration of nullity then pending action
with the trial court in Dagupan City filed by Felicitas Amor against the deceased and
petitioner. It considered the pending action to be a prejudicial question in determining
the guilt of petitioner for the crime of bigamy.
Finally, the trial court found that, in the first place, petitioner had never been married
to Eusebio Bristol.
On 26 June 2006, Branch 70 of the RTC of Burgos, Pangasinan dismissed the
Petition for the issuance of letters of administration filed by petitioner and granted that
of private respondent. Contrary to its findings in Crim. Case No. 2699-A, the RTC
held that the marriage between petitioner and Eusebio Bristol was valid and
subsisting when she married Orlando. Without expounding, it reasoned further that
her acquittal in the previous bigamy case was fatal to her cause. Thus, the trial court
held that petitioner was not an interested party who may file a petition for the
issuance of letters of administration.4
After the subsequent denial of her Motion for Reconsideration, petitioner elevated the
matter to the Court of Appeals (CA) via her Petition for Certiorari, alleging grave
abuse of discretion on the part of the RTC in dismissing her Petition for the issuance
of letters of administration.
Petitioner reiterated before the CA that the Petition filed by respondent should have
been dismissed on the ground of litis pendentia. She also insisted that, while a
petition for letters of administration may have been filed by an "uninterested person,"
the defect was cured by the appearance of a real party-in-interest. Thus, she insisted
that, to determine who has a better right to administer the decedents properties, the
RTC should have first required the parties to present their evidence before it ruled on
the matter.
On 18 October 2007, the CA promulgated the assailed Decision. First, it held that
petitioner undertook the wrong remedy. She should have instead filed a petition for
review rather than a petition for certiorari. Nevertheless, since the Petition for
Certiorari was filed within the fifteen-day reglementary period for filing a petition for
review under Sec. 4 of Rule 43, the CA allowed the Petition and continued to decide
on the merits of the case. Thus, it ruled in this wise:
As to the issue of litis pendentia, we find it not applicable in the case. For litis
pendentia to be a ground for the dismissal of an action, there must be: (a) identity of
the parties or at least such as to represent the same interest in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the same
acts, and (c) the identity in the two cases should be such that the judgment which
may be rendered in one would, regardless of which party is successful, amount to res
judicata in the other. A petition for letters of administration is a special proceeding. A
special proceeding is an application or proceeding to establish the status or right of a
party, or a particular fact. And, in contrast to an ordinary civil action, a special
proceeding involves no defendant or respondent. The only party in this kind of
proceeding is the petitioner of the applicant. Considering its nature, a subsequent
petition for letters of administration can hardly be barred by a similar pending petition
involving the estate of the same decedent unless both petitions are filed by the same
person. In the case at bar, the petitioner was not a party to the petition filed by the
private respondent, in the same manner that the latter was not made a party to the
petition filed by the former. The first element of litis pendentia is wanting. The
contention of the petitioner must perforce fail.
Moreover, to yield to the contention of the petitioner would render nugatory the
provision of the Rules requiring a petitioner for letters of administration to be an
"interested party," inasmuch as any person, for that matter, regardless of whether he
has valid interest in the estate sought to be administered, could be appointed as
administrator for as long as he files his petition ahead of any other person, in
derogation of the rights of those specifically mentioned in the order of preference in
the appointment of administrator under Rule 78, Section 6 of the Revised Rules of
Court, which provides:
xxx xxx xxx
The petitioner, armed with a marriage certificate, filed her petition for letters of
administration. As a spouse, the petitioner would have been preferred to administer
the estate of Orlando B. Catalan. However, a marriage certificate, like any other
public document, is only prima facie evidence of the facts stated therein. The fact
that the petitioner had been charged with bigamy and was acquitted has not
been disputed by the petitioner.Bigamy is an illegal marriage committed by
contracting a second or subsequent marriage before the first marriage has been
dissolved or before the absent spouse has been declared presumptively dead by a
judgment rendered in a proper proceedings. The deduction of the trial court that
the acquittal of the petitioner in the said case negates the validity of her
subsequent marriage with Orlando B. Catalan has not been disproved by her.
There was not even an attempt from the petitioner to deny the findings of the
trial court. There is therefore no basis for us to make a contrary finding. Thus, not
being an interested party and a stranger to the estate of Orlando B. Catalan, the
dismissal of her petition for letters of administration by the trial court is in place.
xxx xxx xxx
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. No
pronouncement as to costs.
SO ORDERED.5 (Emphasis supplied)
Petitioner moved for a reconsideration of this Decision. 6 She alleged that the
reasoning of the CA was illogical in stating, on the one hand, that she was acquitted
of bigamy, while, on the other hand, still holding that her marriage with Orlando was
invalid. She insists that with her acquittal of the crime of bigamy, the marriage enjoys
the presumption of validity.
On 20 June 2008, the CA denied her motion.
Hence, this Petition.
At the outset, it seems that the RTC in the special proceedings failed to appreciate
the finding of the RTC in Crim. Case No. 2699-A that petitioner was never married to
Eusebio Bristol. Thus, the trial court concluded that, because petitioner was acquitted
of bigamy, it follows that the first marriage with Bristol still existed and was valid. By
failing to take note of the findings of fact on the nonexistence of the marriage between
petitioner and Bristol, both the RTC and CA held that petitioner was not an interested
party in the estate of Orlando.
Second, it is imperative to note that at the time the bigamy case in Crim. Case No.
2699-A was dismissed, we had already ruled that under the principles of comity, our
jurisdiction recognizes a valid divorce obtained by a spouse of foreign nationality. This
doctrine was established as early as 1985 in Van Dorn v. Romillo, Jr. 7 wherein we
said:
It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered by the policy against absolute divorces[,]
the same being considered contrary to our concept of public policy and
morality. However, aliens may obtain divorces abroad, which may be recognized
in the Philippines, provided they are valid according to their national law. In this
case, the divorce in Nevada released private respondent from the marriage
from the standards of American law, under which divorce dissolves the
marriage. xxx
We reiterated this principle in Llorente v. Court of Appeals,8 to wit:
In Van Dorn v. Romillo, Jr. we held that owing to the nationality principle embodied in
Article 15 of the Civil Code, only Philippine nationals are covered by the policy against
absolute divorces, the same being considered contrary to our concept of public policy
and morality. In the same case, the Court ruled that aliens may obtain divorces
abroad, provided they are valid according to their national law.
Citing this landmark case, the Court held in Quita v. Court of Appeals, that once
proven that respondent was no longer a Filipino citizen when he obtained the
divorce from petitioner, the ruling in Van Dorn would become applicable and
petitioner could "very well lose her right to inherit" from him.
In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the respondent in
his country, the Federal Republic of Germany. There, we stated that divorce and its
legal effects may be recognized in the Philippines insofar as respondent is
concerned in view of the nationality principle in our civil law on the status of
persons.
For failing to apply these doctrines, the decision of the Court of Appeals must be
reversed. We hold that the divorce obtained by Lorenzo H. Llorente from his
first wife Paula was valid and recognized in this jurisdiction as a matter of
comity. xxx
Nonetheless, the fact of divorce must still first be proven as we have enunciated in
Garcia v. Recio,9 to wit:
Respondent is getting ahead of himself. Before a foreign judgment is given
presumptive evidentiary value, the document must first be presented and admitted in
evidence. A divorce obtained abroad is proven by the divorce decree itself. Indeed
the best evidence of a judgment is the judgment itself. The decree purports to be a
written act or record of an act of an official body or tribunal of a foreign country.
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may
be proven as a public or official record of a foreign country by either (1) an official
publication or (2) a copy thereof attested by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign country in which the record is kept
and (b) authenticated by the seal of his office.
The divorce decree between respondent and Editha Samson appears to be an
authentic one issued by an Australian family court. However, appearance is not
sufficient; compliance with the aforementioned rules on evidence must be
demonstrated.
Fortunately for respondent's cause, when the divorce decree of May 18, 1989 was
submitted in evidence, counsel for petitioner objected, not to its admissibility, but only
to the fact that it had not been registered in the Local Civil Registry of Cabanatuan
City. The trial court ruled that it was admissible, subject to petitioner's qualification.
Hence, it was admitted in evidence and accorded weight by the judge. Indeed,
petitioner's failure to object properly rendered the divorce decree admissible as a
written act of the Family Court of Sydney, Australia.
Compliance with the quoted articles (11, 13 and 52) of the Family Code is not
necessary; respondent was no longer bound by Philippine personal laws after he
acquired Australian citizenship in 1992. Naturalization is the legal act of adopting an
alien and clothing him with the political and civil rights belonging to a citizen.
Naturalized citizens, freed from the protective cloak of their former states, don the
attires of their adoptive countries. By becoming an Australian, respondent severed his
allegiance to the Philippines and the vinculum juris that had tied him to Philippine
personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian divorce law falls upon
petitioner, because she is the party challenging the validity of a foreign judgment. He
contends that petitioner was satisfied with the original of the divorce decree and was
cognizant of the marital laws of Australia, because she had lived and worked in that
country for quite a long time. Besides, the Australian divorce law is allegedly known
by Philippine courts; thus, judges may take judicial notice of foreign laws in the
exercise of sound discretion.
We are not persuaded. The burden of proof lies with the "party who alleges the
existence of a fact or thing necessary in the prosecution or defense of an action." In
civil cases, plaintiffs have the burden of proving the material allegations of the
complaint when those are denied by the answer; and defendants have the burden of
proving the material allegations in their answer when they introduce new matters.
Since the divorce was a defense raised by respondent, the burden of proving the
pertinent Australian law validating it falls squarely upon him.
It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign
laws.1wphi1 Like any other facts, they must be alleged and proved. Australian
marital laws are not among those matters that judges are supposed to know by
reason of their judicial function. The power of judicial notice must be exercised with
caution, and every reasonable doubt upon the subject should be resolved in the
negative. (Emphasis supplied)
It appears that the trial court no longer required petitioner to prove the validity of
Orlandos divorce under the laws of the United States and the marriage between
petitioner and the deceased. Thus, there is a need to remand the proceedings to the
trial court for further reception of evidence to establish the fact of divorce.
Should petitioner prove the validity of the divorce and the subsequent marriage, she
has the preferential right to be issued the letters of administration over the estate.
Otherwise, letters of administration may be issued to respondent, who is undisputedly
the daughter or next of kin of the deceased, in accordance with Sec. 6 of Rule 78 of
the Revised Rules of Court.
This is consistent with our ruling in San Luis v. San Luis,10 in which we said:
Applying the above doctrine in the instant case, the divorce decree allegedly obtained
by Merry Lee which absolutely allowed Felicisimo to remarry, would have vested
Felicidad with the legal personality to file the present petition as Felicisimo's surviving
spouse. However, the records show that there is insufficient evidence to prove
the validity of the divorce obtained by Merry Lee as well as the marriage of
respondent and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, the
Court laid down the specific guidelines for pleading and proving foreign law and
divorce judgments. It held that presentation solely of the divorce decree is insufficient
and that proof of its authenticity and due execution must be presented. Under
Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or
official record of a foreign country by either (1) an official publication or (2) a copy
thereof attested by the officer having legal custody of the document. If the record is
not kept in the Philippines, such copy must be (a) accompanied by a certificate issued
by the proper diplomatic or consular officer in the Philippine foreign service stationed
in the foreign country in which the record is kept and (b) authenticated by the seal of
his office.

With regard to respondent's marriage to Felicisimo allegedly solemnized in California,

U.S.A., she submitted photocopies of the Marriage Certificate and the annotated text
of the Family Law Act of California which purportedly show that their marriage was
done in accordance with the said law. As stated in Garcia, however, the Court cannot
take judicial notice of foreign laws as they must be alleged and proved.

Therefore, this case should be remanded to the trial court for further reception
of evidence on the divorce decree obtained by Merry Lee and the marriage of
respondent and Felicisimo. (Emphasis supplied)

Thus, it is imperative for the trial court to first determine the validity of the divorce to
ascertain the rightful party to be issued the letters of administration over the estate of
Orlando B. Catalan.

WHEREFORE, premises considered, the Petition is hereby PARTIALLY

GRANTED. The Decision dated 18 October 2007 and the Resolution dated 20 June
2008 of the Court of Appeals are hereby REVERSED and SET ASIDE. Let this case
be REMANDED to Branch 70 of the Regional Trial Court of Burgos, Pangasinan for
further proceedings in accordance with this Decision.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 186571 August 11, 2010
GERBERT R. CORPUZ, Petitioner,
vs.
DAISYLYN TIROL STO. TOMAS and The SOLICITOR GENERAL, Respondents.
DECISION
BRION, J.:
Before the Court is a direct appeal from the decision 1 of the Regional Trial Court
(RTC) of Laoag City, Branch 11, elevated via a petition for review on certiorari 2 under
Rule 45 of the Rules of Court (present petition).
Petitioner Gerbert R. Corpuz was a former Filipino citizen who acquired Canadian
citizenship through naturalization on November 29, 2000. 3 On January 18, 2005,
Gerbert married respondent Daisylyn T. Sto. Tomas, a Filipina, in Pasig City. 4 Due to
work and other professional commitments, Gerbert left for Canada soon after the
wedding. He returned to the Philippines sometime in April 2005 to surprise Daisylyn,
but was shocked to discover that his wife was having an affair with another man. Hurt
and disappointed, Gerbert returned to Canada and filed a petition for divorce. The
Superior Court of Justice, Windsor, Ontario, Canada granted Gerberts petition for
divorce on December 8, 2005. The divorce decree took effect a month later, on
January 8, 2006.5
Two years after the divorce, Gerbert has moved on and has found another Filipina to
love. Desirous of marrying his new Filipina fiance in the Philippines, Gerbert went to
the Pasig City Civil Registry Office and registered the Canadian divorce decree on his
and Daisylyns marriage certificate. Despite the registration of the divorce decree, an
official of the National Statistics Office (NSO) informed Gerbert that the marriage
between him and Daisylyn still subsists under Philippine law; to be enforceable, the
foreign divorce decree must first be judicially recognized by a competent Philippine
court, pursuant to NSO Circular No. 4, series of 1982.6
Accordingly, Gerbert filed a petition for judicial recognition of foreign divorce and/or
declaration of marriage as dissolved (petition) with the RTC. Although summoned,
Daisylyn did not file any responsive pleading but submitted instead a notarized
letter/manifestation to the trial court. She offered no opposition to Gerberts petition
and, in fact, alleged her desire to file a similar case herself but was prevented by
financial and personal circumstances. She, thus, requested that she be considered as
a party-in-interest with a similar prayer to Gerberts.
In its October 30, 2008 decision,7 the RTC denied Gerberts petition. The RTC
concluded that Gerbert was not the proper party to institute the action for judicial
recognition of the foreign divorce decree as he is a naturalized Canadian citizen. It
ruled that only the Filipino spouse can avail of the remedy, under the second
paragraph of Article 26 of the Family Code,8 in order for him or her to be able to
remarry under Philippine law.9 Article 26 of the Family Code reads:
Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws
in force in the country where they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and
(6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and
a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or
her to remarry, the Filipino spouse shall likewise have capacity to remarry under
Philippine law.
This conclusion, the RTC stated, is consistent with the legislative intent behind the
enactment of the second paragraph of Article 26 of the Family Code, as determined
by the Court in Republic v. Orbecido III;10 the provision was enacted to "avoid the
absurd situation where the Filipino spouse remains married to the alien spouse who,
after obtaining a divorce, is no longer married to the Filipino spouse." 11
THE PETITION
From the RTCs ruling,12 Gerbert filed the present petition.13
Gerbert asserts that his petition before the RTC is essentially for declaratory relief,
similar to that filed in Orbecido; he, thus, similarly asks for a determination of his
rights under the second paragraph of Article 26 of the Family Code. Taking into
account the rationale behind the second paragraph of Article 26 of the Family Code,
he contends that the provision applies as well to the benefit of the alien spouse. He
claims that the RTC ruling unduly stretched the doctrine in Orbecido by limiting the
standing to file the petition only to the Filipino spouse an interpretation he claims to
be contrary to the essence of the second paragraph of Article 26 of the Family Code.
He considers himself as a proper party, vested with sufficient legal interest, to institute
the case, as there is a possibility that he might be prosecuted for bigamy if he marries
his Filipina fiance in the Philippines since two marriage certificates, involving him,
would be on file with the Civil Registry Office. The Office of the Solicitor General and
Daisylyn, in their respective Comments,14 both support Gerberts position.
Essentially, the petition raises the issue of whether the second paragraph of Article 26
of the Family Code extends to aliens the right to petition a court of this jurisdiction for
the recognition of a foreign divorce decree.
THE COURTS RULING
The alien spouse can claim no right under the second paragraph of Article 26 of the
Family Code as the substantive right it establishes is in favor of the Filipino spouse
The resolution of the issue requires a review of the legislative history and intent
behind the second paragraph of Article 26 of the Family Code.
The Family Code recognizes only two types of defective marriages void15 and
voidable16 marriages. In both cases, the basis for the judicial declaration of absolute
nullity or annulment of the marriage exists before or at the time of the marriage.
Divorce, on the other hand, contemplates the dissolution of the lawful union for cause
arising after the marriage.17 Our family laws do not recognize absolute divorce
between Filipino citizens.18
Recognizing the reality that divorce is a possibility in marriages between a Filipino
and an alien, President Corazon C. Aquino, in the exercise of her legislative powers
under the Freedom Constitution,19 enacted Executive Order No. (EO) 227, amending
Article 26 of the Family Code to its present wording, as follows:
Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws
in force in the country where they were solemnized, and valid there as such, shall
also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and
(6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and
a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or
her to remarry, the Filipino spouse shall likewise have capacity to remarry under
Philippine law.
Through the second paragraph of Article 26 of the Family Code, EO 227 effectively
incorporated into the law this Courts holding in Van Dorn v. Romillo, Jr. 20 and Pilapil
v. Ibay-Somera.21 In both cases, the Court refused to acknowledge the alien spouses
assertion of marital rights after a foreign courts divorce decree between the alien and
the Filipino. The Court, thus, recognized that the foreign divorce had already severed
the marital bond between the spouses. The Court reasoned in Van Dorn v. Romillo
that:
To maintain x x x that, under our laws, [the Filipino spouse] has to be considered still
married to [the alien spouse] and still subject to a wife's obligations x x x cannot be
just. [The Filipino spouse] should not be obliged to live together with, observe respect
and fidelity, and render support to [the alien spouse]. The latter should not continue to
be one of her heirs with possible rights to conjugal property. She should not be
discriminated against in her own country if the ends of justice are to be served.22
As the RTC correctly stated, the provision was included in the law "to avoid the
absurd situation where the Filipino spouse remains married to the alien spouse who,
after obtaining a divorce, is no longer married to the Filipino spouse." 23 The legislative
intent is for the benefit of the Filipino spouse, by clarifying his or her marital status,
settling the doubts created by the divorce decree. Essentially, the second paragraph
of Article 26 of the Family Code provided the Filipino spouse a substantive right to
have his or her marriage to the alien spouse considered as dissolved, capacitating
him or her to remarry.24 Without the second paragraph of Article 26 of the Family
Code, the judicial recognition of the foreign decree of divorce, whether in a
proceeding instituted precisely for that purpose or as a related issue in another
proceeding, would be of no significance to the Filipino spouse since our laws do not
recognize divorce as a mode of severing the marital bond;25 Article 17 of the Civil
Code provides that the policy against absolute divorces cannot be subverted by
judgments promulgated in a foreign country. The inclusion of the second paragraph in
Article 26 of the Family Code provides the direct exception to this rule and serves as
basis for recognizing the dissolution of the marriage between the Filipino spouse and
his or her alien spouse.
Additionally, an action based on the second paragraph of Article 26 of the Family
Code is not limited to the recognition of the foreign divorce decree. If the court finds
that the decree capacitated the alien spouse to remarry, the courts can declare that
the Filipino spouse is likewise capacitated to contract another marriage. No court in
this jurisdiction, however, can make a similar declaration for the alien spouse (other
than that already established by the decree), whose status and legal capacity are
generally governed by his national law.26
Given the rationale and intent behind the enactment, and the purpose of the second
paragraph of Article 26 of the Family Code, the RTC was correct in limiting the
applicability of the provision for the benefit of the Filipino spouse. In other words, only
the Filipino spouse can invoke the second paragraph of Article 26 of the Family Code;
the alien spouse can claim no right under this provision.
The foreign divorce decree is presumptive evidence of a right that clothes the party
with legal interest to petition for its recognition in this jurisdiction
We qualify our above conclusion i.e., that the second paragraph of Article 26 of the
Family Code bestows no rights in favor of aliens with the complementary statement
that this conclusion is not sufficient basis to dismiss Gerberts petition before the
RTC. In other words, the unavailability of the second paragraph of Article 26 of the
Family Code to aliens does not necessarily strip Gerbert of legal interest to petition
the RTC for the recognition of his foreign divorce decree. The foreign divorce decree
itself, after its authenticity and conformity with the aliens national law have been duly
proven according to our rules of evidence, serves as a presumptive evidence of right
in favor of Gerbert, pursuant to Section 48, Rule 39 of the Rules of Court which
provides for the effect of foreign judgments. This Section states:
SEC. 48. Effect of foreign judgments or final orders.The effect of a judgment or final
order of a tribunal of a foreign country, having jurisdiction to render the judgment or
final order is as follows:
(a) In case of a judgment or final order upon a specific thing, the judgment or
final order is conclusive upon the title of the thing; and
(b) In case of a judgment or final order against a person, the judgment or
final order is presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title.
In either case, the judgment or final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
To our mind, direct involvement or being the subject of the foreign judgment is
sufficient to clothe a party with the requisite interest to institute an action before our
courts for the recognition of the foreign judgment. In a divorce situation, we have
declared, no less, that the divorce obtained by an alien abroad may be recognized in
the Philippines, provided the divorce is valid according to his or her national law. 27
The starting point in any recognition of a foreign divorce judgment is the
acknowledgment that our courts do not take judicial notice of foreign judgments and
laws. Justice Herrera explained that, as a rule, "no sovereign is bound to give effect
within its dominion to a judgment rendered by a tribunal of another country."28 This
means that the foreign judgment and its authenticity must be proven as facts under
our rules on evidence, together with the aliens applicable national law to show the
effect of the judgment on the alien himself or herself.29 The recognition may be made
in an action instituted specifically for the purpose or in another action where a party
invokes the foreign decree as an integral aspect of his claim or defense.
In Gerberts case, since both the foreign divorce decree and the national law of the
alien, recognizing his or her capacity to obtain a divorce, purport to be official acts of
a sovereign authority, Section 24, Rule 132 of the Rules of Court comes into play.
This Section requires proof, either by (1) official publications or (2) copies attested by
the officer having legal custody of the documents. If the copies of official records are
not kept in the Philippines, these must be (a) accompanied by a certificate issued by
the proper diplomatic or consular officer in the Philippine foreign service stationed in
the foreign country in which the record is kept and (b) authenticated by the seal of his
office.
The records show that Gerbert attached to his petition a copy of the divorce decree,
as well as the required certificates proving its authenticity, 30 but failed to include a
copy of the Canadian law on divorce.31 Under this situation, we can, at this point,
simply dismiss the petition for insufficiency of supporting evidence, unless we deem it
more appropriate to remand the case to the RTC to determine whether the divorce
decree is consistent with the Canadian divorce law.
We deem it more appropriate to take this latter course of action, given the Article 26
interests that will be served and the Filipina wifes (Daisylyns) obvious conformity
with the petition. A remand, at the same time, will allow other interested parties to
oppose the foreign judgment and overcome a petitioners presumptive evidence of a
right by proving want of jurisdiction, want of notice to a party, collusion, fraud, or clear
mistake of law or fact. Needless to state, every precaution must be taken to ensure
conformity with our laws before a recognition is made, as the foreign judgment, once
recognized, shall have the effect of res judicata32 between the parties, as provided in
Section 48, Rule 39 of the Rules of Court.33
In fact, more than the principle of comity that is served by the practice of reciprocal
recognition of foreign judgments between nations, the res judicata effect of the foreign
judgments of divorce serves as the deeper basis for extending judicial recognition and
for considering the alien spouse bound by its terms. This same effect, as discussed
above, will not obtain for the Filipino spouse were it not for the substantive rule that
the second paragraph of Article 26 of the Family Code provides.
Considerations beyond the recognition of the foreign divorce decree
As a matter of "housekeeping" concern, we note that the Pasig City Civil Registry
Office has already recorded the divorce decree on Gerbert and Daisylyns marriage
certificate based on the mere presentation of the decree. 34We consider the recording
to be legally improper; hence, the need to draw attention of the bench and the bar to
what had been done.
Article 407 of the Civil Code states that "[a]cts, events and judicial decrees
concerning the civil status of persons shall be recorded in the civil register." The law
requires the entry in the civil registry of judicial decrees that produce legal
consequences touching upon a persons legal capacity and status, i.e., those
affecting "all his personal qualities and relations, more or less permanent in nature,
not ordinarily terminable at his own will, such as his being legitimate or illegitimate, or
his being married or not."35
A judgment of divorce is a judicial decree, although a foreign one, affecting a persons
legal capacity and status that must be recorded. In fact, Act No. 3753 or the Law on
Registry of Civil Status specifically requires the registration of divorce decrees in the
civil registry:
Sec. 1. Civil Register. A civil register is established for recording the civil status of
persons, in which shall be entered:
(a) births;
(b) deaths;
(c) marriages;
(d) annulments of marriages;
(e) divorces;
(f) legitimations;
(g) adoptions;
(h) acknowledgment of natural children;
(i) naturalization; and
(j) changes of name.
 xxxx
Sec. 4. Civil Register Books. The local registrars shall keep and preserve in their
offices the following books, in which they shall, respectively make the proper entries
concerning the civil status of persons:
(1) Birth and death register;
(2) Marriage register, in which shall be entered not only the marriages
solemnized but also divorces and dissolved marriages.
(3) Legitimation, acknowledgment, adoption, change of name and
naturalization register.
But while the law requires the entry of the divorce decree in the civil registry, the law
and the submission of the decree by themselves do not ipso facto authorize the
decrees registration. The law should be read in relation with the requirement of a
judicial recognition of the foreign judgment before it can be given res judicata effect.
In the context of the present case, no judicial order as yet exists recognizing the
foreign divorce decree. Thus, the Pasig City Civil Registry Office acted totally out of
turn and without authority of law when it annotated the Canadian divorce decree on
Gerbert and Daisylyns marriage certificate, on the strength alone of the foreign
decree presented by Gerbert.
hearing must be published in a newspaper of general circulation.40 As these basic
jurisdictional requirements have not been met in the present case, we cannot
consider the petition Gerbert filed with the RTC as one filed under Rule 108 of the
Rules of Court.
We hasten to point out, however, that this ruling should not be construed as requiring
two separate proceedings for the registration of a foreign divorce decree in the civil
registry one for recognition of the foreign decree and another specifically for
cancellation of the entry under Rule 108 of the Rules of Court. The recognition of the
foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of
special proceedings (such as that in Rule 108 of the Rules of Court) is precisely to
establish the status or right of a party or a particular fact. Moreover, Rule 108 of the
Rules of Court can serve as the appropriate adversarial proceeding 41 by which the
applicability of the foreign judgment can be measured and tested in terms of
jurisdictional infirmities, want of notice to the party, collusion, fraud, or clear mistake
of law or fact.
WHEREFORE, we GRANT the petition for review on certiorari, and REVERSE the
October 30, 2008 decision of the Regional Trial Court of Laoag City, Branch 11, as
well as its February 17, 2009 order. We order the REMAND of the case to the trial
court for further proceedings in accordance with our ruling above. Let a copy of this
Decision be furnished the Civil Registrar General. No costs.
SO ORDERED.

Evidently, the Pasig City Civil Registry Office was aware of the requirement of a court ARTURO D. BRION
recognition, as it cited NSO Circular No. 4, series of 1982, 36 and Department of Associate Justice
Justice Opinion No. 181, series of 198237 both of which required a final order from a
competent Philippine court before a foreign judgment, dissolving a marriage, can be
registered in the civil registry, but it, nonetheless, allowed the registration of the
decree. For being contrary to law, the registration of the foreign divorce decree
without the requisite judicial recognition is patently void and cannot produce any legal
effect.1avvphi1

Another point we wish to draw attention to is that the recognition that the RTC may
extend to the Canadian divorce decree does not, by itself, authorize the cancellation
of the entry in the civil registry. A petition for recognition of a foreign judgment is not
the proper proceeding, contemplated under the Rules of Court, for the cancellation of
entries in the civil registry.

Article 412 of the Civil Code declares that "no entry in a civil register shall be changed
or corrected, without judicial order." The Rules of Court supplements Article 412 of
the Civil Code by specifically providing for a special remedial proceeding by which
entries in the civil registry may be judicially cancelled or corrected. Rule 108 of the
Rules of Court sets in detail the jurisdictional and procedural requirements that must
be complied with before a judgment, authorizing the cancellation or correction, may
be annotated in the civil registry. It also requires, among others, that the verified
petition must be filed with the RTC of the province where the corresponding civil
registry is located;38 that the civil registrar and all persons who have or claim any
interest must be made parties to the proceedings;39 and that the time and place for
 Republic of the Philippines The Facts
SUPREME COURT
Manila Vicente and Rebecca were married on April 20, 1979 in Sanctuario de San Jose,
Greenhills, Mandaluyong City. On its face, the Marriage Certificate 6 identified
SECOND DIVISION Rebecca, then 26 years old, to be an American citizen7 born in Agaa, Guam, USA to
Cesar Tanchiong Makapugay, American, and Helen Corn Makapugay, American.
G.R. No. 155635 November 7, 2008
On November 27, 1982 in San Francisco, California, Rebecca gave birth to Marie
MARIA REBECCA MAKAPUGAY BAYOT, petitioner, Josephine Alexandra or Alix. From then on, Vicente and Rebecca's marital
vs. relationship seemed to have soured as the latter, sometime in 1996, initiated divorce
THE HONORABLE COURT OF APPEALS and VICENTE MADRIGAL proceedings in the Dominican Republic. Before the Court of the First Instance of the
BAYOT, respondents. Judicial District of Santo Domingo, Rebecca personally appeared, while Vicente was
duly represented by counsel. On February 22, 1996, the Dominican court issuedCivil
Decree No. 362/96,8 ordering the dissolution of the couple's marriage and "leaving
x-------------------------------------------x them to remarry after completing the legal requirements," but giving them joint
custody and guardianship over Alix. Over a year later, the same court would
G.R. No. 163979 November 7, 2008 issue Civil Decree No. 406/97,9 settling the couple's property relations pursuant to an
Agreement10 they executed on December 14, 1996. Said agreement specifically
MARIA REBECCA MAKAPUGAY BAYOT, petitioner, stated that the "conjugal property which they acquired during their marriage consist[s]
vs. only of the real property and all the improvements and personal properties therein
VICENTE MADRIGAL BAYOT, respondent. contained at 502 Acacia Avenue, Alabang, Muntinlupa." 11

DECISION
VELASCO, JR., J.:
The Case
Before us are these two petitions interposed by petitioner Maria Rebecca Makapugay
Bayot impugning certain issuances handed out by the Court of Appeals (CA) in CA-
G.R. SP No. 68187.
In the first, a petition for certiorari1 under Rule 65 and docketed as G.R. No.
155635, Rebecca assails and seeks to nullify the April 30, 2002 Resolution2 of the
CA, as reiterated in another Resolution of September 2, 2002,3 granting a writ of
preliminary injunction in favor of private respondent Vicente Madrigal Bayot staving
off the trial court's grant of support pendente lite to Rebecca.
The second, a petition for review under Rule 45,4 docketed G.R. No. 163979, assails
the March 25, 2004 Decision5 of the CA, (1) dismissing Civil Case No. 01-094, a suit
for declaration of absolute nullity of marriage with application for support commenced
by Rebecca against Vicente before the Regional Trial Court (RTC) in Muntinlupa City;
and (2) setting aside certain orders and a resolution issued by the RTC in the said
case.
Meanwhile, on March 14, 1996, or less than a month from the issuance of Civil
Decree No. 362/96, Rebecca filed with the Makati City RTC a petition 12 dated January
26, 1996, with attachments, for declaration of nullity of marriage, docketed as Civil
Case No. 96-378. Rebecca, however, later moved13 and secured approval14 of the
motion to withdraw the petition.
On May 29, 1996, Rebecca executed an Affidavit of Acknowledgment 15 stating under
oath that she is an American citizen; that, since 1993, she and Vicente have been
living separately; and that she is carrying a child not of Vicente.
On March 21, 2001, Rebecca filed another petition, this time before the Muntinlupa
City RTC, for declaration of absolute nullity of marriage16 on the ground of Vicente's
alleged psychological incapacity. Docketed as Civil Case No. 01-094 and entitled
as Maria Rebecca Makapugay Bayot v. Vicente Madrigal Bayot, the petition was
eventually raffled to Branch 256 of the court. In it, Rebecca also sought the
dissolution of the conjugal partnership of gains with application for support pendente
lite for her and Alix. Rebecca also prayed that Vicente be ordered to pay a permanent
monthly support for their daughter Alix in the amount of PhP 220,000.
On June 8, 2001, Vicente filed a Motion to Dismiss 17 on, inter alia, the grounds of lack
of cause of action and that the petition is barred by the prior judgment of divorce.
Earlier, on June 5, 2001, Rebecca filed and moved for the allowance of her
application for support pendente lite.

Per its Resolution of August 11, 2004, the Court ordered the consolidation of both To the motion to dismiss, Rebecca interposed an opposition, insisting on her Filipino
cases. citizenship, as affirmed by the Department of Justice (DOJ), and that, therefore, there
is no valid divorce to speak of.
Meanwhile, Vicente, who had in the interim contracted another marriage, and
Rebecca commenced several criminal complaints against each other. Specifically,
Vicente filed adultery and perjury complaints against Rebecca. Rebecca, on the other
hand, charged Vicente with bigamy and concubinage.
Ruling of the RTC on the Motion to Dismiss
and Motion for Support Pendente Lite
On August 8, 2001, the RTC issued an Order18 denying Vicente's motion to dismiss
Civil Case No. 01-094 and granting Rebecca's application for support pendente lite,
disposing as follows:
Wherefore, premises considered, the Motion to Dismiss filed by the
respondent is DENIED. Petitioner's Application in Support of the Motion for
Support Pendente Lite is hereby GRANTED. Respondent is hereby ordered
to remit the amount of TWO HUNDRED AND TWENTY THOUSAND
PESOS (Php 220,000.00) a month to Petitioner as support for the duration
of the proceedings relative to the instant Petition.
SO ORDERED.19
The RTC declared, among other things, that the divorce judgment invoked by Vicente
as bar to the petition for declaration of absolute nullity of marriage is a matter of
defense best taken up during actual trial. As to the grant of support pendente lite, the
trial court held that a mere allegation of adultery against Rebecca does not operate to
preclude her from receiving legal support.
Following the denial20 of his motion for reconsideration of the above August 8, 2001
RTC order, Vicente went to the CA on a petition for certiorari, with a prayer for the
issuance of a temporary restraining order (TRO) and/or writ of preliminary
injunction.21 His petition was docketed as CA-G.R. SP No. 68187.
Grant of Writ of Preliminary Injunction by the CA
On January 9, 2002, the CA issued the desired TRO.22 On April 30, 2002, the
appellate court granted, via a Resolution, the issuance of a writ of preliminary
injunction, the decretal portion of which reads:
IN VIEW OF ALL THE FOREGOING, pending final resolution of the petition
at bar, let the Writ of Preliminary Injunction be ISSUED in this case,
enjoining the respondent court from implementing the assailed Omnibus
Order dated August 8, 2001 and the Order dated November 20, 2001, and
from conducting further proceedings in Civil Case No. 01-094, upon the
posting of an injunction bond in the amount of P250,000.00.
SO ORDERED.23
Rebecca moved24 but was denied reconsideration of the aforementioned April 30,
2002 resolution. In the meantime, on May 20, 2002, the preliminary injunctive
writ25 was issued. Rebecca also moved for reconsideration of this issuance, but the
CA, by Resolution dated September 2, 2002, denied her motion.
The adverted CA resolutions of April 30, 2002 and September 2, 2002 are presently
being assailed in Rebecca's petition for certiorari, docketed under G.R. No. 155635.
Ruling of the CA
Pending resolution of G.R. No. 155635, the CA, by a Decision dated March 25, 2004,
effectively dismissed Civil Case No. 01-094, and set aside incidental orders the RTC
issued in relation to the case. The fallo of the presently assailed CA Decision reads:
IN VIEW OF THE FOREGOING, the petition is GRANTED. The Omnibus
Order dated August 8, 2001 and the Order dated November 20, 2001
are REVERSED and SET ASIDE and a new one entered DISMISSING Civil
Case No. 01-094, for failure to state a cause of action. No pronouncement
as to costs.
SO ORDERED.26
To the CA, the RTC ought to have granted Vicente's motion to dismiss on the basis of
the following premises:
(1) As held in China Road and Bridge Corporation v. Court of Appeals, the
hypothetical-admission rule applies in determining whether a complaint or petition
states a cause of action.27 Applying said rule in the light of the essential elements of a
cause of action,28 Rebecca had no cause of action against Vicente for declaration of
nullity of marriage.
(2) Rebecca no longer had a legal right in this jurisdiction to have her marriage with
Vicente declared void, the union having previously been dissolved on February 22,
1996 by the foreign divorce decree she personally secured as an American citizen.
Pursuant to the second paragraph of Article 26 of the Family Code, such divorce
restored Vicente's capacity to contract another marriage.
(3) Rebecca's contention about the nullity of a divorce, she being a Filipino citizen at
the time the foreign divorce decree was rendered, was dubious. Her allegation as to
her alleged Filipino citizenship was also doubtful as it was not shown that her father,
at the time of her birth, was still a Filipino citizen. The Certification of Birth of Rebecca
issued by the Government of Guam also did not indicate the nationality of her father.
(4) Rebecca was estopped from denying her American citizenship, having professed
to have that nationality status and having made representations to that effect during
momentous events of her life, such as: (a) during her marriage; (b) when she applied
for divorce; and (c) when she applied for and eventually secured an American
passport on January 18, 1995, or a little over a year before she initiated the first but
later withdrawn petition for nullity of her marriage (Civil Case No. 96-378) on March
14, 1996.
(5) Assuming that she had dual citizenship, being born of a purportedly Filipino father
in Guam, USA which follows the jus soli principle, Rebecca's representation and
assertion about being an American citizen when she secured her foreign divorce
precluded her from denying her citizenship and impugning the validity of the divorce.
Rebecca seasonably filed a motion for reconsideration of the above Decision, but this
recourse was denied in the equally assailed June 4, 2004 Resolution.29 Hence,
Rebecca's Petition for Review on Certiorari under Rule 45, docketed under G.R. No.
163979.
The Issues
In G.R. No. 155635, Rebecca raises four (4) assignments of errors as grounds for the
allowance of her petition, all of which converged on the proposition that the CA erred
in enjoining the implementation of the RTC's orders which would have entitled her to
support pending final resolution of Civil Case No. 01-094.
In G.R. No. 163979, Rebecca urges the reversal of the assailed CA decision
submitting as follows:
I
THE COURT OF APPEALS GRAVELY ERRED IN NOT MENTIONING AND
NOT TAKING INTO CONSIDERATION IN ITS APPRECIATION OF THE
FACTS THE FACT OF PETITIONER'S FILIPINO CITIZENSHIP AS
CATEGORICALLY STATED AND ALLEGED IN HER PETITION BEFORE
THE COURT A QUO.
II
THE COURT OF APPEALS GRAVELY ERRED IN RELYING ONLY ON
ANNEXES TO THE PETITION IN RESOLVING THE MATTERS BROUGHT
BEFORE IT.
III
THE COURT OF APPEALS GRAVELY ERRED IN FAILING TO CONSIDER
THAT RESPONDENT IS ESTOPPED FROM CLAIMING THAT HIS
MARRIAGE TO PETITIONER HAD ALREADY BEEN DISSOLVED BY
VIRTUE OF HIS SUBSEQUENT AND CONCURRENT ACTS.
IV
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THERE
WAS ABUSE OF DISCRETION ON THE PART OF THE TRIAL COURT,
MUCH LESS A GRAVE ABUSE.30
We shall first address the petition in G.R. No. 163979, its outcome being
determinative of the success or failure of the petition in G.R. No. 155635.
Three legal premises need to be underscored at the outset. First, a divorce obtained
abroad by an alien married to a Philippine national may be recognized in the
Philippines, provided the decree of divorce is valid according to the national law of the
foreigner.31 Second, the reckoning point is not the citizenship of the divorcing parties
at birth or at the time of marriage, but their citizenship at the time a valid divorce is
obtained abroad. And third, an absolute divorce secured by a Filipino married to
another Filipino is contrary to our concept of public policy and morality and shall not
be recognized in this jurisdiction.32
Given the foregoing perspective, the determinative issue tendered in G.R. No.
155635, i.e., the propriety of the granting of the motion to dismiss by the appellate
court, resolves itself into the questions of: first, whether petitioner Rebecca was a
Filipino citizen at the time the divorce judgment was rendered in the Dominican
Republic on February 22, 1996; and second, whether the judgment of divorce is valid
and, if so, what are its consequent legal effects?
The Court's Ruling
The petition is bereft of merit.
Rebecca an American Citizen in the Purview of This Case
There can be no serious dispute that Rebecca, at the time she applied for and
obtained her divorce from Vicente, was an American citizen and remains to be one,
absent proof of an effective repudiation of such citizenship. The following are
compelling circumstances indicative of her American citizenship: (1) she was born in
Agaa, Guam, USA; (2) the principle of jus soli is followed in this American territory
granting American citizenship to those who are born there; and (3) she was, and may
still be, a holder of an American passport.33
And as aptly found by the CA, Rebecca had consistently professed, asserted, and
represented herself as an American citizen, particularly: (1) during her marriage as
shown in the marriage certificate; (2) in the birth certificate of Alix; and (3) when she
secured the divorce from the Dominican Republic. Mention may be made of the
Affidavit of Acknowledgment34 in which she stated being an American citizen.
It is true that Rebecca had been issued by the Bureau of Immigration (Bureau) of
Identification (ID) Certificate No. RC 9778 and a Philippine Passport. On its face, ID
Certificate No. RC 9778 would tend to show that she has indeed been recognized as
a Filipino citizen. It cannot be over-emphasized, however, that such recognition was
given only on June 8, 2000 upon the affirmation by the Secretary of Justice of
Rebecca's recognition pursuant to the Order of Recognition issued by Bureau
Associate Commissioner Edgar L. Mendoza.
For clarity, we reproduce in full the contents of ID Certificate No. RC 9778:
To Whom It May Concern:
This is to certify that *MARIA REBECCA MAKAPUGAY BAYOT* whose
photograph and thumbprints are affixed hereto and partially covered by the
seal of this Office, and whose other particulars are as follows:
Place of Birth: Guam, USA Date of Birth: March 5, 1953
Sex: female Civil Status: married Color
of Hair: brown
Color of Eyes: brown Distinguishing marks on
face: none
was - r e c o g n i z e d - as a citizen of the Philippines as per pursuant to
Article IV, Section 1, Paragraph 3 of the 1935 Constitution per order of
Recognition JBL 95-213 signed by Associate Commissioner Jose B. Lopez
dated October 6, 1995, and duly affirmed by Secretary of Justice Artemio G.
Tuquero in his 1st Indorsement dated June 8, 2000.
Issued for identification purposes only. NOT VALID for travel purposes.
Given under my hand and seal this 11th day of October, 1995
(SGD) EDGAR L. MENDOZA
ASSO. COMMISSIONER
Official Receipt No. 5939988
issued at Manila
dated Oct. 10, 1995 for P 2,000
From the text of ID Certificate No. RC 9778, the following material facts and dates
may be deduced: (1) Bureau Associate Commissioner Jose B. Lopez issued the
Order of Recognition on October 6, 1995; (2) the 1st Indorsement of Secretary of
Justice Artemio G. Tuquero affirming Rebecca's recognition as a Filipino citizen was
issued on June 8, 2000 or almost five years from the date of the order of recognition;
and (3) ID Certificate No. RC 9778 was purportedly issued on October 11, 1995after
the payment of the PhP 2,000 fee on October 10, 1995 per OR No. 5939988.
What begs the question is, however, how the above certificate could have been
issued by the Bureau on October 11, 1995 when the Secretary of Justice issued the
required affirmation only on June 8, 2000. No explanation was given for this patent
aberration. There seems to be no error with the date of the issuance of the
1st Indorsement by Secretary of Justice Tuquero as this Court takes judicial notice
that he was the Secretary of Justice from February 16, 2000 to January 22, 2001.
There is, thus, a strong valid reason to conclude that the certificate in question must
be spurious.
Under extant immigration rules, applications for recognition of Filipino citizenship
require the affirmation by the DOJ of the Order of Recognition issued by the Bureau.
Under Executive Order No. 292, also known as the 1987 Administrative Code,
specifically in its Title III, Chapter 1, Sec. 3(6), it is the DOJ which is tasked to
"provide immigration and naturalization regulatory services andimplement the laws
governing citizenship and the admission and stay of aliens." Thus, the confirmation
by the DOJ of any Order of Recognition for Filipino citizenship issued by the Bureau
is required.
Pertinently, Bureau Law Instruction No. RBR-99-00235 on Recognition as a Filipino
Citizen clearly provides:
The Bureau [of Immigration] through its Records Section shall automatically
furnish the Department of Justice an official copy of its Order of Recognition
within 72 days from its date of approval by the way of indorsement for
confirmation of the Order by the Secretary of Justice pursuant to Executive
Order No. 292. No Identification Certificate shall be issued before the
date of confirmation by the Secretary of Justice and any Identification
Certificate issued by the Bureau pursuant to an Order of Recognition shall
prominently indicate thereon the date of confirmation by the Secretary of
Justice. (Emphasis ours.)
Not lost on the Court is the acquisition by Rebecca of her Philippine passport only on
June 13, 2000, or five days after then Secretary of Justice Tuquero issued the
1st Indorsement confirming the order of recognition. It may be too much to attribute to
coincidence this unusual sequence of close events which, to us, clearly suggests that
prior to said affirmation or confirmation, Rebecca was not yet recognized as a Filipino
citizen. The same sequence would also imply that ID Certificate No. RC 9778 could
not have been issued in 1995, as Bureau Law Instruction No. RBR-99-002 mandates
that no identification certificate shall be issued before the date of confirmation by the
Secretary of Justice. Logically, therefore, the affirmation or confirmation of Rebecca's
recognition as a Filipino citizen through the 1st Indorsement issued only on June 8,
2000 by Secretary of Justice Tuquero corresponds to the eventual issuance of
Rebecca's passport a few days later, or on June 13, 2000 to be exact.
When Divorce Was Granted Rebecca, She Was not a
Filipino Citizen and Was not Yet Recognized as One
The Court can assume hypothetically that Rebecca is now a Filipino citizen. But from
the foregoing disquisition, it is indubitable that Rebecca did not have that status of, or
at least was not yet recognized as, a Filipino citizen when she secured the February
22, 1996 judgment of divorce from the Dominican Republic.
The Court notes and at this juncture wishes to point out that Rebecca voluntarily
withdrew her original petition for declaration of nullity (Civil Case No. 96-378 of the
Makati City RTC) obviously because she could not show proof of her alleged Filipino
citizenship then. In fact, a perusal of that petition shows that, while bearing the date
January 26, 1996, it was only filed with the RTC on March 14, 1996 or less than a
month after Rebecca secured, on February 22, 1996, the foreign divorce decree in
question. Consequently, there was no mention about said divorce in the petition.
Significantly, the only documents appended as annexes to said original petition were:
the Vicente-Rebecca Marriage Contract (Annex "A") and Birth Certificate of Alix
(Annex "B"). If indeed ID Certificate No. RC 9778 from the Bureau was truly issued on
October 11, 1995, is it not but logical to expect that this piece of document be
appended to form part of the petition, the question of her citizenship being crucial to
her case?
As may be noted, the petition for declaration of absolute nullity of marriage under Civil
Case No. 01-094, like the withdrawn first petition, also did not have the ID Certificate
from the Bureau as attachment. What were attached consisted of the following
material documents: Marriage Contract (Annex "A") and Divorce Decree. It was only
through her Opposition (To Respondent's Motion to Dismiss dated 31 May
2001)36 did Rebecca attach as Annex "C" ID Certificate No. RC 9778.
At any rate, the CA was correct in holding that the RTC had sufficient basis to dismiss
the petition for declaration of absolute nullity of marriage as said petition, taken
together with Vicente's motion to dismiss and Rebecca's opposition to motion, with
their respective attachments, clearly made out a case of lack of cause of action,
which we will expound later.
Validity of Divorce Decree
Going to the second core issue, we find Civil Decree Nos. 362/96 and 406/97 valid.
First, at the time of the divorce, as above elucidated, Rebecca was still to be
recognized, assuming for argument that she was in fact later recognized, as a Filipino
citizen, but represented herself in public documents as an American citizen. At the
very least, she chose, before, during, and shortly after her divorce, her American
citizenship to govern her marital relationship. Second, she secured personally said
divorce as an American citizen, as is evident in the text of the Civil Decrees, which
pertinently declared:
IN THIS ACTION FOR DIVORCE in which the parties expressly submit to
the jurisdiction of this court, by reason of the existing incompatibility of
temperaments x x x. The parties MARIA REBECCA M. BAYOT, of United
States nationality, 42 years of age, married, domiciled and residing at 502
Acacia Ave., Ayala Alabang, Muntin Lupa, Philippines, x x x,
who personally appeared before this court, accompanied by DR. JUAN
ESTEBAN OLIVERO, attorney, x x x and VICENTE MADRIGAL BAYOT, of
Philippine nationality, of 43 years of age, married and domiciled and residing
at 502 Acacia Ave., Ayala Alabang, Muntin Lupa, Filipino, appeared before
this court represented by DR. ALEJANDRO TORRENS, attorney, x x x,
revalidated by special power of attorney given the 19 th of February of 1996,
signed before the Notary Public Enrico L. Espanol of the City of Manila, duly
legalized and authorizing him to subscribe all the acts concerning this
case.37 (Emphasis ours.)
Third, being an American citizen, Rebecca was bound by the national laws of the
United States of America, a country which allows divorce. Fourth, the property
relations of Vicente and Rebecca were properly adjudicated through their
Agreement38 executed on December 14, 1996 after Civil Decree No. 362/96 was
rendered on February 22, 1996, and duly affirmed by Civil Decree No. 406/97 issued
on March 4, 1997. Veritably, the foreign divorce secured by Rebecca was valid.
To be sure, the Court has taken stock of the holding in Garcia v. Recio that a foreign
divorce can be recognized here, provided the divorce decree is proven as a fact and
as valid under the national law of the alien spouse.39 Be this as it may, the fact that
Rebecca was clearly an American citizen when she secured the divorce and that
divorce is recognized and allowed in any of the States of the Union,40 the presentation
of a copy of foreign divorce decree duly authenticated by the foreign court issuing
said decree is, as here, sufficient.
It bears to stress that the existence of the divorce decree has not been denied, but in
fact admitted by both parties. And neither did they impeach the jurisdiction of the
divorce court nor challenge the validity of its proceedings on the ground of collusion,
fraud, or clear mistake of fact or law, albeit both appeared to have the opportunity to
do so. The same holds true with respect to the decree of partition of their conjugal
property. As this Court explained in Roehr v. Rodriguez:
Before our courts can give the effect of res judicata to a foreign judgment [of
divorce] x x x, it must be shown that the parties opposed to the judgment
had been given ample opportunity to do so on grounds allowed under Rule
39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997 Rules
of Civil Procedure), to wit:
SEC. 50. Effect of foreign judgments.--The effect of a judgment of a
tribunal of a foreign country, having jurisdiction to pronounce the
judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is
conclusive upon the title to the thing;
(b) In case of a judgment against a person, the judgment is
presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title; but the judgment may
be repelled by evidence of a want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact.
It is essential that there should be an opportunity to challenge the foreign
judgment, in order for the court in this jurisdiction to properly determine its
efficacy. In this jurisdiction, our Rules of Court clearly provide that with
respect to actions in personam, as distinguished from actions in rem, a
 foreign judgment |merely constitutes prima facie evidence of the justness of
the claim of a party and, as such, is subject to proof to the contrary. 41
As the records show, Rebecca, assisted by counsel, personally secured the foreign
divorce while Vicente was duly represented by his counsel, a certain Dr. Alejandro
Torrens, in said proceedings. As things stand, the foreign divorce decrees rendered
and issued by the Dominican Republic court are valid and, consequently, bind both
Rebecca and Vicente.
Finally, the fact that Rebecca may have been duly recognized as a Filipino citizen by
force of the June 8, 2000 affirmation by Secretary of Justice Tuquero of the October
6, 1995 Bureau Order of Recognition will not, standing alone, work to nullify or
invalidate the foreign divorce secured by Rebecca as an American citizen on
February 22, 1996. For as we stressed at the outset, in determining whether or not a
divorce secured abroad would come within the pale of the country's policy against
absolute divorce, the reckoning point is the citizenship of the parties at the time a
valid divorce is obtained.42
Legal Effects of the Valid Divorce
Given the validity and efficacy of divorce secured by Rebecca, the same shall be
given a res judicataeffect in this jurisdiction. As an obvious result of the divorce
decree obtained, the marital vinculumbetween Rebecca and Vicente is considered
severed; they are both freed from the bond of matrimony. In plain language, Vicente
and Rebecca are no longer husband and wife to each other. As the divorce court
formally pronounced: "[T]hat the marriage between MARIA REBECCA M. BAYOT
and VICENTE MADRIGAL BAYOT is hereby dissolved x x x leaving them free to
remarry after completing the legal requirements."43
Consequent to the dissolution of the marriage, Vicente could no longer be subject to a
husband's obligation under the Civil Code. He cannot, for instance, be obliged to live
with, observe respect and fidelity, and render support to Rebecca. 44
The divorce decree in question also brings into play the second paragraph of Art. 26
of the Family Code, providing as follows:
Art. 26. x x x x
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the Filipino spouse shall likewise
have capacity to remarry under Philippine law. (As amended by E.O. 227)
In Republic v. Orbecido III, we spelled out the twin elements for the applicability of the
second paragraph of Art. 26, thus:
x x x [W]e state the twin elements for the application of Paragraph 2 of
Article 26 as follows:
1. There is a valid marriage that has been celebrated between a Filipino
citizen and a foreigner; and
2. A valid divorce is obtained abroad by the alien spouse capacitating him or
her to remarry.
The reckoning point is not the citizenship of the parties at the time of the
celebration of the marriage, but their citizenship at the time a valid divorce is
obtained abroad by the alien spouse capacitating the latter to remarry.45
Both elements obtain in the instant case. We need not belabor further the fact of
marriage of Vicente and Rebecca, their citizenship when they wed, and their
professed citizenship during the valid divorce proceedings.
Not to be overlooked of course is the fact that Civil Decree No. 406/97 and the
Agreement executed on December 14, 1996 bind both Rebecca and Vicente as
regards their property relations. The Agreement provided that the ex-couple's
conjugal property consisted only their family home, thus:
9. That the parties stipulate that the conjugal property which they
acquired during their marriage consists only of the real property and all
the improvements and personal properties therein contained at 502 Acacia
Avenue, Ayala Alabang, Muntinlupa, covered by TCT No. 168301 dated
Feb. 7, 1990 issued by the Register of Deeds of Makati, Metro Manila
registered in the name of Vicente M. Bayot, married to Rebecca M. Bayot, x
x x.46 (Emphasis ours.)
This property settlement embodied in the Agreement was affirmed by the divorce
court which, per its second divorce decree, Civil Decree No. 406/97 dated March 4,
1997, ordered that, "THIRD: That the agreement entered into between the parties
dated 14th day of December 1996 in Makati City, Philippines shall survive in this
Judgment of divorce by reference but not merged and that the parties are hereby
ordered and directed to comply with each and every provision of said
agreement."47
Rebecca has not repudiated the property settlement contained in the Agreement. She
is thus estopped by her representation before the divorce court from asserting that
her and Vicente's conjugal property was not limited to their family home in Ayala
Alabang.48
No Cause of Action in the Petition for Nullity of Marriage
Upon the foregoing disquisitions, it is abundantly clear to the Court that Rebecca
lacks, under the premises, cause of action. Philippine Bank of Communications v.
Trazo explains the concept and elements of a cause of action, thus:
A cause of action is an act or omission of one party in violation of the legal
right of the other. A motion to dismiss based on lack of cause of action
 hypothetically admits the truth of the allegations in the complaint. The SO ORDERED.
allegations in a complaint are sufficient to constitute a cause of action
against the defendants if, hypothetically admitting the facts alleged, the court PRESBITERO J. VELASCO, JR.
can render a valid judgment upon the same in accordance with the prayer Associate Justice
therein. A cause of action exists if the following elements are present,
namely: (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; (2) an obligation on the part of the
named defendant to respect or not to violate such right; and (3) an act or
omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff for
which the latter may maintain an action for recovery of damages. 49

One thing is clear from a perusal of Rebecca's underlying petition before the RTC,
Vicente's motion to dismiss and Rebecca's opposition thereof, with the documentary
evidence attached therein: The petitioner lacks a cause of action for declaration of
nullity of marriage, a suit which presupposes the existence of a marriage.

To sustain a motion to dismiss for lack of cause of action, the movant must show that
the claim for relief does not exist rather than that a claim has been defectively stated
or is ambiguous, indefinite, or uncertain.50 With the valid foreign divorce secured by
Rebecca, there is no more marital tie binding her to Vicente. There is in fine no more
marriage to be dissolved or nullified.

The Court to be sure does not lose sight of the legal obligation of Vicente and
Rebecca to support the needs of their daughter, Alix. The records do not clearly show
how he had discharged his duty, albeit Rebecca alleged that the support given had
been insufficient. At any rate, we do note that Alix, having been born on November
27, 1982, reached the majority age on November 27, 2000, or four months before her
mother initiated her petition for declaration of nullity. She would now be 26 years old.
Hence, the issue of back support, which allegedly had been partly shouldered by
Rebecca, is best litigated in a separate civil action for reimbursement. In this way, the
actual figure for the support of Alix can be proved as well as the earning capacity of
both Vicente and Rebecca. The trial court can thus determine what Vicente owes, if
any, considering that support includes provisions until the child concerned shall have
finished her education.

Upon the foregoing considerations, the Court no longer need to delve into the issue
tendered in G.R. No. 155635, that is, Rebecca's right to support pendente lite. As it
were, her entitlement to that kind of support hinges on the tenability of her petition
under Civil Case No. 01-094 for declaration of nullity of marriage. The dismissal of
Civil Case No. 01-094 by the CA veritably removed any legal anchorage for, and
effectively mooted, the claim for support pendente lite.

WHEREFORE, the petition for certiorari in G.R. No. 155635 is hereby DISMISSED on
the ground of mootness, while the petition for review in G.R. No. 163979 is
hereby DENIED for lack of merit. Accordingly, the March 25, 2004 Decision and June
4, 2004 Resolution of the CA in CA-G.R. SP No. 68187 are hereby AFFIRMED.
Costs against petitioner.
 Republic of the Philippines
SUPREME COURT
FIRST DIVISION
G.R. No. 154380 October 5, 2005
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
CIPRIANO ORBECIDO III, Respondent.
DECISION
QUISUMBING, J.:
Given a valid marriage between two Filipino citizens, where one party is later
naturalized as a foreign citizen and obtains a valid divorce decree capacitating him or
her to remarry, can the Filipino spouse likewise remarry under Philippine law?
Before us is a case of first impression that behooves the Court to make a definite
ruling on this apparently novel question, presented as a pure question of law.
In this petition for review, the Solicitor General assails the Decision1 dated May 15,
2002, of the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23 and
its Resolution2 dated July 4, 2002 denying the motion for reconsideration. The
court a quo had declared that herein respondent Cipriano Orbecido III is capacitated
to remarry. The fallo of the impugned Decision reads:
WHEREFORE, by virtue of the provision of the second paragraph of Art. 26 of the
Family Code and by reason of the divorce decree obtained against him by his
American wife, the petitioner is given the capacity to remarry under the Philippine
Law.
IT IS SO ORDERED.3
The factual antecedents, as narrated by the trial court, are as follows.
On May 24, 1981, Cipriano Orbecido III married Lady Myros M. Villanueva at the
United Church of Christ in the Philippines in Lam-an, Ozamis City. Their marriage
was blessed with a son and a daughter, Kristoffer Simbortriz V. Orbecido and Lady
Kimberly V. Orbecido.
In 1986, Ciprianos wife left for the United States bringing along their son Kristoffer. A
few years later, Cipriano discovered that his wife had been naturalized as an
American citizen.
Sometime in 2000, Cipriano learned from his son that his wife had obtained a divorce
decree and then married a certain Innocent Stanley. She, Stanley and her child by
him currently live at 5566 A. Walnut Grove Avenue, San Gabriel, California.
Cipriano thereafter filed with the trial court a petition for authority to remarry invoking
Paragraph 2 of Article 26 of the Family Code. No opposition was filed. Finding merit in
the petition, the court granted the same. The Republic, herein petitioner, through the
Office of the Solicitor General (OSG), sought reconsideration but it was denied.
In this petition, the OSG raises a pure question of law:
WHETHER OR NOT RESPONDENT CAN REMARRY UNDER ARTICLE 26 OF THE
FAMILY CODE4
The OSG contends that Paragraph 2 of Article 26 of the Family Code is not applicable
to the instant case because it only applies to a valid mixed marriage; that is, a
marriage celebrated between a Filipino citizen and an alien. The proper remedy,
according to the OSG, is to file a petition for annulment or for legal
separation.5 Furthermore, the OSG argues there is no law that governs respondents
situation. The OSG posits that this is a matter of legislation and not of judicial
determination.6
For his part, respondent admits that Article 26 is not directly applicable to his case but
insists that when his naturalized alien wife obtained a divorce decree which
capacitated her to remarry, he is likewise capacitated by operation of law pursuant to
Section 12, Article II of the Constitution.7
At the outset, we note that the petition for authority to remarry filed before the trial
court actually constituted a petition for declaratory relief. In this connection, Section 1,
Rule 63 of the Rules of Court provides:
RULE 63
DECLARATORY RELIEF AND SIMILAR REMEDIES
Section 1. Who may file petitionAny person interested under a deed, will, contract
or other written instrument, or whose rights are affected by a statute, executive order
or regulation, ordinance, or other governmental regulation may, before breach or
violation thereof, bring an action in the appropriate Regional Trial Court to determine
any question of construction or validity arising, and for a declaration of his rights or
duties, thereunder.
...
The requisites of a petition for declaratory relief are: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are
adverse; (3) that the party seeking the relief has a legal interest in the controversy;
and (4) that the issue is ripe for judicial determination.8
This case concerns the applicability of Paragraph 2 of Article 26 to a marriage
between two Filipino citizens where one later acquired alien citizenship, obtained a
divorce decree, and remarried while in the U.S.A. The interests of the parties are also
adverse, as petitioner representing the State asserts its duty to protect the institution
of marriage while respondent, a private citizen, insists on a declaration of his capacity
to remarry. Respondent, praying for relief, has legal interest in the controversy. The
issue raised is also ripe for judicial determination inasmuch as when respondent
remarries, litigation ensues and puts into question the validity of his second marriage.
Coming now to the substantive issue, does Paragraph 2 of Article 26 of the Family
Code apply to the case of respondent? Necessarily, we must dwell on how this
provision had come about in the first place, and what was the intent of the legislators
in its enactment?
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law Executive Order No.
209, otherwise known as the "Family Code," which took effect on August 3, 1988.
Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws in force
in the country where they were solemnized, and valid there as such, shall also be
valid in this country, except those prohibited under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code, Executive
Order No. 227 was likewise signed into law, amending Articles 26, 36, and 39 of the
Family Code. A second paragraph was added to Article 26. As so amended, it now
provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with the
laws in force in the country where they were solemnized, and valid there as such,
shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5)
and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and
a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or
her to remarry, the Filipino spouse shall have capacity to remarry under Philippine
law. (Emphasis supplied)
On its face, the foregoing provision does not appear to govern the situation presented
by the case at hand. It seems to apply only to cases where at the time of the
celebration of the marriage, the parties are a Filipino citizen and a foreigner. The
instant case is one where at the time the marriage was solemnized, the parties were
two Filipino citizens, but later on, the wife was naturalized as an American citizen and
subsequently obtained a divorce granting her capacity to remarry, and indeed she
remarried an American citizen while residing in the U.S.A.
Noteworthy, in the Report of the Public Hearings 9 on the Family Code, the Catholic
Bishops Conference of the Philippines (CBCP) registered the following objections to
Paragraph 2 of Article 26:
1. The rule is discriminatory. It discriminates against those whose spouses are
Filipinos who divorce them abroad. These spouses who are divorced will not be able
to re-marry, while the spouses of foreigners who validly divorce them abroad can.
2. This is the beginning of the recognition of the validity of divorce even for Filipino
citizens. For those whose foreign spouses validly divorce them abroad will also be
considered to be validly divorced here and can re-marry. We propose that this be
deleted and made into law only after more widespread consultation. (Emphasis
supplied.)
Legislative Intent
Records of the proceedings of the Family Code deliberations showed that the intent
of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of
the Civil Code Revision Committee, is to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who, after obtaining a divorce, is no
longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn
v. Romillo, Jr.10 The Van Dorn case involved a marriage between a Filipino citizen
and a foreigner. The Court held therein that a divorce decree validly obtained by the
alien spouse is valid in the Philippines, and consequently, the Filipino spouse is
capacitated to remarry under Philippine law.
Does the same principle apply to a case where at the time of the celebration of the
marriage, the parties were Filipino citizens, but later on, one of them obtains a foreign
citizenship by naturalization?
The jurisprudential answer lies latent in the 1998 case of Quita v. Court of
Appeals.11 In Quita, the parties were, as in this case, Filipino citizens when they got
married. The wife became a naturalized American citizen in 1954 and obtained a
divorce in the same year. The Court therein hinted, by way of obiter dictum, that a
Filipino divorced by his naturalized foreign spouse is no longer married under
Philippine law and can thus remarry.
Thus, taking into consideration the legislative intent and applying the rule of reason,
we hold that Paragraph 2 of Article 26 should be interpreted to include cases
involving parties who, at the time of the celebration of the marriage were Filipino
citizens, but later on, one of them becomes naturalized as a foreign citizen and
obtains a divorce decree. The Filipino spouse should likewise be allowed to remarry
as if the other party were a foreigner at the time of the solemnization of the marriage.
To rule otherwise would be to sanction absurdity and injustice. Where the
interpretation of a statute according to its exact and literal import would lead to
mischievous results or contravene the clear purpose of the legislature, it should be
construed according to its spirit and reason, disregarding as far as necessary the
letter of the law. A statute may therefore be extended to cases not within the literal as specifically required in Article 26. Otherwise, there would be no evidence sufficient
meaning of its terms, so long as they come within its spirit or intent.12 to declare that he is capacitated to enter into another marriage.

If we are to give meaning to the legislative intent to avoid the absurd situation where
the Filipino spouse remains married to the alien spouse who, after obtaining a divorce
is no longer married to the Filipino spouse, then the instant case must be deemed as
coming within the contemplation of Paragraph 2 of Article 26.
In view of the foregoing, we state the twin elements for the application of Paragraph 2
of Article 26 as follows:
1. There is a valid marriage that has been celebrated between a Filipino citizen and a
foreigner; and
2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to
remarry.
Nevertheless, we are unanimous in our holding that Paragraph 2 of Article 26 of the
Family Code (E.O. No. 209, as amended by E.O. No. 227), should be interpreted to
allow a Filipino citizen, who has been divorced by a spouse who had acquired foreign
citizenship and remarried, also to remarry. However, considering that in the present
petition there is no sufficient evidence submitted and on record, we are unable to
declare, based on respondents bare allegations that his wife, who was naturalized as
an American citizen, had obtained a divorce decree and had remarried an American,
that respondent is now capacitated to remarry. Such declaration could only be made
properly upon respondents submission of the aforecited evidence in his favor.
ACCORDINGLY, the petition by the Republic of the Philippines is GRANTED. The
assailed Decision dated May 15, 2002, and Resolution dated July 4, 2002, of the
Regional Trial Court of Molave, Zamboanga del Sur, Branch 23, are hereby SET
ASIDE.

The reckoning point is not the citizenship of the parties at the time of the celebration No pronouncement as to costs.
of the marriage, but their citizenship at the time a valid divorce is obtained abroad by
the alien spouse capacitating the latter to remarry.
SO ORDERED.
In this case, when Ciprianos wife was naturalized as an American citizen, there was
still a valid marriage that has been celebrated between her and Cipriano. As fate LEONARDO A. QUISUMBING
would have it, the naturalized alien wife subsequently obtained a valid divorce Associate Justice
capacitating her to remarry. Clearly, the twin requisites for the application of
Paragraph 2 of Article 26 are both present in this case. Thus Cipriano, the "divorced"
Filipino spouse, should be allowed to remarry.

We are also unable to sustain the OSGs theory that the proper remedy of the Filipino
spouse is to file either a petition for annulment or a petition for legal separation.
Annulment would be a long and tedious process, and in this particular case, not even
feasible, considering that the marriage of the parties appears to have all the badges
of validity. On the other hand, legal separation would not be a sufficient remedy for it
would not sever the marriage tie; hence, the legally separated Filipino spouse would
still remain married to the naturalized alien spouse.

However, we note that the records are bereft of competent evidence duly submitted
by respondent concerning the divorce decree and the naturalization of respondents
wife. It is settled rule that one who alleges a fact has the burden of proving it and
mere allegation is not evidence.13

Accordingly, for his plea to prosper, respondent herein must prove his allegation that
his wife was naturalized as an American citizen. Likewise, before a foreign divorce
decree can be recognized by our own courts, the party pleading it must prove the
divorce as a fact and demonstrate its conformity to the foreign law allowing it. 14 Such
foreign law must also be proved as our courts cannot take judicial notice of foreign
laws. Like any other fact, such laws must be alleged and proved. 15 Furthermore,
respondent must also show that the divorce decree allows his former wife to remarry
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 145226 February 06, 2004
LUCIO MORIGO y CACHO, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse the decision1 dated October 21,
1999 of the Court of Appeals in CA-G.R. CR No. 20700, which affirmed the
judgment2 dated August 5, 1996 of the Regional Trial Court (RTC) of Bohol, Branch
4, in Criminal Case No. 8688. The trial court found herein petitioner Lucio Morigo y
Cacho guilty beyond reasonable doubt of bigamy and sentenced him to a prison term
of seven (7) months ofprision correccional as minimum to six (6) years and one (1)
day of prision mayor as maximum. Also assailed in this petition is the resolution3 of
the appellate court, dated September 25, 2000, denying Morigos motion for
reconsideration.
The facts of this case, as found by the court a quo, are as follows:
Appellant Lucio Morigo and Lucia Barrete were boardmates at the house of
Catalina Tortor at Tagbilaran City, Province of Bohol, for a period of four (4)
years (from 1974-1978).
After school year 1977-78, Lucio Morigo and Lucia Barrete lost contact with each
other.
In 1984, Lucio Morigo was surprised to receive a card from Lucia Barrete from
Singapore. The former replied and after an exchange of letters, they became
sweethearts.
In 1986, Lucia returned to the Philippines but left again for Canada to work there.
While in Canada, they maintained constant communication.
In 1990, Lucia came back to the Philippines and proposed to petition appellant to
join her in Canada. Both agreed to get married, thus they were married on
August 30, 1990 at the Iglesia de Filipina Nacional at Catagdaan, Pilar, Bohol.
On September 8, 1990, Lucia reported back to her work in Canada leaving
appellant Lucio behind.
On August 19, 1991, Lucia filed with the Ontario Court (General Division) a
petition for divorce against appellant which was granted by the court on January
17, 1992 and to take effect on February 17, 1992.
On October 4, 1992, appellant Lucio Morigo married Maria Jececha Lumbago 4 at
the Virgen sa Barangay Parish, Tagbilaran City, Bohol.
On September 21, 1993, accused filed a complaint for judicial declaration of
nullity of marriage in the Regional Trial Court of Bohol, docketed as Civil Case
No. 6020. The complaint seek (sic) among others, the declaration of nullity of
accuseds marriage with Lucia, on the ground that no marriage ceremony
actually took place.
On October 19, 1993, appellant was charged with Bigamy in an Information5 filed
by the City Prosecutor of Tagbilaran [City], with the Regional Trial Court of
Bohol.6
The petitioner moved for suspension of the arraignment on the ground that the civil
case for judicial nullification of his marriage with Lucia posed a prejudicial question in
the bigamy case. His motion was granted, but subsequently denied upon motion for
reconsideration by the prosecution. When arraigned in the bigamy case, which was
docketed as Criminal Case No. 8688, herein petitioner pleaded not guilty to the
charge. Trial thereafter ensued.
On August 5, 1996, the RTC of Bohol handed down its judgment in Criminal Case No.
8688, as follows:
WHEREFORE, foregoing premises considered, the Court finds accused Lucio
Morigo y Cacho guilty beyond reasonable doubt of the crime of Bigamy and
sentences him to suffer the penalty of imprisonment ranging from Seven (7)
Months of Prision Correccional as minimum to Six (6) Years and One (1) Day
ofPrision Mayor as maximum.
SO ORDERED.7
In convicting herein petitioner, the trial court discounted petitioners claim that his first
marriage to Lucia was null and void ab initio. Following Domingo v. Court of
Appeals,8 the trial court ruled that want of a valid marriage ceremony is not a defense
in a charge of bigamy. The parties to a marriage should not be allowed to assume
that their marriage is void even if such be the fact but must first secure a judicial
declaration of the nullity of their marriage before they can be allowed to marry again.
Anent the Canadian divorce obtained by Lucia, the trial court cited Ramirez v.
Gmur,9 which held that the court of a country in which neither of the spouses is
domiciled and in which one or both spouses may resort merely for the purpose of
obtaining a divorce, has no jurisdiction to determine the matrimonial status of the
parties. As such, a divorce granted by said court is not entitled to recognition
anywhere. Debunking Lucios defense of good faith in contracting the second
marriage, the trial court stressed that following People v. Bitdu,10 everyone is
presumed to know the law, and the fact that one does not know that his act
constitutes a violation of the law does not exempt him from the consequences
thereof.
Seasonably, petitioner filed an appeal with the Court of Appeals, docketed as CA-
G.R. CR No. 20700.
Meanwhile, on October 23, 1997, or while CA-G.R. CR No. 20700 was pending
before the appellate court, the trial court rendered a decision in Civil Case No. 6020
declaring the marriage between Lucio and Lucia void ab initio since no marriage
ceremony actually took place. No appeal was taken from this decision, which then
became final and executory.
On October 21, 1999, the appellate court decided CA-G.R. CR No. 20700 as follows:
WHEREFORE, finding no error in the appealed decision, the same is hereby
AFFIRMED in toto.
SO ORDERED.11
In affirming the assailed judgment of conviction, the appellate court stressed that the
subsequent declaration of nullity of Lucios marriage to Lucia in Civil Case No. 6020
could not acquit Lucio. The reason is that what is sought to be punished by Article
34912 of the Revised Penal Code is the act of contracting a second marriage before
the first marriage had been dissolved. Hence, the CA held, the fact that the first
marriage was void from the beginning is not a valid defense in a bigamy case.
The Court of Appeals also pointed out that the divorce decree obtained by Lucia from
the Canadian court could not be accorded validity in the Philippines, pursuant to
Article 1513 of the Civil Code and given the fact that it is contrary to public policy in
this jurisdiction. Under Article 1714 of the Civil Code, a declaration of public policy
cannot be rendered ineffectual by a judgment promulgated in a foreign jurisdiction.
Petitioner moved for reconsideration of the appellate courts decision, contending that
the doctrine in Mendiola v. People,15 allows mistake upon a difficult question of law
(such as the effect of a foreign divorce decree) to be a basis for good faith.
On September 25, 2000, the appellate court denied the motion for lack of
merit.16 However, the denial was by a split vote. The ponente of the appellate courts
original decision in CA-G.R. CR No. 20700, Justice Eugenio S. Labitoria, joined in the
opinion prepared by Justice Bernardo P. Abesamis. The dissent observed that as the
first marriage was validly declared void ab initio, then there was no first marriage to
speak of. Since the date of the nullity retroacts to the date of the first marriage and
since herein petitioner was, in the eyes of the law, never married, he cannot be
convicted beyond reasonable doubt of bigamy.
The present petition raises the following issues for our resolution:
A.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FAILING TO
APPLY THE RULE THAT IN CRIMES PENALIZED UNDER THE REVISED
PENAL CODE, CRIMINAL INTENT IS AN INDISPENSABLE REQUISITE.
COROLLARILY, WHETHER OR NOT THE COURT OF APPEALS ERRED IN
FAILING TO APPRECIATE [THE] PETITIONERS LACK OF CRIMINAL INTENT
WHEN HE CONTRACTED THE SECOND MARRIAGE.
B.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT
THE RULING IN PEOPLE VS. BITDU (58 PHIL. 817) IS APPLICABLE TO THE
CASE AT BAR.
C.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN FAILING TO
APPLY THE RULE THAT EACH AND EVERY CIRCUMSTANCE FAVORING
THE INNOCENCE OF THE ACCUSED MUST BE TAKEN INTO ACCOUNT.17
To our mind, the primordial issue should be whether or not petitioner committed
bigamy and if so, whether his defense of good faith is valid.
The petitioner submits that he should not be faulted for relying in good faith upon the
divorce decree of the Ontario court. He highlights the fact that he contracted the
second marriage openly and publicly, which a person intent upon bigamy would not
be doing. The petitioner further argues that his lack of criminal intent is material to a
conviction or acquittal in the instant case. The crime of bigamy, just like other felonies
punished under the Revised Penal Code, is mala in se, and hence, good faith and
lack of criminal intent are allowed as a complete defense. He stresses that there is a
difference between the intent to commit the crime and the intent to perpetrate the act.
Hence, it does not necessarily follow that his intention to contract a second marriage
is tantamount to an intent to commit bigamy.
For the respondent, the Office of the Solicitor General (OSG) submits that good faith
in the instant case is a convenient but flimsy excuse. The Solicitor General relies
upon our ruling in Marbella-Bobis v. Bobis,18 which held that bigamy can be
successfully prosecuted provided all the elements concur, stressing that under Article
4019 of the Family Code, a judicial declaration of nullity is a must before a party may
re-marry. Whether or not the petitioner was aware of said Article 40 is of no account
as everyone is presumed to know the law. The OSG counters that petitioners
contention that he was in good faith because he relied on the divorce decree of the
Ontario court is negated by his act of filing Civil Case No. 6020, seeking a judicial
declaration of nullity of his marriage to Lucia.
Before we delve into petitioners defense of good faith and lack of criminal intent, we
must first determine whether all the elements of bigamy are present in this case.
In Marbella-Bobis v. Bobis,20 we laid down the elements of bigamy thus:
(1) the offender has been legally married;
(2) the first marriage has not been legally dissolved, or in case his or her spouse
is absent, the absent spouse has not been judicially declared presumptively
dead;
(3) he contracts a subsequent marriage; and
(4) the subsequent marriage would have been valid had it not been for the
existence of the first.
Applying the foregoing test to the instant case, we note that during the pendency of
CA-G.R. CR No. 20700, the RTC of Bohol Branch 1, handed down the following
decision in Civil Case No. 6020, to wit:
WHEREFORE, premises considered, judgment is hereby rendered decreeing the
annulment of the marriage entered into by petitioner Lucio Morigo and Lucia
Barrete on August 23, 1990 in Pilar, Bohol and further directing the Local Civil
Registrar of Pilar, Bohol to effect the cancellation of the marriage contract.
SO ORDERED.21
The trial court found that there was no actual marriage ceremony performed between
Lucio and Lucia by a solemnizing officer. Instead, what transpired was a mere signing
of the marriage contract by the two, without the presence of a solemnizing officer. The
trial court thus held that the marriage is void ab initio, in accordance with Articles
322 and 423 of the Family Code. As the dissenting opinion in CA-G.R. CR No. 20700,
correctly puts it, "This simply means that there was no marriage to begin with; and
that such declaration of nullity retroacts to the date of the first marriage. In other
words, for all intents and purposes, reckoned from the date of the declaration of the
first marriage as void ab initio to the date of the celebration of the first marriage, the
accused was, under the eyes of the law, never married." 24 The records show that no
appeal was taken from the decision of the trial court in Civil Case No. 6020, hence,
the decision had long become final and executory.
The first element of bigamy as a crime requires that the accused must have been
legally married. But in this case, legally speaking, the petitioner was never married to
Lucia Barrete. Thus, there is no first marriage to speak of. Under the principle of
retroactivity of a marriage being declared void ab initio, the two were never married
"from the beginning." The contract of marriage is null; it bears no legal effect. Taking
this argument to its logical conclusion, for legal purposes, petitioner was not married
to Lucia at the time he contracted the marriage with Maria Jececha. The existence
and the validity of the first marriage being an essential element of the crime of
bigamy, it is but logical that a conviction for said offense cannot be sustained where
there is no first marriage to speak of. The petitioner, must, perforce be acquitted of
the instant charge.
The present case is analogous to, but must be distinguished from Mercado v.
Tan.25 In the latter case, the judicial declaration of nullity of the first marriage was
likewise obtained after the second marriage was already celebrated. We held therein
that:
A judicial declaration of nullity of a previous marriage is necessary before a
subsequent one can be legally contracted. One who enters into a subsequent
marriage without first obtaining such judicial declaration is guilty of bigamy. This
principle applies even if the earlier union is characterized by statutes as "void." 26
It bears stressing though that in Mercado, the first marriage was actually solemnized
not just once, but twice: first before a judge where a marriage certificate was duly
issued and then again six months later before a priest in religious rites. Ostensibly, at
least, the first marriage appeared to have transpired, although later declared void ab
initio.
In the instant case, however, no marriage ceremony at all was performed by a duly
authorized solemnizing officer. Petitioner and Lucia Barrete merely signed a marriage
contract on their own. The mere private act of signing a marriage contract bears no
semblance to a valid marriage and thus, needs no judicial declaration of nullity. Such
act alone, without more, cannot be deemed to constitute an ostensibly valid marriage
for which petitioner might be held liable for bigamy unless he first secures a judicial
declaration of nullity before he contracts a subsequent marriage.
The law abhors an injustice and the Court is mandated to liberally construe a penal
statute in favor of an accused and weigh every circumstance in favor of the
presumption of innocence to ensure that justice is done. Under the circumstances of
the present case, we held that petitioner has not committed bigamy. Further, we also
find that we need not tarry on the issue of the validity of his defense of good faith or
lack of criminal intent, which is now moot and academic.
WHEREFORE, the instant petition is GRANTED. The assailed decision, dated
October 21, 1999 of the Court of Appeals in CA-G.R. CR No. 20700, as well as the
resolution of the appellate court dated September 25, 2000, denying herein
petitioners motion for reconsideration, is REVERSED and SET ASIDE. The petitioner
Lucio Morigo y Cacho is ACQUITTED from the charge of BIGAMY on the ground that
his guilt has not been proven with moral certainty.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 142820 June 20, 2003
WOLFGANG O. ROEHR, petitioner,
vs.
MARIA CARMEN D. RODRIGUEZ, HON. JUDGE JOSEFINA GUEVARA-
SALONGA, Presiding Judge of Makati RTC, Branch 149, respondents.
QUISUMBING, J.:
At the core of the present controversy are issues of (a) grave abuse of discretion
allegedly committed by public respondent and (b) lack of jurisdiction of the regional
trial court, in matters that spring from a divorce decree obtained abroad by petitioner.
order 1
In this special civil action for certiorari, petitioner assails (a) the dated
September 30, 1999 of public respondent Judge Josefina Guevara-Salonga,
Presiding Judge of Makati Regional Trial Court,2 Branch 149, in Civil Case No. 96-
1389 for declaration of nullity of marriage, and (b) the order 3 dated March 31, 2000
denying his motion for reconsideration. The assailed orders partially set aside the trial
courts order dismissing Civil Case No. 96-1389, for the purpose of resolving issues
relating to the property settlement of the spouses and the custody of their children.
Petitioner Wolfgang O. Roehr, a German citizen and resident of Germany, married
private respondent Carmen Rodriguez, a Filipina, on December 11, 1980 in Hamburg,
Germany. Their marriage was subsequently ratified on February 14, 1981 in Tayasan,
Negros Oriental.4 Out of their union were born Carolynne and Alexandra Kristine on
November 18, 1981 and October 25, 1987, respectively.
On August 28, 1996, private respondent filed a petition 5 for declaration of nullity of
marriage before the Regional Trial Court (RTC) of Makati City. On February 6, 1997,
petitioner filed a motion to dismiss,6 but it was denied by the trial court in its
order7 dated May 28, 1997.
On June 5, 1997, petitioner filed a motion for reconsideration, but was also denied in
an order8 dated August 13, 1997. On September 5, 1997, petitioner filed a petition for
certiorari with the Court of Appeals. On November 27, 1998, the appellate court
denied the petition and remanded the case to the RTC.
Meanwhile, petitioner obtained a decree of divorce from the Court of First Instance of
Hamburg-Blankenese, promulgated on December 16, 1997.
The decree provides in part:
[T]he Court of First Instance, Hamburg-Blankenese, Branch 513, has ruled
through Judge van Buiren of the Court of First Instance on the basis of the
oral proceedings held on 4 Nov. 1997:
The marriage of the Parties contracted on 11 December 1980 before the
Civil Registrar of Hamburg-Altona is hereby dissolved.
The parental custody for the children
Carolynne Roehr, born 18 November 1981
Alexandra Kristine Roehr, born on 25 October 1987
is granted to the father.
The litigation expenses shall be assumed by the Parties. 9
In view of said decree, petitioner filed a Second Motion to Dismiss on May 20, 1999
on the ground that the trial court had no jurisdiction over the subject matter of the
action or suit as a decree of divorce had already been promulgated dissolving the
marriage of petitioner and private respondent.
On July 14, 1999, Judge Guevara-Salonga issued an order granting petitioners
motion to dismiss. Private respondent filed a Motion for Partial Reconsideration, with
a prayer that the case proceed for the purpose of determining the issues of custody of
children and the distribution of the properties between petitioner and private
respondent.
On August 18, 1999, an Opposition to the Motion for Partial Reconsideration was filed
by the petitioner on the ground that there is nothing to be done anymore in the instant
case as the marital tie between petitioner Wolfgang Roehr and respondent Ma.
Carmen D. Rodriguez had already been severed by the decree of divorce
promulgated by the Court of First Instance of Hamburg, Germany on December 16,
1997 and in view of the fact that said decree of divorce had already been recognized
by the RTC in its order of July 14, 1999, through the implementation of the mandate
of Article 26 of the Family Code,10 endowing the petitioner with the capacity to
remarry under the Philippine law.
On September 30, 1999, respondent judge issued the assailed order partially setting
aside her order dated July 14, 1999 for the purpose of tackling the issues of property
relations of the spouses as well as support and custody of their children. The
pertinent portion of said order provides:
Acting on the Motion for Partial Reconsideration of the Order dated July 14,
1999 filed by petitioner thru counsel which was opposed by respondent and
considering that the second paragraph of Article 26 of the Family Code was
included as an amendment thru Executive Order 227, to avoid the absurd
situation of a Filipino as being still married to his or her alien spouse though
 the latter is no longer married to the Filipino spouse because he/she had
obtained a divorce abroad which is recognized by his/her national law, and
considering further the effects of the termination of the marriage under
Article 43 in relation to Article 50 and 52 of the same Code, which include
the dissolution of the property relations of the spouses, and the support and
custody of their children, the Order dismissing this case is partially set aside
with respect to these matters which may be ventilated in this Court.
SO ORDERED.11 (Emphasis supplied.)
Petitioner filed a timely motion for reconsideration on October 19, 1999, which was
denied by respondent judge in an order dated March 31, 2000.12
Petitioner ascribes lack of jurisdiction of the trial court and grave abuse of discretion
on the part of respondent judge. He cites as grounds for his petition the following:
1. Partially setting aside the order dated July 14, 1999 dismissing the instant
case is not allowed by 1997 Rules of Civil Procedure. 13
2. Respondent Maria Carmen Rodriguez by her motion for Partial
Reconsideration had recognized and admitted the Divorce Decision obtained
by her ex-husband in Hamburg, Germany.14
3. There is nothing left to be tackled by the Honorable Court as there are no
conjugal assets alleged in the Petition for Annulment of Marriage and in the
Divorce petition, and the custody of the children had already been awarded
to Petitioner Wolfgang Roehr.15
Pertinent in this case before us are the following issues:
1. Whether or not respondent judge gravely abused her discretion in issuing
her order dated September 30, 1999, which partially modified her order
dated July 14, 1999; and
2. Whether or not respondent judge gravely abused her discretion when she
assumed and retained jurisdiction over the present case despite the fact that
petitioner has already obtained a divorce decree from a German court.
On the first issue, petitioner asserts that the assailed order of respondent judge is
completely inconsistent with her previous order and is contrary to Section 3, Rule 16,
Rules of Civil Procedure, which provides:
Sec. 3. Resolution of motion - After the hearing, the court may dismiss the
action or claim, deny the motion, or order the amendment of the pleading.
The court shall not defer the resolution of the motion for the reason that the
ground relied upon is not indubitable.
In every case, the resolution shall state clearly and distinctly the reasons
therefor. (Emphasis supplied.)
Petitioner avers that a courts action on a motion is limited to dismissing the action or
claim, denying the motion, or ordering the amendment of the pleading.
Private respondent, on her part, argues that the RTC can validly reconsider its order
dated July 14, 1999 because it had not yet attained finality, given the timely filing of
respondents motion for reconsideration.
Pertinent to this issue is Section 3 in relation to Section 7, Rule 37 of the 1997 Rules
of Civil Procedure, which provides:
Sec. 3. Action upon motion for new trial or reconsideration.The trial court
may set aside the judgment or final order and grant a new trial, upon such
terms as may be just, or may deny the motion. If the court finds that
excessive damages have been awarded or that the judgment or final order is
contrary to the evidence or law, it may amend such judgment or final order
accordingly.
Sec. 7. Partial new trial or reconsideration.If the grounds for a motion
under this Rule appear to the court to affect the issues as to only a part, or
less than all of the matters in controversy, or only one, or less than all, of the
parties to it, the court may order a new trial or grant reconsideration as to
such issues if severable without interfering with the judgment or final order
upon the rest. (Emphasis supplied.)
It is clear from the foregoing rules that a judge can order a partial reconsideration of a
case that has not yet attained finality. Considering that private respondent filed a
motion for reconsideration within the reglementary period, the trial court's decision of
July 14, 1999 can still be modified. Moreover, in Saado v. Court of Appeals,16we
held that the court could modify or alter a judgment even after the same has become
executory whenever circumstances transpire rendering its decision unjust and
inequitable, as where certain facts and circumstances justifying or requiring such
modification or alteration transpired after the judgment has become final and
executory17 and when it becomes imperative in the higher interest of justice or when
supervening events warrant it.18 In our view, there are even more compelling reasons
to do so when, as in this case, judgment has not yet attained finality.
Anent the second issue, petitioner claims that respondent judge committed grave
abuse of discretion when she partially set aside her order dated July 14, 1999,
despite the fact that petitioner has already obtained a divorce decree from the Court
of First Instance of Hamburg, Germany.
In Garcia v. Recio,19 Van Dorn v. Romillo, Jr.,20 and Llorente v. Court of
Appeals,21 we consistently held that a divorce obtained abroad by an alien may be
recognized in our jurisdiction, provided such decree is valid according to the national
law of the foreigner. Relevant to the present case is Pilapil v. Ibay-Somera,22 where
this Court specifically recognized the validity of a divorce obtained by a German
citizen in his country, the Federal Republic of Germany. We held in Pilapil that a
foreign divorce and its legal effects may be recognized in the Philippines insofar as
respondent is concerned in view of the nationality principle in our civil law on the
status of persons.
In this case, the divorce decree issued by the German court dated December 16,
1997 has not been challenged by either of the parties. In fact, save for the issue of
parental custody, even the trial court recognized said decree to be valid and binding,
thereby endowing private respondent the capacity to remarry. Thus, the present
controversy mainly relates to the award of the custody of their two children, Carolynne
and Alexandra Kristine, to petitioner.
As a general rule, divorce decrees obtained by foreigners in other countries are
recognizable in our jurisdiction, but the legal effects thereof, e.g. on custody, care and
support of the children, must still be determined by our courts. 23 Before our courts can
give the effect of res judicata to a foreign judgment, such as the award of custody to
petitioner by the German court, it must be shown that the parties opposed to the
judgment had been given ample opportunity to do so on grounds allowed under Rule
39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997 Rules of Civil
Procedure), to wit:
SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal
of a foreign country, having jurisdiction to pronounce the judgment is as
follows:
(a) In case of a judgment upon a specific thing, the judgment is conclusive
upon the title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive
evidence of a right as between the parties and their successors in interest by
a subsequent title; but the judgment may be repelled by evidence of a want
of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of
law or fact.
It is essential that there should be an opportunity to challenge the foreign judgment, in
order for the court in this jurisdiction to properly determine its efficacy. In this
jurisdiction, our Rules of Court clearly provide that with respect to actions in
personam, as distinguished from actions in rem, a foreign judgment merely
constitutes prima facie evidence of the justness of the claim of a party and, as such,
is subject to proof to the contrary.24
In the present case, it cannot be said that private respondent was given the
opportunity to challenge the judgment of the German court so that there is basis for
declaring that judgment as res judicata with regard to the rights of petitioner to have
parental custody of their two children. The proceedings in the German court were
summary. As to what was the extent of private respondents participation in the
proceedings in the German court, the records remain unclear. The divorce decree
itself states that neither has she commented on the proceedings25 nor has she given
her opinion to the Social Services Office.26 Unlike petitioner who was represented by
two lawyers, private respondent had no counsel to assist her in said
proceedings.27 More importantly, the divorce judgment was issued to petitioner by
virtue of the German Civil Code provision to the effect that when a couple lived
separately for three years, the marriage is deemed irrefutably dissolved. The decree
did not touch on the issue as to who the offending spouse was. Absent any finding
that private respondent is unfit to obtain custody of the children, the trial court was
correct in setting the issue for hearing to determine the issue of parental custody,
care, support and education mindful of the best interests of the children. This is in
consonance with the provision in the Child and Youth Welfare Code that the childs
welfare is always the paramount consideration in all questions concerning his care
and custody. 28
On the matter of property relations, petitioner asserts that public respondent
exceeded the bounds of her jurisdiction when she claimed cognizance of the issue
concerning property relations between petitioner and private respondent. Private
respondent herself has admitted in Par. 14 of her petition for declaration of nullity of
marriage dated August 26, 1996 filed with the RTC of Makati, subject of this case,
that: "[p]etitioner and respondent have not acquired any conjugal or community
property nor have they incurred any debts during their marriage." 29 Herein petitioner
did not contest this averment. Basic is the rule that a court shall grant relief warranted
by the allegations and the proof.30 Given the factual admission by the parties in their
pleadings that there is no property to be accounted for, respondent judge has no
basis to assert jurisdiction in this case to resolve a matter no longer deemed in
controversy.
In sum, we find that respondent judge may proceed to determine the issue regarding
the custody of the two children born of the union between petitioner and private
respondent. Private respondent erred, however, in claiming cognizance to settle the
matter of property relations of the parties, which is not at issue.
WHEREFORE, the orders of the Regional Trial Court of Makati, Branch 149, issued
on September 30, 1999 and March 31, 2000 are AFFIRMED with MODIFICATION.
We hereby declare that the trial court has jurisdiction over the issue between the
parties as to who has parental custody, including the care, support and education of
the children, namely Carolynne and Alexandra Kristine Roehr. Let the records of this
case be remanded promptly to the trial court for continuation of appropriate
proceedings. No pronouncement as to costs.
SO ORDERED.
Bellosillo, (Chairman), and Callejo, Sr., JJ., concur.
Austria-Martinez, J., on official leave.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 138322 October 2, 2001
GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner,
vs.
REDERICK A. RECIO, respondents.
PANGANIBAN, J.:
A divorce obtained abroad by an alien may be recognized in our jurisdiction, provided
such decree is valid according to the national law of the foreigner. However, the
divorce decree and the governing personal law of the alien spouse who obtained the
divorce must be proven. Our courts do not take judicial notice of foreign laws and
judgment; hence, like any other facts, both the divorce decree and the national law of
the alien must be alleged and proven according to our law on evidence.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to
nullify the January 7, 1999 Decision1 and the March 24, 1999 Order2 of the Regional
Trial Court of Cabanatuan City, Branch 28, in Civil Case No. 3026-AF. The assailed
Decision disposed as follows:
"WHEREFORE, this Court declares the marriage between Grace J. Garcia
and Rederick A. Recio solemnized on January 12, 1994 at Cabanatuan City
as dissolved and both parties can now remarry under existing and applicable
laws to any and/or both parties."3
The assailed Order denied reconsideration of the above-quoted Decision.
The Facts
Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian citizen, in
Malabon, Rizal, on March 1, 1987.4 They lived together as husband and wife in
Australia. On May 18, 1989,5 a decree of divorce, purportedly dissolving the marriage,
was issued by an Australian family court.
On June 26, 1992, respondent became an Australian citizen, as shown by a
"Certificate of Australian Citizenship" issued by the Australian government.6 Petitioner
a Filipina and respondent were married on January 12, 1994 in Our Lady of
Perpetual Help Church in Cabanatuan City.7 In their application for a marriage
license, respondent was declared as "single" and "Filipino." 8
Starting October 22, 1995, petitioner and respondent lived separately without prior
judicial dissolution of their marriage. While the two were still in Australia, their
conjugal assets were divided on May 16, 1996, in accordance with their Statutory
Declarations secured in Australia.9
On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of
Marriage10 in the court a quo, on the ground of bigamy respondent allegedly had a
prior subsisting marriage at the time he married her on January 12, 1994. She
claimed that she learned of respondent's marriage to Editha Samson only in
November, 1997.
In his Answer, respondent averred that, as far back as 1993, he had revealed to
petitioner his prior marriage andits subsequent dissolution.11 He contended that his
first marriage to an Australian citizen had been validly dissolved by a divorce decree
obtained in Australian in 1989;12 thus, he was legally capacitated to marry petitioner in
1994.1wphi1.nt
On July 7, 1998 or about five years after the couple's wedding and while the suit for
the declaration of nullity was pending respondent was able to secure a divorce
decree from a family court in Sydney, Australia because the "marriage ha[d]
irretrievably broken down."13
Respondent prayed in his Answer that the Complained be dismissed on the ground
that it stated no cause of action.14 The Office of the Solicitor General agreed with
respondent.15 The court marked and admitted the documentary evidence of both
parties.16 After they submitted their respective memoranda, the case was submitted
for resolution.17
Thereafter, the trial court rendered the assailed Decision and Order.
Ruling of the Trial Court
The trial court declared the marriage dissolved on the ground that the divorce issued
in Australia was valid and recognized in the Philippines. It deemed the marriage
ended, but not on the basis of any defect in an essential element of the marriage; that
is, respondent's alleged lack of legal capacity to remarry. Rather, it based its Decision
on the divorce decree obtained by respondent. The Australian divorce had ended the
marriage; thus, there was no more martial union to nullify or annual.
Hence, this Petition.18
Issues
Petitioner submits the following issues for our consideration:
"I
 The trial court gravely erred in finding that the divorce decree obtained in
Australia by the respondent ipso facto terminated his first marriage to Editha
Samson thereby capacitating him to contract a second marriage with the
petitioner.
"2
The failure of the respondent, who is now a naturalized Australian, to
present a certificate of legal capacity to marry constitutes absence of a
substantial requisite voiding the petitioner' marriage to the respondent.
"3
The trial court seriously erred in the application of Art. 26 of the Family Code
in this case.
"4
The trial court patently and grievously erred in disregarding Arts. 11, 13, 21,
35, 40, 52 and 53 of the Family Code as the applicable provisions in this
case.
"5
The trial court gravely erred in pronouncing that the divorce gravely erred in
pronouncing that the divorce decree obtained by the respondent in
Australia ipso facto capacitated the parties to remarry, without first securing
a recognition of the judgment granting the divorce decree before our
courts."19
The Petition raises five issues, but for purposes of this Decision, we shall concentrate
on two pivotal ones: (1) whether the divorce between respondent and Editha Samson
was proven, and (2) whether respondent was proven to be legally capacitated to
marry petitioner. Because of our ruling on these two, there is no more necessity to
take up the rest.
The Court's Ruling
The Petition is partly meritorious.
First Issue:
Proving the Divorce Between Respondent and Editha Samson
Petitioner assails the trial court's recognition of the divorce between respondent and
Editha Samson. Citing Adong v. Cheong Seng Gee,20 petitioner argues that the
divorce decree, like any other foreign judgment, may be given recognition in this
jurisdiction only upon proof of the existence of (1) the foreign law allowing absolute
divorce and (2) the alleged divorce decree itself. She adds that respondent miserably
failed to establish these elements.
Petitioner adds that, based on the first paragraph of Article 26 of the Family Code,
marriages solemnized abroad are governed by the law of the place where they were
celebrated (the lex loci celebrationist). In effect, the Code requires the presentation of
the foreign law to show the conformity of the marriage in question to the legal
requirements of the place where the marriage was performed.
At the outset, we lay the following basic legal principles as the take-off points for our
discussion. Philippine law does not provide for absolute divorce; hence, our courts
cannot grant it.21 A marriage between two Filipinos cannot be dissolved even by a
divorce obtained abroad, because of Articles 1522 and 1723 of the Civil Code.24 In
mixed marriages involving a Filipino and a foreigner, Article 26 25 of the Family Code
allows the former to contract a subsequent marriage in case the divorce is "validly
obtained abroad by the alien spouse capacitating him or her to remarry." 26 A divorce
obtained abroad by a couple, who are both aliens, may be recognized in the
Philippines, provided it is consistent with their respective national laws. 27
A comparison between marriage and divorce, as far as pleading and proof are
concerned, can be made. Van Dorn v. Romillo Jr. decrees that "aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided they are valid
according to their national law."28 Therefore, before a foreign divorce decree can be
recognized by our courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it. 29 Presentation solely of the
divorce decree is insufficient.
Divorce as a Question of Fact
Petitioner insists that before a divorce decree can be admitted in evidence, it must
first comply with the registration requirements under Articles 11, 13 and 52 of the
Family Code. These articles read as follows:
"ART. 11. Where a marriage license is required, each of the contracting
parties shall file separately a sworn application for such license with the
proper local civil registrar which shall specify the following:
xxx xxx xxx
"(5) If previously married, how, when and where the previous marriage was
dissolved or annulled;
xxx xxx xxx
"ART. 13. In case either of the contracting parties has been previously
married, the applicant shall be required to furnish, instead of the birth of
baptismal certificate required in the last preceding article, the death
 certificate of the deceased spouse or the judicial decree of annulment or
declaration of nullity of his or her previous marriage. x x x.
"ART. 52. The judgment of annulment or of absolute nullity of the marriage,
the partition and distribution of the properties of the spouses, and the
delivery of the children's presumptive legitimes shall be recorded in the
appropriate civil registry and registries of property; otherwise, the same shall
not affect their persons."
Respondent, on the other hand, argues that the Australian divorce decree is a public
document a written official act of an Australian family court. Therefore, it requires no
further proof of its authenticity and due execution.
Respondent is getting ahead of himself. Before a foreign judgment is given
presumptive evidentiary value, the document must first be presented and admitted in
evidence.30 A divorce obtained abroad is proven by the divorce decree itself. Indeed
the best evidence of a judgment is the judgment itself. 31 The decree purports to be a
written act or record of an act of an officially body or tribunal of a foreign country. 32
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may
be proven as a public or official record of a foreign country by either (1) an official
publication or (2) a copy thereof attested33 by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or consular officer in the
Philippine foreign service stationed in the foreign country in which the record is kept
and (b) authenticated by the seal of his office.34
The divorce decree between respondent and Editha Samson appears to be an
authentic one issued by an Australian family court.35 However, appearance is not
sufficient; compliance with the aforemetioned rules on evidence must be
demonstrated.
Fortunately for respondent's cause, when the divorce decree of May 18, 1989 was
submitted in evidence, counsel for petitioner objected, not to its admissibility, but only
to the fact that it had not been registered in the Local Civil Registry of Cabanatuan
City.36 The trial court ruled that it was admissible, subject to petitioner's
qualification.37Hence, it was admitted in evidence and accorded weight by the judge.
Indeed, petitioner's failure to object properly rendered the divorce decree admissible
as a written act of the Family Court of Sydney, Australia.38
Compliance with the quoted articles (11, 13 and 52) of the Family Code is not
necessary; respondent was no longer bound by Philippine personal laws after he
acquired Australian citizenship in 1992.39 Naturalization is the legal act of adopting an
alien and clothing him with the political and civil rights belonging to a
citizen.40 Naturalized citizens, freed from the protective cloak of their former states,
don the attires of their adoptive countries. By becoming an Australian, respondent
severed his allegiance to the Philippines and the vinculum juris that had tied him to
Philippine personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian divorce law falls upon
petitioner, because she is the party challenging the validity of a foreign judgment. He
contends that petitioner was satisfied with the original of the divorce decree and was
cognizant of the marital laws of Australia, because she had lived and worked in that
country for quite a long time. Besides, the Australian divorce law is allegedly known
by Philippine courts: thus, judges may take judicial notice of foreign laws in the
exercise of sound discretion.
We are not persuaded. The burden of proof lies with "the party who alleges the
existence of a fact or thing necessary in the prosecution or defense of an action." 41 In
civil cases, plaintiffs have the burden of proving the material allegations of the
complaint when those are denied by the answer; and defendants have the burden of
proving the material allegations in their answer when they introduce new
matters.42 Since the divorce was a defense raised by respondent, the burden of
proving the pertinent Australian law validating it falls squarely upon him.
It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign
laws.43 Like any other facts, they must be alleged and proved. Australian marital laws
are not among those matters that judges are supposed to know by reason of their
judicial function.44 The power of judicial notice must be exercised with caution, and
every reasonable doubt upon the subject should be resolved in the negative.
Second Issue:
Respondent's Legal Capacity to Remarry
Petitioner contends that, in view of the insufficient proof of the divorce, respondent
was legally incapacitated to marry her in 1994.
Hence, she concludes that their marriage was void ab initio.
Respondent replies that the Australian divorce decree, which was validly admitted in
evidence, adequately established his legal capacity to marry under Australian law.
Respondent's contention is untenable. In its strict legal sense, divorce means the
legal dissolution of a lawful union for a cause arising after marriage. But divorces are
of different types. The two basic ones are (1) absolute divorce or a vinculo
matrimonii and (2) limited divorce or a mensa et thoro. The first kind terminates the
marriage, while the second suspends it and leaves the bond in full force.45 There is no
showing in the case at bar which type of divorce was procured by respondent.
Respondent presented a decree nisi or an interlocutory decree a conditional or
provisional judgment of divorce. It is in effect the same as a separation from bed and
board, although an absolute divorce may follow after the lapse of the prescribed
period during which no reconciliation is effected.46
Even after the divorce becomes absolute, the court may under some foreign statutes
and practices, still restrict remarriage. Under some other jurisdictions, remarriage may
be limited by statute; thus, the guilty party in a divorce which was granted on the
ground of adultery may be prohibited from remarrying again. The court may allow a
remarriage only after proof of good behavior.47
On its face, the herein Australian divorce decree contains a restriction that reads:
"1. A party to a marriage who marries again before this decree becomes
absolute (unless the other party has died) commits the offence of bigamy." 48
This quotation bolsters our contention that the divorce obtained by respondent may
have been restricted. It did not absolutely establish his legal capacity to remarry
according to his national law. Hence, we find no basis for the ruling of the trial court,
which erroneously assumed that the Australian divorce ipso facto restored
respondent's capacity to remarry despite the paucity of evidence on this matter.
We also reject the claim of respondent that the divorce decree raises a disputable
presumption or presumptive evidence as to his civil status based on Section 48, Rule
3949 of the Rules of Court, for the simple reason that no proof has been presented on
the legal effects of the divorce decree obtained under Australian laws.
Significance of the Certificate of Legal Capacity
Petitioner argues that the certificate of legal capacity required by Article 21 of the
Family Code was not submitted together with the application for a marriage license.
According to her, its absence is proof that respondent did not have legal capacity to
remarry.
Citizenship of Rederick A. Recto;58 (d) Exhibit "4" Decree Nisi of Dissolution of
Marriage in the Family Court of Australia Certificate; 59 and Exhibit "5" Statutory
Declaration of the Legal Separation Between Rederick A. Recto and Grace J. Garcia
Recio since October 22, 1995.60
Based on the above records, we cannot conclude that respondent, who was then a
naturalized Australian citizen, was legally capacitated to marry petitioner on January
12, 1994. We agree with petitioner's contention that the court a quo erred in finding
that the divorce decree ipso facto clothed respondent with the legal capacity to
remarry without requiring him to adduce sufficient evidence to show the Australian
personal law governing his status; or at the very least, to prove his legal capacity to
contract the second marriage.
Neither can we grant petitioner's prayer to declare her marriage to respondent null
and void on the ground of bigamy. After all, it may turn out that under Australian law,
he was really capacitated to marry petitioner as a direct result of the divorce decree.
Hence, we believe that the most judicious course is to remand this case to the trial
court to receive evidence, if any, which show petitioner's legal capacity to marry
petitioner. Failing in that, then the court a quo may declare a nullity of the parties'
marriage on the ground of bigamy, there being already in evidence two existing
marriage certificates, which were both obtained in the Philippines, one in Malabon,
Metro Manila dated March 1, 1987 and the other, in Cabanatuan City dated January
12, 1994.
WHEREFORE, in the interest of orderly procedure and substantial justice,
we REMAND the case to the court a quo for the purpose of receiving evidence which
conclusively show respondent's legal capacity to marry petitioner; and failing in that,
of declaring the parties' marriage void on the ground of bigamy, as above discussed.
No costs.

We clarify. To repeat, the legal capacity to contract marriage is determined by the SO ORDERED.
national law of the party concerned. The certificate mentioned in Article 21 of the
Family Code would have been sufficient to establish the legal capacity of respondent, Melo, Puno, Vitug, and Sandoval-Gutierrez, JJ., concur.
had he duly presented it in court. A duly authenticated and admitted certificate is
prima facie evidence of legal capacity to marry on the part of the alien applicant for a
marriage license.50

As it is, however, there is absolutely no evidence that proves respondent's legal

capacity to marry petitioner. A review of the records before this Court shows that only
the following exhibits were presented before the lower court: (1) for petitioner: (a)
Exhibit "A" Complaint;51 (b) Exhibit "B" Certificate of Marriage Between Rederick
A. Recto (Filipino-Australian) and Grace J. Garcia (Filipino) on January 12, 1994 in
Cabanatuan City, Nueva Ecija;52(c) Exhibit "C" Certificate of Marriage Between
Rederick A. Recio (Filipino) and Editha D. Samson (Australian) on March 1, 1987 in
Malabon, Metro Manila;53 (d) Exhibit "D" Office of the City Registrar of Cabanatuan
City Certification that no information of annulment between Rederick A. Recto and
Editha D. Samson was in its records;54 and (e) Exhibit "E" Certificate of Australian
Citizenship of Rederick A. Recto;55 (2) for respondent: (Exhibit "1" Amended
Answer;56 (b) Exhibit "S" Family Law Act 1975 Decree Nisi of Dissolution of
Marriage in the Family Court of Australia;57 (c) Exhibit "3" Certificate of Australian
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 80116 June 30, 1989
IMELDA MANALAYSAY PILAPIL, petitioner,
vs.
HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the
Regional Trial Court of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his
capacity as the City Fiscal of Manila; and ERICH EKKEHARD
GEILING, respondents.
REGALADO, J.:
An ill-starred marriage of a Filipina and a foreigner which ended in a foreign absolute
divorce, only to be followed by a criminal infidelity suit of the latter against the former,
provides Us the opportunity to lay down a decisional rule on what hitherto appears to
be an unresolved jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino citizen, and
private respondent Erich Ekkehard Geiling, a German national, were married before
the Registrar of Births, Marriages and Deaths at Friedensweiler in the Federal
Republic of Germany. The marriage started auspiciously enough, and the couple
lived together for some time in Malate, Manila where their only child, Isabella Pilapil
Geiling, was born on April 20, 1980. 1
Thereafter, marital discord set in, with mutual recriminations between the spouses,
followed by a separation de facto between them.
After about three and a half years of marriage, such connubial disharmony
eventuated in private respondent initiating a divorce proceeding against petitioner in
Germany before the Schoneberg Local Court in January, 1983. He claimed that there
was failure of their marriage and that they had been living apart since April, 1982. 2
Petitioner, on the other hand, filed an action for legal separation, support and
separation of property before the Regional Trial Court of Manila, Branch XXXII, on
January 23, 1983 where the same is still pending as Civil Case No. 83-15866. 3
On January 15, 1986, Division 20 of the Schoneberg Local Court, Federal Republic of
Germany, promulgated a decree of divorce on the ground of failure of marriage of the
spouses. The custody of the child was granted to petitioner. The records show that
under German law said court was locally and internationally competent for the divorce
proceeding and that the dissolution of said marriage was legally founded on and
authorized by the applicable law of that foreign jurisdiction. 4
On June 27, 1986, or more than five months after the issuance of the divorce decree,
private respondent filed two complaints for adultery before the City Fiscal of Manila
alleging that, while still married to said respondent, petitioner "had an affair with a
certain William Chia as early as 1982 and with yet another man named Jesus Chua
sometime in 1983". Assistant Fiscal Jacinto A. de los Reyes, Jr., after the
corresponding investigation, recommended the dismissal of the cases on the ground
of insufficiency of evidence. 5 However, upon review, the respondent city fiscal
approved a resolution, dated January 8, 1986, directing the filing of two complaints for
adultery against the petitioner. 6 The complaints were accordingly filed and were
eventually raffled to two branches of the Regional Trial Court of Manila. The case
entitled "People of the Philippines vs. Imelda Pilapil and William Chia", docketed as
Criminal Case No. 87-52435, was assigned to Branch XXVI presided by the
respondent judge; while the other case, "People of the Philippines vs. Imelda Pilapil
and James Chua", docketed as Criminal Case No. 87-52434 went to the sala of
Judge Leonardo Cruz, Branch XXV, of the same court. 7
On March 14, 1987, petitioner filed a petition with the Secretary of Justice asking that
the aforesaid resolution of respondent fiscal be set aside and the cases against her
be dismissed. 8 A similar petition was filed by James Chua, her co-accused in
Criminal Case No. 87-52434. The Secretary of Justice, through the Chief State
Prosecutor, gave due course to both petitions and directed the respondent city fiscal
to inform the Department of Justice "if the accused have already been arraigned and
if not yet arraigned, to move to defer further proceedings" and to elevate the entire
records of both cases to his office for review. 9
Petitioner thereafter filed a motion in both criminal cases to defer her arraignment and
to suspend further proceedings thereon. 10 As a consequence, Judge Leonardo Cruz
suspended proceedings in Criminal Case No. 87-52434. On the other hand,
respondent judge merely reset the date of the arraignment in Criminal Case No. 87-
52435 to April 6, 1987. Before such scheduled date, petitioner moved for the
cancellation of the arraignment and for the suspension of proceedings in said
Criminal Case No. 87-52435 until after the resolution of the petition for review then
pending before the Secretary of Justice. 11 A motion to quash was also filed in the
same case on the ground of lack of jurisdiction, 12 which motion was denied by the
respondent judge in an order dated September 8, 1987. The same order also directed
the arraignment of both accused therein, that is, petitioner and William Chia. The
latter entered a plea of not guilty while the petitioner refused to be arraigned. Such
refusal of the petitioner being considered by respondent judge as direct contempt,
she and her counsel were fined and the former was ordered detained until she
submitted herself for arraignment. 13 Later, private respondent entered a plea of not
guilty. 14
On October 27, 1987, petitioner filed this special civil action for certiorari and
prohibition, with a prayer for a temporary restraining order, seeking the annulment of
the order of the lower court denying her motion to quash. The petition is anchored on
the main ground that the court is without jurisdiction "to try and decide the charge of
adultery, which is a private offense that cannot be prosecuted de officio (sic), since
the purported complainant, a foreigner, does not qualify as an offended spouse
having obtained a final divorce decree under his national law prior to his filing the
criminal complaint." 15
On October 21, 1987, this Court issued a temporary restraining order enjoining the
respondents from implementing the aforesaid order of September 8, 1987 and from
further proceeding with Criminal Case No. 87-52435. Subsequently, on March 23,
1988 Secretary of Justice Sedfrey A. Ordoez acted on the aforesaid petitions for
review and, upholding petitioner's ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the complaints against the
petitioner. 16
We find this petition meritorious. The writs prayed for shall accordingly issue.
Under Article 344 of the Revised Penal Code, 17 the crime of adultery, as well as four
other crimes against chastity, cannot be prosecuted except upon a sworn written
complaint filed by the offended spouse. It has long since been established, with
unwavering consistency, that compliance with this rule is a jurisdictional, and not
merely a formal, requirement. 18 While in point of strict law the jurisdiction of the court
over the offense is vested in it by the Judiciary Law, the requirement for a sworn
written complaint is just as jurisdictional a mandate since it is that complaint which
starts the prosecutory proceeding 19 and without which the court cannot exercise its
jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for adultery and concubinage
the person who can legally file the complaint should be the offended spouse, and
nobody else. Unlike the offenses of seduction, abduction, rape and acts of
lasciviousness, no provision is made for the prosecution of the crimes of adultery and
concubinage by the parents, grandparents or guardian of the offended party. The so-
called exclusive and successive rule in the prosecution of the first four offenses above
mentioned do not apply to adultery and concubinage. It is significant that while the
State, as parens patriae, was added and vested by the 1985 Rules of Criminal
Procedure with the power to initiate the criminal action for a deceased or
incapacitated victim in the aforesaid offenses of seduction, abduction, rape and acts
of lasciviousness, in default of her parents, grandparents or guardian, such
amendment did not include the crimes of adultery and concubinage. In other words,
only the offended spouse, and no other, is authorized by law to initiate the action
therefor.
Corollary to such exclusive grant of power to the offended spouse to institute the
action, it necessarily follows that such initiator must have the status, capacity or legal
representation to do so at the time of the filing of the criminal action. This is a familiar
and express rule in civil actions; in fact, lack of legal capacity to sue, as a ground for a
motion to dismiss in civil cases, is determined as of the filing of the complaint or
petition.
The absence of an equivalent explicit rule in the prosecution of criminal cases does
not mean that the same requirement and rationale would not apply. Understandably,
it may not have been found necessary since criminal actions are generally and
fundamentally commenced by the State, through the People of the Philippines, the
offended party being merely the complaining witness therein. However, in the so-
called "private crimes" or those which cannot be prosecuted de oficio, and the present
prosecution for adultery is of such genre, the offended spouse assumes a more
predominant role since the right to commence the action, or to refrain therefrom, is a
matter exclusively within his power and option.
This policy was adopted out of consideration for the aggrieved party who might prefer
to suffer the outrage in silence rather than go through the scandal of a public
trial. 20 Hence, as cogently argued by petitioner, Article 344 of the Revised Penal
Code thus presupposes that the marital relationship is still subsisting at the time of
the institution of the criminal action for, adultery. This is a logical consequence since
the raison d'etre of said provision of law would be absent where the supposed
offended party had ceased to be the spouse of the alleged offender at the time of the
filing of the criminal case. 21
In these cases, therefore, it is indispensable that the status and capacity of the
complainant to commence the action be definitely established and, as already
demonstrated, such status or capacity must indubitably exist as of the time he
initiates the action. It would be absurd if his capacity to bring the action would be
determined by his status before or subsequent to the commencement thereof, where
such capacity or status existed prior to but ceased before, or was acquired
subsequent to but did not exist at the time of, the institution of the case. We would
thereby have the anomalous spectacle of a party bringing suit at the very time when
he is without the legal capacity to do so.
To repeat, there does not appear to be any local precedential jurisprudence on the
specific issue as to when precisely the status of a complainant as an offended spouse
must exist where a criminal prosecution can be commenced only by one who in law
can be categorized as possessed of such status. Stated differently and with reference
to the present case, the inquiry ;would be whether it is necessary in the
commencement of a criminal action for adultery that the marital bonds between the
complainant and the accused be unsevered and existing at the time of the institution
of the action by the former against the latter.
American jurisprudence, on cases involving statutes in that jurisdiction which are in
pari materia with ours, yields the rule that after a divorce has been decreed, the
innocent spouse no longer has the right to institute proceedings against the
offenders where the statute provides that the innocent spouse shall have the
exclusive right to institute a prosecution for adultery. Where, however, proceedings
have been properly commenced, a divorce subsequently granted can have no legal
effect on the prosecution of the criminal proceedings to a conclusion. 22
In the cited Loftus case, the Supreme Court of Iowa held that
'No prosecution for adultery can be commenced except on the
complaint of the husband or wife.' Section 4932, Code. Though
Loftus was husband of defendant when the offense is said to have
been committed, he had ceased to be such when the prosecution
was begun; and appellant insists that his status was not such as to
entitle him to make the complaint. We have repeatedly said that the
 offense is against the unoffending spouse, as well as the state, in
explaining the reason for this provision in the statute; and we are of
the opinion that the unoffending spouse must be such when the
prosecution is commenced. (Emphasis supplied.)
We see no reason why the same doctrinal rule should not apply in this case and in
our jurisdiction, considering our statutory law and jural policy on the matter. We are
convinced that in cases of such nature, the status of the complainant vis-a-vis the
accused must be determined as of the time the complaint was filed. Thus, the person
who initiates the adultery case must be an offended spouse, and by this is meant that
he is still married to the accused spouse, at the time of the filing of the complaint.
In the present case, the fact that private respondent obtained a valid divorce in his
country, the Federal Republic of Germany, is admitted. Said divorce and its legal
effects may be recognized in the Philippines insofar as private respondent is
concerned 23 in view of the nationality principle in our civil law on the matter of status
of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24 after a divorce was
granted by a United States court between Alice Van Dornja Filipina, and her
American husband, the latter filed a civil case in a trial court here alleging that her
business concern was conjugal property and praying that she be ordered to render an
accounting and that the plaintiff be granted the right to manage the business.
Rejecting his pretensions, this Court perspicuously demonstrated the error of such
stance, thus:
There can be no question as to the validity of that Nevada divorce
in any of the States of the United States. The decree is binding on
private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of
the Union. ...
It is true that owing to the nationality principle embodied in Article
15 of the Civil Code, only Philippine nationals are covered by the
policy against absolute divorces the same being considered
contrary to our concept of public policy and morality. However,
aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national law.
...
Thus, pursuant to his national law, private respondent is no longer
the husband of petitioner. He would have no standing to sue in the
case below as petitioner's husband entitled to exercise control over
conjugal assets. ... 25
Under the same considerations and rationale, private respondent, being no longer the
husband of petitioner, had no legal standing to commence the adultery case under
the imposture that he was the offended spouse at the time he filed suit.
The allegation of private respondent that he could not have brought this case before
the decree of divorce for lack of knowledge, even if true, is of no legal significance or
consequence in this case. When said respondent initiated the divorce proceeding, he
obviously knew that there would no longer be a family nor marriage vows to protect
once a dissolution of the marriage is decreed. Neither would there be a danger of
introducing spurious heirs into the family, which is said to be one of the reasons for
the particular formulation of our law on adultery, 26 since there would thenceforth be
no spousal relationship to speak of. The severance of the marital bond had the effect
of dissociating the former spouses from each other, hence the actuations of one
would not affect or cast obloquy on the other.
The aforecited case of United States vs. Mata cannot be successfully relied upon by
private respondent. In applying Article 433 of the old Penal Code, substantially the
same as Article 333 of the Revised Penal Code, which punished adultery "although
the marriage be afterwards declared void", the Court merely stated that "the
lawmakers intended to declare adulterous the infidelity of a married woman to her
marital vows, even though it should be made to appear that she is entitled to have her
marriage contract declared null and void, until and unless she actually secures a
formal judicial declaration to that effect". Definitely, it cannot be logically inferred
therefrom that the complaint can still be filed after the declaration of nullity because
such declaration that the marriage is void ab initio is equivalent to stating that it never
existed. There being no marriage from the beginning, any complaint for adultery filed
after said declaration of nullity would no longer have a leg to stand on. Moreover,
what was consequently contemplated and within the purview of the decision in said
case is the situation where the criminal action for adultery was filed before the
termination of the marriage by a judicial declaration of its nullity ab initio. The same
rule and requisite would necessarily apply where the termination of the marriage was
effected, as in this case, by a valid foreign divorce.
Private respondent's invocation of Donio-Teves, et al. vs. Vamenta, hereinbefore
cited, 27 must suffer the same fate of inapplicability. A cursory reading of said case
reveals that the offended spouse therein had duly and seasonably filed a complaint
for adultery, although an issue was raised as to its sufficiency but which was resolved
in favor of the complainant. Said case did not involve a factual situation akin to the
one at bar or any issue determinative of the controversy herein.
WHEREFORE, the questioned order denying petitioner's motion to quash is SET
ASIDE and another one enteredDISMISSING the complaint in Criminal Case No. 87-
52435 for lack of jurisdiction. The temporary restraining order issued in this case on
October 21, 1987 is hereby made permanent.
SO ORDERED.
Melencio-Herrera, Padilla and Sarmiento, JJ., concur.
Separate Opinions
PARAS, J., concurring:
It is my considered opinion that regardless of whether We consider the German
absolute divorce as valid also in the Philippines, the fact is that the husband in the
instant case, by the very act of his obtaining an absolute divorce in Germany can no
longer be considered as the offended party in case his former wife actually has carnal
knowledge with another, because in divorcing her, he already implicitly authorized the
woman to have sexual relations with others. A contrary ruling would be less than fair
for a man, who is free to have sex will be allowed to deprive the woman of the same
privilege.
In the case of Recto v. Harden (100 Phil. 427 [1956]), the Supreme Court considered
the absolute divorce between the American husband and his American wife as valid
and binding in the Philippines on the theory that their status and capacity are
governed by their National law, namely, American law. There is no decision yet of the
Supreme Court regarding the validity of such a divorce if one of the parties, say an
American, is married to a Filipino wife, for then two (2) different nationalities would be
involved.
In the book of Senate President Jovito Salonga entitled Private International Law and
precisely because of theNational law doctrine, he considers the absolute divorce as
valid insofar as the American husband is concerned but void insofar as the Filipino
wife is involved. This results in what he calls a "socially grotesque situation," where a
Filipino woman is still married to a man who is no longer her husband. It is the opinion
however, of the undersigned that very likely the opposite expresses the correct view.
While under the national law of the husband the absolute divorce will be valid, still
one of the exceptions to the application of the proper foreign law (one of the
exceptions to comity) is when the foreign law will work an injustice or injury to the
people or residents of the forum. Consequently since to recognize the absolute
divorce as valid on the part of the husband would be injurious or prejudicial to the
Filipino wife whose marriage would be still valid under her national law, it would seem
that under our law existing before the new Family Code (which took effect on August
3, 1988) the divorce should be considered void both with respect to the American
husband and the Filipino wife.
The recent case of Van Dorn v. Romillo, Jr. (139 SCRA [1985]) cannot apply despite
the fact that the husband was an American can with a Filipino wife because in said
case the validity of the divorce insofar as the Filipino wife is concerned was NEVER
put in issue.
Separate Opinions
PARAS, J., concurring:
It is my considered opinion that regardless of whether We consider the German
absolute divorce as valid also in the Philippines, the fact is that the husband in the
instant case, by the very act of his obtaining an absolute divorce in Germany can no
longer be considered as the offended party in case his former wife actually has carnal
knowledge with another, because in divorcing her, he already implicitly authorized the
woman to have sexual relations with others. A contrary ruling would be less than fair
for a man, who is free to have sex will be allowed to deprive the woman of the same
privilege.
In the case of Recto v. Harden (100 Phil. 427 [1956]), the Supreme Court considered
the absolute divorce between the American husband and his American wife as valid
and binding in the Philippines on the theory that their status and capacity are
governed by their National law, namely, American law. There is no decision yet of the
Supreme Court regarding the validity of such a divorce if one of the parties, say an
American, is married to a Filipino wife, for then two (2) different nationalities would be
involved.
In the book of Senate President Jovito Salonga entitled Private International Law and
precisely because of theNational law doctrine, he considers the absolute divorce as
valid insofar as the American husband is concerned but void insofar as the Filipino
wife is involved. This results in what he calls a "socially grotesque situation," where a
Filipino woman is still married to a man who is no longer her husband. It is the opinion
however, of the undersigned that very likely the opposite expresses the correct view.
While under the national law of the husband the absolute divorce will be valid, still
one of the exceptions to the application of the proper foreign law (one of the
exceptions to comity) is when the foreign law will work an injustice or injury to the
people or residents of the forum. Consequently since to recognize the absolute
divorce as valid on the part of the husband would be injurious or prejudicial to the
Filipino wife whose marriage would be still valid under her national law, it would seem
that under our law existing before the new Family Code (which took effect on August
3, 1988) the divorce should be considered void both with respect to the American
husband and the Filipino wife.
The recent case of Van Dorn v. Romillo, Jr. (139 SCRA [1985]) cannot apply despite
the fact that the husband was an American can with a Filipino wife because in said
case the validity of the divorce insofar as the Filipino wife is concerned was NEVER
put in issue.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-68470 October 8, 1985
ALICE REYES VAN DORN, petitioner,
vs.
HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch CX, Regional
Trial Court of the National Capital Region Pasay City and RICHARD
UPTON respondents.
MELENCIO-HERRERA, J.:\
In this Petition for certiorari and Prohibition, petitioner Alice Reyes Van Dorn seeks to
set aside the Orders, dated September 15, 1983 and August 3, 1984, in Civil Case
No. 1075-P, issued by respondent Judge, which denied her Motion to Dismiss said
case, and her Motion for Reconsideration of the Dismissal Order, respectively.
The basic background facts are that petitioner is a citizen of the Philippines while
private respondent is a citizen of the United States; that they were married in
Hongkong in 1972; that, after the marriage, they established their residence in the
Philippines; that they begot two children born on April 4, 1973 and December 18,
1975, respectively; that the parties were divorced in Nevada, United States, in 1982;
and that petitioner has re-married also in Nevada, this time to Theodore Van Dorn.
Dated June 8, 1983, private respondent filed suit against petitioner in Civil Case No.
1075-P of the Regional Trial Court, Branch CXV, in Pasay City, stating that
petitioner's business in Ermita, Manila, (the Galleon Shop, for short), is conjugal
property of the parties, and asking that petitioner be ordered to render an accounting
of that business, and that private respondent be declared with right to manage the
conjugal property. Petitioner moved to dismiss the case on the ground that the cause
of action is barred by previous judgment in the divorce proceedings before the
Nevada Court wherein respondent had acknowledged that he and petitioner had "no
community property" as of June 11, 1982. The Court below denied the Motion to
Dismiss in the mentioned case on the ground that the property involved is located in
the Philippines so that the Divorce Decree has no bearing in the case. The denial is
now the subject of this certiorari proceeding.
Generally, the denial of a Motion to Dismiss in a civil case is interlocutory and is not
subject to appeal. certiorari and Prohibition are neither the remedies to question the
propriety of an interlocutory order of the trial Court. However, when a grave abuse of
discretion was patently committed, or the lower Court acted capriciously and
whimsically, then it devolves upon this Court in a certiorari proceeding to exercise its
supervisory authority and to correct the error committed which, in such a case, is
equivalent to lack of jurisdiction. 1 Prohibition would then lie since it would be useless
and a waste of time to go ahead with the proceedings. 2 Weconsider the petition filed
in this case within the exception, and we have given it due course.
For resolution is the effect of the foreign divorce on the parties and their alleged
conjugal property in the Philippines.
Petitioner contends that respondent is estopped from laying claim on the alleged
conjugal property because of the representation he made in the divorce proceedings
before the American Court that they had no community of property; that the Galleon
Shop was not established through conjugal funds, and that respondent's claim is
barred by prior judgment.
For his part, respondent avers that the Divorce Decree issued by the Nevada Court
cannot prevail over the prohibitive laws of the Philippines and its declared national
policy; that the acts and declaration of a foreign Court cannot, especially if the same
is contrary to public policy, divest Philippine Courts of jurisdiction to entertain matters
within its jurisdiction.
For the resolution of this case, it is not necessary to determine whether the property
relations between petitioner and private respondent, after their marriage, were upon
absolute or relative community property, upon complete separation of property, or
upon any other regime. The pivotal fact in this case is the Nevada divorce of the
parties.
The Nevada District Court, which decreed the divorce, had obtained jurisdiction over
petitioner who appeared in person before the Court during the trial of the case. It also
obtained jurisdiction over private respondent who, giving his address as No. 381 Bush
Street, San Francisco, California, authorized his attorneys in the divorce case, Karp &
Gradt Ltd., to agree to the divorce on the ground of incompatibility in the
understanding that there were neither community property nor community
obligations. 3 As explicitly stated in the Power of Attorney he executed in favor of the
law firm of KARP & GRAD LTD., 336 W. Liberty, Reno, Nevada, to represent him in
the divorce proceedings:
xxx xxx xxx
You are hereby authorized to accept service of Summons, to file an Answer,
appear on my behalf and do an things necessary and proper to represent me,
without further contesting, subject to the following:
1. That my spouse seeks a divorce on the ground of incompatibility.
2. That there is no community of property to be adjudicated by the Court.
3. 'I'hat there are no community obligations to be adjudicated by the court.
xxx xxx xxx 4
There can be no question as to the validity of that Nevada divorce in any of the States
of the United States. The decree is binding on private respondent as an American
citizen. For instance, private respondent cannot sue petitioner, as her husband, in any
State of the Union. What he is contending in this case is that the divorce is not valid
and binding in this jurisdiction, the same being contrary to local law and public policy.

It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, 5 only Philippine nationals are covered by the policy against absolute divorces
the same being considered contrary to our concept of public police and morality.
However, aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national law. 6 In this case, the
divorce in Nevada released private respondent from the marriage from the standards
of American law, under which divorce dissolves the marriage. As stated by
the Federal Supreme Court of the United States in Atherton vs. Atherton, 45 L. Ed.
794, 799:

The purpose and effect of a decree of divorce from the bond of matrimony by a
court of competent jurisdiction are to change the existing status or domestic
relation of husband and wife, and to free them both from the bond. The marriage
tie when thus severed as to one party, ceases to bind either. A husband without
a wife, or a wife without a husband, is unknown to the law. When the law
provides, in the nature of a penalty. that the guilty party shall not marry again,
that party, as well as the other, is still absolutely freed from the bond of the
former marriage.

Thus, pursuant to his national law, private respondent is no longer the husband of
petitioner. He would have no standing to sue in the case below as petitioner's
husband entitled to exercise control over conjugal assets. As he is bound by the
Decision of his own country's Court, which validly exercised jurisdiction over him, and
whose decision he does not repudiate, he is estopped by his own representation
before said Court from asserting his right over the alleged conjugal property.

To maintain, as private respondent does, that, under our laws, petitioner has to be
considered still married to private respondent and still subject to a wife's obligations
under Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not be
obliged to live together with, observe respect and fidelity, and render support to
private respondent. The latter should not continue to be one of her heirs with possible
rights to conjugal property. She should not be discriminated against in her own
country if the ends of justice are to be served.

WHEREFORE, the Petition is granted, and respondent Judge is hereby ordered to

dismiss the Complaint filed in Civil Case No. 1075-P of his Court.

Without costs.

SO ORDERED.

Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., De la Fuente and Patajo, JJ.,
concur.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 187240 October 15, 2014
CARLOS A. LORIA, Petitioner,
vs.
LUDOLFO P. MUOZ, JR. Respondent.
DECISION
LEONEN, J.:
No person should unjustly enrich himself or herself at the expense of another.
This is a petition for review on certiorari1 to set aside the Court of Appeals'
decision2 and resolution3 in CA-G.R. CV No. 81882. The Court of Appeals ordered
petitioner Carlos A. Loria to pay respondent Ludolfo P. Muoz, Jr.P2,000,000.00 in
actual damages with 12% interest per year from the filing of the complaint until full
payment.4
The facts of this case are as follows:
Ludolfo P. Muoz, Jr. (Muoz) filed a complaint for sum of money and damages with
an application for issuance of a writ of preliminary attachment against Carlos A. Loria
(Loria) with the Regional Trial Court of Legazpi City.5
In his complaint, Muoz alleged that he has been engaged in construction under the
name, "Ludolfo P. Muoz, Jr. Construction." In August 2000, Loria visited Muoz in
his office in Doa Maria Subdivision in Daraga, Albay. He invited Muoz to
advance P2,000,000.00 for a subcontract of a P50,000,000.00 river-dredging project
in Guinobatan.6
Loria represented that he would makearrangements such that Elizaldy Co, owner of
Sunwest Construction and Development Corporation, would turn out to be the lowest
bidder for the project. Elizaldy Co would payP8,000,000.00 to ensure the projects
award to Sunwest. After the award to Sunwest, Sunwest would subcontract 20%
or P10,000,000.00 worth of the project to Muoz.7
Since Muoz had known Loria for five years, Muoz accepted Lorias proposal. 8
On October 2, 2000, Muoz requested Allied Bank to release P3,000,000.00 from his
joint account withhis business partner, Christopher Co, to a certain Grace delos
Santos (delos Santos). Loria then obtained the money from delos Santos.9
Four days later, P1,800,000.00 of the P3,000,000.00 was returned to Muoz.10
On January 10, 2001, Loria collectedMuozs P800,000.00 balance. After deducting
Lorias personal loans from Muoz, Muoz issued a check to Loria for P481,800.00.
Loria acknowledged receiving this amount from Muoz. 11
The project to dredge the Masarawag and San Francisco Rivers in Guinobatan was
subjected to public bidding. The project was awarded to the lowest bidder, Sunwest
Construction and Development Corporation.12
Sunwest allegedly finished dredging the Masarawag and San Francisco Rivers
without subcontracting Muoz.13With the project allegedly finished, Muozdemanded
Loria to return his P2,000,000.00. Loria, however, did not return the money. 14
Muoz first charged Loria and Elizaldy Co with estafa. This criminal case was
dismissed by the Municipal Trial Court of Daraga, Albay for lack of probable cause. 15
Muoz then filed the complaint for sum of money. The case was raffled to Branch 6
and presidedby Judge Vladimir B. Brusola.16
Loria answered Muozs complaint. He admitted receiving P481,800.00 from Muoz
but argued that the complaint did not state a cause of action against him. According
to Loria, he followed up the projects approval with the Central Office of the
Department of Public Works and Highways as the parties agreed upon. He was,
therefore, entitled to his representation expenses.17
Loria also argued that Muoz was guilty of forum shopping. Muoz first filed a
criminal complaint for estafa against him and Elizaldy Co, which complaint the
Municipal Trial Court of Daraga, Albay dismissed. The subsequently filed complaint
for sum of money, allegedly a complaint to recover the civil aspect of the estafa case,
must, therefore, be dismissed as argued by Loria.18
During pre-trial, the parties agreed to litigate the sole issue of whether Loria is liable
to Muoz forP2,000,000.00.19
According to the trial court, Muoz established with preponderant evidence that Loria
received P2,000,000.00 from Muoz for a subcontract of the river-dredging project.
Since no part of the project was subcontracted to Muoz, Loria must return
the P2,000,000.00 he received, or he would be "unduly enriching himself at the
expense of [Muoz]."20
On the claim of forum shopping, the trial court ruled that Lorias obligation to return
the 2,000,000.00 did not arise from criminal liability. Muoz may, therefore, file a civil
action to recover his P2,000,000.00.21
As to the prayer for issuance of a writ of preliminary attachment, the trial court denied
the prayer for lack of sufficient basis.22
Thus, in the decision23 dated January 30, 2004, the trial court ordered Loria to return
the P2,000,000.00 toMuoz as actual damages with 12% interest from the filing of the
complaint until the amounts full payment. The trial court likewise ordered Loria to pay
Muoz P100,000.00 in attorneys fees, P25,000.00 in litigation expenses,
andP25,000.00 in exemplary damages with costs against Loria.24
Loria appealed to the Court of Appeals, arguing that Muoz failed to establish his
receipt of the P2,000,000.00. Specifically, Muoz failed to establish that he
obtained P3,000,000.00from a certain Grace delos Santos. Loria also appealed the
award of attorneys fees, litigation expenses, and exemplary damages for having no
basis in fact and in law.25
The Court of Appeals sustained the trial courts factual findings. In ruling that Loria
received the net amount ofP2,000,000.00 from Muoz, the Court of Appeals referred
to Muozs testimony that he ordered Allied Bank to release P3,000,000.00 from his
joint account with Christopher Co to a certain Grace delos Santos. 26 Loria then
obtained the money from delos Santos and confirmed with Muoz his receipt of the
money.27 This testimony, according to the appellate court, was supported by Exhibit
"C," a check voucher the trial court admitted inevidence. Loria signed this check
voucher and acknowledged receiving P1,200,000.00 on October 2, 2000
andP800,000.00 on January 10, 2001, ora total of P2,000,000.00.28
Considering that Muoz did not benefit from paying Loria P2,000,000.00, the
appellate court ruled that Loria must return the money to Muoz under the principle of
unjust enrichment.29
The appellate court, however, ruled that Muoz failed to show his right to exemplary
damages and attorneys fees.30
Thus, in the decision31 dated October 23, 2008, the Court of Appeals affirmed the trial
courts decision but deleted the award of exemplary damages and attorneys
fees.32 The appellate court likewise denied Lorias motion for reconsideration in the
resolution33 dated March 12, 2009.
Loria filed a petition for review on certiorari34 with this court, arguing that the principle
of unjust enrichment does not apply in this case. As the trial and appellate courts
found, Muoz paid Loria P2,000,000.00 for a subcontract of a government project.
The parties agreement, therefore, was void for being contrary to law, specifically, the
Anti-Graft and Corrupt Practices Act, the Revised Penal Code, and Section 6 of
Presidential Decree No. 1594. The agreement was likewise contrary to the public
policy of public or open competitive bidding of government contracts. 35
Since the parties agreement was void, Loria argues that the parties were in pari
delicto, and Muoz should not be allowed to recover the money he gave under the
contract.36
On the finding that he received a net amount of P2,000,000.00 from Muoz, Loria
maintains that Muoz failed to prove his receipt of P3,000,000.00 through a certain
Grace delos Santos.37
In the resolution38 dated June 3, 2009, thiscourt ordered Muoz to comment on
Lorias petition.
In his comment,39 Muoz argues that Lorias petition raises questions of fact and law
that the trial and appellate courts have already passed upon and resolved in his favor.
He prays that this court deny Lorias petition for raising questions of fact.
Loria replied40 to the comment, arguing thathe raised only questions of law in his
petition.41 Even assuming that he raised questions of fact, Loria argues that this does
not warrant the automatic dismissal of his petition since the trial and appellate courts
allegedly erred inruling for Muoz.42
On October 8, 2010, the parties filed their joint motion to render judgment based on
the compromise agreement.43 In their compromise agreement,44 the parties declared
that thiscase "was a product of a mere misunderstanding."45 To amicably settle their
dispute, the parties agreed to waive all their claims, rights, and interests against each
other.46
This court denied the joint motion for lack of merit in the resolution47 dated December
15, 2010.
The issues for our resolution are the following:
I. Whether Loria initially obtained P3,000,000.00 from a certain Grace delos
Santos
II. Whether Loria is liable for P2,000,000.00 to Muoz
We rule for Muoz and deny Lorias petition for review on certiorari.
I
Whether Loria initially received 3,000,000.00 is a question of fact not proper in a
petition for review on certiorari
We first address Lorias contention that Muoz failed to prove his initial receipt
of P3,000,000.00. This is a question of fact the trial and appellate courts have already
resolved. In a Rule 45 petition, we do not address questions of fact, questions which
require us to ruleon "the truth or falsehood of alleged facts."48 Under Section 1, Rule
45 of the Rules of Court, we only entertain questions of law questions as to the
applicable law given a set of facts49 in a petition for review on certiorari:
Section 1. Filing of petition with Supreme Court.
A party desiring to appeal by certiorari from a judgment or final order or resolution of
the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts
whenever authorized by law, may file withthe Supreme Court a verified petition for
review on certiorari. The petition shall raise only questions of lawwhich must be
distinctly set forth. (Emphasis supplied)50
We may review questions of fact in a Rule 45 petition:
. . . (1) when the findings are grounded entirely on speculations, surmises, or
conjectures; (2) when the inference made is manifestly mistaken, absurd, or
impossible; (3) when there is a grave abuse of discretion; (4) when the judgment is
based on misappreciation of facts; (5) when the findings of fact are conflicting; (6)
when in making its findings, the same are contrary to the admissions of both appellant
and appellee; (7) the findings are contrary to those of the trial court; (8) when the
findings are conclusions without citation of specific evidence on which they are based;
(9) the facts set forth in the petition as well as in petitioners main and reply briefs are
not disputed by respondent; and (10) the findings of fact are premised on the
supposed absence of evidence and contradicted by the evidence on
record.51 [Emphases omitted]
Loria failed to convince us why we should make an exception in this case.
During trial, Muoz testified thathe ordered Allied Bank to release P3,000,000.00 from
his joint account withChristopher Co to a certain Grace delos Santos. 52 Loria then
obtained the money from delos Santos and confirmed with Muoz his receipt of the
amount.53 P1,800,000.00 was subsequently returned to Muoz, leaving
aP1,200,000.00 balance with Loria. This testimony was supported by Exhibit "C," the
check voucher where Loria acknowledged receiving P1,200,000.00 from Muoz.54
We agree that these pieces ofevidence duly prove Lorias initial receipt
of P3,000,000.00. We will not disturb this finding.
II
Loria must return Munozs P2,000,000.00 under the principle of unjust enrichment
Under Article 22 of the Civil Codeof the Philippines, "every person who through an act
of performance by another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground, shall return the
same to him." There is unjust enrichment "when a person unjustly retains a benefit to
the loss of another, or when a person retains money orproperty of another against the
fundamental principles of justice, equity and good conscience." 55
The principle of unjust enrichment has two conditions. First, a person must have been
benefited without a real or valid basis or justification. Second, the benefit was derived
at another persons expense or damage.56
In this case, Loria received P2,000,000.00 from Muoz for a subcontract of a
government projectto dredge the Masarawag and San Francisco Rivers in
Guinobatan, Albay. However, contrary to the parties agreement, Muoz was not
subcontracted for the project. Nevertheless, Loria retained the P2,000,000.00.
Thus, Loria was unjustly enriched. He retained Muozs money without valid basis or
justification. Under Article 22 of the Civil Code of the Philippines, Loria must return
the P2,000,000.00 to Muoz.
Contrary to Lorias claim, Section 6 of the Presidential Decree No. 1594 does not
prevent Muoz from recovering his money.
Under Section 6 of the Presidential Decree No. 1594,57 a contractor shall not
subcontract a part or interestin a government infrastructure project without the
approval of the relevant department secretary:
Section 6. Assignment and Contract.The contractor shall not assign, transfer, pledge,
subcontract ormake any other disposition of the contract or any part or interest therein
except with the approval of the Minister of Public Works, Transportation and
Communications, the Minister of Public Highways, or the Minister of Energy, as the
case may be. Approval of the subcontract shall not relieve the main contractor from
any liability or obligation under his contract with the Government nor shall it create
any contractual relation between the subcontractor and the Government.
A subcontract, therefore, is void only if not approved by the department secretary.
In this case, it is premature to rule on the legality of the parties agreement precisely
becausethe subcontract did not push through. No actual agreement was proven in
evidence.The Secretary of Public Works and Highways could have approved the
subcontract, which is allowed under Section 6 of the Presidential Decree No. 1594.
At any rate, even assuming that there was a subcontracting arrangement between
Sunwest Construction and Development Corporation and Muoz, this court has
allowed recovery under a void subcontract as an exception to the in pari delicto
doctrine.
In Gonzalo v. Tarnate, Jr.,58 the Department of Public Works and Highways (DPWH)
awarded the contractto Dominador Gonzalo to improve the Sadsadan-Maba-ay
section of the Mountain Province Road. Gonzalo then subcontracted the supply of
materials and labor to John Tarnate, Jr. without the approval of the Secretary of
Public Works and Highways. The parties agreed to a total subcontract fee of 12% of
the projects contract price.59
Tarnate, Jr. also rented equipment to Gonzalo. In a deed of assignment, the parties
agreed to a retention fee of 10% of Gonzalos total collection from the Department of
Public Works and Highways, or 233,526.13, as rent for the equipment. They then
submitted the deed of assignment to the Department for approval. 60
Subsequently, Tarnate, Jr. learned that Gonzalo filed with the Department of Public
Works and Highways an affidavit to unilaterally cancel the deed of assignment.
Gonzalo also collected the retention fee from the Department. 61
Tarnate, Jr. demanded payment for the rent of the equipment, but Gonzalo ignored
his demand. He thenfiled a complaint for sum of money and damages with the
Regional Trial Court of Mountain Province to collect on the 10% retention fee.62
In his defense, Gonzalo argued thatthe subcontract was void for being contrary to
law, specifically, Section 6 of the Presidential Decree No. 1594. Since the deed of
assignment "was a mere product of the subcontract,"63 the deed of assignment was
likewise void. With Tarnate, Jr. "fully aware of the illegality and ineffectuality of the
deed of assignment,"64 Gonzalo contended that Tarnate, Jr. could not collect on the
retention fee under the principle of in pari delicto.65
This court ruled that the subcontract was void for being contrary to law. Under Section
6 of the Presidential Decree No. 1594, a contractor shall not subcontract the
implementation of a government infrastructure project without the approval of the
relevant department secretary.66 Since Gonzalo subcontracted the project to Tarnate,
Jr. without the approvalof the Secretary of Public Works and Highways, the
subcontract was void, including the deed of assignment, which "sprung from the
subcontract."67
Generally, parties to an illegal contract may not recover what they gave under the
contract.68 Under the doctrine of in pari delicto, "no action arises, in equity or at law,
from anillegal contract[.] No suit can be maintained for its specific performance, or to
recover the property agreed to be sold or delivered, or the money agreed to be paid,
or damages for its violation[.]"69 Nevertheless, this court allowed Tarnate, Jr. to
recover 10% of the retention fee. According to this court,"the application of the
doctrine of in pari delictois not always rigid."70 An exception to the doctrine is "when
its application contravenes well-established public policy."71 In Gonzalo, this court
ruled that "the prevention of unjust enrichment is a recognized public policy of the
State."72 It is, therefore, an exception to the application of the in pari delicto doctrine.
This court explained:
. . . the application of the doctrine of in pari delicto is not always rigid.1wphi1 An
accepted exception arises when its application contravenes wellestablished public
policy. In this jurisdiction, public policy has been defined as "that principle of the law
which holds that no subject or citizen can lawfully do that which has a tendency to be
injurious to the public or against the public good."
Unjust enrichment exists, according to Hulst v. PR Builders, Inc., "when a person
unjustly retains a benefit at the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity and good
conscience." The prevention of unjust enrichment is a recognized public policy of the
State, for Article 22 of the Civil Code explicitly provides that "[e]veryperson who
through an act of performance by another, or any other means, acquires or comes
into possession of something at the expense of the latter without just or legal ground,
shall return the same to him." It is well to note that Article 22 "is part of the chapter of
the Civil Code on Human Relations, the provisions of which were formulated as basic
principles to be observed for the rightful relationship between human beings and for
the stability of the social order; designed to indicate certain norms that spring from the
fountain of good conscience;guides for human conduct that should run as golden
threads through society to the end that law may approach its supreme ideal which is
the sway and dominance of justice."73 (Citations omitted)
Given that Tarnate, Jr. performed his obligations under the subcontract and the deed
of assignment, this court ruled that he was entitled to the agreed fee. According to
this court, Gonzalo "would be unjustly enriched at the expense of Tarnate if the latter
was tobe barred from recovering because of the rigid application of the doctrine of in
pari delicto."74
In this case, both the trial and appellate courts found that Loria
received P2,000,000.00 from Muoz for a subcontract of the river-dredging project.
Loria never denied that hefailed to fulfill his agreement with Muoz. Throughout the
cases proceedings, Loria failed to justify why he has the right to retain
Muozs P2,000,000.00. As the Court of Appeals ruled, "it was not shown that
[Muoz] benefited from the delivery of the amount ofP2,000,000.00 to [Loria]."75
Loria, therefore, is retaining the P2,000,000.00 without just or legal ground. This
cannot be done. Under Article 22 of the Civil Code of the Philippines, he must return
the P2,000,000.00 to Muoz.
This court notes the possible irregularities in these transactions. At the very least,
there appears to have been an attempt to circumvent our procurement laws. If
petitioner indeed had the authority of Sunwest Construction and Development
Corporation, it is strange that Loria could have guaranteed a bidding result. If he did
not have any true dealing with Sunwest Construction, then his is an elaborate scheme
to cause financiers to lose their hard-earned money for nothing. WHEREFORE, the
petition for review on certiorari is DENIED. The Court of Appeals' decision and
resolution in CA-GR. CV No. 81882 are AFFIRMED with MODIFICATION as to
interest rate. Petitioner Carlos A. Loria shall pay respondent Ludolfo P. Mufioi,
Jr. P2,000,000.00 in actual damages, with interest of 12% interest per annum from
the filing of the complaint until June 30, 2013, and 6% interest per annum from July 1,
2013 until full payment.76
Let a copy of this decision be SERVED on the Office of the Ombudsman and the
Department of Justice for their appropriate actions.
SO ORDERED.
MARVIC M.V.F. LEONEN
Associate Justice
 Republic of the Philippines In 1990, a Declaration of Real Property was filed and issued in Teodoricos
SUPREME COURT name.7 On March 21, 1991,he made full payment of the value of the subject lot in the
Manila amount of P43,472.00.8 He likewise paid the real property taxes thereon.9

SECOND DIVISION In an August 5, 1994 Letter-Decision,10 the NHA informed Teodorico that after
consideration of the objections raised by the Rosetes, the Corpuzes and the
G.R. No. 176121 September 22, 2014 Brioneses, the original award of 152 square meters in his favor has been cancelled
and instead, the subject lot will besubdivided and awarded as follows:
SPOUSES TEODORICO and PACITA ROSETE, Petitioners,
vs. 1. Teodorico 62 square meters
FELIX and/or MARIETTA BRIONES, SPOUSES JOSE and REMEDIOS ROSETE,
AND NEORIMSE and FELICITAS CORPUZ, Respondents. 2. The Brioneses 40 square meters

DECISION 3. The Rosetes 25 square meters

DEL CASTILLO, J.: 4. The Corpuzes 15 square meters

Assailed in this Petition for Review on Certiorari1 are the October 30, 2006
Decision2 of the Court of Appeals (CA) which denied the Petition for Review in CA-
G.R. SP No. 79400 and its December 22, 2006 Resolution 3 denying the herein
petitioners' Motion for Reconsideration.4
Factual Antecedents
The subject lot is a 152-square meter lot located at 1014 Estrada Street, Malate,
Manila which is owned by the National Housing Authority (NHA).
On July 30, 1987, the NHA conducted a census survey of the subject lot, and the
following information was gathered:
Tag No. 674
Ricardo Dimalanta, Sr. - absentee structure owner
Felix Briones - lessee
Neorimse Corpuz - lessee
5. Easement for pathwalk 10 square meters
In the same Letter-Decision, NHA likewise informed Teodorico that his payments
shall be adjusted accordingly, but his excess payments will not be refunded; instead,
they will be applied to his co-awardees amortizations. His coawardees shall in turn
pay him, under pain of cancellation of their respective awards. NHA also
informedTeodorico that the matters contained in the letter were final, and that if he
intended to appeal, he should do so with the Office of the President within 30 days.
In an October 18, 1994 letter11 to the NHA, Teodorico protested and sought a
reconsideration of the decision to cancelthe award, claiming that it was unfair and
confiscatory. He likewise requested that his co-awardees be required to reimburse his
property tax payments and that the subject lot be assessed at its current value.
Meanwhile, on October 24, 1994, the Rosetes and the Corpuzes appealed the NHAs
August 5, 1994 Letter-Decision tothe Office of the President (OP), which case was
docketed as O.P. Case No. 5902.

Tag No. 87-0675
Teodoro Rosete - residing owner
Jose Rosete lessee5
The NHA awarded the subject lot topetitioner Teodorico P. Rosete (Teodorico).6 The
herein respondents, Jose and Remedios Rosete(the Rosetes), Neorimse and
Felicitas Corpuz (the Corpuzes), and Felix and Marietta Briones (the Brioneses)
objected to the award, claiming that the award of the entire lot to Teodorico was
erroneous.
On February 2, 1995, Teodorico filed an undated letter12 in O.P. Case No. 5902. In
the said letter, he directed the OPs attention to the Rosetes and the Corpuzes
resolve not to question the 62-square meter allocation/award to him. At the same
time, he manifested his assent to such allocation, thus:
Undersigned is satisfied with the 62 sq. m. lot awarded to him. However, in the
adjudication of the above-mentioned case and in furtherance of justice, it is prayed
that:
1. The period within which refund to the undersigned by the spouses Jose
and Remedios Rosete, Neorimseand Felicitas Corpuz, and Felix and
 Marietta Briones of the purchase price of the lots awarded to them be fixed,
with interest thereon from March 21, 1991 until full reimbursement is made;
2. The foregoing awardees be ordered likewise to reimburse to the
undersigned the real estate taxes paid on their respective lots from 1980,
plus interest thereon, until full reimbursement; and 3. Other relief in favor of
the undersigned be issued.13
On November 19, 1997, the OP issued its Decision14 in O.P. Case No. 5902,
dismissing the appeal for being filed out of time.
On March 27, 1998, the OP issued a Resolution15declaring that the above November
19, 1997 Decision in O.P. Case No. 5902 has become final and executory since no
motion for reconsideration was filed, nor appeal taken, by the parties.
In another July 28, 1999 letter16 to the NHA, Teodorico, the Rosetes, and the
Corpuzes sought approval of their request to subdivide the subject lot on an "as is,
where is" basis as per NHA policy, since it appeared that the parties respective
allocations/awards did not correspond to the actual areas occupied by them and thus
could result in unwanted demolition of their existing homes/structures.
In a November 12, 1999 Letter-Reply,17 the NHA informed the parties that the original
awards/allocationswere being retained; it also advised them to hire a surveyor for the
purpose of subdividing the subject lot in accordance with such awards.
Through counsel, Teodorico wrote back. In his November 23, 1999 letter, 18 he
reiterated his request tosubdivide the subject lot onan "as is, where is" basis and to
be reimbursed by his co-awardees for his overpayments, with interest. This was
followed by another March 29, 2001 letter19 by his counsel.
Receiving no response from the NHA regarding the above November 23, 1999 letter,
Teodorico senta May 7, 2003 letter cummotion for reconsideration20 to the OP, in
which he sought a reconsideration of the November 19, 1997 Decision in O.P. Case
No. 5902. Heclaimed that the August 5, 1994 LetterDecision of the NHA containing
the award/allocation of the subject lot to the parties is null and void as it violated the
provisions of Presidential Decree No. 151721 (PD 1517) and PD 2016;22 that the
award of 40 square meters to the Brioneses is null and void as they were mere
"renters" (lessees); that because the August 5, 1994 Letter-Decision of the NHA is a
nullity, it never became final and executory. Thus, he prayed:
WHEREFORE, it is reiterated that the "as is, where is" policy of the NHA be followed
in the instant case and that Teodorico P. Rosete be reimbursed by Marietta Briones,
et al. of the value of the lots adjudicated in their favor and the real estate taxes he
paid on the lots they occupy, plus interest thereon to be determined by the NHA.
Wewill not demand the cancellation of the awards to Marietta Briones, et al. so as not
to prejudice their respective families.23
In a September 8, 2003 Resolution,24 the OP denied Teodoricos May 7, 2003 letter
cummotion for reconsideration, saying that
Before this Office is the motion filed by Teodorico P. Rosete, requesting
reconsideration of the Decision of this Office dated November 19, 1997 dismissing
the appeal for having been filed out of time.
On March 27, 1998, this Office also declared the said Decision dated November 19,
1997 as having become final and executory. Being so, this Office has no more
jurisdiction over the case. There is nothing left for the office a quo except to
implement the letter-decision of the National Housing Authority (NHA) dated October
24, 1994.25
Besides, contrary to appellants motion, the said NHA letter-decision is in accordance
with NHA Circular No. 13 dated February 19, 1982, pertinent provisions of which
read:
"V. BENEFICIARIES SELECTION AND LOT ALLOCATION
1. The official ZIP censusand tagging shall be the primary basis for
determining potential program beneficiaries and structures or dwelling units
in the area.
xxxx
4. Only those households included in the ZIP Census and who, in addition,
qualify under the provisions of the Code of Policies, are the beneficiaries of
the Zonal Improvement Program.
5. A qualified censused-household is entitled to only one residential lot within
the ZIP Project area of Metro Manila."
Hence, the letter decision ofthe NHA is a valid judgment.
WHEREFORE, premises considered, the instant motion for reconsideration is hereby
DENIED. Let the records of the case be remanded to the office-a-quo for
implementation.
SO ORDERED.26
Ruling of the Court of Appeals
Teodorico and his wife Pacita, the Rosetes, and the Corpuzes went up to the CA by
Petition for Review,27docketed as CA-G.R. SP No. 79400. They essentially claimed
that pursuant to the "pertinent laws on Beneficiary Selection and Disposition of
Homelots in Urban Bliss Projects,"28 the Rosetes, the Corpuzes, and the Brioneses
are not entitled to own a portion of the subject lot since they were mere "renters" or
lessees therein; for thisreason, the NHAs August 5, 1994 Letter-Decision and
November 19, 1997 Decision and September 8, 2003 Resolution of the OP are null
and void. The Petition contained a prayer for the CA to order the NHA to allocatethe
subject lot on an "as is, where is" basis; that the assailed Decision and Resolution be
stayed; and that the Rosetes, the Corpuzes and the Brioneses be ordered to
reimburse Teodorico in such manner as originally prayed for byhim in the NHA and
OP.
On October 30, 2006, the CA issued the questioned Decision, which held as follows:
Clearly, the Office of the President, in issuing the assailed Resolution, mainly
anchored its denial ofPetitioner TEODORICOs motion for reconsideration of the
Decision dated 19 November 1997 on the finalityof said Decision, which accordingly,
the said Office has no jurisdiction to disturb. We agree with the Office of the
President.
It bears emphasis that as early as 27 March 1998, the Office of the President had
issued a Resolution which essentially states, thus:
Considering that appellants in the above-entitled case have received certified copies
ofthe decision of this Office, dated November 17, 1997, as shown by registry return
receipts attached to the records copy of said decision, and as of March 23, 1998, no
motion for reconsideration thereof has been filed nor appeal taken to the proper court,
this Office resolves to declare said decision, dated November 19, 1997, to have
become FINAL and EXECUTORY.
Necessarily therefore, the subsequent filing by Petitioner TEODORICO of a motion
for reconsideration of the Decision, supra. before the Office of the President did not
produce any legal effect as to warrant a reversal of the said Decision.
Generally, once a decision has become final and executory, it can no longer be
modified or otherwise disturbed. Thus, it is the ministerial duty of the proper judicial or
quasi-judicial body to order its execution, except when, after the decision has become
final and executory, facts and circumstances would transpire which render the
execution impossible or unjust. On this regard, in order to harmonize the disposition
withthe prevailing circumstances, any interested party may ask a competent court to
stay its execution or prevent its enforcement.
However, the Petitioners failed to prove that the aforesaid exception is present in the
case at bar. Instead, they insist that Decisions/Resolutions of the NHA and of the
Office of the President are wanting in validity because they allegedly violated certain
statutes and jurisprudence.
Sadly, We cannot sustain Petitioners theory.
xxxx
Accordingly, the findings of the NHA and of the Office of the President are perforce no
longer open for review.
xxxx
Withal, We find no legal as well as equitable reason for Us to discuss further the
issue, supra, raised by the Petitionersin the instant petition.
WHEREFORE, premises considered, the instant Petition is DENIED. The challenged
Resolution of the Office of the President is hereby AFFIRMED in toto.
SO ORDERED.29
Petitioners filed their Motion for Reconsideration,30 which the CA denied in its
assailed December 22, 2006 Resolution. Hence, the present Petition.
Issues
Petitioners raise the following issues:
5.00.1 The Court of Appeals erred in ruling that petitioner Teodorico Rosete did not
file an appeal from the decision of the National Housing Authority;
5.00.2 The Court of Appeals erred in ruling that the decision of the Office of the
President against the appeal of Remedios Rosete and Felicitas Corpuz binds
petitioner Teodorico Rosete; 5.00.3 The Court of Appeals erred in failing to look into
the merits of petitioner Teodorico Rosetes claim over the subject lot.31
Petitioners Arguments
Praying that the assailed CA Decision and Resolution be set aside and that the
NHAs August 5, 1994 Letter-Decision be modified soas to allow: 1) the subdivision
of the subject lot on an "as is, where is" basis; 2) reimbursement/ refund by the
respondents of Teodoricos lot and tax overpayments; and 3) the corresponding
transfer of title to them petitioners maintain in their Petition and Consolidated
Reply32 that Teodoricos October 18, 1994 letter to the NHA which he allegedly sent
on September 24, 1994 should have been treated as a timely appeal to the OP, the
same having been filed with the NHA within the 30-day reglementary period
prescribed by the latter in its August 5, 1994 LetterDecision and pursuant to Section 1
of Administrative Order No. 18, series of 198733 of the OP (OP AO 18; Prescribing
Rules and Regulations Governing Appeals to the Office of the President of the
Philippines). Thus, the CAs pronouncement that Teodorico made no appeal to the
OP or that it was not timely filed is erroneous.
Petitioners add that since Teodoricos October 18, 1994letter to the NHA which
should be treated as an appeal to the OP remains pending and unacted upon, then
his case is still pending as far as the OP is concerned; that the dismissal of the
appeal through the November 19, 1997 Decision in O.P. Case No. 5902 affected only
the appellants therein, or the Rosetes and the Corpuzes, but not Teodorico whose
appeal remained pending asa result of the OPs failure to act on his October 18, 1994
letter cumappeal. They add thatTeodoricos subsequent filing of his May 7, 2003 letter
with the OP seeking a reconsideration of the November 19, 1997 Decision in O.P.
CaseNo. 5902 should not have been taken against him by the CA, as it was prompted
more by confusion engendered by the OPs failure to act on his October 18, 1994
letter cumappeal; the fact remains that he was not a party appellant in said case, and
thus could not be bound by the November 19, 1997judgment therein rendered.
Finally, petitioners argue that the NHA committed error insubdividing the subject lot,
as it failed to accurately survey the same before making the awards; that the NHA
failed to review the sketch plans submitted by the NHA District Office which reflected
clearly the existing position of the structures built by the awardees; that the NHA
decision would result in the unwarranted destruction of such structures in order to
conform to the respective allocations of the awardees; and that their overpayments
should be returned to them by the respondents, lest unjust enrichment results.
Respondents Arguments
On the other hand, the Rosetes in their Comment34 argue that the NHAs August 5,
1994 Letter-Decision is erroneous and unjust, because only the Brioneses stand to
unduly benefit therefrom since their existing lot area would be increased while that of
the others would be decreased, thus resulting in the destruction of their existing
homes and structures.
The Corpuzes in their Comment35 claim that Teodoricos October 18, 1994 letter to
the NHA cannot betreated as an appeal to the OP, and the NHAs inaction or failure
to act on the said letter should be construed as an implied denial thereof which should
have prompted Teodorico to takefurther legal steps to protect his interests. They
object to being required to pay for interests on the purchase price and taxes
advanced by Teodorico, claiming that this was unjust. Finally, they maintain that the
NHA is correct in allocating the subject lot the way it did among the parties; they
should observe and yield to the law and policy of the NHA, even if it required the
destruction of their homes and structures.
The Brioneses in their Comment36 plainly adopt the decisions of the NHA, the OP and
the CA. They particularly stress thatthe OPs disposition has long become final and
executory;that the courts cannot interfere with the NHAs discretion in awarding the
subject lot; that in the absence of grave abuse of discretion, the courts cannot
overturn the OPs judgment; and that petitioners have not shown any valid ground to
have the NHA and OPs respective decisions reversed.
Our Ruling
The Court deniesthe Petition.
On August 5, 1994, the NHA rendered its Letter-Decision, which Teodorico received
on September 24, 1994. In an October 18, 1994 letter to the NHA, Teodorico sought
a reconsideration ofthe said decision. This was followed by a July 28, 1999 letter to
the NHA, where Teodorico, the Rosetes, and the Corpuzes sought approval of their
request to subdivide the subject lot on an "as is, where is" basis. In a November 12,
1999 Letter-Reply, the NHA informed the parties that the original
awards/allocationswere being retained, and advised them to hire a surveyor for the
purpose of subdividing the subject lot in accordance with such awards. It can be said
that the NHAs November 12, 1999 Letter-Reply constituted not only a written
response tothe July 28, 1999 letter of Teodorico, the Rosetes, and the Corpuzes,
buta denial as well of Teodoricos October 18, 1994 letter cum motion for
reconsideration ofthe agencysAugust 5, 1994 Letter-Decision. As such, Teodorico
should have thereafter filed an appealwith the OPwithin the prescribed period.
However,instead of doing so, he sent another letter to the NHA dated November 23,
1999 reiterating his request to subdivide the subject lot on an "as is, where is" basis
and to bereimbursed by his co-awardees for his overpayments, withinterest. He
likewise filed in O.P. Case No. 5902 a May 7, 2003 letter, in which he sought a
reconsideration of the November 19, 1997 Decision rendered in said case.
With his failure to timely appealthe NHAs August 5, 1994 LetterDecision and its
November 12, 1999 Letter-Reply denying his motion for reconsideration, and instead
taking various erroneous courses of action which did not properly direct his
grievances at the right forum and within the prescribed period, the NHAs August
5,1994 Letter-Decision became final and executory as against Teodorico and the
petitioners for that matter. In contemplation of law, petitioners did not at all file an
appeal of the NHAs August 5, 1994 Letter Decision.
Contrary to petitioners claim, the Court cannot consider Teodoricos October 18,
1994 letter to the NHA as his appeal to the OP; it is properly a motion for
reconsideration of the agencys August 5, 1994 Letter-Decision. Indeed, OP AO 18
does not preclude the filing of a motion for reconsideration with the agency which
rendered the questioned decision; in reference to such motions for reconsideration,
OP AO 18 specifically states that "[t]he time during which a motion for reconsideration
has been pending with the Ministry/agency concerned shall be deducted from the
period for appeal."
With regard to O.P. Case No. 5902, Teodorico could not have validly intervened. He
had no personality to register his objections through his undated letter which he
filed on February 2, 1995 and his May 7,2003 letter in which he sought a
reconsideration of the OPs November 19, 1997 Decision; he was not a party
appellant or otherwise in saidcase. Thus, "[h]e cannot impugn the correctness of a
judgment not appealed from by him. Hecannot assign such errors as are designed to
have the judgment modified."37 This view is ineffect taken by petitioners themselves,
with their argument in the instant Petition that since Teodorico was not an appellant in
O.P. Case No. 5902,then he should not be bound by the November 19, 1997
judgment therein dismissing the appeal. If he did not intend to be bound by the
judgment therein, then he had no business intervening in the case.
Since petitioners did not have the personality to intervene in O.P. Case No. 5902,
then Teodorico had no standing to file therein his May 7, 2003 letter cum motion for
reconsideration. The OP was thus correct indenying the same; in turn, the CA
correctly affirmed the OP.
Notably, there is very little that petitioners can benefit from in obtaining a reversal of
the assailed Decision of the CA.1wphi1 For one, they do not dispute the award of 62
square meters in Teodoricos favor; this has been made clear as early as in
Teodoricos undated letter to the OP which was filed on February 2, 1995, where he
indicated that he was "satisfied" with the award. For another, petitioners do not seek
to question the allocations made in favor of their co-awardees; in fact, in the instant
Petition, they openly declared that

In closing and perhaps most important of all, petitioners would like to respectfully
manifest to this Honorable Court that they have deliberately not questioned the right
of respondents to be potential beneficiaries of the ZIP Census even if they had
argued before the Court of Appeals that respondents were mere renters. The reason
for this is that, at the end of the day, the peace of the community is paramount. x x x 38

The petitioners' remaining point of contention is their claim for reimbursement. Sad to
say, this Court cannot order a refund of Teodorico's overpayments. First of all, NHA -
the recipient of the overpayment - cannot be ordered to make a refund, since
Teodorico never prayed to recover from it; in all his submissions - from the NHA, the
OP, the CA, and all the way up to this Court - he consistently sought reimbursement
only from his co-awardees, not the NHA. Secondly, the specific amount of
overpayment is not fixed or determinable from the record; this being the case, it
cannot be determined how much exactly each of Teodorico's co-awardees owes him.
Thirdly, this Court is not a trier of facts; it cannot go out of its way to determine and
analyze from the record what should be returned to Teodorico, nor can it receive
evidence on the matter. Suffice it to state that petitioners are indeed entitled to be
indemnified for paying for the value of the subject lot and the real property taxes
thereon over and above what was awarded to them, pursuant to Article 1236 of the
Civil Code, which states that "[w]hoever pays for another may demand from the
debtor what he has paid, except that if he paid without the knowledge or against the
will of the debtor, he can recover only insofar as the payment has been beneficial to
the debtor." They may also recover from the NHA, applying the principle of solutio
indebiti.39

WHEREFORE, the Petition is DENIED. The assailed October 30, 2006 Decision and
December 22, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 79400 are
AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice
 Republic of the Philippines
SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 175540 April 7, 2014
DR. FILOTEO A. ALANO, Petitioner,
vs.
ZENAIDA MAGUD-LOGMAO, Respondent.
DECISION
PERALTA, J.:
This deals with the Petition for Review on Certiorari under Rule 45 of the Rules of
Court praying that the Decision1of the Court of Appeals (CA), dated March 31, 2006,
adjudging petitioner liable for damages, and the Resolution 2dated November 22,
2006, denying petitioner's motion for reconsideration thereof, be reversed and set
aside.
The CA's narration of facts is accurate, to wit:
Plaintiff-appellee Zenaida Magud-Logmao is the mother of deceased Arnelito
Logmao. Defendant-appellant Dr. Filoteo Alano is the Executive Director of the
National Kidney Institute (NKI).
At around 9:50 in the evening of March 1, 1988, Arnelito Logmao, then eighteen (18)
years old, was brought to the East Avenue Medical Center (EAMC) in Quezon City by
two sidewalk vendors, who allegedly saw the former fall from the overpass near the
Farmers Market in Cubao, Quezon City. The patients data sheet identified the
patient as Angelito Lugmoso of Boni Avenue, Mandaluyong. However, the clinical
abstract prepared by Dr. Paterno F. Cabrera, the surgical resident on-duty at the
Emergency Room of EAMC, stated that the patient is Angelito [Logmao].
Dr. Cabrera reported that [Logmao] was drowsy with alcoholic breath, was conscious
and coherent; that the skull x-ray showed no fracture; that at around 4:00 oclock in
the morning of March 2, 1988, [Logmao] developed generalized seizures and was
managed by the neuro-surgery resident on-duty; that the condition of [Logmao]
progressively deteriorated and he was intubated and ambu-bagging support was
provided; that admission to the Intensive Care Unit (ICU) and mechanical ventilator
support became necessary, but there was no vacancy at the ICU and all the ventilator
units were being used by other patients; that a resident physician of NKI, who was
rotating at EAMC, suggested that [Logmao] be transferred to NKI; and that after
arrangements were made, [Logmao] was transferred to NKI at 10:10 in the morning.
At the NKI, the name Angelito [Logmao] was recorded as Angelito Lugmoso.
Lugmoso was immediately attended to and given the necessary medical treatment.
As Lugmoso had no relatives around, Jennifer B. Misa, Transplant Coordinator, was
asked to locate his family by enlisting police and media assistance. Dr. Enrique T.
Ona, Chairman of the Department of Surgery, observed that the severity of the brain
injury of Lugmoso manifested symptoms of brain death. He requested the Laboratory
Section to conduct a tissue typing and tissue cross-matching examination, so that
should Lugmoso expire despite the necessary medical care and management and he
would be found to be a suitable organ donor and his family would consent to organ
donation, the organs thus donated could be detached and transplanted promptly to
any compatible beneficiary.
Jennifer Misa verified on the same day, March 2, 1988, from EAMC the identity of
Lugmoso and, upon her request, she was furnished by EAMC a copy of the patients
date sheet which bears the name Angelito Lugmoso, with address at Boni Avenue,
Mandaluyong. She then contacted several radio and television stations to request for
air time for the purpose of locating the family of Angelito Lugmoso of Boni Avenue,
Mandaluyong, who was confined at NKI for severe head injury after allegedly falling
from the Cubao overpass, as well as Police Station No. 5, Eastern Police District,
whose area of jurisdiction includes Boni Avenue, Mandaluyong, for assistance in
locating the relatives of Angelito Lugmoso. Certifications were issued by Channel 4,
ABS-CBN and GMA attesting that the request made by the NKI on March 2, 1988 to
air its appeal to locate the family and relatives of Angelito Lugmoso of Boni Avenue,
Mandaluyong was accommodated. A Certification was likewise issued by Police
Station No. 5, Eastern Police District, Mandaluyong attesting to the fact that on March
2, 1988, at about 6:00 p.m., Jennifer Misa requested for assistance to immediately
locate the family and relatives of Angelito Lugmoso and that she followed up her
request until March 9, 1988.
On March 3, 1988, at about 7:00 oclock in the morning, Dr. Ona was informed that
Lugmoso had been pronounced brain dead by Dr. Abdias V. Aquino, a neurologist,
and by Dr. Antonio Rafael, a neurosurgeon and attending physician of Lugmoso, and
that a repeat electroencephalogram (EEG) was in progress to confirm the diagnosis
of brain death. Two hours later, Dr. Ona was informed that the EEG recording
exhibited a flat tracing, thereby confirming that Lugmoso was brain dead. Upon
learning that Lugmoso was a suitable organ donor and that some NKI patients
awaiting organ donation had blood and tissue types compatible with Lugmoso, Dr.
Ona inquired from Jennifer Misa whether the relatives of Lugmoso had been located
so that the necessary consent for organ donation could be obtained. As the extensive
search for the relatives of Lugmoso yielded no positive result and time being of the
essence in the success of organ transplantation, Dr. Ona requested Dr. Filoteo A.
Alano, Executive Director of NKI, to authorize the removal of specific organs from the
body of Lugmoso for transplantation purposes. Dr. Ona likewise instructed Dr. Rose
Marie Rosete-Liquete to secure permission for the planned organ retrieval and
transplantation from the Medico-Legal Office of the National Bureau of Investigation
(NBI), on the assumption that the incident which lead to the brain injury and death of
Lugmoso was a medico legal case.
On March 3, 1988, Dr. Alano issued to Dr. Ona a Memorandum, which reads as
follows:
This is in connection with the use of the human organs or any portion or portions of
the human body of the deceased patient, identified as a certain Mr. Angelito Lugmoso
who was brought to the National Kidney Institute on March 2, 1988 from the East
Avenue Medical Center.
As shown by the medical records, the said patient died on March 3, 1988 at 9:10 in
the morning due to craniocerebral injury. Please make certain that your Department
has exerted all reasonable efforts to locate the relatives or next of kin of the said
deceased patient such as appeal through the radios and television as well as through
police and other government agencies and that the NBI [Medico-Legal] Section has
been notified and is aware of the case.
If all the above has been complied with, in accordance with the provisions of Republic
Act No. 349 as amended and P.D. 856, permission and/or authority is hereby given to
the Department of Surgery to retrieve and remove the kidneys, pancreas, liver and
heart of the said deceased patient and to transplant the said organs to any
compatible patient who maybe in need of said organs to live and survive.
A Certification dated March 10, 1988 was issued by Dr. Maximo Reyes, Medico-Legal
Officer of the NBI, stating that he received a telephone call from Dr. Liquete on March
3, 1988 at 9:15 a.m. regarding the case of Lugmoso, who was declared brain dead;
that despite efforts to locate the latters relatives, no one responded; that Dr. Liquete
sought from him a second opinion for organ retrieval for donation purposes even in
the absence of consent from the family of the deceased; and that he verbally agreed
to organ retrieval.
At 3:45 in the afternoon of March 3, 1988, a medical team, composed of Dr. Enrique
Ona, as principal surgeon, Drs. Manuel Chua-Chiaco, Jr., Rose Marie Rosete-
Liquete, Aurea Ambrosio, Ludivino de Guzman, Mary Litonjua, Jaime Velasquez,
Ricardo Fernando, and Myrna Mendoza, removed the heart, kidneys, pancreas, liver
and spleen of Lugmoso. The medical team then transplanted a kidney and the
pancreas of Lugmoso to Lee Tan Hoc and the other kidney of Lugmoso to Alexis
Ambustan. The transplant operation was completed at around 11:00 oclock in the
evening of March 3, 1988.
On March 4, 1988, Dr. Antonio R. Paraiso, Head of the Cadaver Organ Retrieval
Effort (CORE) program of NKI, made arrangements with La Funeraria Oro for the
embalmment of the cadaver of Lugmoso good for a period of fifteen (15) days to
afford NKI more time to continue searching for the relatives of the latter. On the same
day, Roberto Ortega, Funeral Consultant of La Funeraria Oro, sent a request for
autopsy to the NBI. The Autopsy Report and Certification of Post-Mortem
Examination issued by the NBI stated that the cause of death of Lugmoso was
intracranial hemorrhage secondary to skull fracture.
On March 11, 1988, the NKI issued a press release announcing its successful double
organ transplantation. Aida Doromal, a cousin of plaintiff, heard the news aired on
television that the donor was an eighteen (18) year old boy whose remains were at La
Funeraria Oro in Quezon City. As the name of the donor sounded like Arnelito
Logmao, Aida informed plaintiff of the news report.
It appears that on March 3, 1988, Arlen Logmao, a brother of Arnelito, who was then
a resident of 17-C San Pedro Street, Mandaluyong, reported to Police Station No. 5,
Eastern Police District, Mandaluyong that the latter did not return home after seeing a
movie in Cubao, Quezon City, as evidenced by a Certification issued by said Station;
and that the relatives of Arnelito were likewise informed that the latter was missing.
Upon receiving the news from Aida, plaintiff and her other children went to La
Funeraria Oro, where they saw Arnelito inside a cheap casket.
On April 29, 1988, plaintiff filed with the court a quo a complaint for damages against
Dr. Emmanuel Lenon, Taurean Protectors Agency, represented by its Proprietor,
Celso Santiago, National Kidney Institute, represented by its Director, Dr. Filoteo A.
Alano, Jennifer Misa, Dr. Maximo Reyes, Dr. Enrique T. Ona, Dr. Manuel Chua-
Chiaco, Jr., Dr. Rose Marie O. Rosete-Liquete, Dr. Aurea Z. Ambrosio, Dr. Ludivino
de Guzman, Dr. Mary Litonjua, Dr. Jaime Velasquez, Dr. Ricardo Fernando, Dr.
Myrna Mendoza, Lee Tan Koc, Alexis Ambustan, Dr. Antonio R. Paraiso, La
Funeraria Oro, Inc., represented by its President, German E. Ortega, Roberto Ortega
alias Bobby Ortega, Dr. Mariano B. Cueva, Jr., John Doe, Peter Doe, and Alex Doe in
connection with the death of her son Arnelito. Plaintiff alleged that defendants
conspired to remove the organs of Arnelito while the latter was still alive and that they
concealed his true identity.
On January 17, 2000, the court a quo rendered judgment finding only Dr. Filoteo
Alano liable for damages to plaintiff and dismissing the complaint against the other
defendants for lack of legal basis.3
After finding petitioner liable for a quasi-delict, the Regional Trial Court of Quezon City
(RTC) ordered petitioner to pay respondent P188,740.90 as actual
damages; P500,000.00 as moral damages; P500,000.00 as exemplary
damages; P300,000.00 as attorney's fees; and costs of suit. Petitioner appealed to
the CA.
On March 31, 2006, the CA issued its Decision, the dispositive portion of which reads
as follows:
WHEREFORE, the Decision appealed from is AFFIRMED, with MODIFICATION by
DELETING the award ofP188,740.90 as actual damages and REDUCING the award
of moral damages to P250,000.00, the award of exemplary damages to P200,000.00
and the award of attorney's fees to P100,000.00.
SO ORDERED.4
Petitioner then elevated the matter to this Court via a petition for review on certiorari,
where the following issues are presented for resolution:
A. WHETHER THE COURT OF APPEALS DISREGARDED EXISTING
JURISPRUDENCE PRONOUNCED BY THIS HONORABLE SUPREME
COURT IN HOLDING PETITIONER DR. FILOTEO ALANO LIABLE FOR
MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES
DESPITE THE FACT THAT THE ACT OF THE PETITIONER IS NOT THE
 PROXIMATE CAUSE NOR IS THERE ANY FINDING THAT THE ACT OF
THE PETITIONER WAS THE PROXIMATE CAUSE OF THE INJURY OR
DAMAGE ALLEGEDLY SUSTAINED BY RESPONDENT ZENAIDA
MAGUD-LOGMAO.
B. WHETHER THE COURT OF APPEALS GRAVELY ERRED IN
REFUSING AND/OR FAILING TO DECLARE THAT PETITIONER DR.
ALANO ACTED IN GOOD FAITH AND PURSUANT TO LAW WHEN HE
ISSUED THE AUTHORIZATION TO REMOVE AND RETRIEVE THE
ORGANS OF ANGELITO LUGMOSO (LATER IDENTIFIED TO BE IN FACT
ARNELITO LOGMAO) CONSIDERING THAT NO NEGLIGENCE CAN BE
ATTRIBUTED OR IMPUTED ON HIM IN HIS PERFORMANCE OF AN ACT
MANDATED BY LAW.
C. WHETHER THE COURT OF APPEALS GRAVELY ERRED IN
AWARDING RESPONDENT ZENAIDA MAGUD-LOGMAO MORAL AND
EXEMPLARY DAMAGES AND ATTORNEY'S FEES THAT ARE NOT IN
ACCORDANCE WITH AND ARE CONTRARY TO ESTABLISHED
JURISPRUDENCE.5
The first two issues boil down to the question of whether respondent's sufferings were
brought about by petitioner's alleged negligence in granting authorization for the
removal or retrieval of the internal organs of respondent's son who had been declared
brain dead.
Petitioner maintains that when he gave authorization for the removal of some of the
internal organs to be transplanted to other patients, he did so in accordance with the
letter of the law, Republic Act (R.A.) No. 349, as amended by Presidential Decree
(P.D.) 856, i.e., giving his subordinates instructions to exert all reasonable efforts to
locate the relatives or next of kin of respondent's son. In fact, announcements were
made through radio and television, the assistance of police authorities was sought,
and the NBI Medico-Legal Section was notified. Thus, petitioner insists that he should
not be held responsible for any damage allegedly suffered by respondent due to the
death of her son and the removal of her sons internal organs for transplant purposes.
The appellate court affirmed the trial court's finding that there was negligence on
petitioner's part when he failed to ensure that reasonable time had elapsed to locate
the relatives of the deceased before giving the authorization to remove said
deceased's internal organs for transplant purposes. However, a close examination of
the records of this case would reveal that this case falls under one of the exceptions
to the general rule that factual findings of the trial court, when affirmed by the
appellate court, are binding on this Court. There are some important circumstances
that the lower courts failed to consider in ascertaining whether it was the actions of
petitioner that brought about the sufferings of respondent. 6
The Memorandum dated March 3, 1988 issued by petitioner, stated thus:
As shown by the medical records, the said patient died on March 3, 1988 at 9:10 in
the morning due to craniocerebral injury. Please make certain that your Department
has exerted all reasonable efforts to locate the relatives or next-of-kin of the said
deceased patient, such as appeal through the radios and television, as well as
through police and other government agencies and that the NBI [Medico-Legal]
Section has been notified and is aware of the case.
If all the above has been complied with, in accordance with the provisions of Republic
Act No. 349 as amended and P.D. 856, permission and/or authority is hereby given to
the Department of Surgery to retrieve and remove the kidneys, pancreas, liver and
heart of the said deceased patient and to transplant the said organs to any
compatible patient who maybe in need of said organs to live and survive. 7
A careful reading of the above shows that petitioner instructed his subordinates to
"make certain" that "all reasonable efforts" are exerted to locate the patient's next of
kin, even enumerating ways in which to ensure that notices of the death of the patient
would reach said relatives. It also clearly stated that permission or authorization to
retrieve and remove the internal organs of the deceased was being given ONLY IF
the provisions of the applicable law had been complied with. Such instructions reveal
that petitioner acted prudently by directing his subordinates to exhaust all reasonable
means of locating the relatives of the deceased. He could not have made his
directives any clearer. He even specifically mentioned that permission is only being
granted IF the Department of Surgery has complied with all the requirements of the
law. Verily, petitioner could not have been faulted for having full confidence in the
ability of the doctors in the Department of Surgery to comprehend the instructions,
obeying all his directives, and acting only in accordance with the requirements of the
law.
Furthermore, as found by the lower courts from the records of the case, the doctors
and personnel of NKI disseminated notices of the death of respondent's son to the
media and sought the assistance of the appropriate police authorities as early as
March 2, 1988, even before petitioner issued the Memorandum. Prior to performing
the procedure for retrieval of the deceased's internal organs, the doctors concerned
also the sought the opinion and approval of the Medico-Legal Officer of the NBI.
Thus, there can be no cavil that petitioner employed reasonable means to
disseminate notifications intended to reach the relatives of the deceased. The only
question that remains pertains to the sufficiency of time allowed for notices to reach
the relatives of the deceased.
If respondent failed to immediately receive notice of her son's death because the
notices did not properly state the name or identity of the deceased, fault cannot be
laid at petitioner's door. The trial and appellate courts found that it was the EAMC,
who had the opportunity to ascertain the name of the deceased, who recorded the
wrong information regarding the deceased's identity to NKI. The NKI could not have
obtained the information about his name from the patient, because as found by the
lower courts, the deceased was already unconscious by the time he was brought to
the NKI.
Ultimately, it is respondent's failure to adduce adequate evidence that doomed this
case.1wphi1 As stated in Otero v. Tan,8 "[i]n civil cases, it is a basic rule that the
party making allegations has the burden of proving them by a preponderance of
evidence. The parties must rely on the strength of their own evidence and not upon
the weakness of the defense offered by their opponent." 9 Here, there is to proof that,
indeed, the period of around 24 hours from the time notices were disseminated,
cannot be considered as reasonable under the circumstances. They failed to present
any expert witness to prove that given the medical technology and knowledge at that
time in the 1980's, the doctors could or should have waited longer before harvesting
the internal organs for transplantation.

Verily, the Court cannot, in conscience, agree with the lower court. Finding petitioner
liable for damages is improper. It should be emphasized that the internal organs of
the deceased were removed only after he had been declared brain dead; thus, the
emotional pain suffered by respondent due to the death of her son cannot in any way
be attributed to petitioner. Neither can the Court find evidence on record to show that
respondent's emotional suffering at the sight of the pitiful state in which she found her
son's lifeless body be categorically attributed to petitioner's conduct.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals,

dated March 31, 2006, is REVERSED and SET ASIDE. The complaint against
petitioner is hereby DISMISSED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 160689 March 26, 2014
RAUL H. SESBREO, Petitioner,
vs.
HONORABLE COURT OF APPEALS, JUAN I. COROMINA (SUBSTITUTED BY
ANITA COROMINA, ELIZABETH COROMINA and ROSIEMARIE COROMINA),
VICENTE E. GARCIA (SUBSTITUTED BY EDGAR JOHN GARCIA), FELIPE
CONSTANTINO, RONALD ARCILLA, NORBETO ABELLANA, DEMETRIO
BALICHA, ANGELITA LHUILLIER, JOSE E. GARCIA, AND VISA YAN ELECTRIC
COMPANY (VECO), Respondents.
DECISION
BERSAMIN, J.:
This case concerns the claim for damages of petitioner Raul H. Sesbreo founded on
abuse of rights. Sesbreo accused the violation of contract (VOC) inspection team
dispatched by the Visayan Electric Company (VECO) to check his electric meter with
conducting an unreasonable search in his residential premises. But the Regional Trial
Court (RTC), Branch 13, in Cebu City rendered judgment on August 19, 1994
dismissing the claim;1 and the Court of Appeals (CA) affirmed the dismissal on March
10, 2003.2
Hence, this appeal by Sesbreo.
Antecedents
At the time material to the petition, VECO was a public utility corporation organized
and existing under the laws of the Philippines. VECO engaged in the sale and
distribution of electricity within Metropolitan Cebu. Sesbreo was one of VECOs
customers under the metered service contract they had entered into on March 2,
1982.3Respondent Vicente E. Garcia was VECOs President, General Manager and
Chairman of its Board of Directors. Respondent Jose E. Garcia was VECOs Vice-
President, Treasurer and a Member of its Board of Directors. Respondent Angelita
Lhuillier was another Member of VECOs Board of Directors. Respondent Juan
Coromina was VECOs Assistant Treasurer, while respondent Norberto Abellana was
the Head of VECOs Billing Section whose main function was to compute back billings
of customers found to have violated their contracts.
To ensure that its electric meters were properly functioning, and that none of it meters
had been tampered with, VECO employed respondents Engr. Felipe Constantino and
Ronald Arcilla as violation of contract (VOC) inspectors. 4 Respondent Sgt. Demetrio
Balicha, who belonged to the 341st Constabulary Company, Cebu Metropolitan
Command, Camp Sotero Cabahug, Cebu City, accompanied and escorted the VOC
inspectors during their inspection of the households of its customers on May 11, 1989
pursuant to a mission order issued to him.5
The CA summarized the antecedent facts as follows:
x x x. Reduced to its essentials, however, the facts of this case are actually simple
enough, although the voluminous records might indicate otherwise. It all has to do
with an incident that occurred at around 4:00 oclock in the afternoon of May 11,
1989. On that day, the Violation of Contracts (VOC) Team of defendants-appellees
Constantino and Arcilla and their PC escort, Balicha, conducted a routine inspection
of the houses at La Paloma Village, Labangon, Cebu City, including that of plaintiff-
appellant Sesbreo, for illegal connections, meter tampering, seals, conduit pipes,
jumpers, wiring connections, and meter installations. After Bebe Baledio, plaintiff-
appellant Sesbreos maid, unlocked the gate, they inspected the electric meter and
found that it had been turned upside down. Defendant-appellant Arcilla took
photographs of the upturned electric meter. With Chuchie Garcia, Peter Sesbreo
and one of the maids present, they removed said meter and replaced it with a new
one. At that time, plaintiff-appellant Sesbreo was in his office and no one called to
inform him of the inspection. The VOC Team then asked for and received Chuchie
Garcias permission to enter the house itself to examine the kind and number of
appliances and light fixtures in the household and determine its electrical load.
Afterwards, Chuchie Garcia signed the Inspection Division Report, which showed the
condition of the electric meter on May 11, 1989 when the VOC Team inspected it,
with notice that it would be subjected to a laboratory test. She also signed a Load
Survey Sheet that showed the electrical load of plaintiff-appellant Sesbreo.
But according to plaintiff-appellant Sesbreo there was nothing routine or proper at all
with what the VOC Team did on May 11, 1989 in his house. Their entry to his house
and the surrounding premises was effected without his permission and over the
objections of his maids. They threatened, forced or coerced their way into his house.
They unscrewed the electric meter, turned it upside down and took photographs
thereof. They then replaced it with a new electric meter. They searched the house
and its rooms without his permission or a search warrant. They forced a visitor to sign
two documents, making her appear to be his representative or agent. Afterwards, he
found that some of his personal effects were missing, apparently stolen by the VOC
Team when they searched the house.6
Judgment of the RTC
On August 19, 1994, the RTC rendered judgment dismissing the complaint. 7 It did not
accord credence to the testimonies of Sesbreos witnesses, Bebe Baledio, his
housemaid, and Roberto Lopez, a part-time salesman, due to inconsistencies on
material points in their respective testimonies. It observed that Baledio could not
make up her mind as to whether Sesbreos children were in the house when the
VOC inspection team detached and replaced the electric meter. Likewise, it
considered unbelievable that Lopez should hear the exchanges between Constantino,
Arcilla and Balicha, on one hand, and Baledio, on the other, considering that Lopez
could not even hear the conversation between two persons six feet away from where
he was seated during the simulation done in court, the same distance he supposedly
had from the gate of Sesbreos house during the incident. It pointed out that Lopezs
presence at the gate during the incident was even contradicted by his own testimony
indicating that an elderly woman had opened the gate for the VECO personnel,
because it was Baledio, a lady in her 20s, who had repeatedly stated on her direct
and cross examinations that she had let the VECO personnel in. It concluded that for
Lopez to do nothing at all upon seeing a person being threatened by another in the
manner he described was simply contrary to human experience.
In contrast, the RTC believed the evidence of the respondents showing that the VOC
inspection team had found the electric meter in Sesbreos residence turned upside
down to prevent the accurate registering of the electricity consumption of the
household, causing them to detach and replace the meter. It held as unbelievable that
the team forcibly entered the house through threats and intimidation; that they
themselves turned the electric meter upside down in order to incriminate him for theft
of electricity, because the fact that the team and Sesbreo had not known each other
before then rendered it unlikely for the team to fabricate charges against him; and that
Sesbreos non-presentation of Chuchie Garcia left her allegation of her being forced
to sign the two documents by the team unsubstantiated.
Decision of the CA
Sesbreo appealed, but the CA affirmed the RTC on March 10, 2003, 8 holding thusly:
x x x. plaintiff-appellant Sesbreos account is simply too implausible or far-fetched to
be believed. For one thing, the inspection on his household was just one of many
others that the VOC Team had conducted in that subdivision. Yet, none but plaintiff-
appellant Sesbreo complained of the alleged acts of the VOC Team. Considering
that there is no proof that they also perpetrated the same illegal acts on other
customers in the guise of conducting a Violation of Contracts inspection, plaintiff-
appellant Sesbreo likewise failed to show why he alone was singled out. It is also
difficult to believe that the VOC Team would be brazen enough to want to antagonize
a person such as plaintiff-appellant Sesbreo. There is no evidence that the VOC
Team harbored any evil motive or grudge against plaintiff-appellant Sesbreo, who is
a total stranger to them. Until he came along, they did not have any prior criminal
records to speak of, or at least, no evidence thereof was presented. It is equally
difficult to believe that their superiors would authorize or condone their alleged illegal
acts. Especially so since there is no indication that prior to the incident on May 11,
1989, there was already bad blood or animosity between plaintiff-appellant Sesbreo
and defendant appellees to warrant such a malevolent response. In fact, since
availing of defendant-appellee VECOs power services, the relationship between
them appears to have been uneventful.
It becomes all the more apparent that the charges stemming from the May 11, 1989
incident were fabricated when taken together with the lower courts evaluation of the
alleged theft of plaintiff-appellant Sesbreos personal effects. It stated that on August
8, 1989, plaintiff-appellant Sesbreo wrote the barangay captain of Punta Princesa
and accused Chuchie Garcia and Victoria Villarta alias Victoria Rocamora of theft of
some of his things that earlier he claimed had been stolen by members of the VOC
Team. When he was confronted with these facts, plaintiff-appellant Sesbreo further
claimed that the items allegedly stolen by Chuchie Garcia were part of the loot taken
by defendants-appellees Constantino and Arcilla. Yet not once did plaintiff-appellant
Sesbreo or any of his witnesses mention that a conspiracy existed between these
people. Clearly, much like his other allegations, it is nothing more than an
afterthought by plaintiff-appellant Sesbreo.
All in all, the allegations against defendants-appellees appear to be nothing more
than a put-on to save face. For the simple truth is that the inspection exposed plaintiff-
appellant Sesbreo as a likely cheat and thief.
xxxx
Neither is this Court swayed by the testimonies of Baledio and Lopez.1wphi1 The
lower court rightly described their testimonies as fraught by discrepancies and
inconsistencies on material points and even called Lopez a perjured witness. On the
other hand, it is odd that plaintiff-appellant Sesbreo chose not to present the witness
whose testimony was very crucial. But even though Chuchie Garcia never testified,
her absence speaks volumes. Whereas plaintiff-appellant Sesbreo claimed that the
VOC Team forced her to sign two documents that made her appear to be his
authorized agent or representative, the latter claimed otherwise and that she also
gave them permission to enter and search the house. The person most qualified to
refute the VOC Teams claim is Chuchie Garcia herself. It is axiomatic that he who
asserts a fact or claim must prove it. He cannot transfer that burden to the person
against whom he asserts such fact or claim. When certain evidence is suppressed,
the presumption is that it will adversely affect the cause of the party suppressing it,
should it come to light. x x x9
Upon denial of his motion for reconsideration,10 Sesbreo appealed.
Issue
Was Sesbreo entitled to recover damages for abuse of rights?
Ruling
The appeal has no merit.
Sesbreos main contention is that the inspection of his residence by the VOC team
was an unreasonable search for being carried out without a warrant and for being
allegedly done with malice or bad faith.
Before dealing with the contention, we have to note that two distinct portions of
Sesbreos residence were inspected by the VOS team the garage where the
electric meter was installed, and the main premises where the four bedrooms, living
rooms, dining room and kitchen were located.
Anent the inspection of the garage where the meter was installed, the respondents
assert that the VOC team had the continuing authority from Sesbreo as the
consumer to enter his premises at all reasonable hours to conduct an inspection of
the meter without being liable for trespass to dwelling. The authority emanated from
paragraph 9 of the metered service contract entered into between VECO and each of
its consumers, which provided as follows:
9. The CONSUMER agrees to allow properly authorized employees or
representatives of the COMPANY to enter his premises at all reasonable hours
without being liable to trespass to dwelling for the purpose of inspecting, installing,
reading, removing, testing, replacing or otherwise disposing of its property, and/or
removing the COMPANYS property in the event of the termination of the contract for
any cause.11
Sesbreo contends, however, that paragraph 9 did not give Constantino, Arcilla and
Balicha the blanket authority to enter at will because the only property VECO owned
in his premises was the meter; hence, Constantino and Arcilla should enter only the
garage. He denies that they had the right to enter the main portion of the house and
inspect the various rooms and the appliances therein because those were not the
properties of VECO. He posits that Balicha, who was not an employee of VECO, had
no authority whatsoever to enter his house and conduct a search. He concludes that
their search was unreasonable, and entitled him to damages in light of their
admission that they had entered and inspected his premises without a search
warrant.12
We do not accept Sesbreos conclusion.1avvphi1 Paragraph 9 clothed the entire
VOC team with unquestioned authority to enter the garage to inspect the meter. The
members of the team obviously met the conditions imposed by paragraph 9 for an
authorized entry. Firstly, their entry had the objective of conducting the routine
inspection of the meter.13 Secondly, the entry and inspection were confined to the
garage where the meter was installed.14Thirdly, the entry was effected at around 4
oclock p.m., a reasonable hour.15 And, fourthly, the persons who inspected the meter
were duly authorized for the purpose by VECO.
Although Balicha was not himself an employee of VECO,16 his participation was to
render police assistance to ensure the personal security of Constantino and Arcilla
during the inspection, rendering him a necessary part of the team as an authorized
representative. Under the circumstances, he was authorized to enter considering that
paragraph 9 expressly extended such authority to "properly authorized employees or
representatives" of VECO.
It is true, as Sesbreo urges, that paragraph 9 did not cover the entry into the main
premises of the residence. Did this necessarily mean that any entry by the VOS team
into the main premises required a search warrant to be first secured?
Sesbreo insists so, citing Section 2, Article III of the 1987 Constitution, the clause
guaranteeing the right of every individual against unreasonable searches and
seizures, viz:
Section 2. The right of the people to be secure in their persons, houses, papers and
effects against unreasonable searches and seizures of whatever nature and for any
purpose shall be inviolable, and no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the judge after
examination under oath or affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched and the persons or
things to be seized.
He states that a violation of this constitutional guaranty rendered VECO and its VOS
team liable to him for damages by virtue of Article 32 (9) of the Civil Code, which
pertinently provides:
Article 32. Any public officer or employee, or any private individual, who directly or
indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be liable to the latter for
damages:
xxxx
(9) The right to be secured in ones person, house, papers, and effects against
unreasonable searches and seizures;
x x x x.
Sesbreos insistence has no legal and factual basis.
The constitutional guaranty against unlawful searches and seizures is intended as a
restraint against the Government and its agents tasked with law enforcement. It is to
be invoked only to ensure freedom from arbitrary and unreasonable exercise of State
power. The Court has made this clear in its pronouncements, including that made in
People v. Marti,17 viz:
If the search is made upon the request of law enforcers, a warrant must generally be
first secured if it is to pass the test of constitutionality. However, if the search is made
at the behest or initiative of the proprietor of a private establishment for its own and
private purposes, as in the case at bar, and without the intervention of police
authorities, the right against unreasonable search and seizure cannot be invoked for
only the act of private individual, not the law enforcers, is involved. In sum, the
protection against unreasonable searches and seizures cannot be extended to acts
committed by private individuals so as to bring it within the ambit of alleged unlawful
intrusion by the government.18
It is worth noting that the VOC inspectors decided to enter the main premises only
after finding the meter of Sesbreo turned upside down, hanging and its disc not
rotating. Their doing so would enable them to determine the unbilled electricity
consumed by his household. The circumstances justified their decision, and their
inspection of the main premises was a continuation of the authorized entry. There
was no question then that their ability to determine the unbilled electricity called for
them to see for themselves the usage of electricity inside. Not being agents of the
State, they did not have to first obtain a search warrant to do so.
Balichas presence participation in the entry did not make the inspection a search by
an agent of the State within the ambit of the guaranty. As already mentioned, Balicha
was part of the team by virtue of his mission order authorizing him to assist and
escort the team during its routine inspection.19 Consequently, the entry into the main
premises of the house by the VOC team did not constitute a violation of the guaranty.
Our holding could be different had Sesbreo persuasively demonstrated the
intervention of malice or bad faith on the part of Constantino and Arcilla during their
inspection of the main premises, or any excessiveness committed by them in the
course of the inspection. But Sesbreo did not. On the other hand, the CA correctly
observed that the inspection did not zero in on Sesbreos residence because the
other houses within the area were similarly subjected to the routine inspection.20 This,
we think, eliminated any notion of malice or bad faith.
Clearly, Sesbreo did not establish his claim for damages if the respondents were not
guilty of abuse of rights. To stress, the concept of abuse of rights prescribes that a
person should not use his right unjustly or in bad faith; otherwise, he may be liable to
another who suffers injury. The rationale for the concept is to present some basic
principles to be followed for the rightful relationship between human beings and the
stability of social order.21Moreover, according to a commentator,22 "the exercise of
right ends when the right disappears, and it disappears when it is abused, especially
to the prejudice of others[;] [i]t cannot be said that a person exercises a right when he
unnecessarily prejudices another." Article 19 of the Civil Code 23 sets the standards to
be observed in the exercise of ones rights and in the performance of ones duties,
namely: (a) to act with justice; (b) to give everyone his due; and (c) to observe
honesty and good faith. The law thereby recognizes the primordial limitation on all
rights that in the exercise of the rights, the standards under Article 19 must be
observed.24
Although the act is not illegal, liability for damages may arise should there be an
abuse of rights, like when the act is performed without prudence or in bad faith. In
order that liability may attach under the concept of abuse of rights, the following
elements must be present, to wit: (a) the existence of a legal right or duty, (b) which is
exercised in bad faith, and (c) for the sole intent of prejudicing or injuring
another.25 There is no hard and fast rule that can be applied to ascertain whether or
not the principle of abuse of rights is to be invoked. The resolution of the issue
depends on the circumstances of each case.
Sesbreo asserts that he did not authorize Baledio or Chuchie Garcia to let anyone
enter his residence in his absence; and that Baledio herself confirmed that the
members of the VOC team had intimidated her into letting them in.
The assertion of Sesbreo is improper for consideration in this appeal.1wphi1 The
RTC and the CA unanimously found the testimonies of Sesbreos witnesses
implausible because of inconsistencies on material points; and even declared that the
non-presentation of Garcia as a witness was odd if not suspect. Considering that
such findings related to the credibility of the witnesses and their testimonies, the
Court cannot review and undo them now because it is not a trier of facts, and is not
also tasked to analyze or weigh evidence all over again.26 Verily, a review that may
tend to supplant the findings of the trial court that had the first-hand opportunity to
observe the demeanor of the witnesses themselves should be undertaken by the
Court with prudent hesitation. Only when Sesbreo could make a clear showing of
abuse in their appreciation of the evidence and records by the trial and the appellate
courts should the Court do the unusual review of the factual findings of the trial and
appellate courts.27 Alas, that showing was not made here.
Nor should the Court hold that Sesbreo was denied due process by the refusal of
the trial judge to inhibit from the case. Although the trial judge had issued an order for
his voluntary inhibition, he still rendered the judgment in the end in compliance with
the instruction of the Executive Judge, whose exercise of her administrative authority
on the matter of the inhibition should be respected.28 In this connection, we find to be
apt the following observation of the CA, to wit:
x x x. Both Judge Paredes and Judge Priscila Agana serve the Regional Trial Court
and are therefore of co-equal rank. The latter has no authority to reverse or modify
the orders of Judge Paredes. But in ordering Judge Paredes to continue hearing the
case, Judge Agana did not violate their co-equal status or unilaterally increased her
jurisdiction. It is merely part of her administrative responsibilities as Executive Judge
of the Regional Trial Court of Cebu City, of which Judge Paredes is also a member. 29
Lastly, the Court finds nothing wrong if the writer of the decision in the CA refused to
inhibit from participating in the resolution of the motion for reconsideration filed by
Sesbrefio. The motion for her inhibition was grounded on suspicion of her bias and
prejudice,30 but suspicion of bias and prejudice were not enough grounds for
inhibition.31
Suffice it to say that the records are bereft of any indication that even suggested that
the Associate Justices of the CA who participated in the promulgation of the decision
were tainted with bias against him.
WHEREFORE, the Court DENIES the pet1t1on for review on certiorari; AFFIRMS the
decision promulgated on March 10, 2003; and DIRECTS the petitioner to pay the
costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 175822 October 23, 2013
CALIFORNIA CLOTHING INC. and MICHELLE S. YBAEZ, Petitioners,
vs.
SHIRLEY G. QUIONES, Respondent.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the ; Rules of Court
are the Court of Appeals Decision1 dated August 3, 2006 and Resolution2 dated
November 14, 2006 in CA-G.R. CV No. 80309. The assailed decision reversed and
set aside the June 20, 2003 Decision3 of the Regional Trial Court of Cebu City (RTC),
Branch 58, in Civil Case No. CEB-26984; while the assailed resolution denied the
motion for reconsideration filed by petitioner Michelle Ybaez (Ybaez).
The facts of the case, as culled from the records, are as follows:
On July 25, 2001, respondent Shirley G. Quiones, a Reservation Ticketing Agent of
Cebu Pacific Air in Lapu Lapu City, went inside the Guess USA Boutique at the
second floor of Robinsons Department Store (Robinsons) in Cebu City. She fitted
four items: two jeans, a blouse and a shorts, then decided to purchase the black
jeans worth P2,098.00.4 Respondent allegedly paid to the cashier evidenced by a
receipt5 issued by the store.6
While she was walking through the skywalk connecting Robinsons and Mercury Drug
Store (Mercury) where she was heading next, a Guess employee approached and
informed her that she failed to pay the item she got. She, however, insisted that she
paid and showed the employee the receipt issued in her favor. 7 She then suggested
that they talk about it at the Cebu Pacific Office located at the basement of the mall.
She first went to Mercury then met the Guess employees as agreed upon. 8
When she arrived at the Cebu Pacific Office, the Guess employees allegedly
subjected her to humiliation in front of the clients of Cebu Pacific and repeatedly
demanded payment for the black jeans.9 They supposedly even searched her wallet
to check how much money she had, followed by another argument. Respondent,
thereafter, went home.10
On the same day, the Guess employees allegedly gave a letter to the Director of
Cebu Pacific Air narrating the incident, but the latter refused to receive it as it did not
concern the office and the same took place while respondent was off duty. 11 Another
letter was allegedly prepared and was supposed to be sent to the Cebu Pacific Office
in Robinsons, but the latter again refused to receive it. 12 Respondent also claimed
that the Human Resource Department (HRD) of Robinsons was furnished said letter
and the latter in fact conducted an investigation for purposes of canceling
respondents Robinsons credit card. Respondent further claimed that she was not
given a copy of said damaging letter.13 With the above experience, respondent
claimed to have suffered physical anxiety, sleepless nights, mental anguish, fright,
serious apprehension, besmirched reputation, moral shock and social
humiliation.14 She thus filed the Complaint for Damages15 before the RTC against
petitioners California Clothing, Inc. (California Clothing), Excelsis Villagonzalo
(Villagonzalo), Imelda Hawayon (Hawayon) and Ybaez. She demanded the payment
of moral, nominal, and exemplary damages, plus attorneys fees and litigation
expenses.16
In their Answer,17 petitioners and the other defendants admitted the issuance of the
receipt of payment. They claimed, however, that instead of the cashier (Hawayon)
issuing the official receipt, it was the invoicer (Villagonzalo) who did it manually. They
explained that there was miscommunication between the employees at that time
because prior to the issuance of the receipt, Villagonzalo asked Hawayon " Ok na ?,"
and the latter replied " Ok na ," which the former believed to mean that the item has
already been paid.18 Realizing the mistake, Villagonzalo rushed outside to look for
respondent and when he saw the latter, he invited her to go back to the shop to make
clarifications as to whether or not payment was indeed made. Instead, however, of
going back to the shop, respondent suggested that they meet at the Cebu Pacific
Office. Villagonzalo, Hawayon and Ybaez thus went to the agreed venue where they
talked to respondent.19 They pointed out that it appeared in their conversation that
respondent could not recall whom she gave the payment. 20 They emphasized that
they were gentle and polite in talking to respondent and it was the latter who was
arrogant in answering their questions.21As counterclaim, petitioners and the other
defendants sought the payment of moral and exemplary damages, plus attorneys
fees and litigation expenses.22
On June 20, 2003, the RTC rendered a Decision dismissing both the complaint and
counterclaim of the parties. From the evidence presented, the trial court concluded
that the petitioners and the other defendants believed in good faith that respondent
failed to make payment. Considering that no motive to fabricate a lie could be
attributed to the Guess employees, the court held that when they demanded payment
from respondent, they merely exercised a right under the honest belief that no
payment was made. The RTC likewise did not find it damaging for respondent when
the confrontation took place in front of Cebu Pacific clients, because it was
respondent herself who put herself in that situation by choosing the venue for
discussion. As to the letter sent to Cebu Pacific Air, the trial court also did not take it
against the Guess employees, because they merely asked for assistance and not to
embarrass or humiliate respondent. In other words, the RTC found no evidence to
prove bad faith on the part of the Guess employees to warrant the award of
damages.23
On appeal, the CA reversed and set aside the RTC decision, the dispositive portion of
which reads:
WHEREFORE, the instant appeal is GRANTED. The decision of the Regional Trial
Court of Cebu City, Branch 58, in Civil Case No. CEB-26984 (for: Damages) is
hereby REVERSED and SET ASIDE. Defendants Michelle Ybaez and California
Clothing, Inc. are hereby ordered to pay plaintiff-appellant Shirley G. Quiones jointly
and solidarily moral damages in the amount of Fifty Thousand Pesos (P50,000.00)
and attorneys fees in the amount of Twenty Thousand Pesos (P20,000.00).
SO ORDERED.24
While agreeing with the trial court that the Guess employees were in good faith when
they confronted respondent inside the Cebu Pacific Office about the alleged non-
payment, the CA, however, found preponderance of evidence showing that they
acted in bad faith in sending the demand letter to respondents employer. It found
respondents possession of both the official receipt and the subject black jeans as
evidence of payment.25Contrary to the findings of the RTC, the CA opined that the
letter addressed to Cebu Pacifics director was sent to respondents employer not
merely to ask for assistance for the collection of the disputed payment but to subject
her to ridicule, humiliation and similar injury such that she would be pressured to
pay.26 Considering that Guess already started its investigation on the incident, there
was a taint of bad faith and malice when it dragged respondents employer who was
not privy to the transaction. This is especially true in this case since the purported
letter contained not only a narrative of the incident but accusations as to the alleged
acts of respondent in trying to evade payment.27 The appellate court thus held that
petitioners are guilty of abuse of right entitling respondent to collect moral damages
and attorneys fees. Petitioner California Clothing Inc. was made liable for its failure to
exercise extraordinary diligence in the hiring and selection of its employees; while
Ybaezs liability stemmed from her act of signing the demand letter sent to
respondents employer. In view of Hawayon and Villagonzalos good faith, however,
they were exonerated from liability.28
Ybaez moved for the reconsideration29 of the aforesaid decision, but the same was
denied in the assailed November 14, 2006 CA Resolution.
Petitioners now come before the Court in this petition for review on certiorari under
Rule 45 of the Rules of Court based on the following grounds:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE LETTER
SENT TO THE CEBU PACIFIC OFFICE WAS MADE TO SUBJECT HEREIN
RESPONDENT TO RIDICULE, HUMILIATION AND SIMILAR INJURY.
II.
THE HONORABLE COURT OF APPEALS ERRED IN AWARDING MORAL
DAMAGES AND ATTORNEYS FEES.30
The petition is without merit.
Respondents complaint against petitioners stemmed from the principle of abuse of
rights provided for in the Civil Code on the chapter of human relations. Respondent
cried foul when petitioners allegedly embarrassed her when they insisted that she did
not pay for the black jeans she purchased from their shop despite the evidence of
payment which is the official receipt issued by the shop. The issuance of the receipt
notwithstanding, petitioners had the right to verify from respondent whether she
indeed made payment if they had reason to believe that she did not. However, the
exercise of such right is not without limitations. Any abuse in the exercise of such
right and in the performance of duty causing damage or injury to another is actionable
under the Civil Code. The Courts pronouncement in Carpio v. Valmonte31 is
noteworthy:
In the sphere of our law on human relations, the victim of a wrongful act or omission,
whether done willfully or negligently, is not left without any remedy or recourse to
obtain relief for the damage or injury he sustained. Incorporated into our civil law are
not only principles of equity but also universal moral precepts which are designed to
indicate certain norms that spring from the fountain of good conscience and which are
meant to serve as guides for human conduct. First of these fundamental precepts is
the principle commonly known as "abuse of rights" under Article 19 of the Civil Code.
It provides that " Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due and observe
honesty and good faith."x x x32The elements of abuse of rights are as follows: (1)
there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent
of prejudicing or injuring another.33
In this case, petitioners claimed that there was a miscommunication between the
cashier and the invoicer leading to the erroneous issuance of the receipt to
respondent. When they realized the mistake, they made a cash count and discovered
that the amount which is equivalent to the price of the black jeans was missing. They,
thus, concluded that it was respondent who failed to make such payment. It was,
therefore, within their right to verify from respondent whether she indeed paid or not
and collect from her if she did not. However, the question now is whether such right
was exercised in good faith or they went overboard giving respondent a cause of
action against them.
Under the abuse of rights principle found in Article 19 of the Civil Code, a person
must, in the exercise of legal right or duty, act in good faith. He would be liable if he
instead acted in bad faith, with intent to prejudice another. 34 Good faith refers to the
state of mind which is manifested by the acts of the individual concerned. It consists
of the intention to abstain from taking an unconscionable and unscrupulous
advantage of another.35Malice or bad faith, on the other hand, implies a conscious
and intentional design to do a wrongful act for a dishonest purpose or moral
obliquity.36
Initially, there was nothing wrong with petitioners asking respondent whether she paid
or not. The Guess employees were able to talk to respondent at the Cebu Pacific
Office. The confrontation started well, but it eventually turned sour when voices were
raised by both parties. As aptly held by both the RTC and the CA, such was the
natural consequence of two parties with conflicting views insisting on their respective
beliefs. Considering, however, that respondent was in possession of the item
purchased from the shop, together with the official receipt of payment issued by
petitioners, the latter cannot insist that no such payment was made on the basis of a
mere speculation. Their claim should have been proven by substantial evidence in the
proper forum.
It is evident from the circumstances of the case that petitioners went overboard and
tried to force respondent to pay the amount they were demanding. In the guise of
asking for assistance, petitioners even sent a demand letter to respondents employer
not only informing it of the incident but obviously imputing bad acts on the part of
respondent.1wphi1 Petitioners claimed that after receiving the receipt of payment
and the item purchased, respondent "was noted to hurriedly left (sic) the store." They
also accused respondent that she was not completely being honest when she was
asked about the circumstances of payment, thus:
x x x After receiving the OR and the item, Ms. Gutierrez was noted to hurriedly left
(sic) the store. x x x
When I asked her about to whom she gave the money, she gave out a blank
expression and told me, "I cant remember." Then I asked her how much money she
gave, she answered, "P2,100; 2 pcs 1,000 and 1 pc 100 bill." Then I told her that that
would (sic) impossible since we have no such denomination in our cash fund at that
moment. Finally, I asked her if how much change and if she received change from the
cashier, she then answered, "I dont remember." After asking these simple questions,
I am very certain that she is not completely being honest about this. In fact, we invited
her to come to our boutique to clear these matters but she vehemently refused saying
that shes in a hurry and very busy.37
Clearly, these statements are outrightly accusatory. Petitioners accused respondent
that not only did she fail to pay for the jeans she purchased but that she deliberately
took the same without paying for it and later hurriedly left the shop to evade payment.
These accusations were made despite the issuance of the receipt of payment and the
release of the item purchased. There was, likewise, no showing that respondent had
the intention to evade payment. Contrary to petitioners claim, respondent was not in
a rush in leaving the shop or the mall. This is evidenced by the fact that the Guess
employees did not have a hard time looking for her when they realized the supposed
non-payment.
Complementing the principle of abuse of rights are the provisions of Articles 20 and 2
of the Civil Code which read:40
Article 20. Every person who, contrary to law, willfully or negligently causes damage
to another, shall indemnify the latter for the same.
Article 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals or good customs, or public policy shall compensate the latter for
the damage.
In view of the foregoing, respondent is entitled to an award of moral damages and
attorney s fees. Moral damages may be awarded whenever the defendant s wrongful
act or omission is the proximate cause of the plaintiffs physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation and similar injury in the cases specified or analogous to
those provided in Article 2219 of the Civil Code.41 Moral damages are not a bonanza.
They are given to ease the defendant s grief and suffering. They should, thus,
reasonably approximate the extent of hurt caused and the gravity of the wrong
done.42 They are awarded not to enrich the complainant but to enable the latter to
obtain means, diversions, or amusements that will serve to alleviate the moral
suffering he has undergone.43 We find that the amount ofP50,000.00 as moral
damages awarded by the CA is reasonable under the circumstances. Considering
that respondent was compelled to litigate to protect her interest, attorney s fees in the
amount of ofP20,000.00 is likewise just and proper.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The
Court of Appeals Decision dated August 3, 2006 and Resolution dated November 14,
2006 in CA-G.R. CV No. 80309, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice

It can be inferred from the foregoing that in sending the demand letter to respondents
employer, petitioners intended not only to ask for assistance in collecting the disputed
amount but to tarnish respondents reputation in the eyes of her employer. To malign
respondent without substantial evidence and despite the latters possession of
enough evidence in her favor, is clearly impermissible. A person should not use his
right unjustly or contrary to honesty and good faith, otherwise, he opens himself to
liability.38

The exercise of a right must be in accordance with the purpose for which it was
established and must not be excessive or unduly harsh.39 In this case, petitioners
obviously abused their rights.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 179736 June 26, 2013
SPOUSES BILL AND VICTORIA HING, Petitioners,
vs.
ALEXANDER CHOACHUY, SR. and ALLAN CHOACHUY, Respondents.
DECISION
DEL CASTILLO, J.:
"The concept of liberty would be emasculated if it does not likewise compel respect
for one's personality as a unique individual whose claim to privacy and non-
interference demands respect."1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the
July 10, 2007 Decision3and the September 11, 2007 Resolution4 of the Court of
Appeals (CA) in CA-G.R. CEB-SP No. 01473.
Factual Antecedents
On August 23, 2005, petitioner-spouses Bill and Victoria Hing filed with the Regional
Trial Court (RTC) of Mandaue City a Complaint5 for Injunction and Damages with
prayer for issuance of a Writ of Preliminary Mandatory Injunction/Temporary
Restraining Order (TRO), docketed as Civil Case MAN-5223 and raffled to Branch 28,
against respondents Alexander Choachuy, Sr. and Allan Choachuy.
Petitioners alleged that they are the registered owners of a parcel of land (Lot 1900-
B) covered by Transfer Certificate of Title (TCT) No. 42817 situated in Barangay
Basak, City of Mandaue, Cebu;6 that respondents are the owners of Aldo
Development & Resources, Inc. (Aldo) located at Lots 1901 and 1900-C, adjacent to
the property of petitioners;7 that respondents constructed an auto-repair shop building
(Aldo Goodyear Servitec) on Lot 1900-C; that in April 2005, Aldo filed a case against
petitioners for Injunction and Damages with Writ of Preliminary Injunction/TRO,
docketed as Civil Case No. MAN-5125;8 that in that case, Aldo claimed that
petitioners were constructing a fence without a valid permit and that the said
construction would destroy the wall of its building, which is adjacent to petitioners
property;9 that the court, in that case, denied Aldos application for preliminary
injunction for failure to substantiate its allegations;10 that, in order to get evidence to
support the said case, respondents on June 13, 2005 illegally set-up and installed on
the building of Aldo Goodyear Servitec two video surveillance cameras facing
petitioners property;11 that respondents, through their employees and without the
consent of petitioners, also took pictures of petitioners on-going construction;12 and
that the acts of respondents violate petitioners right to privacy. 13 Thus, petitioners
prayed that respondents be ordered to remove the video surveillance cameras and
enjoined from conducting illegal surveillance.14
In their Answer with Counterclaim,15 respondents claimed that they did not install the
video surveillance cameras,16 nor did they order their employees to take pictures of
petitioners construction.17 They also clarified that they are not the owners of Aldo but
are mere stockholders.18
Ruling of the Regional Trial Court
On October 18, 2005, the RTC issued an Order19 granting the application for a TRO.
The dispositive portion of the said Order reads:
WHEREFORE, the application for a Temporary Restraining Order or a Writ of
Preliminary Injunction is granted. Upon the filing and approval of a bond by
petitioners, which the Court sets at P50,000.00, let a Writ of Preliminary Injunction
issue against the respondents Alexander Choachuy, Sr. and Allan Choachuy. They
are hereby directed to immediately remove the revolving camera that they installed at
the left side of their building overlooking the side of petitioners lot and to transfer and
operate it elsewhere at the back where petitioners property can no longer be viewed
within a distance of about 2-3 meters from the left corner of Aldo Servitec, facing the
road.
IT IS SO ORDERED.20
Respondents moved for a reconsideration21 but the RTC denied the same in its
Order22 dated February 6, 2006.23 Thus:
WHEREFORE, the Motion for Reconsideration is hereby DENIED for lack of merit.
Issue a Writ of Preliminary Injunction in consonance with the Order dated 18 October
2005.
IT IS SO ORDERED.24
Aggrieved, respondents filed with the CA a Petition for Certiorari 25 under Rule 65 of
the Rules of Court with application for a TRO and/or Writ of Preliminary Injunction.
Ruling of the Court of Appeals
On July 10, 2007, the CA issued its Decision26 granting the Petition for Certiorari. The
CA ruled that the Writ of Preliminary Injunction was issued with grave abuse of
discretion because petitioners failed to show a clear and unmistakable right to an
injunctive writ.27 The CA explained that the right to privacy of residence under Article
26(1) of the Civil Code was not violated since the property subject of the controversy
is not used as a residence.28 The CA alsosaid that since respondents are not the
owners of the building, they could not have installed video surveillance
cameras.29 They are mere stockholders of Aldo, which has a separate juridical
personality.30 Thus, they are not the proper parties.31 The fallo reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
GRANTING the petition filed in this case. The assailed orders dated October 18, 2005
and February 6, 2006 issued by the respondent judge are hereby ANNULLED and
SET ASIDE.
SO ORDERED.32
Issues
Hence, this recourse by petitioners arguing that:
I.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT ANNULLED AND
SET ASIDE THE ORDERS OF THE RTC DATED 18 OCTOBER 2005 AND 6
FEBRUARY 2006 HOLDING THAT THEY WERE ISSUED WITH GRAVE ABUSE OF
DISCRETION.
II.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT
PETITIONER SPOUSES HING ARE NOT ENTITLED TO THE WRIT OF
PRELIMINARY INJUNCTION ON THE GROUND THAT THERE IS NO VIOLATION
OF THEIR CONSTITUTIONAL AND CIVIL RIGHT TO PRIVACY DESPITE THE
FACTUAL FINDINGS OF THE RTC, WHICH RESPONDENTS CHOACHUY FAILED
TO REFUTE, THAT THE ILLEGALLY INSTALLED SURVEILLANCE CAMERAS OF
RESPONDENTS CHOACH[U]Y WOULD CAPTURE THE PRIVATE ACTIVITIES OF
PETITIONER SPOUSES HING, THEIR CHILDREN AND EMPLOYEES.
III.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT
SINCE THE OWNER OF THE BUILDING IS ALDO DEVELOPMENT AND
RESOURCES, INC. THEN TO SUE RESPONDENTS CHOACHUY CONSTITUTES
A PURPORTEDLY UNWARRANTED PIERCING OF THE CORPORATE VEIL.
IV.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT IGNORED THE
SERIOUS FORMAL DEFICIENCIES OF BOTH THE PETITION AND THE MOTION
FOR RECONSIDERATION DATED 15 MARCH 2006 OF RESPONDENTS
CHOACHUY AND GAVE X X X THEM DUE COURSE AND CONSIDERATION.33
Essentially, the issues boil down to (1) whether there is a violation of petitioners right
to privacy, and (2) whether respondents are the proper parties to this suit.
Petitioners Arguments
Petitioners insist that they are entitled to the issuance of a Writ of Preliminary
Injunction because respondents installation of a stationary camera directly facing
petitioners property and a revolving camera covering a significant portion of the same
property constitutes a violation of petitioners right to privacy.34 Petitioners cite Article
26(1) of the Civil Code, which enjoins persons from prying into the private lives of
others.35 Although the said provision pertains to the privacy of anothers residence,
petitioners opine that it includes business offices, citing Professor Arturo M.
Tolentino.36 Thus, even assuming arguendo that petitioners property is used for
business, it is still covered by the said provision.37
As to whether respondents are the proper parties to implead in this case, petitioners
claim that respondents and Aldo are one and the same, and that respondents only
want to hide behind Aldos corporate fiction.38 They point out that if respondents are
not the real owners of the building, where the video surveillance cameras were
installed, then they had no business consenting to the ocular inspection conducted by
the court.39
Respondents Arguments
Respondents, on the other hand, echo the ruling of the CA that petitioners cannot
invoke their right to privacy since the property involved is not used as a
residence.40 Respondents maintain that they had nothing to do with the installation of
the video surveillance cameras as these were installed by Aldo, the registered owner
of the building,41 as additional security for its building.42 Hence, they were wrongfully
impleaded in this case.43
Our Ruling
The Petition is meritorious.
The right to privacy is the right to be let alone.
The right to privacy is enshrined in our Constitution 44 and in our laws. It is defined as
"the right to be free from unwarranted exploitation of ones person or from intrusion
into ones private activities in such a way as to cause humiliation to a persons
ordinary sensibilities."45 It is the right of an individual "to be free from unwarranted
publicity, or to live without unwarranted interference by the public in matters in which
the public is not necessarily concerned."46 Simply put, the right to privacy is "the right
to be let alone."47
The Bill of Rights guarantees the peoples right to privacy and protects them against
the States abuse of power. In this regard, the State recognizes the right of the people
to be secure in their houses. No one, not even the State, except "in case of overriding
social need and then only under the stringent procedural safeguards," can disturb
them in the privacy of their homes.48
The right to privacy under Article 26(1)
of the Civil Code covers business offices
where the public are excluded
therefrom and only certain individuals
are allowed to enter.
Article 26(1) of the Civil Code, on the other hand, protects an individuals right to
privacy and provides a legal remedy against abuses that may be committed against
him by other individuals. It states:
Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind
of his neighbors and other persons. The following and similar acts, though they may
not constitute a criminal offense, shall produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of anothers residence;
xxxx
This provision recognizes that a mans house is his castle, where his right to privacy
cannot be denied or even restricted by others. It includes "any act of intrusion into,
peeping or peering inquisitively into the residence of another without the consent of
the latter."49 The phrase "prying into the privacy of anothers residence," however,
does not mean that only the residence is entitled to privacy. As elucidated by Civil law
expert Arturo M. Tolentino:
Our Code specifically mentions "prying into the privacy of anothers residence." This
does not mean, however, that only the residence is entitled to privacy, because the
law covers also "similar acts." A business office is entitled to the same privacy when
the public is excluded therefrom and only such individuals as are allowed to enter
may come in. x x x50 (Emphasis supplied)
Thus, an individuals right to privacy under Article 26(1) of the Civil Code should not
be confined to his house or residence as it may extend to places where he has the
right to exclude the public or deny them access. The phrase "prying into the privacy of
anothers residence," therefore, covers places, locations, or even situations which an
individual considers as private. And as long as his right is recognized by society,
other individuals may not infringe on his right to privacy. The CA, therefore, erred in
limiting the application of Article 26(1) of the Civil Code only to residences.
The "reasonable expectation of
privacy" test is used to determine
whether there is a violation of the right
to privacy.
In ascertaining whether there is a violation of the right to privacy, courts use the
"reasonable expectation of privacy" test. This test determines whether a person has a
reasonable expectation of privacy and whether the expectation has been violated. 51 In
Ople v. Torres,52 we enunciated that "the reasonableness of a persons expectation of
privacy depends on a two-part test: (1) whether, by his conduct, the individual has
exhibited an expectation of privacy; and (2) this expectation is one that society
recognizes as reasonable." Customs, community norms, and practices may,
therefore, limit or extend an individuals "reasonable expectation of privacy." 53 Hence,
the reasonableness of a persons expectation of privacy must be determined on a
case-to-case basis since it depends on the factual circumstances surrounding the
case.54
In this day and age, video surveillance cameras are installed practically everywhere
for the protection and safety of everyone. The installation of these cameras, however,
should not cover places where there is reasonable expectation of privacy, unless the
consent of the individual, whose right to privacy would be affected, was obtained. Nor
should these cameras be used to pry into the privacy of anothers residence or
business office as it would be no different from eavesdropping, which is a crime under
Republic Act No. 4200 or the Anti-Wiretapping Law.
In this case, the RTC, in granting the application for Preliminary Injunction, ruled that:
After careful consideration, there is basis to grant the application for a temporary
restraining order. The operation by respondents of a revolving camera, even if it were
mounted on their building, violated the right of privacy of petitioners, who are the
owners of the adjacent lot. The camera does not only focus on respondents property
or the roof of the factory at the back (Aldo Development and Resources, Inc.) but it
actually spans through a good portion of the land of petitioners.
Based on the ocular inspection, the Court understands why petitioner Hing was so
unyielding in asserting that the revolving camera was set up deliberately to monitor
the on[-]going construction in his property. The monitor showed only a portion of the
roof of the factory of Aldo. If the purpose of respondents in setting up a camera at the
back is to secure the building and factory premises, then the camera should revolve
only towards their properties at the back. Respondents camera cannot be made to
extend the view to petitioners lot. To allow the respondents to do that over the
objection of the petitioners would violate the right of petitioners as property owners.
"The owner of a thing cannot make use thereof in such a manner as to injure the
rights of a third person."55
The RTC, thus, considered that petitioners have a "reasonable expectation of privacy"
in their property, whether they use it as a business office or as a residence and that
the installation of video surveillance cameras directly facing petitioners property or
covering a significant portion thereof, without their consent, is a clear violation of their
right to privacy. As we see then, the issuance of a preliminary injunction was justified.
We need not belabor that the issuance of a preliminary injunction is discretionary on
the part of the court taking cognizance of the case and should not be interfered with,
unless there is grave abuse of discretion committed by the court. 56 Here, there is no
indication of any grave abuse of discretion. Hence, the CA erred in finding that
petitioners are not entitled to an injunctive writ.
This brings us to the next question: whether respondents are the proper parties to this
suit.
A real party defendant is one who has a
correlative legal obligation to redress a
wrong done to the plaintiff by reason of
the defendant's act or omission which
had violated the legal right of the
former.
Section 2, Rule 3 of the Rules of Court provides:
SEC. 2. Parties-in-interest. A real party-in-interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of
the suit. Unless otherwise authorized by law or these Rules, every action must be
prosecuted or defended in the name of the real party-in-interest.
A real party defendant is "one who has a correlative legal obligation to redress a
wrong done to the plaintiff by reason of the defendants act or omission which had
violated the legal right of the former."57
Also quite telling is the fact that respondents, notwithstanding their claim that they are
not owners of the building, allowed the court to enter the compound of Aldo and
conduct an ocular inspection. The counsel for respondents even toured Judge Marilyn
Lagura-Yap inside the building and answered all her questions regarding the set-up
and installation of the video surveillance cameras.64 And when respondents moved
for reconsideration of the Order dated October 18, 2005 of the RTC, one of the
arguments they raised is that Aldo would suffer damages if the video surveillance
cameras are removed and transferred.65 Noticeably, in these instances, the
personalities of respondents and Aldo seem to merge.
All these taken together lead us to the inevitable conclusion that respondents are
merely using the corporate fiction of Aldo as a shield to protect themselves from this
suit. In view of the foregoing, we find that respondents are the proper parties to this
suit.
WHEREFORE, the Petition is hereby GRANTED. The Decision dated July 10, 2007
and the Resolution dated September 11, 2007 of the Court of Appeals in CA-G.R.
CEB-SP No. 01473 are hereby REVERSED and SET ASIDE. The Orders dated
October 18,2005 and February 6, 200[6] of Branch 28 of the Regional Trial Court of
Mandaue City in Civil Case No. MAN-5223 are hereby REINSTATED and
AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

In ruling that respondents are not the proper parties, the CA reasoned that since they
do not own the building, they could not have installed the video surveillance
cameras.58 Such reasoning, however, is erroneous. The fact that respondents are not
the registered owners of the building does not automatically mean that they did not
cause the installation of the video surveillance cameras.

In their Complaint, petitioners claimed that respondents installed the video

surveillance cameras in order to fish for evidence, which could be used against
petitioners in another case.59 During the hearing of the application for Preliminary
Injunction, petitioner Bill testified that when respondents installed the video
surveillance cameras, he immediately broached his concerns but they did not seem to
care,60 and thus, he reported the matter to the barangay for mediation, and
eventually, filed a Complaint against respondents before the RTC. 61 He also admitted
that as early as 1998 there has already been a dispute between his family and the
Choachuy family concerning the boundaries of their respective properties. 62 With
these factual circumstances in mind, we believe that respondents are the proper
parties to be impleaded.

Moreover, although Aldo has a juridical personality separate and distinct from its
stockholders, records show that it is a family-owned corporation managed by the
Choachuy family.63
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 202791 June 10, 2013
PHILIPPINE TRANSMARINE CARRIERS, INC., Petitioner,
vs.
LEANDRO LEGASPI, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing
the January 5, 2012 Resolution1 and July 20, 2012 Resolution2 of the Court of
Appeals (CA), in CA-G.R. SP No. 116686, which denied the petitioners motion to
amend the dispositive portion of the June 29, 2011 CA Decision.
The Factual and Procedural Antecedents
Respondent Leandro Legaspi (respondent) was employed as Utility Pastry on board
the vessel "Azamara Journey" under the employment of petitioner Philippine
Transmarine Carriers, Inc. (petitioner). Respondents employment was covered by a
Collective Bargaining Agreement (CBA) wherein it was agreed that the company shall
pay a maximum disability compensation of up to US$60,000.00 only.
While on board the vessel, respondent suffered "Cardiac Arrest S/P ICD Insertation."
He was checked by the ships doctor and was prescribed medications. On November
14, 2008, respondent was repatriated to receive further medical treatment and
examination. On May 23, 2009, the company designated physician assessed his
condition to be Disability Grade 2.
Not satisfied, respondent filed a complaint for full and permanent disability
compensation against petitioner before the Labor Arbiter (LA).
The Labor Arbiters Ruling
In its January 25, 2010 Decision,3 the LA ruled in favor of respondent, the dispositive
portion of which reads:
WHEREFORE, respondents (now petitioner) are hereby ordered to pay complainant
jointly and severally, the following:
1. US$80,000.00 or its peso equivalent at the time of payment as permanent
disability compensation;
2. US$1,320.00 or its peso equivalent as sick wages;
3. Attorneys fees equivalent to 10% of the total award.
SO ORDERED.
Notably, the LA awarded US$80,000.00 based on the ITF Cruise Ship Model
Agreement for Catering Personnel, not on the CBA.
Not satisfied, petitioner appealed the LA decision before the National Labor Relations
Commission (NLRC).
The NLRCs Ruling
In its May 28, 2010 Decision, the NLRC affirmed the decision of the LA. Petitioner
timely filed its motion for reconsideration but it was denied by the NLRC in its July 30,
2010 Resolution. On September 5, 2010, the NLRC issued the Entry of Judgment
stating that its resolution affirming the LA decision had become final and executory.
On October 22, 2010, during the hearing on the motion for execution before the
NLRC, petitioner agreed to pay respondent US$81,320.00. The terms and conditions
of said payment were embodied in the Receipt of Judgment Award with
Undertaking,4 wherein respondent acknowledged receipt of the said amount and
undertook to return it to petitioner in the event the latters petition for certiorari would
be granted, without prejudice to respondents right to appeal. It was also agreed upon
that the remaining balance would be given on the next scheduled conference.
Pertinent portions of the said undertaking provide:
xxxx
3. That counsel (of the petitioner) manifested their willingness to tender the
judgment award without prejudice to the respondents (now petitioner) right
to file a Petition for Certiorari and provided, complainant (now respondent)
undertakes to return the full amount without need of demand or a separate
action in the event that the Petition for Certiorari is granted;
4. That complainants counsel was amenable to the arrangement and
accepted the offer. NOW THEREFORE complainant and his counsel hereby
acknowledge RECEIPT of the sum of EIGHTY-ONE THOUSAND THREE
HUNDRED TWENTY AND 0/100 (US$81,320.00) covered by CITIBANK
CHECK with No. 1000001161 dated October 21, 2010 payable to the order
of LEANDRO V. LEGASPI and UNDERTAKES to RETURN the entire
amount to respondent PHILIPPINE TRANSMARINE CARRIERS, INC. in the
event that the Petition for Certiorari is granted without prejudice to
complainants right to appeal. Such undertaking shall be ENFORCEABLE by
 mere motion before this Honorable office without need of separate
action.5 [Emphasis and underscoring supplied]
On November 8, 2010, petitioner timely filed a petition for certiorari with the CA. 6
In the meantime, on March 2, 2011, the LA issued a writ of execution which noted
petitioners payment of the amount of US$81,320.00. On March 16, 2011, in
compliance with the said writ, petitioner tendered to the NLRC Cashier the additional
amounts of US$8,132.00 as attorneys fees and P3,042.95 as execution fee. In its
Order, dated March 31, 2011, the LA ordered the release of the aforementioned
amounts to respondent.
The CAs Ruling
Unaware of a) the September 5, 2010 entry of judgment of the NLRC, b) the October
22, 2010 payment of US$81,320.00, and c) the writ of execution issued by the LA, the
CA rendered its Decision, dated June 29, 2011. The CA partially granted the petition
for certiorari and modified the assailed resolutions of the NLRC, awarding only
US$60,000.00 pursuant to the CBA between Celebrity Cruise Lines and Federazione
Italianaa Transporti CISL.
Petitioner then filed its Manifestation with Motion to Amend the Dispositive Portion,
submitting to the CA the writ of execution issued by the LA in support of its motion.
Petitioner contended that since it had already paid the total amount of US$89,452.00,
it was entitled to the return of the excess payment in the amount of US$29,452.00.
In its assailed January 5, 2012 Resolution, the CA denied the motion and ruled that
the petition should have been dismissed for being moot and academic not only
because the assailed decision of the NLRC had become final and executory on
September 5, 2010, but also because the said judgment had been satisfied on
October 22, 2010, even before the filing of the petition for certiorari on November 8,
2010. In so ruling, the CA cited the pronouncement in Career Philippines Ship
Management v. Geronimo Madjus7 where it was stated that the satisfaction of the
monetary award rendered the petition for certiorari moot.
Petitioner filed a motion for reconsideration but it was denied by the CA in its assailed
July 20, 2012 Resolution.
Hence, this petition.
ISSUES
I. WHETHER THE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR OF LAW IN RULING THAT PETITIONER IS
ESTOPPED IN COLLECTING THE EXCESS PAYMENT IT MADE TO THE
RESPONDENT NOTWITHSTANDING THE RECEIPT OF JUDGMENT
AWARD SIGNED BY THE RESPONDENT
II. WHETHER THE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN INVOKING THE RULING OF CAREER V.
MADJUS
Petitioner argues that it clearly filed its petition for certiorari within the 60-day
reglementary period and, thus, the NLRC resolutions could not have attained finality.
Citing Delima v. Gois,8 petitioner avers that the NLRC cannot declare that a decision
has become final and executory because the period to file the petition has not yet
expired. Petitioner, thus, contends that the finality of the NLRC judgment did not
render the petition moot and academic because such is null and void ab initio.
Petitioner also argues that the Receipt of the Judgment Award with Undertaking,
which was never refuted by respondent, clearly stated that the payment of the
judgment award was without prejudice to its right to file a petition for certiorari with the
CA. Petitioner asserts that the case relied upon by the CA, Career Philippines, is not
applicable as it is not on all fours with this case. Instead, it asserts that the applicable
case should be Leonis Navigation Co., Inc. v. Villamater,9 where it was held that the
satisfaction of the monetary award by the employer does not render the petition for
certiorari moot before the CA.
On the other hand, respondent reiterates the CA ruling, asserting that the voluntary
satisfaction by petitioner of the full judgment award rendered the case moot, and
insists that it was a clear indication that it had already been persuaded by the
judiciousness and merits of the award for disability compensation. He also avers that
this petition is merely pro-forma as it is a reiteration of petitioners previous issues and
arguments already resolved by the CA.
The Courts Ruling
Petition for Certiorari, Not Moot
Section 14, Rule VII of the 2011 NLRC Rules of Procedure provides that decisions,
resolutions or orders of the NLRC shall become final and executory after ten (10)
calendar days from receipt thereof by the parties, and entry of judgment shall be
made upon the expiration of the said period.10 In St. Martin Funeral Home v.
NLRC,11however, it was ruled that judicial review of decisions of the NLRC may be
sought via a petition for certiorari before the CA under Rule 65 of the Rules of Court;
and under Section 4 thereof, petitioners are allowed sixty (60) days from notice of the
assailed order or resolution within which to file the petition. Hence, in cases where a
petition for certiorari is filed after the expiration of the 10-day period under the 2011
NLRC Rules of Procedure but within the 60-day period under Rule 65 of the Rules of
Court, the CA can grant the petition and modify, nullify and reverse a decision or
resolution of the NLRC.
Accordingly, in this case, although the petition for certiorari was not filed within the 10-
day period, petitioner timely filed it before the CA within the 60-day reglementary
period under Rule 65. It has, thus, been held that the CAs review of the decisions or
resolutions of the NLRC under Rule 65, particularly those which have already been
executed, does not affect their statutory finality, considering that Section 4,12 Rule XI
of the 2011 NLRC Rules of Procedure, provides that a petition for certiorari filed with
the CA shall not stay the execution of the assailed decision unless a restraining order
is issued. In Leonis Navigation, it was further written:
The CA, therefore, could grant the petition for certiorari if it finds that the NLRC, in its
assailed decision or resolution, committed grave abuse of discretion by capriciously,
whimsically, or arbitrarily disregarding evidence that is material to or decisive of the
controversy; and it cannot make this determination without looking into the evidence
of the parties. Necessarily, the appellate court can only evaluate the materiality or
significance of the evidence, which is alleged to have been capriciously, whimsically,
or arbitrarily disregarded by the NLRC, in relation to all other evidence on
record.13 Notably, if the CA grants the petition and nullifies the decision or resolution
of the NLRC on the ground of grave abuse of discretion amounting to excess or lack
of jurisdiction, the decision or resolution of the NLRC is, in contemplation of law, null
and void ab initio; hence, the decision or resolution never became final and
executory.14
Career Philippines not applicable
In Career Philippines, believing that the execution of the LA Decision was imminent
after its petition for injunctive relief was denied, the employer filed before the LA a
pleading embodying a conditional satisfaction of judgment before the CA and,
accordingly, paid the employee the monetary award in the LA decision. In the said
pleading, the employer stated that the conditional satisfaction of the judgment award
was without prejudice to its pending appeal before the CA and that it was being made
only to prevent the imminent execution.15
The CA later dismissed the employers petition for being moot and academic, noting
that the decision of the LA had attained finality with the satisfaction of the judgment
award. This Court affirmed the ruling of the CA, interpreting the "conditional
settlement" to be tantamount to an amicable settlement of the case resulting in the
mootness of the petition for certiorari, considering (i) that the employee could no
longer pursue other claims,16and (ii) that the employer could not have been compelled
to immediately pay because it had filed an appeal bond to ensure payment to the
employee.
Stated differently, the Court ruled against the employer because the conditional
satisfaction of judgment signed by the parties was highly prejudicial to the employee.
The agreement stated that the payment of the monetary award was without prejudice
to the right of the employer to file a petition for certiorari and appeal, while the
employee agreed that she would no longer file any complaint or prosecute any suit of
action against the employer after receiving the payment.
In contrast, in Leonis Navigation, after the NLRC resolution awarding disability
benefits became final and executory, the employer paid the monetary award to the
employee. The CA dismissed the employers petition for certiorari, ruling that the final
and executory decisions or resolutions of the NLRC rendered appeals to superior
courts moot and academic. This Court disagreed with the CA and held that final and
executed decisions of the NLRC did not prevent the CA from reviewing the same
under Rule 65 of the Rules of Court. It was further ruled that the employee was
estopped from claiming that the case was closed and terminated, considering that the
employees Acknowledgment Receipt stated that such was without prejudice to the
final outcome of the petition for certiorari pending before the CA.
In the present case, the Receipt of the Judgment Award with Undertaking was fair to
both the employer and the employee. As in Leonis Navigation, the said agreement
stipulated that respondent should return the amount to petitioner if the petition for
certiorari would be granted but without prejudice to respondents right to appeal. The
agreement, thus, provided available remedies to both parties.
It is clear that petitioner paid respondent subject to the terms and conditions stated in
the Receipt of the Judgment Award with Undertaking.17 Both parties signed the
agreement. Respondent neither refuted the agreement nor claimed that he was
forced to sign it against his will.
Therefore, the petition for certiorari was not rendered moot despite petitioners
satisfaction of the judgment award, as the respondent had obliged himself to return
the payment if the petition would be granted.
Return of Excess Payment
As the agreement was voluntarily entered into and represented a reasonable
settlement, it is binding on the parties and may not later be disowned simply because
of a change of mind.18 Respondent agreed to the stipulation that he would return the
amount paid to him in the event that the petition for certiorari would be granted. Since
the petition was indeed granted by the CA, albeit partially, respondent must comply
with the condition to return the excess amount.
The Court finds that the Receipt of the Judgment Award with Undertaking was a fair
and binding agreement. It was executed by the parties subject to outcome of the
petition. To allow now respondent to retain the excess money judgment would
amount to his unjust enrichment to the prejudice of petitioner.
Unjust enrichment is a term used to depict result or effect of failure to make
remuneration of or for property or benefits received under circumstances that give
rise to legal or equitable obligation to account for them. To be entitled to
remuneration, one must confer benefit by mistake, fraud, coercion, or request. Unjust
enrichment is not itself a theory of reconveyance. Rather, it is a prerequisite for the
enforcement of the doctrine of restitution.19There is unjust enrichment when:
1. A person is unjustly benefited; and
2. Such benefit is derived at the expense of or with damages to another.20
In the case at bench, petitioner paid respondent US$81,320.00 in the pre-execution
conference plus attorneys fees of US$8,132.00 pursuant to the writ of execution. The
June 29, 2011 CA Decision, however, modified the final resolution of the NLRC and
awarded only US$60,000.00 to respondent.1wphi1 If allowed to return the excess,
the respondent would have been unjustly benefited to the prejudice and expense of
petitioner.

Petitioner's claim of excess payment is further buttressed by, and in line with, Section
14, Rule XI of the 20 II NLRC Rules of Procedure which provides:

EFFECT OF REVERSAL OF EXECUTED JUDGMENT. Where the executed

judgment is totally or partially reversed or annulled by the Court of Appeals or the
Supreme Court, the Labor Arbiter shall, on motion, issue such orders of restitution of
the executed award, except wages paid during reinstatement pending appeal.
[Emphases supplied]

Although the Court has, more often than not, been inclined towards the plight of the
workers and has upheld their cause in their conflicts with the employers, such
inclination has not blinded it to the rule that justice is in every case for the deserving,
to be dispensed in the light of the established facts and applicable law and doctrine. 21

WHEREFORE, the petition is GRANTED. The Court of Appeals Resolutions, dated

January 5, 2012 and July 20, 2012, are hereby REVERSED and SET ASIDE.
Respondent Leandro Legaspi is ORDERED to return the excess amount of payment
in the sum of

US$29,452.00 to petitioner Philippine Transmarine Carriers, Inc. The amount shall

earn interest at the rate of 12o/o per annum from the finality of this judgment.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 195670 December 3, 2012
WILLEM BEUMER, Petitioner,
vs.
AVELINA AMORES, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of
CoLlli assailing the October 8, 2009 Decision2 and January 24, 2011 Resolution3 of
the court of Appeals (CA) in CA-G.R. CV No. 01940, which affirmed the February 28,
2007 Decision4 of the Regional Trial Court (RTC) of Negros Oriental, Branch 34 in
Civil Case No. I 2884. The foregoing rulings dissolved the conjugal partnership of
gains of Willem Beumer (petitioner) and Avelina Amores (respondent) and distributed
the properties forming part of the said property regime.
The Factual Antecedents
Petitioner, a Dutch National, and respondent, a Filipina, married in March 29, 1980.
After several years, the RTC of Negros Oriental, Branch 32, declared the nullity of
their marriage in the Decision5 dated November 10, 2000 on the basis of the formers
psychological incapacity as contemplated in Article 36 of the Family Code.
Consequently, petitioner filed a Petition for Dissolution of Conjugal Partnership 6 dated
December 14, 2000 praying for the distribution of the following described properties
claimed to have been acquired during the subsistence of their marriage, to wit:
By Purchase:
a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by Transfer Certificate of Title (TCT) No.
22846, containing an area of 252 square meters (sq.m.), including a
residential house constructed thereon.
b. Lot 2142 of the Dumaguete Cadastre, covered by TCT No. 21974,
containing an area of 806 sq.m., including a residential house constructed
thereon.
c. Lot 5845 of the Dumaguete Cadastre, covered by TCT No. 21306,
containing an area of 756 sq.m.
d. Lot 4, Block 4 of the consolidated survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by TCT No. 21307, containing an area of 45
sq.m.
By way of inheritance:
e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by TCT No.
23567, containing an area of 2,635 sq.m. (the area that appertains to the
conjugal partnership is 376.45 sq.m.).
f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No.
23575, containing an area of 360 sq.m. (the area that appertains to the
conjugal partnership is 24 sq.m.).7
In defense,8 respondent averred that, with the exception of their two (2) residential
houses on Lots 1 and 2142, she and petitioner did not acquire any conjugal
properties during their marriage, the truth being that she used her own personal
money to purchase Lots 1, 2142, 5845 and 4 out of her personal funds and Lots
2055-A and 2055-I by way of inheritance.9 She submitted a joint affidavit executed by
her and petitioner attesting to the fact that she purchased Lot 2142 and the
improvements thereon using her own money.10 Accordingly, respondent sought the
dismissal of the petition for dissolution as well as payment for attorneys fees and
litigation expenses.11
During trial, petitioner testified that while Lots 1, 2142, 5845 and 4 were registered in
the name of respondent, these properties were acquired with the money he received
from the Dutch government as his disability benefit12since respondent did not have
sufficient income to pay for their acquisition. He also claimed that the joint affidavit
they submitted before the Register of Deeds of Dumaguete City was contrary to
Article 89 of the Family Code, hence, invalid.13
For her part, respondent maintained that the money used for the purchase of the lots
came exclusively from her personal funds, in particular, her earnings from selling
jewelry as well as products from Avon, Triumph and Tupperware. 14 She further
asserted that after she filed for annulment of their marriage in 1996, petitioner
transferred to their second house and brought along with him certain personal
properties, consisting of drills, a welding machine, grinders, clamps, etc. She alleged
that these tools and equipment have a total cost of P500,000.00.15
The RTC Ruling
On February 28, 2007, the RTC of Negros Oriental, Branch 34 rendered its Decision,
dissolving the parties conjugal partnership, awarding all the parcels of land to
respondent as her paraphernal properties; the tools and equipment in favor of
petitioner as his exclusive properties; the two (2) houses standing on Lots 1 and 2142
as co-owned by the parties, the dispositive of which reads:
WHEREFORE, judgment is hereby rendered granting the dissolution of the conjugal
partnership of gains between petitioner Willem Beumer and respondent Avelina
Amores considering the fact that their marriage was previously annulled by Branch 32
of this Court. The parcels of land covered by Transfer Certificate of Titles Nos. 22846,
21974, 21306, 21307, 23567 and 23575 are hereby declared paraphernal properties
of respondent Avelina Amores due to the fact that while these real properties were
acquired by onerous title during their marital union, Willem Beumer, being a foreigner,
is not allowed by law to acquire any private land in the Philippines, except through
inheritance.
The personal properties, i.e., tools and equipment mentioned in the complaint which
were brought out by Willem from the conjugal dwelling are hereby declared to be
exclusively owned by the petitioner.
The two houses standing on the lots covered by Transfer Certificate of Title Nos.
21974 and 22846 are hereby declared to be co-owned by the petitioner and the
respondent since these were acquired during their marital union and since there is no
prohibition on foreigners from owning buildings and residential units. Petitioner and
respondent are, thereby, directed to subject this court for approval their project of
partition on the two houses aforementioned.
The Court finds no sufficient justification to award the counterclaim of respondent for
attorneys fees considering the well settled doctrine that there should be no premium
on the right to litigate. The prayer for moral damages are likewise denied for lack of
merit.
No pronouncement as to costs.
SO ORDERED.16
It ruled that, regardless of the source of funds for the acquisition of Lots 1, 2142, 5845
and 4, petitioner could not have acquired any right whatsoever over these properties
as petitioner still attempted to acquire them notwithstanding his knowledge of the
constitutional prohibition against foreign ownership of private lands. 17 This was made
evident by the sworn statements petitioner executed purporting to show that the
subject parcels of land were purchased from the exclusive funds of his wife, the
herein respondent.18 Petitioners plea for reimbursement for the amount he had paid
to purchase the foregoing properties on the basis of equity was likewise denied for
not having come to court with clean hands.
The CA Ruling
Petitioner elevated the matter to the CA, contesting only the RTCs award of Lots 1,
2142, 5845 and 4 in favor of respondent. He insisted that the money used to
purchase the foregoing properties came from his own capital funds and that they
were registered in the name of his former wife only because of the constitutional
prohibition against foreign ownership. Thus, he prayed for reimbursement of one-half
(1/2) of the value of what he had paid in the purchase of the said properties, waiving
the other half in favor of his estranged ex-wife.19
On October 8, 2009, the CA promulgated a Decision20 affirming in toto the judgment
rendered by the RTC of Negros Oriental, Branch 34. The CA stressed the fact that
petitioner was "well-aware of the constitutional prohibition for aliens to acquire lands
in the Philippines."21 Hence, he cannot invoke equity to support his claim for
reimbursement.
Consequently, petitioner filed the instant Petition for Review on Certiorari assailing
the CA Decision due to the following error:
UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT SUSTAINING
THE PETITIONERS ATTEMPT AT SUBSEQUENTLY ASSERTING OR CLAIMING A
RIGHT OF HALF OR WHOLE OF THE PURCHASE PRICE USED IN THE
PURCHASE OF THE REAL PROPERTIES SUBJECT OF THIS CASE.22 (Emphasis
supplied)
The Ruling of the Court
The petition lacks merit.
The issue to be resolved is not of first impression. In In Re: Petition For Separation of
Property-Elena Buenaventura Muller v. Helmut Muller23 the Court had already denied
a claim for reimbursement of the value of purchased parcels of Philippine land
instituted by a foreigner Helmut Muller, against his former Filipina spouse, Elena
Buenaventura Muller. It held that Helmut Muller cannot seek reimbursement on the
ground of equity where it is clear that he willingly and knowingly bought the property
despite the prohibition against foreign ownership of Philippine land24 enshrined under
Section 7, Article XII of the 1987 Philippine Constitution which reads:
Section 7. Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or associations qualified
to acquire or hold lands of the public domain.
Undeniably, petitioner openly admitted that he "is well aware of the above-cited
constitutional prohibition"25 and even asseverated that, because of such prohibition,
he and respondent registered the subject properties in the latters name. 26 Clearly,
petitioners actuations showed his palpable intent to skirt the constitutional prohibition.
On the basis of such admission, the Court finds no reason why it should not apply the
Muller ruling and accordingly, deny petitioners claim for reimbursement.
As also explained in Muller, the time-honored principle is that he who seeks equity
must do equity, and he who comes into equity must come with clean hands.
Conversely stated, he who has done inequity shall not be accorded equity. Thus, a
litigant may be denied relief by a court of equity on the ground that his conduct has
been inequitable, unfair and dishonest, or fraudulent, or deceitful.27
In this case, petitioners statements regarding the real source of the funds used to
purchase the subject parcels of land dilute the veracity of his claims: While admitting
to have previously executed a joint affidavit that respondents personal funds were
used to purchase Lot 1,28 he likewise claimed that his personal disability funds were
used to acquire the same. Evidently, these inconsistencies show his untruthfulness. WHEREFORE, the petition is DENIED. Accordingly, the assailed October 8, 2009
Thus, as petitioner has come before the Court with unclean hands, he is now Decision and January 24, 2011 Resolution of the Court of Appeals in CA-G.R. CV No.
precluded from seeking any equitable refuge. 01940 are AFFIRMED.

In any event, the Court cannot, even on the grounds of equity, grant reimbursement SO ORDERED.
to petitioner given that he acquired no right whatsoever over the subject properties by
virtue of its unconstitutional purchase. It is well-established that equity as a rule will ESTELA M. PERLAS-BERNABE
follow the law and will not permit that to be done indirectly which, because of public Associate Justice
policy, cannot be done directly.29 Surely, a contract that violates the Constitution and
the law is null and void, vests no rights, creates no obligations and produces no legal
effect at all.30 Corollary thereto, under Article 1412 of the Civil Code,31 petitioner
cannot have the subject properties deeded to him or allow him to recover the money
he had spent for the purchase thereof. The law will not aid either party to an illegal
contract or agreement; it leaves the parties where it finds them.32 Indeed, one cannot
salvage any rights from an unconstitutional transaction knowingly entered into.

Neither can the Court grant petitioners claim for reimbursement on the basis of unjust
enrichment.33 As held in Frenzel v. Catito, a case also involving a foreigner seeking
monetary reimbursement for money spent on purchase of Philippine land, the
provision on unjust enrichment does not apply if the action is proscribed by the
Constitution, to wit:

Futile, too, is petitioner's reliance on Article 22 of the New Civil Code which reads:

Art. 22. Every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.1wphi1

The provision is expressed in the maxim: "MEMO CUM ALTERIUS DETER

DETREMENTO PROTEST" (No person should unjustly enrich himself at the expense
of another). An action for recovery of what has been paid without just cause has been
designated as an accion in rem verso. This provision does not apply if, as in this
case, the action is proscribed by the Constitution or by the application of the pari
delicto doctrine. It may be unfair and unjust to bar the petitioner from filing an accion
in rem verso over the subject properties, or from recovering the money he paid for the
said properties, but, as Lord Mansfield stated in the early case of Holman v. Johnson:
"The objection that a contract is immoral or illegal as between the plaintiff and the
defendant, sounds at all times very ill in the mouth of the defendant. It is not for his
sake, however, that the objection is ever allowed; but it is founded in general
principles of policy, which the defendant has the advantage of, contrary to the real
justice, as between him and the plaintiff."34 (Citations omitted)

Nor would the denial of his claim amount to an injustice based on his foreign
citizenship.35 Precisely, it is the Constitution itself which demarcates the rights of
citizens and non-citizens in owning Philippine land. To be sure, the constitutional ban
against foreigners applies only to ownership of Philippine land and not to the
improvements built thereon, such as the two (2) houses standing on Lots 1 and 2142
which were properly declared to be co-owned by the parties subject to partition.
Needless to state, the purpose of the prohibition is to conserve the national
patrimony36 and it is this policy which the Court is duty-bound to protect.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 183026 November 14, 2012
NESTOR N. PADALHIN and ANNIE PADALHIN, Petitioners,
vs.
NELSON D. LAVINA, Respondent.
RESOLUTION
REYES, J.:
For review is the Decision1 rendered on February 14, 2008 and Resolution2 issued on
May 20, 2008 by the Court of Appeals (CA) in CA-G.R. CV No. 81810. The CA
affirmed, albeit with modification relative to the award of attorney's fees, the
Decision3 rendered on October 3, 2003 by the Regional Trial Court (RTC), Pasig City,
Branch 165, which ordered herein petitioner Nestor Padalhin (Nestor), to pay herein
respondent Nelson D. Lavina (Lavina) the total amount of P775,000.00 as damages.
Antecedent Facts
Lavia and Nestor were both Filipino diplomats assigned in Kenya as Ambassador
and Consul General, respectively.
In the course of their stay in Kenya, the residence of Lavia was raided twice. Prior to
the raids, Bienvenido Pasturan4 (Pasturan) delivered messages to the Filipino
household helpers in the ambassadors residence instructing them to allow the entry
of an officer who would come to take photographs of the ivory souvenirs kept therein.
The first raid on April 18, 1996 was conducted while Lavia and his wife were
attending a diplomatic dinner hosted by the Indian High Commission. Lucy Ercolano
Muthua, who was connected with the Criminal Investigation Divisions Intelligence
Office of Kenya and David Menza, an officer in the Digirie Police Station in Nairobi,
participated in the raid. Photographs of the first and second floors of Lavias
residence were taken with the aid of James Mbatia,5 Juma Kalama,6 Zenaida
Cabando7 (Cabando), and Edna Palao8 (Palao). The second raid was conducted on
April 23, 1996 during which occasion, the ambassador and his spouse were once
again not present and additional photographs of the residence were taken.
On September 27, 1996, Lavia received an information from the Department of
Foreign Affairs (DFA) in Manila that an investigating team was to be sent to Nairobi to
inquire into the complaints filed against him by the employees of the Philippine
Embassy in Kenya, on one hand, and his own complaint against the spouses
Padalhin, on the other. The investigating team was led by Rosario G. Manalo
(Manalo) and had Franklin M. Ebdalin (Ebdalin) and Maria Theresa Dizon (Dizon) as
members. The team stayed in Kenya from April 20, 1997 to April 30, 1997. On April
29, 1997, the team entered Lavias residence unarmed with a search warrant, court
order or letter from the DFA Secretary. Lavia alleged that in the course of the
inspection, the team destroyed cabinet locks, damaged furnitures and took three sets
of carved ivory tusks.
Subsequently, both Nestor and Lavia were recalled from their posts in Kenya.
On November 17, 1997, Lavia filed before the RTC a complaint for damages against
Nestor and his wife, petitioner Annie Padalhin (Annie) Palao, Cabando, Manalo,
Ebdalin and Dizon. On July 6, 1998, Lavia amended his complaint to include
Pasturan as a defendant.
Lavias complaint alleged the following causes of action, to wit: (a) affront against his
privacy and the sanctity and inviolability of his diplomatic residence during the two
raids conducted by the Kenyan officials, supposedly instigated by Padalhin and
participated by all the defendants as conspirators; (b) infringement of his
constitutional rights against illegal searches and seizures when the investigating team
sent by the DFA entered into his residence without a warrant, court order or letter
from the DFA Secretary and confiscated some of his personal belongings; and (c)
bad faith, malice and deceit exhibited by the defendants, including Padalhin, in
conspiring on the conduct of the raids, engaging in a smear campaign against him,
and seizing without authority his personal effects. Lavia sought payment of actual,
moral, exemplary and nominal damages, attorneys fees and costs of suits.
In the course of the trial, Nestor denied any involvement in the raids conducted on
Lavias residence. As counterclaims, he alleged that the suit filed by Lavia caused
him embarasssment and sleepless nights, as well as unnecessary expenses which
he incurred to defend himself against the charges. On the other hand, Annie denied
prior knowledge of and participation in the raids.
On February 24, 2000, the RTC, upon oral motion of Lavias counsel informing the
court that a settlement had been reached, dismissed the charges against Palao,
Cabando, Manalo, Ebdalin and Dizon. As a consequence, the RTC deemed it proper
to no longer resolve the claims of Lavia relative to the alleged seizure of his personal
effects by the DFA investigating team. Lavia pursued his charges against Nestor,
Annie and Pasturan.
The Ruling of the RTC
On October 3, 2003, the RTC rendered a Decision9 ordering Nestor to pay Lavia
P500,000.00 as moral damages, P50,000.00 as nominal damages, P75,000.00 as
exemplary damages, P150,000.00 as attorneys fees and litigation expenses, and
costs of suit for the formers participation in the raid conducted in the Ambassadors
residence on April 18, 1996. The RTC ruled that:
Defendant Nestor N. Padalhin admitted in his sworn statement dated October 10,
1997 which was subscribed and sworn to on October 13, 1997 before the Executive
Director Benito B. Valeriano, Office of Personnel and Administrative Services of the
Department of Foreign Affairs, that he caused the taking of pictures of the raw
elephant tusks in the official residence of the ambassador (Exh. "B"). x x x.
xxxx
The said affidavit was submitted by Nestor Padalhin in answer to the administrative
charge filed against him by then Secretary of the Department of Foreign Affairs
Domingo L. Siazon, Jr. in connection with the violation of the diplomatic immunity of
the residence of the Philippine
Ambassador to Kenya on April 18, 1996. x x x.
xxxx
When Nestor Padalhin was presented by the plaintiff as hostile witness, he affirmed
the truth of the contents of his affidavit marked as Exhibit "B". x x x.
It is therefore clear that the taking of the pictures of the elephant tusks inside the
residence of Ambassador Nelson Lavia while the latter and his wife were out and
attending a diplomatic function, was upon order of Nestor Padalhin to his driver
James Mbatia with the cooperation of Juma Kalama, a gardener in the ambassadors
residence. The admission of defendant Nestor Padalhin that he was the one who
caused the taking of the pictures of the elephant tusks in the official residence of
Ambassador Lavia in effect corroborates the latters testimony that it was Nestor
Padalhin who masterminded the invasion and violation of the privacy and inviolability
of his diplomatic residence in Kenya on April 18, 1996.
The invasion of the diplomatic residence of the plaintiff in Kenya and the taking of
photographs of the premises and the elephant tusks inside the residence upon order
of defendant Nestor Padalhin without the knowledge and consent of the plaintiff were
done by the said defendant in bad faith. The intention to malign the plaintiff is shown
by the fact that Nestor Padalhin even went to the Kenyan Ministry of Foreign Affairs
and reported the raw elephant tusks of Ambassador Lavia as admitted in paragraph
2.a of his affidavit marked as Exhibit "B".
This incident reached not only the Ministry of Foreign Affairs of Kenya but also the
Filipino community in Kenya, the Department of Foreign Affairs in Manila and the
circle of friends of plaintiff. As a result, plaintiff felt insulted, betrayed, depressed and
even feared for his life because the intelligence and local police were involved in this
incident. Plaintiff suffered humiliation, sleepless nights, serious anxiety, besmirched
reputation and wounded feeling.
The admission of defendant Nestor Padalhin in his affidavit (Exh. "B") regarding the
first cause of action is binding upon him only but cannot bind his co-defendants Annie
Padalhin and Bienvenido Pasturan who were not included in the administrative case
where the affidavit of
Nestor Padalhin was submitted.
The affidavits of plaintiffs maids Zenaida Cabando and Edna Palao who implicated
Annie Padalhin and Bienvenido Pasturan in this case is hearsay evidence because
the said househelpers did not appear to testify in this case and to identify their
affidavits although the record will show that plaintiff exerted all efforts to present them
as witnesses but failed because their address/whereabouts could not be traced
and/or ascertained. In view of this, defendants Annie Padalhin and Bienvenido
Pasturan did not have the opportunity to cross-examine the said affiants.10 (Italics
ours)
The RTC was, however, not convinced of Nestors involvement in the raid staged on
April 23, 1996. Lavias testimony relative to the raid was not based on his own
personal knowledge as it was only derived from the affidavits subscribed and sworn
to before him by Cabando, Palao, Helen Tadifa,11 John Ochieng12 and Leonidas
Peter Logarta.13 During the trial before the RTC and even in the proceedings before
the DFA, Lavia had not presented the aforementioned persons as witnesses. Their
affidavits were thus considered as hearsay evidence since the witnesses were not
subjected to cross-examination. The RTC likewise found no sufficient evidence to
render Annie and Pasturan liable and to grant Nestors counterclaims.
Both Lavia and Nestor filed their respective appeals to assail the RTC decision.
Lavia ascribed error on the part of the RTC when it absolved Annie and Pasturan
from liability anent their supposed participation in the raid conducted on April 18,
1996. Lavia likewise assailed as insufficient the amount of exemplary and nominal
damages imposed on Nestor by the RTC. Lavia also challenged the propriety of the
RTCs dismissal of his claims relative to the conduct of the second raid on April 23,
1996. On the other hand, Nestor lamented that his participation in the April 18, 1996
raid was not proven by clear and substantial evidence, hence, the award of damages
made by the RTC in favor of Lavia lacked basis.
The Ruling of the CA
On February 14, 2008, the CA rendered a Decision 14 denying the appeals of both
Lavia and Nestor. The CA, however, reduced to P75,000.00 the award of attorneys
fees and litigation expenses made in Lavias favor. In affirming, albeit with
modification, the RTCs disquisition, the CA explained:
There is no doubt in our mind that defendant-appellant indeed participated in the first
raid that happened on April 18, 1997 [sic]. This conclusion of ours is based on the
admission made by the defendant- appellant himself in his affidavit dated October 10,
1997. x x x.
xxxx
Defendat-appellants affidavit constitutes as [sic] an admission against his interest.
Being an admission against interest, the affidavit is the best evidence which affords
the greatest certainty of the facts in dispute. The rationale for the rule is based on the
presumption that no man would declare anything against himself unless such
declaration was true. Thus, it is fair to presume that the declaration corresponds with
the truth, and it is his fault if it does not. As a Consul General of the Republic of the
Philippines, defendant-appellant cannot pretend that the plain meaning of his
admission eluded his mind. On the witness stand, he testified that he was the one
who voluntarily and freely prepared his affidavit. He further stated that the contents
thereof are true. His affidavit likewise contained an apology for his lack of judgment
and discretion regarding the April 18, 1996 raid.
Anent plaintiff-appellants second cause of action, the court a quo correctly ruled that
plaintiff-appellant was not able to prove defendant- appellants participation in the
second raid that happened on April 26, 1996 [sic]. Basic is the rule in evidence that
the burden of proof is on the part of the party who makes the allegations x x x.
Plaintiff-appellants testimony regarding the second raid was not of his own personal
knowledge. Neither does the affidavit of defendant-appellant admit that he had
anything to do with the second raid. Plaintiff-appellant came to know of the second
raid only from the stories told to him by his household helps and employees of the
Philippine Embassy in Nairobi, Kenya. Inasmuch as these people were not presented
as witnesses in the instant case, their affidavits are considered hearsay and without
probative value.
x x x.
Next, plaintiff-appellant bewails the dismissal of the complaint against Annie Padalhin
and Bienvenido Pasturan. He contends that the affidavits of Cabando and Palao,
which were executed and sworn to before him, linking defendant Annie Padalhin and
B[ie]nvenido Pasturan to the two raids are binding upon the latter two.
Such a contention by the plaintiff-appellant must fail. The failure of the plaintiff-
appellant to put Cabando and Palao on the witness stand is fatal to his case. Even if
defendants Annie Padalhin and Bienvenido Pasturan failed to object to the hearsay
evidence presented by the plaintiff-appellant, it would only mean that they have
waived their right of confrontation and cross-examination, and the affidavits then are
admissible. But admissibility of evidence should not be equated with weight of
evidence. Hearsay evidence, whether objected to or not, has no probative value.
xxxx
Defendant-appellant contends that there is no factual basis to conclude that he was
motivated by malice, bad faith or deceit, which would warrant the award of damages
in favor of the plaintiff-appellant.
x x x Plaintiff-appellants complaint is mainly anchored on Article 19 in relation to
Articles 21 and 26 of the New Civil Code. These provisions of the law state thus:
"Article 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith."
"Article 21. Any person who willfully causes loss or injury to another in a manner that
is contrary to morals, good customs or public policy shall compensate the latter for
the damage."
"Article 26. Every person shall respect the dignity, personality, privacy and peace of
mind of his neighbors and other persons. The following and similar acts, though they
may not constitute a criminal offense, shall produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of anothers residence:
(2) Meddling with or disturbing the private life or family relations off [sic] another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his beliefs, lowly station in life, place
of birth, physical defect, or other personal condition."
The Comment of Tolentino on what constitute an abuse of rights under Article 19 of
the New Civil Code is pertinent:
"Test of Abuse of Right. Modern jurisprudence does not permit acts which, although
not unlawful, are anti-social. There is undoubtedly an abuse of right when it is
exercised for the only purpose of prejudicing or injuring another. When the objective
of the actor is illegitimate, the illicit act cannot be concealed under the guise of
exercising a right. The principle does not permit acts which, without utility or legitimate
purpose cause damage to another, because they violate the concept of social
solidarity which considers law as rational and just. x x x."
The question, therefore, is whether defendant-appellant intended to prejudice or
injure plaintiff-appellant when he did the acts as embodied in his affidavit.
We rule in the affirmative. Defendant-appellants participation in the invasion of
plaintiff-appellants diplomatic residence and his act of ordering an employee to take
photographs of what was inside the diplomatic residence without the consent of the
plaintiff-appellant were clearly done to prejudice the latter. Moreover, we find that
defendant- appellant was not driven by legitimate reasons when he did the
questioned acts. As pointed out by the court a quo, defendant-appellant made sure
that the Kenyan Minister of Foreign Affairs and the Filipino community in Kenya knew
about the alleged illegal items in plaintiff-appellants diplomatic residence.
xxxx
Basic is the rule that trial courts are given the discretion to determine the amount of
damages, and the appellate court can modify or change the amount awarded only
when it is inordinate. x x x We reduce the amount of attorneys fees and expenses of
litigation from P150,000.00 to P75,000.00 considering that the instant suit is merely
for damages.
With regard to plaintiff-appellants contention that his prayer for "other reliefs which
are just and equitable", consisting of his remuneration, salaries and allowances which
should have been paid to him in Nairobi if it were not for his illegal recall to Manila,
the same must likewise fail. First of all, it is not within our powers to determine
whether or not plaintiff-appellants recall to Manila following the two raids was illegal
or not. Second, the "other reliefs" prayed for by the plaintiff- appellant are in the
nature of actual or compensatory damages which must be duly proved with
reasonable degree of certainty. A court cannot rely on speculation, conjecture or
guesswork as to the amount of damages, but must depend upon competent proof and
on evidence of the actual amount thereof. Here, plaintiff-appellant failed to present
proof of his salary and allowances. x x x.15 (Citations omitted and italics ours)
The Resolution16 issued by the CA on May 20, 2008 denied the respective motions
for reconsideration filed by Lavia and Nestor.
Hence, Nestor filed before us the instant Petition for Review on Certiorari17 anchored
on the following issues:
I. WHETHER OR NOT NESTORS PARTICIPATION IN THE RAID CONDUCTED
ON LAVIAS RESIDENCE WAS PROVEN BY CLEAR AND SUBSTANTIAL
EVIDENCE AS TO WARRANT THE AWARD OF MORAL, EXEMPLARY AND
NOMINAL DAMAGES AND ATTORNEYS FEES IN THE LATTERS FAVOR.
II. WHETHER OR NOT NESTORS COUNTERCLAIMS SHOULD HAVE BEEN
GRANTED CONSIDERING A CLEAR SHOWING THAT LAVIAS SUIT WAS
GROUNDLESS.
The Arguments in Support of the Petition
Nestor reiterates that his admission of having caused the taking of photographs in
Lavias residence was subject to the qualification that he did so sans malice or bad
faith. Padalhin insists that he did nothing unlawful. He merely intended to verify the
complaints of some embassy personnel against Lavia, with the end in mind of
protecting and upholding the image of the Philippine diplomatic corps in Kenya. He
may have committed a lapse in the exercise of his discretion, but he never meant to
cause Lavia harm, damage or embarrassment.
Nestor avers that Lavia kept grudges against him based on a mistaken sentiment
that the former intended to oust the latter from his post. This, however, did not justify
Lavias filing of a suit for damages against Nestor.
Lavias Contentions
In his Comment,18 Lavia seeks the dismissal of the instant petition on both
procedural and substantive grounds. He alleges that the verification and certification
of non-forum-shopping attached to the petition was signed not by Spouses Padalhin
but by their son, Norman Padalhin (Norman). Such being the case, it is as if the said
verification and certification was not signed at all, hence, legally inexistent, rendering
the petition defective. Besides, even if the Special Power of Attorney 19 (SPA) signed
by Nestor were to be considered as the source of Normans authority to sign the said
verification and certification of non-forum-shopping, still, the instrument is wanting as
Annie, a co-petitioner in the case at bar, had no participation in its execution.
Lavia likewise emphasizes that since factual and not legal issues are raised, resort
to a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure is
erroneous.
In challenging the substantial merits of the instant petition, Lavia reiterates the
arguments he proferred in the proceedings below. He also made affirmative
references to the portions of rulings of both the RTC and the CA, relative to the
binding effect of the affidavits submitted by some of the defendants either with the
DFA or the RTC, to render all of them liable for damages for their participation in the
conduct of the supposed raids.
Our Disquisition
The instant petition is procedurally flawed.
We deem it proper to first resolve the procedural issues raised by Lavia relative to
the (a) alleged defective verification and certification of non-forum shopping attached
to the instant petition, and (b) the circumstance that factual and not legal issues are
presented before us, hence, beyond the ambit of a petition for review on certiorari
under Rule 45 of the Rules of Civil Procedure.
Sections 4 and 5 of Rule 7 of the Rules of Civil Procedure provide:
Sec. 4. Verification. - Except when otherwise specifically required by law or rule,
pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleadings and that
the allegations therein are true and correct of his personal knowledge or based on
authentic records.
A pleading required to be verified which contains a verification based on "information
and belief" or upon "knowledge, information and belief" or lacks a proper verification,
shall be treated as an unsigned pleading.
Sec. 5. Certification against forum shopping. - The plaintiff or principal party shall
certify under oath in the complaint or other initiatory pleading asserting a claim for
relief, or in a sworn certification annexed thereto and simultaneously filed therewith:
(a) that he has not theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such other
pending action or claim, a complete statement of the present status thereof; and (c) if
he should thereafter learn that the same or similar action or claim has been filed or is
pending, he shall report that fact within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion and
after hearing. The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court, without prejudice
to the corresponding administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum-shopping, the same shall be
ground for summary dismissal with prejudice and shall constitute direct contempt, as
well as a cause for administrative sanctions. (Italics ours)
Obedience to the requirements of procedural rules is needed if we are to expect fair
results therefrom, and utter disregard of the rules cannot justly be rationalized by
harking on the policy of liberal construction.20 Time and again, this Court has strictly
enforced the requirement of verification and certification of non-forum shopping under
the Rules of Court.21 Verification is required to secure an assurance that the
allegations of the petition have been made in good faith, or are true and correct and
not merely speculative.22 The attestation on non-forum shopping requires personal
knowledge by the party executing the same, and the lone signing petitioner cannot be
presumed to have personal knowledge of the filing or non-filing by his co-petitioners
of any action or claim the same as similar to the current petition. 23
The circumstances surrounding the case at bar do not qualify to exempt compliance
with the rules and justify our exercise of leniency. The verification and certification of
non-forum shopping24 attached to the instant petition was not signed personally by
the petitioners themselves. Even if we were to admit as valid the SPA executed in
Normans favor allowing him to sign the verification and certification of non-forum
shopping attached to the instant petition, still, his authority is wanting. Petitioner Annie
did not participate in the execution of the said SPA. In the pleadings filed with us,
there is nary an explanation regarding the foregoing omissions. The petitioner
spouses took procedural rules for granted and simply assumed that the Court will
accord them leniency. It bears stressing that procedural rules are crafted towards the
orderly administration of justice and they cannot be haphazardly ignored at the
convenience of the party litigants.
Lavia also seeks the dismissal of the instant petition on the ground of being
supposedly anchored on factual and not legal issues.
The case of Vda. De Formoso v. Philippine National Bank 25 is emphatic on what
issues can be resolved in a petition for review on certiorari filed under Rule 45 of the
Rules of Procedure, to wit:
Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition
filed shall raise only questions of law, which must be distinctly set forth. A question of
law arises when there is doubt as to what the law is on a certain state of facts, while
there is a question of fact when the doubt arises as to the truth or falsity of the alleged
facts. For a question to be one of law, the same must not involve an examination of
the probative value of the evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law provides on the given set of
circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact.
x x x The substantive issue of whether or not the petitioners are entitled to moral and
exemplary damages as well as attorneys fees is a factual issue which is beyond the
province of a petition for review on certiorari.26 (Citation omitted and italics ours)
In the case at bar, the petitioner spouses present to us issues with an intent to subject
to review the uniform factual findings of the RTC and the CA.1wphi1 Specifically, the
instant petition challenges the existence of clear and substantial evidence warranting
the award of damages and attorneys fees in Lavias favor. Further, the instant
petition prays for the grant of the Spouses Padalhins counterclaims on the supposed
showing that the complaint filed by Lavia before the RTC was groundless. It bears
stressing that we are not a trier of facts. Undoubtedly, the questions now raised
before us are factual and not legal in character, hence, beyond the contemplation of a
petition filed under Rule 45 of the Rules of Civil Procedure.
Even if we were to overlook the
aforecited procedural defects of the
instant petition, still, the reliefs
prayed for by the petitioner spouses
cannot be granted.
As already exhaustively discussed by both the RTC and the CA, Nestor himself
admitted that he caused the taking of the pictures of Lavina's residence without the
latter's knowledge and consent. Nestor reiterates that he did so sans bad faith or
malice. However, Nestor's surreptitious acts negate his allegation of good faith. If it
were true that Lavina kept ivories in his diplomatic residence, then, his behavior
deserves condemnation. However, that is not the issue in the case at bar. Nestor
violated the New Civil Code prescriptions concerning the privacy of one's residence
and he cannot hide behind the cloak of his supposed benevolent intentions to justify
the invasion. Hence, the award of damages and attorney's fees in Lavina's favor is
proper.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is DENIED. The
Decision dated February 14, 2008 and Resolution dated May 20, 2008 by the Court of
Appeals in C A-G.R. CV No. 81810 are AFFIRMED.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 174238 July 7, 2009
ANITA CHENG, Petitioner,
vs.
SPOUSES WILLIAM SY and TESSIE SY, Respondents.
DECISION
NACHURA, J.:
This is a petition1 for review on certiorari under Rule 45 of the Rules of Court of the
Order dated January 2, 20062of the Regional Trial Court (RTC), Branch 18, Manila in
Civil Case No. 05-112452 entitled Anita Cheng v. Spouses William Sy and Tessie Sy.
The antecedents are as follows
Petitioner Anita Cheng filed two (2) estafa cases before the RTC, Branch 7, Manila
against respondent spouses William and Tessie Sy (Criminal Case No. 98-969952
against Tessie Sy and Criminal Case No. 98-969953 against William Sy) for issuing
to her Philippine Bank of Commerce (PBC) Check Nos. 171762 and 71860
for P300,000.00 each, in payment of their loan, both of which were dishonored upon
presentment for having been drawn against a closed account.
Meanwhile, based on the same facts, petitioner, on January 20, 1999, filed against
respondents two (2) cases for violation of Batas Pambansa Bilang (BP Blg.) 22 before
the Metropolitan Trial Court (MeTC), Branch 25, Manila (Criminal Case Nos. 341458-
59).
On March 16, 2004, the RTC, Branch 7, Manila dismissed the estafa cases for failure
of the prosecution to prove the elements of the crime. The Order dismissing Criminal
Case No. 98-969952 contained no declaration as to the civil liability of Tessie Sy.3 On
the other hand, the Order in Criminal Case No. 98-969953 contained a statement,
"Hence, if there is any liability of the accused, the same is purely civil, not criminal in
nature."4
Later, the MeTC, Branch 25, Manila, dismissed, on demurrer, the BP Blg. 22 cases in
its Order5 dated February 7, 2005 on account of the failure of petitioner to identify the
accused respondents in open court. The Order also did not make any pronouncement
as to the civil liability of accused respondents.1avvphi1
On April 26, 2005, petitioner lodged against respondents before the RTC, Branch 18,
Manila, a complaint6 for collection of a sum of money with damages (Civil Case No.
05-112452) based on the same loaned amount ofP600,000.00 covered by the two
PBC checks previously subject of the estafa and BP Blg. 22 cases.
In the assailed Order7 dated January 2, 2006, the RTC, Branch 18, Manila, dismissed
the complaint for lack of jurisdiction, ratiocinating that the civil action to collect the
amount of P600,000.00 with damages was already impliedly instituted in the BP Blg.
22 cases in light of Section 1, paragraph (b) of Rule 111 of the Revised Rules of
Court.
Petitioner filed a motion for reconsideration8 which the court denied in its Order9 dated
June 5, 2006. Hence, this petition, raising the sole legal issue
Whether or not Section 1 of Rule 111 of the 2000 Rules of Criminal Procedure and
Supreme Court Circular No. 57-97 on the Rules and Guidelines in the filing and
prosecution of criminal cases under BP Blg. 22 are applicable to the present case
where the nature of the order dismissing the cases for bouncing checks against the
respondents was [based] on the failure of the prosecution to identify both the accused
(respondents herein)?10
Essentially, petitioner argues that since the BP Blg. 22 cases were filed on January
20, 1999, the 2000 Revised Rules on Criminal Procedure promulgated on December
1, 2000 should not apply, as it must be given only prospective application. She further
contends that that her case falls within the following exceptions to the rule that the
civil action correspondent to the criminal action is deemed instituted with the latter
(1) additional evidence as to the identities of the accused is necessary for
the resolution of the civil aspect of the case;
(2) a separate complaint would be just as efficacious as or even more
expedient than a timely remand to the trial court where the criminal action
was decided for further hearings on the civil aspect of the case;
(3) the trial court failed to make any pronouncement as to the civil liability of
the accused amounting to a reservation of the right to have the civil liability
litigated in a separate action;
(4) the trial court did not declare that the facts from which the civil liability
might arise did not exist;
(5) the civil complaint is based on an obligation ex-contractu and not ex-
delicto pursuant to Article 3111 of the Civil Code; and
(6) the claim for civil liability for damages may be had under Article 2912 of
the Civil Code.
Petitioner also points out that she was not assisted by any private prosecutor in the
BP Blg. 22 proceedings.
The rule is that upon the filing of the estafa and BP Blg. 22 cases against
respondents, where the petitioner has not made any waiver, express reservation to
litigate separately, or has not instituted the corresponding civil action to collect the
amount of P600,000.00 and damages prior to the criminal action, the civil action is
deemed instituted with the criminal cases.13
This rule applies especially with the advent of the 2000 Revised Rules on Criminal
Procedure. Thus, during the pendency of both the estafa and the BP Blg. 22 cases,
the action to recover the civil liability was impliedly instituted and remained pending
before the respective trial courts. This is consonant with our ruling in Rodriguez v.
Ponferrada14 that the possible single civil liability arising from the act of issuing a
bouncing check can be the subject of both civil actions deemed instituted with the
estafa case and the prosecution for violation of BP Blg. 22, simultaneously available
to the complaining party, without traversing the prohibition against forum
shopping.15Prior to the judgment in either the estafa case or the BP Blg. 22 case,
petitioner, as the complainant, cannot be deemed to have elected either of the civil
actions both impliedly instituted in the said criminal proceedings to the exclusion of
the other.16
The dismissal of the estafa cases for failure of the prosecution to prove the elements
of the crime beyond reasonable doubtwhere in Criminal Case No. 98-969952 there
was no pronouncement as regards the civil liability of the accused and in Criminal
Case No. 98-969953 where the trial court declared that the liability of the accused
was only civil in natureproduced the legal effect of a reservation by the petitioner of
her right to litigate separately the civil action impliedly instituted with the estafa cases,
following Article 29 of the Civil Code.17
However, although this civil action could have been litigated separately on account of
the dismissal of the estafa cases on reasonable doubt, the petitioner was deemed to
have also elected that such civil action be prosecuted together with the BP Blg. 22
cases in light of the Rodriguez v. Ponferrada ruling.
With the dismissal of the BP Blg. 22 cases for failure to establish the identity of the
accused, the question that arises is whether such dismissal would have the same
legal effect as the dismissed estafa cases. Put differently, may petitioners action to
recover respondents civil liability be also allowed to prosper separately after the BP
Blg. 22 cases were dismissed?
Section 1 (b), Rule 111 of the 2000 Revised Rules on Criminal Procedure states
Section 1. Institution of criminal and civil actions.
xxx
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to
include the corresponding civil action. No reservation to file such civil action
separately shall be allowed.
Upon filing of the joint criminal and civil actions, the offended party shall pay in full the
filing fees based on the amount of the check involved, which shall be considered as
the actual damages claimed. Where the complaint or information also seeks to
recover liquidated, moral, nominal, temperate or exemplary damages, the offended
party shall pay the filing fees based on the amounts alleged therein. If the amounts
are not so alleged but any of these damages [is] subsequently awarded by the court,
the filing fees based on the amount awarded shall constitute a first lien on the
judgment.
Where the civil action has been filed separately and trial thereof has not yet
commenced, it may be consolidated with the criminal action upon application with the
court trying the latter case. If the application is granted, the trial of both actions shall
proceed in accordance with section 2 of this Rule governing consolidation of the civil
and criminal actions.
Petitioner is in error when she insists that the 2000 Rules on Criminal Procedure
should not apply because she filed her BP Blg. 22 complaints in 1999. It is now
settled that rules of procedure apply even to cases already pending at the time of
their promulgation. The fact that procedural statutes may somehow affect the litigants
rights does not preclude their retroactive application to pending actions. It is axiomatic
that the retroactive application of procedural laws does not violate any right of a
person who may feel that he is adversely affected, nor is it constitutionally
objectionable. The reason for this is that, as a general rule, no vested right may
attach to, nor arise from, procedural laws.18
Indeed, under the present revised Rules, the criminal action for violation of BP Blg. 22
includes the corresponding civil action to recover the amount of the checks. It should
be stressed, this policy is intended to discourage the separate filing of the civil action.
In fact, the Rules even prohibits the reservation of a separate civil action, i.e., one can
no longer file a separate civil case after the criminal complaint is filed in court. The
only instance when separate proceedings are allowed is when the civil action is filed
ahead of the criminal case. Even then, the Rules encourages the consolidation of the
civil and criminal cases. Thus, where petitioners rights may be fully adjudicated in the
proceedings before the court trying the BP Blg. 22 cases, resort to a separate action
to recover civil liability is clearly unwarranted on account of res judicata, for failure of
petitioner to appeal the civil aspect of the cases. In view of this special rule governing
actions for violation of BP Blg. 22, Article 31 of the Civil Code is not applicable.19
Be it remembered that rules governing procedure before the courts, while not cast in
stone, are for the speedy, efficient, and orderly dispensation of justice and should
therefore be adhered to in order to attain this objective.20
However, in applying the procedure discussed above, it appears that petitioner would
be left without a remedy to recover from respondents the P600,000.00 allegedly
loaned from her. This could prejudice even the petitioners Notice of Claim involving
the same amount filed in Special Proceedings No. 98-88390 (Petition for Voluntary
Insolvency by Kolin Enterprises, William Sy and Tessie Sy), which case was
reportedly archived for failure to prosecute the petition for an unreasonable length of
time.21 Expectedly, respondents would raise the same defense that petitioner had
already elected to litigate the civil action to recover the amount of the checks along
with the BP Blg. 22 cases.
It is in this light that we find petitioners contention that she was not assisted by a
private prosecutor during the BP Blg. 22 proceedings critical. Petitioner indirectly
protests that the public prosecutor failed to protect and prosecute her cause when he
failed to have her establish the identities of the accused during the trial and when he
failed to appeal the civil action deemed impliedly instituted with the BP Blg. 22 cases.
On this ground, we agree with petitioner.
Faced with the dismissal of the BP Blg. 22 cases, petitioners recourse pursuant to
the prevailing rules of procedure would have been to appeal the civil action to recover
the amount loaned to respondents corresponding to the bounced checks. Hence, the
said civil action may proceed requiring only a preponderance of evidence on the part
of petitioner. Her failure to appeal within the reglementary period was tantamount to a
waiver altogether of the remedy to recover the civil liability of respondents. However,
due to the gross mistake of the prosecutor in the BP Blg. 22 cases, we are
constrained to digress from this rule.
It is true that clients are bound by the mistakes, negligence and omission of their
counsel.22 But this rule admits of exceptions (1) where the counsels mistake is so
great and serious that the client is prejudiced and denied his day in court, or (2)
where the counsel is guilty of gross negligence resulting in the clients deprivation of
liberty or property without due process of law.23 Tested against these guidelines, we
hold that petitioners lot falls within the exceptions.
There is unjust enrichment when (1) a person is unjustly benefited, and (2) such
benefit is derived at the expense of or with damages to another. This doctrine simply
means that a person shall not be allowed to profit or enrich himself inequitably at
anothers expense. One condition for invoking this principle of unjust enrichment is
that the aggrieved party has no other recourse based on contract, quasi-contract,
crime, quasi-delict or any other provision of law.26
Court litigations are primarily designed to search for the truth, and a liberal
interpretation and application of the rules which will give the parties the fullest
opportunity to adduce proof is the best way to ferret out the truth. The dispensation of
justice and vindication of legitimate grievances should not be barred by
technicalities.27 For reasons of substantial justice and equity, as the complement of
the legal jurisdiction that seeks to dispense justice where courts of law, through the
inflexibility of their rules and want of power to adapt their judgments to the special
circumstances of cases, are incompetent to do so,28 we thus rule, pro hac vice, in
favor of petitioner.
WHEREFORE, the petition is GRANTED. Civil Case No. 05-112452 entitled Anita
Cheng v. Spouses William Sy and Tessie Sy is hereby ordered REINSTATED. No
pronouncement as to costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice

It is an oft-repeated exhortation to counsels to be well-informed of existing laws and

rules and to keep abreast with legal developments, recent enactments and
jurisprudence. Unless they faithfully comply with such duty, they may not be able to
discharge competently and diligently their obligations as members of the
Bar.24 Further, lawyers in the government service are expected to be more
conscientious in the performance of their duties as they are subject to public scrutiny.
They are not only members of the Bar but are also public servants who owe utmost
fidelity to public service.25 Apparently, the public prosecutor neglected to equip
himself with the knowledge of the proper procedure for BP Blg. 22 cases under the
2000 Rules on Criminal Procedure such that he failed to appeal the civil action
impliedly instituted with the BP Blg. 22 cases, the only remaining remedy available to
petitioner to be able to recover the money she loaned to respondents, upon the
dismissal of the criminal cases on demurrer. By this failure, petitioner was denied her
day in court to prosecute the respondents for their obligation to pay their loan.

Moreover, we take into consideration the trial courts observation when it dismissed
the estafa charge in Criminal Case No. 98-969953 that if there was any liability on the
part of respondents, it was civil in nature. Hence, if the loan be proven true, the
inability of petitioner to recover the loaned amount would be tantamount to unjust
enrichment of respondents, as they may now conveniently evade payment of their
obligation merely on account of a technicality applied against petitioner.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 167017 June 22, 2009
SERAFIN CHENG, Petitioner,
vs.
SPOUSES VITTORIO and MA. HELEN DONINI, Respondents.
DECISION
CORONA,J.:
The subject of this petition is an oral lease agreement that went sour. Petitioner
Serafin Cheng agreed to lease his property located at 479 Shaw Blvd., Mandaluyong
City to respondents, Spouses Vittorio and Ma. Helen Donini, who intended to put up a
restaurant thereon. They agreed to a monthly rental of P17,000, to commence in
December 1990.
Bearing an Interim Grant of Authority executed by petitioner, respondents proceeded
to introduce improvements in the premises. The authority read:
I, Serafin Cheng, of legal age and with office address at Room 310 Federation Center
Building Muelle de Binondo, Manila, owner of the building/structure located at 479
Shaw Boulevard, Mandaluyong, Metro Manila,pursuant to a lease agreement now
being finalized and to take effect December 1, 1990, hereby grants VITTORIO
DONINI (Prospective Lessee) and all those acting under his orders to make all the
necessary improvements on the prospective leased premises located at 479 Shaw
Blvd., Mandaluyong, Metro Manila, and for this purpose, to enter said premises and
perform, all such works and activities to make the leased premises operational as a
restaurant or similar purpose.
Manila, 31 October 1990.1
However, before respondents business could take off and before any final lease
agreement could be drafted and signed, the parties began to have serious
disagreements regarding its terms and conditions. Petitioner thus wrote respondents
on January 28, 1991, demanding payment of the deposit and rentals, and signifying
that he had no intention to continue with the agreement should respondents fail to
pay. Respondents, however, ignoring petitioners demand, continued to occupy the
premises until April 17, 1991 when their caretaker voluntarily surrendered the
property to petitioner.
Respondents then filed an action for specific performance and damages with a prayer
for the issuance of a writ of preliminary injunction in the Regional Trial Court (RTC) of
Pasig City, Branch 67, docketed as Civil Case No. 60769. Respondents prayed that
petitioner be ordered to execute a written lease contract for five years, deducting from
the deposit and rent the cost of repairs in the amount of P445,000, or to order
petitioner to return their investment in the amount of P964,000 and compensate for
their unearned net income of P200,000 with interest, plus attorneys fees.2
Petitioner, in his answer, denied respondents claims and sought the award of moral
and exemplary damages, and attorneys fees.3
After trial, the RTC rendered its decision in favor of petitioner, the dispositive portion
of which provided:
WHEREFORE, in view of all the foregoing, this Court finds the preponderance of
evidence in favor of the [petitioner] and hereby renders judgment as follows:
1. The Complaint is dismissed.
2. On the counterclaim, [respondents] are ordered, jointly and severally, to
pay the [petitioner] P500,000.00 as moral damages; P100,000.00 as
exemplary damages; and P50,000.00 as attorneys fees.
3. [Respondents] are likewise ordered to pay the costs.
SO ORDERED.4
Respondents appealed to the Court of Appeals (CA) which, in its decision5 dated
March 31, 2004, recalled and set aside the RTC decision, and entered a new one
ordering petitioner to pay respondents the amount ofP964,000 representing the
latters expenses incurred for the repairs and improvements of the premises.6
Petitioner filed a motion for reconsideration on the ground that the award of
reimbursement had no factual and legal bases,7 but this was denied by the CA in its
resolution dated February 21, 2005.8
Hence, this petition for certiorari under Rule 45 of the Rules of Court, with petitioner
arguing that:
THE COURT OF APPEALS DECIDED THIS CASE NOT IN ACCORD WITH LAW
AND WITH APPLICABLE DECISIONS OF THIS HONORABLE COURT. PUT
OTHERWISE:
A. BY ORDERING PETITIONER TO REIMBURSE
RESPONDENTS THE FULL VALUE OF EXPENSES FOR THEIR
ALLEGED REPAIRS AND IMPROVEMENTS OF THE LEASED
PREMISES, THE COURT OF APPEALS ERRONEOUSLY
CONSIDERED RESPONDENTS NOT AS MERE LESSEES BUT
 POSSESSORS IN GOOD FAITH UNDER ARTICLES 448 AND
546 OF THE CIVIL CODE.
B. THE COURT OF APPEALS DECIDED THIS CASE NOT IN
ACCORD WITH ARTICLE 1678 OF THE CIVIL CODE WHICH
GIVES THE LESSOR THE OPTION TO REIMBURSE THE
LESSEE ONE-HALF OF THE VALUE OF USEFUL
IMPROVEMENTS OR, IF HE DOES NOT WANT TO, ALLOW THE
LESSEE TO REMOVE THE IMPROVEMENTS.
C. LIKEWISE, BY ORDERING PETITIONER TO REIMBURSE
THE VALUE OF ORNAMENTAL EXPENSES, THE COURT OF
APPEALS CONTRAVENED THE SECOND PARAGRAPH OF
ARTICLE 1678.
D. THE COURT OF APPEALS ERRED IN APPLYING THE
PRINCIPLE OF EQUITY IN FAVOR OF THE RESPONDENTS.
E. THE COURT OF APPEALS ERRED IN NOT AFFIRMING THE
DECISION OF THE TRIAL COURT AWARDING DAMAGES TO
PETITIONER.
F. THE COURT OF APPEALS SERIOUSLY ERRED AND/OR
GRAVELY ABUSED ITS DISCRETION IN FIXING THE AMOUNT
OF P961,000.009 CONTRARY TO RESPONDENTS OWN
REPRESENTATION AND EVIDENCE.10
Respondents were required to file their comment on the petition but their counsel
manifested that he could not file one since his clients whereabouts were unknown to
him.11 Counsel also urged the Court to render a decision on the basis of the available
records and documents.12 Per resolution dated August 30, 2006, copies of the
resolutions requiring respondents to file their comment were sent to their last known
address and were deemed served. The order requiring respondents counsel to file a
comment in their behalf was reiterated.13
In their comment, respondents argued that they were possessors in good faith,
hence, Articles 448 and 546 of the Civil Code applied and they should be indemnified
for the improvements introduced on the leased premises. Respondents bewailed the
fact that petitioner was going to benefit from these improvements, the cost of which
amounted to P1.409 million, in contrast to respondents rental/deposit obligation
amounting to only P34,000. Respondents also contended that petitioners rescission
of the agreement was in bad faith and they were thus entitled to a refund. 14
In settling the appeal before it, the CA made the following findings and conclusions:
1. there was no agreement that the deposit and rentals accruing to petitioner
would be deducted from the costs of repairs and renovation incurred by
respondents;
2. respondents committed a breach in the terms and conditions of the
agreement when they failed to pay the rentals;
3. there was no valid rescission on the part of petitioner;
4. respondents were entitled to reimbursement for the cost of improvements
under the principle of equity and unjust enrichment; and
5. the award of damages in favor of petitioner had no basis in fact and law. 15
As the correctness of the CAs ruling regarding (1) the lack of agreement on the
deposit and rentals; (2) respondents breach of the terms of the verbal agreement and
(3) the lack of valid rescission by petitioner was never put in issue, this decision will
be confined only to the issues raised by petitioner, that is, the award of
reimbursement and the deletion of the award of damages. It need not be stressed
that an appellate court will not review errors that are not assigned before it, save in
certain exceptional circumstances and those affecting jurisdiction over the subject
matter as well as plain and clerical errors, none of which is present in this case. 16
Remarkably, in ruling that respondents were entitled to reimbursement, the CA did
not provide any statutory basis therefor and instead applied the principles of equity
and unjust enrichment, stating:
It would be inequitable to allow the defendant-appellee, as owner of the property to
enjoy perpetually the improvements introduced by the plaintiffs-appellants without
reimbursing them for the value of the said improvements. Well-settled is the rule that
no one shall be unjustly enriched or benefitted at the expense of another. 17
Petitioner, however, correctly argued that the principle of equity did not apply in this
case. Equity, which has been aptly described as "justice outside legality," is applied
only in the absence of, and never against, statutory law or judicial rules of
procedure.18 Positive rules prevail over all abstract arguments based on equity contra
legem.19Neither is the principle of unjust enrichment applicable since petitioner (who
was to benefit from it) had a valid claim.20
The relationship between petitioner and respondents was explicitly governed by the
Civil Code provisions on lease, which clearly provide for the rule on reimbursement of
useful improvements and ornamental expenses after termination of a lease
agreement. Article 1678 states:
If the lessee makes, in good faith, useful improvements which are suitable to the use
for which the lease is intended, without altering the form or substance of the property
leased, the lessor upon the termination of the lease shall pay the lessee one-half of
the value of the improvements at that time. Should the lessor refuse to reimburse said
amount, the lessee may remove the improvements, even though the principal thing
may suffer damage thereby. He shall not, however, cause any more impairment upon
the property leased than is necessary.
With regard to ornamental expenses, the lessee shall not be entitled to any the improvements, he cannot be compelled to do so. It then lies on respondents to
reimbursement, but he may remove the ornamental objects, provided no damage is insist on their subsidiary right to remove the improvements even though the principal
caused to the principal thing, and the lessor does not choose to retain them by paying thing suffers damage but without causing any more impairment on the property
their value at the time the lease is extinguished. leased than is necessary.

Article 1678 modified the (old) Civil Code provision on reimbursement where the As regards the ornamental expenses, respondents are not entitled to reimbursement.
lessee had no right at all to be reimbursed for the improvements introduced on the Article 1678 gives respondents the right to remove the ornaments without damage to
leased property, he being entitled merely to the rights of a usufructuary the right of the principal thing. But if petitioner appropriates and retains said ornaments, he shall
removal and set-off but not to reimbursement.21 pay for their value upon the termination of the lease.

Contrary to respondents position, Articles 448 and 546 of the Civil Code did not
apply. Under these provisions, to be entitled to reimbursement for useful
improvements introduced on the property, respondents must be considered builders
in good faith. Articles 448 and 546, which allow full reimbursement of useful
improvements and retention of the premises until reimbursement is made, apply only
to a possessor in good faith or one who builds on land in the belief that he is the
owner thereof. A builder in good faith is one who is unaware of any flaw in his title to
the land at the time he builds on it. 22
But respondents cannot be considered possessors or builders in good faith. As early
as 1956, in Lopez v. Philippine & Eastern Trading Co., Inc.,23 the Court clarified that a
lessee is neither a builder nor a possessor in good faith
x x x This principle of possessor in good faith naturally cannot apply to a lessee
because as such lessee he knows that he is not the owner of the leased property.
Neither can he deny the ownership or title of his lessor. Knowing that his occupation
of the premises continues only during the life of the lease contract and that he must
vacate the property upon termination of the lease or upon the violation by him of any
of its terms, he introduces improvements on said property at his own risk in the
sense that he cannot recover their value from the lessor, much less retain the
premises until such reimbursement. (Emphasis supplied)
The fact that petitioner will benefit from the improvements introduced by respondents
is beside the point. In the first place, respondents introduced these improvements at
their own risk as lessees. Respondents were not forced or obliged to splurge on the
leased premises as it was a matter of necessity as well as a business strategy. 27 In
fact, had respondents only complied with their obligation to pay the deposit/rent, there
would have been no dispute to begin with. If they were able to shell out more than a
million pesos to improve the property, the measly P34,000 deposit demanded by
petitioner was a mere "drop in the bucket," so to speak. More importantly, the
unequivocal terms of Article 1678 of the Civil Code should be the foremost
consideration.
The Court notes that the CA pegged the total value of the improvements made on the
leased premises atP964,000, which was apparently based on the allegation in
respondents complaint that it was their total investment cost. 28 The CA lumped
together all of respondents expenses, which was a blatant error. A qualification
should have been made as to how much was spent for useful improvements (or those
which were suitable to the use for which the lease was intended) and how much was
for ornamental expenses. Respondent Vittorio Donini testified that he spent P450,000
for necessary repairs, while P500,000 was spent for adornments.29 The evidence on
record, however, showed respondents expenses for useful improvements to be as
follows:

Being mere lessees, respondents knew that their right to occupy the premises existed Expense Amount
only for the duration of the lease.24 Cortez v. Manimbo25 went further to state that: Electrical P31,893.65 Exh. "F", et seq. 30
Roofing P14,856.00 Exhibit "O"31
If the rule were otherwise, it would always be in the power of the tenant to improve Labor P19,909.75 Exh. "P", et seq.32
his landlord out of his property. Ceiling P65,712.00 Exh. "Q", et seq.33
Labor P38,689.20 Exh. "R", et seq.34
These principles have been consistently adhered to and applied by the Court in many Electrical (phase 2) P76,539.10 Exh. "S", et seq.35
cases.26 Door P41,371.75 Exh. "T", et seq.36
Labor P25,126.00 Exh. "U", et seq.37
Under Article 1678 of the Civil Code, the lessor has the primary right (or the first Water P 8,031.00 Exhs. "W" & "W-1"3
move) to reimburse the lessee for 50% of the value of the improvements at the end of Gutters P 35,550.05 Exhs. "X" & "X-1"39
the lease. If the lessor refuses to make the reimbursement, the subsidiary right of the Outside Wall P 24,744.00 Exh. "X-2"40
lessee to remove the improvements, even though the principal thing suffers damage, Inside Wall P 22,186.10 Exh. "X-3"41
arises. Consequently, on petitioner rests the primary option to pay for one-half of the
Electrical (phase 3) P 88,698.30 Exhs. "X-8" to "X-11
value of the useful improvements. It is only when petitioner as lessor refuses to make
the reimbursement that respondents, as lessees, may remove the improvements. Labor P 19,995.00 Exhibit "Y"43
Should petitioner refuse to exercise the option of paying for one-half of the value of Total P513,301.90
Accordingly, the 50% value of the useful improvements to be reimbursed by Finally, Article 2208 of the Civil Code allows recovery of attorney's fees when
petitioner, if he chose to do so, should be based on P513,301.90. Since petitioner did exemplary damages are awarded or when the defendant's act or omission has
not exercise his option to retain these useful improvements, then respondents could compelled the plaintiff to litigate with third persons or to incur expenses to protect his
have removed the same. This was the legal consequence of the application of Article interest.52 Petitioner is entitled to it since exemplary damages were awarded in this
1678 under ordinary circumstances. case and respondents act in filing Civil Case No. 60769 compelled him to litigate.
The amount of P25,000 is in accord with prevailing jurisprudence.53
The reality on the ground ought to be recognized. For one, as disclosed by
respondents counsel, he no longer knows the exact whereabouts of his clients, only WHEREFORE, the petition is PARTIALLY GRANTED. The decision dated March 31,
that they are now in Europe and he has no communication with them at all. 44 For 2004 rendered by the Court of Appeals in CA-G.R. CV No. 54430 is
another, it appears that as soon as respondents vacated the premises, petitioner hereby MODIFIED in that
immediately reclaimed the property and barred respondents from entering it.
Respondents also alleged, and petitioner did not deny, that the property subject of (1) petitioner Serafin Cheng is ORDERED to pay respondents, spouses
this case had already been leased to another entity since 1991.45 This is where Vittorio and Ma. Helen Donini, the amount of P171,650.95 as indemnity for
considerations of equity should come into play. It is obviously no longer feasible for the useful improvements; and
respondents to remove the improvements from the property, if they still exist. The
only equitable alternative then, given the circumstances, is to order petitioner to pay
respondents one-half of the value of the useful improvements (50% of P513,301.90) (2) respondents, spouses Vittorio and Ma. Helen Donini, are ORDERED to
introduced on the property, or P256,650.95. To be off-set against this amount are pay petitioner Serafin Cheng the following sums:
respondents unpaid P17,000 monthly rentals for the period of December 1990 to
April 1991,46 or P85,000. Petitioner should, therefore, indemnify respondents the a) P100,000.00 moral damages;
amount of P171,650.95. This is in accord with the laws intent of preventing unjust
enrichment of a lessor who now has to pay one-half of the value of the useful b) P50,000.00 exemplary damages and
improvements at the end of the lease because the lessee has already enjoyed the
same, whereas the lessor can enjoy them indefinitely thereafter. 47
c) P25,000.00 attorneys fees.
Respondents are not entitled to reimbursement for the ornamental expenses under
the express provision of Article 1678. Moreover, since they failed to remove these Let copies of this decision be furnished respondents, spouses Vittorio and Ma. Helen
ornaments despite the opportunity to do so when they vacated the property, then they Donini, at their last known address, and their counsel of record.
were deemed to have waived or abandoned their right of removal.
SO ORDERED.
The CA also erred when it deleted the awards of moral and exemplary damages and
attorneys fees. RENATO C. CORONA
Associate Justice
Petitioner is entitled to moral damages but not in the amount of P500,000 awarded by
the RTC, which the Court finds to be excessive. While trial courts are given discretion
to determine` the amount of moral damages, it "should not be palpably and
scandalously excessive."48 Moral damages are not meant to enrich a person at the
expense of the other but are awarded only to allow the former to obtain means,
diversion or amusements that will serve to alleviate the moral suffering he has
undergone due to the other persons culpable action. 49 It must always reasonably
approximate the extent of injury and be proportional to the wrong committed. 50 The
award ofP100,000 as moral damages is sufficient and reasonable under the
circumstances.

The award of P100,000 as exemplary damages is likewise excessive. Exemplary

damages are imposed not to enrich one party or impoverish another but to serve as a
deterrent against or as a negative incentive to curb socially deleterious actions.51 We
think P50,000 is reasonable in this case.1avvphi1
 Republic of the Philippines Date Set SR Number No. of eggs Date hatched/
SUPREME COURT delivered Pick-up date
Manila
1/13/1993 SR 108 32,566 eggs February 3, 1993
SECOND DIVISION 1/20/1993 SR 109 21,485 eggs February 10, 1993
1/22/1993 SR 110 7,213 eggs February 12, 1993
G.R. No. 158086 February 14, 2008 1/28/1993 SR 111 14,495 eggs February 18, 1993
1/30/1993 SR 112 15,346 eggs February 20, 1993
ASJ CORPORATION and ANTONIO SAN JUAN, petitioners,
vs. 2/3/1993 SR 113 10,24[5]7 eggs February 24, 1993
SPS. EFREN & MAURA EVANGELISTA, respondents. TOTAL 101,350 eggs

DECISION
QUISUMBING, J.:
For review on certiorari is the Decision1 dated April 30, 2003 of the Court of Appeals
in CA-G.R. CV No. 56082, which had affirmed the Decision2 dated July 8, 1996 of the
Regional Trial Court (RTC) of Malolos, Bulacan, Branch 9 in Civil Case No. 745-M-93.
The Court of Appeals, after applying the doctrine of piercing the veil of corporate
fiction, held petitioners ASJ Corporation (ASJ Corp.) and Antonio San Juan solidarily
liable to respondents Efren and Maura Evangelista for the unjustified retention of the
chicks and egg by-products covered by Setting Report Nos. 108 to 113.3
The pertinent facts, as found by the RTC and the Court of Appeals, are as follows:
Respondents, under the name and style of R.M. Sy Chicks, are engaged in the large-
scale business of buying broiler eggs, hatching them, and selling their hatchlings
(chicks) and egg by-products4 in Bulacan and Nueva Ecija. For the incubation and
hatching of these eggs, respondents availed of the hatchery services of ASJ Corp., a
corporation duly registered in the name of San Juan and his family.
On February 3, 1993, respondent Efren went to the hatchery to pick up the chicks and
by-products covered by Setting Report No. 108, but San Juan refused to release the
same due to respondents failure to settle accrued service fees on several setting
reports starting from Setting Report No. 90. Nevertheless, San Juan accepted from
Efren 10,245 eggs covered by Setting Report No. 113 and P15,000.008 in cash as
partial payment for the accrued service fees.
On February 10, 1993, Efren returned to the hatchery to pick up the chicks and by-
products covered by Setting Report No. 109, but San Juan again refused to release
the same unless respondents fully settle their accounts. In the afternoon of the same
day, respondent Maura, with her son Anselmo, tendered P15,000.009 to San Juan,
and tried to claim the chicks and by-products. She explained that she was unable to
pay their balance because she was hospitalized for an undisclosed ailment. San Juan
accepted the P15,000.00, but insisted on the full settlement of respondents accounts
before releasing the chicks and by-products. Believing firmly that the total value of the
eggs delivered was more than sufficient to cover the outstanding balance, Maura
promised to settle their accounts only upon proper accounting by San Juan. San Juan
disliked the idea and threatened to impound their vehicle and detain them at the
hatchery compound if they should come back unprepared to fully settle their accounts
with him.

Sometime in 1991, respondents delivered to petitioners various quantities of eggs at
an agreed service fee of 80 centavos per egg, whether successfully hatched or not.
Each delivery was reflected in a "Setting Report" indicating the following: the number
of eggs delivered; the date of setting or the date the eggs were delivered and laid out
in the incubators; the date of candling or the date the eggs, through a lighting system,
were inspected and determined if viable or capable of being hatched into chicks; and
the date of hatching, which is also the date respondents would pick-up the chicks and
by-products. Initially, the service fees were paid upon release of the eggs and by-
products to respondents. But as their business went along, respondents delays on
their payments were tolerated by San Juan, who just carried over the balance, as
there may be, into the next delivery, out of keeping goodwill with respondents.
On February 11, 1993, respondents directed their errand boy, Allan Blanco, to pick up
the chicks and by-products covered by Setting Report No. 110 and also to ascertain if
San Juan was still willing to settle amicably their differences. Unfortunately, San Juan
was firm in his refusal and reiterated his threats on respondents. Fearing San Juans
threats, respondents never went back to the hatchery.
The parties tried to settle amicably their differences before police authorities, but to no
avail. Thus, respondents filed with the RTC an action for damages based on
petitioners retention of the chicks and by-products covered by Setting Report Nos.
108 to 113.

From January 13 to February 3, 1993, respondents had delivered to San Juan a total On July 8, 1996, the RTC ruled in favor of respondents and made the following
of 101,3[50]5 eggs, detailed as follows:6 findings: (1) as of Setting Report No. 107, respondents owed
petitioners P102,336.80;10 (2) petitioners withheld the release of the chicks and by-
products covered by Setting Report Nos. 108-113;11 and (3) the retention of the
chicks and by-products was unjustified and accompanied by threats and intimidations
on respondents.12 The RTC disregarded the corporate fiction of ASJ Corp.,13 and held
it and San Juan solidarily liable to respondents for P529,644.80 as actual
damages, P100,000.00 as moral damages, P50,000.00 as attorneys fees, plus
interests and costs of suit. The decretal portion of the decision reads:
WHEREFORE, based on the evidence on record and the laws/jurisprudence
applicable thereon, judgment is hereby rendered ordering the defendants to
pay, jointly and severally, unto the plaintiffs the amounts ofP529,644.80,
representing the value of the hatched chicks and by-products which the
plaintiffs on the average expected to derive under Setting Reports Nos. 108
to 113, inclusive, with legal interest thereon from the date of this judgment
until the same shall have been fully paid, P100,000.00 as moral damages
and P50,000.00 as attorneys fees, plus the costs of suit.
SO ORDERED.14
Both parties appealed to the Court of Appeals. Respondents prayed for an additional
award of P76,139.00 as actual damages for the cost of other unreturned by-products
and P1,727,687.52 as unrealized profits, while petitioners prayed for the reversal of
the trial courts entire decision.
On April 30, 2003, the Court of Appeals denied both appeals for lack of merit and
affirmed the trial courts decision, with the slight modification of including an award of
exemplary damages of P10,000.00 in favor of respondents. The Court of Appeals,
applying the doctrine of piercing the veil of corporate fiction, considered ASJ Corp.
and San Juan as one entity, after finding that there was no bona fide intention to treat
the corporation as separate and distinct from San Juan and his wife Iluminada.
The fallo of the Court of Appeals decision reads:
WHEREFORE, in view of the foregoing, the Decision appealed from is
hereby AFFIRMED, with the slight modification that exemplary damages in
the amount of P10,000.00 are awarded to plaintiffs.
Costs against defendants.
SO ORDERED.15
Hence, the instant petition, assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN
HOLDING, AS DID THE COURT A QUO, THAT PETITIONERS
WITHHELD/OR FAILED TO RELEASE THE CHICKS AND BY-PRODUCTS
COVERED BY SETTING REPORT NOS. 108 AND 109.
II.
THE HONORABLE COURT OF APPEALS ERRED IN ADMITTING THE
HEARSAY TESTIMONY OF MAURA EVANGELISTA SUPPORTIVE OF ITS
FINDINGS THAT PETITIONERS WITHHELD/OR FAILED TO RELEASE
THE CHICKS AND BY-PRODUCTS COVERED BY SETTING REPORT
NOS. 108 AND 109.
III.
THE HONORABLE COURT OF APPEALS, AS DID THE COURT A QUO,
ERRED IN NOT FINDING THAT RESPONDENTS FAILED TO RETURN TO
THE PLANT TO GET THE CHICKS AND BY-PRODUCTS COVERED BY
SETTING REPORT NOS. 110, 111, 112 AND 113.
IV.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING, AS DID
THE COURT A QUO, THAT THE PIERCING OF THE VEIL OF
CORPORATE ENTITY IS JUSTIFIED, AND CONSEQUENTLY HOLDING
PETITIONERS JOINTLY AND SEVERALLY LIABLE TO PAY
RESPONDENTS THE SUM OF P529,644.[80].
V.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
PETITIONERS HAVE VIOLATED THE PRINCIPLES ENUNCIATED IN
ART. 19 OF THE NEW CIVIL CODE AND CONSEQUENTLY IN
AWARDING MORAL DAMAGES, EXEMPLARY DAMAGES AND
ATTORNEYS FEES.
VI.
THE HONORABLE COURT OF APPEALS ERRED IN NOT AWARDING
PETITIONERS COUNTERCLAIM.16
Plainly, the issues submitted for resolution are: First, did the Court of Appeals err
when (a) it ruled that petitioners withheld or failed to release the chicks and by-
products covered by Setting Report Nos. 108 and 109; (b) it admitted the testimony of
Maura; (c) it did not find that it was respondents who failed to return to the hatchery to
pick up the chicks and by-products covered by Setting Report Nos. 110 to 113; and
(d) it pierced the veil of corporate fiction and held ASJ Corp. and Antonio San Juan as
one entity? Second, was it proper to hold petitioners solidarily liable to respondents
for the payment of P529,644.80 and other damages?
In our view, there are two sets of issues that the petitioners have raised.
The first set is factual. Petitioners seek to establish a set of facts contrary to the
factual findings of the trial and appellate courts. However, as well established in our
jurisprudence, only errors of law are reviewable by this Court in a petition for review
under Rule 45.17 The trial court, having had the opportunity to personally observe and
analyze the demeanor of the witnesses while testifying, is in a better position to pass
judgment on their credibility.18 More importantly, factual findings of the trial court,
when amply supported by evidence on record and affirmed by the appellate court, are
binding upon this Court and will not be disturbed on appeal. 19 While there are
exceptional circumstances20 when these findings may be set aside, none of them is
present in this case.
Based on the records, as well as the parties own admissions, the following facts were
uncontroverted: (1) As of Setting Report No. 107, respondents were indebted to
petitioners for P102,336.80 as accrued service fees for Setting Report Nos. 90 to
107;21 (2) Petitioners, based on San Juans own admission,22 did not release the
chicks and by-products covered by Setting Report Nos. 108 and 109 for failure of
respondents to fully settle their previous accounts; and (3) Due to San Juans threats,
respondents never returned to the hatchery to pick up those covered by Setting
Report Nos. 110 to 113.23
Furthermore, although no hard and fast rule can be accurately laid down under which
the juridical personality of a corporate entity may be disregarded, the following
probative factors of identity justify the application of the doctrine of piercing the veil of
corporate fiction24 in this case: (1) San Juan and his wife own the bulk of shares of
ASJ Corp.; (2) The lot where the hatchery plant is located is owned by the San Juan
spouses; (3) ASJ Corp. had no other properties or assets, except for the hatchery
plant and the lot where it is located; (4) San Juan is in complete control of the
corporation; (5) There is no bona fide intention to treat ASJ Corp. as a different entity
from San Juan; and (6) The corporate fiction of ASJ Corp. was used by San Juan to
insulate himself from the legitimate claims of respondents, defeat public convenience,
justify wrong, defend crime, and evade a corporations subsidiary liability for
damages.25 These findings, being purely one of fact,26 should be respected. We need
not assess and evaluate the evidence all over again where the findings of both courts
on these matters coincide.
On the second set of issues, petitioners contend that the retention was justified and
did not constitute an abuse of rights since it was respondents who failed to comply
with their obligation. Respondents, for their part, aver that all the elements on abuse
of rights were present. They further state that despite their offer to partially satisfy the
accrued service fees, and the fact that the value of the chicks and by-products was
more than sufficient to cover their unpaid obligations, petitioners still chose to
withhold the delivery.
The crux of the controversy, in our considered view, is simple enough. Was
petitioners retention of the chicks and by-products on account of respondents failure
to pay the corresponding service fees unjustified? While the trial and appellate courts
had the same decisions on the matter, suffice it to say that a modification is proper.
Worth stressing, petitioners act of withholding the chicks and by-products is entirely
different from petitioners unjustifiable acts of threatening respondents. The retention
had legal basis; the threats had none.
To begin with, petitioners obligation to deliver the chicks and by-products
corresponds to three dates: the date of hatching, the delivery/pick-up date and the
date of respondents payment. On several setting reports, respondents made delays
on their payments, but petitioners tolerated such delay. When respondents accounts
accumulated because of their successive failure to pay on several setting reports,
petitioners opted to demand the full settlement of respondents accounts as a
condition precedent to the delivery. However, respondents were unable to fully settle
their accounts.
Respondents offer to partially satisfy their accounts is not enough to extinguish their
obligation. Under Article 124827 of the Civil Code, the creditor cannot be compelled to
accept partial payments from the debtor, unless there is an express stipulation to that
effect. More so, respondents cannot substitute or apply as their payment the value of
the chicks and by-products they expect to derive because it is necessary that all the
debts be for the same kind, generally of a monetary character. Needless to say, there
was no valid application of payment in this case.
Furthermore, it was respondents who violated the very essence of reciprocity in
contracts, consequently giving rise to petitioners right of retention. This case is
clearly one among the species of non-performance of a reciprocal obligation.
Reciprocal obligations are those which arise from the same cause, wherein each
party is a debtor and a creditor of the other, such that the performance of one is
conditioned upon the simultaneous fulfillment of the other. 28 From the moment one of
the parties fulfills his obligation, delay by the other party begins.29
Since respondents are guilty of delay in the performance of their obligations, they are
liable to pay petitioners actual damages of P183,416.80, computed as follows: From
respondents outstanding balance of P102,336.80, as of Setting Report No. 107, we
add the corresponding services fees of P81,080.0030 for Setting Report Nos. 108 to
113 which had remain unpaid.
Nonetheless, San Juans subsequent acts of threatening respondents should not
remain among those treated with impunity. Under Article 1931 of the Civil Code, an act
constitutes an abuse of right if the following elements are present: (a) the existence of
a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of
prejudicing or injuring another.32 Here, while petitioners had the right to withhold
delivery, the high-handed and oppressive acts of petitioners, as aptly found by the
two courts below, had no legal leg to stand on. We need not weigh the corresponding
pieces of evidence all over again because factual findings of the trial court, when
adopted and confirmed by the appellate court, are binding and conclusive and will not
be disturbed on appeal.33
Since it was established that respondents suffered some pecuniary loss anchored on
petitioners abuse of rights, although the exact amount of actual damages cannot be
ascertained, temperate damages are recoverable. In arriving at a reasonable level of
temperate damages of P408,852.10, which is equivalent to the value of the chicks
and by-products, which respondents, on the average, are expected to derive, this
Court was guided by the following factors: (a) award of temperate damages will cover
only Setting Report Nos. 109 to 113 since the threats started only on February 10 and
11, 1993, which are the pick-up dates for Setting Report Nos. 109 and 110; the rates
of (b) 41% and (c) 17%, representing the average rates of conversion of broiler eggs
into hatched chicks and egg by-products as tabulated by the trial court based on
available statistical data which was unrebutted by petitioners; (d) 68,784 eggs,34 or SO ORDERED.
the total number of broiler eggs under Setting Report Nos. 109 to 113; and (e)P14.00
and (f) P1.20, or the then unit market price of the chicks and by-products, LEONARDO A. QUISUMBING
respectively. Associate Justice

Thus, the temperate damages of P408,852.10 is computed as follows:

[b X (d X e) + c X (d X f)] = Temperate Damages

41% X (68,784 eggs X P14) = P394,820.16
17% X (68,784 eggs X P1.20) = P 14,031.94
[P394,820.16 + P14,031.94] = P408,852.10

At bottom, we agree that petitioners conduct flouts the norms of civil society and
justifies the award of moral and exemplary damages. As enshrined in civil law
jurisprudence: Honeste vivere, non alterum laedere et jus suum cuique tribuere. To
live virtuously, not to injure others and to give everyone his due. 35 Since exemplary
damages are awarded, attorneys fees are also proper. Article 2208 of the Civil Code
provides that:

In the absence of stipulation, attorneys fees and expenses of litigation, other

than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

xxxx

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated April 30,
2003 of the Court of Appeals in CA-G.R. CV No. 56082 is hereby MODIFIED as
follows:

a. Respondents are ORDERED to pay petitioners P183,416.80 as actual damages,

with interest of 6% from the date of filing of the complaint until fully paid, plus legal
interest of 12% from the finality of this decision until fully paid.

b. The award of actual damages of P529,644.80 in favor of respondents is

hereby REDUCED to P408,852.10, with legal interest of 12% from the date of finality
of this judgment until fully paid.

c. The award of moral damages, exemplary damages and attorneys fees

of P100,000.00, P10,000.00,P50,000.00, respectively, in favor of respondents is
hereby AFFIRMED.

d. All other claims are hereby DENIED.

No pronouncement as to costs.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 152411 September 29, 2004
UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
PHILAB INDUSTRIES, INC., respondent.
DECISION
CALLEJO, SR., J.:
Before the Court is a petition for review on certiorari of the Decision 1 of the Court of
Appeals in CA-G.R. CV No. 44209, as well as its Resolution2 denying the petitioners
motion for the reconsideration thereof. Themo1 mo2Court of Appeals set aside the
Decision3 of Branch 150 of the Regional Trial Court (RTC) of Makati City, which
dismissed the complaint of the respondent against the petitioner for sum of money
and damages.
The Facts of the Case
Sometime in 1979, the University of the Philippines (UP) decided to construct an
integrated system of research organization known as the Research Complex. As part
of the project, laboratory equipment and furniture were purchased for the National
Institute of Biotechnology and Applied Microbiology (BIOTECH) at the UP Los Baos.
Providentially, the Ferdinand E. Marcos Foundation (FEMF) came forward and
agreed to fund the acquisition of the laboratory furniture, including the fabrication
thereof.
Renato E. Lirio, the Executive Assistant of the FEMF, gave the go-signal to BIOTECH
to contact a corporation to accomplish the project. On July 23, 1982, Dr. William
Padolina, the Executive Deputy Director of BIOTECH, arranged for Philippine
Laboratory Industries, Inc. (PHILAB), to fabricate the laboratory furniture and deliver
the same to BIOTECH for the BIOTECH Building Project, for the account of the
FEMF. Lirio directed Padolina to give the go-signal to PHILAB to proceed with the
fabrication of the laboratory furniture, and requested Padolina to forward the contract
of the project to FEMF for its approval.
On July 13, 1982, Padolina wrote Lirio and requested for the issuance of the
purchase order and downpayment for the office and laboratory furniture for the
project, thus:
1. Supply and Installation of Laboratory furniture for the BIOTECH Building Project
Amount : P2,934,068.90
Supplier : Philippine Laboratory Furniture Co.,
College, Laguna
Attention : Mr. Hector C. Navasero
President
Downpayment : 40% or P1,173,627.56
2. Fabrication and Supply of office furniture for the BIOTECH Building Project
Amount : P573,375.00
Supplier : Trans-Oriental Woodworks, Inc.
1st Avenue, Bagumbayan Tanyag, Taguig, Metro Manila
Downpayment : 50% or P286,687.504
Padolina assured Lirio that the contract would be prepared as soon as possible
before the issuance of the purchase orders and the downpayment for the goods, and
would be transmitted to the FEMF as soon as possible.
In a Letter dated July 23, 1982, Padolina informed Hector Navasero, the President of
PHILAB, to proceed with the fabrication of the laboratory furniture, per the directive of
FEMF Executive Assistant Lirio. Padolina also requested for copies of the shop
drawings and a sample contract5 for the project, and that such contract and drawings
had to be finalized before the down payment could be remitted to the PHILAB the
following week. However, PHILAB failed to forward any sample contract.
Subsequently, PHILAB made partial deliveries of office and laboratory furniture to
BIOTECH after having been duly inspected by their representatives and FEMF
Executive Assistant Lirio.
On August 24, 1982, FEMF remitted P600,000 to PHILAB as downpayment for the
laboratory furniture for the BIOTECH project, for which PHILAB issued Official
Receipt No. 253 to FEMF. On October 22, 1982, FEMF made another partial
payment of P800,000 to PHILAB, for which the latter issued Official Receipt No. 256
to FEMF. The remittances were in the form of checks drawn by FEMF and delivered
to PHILAB, through Padolina.
On October 16, 1982, UP, through Emil Q. Javier, the Chancellor of UP Los Baos
and FEMF, represented by its Executive Officer, Rolando Gapud, executed a
Memorandum of Agreement (MOA) in which FEMF agreed to grant financial support
and donate sums of money to UP for the construction of buildings, installation of
laboratory and other capitalization for the project, not to exceed P29,000,000.00. The
obligations of FEMF under the MOA are the following:
ARTICLE II
 OBLIGATIONS OF THE FOUNDATION
2.1. The FOUNDATION, in carrying out its principal objectives of promoting
philantrophic and scientific projects through financial support to such projects that
will contribute to the countrys economic development, shall grant such financial
support and donate such sums of money to the RESEARCH COMPLEX as may be
necessary for the construction of buildings, installation of laboratories, setting up of
offices and physical plants and facilities and other capital investment of the
RESEARCH COMPLEX and/or any of its component Research Institutes not to
exceed P29 Million. For this purpose, the FOUNDATION shall:
(a) Acquire and donate to the UNIVERSITY the site for the RESEARCH
COMPLEX; and
(b) Donate or cause to be donated to the UNIVERSITY the sum of TWENTY-NINE
MILLION PESOS (P29,000,000.00) for the construction of the buildings of the
National Institutes of Biotechnology and Applied Microbiology (BIOTECH) and the
installation of their laboratories and their physical plants and other facilities to
enable them to commence operations.
2.2. In addition, the FOUNDATION shall, subject to the approval of the Board of
Trustees of the FOUNDATION, continue to support the activities of the
RESEARCH COMPLEX by way of recurrent additional grants and donations for
specific research and development projects which may be mutually agreed upon
and, from time to time, additional grants and donations of such amounts as may be
necessary to provide the RESEARCH COMPLEX and/or any of its Research
Institutes with operational flexibility especially with regard to incentives to staff
purchase of equipment/facilities, travel abroad, recruitment of local and expatriate
staff and such other activities and inputs which are difficult to obtain under usual
government rules and regulations.6
The Board of Regents of the UP approved the MOA on November 25, 1982.7
In the meantime, Navasero promised to submit the contract for the installation of
laboratory furniture to BIOTECH, by January 12, 1983. However, Navasero failed to
do so. In a Letter dated February 1, 1983, BIOTECH reminded Navasero of the need
to submit the contract so that it could be submitted to FEMF for its evaluation and
approval.8 Instead of submitting the said contract, PHILAB submitted to BIOTECH an
accomplishment report on the project as of February 28, 1983, and requested
payment thereon.9 By May 1983, PHILAB had completed 78% of the project,
amounting to P2,288,573.74 out of the total cost of P2,934,068.90. The FEMF had
already paid forty percent (40%) of the total cost of the project. On May 12, 1983,
Padolina wrote Lirio and furnished him the progress billing from PHILAB.10 On August
11, 1983, the FEMF made another partial payment of P836,119.52 representing the
already delivered laboratory and office furniture after the requisite inspection and
verification thereof by representatives from the BIOTECH, FEMF, and PHILAB. The
payment was made in the form of a check, for which PHILAB issued Official Receipt
No. 202 to FEMF through Padolina.11
On July 1, 1984, PHILAB submitted to BIOTECH Invoice No. 01643 in the amount
of P702,939.40 for the final payment of laboratory furniture. Representatives from
BIOTECH, PHILAB, and Lirio for the FEMF, conducted a verification of the
accomplishment of the work and confirmed the same. BIOTECH forwarded the
invoice to Lirio on December 18, 1984 for its payment. 12 Lirio, in turn, forwarded the
invoice to Gapud, presumably sometime in the early part of 1985. However, the
FEMF failed to pay the bill. PHILAB reiterated its request for payment through a letter
on May 9, 1985.13 BIOTECH again wrote Lirio on March 21, 1985, requesting the
payment of PHILABs bill.14 It sent another letter to Gapud, on November 22, 1985,
again appealing for the payment of PHILABs bill.15 In a Letter to BIOTECH dated
December 5, 1985, PHILAB requested payment of P702,939.40 plus interest thereon
of P224,940.61.16 There was, however, no response from the FEMF. On February 24,
1986, PHILAB wrote BIOTECH, appealing for the payment of its bill even on
installment basis.17
President Marcos was ousted from office during the February 1986 EDSA Revolution.
On March 26, 1986, Navasero wrote BIOTECH requesting for its much-needed
assistance for the payment of the balance already due plus interest of P295,234.55
for its fabrication and supply of laboratory furniture.18
On April 22, 1986, PHILAB wrote President Corazon C. Aquino asking her help to
secure the payment of the amount due from the FEMF.19 The letter was referred to
then Budget Minister Alberto Romulo, who referred the letter to then UP President
Edgardo Angara on June 9, 1986. On September 30, 1986, Raul P. de Guzman, the
Chancellor of UP Los Baos, wrote then Chairman of the Presidential Commission on
Good Government (PCGG) Jovito Salonga, submitting PHILABs claim to be officially
entered as "accounts payable" as soon as the assets of FEMF were liquidated by the
PCGG.20
In the meantime, the PCGG wrote UP requesting for a copy of the relevant contract
and the MOA for its perusal.21
Chancellor De Guzman wrote Navasero requesting for a copy of the contract
executed between PHILAB and FEMF. In a Letter dated October 20, 1987, Navasero
informed De Guzman that PHILAB and FEMF did not execute any contract regarding
the fabrication and delivery of laboratory furniture to BIOTECH.
Exasperated, PHILAB filed a complaint for sum of money and damages against UP.
In the complaint, PHILAB prayed that it be paid the following:
(1) PESOS: SEVEN HUNDRED TWO THOUSAND NINE HUNDRED THIRTY
NINE & 40/100 (P702,939.40) plus an additional amount (as shall be determined
during the hearing) to cover the actual cost of money which at the time of
transaction the value of the peso was eleven to a dollar (P11.00:$1) and twenty
seven (27%) percent interest on the total amount from August 1982 until fully paid;
(2) PESOS: ONE HUNDRED THOUSAND (P100,000.00) exemplary damages;
(3) FIFTY THOUSAND [PESOS] (P50,000.00) as and for attorneys fees; and
 (4) Cost of suit.22
PHILAB alleged, inter alia, that:
3. Sometime in August 1982, defendant, through its officials, particularly MR.
WILLIAM PADOLINA, Director, asked plaintiff to supply and install several
laboratory furnitures and equipment at BIOTECH, a research laboratory of herein
defendant located at its campus in College, Laguna, for a total contract price of
PESOS: TWO MILLION NINE HUNDRED THIRTY-NINE THOUSAND FIFTY-
EIGHT & 90/100 (P2,939,058.90);
4. After the completion of the delivery and installation of said laboratory furnitures
and equipment at defendants BIOTECH Laboratory, defendant paid three (3) times
on installment basis:
a) P600,000.00 as per Official Receipt No. 253 dated August 24, 1982;
b) P800,000.00 as per Official Receipt No. 256 dated October 22, 1982;
c) P836,119.52 as per Official Receipt No. 202 dated August 11, 1983;
thus leaving a balance of PESOS: SEVEN HUNDRED TWO THOUSAND NINE
HUNDRED THIRTY-NINE & 40/100 (P702,939.40).
5. That notwithstanding repeated demands for the past eight years, defendant
arrogantly and maliciously made plaintiff believe that it was going to pay the
balance aforestated, that was why plaintiffs President and General Manager
himself, HECTOR C. NAVASERO, personally went to and from UP Los Baos to
talk with defendants responsible officers in the hope of expecting payment, when,
in truth and in fact, defendant had no intention to pay whatsoever right from the
start on a misplaced ground of technicalities. Some of plaintiffs demand letters
since year 1983 up to the present are hereto attached as Annexes A, B, C, D, E, F,
G, and H hereof;
6. That by reason of defendants malicious, evil and unnecessary
misrepresentations that it was going to pay its obligation and asking plaintiff so
many red tapes and requirements to submit, compliance of all of which took plaintiff
almost eight (8) years to finish, when, in truth and in fact, defendant had no
intention to pay, defendant should be ordered to pay plaintiff no less than PESOS:
ONE HUNDRED THOUSAND (P100,000.00) exemplary damages, so that other
government institutions may be warned that they must not unjustly enrich
themselves at the expense of the people they serve. 23
In its answer, UP denied liability and alleged that PHILAB had no cause of action
against it because it was merely the donee/beneficiary of the laboratory furniture in
the BIOTECH; and that the FEMF, which funded the project, was liable to the PHILAB
for the purchase price of the laboratory furniture. UP specifically denied obliging itself
to pay for the laboratory furniture supplied by PHILAB.
After due proceedings, the trial court rendered judgment dismissing the complaint
without prejudice to PHILABs recourse against the FEMF. The fallo of the decision
reads:
WHEREFORE, this case is hereby DISMISSED for lack of merit without
prejudice to plaintiff's recourse to the assets of the Marcos Foundation for
the unpaid balance of P792,939.49.
SO ORDERED.24
Undaunted, PHILAB appealed to the Court of Appeals (CA) alleging that the trial court
erred in finding that:
1. the contract for the supply and installation of subject laboratory furniture
and equipment was between PHILAB and the Marcos Foundation; and,
2. the Marcos Foundation, not the University of the Philippines, is liable to
pay the respondent the balance of the purchase price.25
The CA reversed and set aside the decision of the RTC and held that there was never
a contract between FEMF and PHILAB. Consequently, PHILAB could not be bound
by the MOA between the FEMF and UP since it was never a party thereto. The
appellate court ruled that, although UP did not bind itself to pay for the laboratory
furniture; nevertheless, it is liable to PHILAB under the maxim: "No one should
unjustly enrich himself at the expense of another."
The Present Petition
Upon the denial of its motion for reconsideration of the appellate courts decision, UP,
now the petitioner, filed its petition for review contending that:
I. THE COURT OF APPEALS ERRED WHEN IT FAILED TO APPLY THE LAW ON
CONTRACTS BETWEEN PHILAB AND THE MARCOS FOUNDATION.
II. THE COURT OF APPEALS ERRED IN APPLYING THE LEGAL PRINCIPLE OF
UNJUST ENRICHMENT WHEN IT HELD THAT THE UNIVERSITY, AND NOT
THE MARCOS FOUNDATION, IS LIABLE TO PHILAB.26
Prefatorily, the doctrinal rule is that pure questions of facts may not be the subject of
appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as this mode
of appeal is generally restricted to questions of law.27However, this rule is not
absolute. The Court may review the factual findings of the CA should they be contrary
to those of the trial court.28 Correspondingly, this Court may review findings of facts
when the judgment of the CA is premised on a misapprehension of facts. 29
On the first assigned error, the petitioner argues that the CA overlooked the
evidentiary effect and substance of the corresponding letters and communications
which support the statements of the witnesses showing affirmatively that an implied
contract of sale existed between PHILAB and the FEMF. The petitioner furthermore
asserts that no contract existed between it and the respondent as it could not have
entered into any agreement without the requisite public bidding and a formal written
contract.
The respondent, on the other hand, submits that the CA did not err in not applying the
law on contracts between the respondent and the FEMF. It, likewise, attests that it
was never privy to the MOA entered into between the petitioner and the FEMF. The
respondent adds that what the FEMF donated was a sum of money equivalent
toP29,000,000, and not the laboratory equipment supplied by it to the petitioner. The
respondent submits that the petitioner, being the recipient of the laboratory furniture,
should not enrich itself at the expense of the respondent.
The petition is meritorious.
It bears stressing that the respondents cause of action is one for sum of money
predicated on the alleged promise of the petitioner to pay for the purchase price of the
furniture, which, despite demands, the petitioner failed to do. However, the
respondent failed to prove that the petitioner ever obliged itself to pay for the
laboratory furniture supplied by it. Hence, the respondent is not entitled to its claim
against the petitioner.
There is no dispute that the respondent is not privy to the MOA executed by the
petitioner and FEMF; hence, it is not bound by the said agreement. Contracts take
effect only between the parties and their assigns.30 A contract cannot be binding upon
and cannot be enforced against one who is not a party to it, even if he is aware of
such contract and has acted with knowledge thereof.31 Likewise admitted by the
parties, is the fact that there was no written contract executed by the petitioner, the
respondent and FEMF relating to the fabrication and delivery of office and laboratory
furniture to the BIOTECH. Even the CA failed to specifically declare that the petitioner
and the respondent entered into a contract of sale over the said laboratory furniture.
The parties are in accord that the FEMF had remitted to the respondent partial
payments via checks drawn and issued by the FEMF to the respondent, through
Padolina, in the total amount of P2,288,573.74 out of the total cost of the project
ofP2,934,068.90 and that the respondent received the said checks and issued
receipts therefor to the FEMF. There is also no controversy that the petitioner did not
pay a single centavo for the said furniture delivered by the respondent that the
petitioner had been using ever since.
We agree with the petitioner that, based on the records, an implied-in-fact contract of
sale was entered into between the respondent and FEMF. A contract implied in fact is
one implied from facts and circumstances showing a mutual intention to contract. It
arises where the intention of the parties is not expressed, but an agreement in fact
creating an obligation. It is a contract, the existence and terms of which are
manifested by conduct and not by direct or explicit words between parties but is to be
deduced from conduct of the parties, language used, or things done by them, or other
pertinent circumstances attending the transaction. To create contracts implied in fact,
circumstances must warrant inference that one expected compensation and the other
to pay.32 An implied-in-fact contract requires the parties intent to enter into a contract;
it is a true contract.33 The conduct of the parties is to be viewed as a reasonable man
would view it, to determine the existence or not of an implied-in-fact contract.34 The
totality of the acts/conducts of the parties must be considered to determine their
intention. An implied-in-fact contract will not arise unless the meeting of minds is
indicated by some intelligent conduct, act or sign.35
In this case, the respondent was aware, from the time Padolina contacted it for the
fabrication and supply of the laboratory furniture until the go-signal was given to it to
fabricate and deliver the furniture to BIOTECH as beneficiary, that the FEMF was to
pay for the same. Indeed, Padolina asked the respondent to prepare the draft of the
contract to be received by the FEMF prior to the execution of the parties (the
respondent and FEMF), but somehow, the respondent failed to prepare one. The
respondent knew that the petitioner was merely the donee-beneficiary of the
laboratory furniture and not the buyer; nor was it liable for the payment of the
purchase price thereof. From the inception, the FEMF paid for the bills and statement
of accounts of the respondent, for which the latter unconditionally issued receipts to
and under the name of the FEMF. Indeed, witness Lirio testified:
Q: Now, did you know, Mr. Witness, if PHILAB Industries was aware that it was the
Marcos Foundation who would be paying for this particular transaction for the
completion of this particular transaction?
A: I think they are fully aware.
Q: What is your basis for saying so?
A: First, I think they were appraised by Dr. Padolina. Secondly, there were
occasions during our inspection in Los Baos, at the installation site, there were
occasions, two or three occasions, when we met with Mr. Navasero who is the
President, I think, or manager of PHILAB, and we appraised him that it was really
between the foundation and him to which includes (sic) the construction company
constructing the building. He is fully aware that it is the foundation who (sic)
engaged them and issued the payments.36
The respondent, in its Letter dated March 26, 1986, informed the petitioner and
sought its assistance for the collection of the amount due from the FEMF:
Dear Dr. Padolina:
May we request for your much-needed assistance in the payment of the balance
still due us on the laboratory furniture we supplied and installed two years ago?
Business is still slow and we will appreciate having these funds as soon as possible
to keep up our operations.
We look forward to hearing from you regarding this matter.
Very truly yours,
 PHILAB INDUSTRIES, INC.37
The respondent even wrote former President Aquino seeking her assistance for the
payment of the amount due, in which the respondent admitted it tried to collect from
her predecessor, namely, the former President Ferdinand E. Marcos:
YOUR EXCELLENCY:
At the instance of the national government, subject laboratory furnitures were
supplied by our company to the National Institute of Biotechnology & Applied
Microbiology (BIOTECH), University of the Philippines, Los Baos, Laguna, in
1984.
Out of the total contract price of PESOS: TWO MILLION NINE HUNDRED
THIRTY-NINE THOUSAND FIFTY-EIGHT & 90/100 (P2,939,058.90), the previous
administration had so far paid us the sum ofP2,236,119.52 thus leaving a balance
of PESOS: ONE MILLION FOUR HUNDRED TWELVE THOUSAND SEVEN
HUNDRED FORTY-EIGHT & 61/100 (P1,412.748.61) inclusive of interest of 24%
per annum and 30% exchange rate adjustment.
On several occasions, we have tried to collect this amount from your predecessor,
the latest of which was subject invoice (01643) we submitted to DR. W.
PADOLINA, deputy director of BIOTECH. But this, notwithstanding, our claim has
remained unacted upon up to now. Copy of said invoice is hereto attached for easy
reference.
Now that your excellency is the head of our government, we sincerely hope that
payment of this obligation will soon be made as this is one project the Republic of
the Philippines has use of and derives benefit from.38
Admittedly, the respondent sent to the petitioner its bills and statements of accounts
for the payments of the laboratory furniture it delivered to the petitioner which the
petitioner, through Padolina, transmitted to the FEMF for its payment. However, the
FEMF failed to pay the last statement of account of the respondent because of the
onset of the EDSA upheaval. It was only when the respondent lost all hope of
collecting its claim from the government and/or the PCGG did it file the complaint
against the petitioner for the collection of the payment of its last delivery of laboratory
furniture.
We reject the ruling of the CA holding the petitioner liable for the claim of the
respondent based on the maxim that no one should enrich itself at the expense of
another.
Unjust enrichment claims do not lie simply because one party benefits from the efforts
or obligations of others, but instead it must be shown that a party was unjustly
enriched in the sense that the term unjustly could mean illegally or unlawfully. 39
Moreover, to substantiate a claim for unjust enrichment, the claimant must
unequivocally prove that another party knowingly received something of value to
which he was not entitled and that the state of affairs are such that it would be unjust
for the person to keep the benefit.40 Unjust enrichment is a term used to depict result
or effect of failure to make remuneration of or for property or benefits received under
circumstances that give rise to legal or equitable obligation to account for them; to be
entitled to remuneration, one must confer benefit by mistake, fraud, coercion, or
request.41 Unjust enrichment is not itself a theory of reconvey. Rather, it is a
prerequisite for the enforcement of the doctrine of restitution.42
Article 22 of the New Civil Code reads:
Every person who, through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without
just or legal ground, shall return the same to him. (Boldface supplied)
In order that accion in rem verso may prosper, the essential elements must be
present: (1) that the defendant has been enriched, (2) that the plaintiff has suffered a
loss, (3) that the enrichment of the defendant is without just or legal ground, and (4)
that the plaintiff has no other action based on contract, quasi-contract, crime or quasi-
delict.43
An accion in rem verso is considered merely an auxiliary action, available only when
there is no other remedy on contract, quasi-contract, crime, and quasi-delict. If there
is an obtainable action under any other institution of positive law, that action must be
resorted to, and the principle of accion in rem verso will not lie.44
The essential requisites for the application of Article 22 of the New Civil Code do not
obtain in this case. The respondent had a remedy against the FEMF via an action
based on an implied-in-fact contract with the FEMF for the payment of its claim. The
petitioner legally acquired the laboratory furniture under the MOA with FEMF; hence,
it is entitled to keep the laboratory furniture.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed
Decision of the Court of Appeals isREVERSED AND SET ASIDE. The Decision of
the Regional Trial Court, Makati City, Branch 150, is REINSTATED. No costs.
SO ORDERED.
Puno, Austria-Martinez, Tinga, and Chico-Nazario*, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 139789 July 19, 2001
IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF POTENCIANO
ILUSORIO, ERLINDA K. ILUSORIO, petitioner,
vs.
ERLINDA K. ILUSORIO-BILDNER, SYLVIA K. ILUSORIO-YAP, JOHN DOES and
JANE DOES, respondents.
x---------------------------------------------------------x
G.R. No. 139808 July 19, 2001
POTENCIANO ILUSORIO, MA. ERLINDA I. BILDNER and SYLVIA K.
ILUSORIO, petitioners,
vs.
HON. COURT OF APPEALS and ERLINDA K. ILUSORIO, respondents.
RESOLUTION
PARDO, J.:
Once again we see the sad tale of a prominent family shattered by conflicts on
expectancy in fabled fortune.
On March 11, 1999, Erlinda K. Ilusorio, the matriarch who was so lovingly inseparable
from her husband some years ago, filed a petition with the Court of
Appeals1 for habeas corpus to have custody of her husband in consortium.
On April 5, 1999, the Court of Appeals promulgated its decision dismissing the
petition for lack of unlawful restraint or detention of the subject, Potenciano Ilusorio.
Thus, on October 11, 1999, Erlinda K. Ilusorio filed with the Supreme Court an
appeal via certiorari pursuing her desire to have custody of her husband Potenciano
Ilusorio.2 This case was consolidated with another case3 filed by Potenciano Ilusorio
and his children, Erlinda I. Bildner and Sylvia K. Ilusorio appealing from the order
giving visitation rights to his wife, asserting that he never refused to see her.
On May 12, 2000, we dismissed the petition for habeas corpus 4 for lack of merit, and
granted the petition5 to nullify the Court of Appeals' ruling6 giving visitation rights to
Erlinda K. Ilusorio.7
What is now before the Court is Erlinda's motion to reconsider the decision.8
On September 20, 2000, we set the case for preliminary conference on October 11,
2000, at 10:00 a. m., without requiring the mandatory presence of the parties.
In that conference, the Court laid down the issues to be resolved, to wit:
(a) To determine the propriety of a physical and medical examination of
petitioner Potenciano Ilusorio;
(b) Whether the same is relevant; and
(c) If relevant, how the Court will conduct the same.9
The parties extensively discussed the issues. The Court, in its resolution, enjoined the
parties and their lawyers to initiate steps towards an amicable settlement of the case
through mediation and other means.
On November 29, 2000, the Court noted the manifestation and compliance of the
parties with the resolution of October 11, 2000.10
On January 31, 2001, the Court denied Erlinda Ilusorio's manifestation and motion
praying that Potenciano Ilusorio be produced before the Court and be medically
examined by a team of medical experts appointed by the Court.11
On March 27, 2001, we denied with finality Erlinda's motion to reconsider the Court's
order of January 31 , 2001.12
The issues raised by Erlinda K. Ilusorio in her motion for reconsideration are mere
reiterations of her arguments that have been resolved in the decision.
Nevertheless, for emphasis, we shall discuss the issues thus:
First. Erlinda K. Ilusorio claimed that she was not compelling Potenciano to live with
her in consortium and that Potenciano's mental state was not an issue. However, the
very root cause of the entire petition is her desire to have her
husband's custody.13 Clearly, Erlinda cannot now deny that she wanted Potenciano
Ilusorio to live with her.
Second. One reason why Erlinda K. Ilusorio sought custody of her husband was that
respondents Lin and Sylvia were illegally restraining Potenciano Ilusorio to
fraudulently deprive her of property rights out of pure greed. 14 She claimed that her
two children were using their sick and frail father to sign away Potenciano and
Erlinda's property to companies controlled by Lin and Sylvia. She also argued that
since Potenciano retired as director and officer of Baguio Country Club and Philippine
Oversees Telecommunications, she would logically assume his position and control.
Yet, Lin and Sylvia were the ones controlling the corporations. 15
The fact of illegal restraint has not been proved during the hearing at the Court of IN VIEW WHEREOF, we DENY Erlinda's motion for reconsideration. At any rate, the
Appeals on March 23, 1999.16Potenciano himself declared that he was not prevented case has been rendered moot by the death of subject.
by his children from seeing anybody and that he had no objection to seeing his wife
and other children whom he loved. SO ORDERED.

Erlinda highlighted that her husband suffered from various ailments. Thus, Davide, Jr., C .J ., Puno, Kapunan and Ynares-Santiago, JJ ., concur.
Potenciano Ilusorio did not have the mental capacity to decide for himself. Hence,
Erlinda argued that Potenciano be brought before the Supreme Court so that we
could determine his mental state.

We were not convinced that Potenciano Ilusorio was mentally incapacitated to choose
whether to see his wife or not. Again, this is a question of fact that has been decided
in the Court of Appeals.

As to whether the children were in fact taking control of the corporation, these are
matters that may be threshed out in a separate proceeding, irrelevant in habeas
corpus.

Third. Petitioner failed to sufficiently convince the Court why we should not rely on the
facts found by the Court of Appeals. Erlinda claimed that the facts mentioned in the
decision were erroneous and incomplete. We see no reason why the High Court of
the land need go to such length. The hornbook doctrine states that findings of fact of
the lower courts are conclusive on the Supreme Court. 17 We emphasize, it is not for
the Court to weigh evidence all over again.18 Although there are exceptions to the
rule,19 Erlinda failed to show that this is an exceptional instance.

Fourth. Erlinda states that Article XII of the 1987 Constitution and Articles 68 and 69
of the Family Code support her position that as spouses, they (Potenciano and
Erlinda) are duty bound to live together and care for each other. We agree.

The law provides that the husband and the wife are obliged to live together, observe
mutual love, respect and fidelity.20 The sanction therefor is the "spontaneous, mutual
affection between husband and wife and not any legal mandate or court order" to
enforce consortium.21

Obviously, there was absence of empathy between spouses Erlinda and Potenciano,
having separated from bed and board since 1972. We defined empathy as a shared
feeling between husband and wife experienced not only by having spontaneous
sexual intimacy but a deep sense of spiritual communion. Marital union is a two-way
process.

Marriage is definitely for two loving adults who view the relationship with "amor gignit
amorem" respect, sacrifice and a continuing commitment to togetherness, conscious
of its value as a sublime social institution.22

On June 28, 2001, Potenciano Ilusorio gave his soul to the Almighty, his Creator and
Supreme Judge. Let his soul rest in peace and his survivors continue the much
prolonged fracas ex aequo et bono.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 139789. May 12, 2000
ERLINDA K. ILUSORIO, petitioner, vs. ERLINDA I. BILDNER and SYLVIA K.
ILUSORIO, JOHN DOE and JANE DOE, respondents. Mesm
G.R. No. 139808. May 12, 2000
POTENCIANO ILUSORIO, MA. ERLINDA I. BILDNER, and SYLVIA ILUSORIO,
petitioners, vs. COURT OF APPEALS and ERLINDA K. ILUSORIO, respondents.
DECISION
PARDO, J.:
May a wife secure a writ of habeas corpus to compel her husband to live with her in
conjugal bliss? The answer is no. Marital rights including coverture and living in
conjugal dwelling may not be enforced by the extra-ordinary writ of habeas corpus.
A writ of habeas corpus extends to all cases of illegal confinement or detention, 1 or by
which the rightful custody of a person is withheld from the one entitled thereto. 2 Slx
"Habeas corpus is a writ directed to the person detaining another, commanding him to
produce the body of the prisoner at a designated time and place, with the day and
cause of his capture and detention, to do, submit to, and receive whatsoever the court
or judge awarding the writ shall consider in that behalf." 3
It is a high prerogative, common-law writ, of ancient origin, the great object of which is
the liberation of those who may be imprisoned without sufficient cause. 4 It is issued
when one is deprived of liberty or is wrongfully prevented from exercising legal
custody over another person.5
The petition of Erlinda K. Ilusorio6 is to reverse the decision7 of the Court of Appeals
and its resolution8dismissing the application for habeas corpus to have the custody of
her husband, lawyer Potenciano Ilusorio and enforce consortium as the wife.
On the other hand, the petition of Potenciano Ilusorio 9 is to annul that portion of the
decision of the Court of Appeals giving Erlinda K. Ilusorio visitation rights to her
husband and to enjoin Erlinda and the Court of Appeals from enforcing the visitation
rights.
The undisputed facts are as follows: Scslx
Erlinda Kalaw Ilusorio is the wife of lawyer Potenciano Ilusorio.
Potenciano Ilusorio is about 86 years of age possessed of extensive property valued
at millions of pesos. For many years, lawyer Potenciano Ilusorio was Chairman of the
Board and President of Baguio Country Club.
On July 11, 1942, Erlinda Kalaw and Potenciano Ilusorio contracted matrimony and
lived together for a period of thirty (30) years. In 1972, they separated from bed and
board for undisclosed reasons. Potenciano lived at Urdaneta Condominium, Ayala
Ave., Makati City when he was in Manila and at Ilusorio Penthouse, Baguio Country
Club when he was in Baguio City. On the other hand, Erlinda lived in Antipolo City.
Out of their marriage, the spouses had six (6) children, namely: Ramon Ilusorio (age
55); Erlinda Ilusorio Bildner (age 52); Maximo (age 50); Sylvia (age 49); Marietta (age
48); and Shereen (age 39).
On December 30, 1997, upon Potencianos arrival from the United States, he stayed
with Erlinda for about five (5) months in Antipolo City. The children, Sylvia and Erlinda
(Lin), alleged that during this time, their mother gave Potenciano an overdose of 200
mg instead of 100 mg Zoloft, an antidepressant drug prescribed by his doctor in New
York, U.S.A. As a consequence, Potencianos health deteriorated.
On February 25, 1998, Erlinda filed with the Regional Trial Court, Antipolo City a
petition10 for guardianship over the person and property of Potenciano Ilusorio due to
the latters advanced age, frail health, poor eyesight and impaired judgment.
On May 31, 1998, after attending a corporate meeting in Baguio City, Potenciano
Ilusorio did not return to Antipolo City and instead lived at Cleveland Condominium,
Makati. Slxsc
On March 11, 1999, Erlinda filed with the Court of Appeals a petition for habeas
corpus to have the custody of lawyer Potenciano Ilusorio. She alleged that
respondents11 refused petitioners demands to see and visit her husband and
prohibited Potenciano from returning to Antipolo City.
After due hearing, on April 5, 1999, the Court of Appeals rendered decision the
dispositive portion of which reads:
"WHEREFORE, in the light of the foregoing disquisitions, judgment is hereby
rendered:
"(1) Ordering, for humanitarian consideration and upon petitioners manifestation,
respondents Erlinda K. Ilusorio Bildner and Sylvia Ilusorio-Yap, the administrator of
Cleveland Condominium or anywhere in its place, his guards and Potenciano
Ilusorios staff especially Ms. Aurora Montemayor to allow visitation rights to
Potenciano Ilusorios wife, Erlinda Ilusorio and all her children, notwithstanding any
list limiting visitors thereof, under penalty of contempt in case of violation of refusal
thereof; xxx
"(2) ORDERING that the writ of habeas corpus previously issued be recalled and the
herein petition for habeas corpus be DENIED DUE COURSE, as it is hereby
DISMISSED for lack of unlawful restraint or detention of the subject of the petition.
"SO ORDERED."12
Hence, the two petitions, which were consolidated and are herein jointly decided.
As heretofore stated, a writ of habeas corpus extends to all cases of illegal
confinement or detention,13 or by which the rightful custody of a person is withheld
from the one entitled thereto. It is available where a person continues to be unlawfully
denied of one or more of his constitutional freedoms, where there is denial of due
process, where the restraints are not merely involuntary but are unnecessary, and
where a deprivation of freedom originally valid has later become arbitrary. 14 It is
devised as a speedy and effectual remedy to relieve persons from unlawful restraint,
as the best and only sufficient defense of personal freedom. 15 Jksm
The essential object and purpose of the writ of habeas corpus is to inquire into all
manner of involuntary restraint, and to relieve a person therefrom if such restraint is
illegal.16
To justify the grant of the petition, the restraint of liberty must be an illegal and
involuntary deprivation of freedom of action.17 The illegal restraint of liberty must be
actual and effective, not merely nominal or moral.18
The evidence shows that there was no actual and effective detention or deprivation of
lawyer Potenciano Ilusorios liberty that would justify the issuance of the writ. The fact
that lawyer Potenciano Ilusorio is about 86 years of age, or under medication does
not necessarily render him mentally incapacitated. Soundness of mind does not hinge
on age or medical condition but on the capacity of the individual to discern his
actions.
After due hearing, the Court of Appeals concluded that there was no unlawful restraint
on his liberty.
The Court of Appeals also observed that lawyer Potenciano Ilusorio did not request
the administrator of the Cleveland Condominium not to allow his wife and other
children from seeing or visiting him. He made it clear that he did not object to seeing
them.
As to lawyer Potenciano Ilusorios mental state, the Court of Appeals observed that
he was of sound and alert mind, having answered all the relevant questions to the
satisfaction of the court.
Being of sound mind, he is thus possessed with the capacity to make choices. In this
case, the crucial choices revolve on his residence and the people he opts to see or
live with. The choices he made may not appeal to some of his family members but
these are choices which exclusively belong to Potenciano. He made it clear before
the Court of Appeals that he was not prevented from leaving his house or seeing
people. With that declaration, and absent any true restraint on his liberty, we have no
reason to reverse the findings of the Court of Appeals.
With his full mental capacity coupled with the right of choice, Potenciano Ilusorio may
not be the subject of visitation rights against his free choice. Otherwise, we will
deprive him of his right to privacy. Needless to say, this will run against his
fundamental constitutional right. Es m
The Court of Appeals exceeded its authority when it awarded visitation rights in a
petition for habeas corpus where Erlinda never even prayed for such right. The ruling
is not consistent with the finding of subjects sanity.
When the court ordered the grant of visitation rights, it also emphasized that the same
shall be enforced under penalty of contempt in case of violation or refusal to comply.
Such assertion of raw, naked power is unnecessary.
The Court of Appeals missed the fact that the case did not involve the right of a
parent to visit a minor child but the right of a wife to visit a husband. In case the
husband refuses to see his wife for private reasons, he is at liberty to do so without
threat of any penalty attached to the exercise of his right.
No court is empowered as a judicial authority to compel a husband to live with his
wife. Coverture cannot be enforced by compulsion of a writ of habeas corpus carried
out by sheriffs or by any other mesne process. That is a matter beyond judicial
authority and is best left to the man and womans free choice.
WHEREFORE, in G. R. No. 139789, the Court DISMISSES the petition for lack of
merit. No costs.
In G. R. No. 139808, the Court GRANTS the petition and nullifies the decision of the
Court of Appeals insofar as it gives visitation rights to respondent Erlinda K. Ilusorio.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.
5/31/00 10:02 AM
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 132344 February 17, 2000
UNIVERSITY OF THE EAST, petitioner,
vs.
ROMEO A. JADER, respondent.
YNARES-SANTIAGO, J.:
May an educational institution be held liable for damages for misleading a student into
believing that the latter had satisfied all the requirements for graduation when such is
not the case? This is the issue in the instant petition for review premised on the
following undisputed facts as summarized by the trial court and adopted by the Court
of Appeals (CA),1 to wit:
Plaintiff was enrolled in the defendants' College of Law from 1984 up to
1988. In the first semester of his last year (School year 1987-1988), he failed
to take the regular final examination in Practice Court I for which he was
given an incomplete grade (Exhibits "2", also Exhibit "H"). He enrolled for the
second semester as fourth year law student (Exhibit "A") and on February 1,
1988 he filed an application for the removal of the incomplete grade given
him by Professor Carlos Ortega (Exhibits "H-2", also Exhibit "2") which was
approved by Dean Celedonio Tiongson after payment of the required fee. He
took the examination on March 28, 1988. On May 30, 1988, Professor
Carlos Ortega submitted his grade. It was a grade of five (5). (Exhibits "H-4",
also Exhibits "2-L", "2-N").1wphi1.nt
In the meantime, the Dean and the Faculty Members of the College of Law
met to deliberate on who among the fourth year students should be allowed
to graduate. The plaintiff's name appeared in the Tentative List of
Candidates for graduation for the Degree of Bachelor of Laws (LL.B) as of
Second Semester (1987-1988) with the following annotation:
JADER ROMEO A.
Def. Conflict of Laws x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to
submit transcript with S.O. (Exhibits "3", "3-C-1", "3-C-2").
The 35th Investitures & Commencement Ceremonies for the candidates of
Bachelor of Laws was scheduled on the 16th of April 1988 at 3:00 o'clock in
the afternoon, and in the invitation for that occasion the name of the plaintiff
appeared as one of the candidates. (Exhibits "B", "B-6", "B-6-A"). At the foot
of the list of the names of the candidates there appeared however the
following annotation:
This is a tentative list Degrees will be conferred upon these
candidates who satisfactorily complete requirements as stated in
the University Bulletin and as approved of the Department of
Education, Culture and Sports (Exhibit "B-7-A").
The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle,
U.E., Recto Campus, during the program of which he went up the stage
when his name was called, escorted by her (sic) mother and his eldest
brother who assisted in placing the Hood, and his Tassel was turned from
left to right, and he was thereafter handed by Dean Celedonio a rolled white
sheet of paper symbolical of the Law Diploma. His relatives took pictures of
the occasion (Exhibits "C" to "C-6", "D-3" to "D-11").
He tendered a blow-out that evening which was attended by neighbors,
friends and relatives who wished him good luck in the forthcoming bar
examination. There were pictures taken too during the blow-out (Exhibits "D"
to "D-1").
He thereafter prepared himself for the bar examination. He took a leave of
absence without pay from his job from April 20, 1988 to September 30, 1988
(Exhibit "G") and enrolled at the pre-bar review class in Far Eastern
University. (Exhibits "F" to "F-2"). Having learned of the deficiency he
dropped his review class and was not able to take the bar examination. 2
Consequently, respondent sued petitioner for damages alleging that he suffered
moral shock, mental anguish, serious anxiety, besmirched reputation, wounded
feelings and sleepless nights when he was not able to take the 1988 bar
examinations arising from the latter's negligence. He prayed for an award of moral
and exemplary damages, unrealized income, attorney's fees, and costs of suit.
In its answer with counterclaim, petitioner denied liability arguing mainly that it never
led respondent to believe that he completed the requirements for a Bachelor of Laws
degree when his name was included in the tentative list of graduating students. After
trial, the lower court rendered judgment as follows:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor
of the plaintiff and against the defendant ordering the latter to pay plaintiff
the sum of THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY
PESOS (P35,470.00) with legal rate of interest from the filing of the
complaint until fully paid, the amount of FIVE THOUSAND PESOS
(P5,000.00) as attorney's fees and the cost of suit.
Defendant's counterclaim is, for lack of merit, hereby dismissed.
SO ORDERED.3
which on appeal by both parties was affirmed by the Court of Appeals (CA) with
modification. The dispositive portion of the CA decision reads:
WHEREFORE, in the light of the foregoing, the lower Court's Decision is
hereby AFFIRMED with the MODIFICATION that defendant-appellee, in
addition to the sum adjudged by the lower court in favor of plaintiff-appellant,
is also ORDERED to pay plaintiff-appellant the amount of FIFTY
THOUSAND (P50,000.00) PESOS for moral damages. Costs against
defendant-appellee.
SO ORDERED.4
Upon the denial of its motion for reconsideration, petitioner UE elevated the case to
this Court on a petition for review under Rule 45 of the Rules of Court, arguing that it
has no liability to respondent Romeo A. Jader, considering that the proximate and
immediate cause of the alleged damages incurred by the latter arose out of his own
negligence in not verifying from the professor concerned the result of his removal
exam.
The petition lacks merit.
When a student is enrolled in any educational or learning institution, a contract of
education is entered into between said institution and the student. The professors,
teachers or instructors hired by the school are considered merely as agents and
administrators tasked to perform the school's commitment under the contract. Since
the contracting parties are the school and the student, the latter is not duty-bound to
deal with the former's agents, such as the professors with respect to the status or
result of his grades, although nothing prevents either professors or students from
sharing with each other such information. The Court takes judicial notice of the
traditional practice in educational institutions wherein the professor directly furnishes
his/her students their grades. It is the contractual obligation of the school to timely
inform and furnish sufficient notice and information to each and every student as to
whether he or she had already complied with all the requirements for the conferment
of a degree or whether they would be included among those who will graduate.
Although commencement exercises are but a formal ceremony, it nonetheless is not
an ordinary occasion, since such ceremony is the educational institution's way of
announcing to the whole world that the students included in the list of those who will
be conferred a degree during the baccalaureate ceremony have satisfied all the
requirements for such degree. Prior or subsequent to the ceremony, the school has
the obligation to promptly inform the student of any problem involving the latter's
grades and performance and also most importantly, of the procedures for remedying
the same.
Petitioner, in belatedly informing respondent of the result of the removal examination,
particularly at a time when he had already commenced preparing for the bar exams,
cannot be said to have acted in good faith. Absence of good faith must be sufficiently
established for a successful prosecution by the aggrieved party in a suit for abuse of
right under Article 19 of the Civil Code. Good faith connotes an honest intention to
abstain from taking undue advantage of another, even though the forms and
technicalities of the law, together with the absence of all information or belief of facts,
would render the transaction unconscientious.5 It is the school that has access to
those information and it is only the school that can compel its professors to act and
comply with its rules, regulations and policies with respect to the computation and the
prompt submission of grades. Students do not exercise control, much less influence,
over the way an educational institution should run its affairs, particularly in disciplining
its professors and teachers and ensuring their compliance with the school's rules and
orders. Being the party that hired them, it is the school that exercises general
supervision and exclusive control over the professors with respect to the submission
of reports involving the students' standing. Exclusive control means that no other
person or entity had any control over the instrumentality which caused the damage or
injury.6
The college dean is the senior officer responsible for the operation of an academic
program, enforcement of rules and regulations, and the supervision of faculty and
student services.7 He must see to it that his own professors and teachers, regardless
of their status or position outside of the university, must comply with the rules set by
the latter. The negligent act of a professor who fails to observe the rules of the school,
for instance by not promptly submitting a student's grade, is not only imputable to the
professor but is an act of the school, being his employer.
Considering further, that the institution of learning involved herein is a university
which is engaged in legal education, it should have practiced what it inculcates in its
students, more specifically the principle of good dealings enshrined in Articles 19 and
20 of the Civil Code which states:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Art. 20. Every person who, contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same.
Art. 19 was intended to expand the concept of torts by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human
foresight to provide specifically in statutory law.8 In civilized society, men must be able
to assume that others will do them no intended injury that others will commit no
internal aggressions upon them; that their fellowmen, when they act affirmatively will
do so with due care which the ordinary understanding and moral sense of the
community exacts and that those with whom they deal in the general course of
society will act in good faith. The ultimate thing in the theory of liability is justifiable
reliance under conditions of civilized society.9 Schools and professors cannot just
take students for granted and be indifferent to them, for without the latter, the former
are useless.
Educational institutions are duty-bound to inform the students of their academic status
and not wait for the latter to inquire from the former. The conscious indifference of a
person to the rights or welfare of the person/persons who may be affected by his act
or omission can support a claim for damages.10 Want of care to the conscious
disregard of civil obligations coupled with a conscious knowledge of the cause
naturally calculated to produce them would make the erring party liable.11 Petitioner
ought to have known that time was of the essence in the performance of its obligation brought this upon himself by not verifying if he has satisfied all the requirements
to inform respondent of his grade. It cannot feign ignorance that respondent will not including his school records, before preparing himself for the bar examination.
prepare himself for the bar exams since that is precisely the immediate concern after Certainly, taking the bar examinations does not only entail a mental preparation on
graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give the subjects thereof; there are also prerequisites of documentation and submission of
out its student's grades at any time because a student has to comply with certain requirements which the prospective examinee must meet.
deadlines set by the Supreme Court on the submission of requirements for taking the
bar. Petitioner's liability arose from its failure to promptly inform respondent of the WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with
result of an examination and in misleading the latter into believing that he had MODIFICATION. Petitioner is ORDERED to PAY respondent the sum of Thirty-five
satisfied all requirements for the course. Worth quoting is the following disquisition of Thousand Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per
the respondent court: annum computed from the date of filing of the complaint until fully paid; the amount of
Five Thousand Pesos (P5,000.00) as attorney's fees; and the costs of the suit. The
It is apparent from the testimony of Dean Tiongson that defendant-appellee award of moral damages is DELEIED.1wphi1.nt
University had been informed during the deliberation that the professor in
Practice Court I gave plaintiff-appellant a failing grade. Yet, defendant- SO ORDERED.
appellee still did not inform plaintiff-appellant of his failure to complete the
requirements for the degree nor did they remove his name from the tentative
list of candidates for graduation. Worse, defendant-appellee university, Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.
despite the knowledge that plaintiff-appellant failed in Practice Court Puno, J., took no part.
I, againincluded plaintiff-appellant's name in the "tentative list of candidates
for graduation which was prepared after the deliberation and which became
the basis for the commencement rites program. Dean Tiongson reasons out
that plaintiff-appellant's name was allowed to remain in the tentative list of
candidates for graduation in the hope that the latter would still be able to
remedy the situation in the remaining few days before graduation day. Dean
Tiongson, however, did not explain how plaintiff appellant Jader could have
done something to complete his deficiency if defendant-appellee university
did not exert any effort to inform plaintiff-appellant of his failing grade in
Practice Court I.12

Petitioner cannot pass on its blame to the professors to justify its own negligence that
led to the delayed relay of information to respondent. When one of two innocent
parties must suffer, he through whose agency the loss occurred must bear it.13 The
modern tendency is to grant indemnity for damages in cases where there is abuse of
right, even when the act is not illicit.14 If mere fault or negligence in one's acts can
make him liable for damages for injury caused thereby, with more reason should
abuse or bad faith make him liable. A person should be protected only when he acts
in the legitimate exercise of his right, that is, when he acts with prudence and in good
faith, but not when he acts with negligence or abuse.15

However, while petitioner was guilty of negligence and thus liable to respondent for
the latter's actual damages, we hold that respondent should not have been awarded
moral damages. We do not agree with the Court of Appeals' findings that respondent
suffered shock, trauma and pain when he was informed that he could not graduate
and will not be allowed to take the bar examinations. At the very least, it behooved on
respondent to verify for himself whether he has completed all necessary requirements
to be eligible for the bar examinations. As a senior law student, respondent should
have been responsible enough to ensure that all his affairs, specifically those
pertaining to his academic achievement, are in order. Given these considerations, we
fail to see how respondent could have suffered untold embarrassment in attending
the graduation rites, enrolling in the bar review classes and not being able to take the
bar exams. If respondent was indeed humiliated by his failure to take the bar, he
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
SBC Case No. 519 July 31, 1997
PATRICIA FIGUEROA, complainant,
vs.
SIMEON BARRANCO, JR., respondent.
RESOLUTION
ROMERO, J.:
In a complaint made way back in 1971, Patricia Figueroa petitioned that respondent
Simeon Barranco, Jr. be denied admission to the legal profession. Respondent had
passed the 1970 bar examinations on the fourth attempt, after unsuccessful attempts
in 1966, 1967 and 1968. Before be could take his oath, however, complainant filed
the instant petition averring that respondent and she had been sweethearts, that a
child out of wedlock was born to them and that respondent did not fulfill his repeated
promises to many her.
The facts were manifested in hearings held before Investigator Victor F. Sevilla in
June and July 1971. Respondent and complainant were townmates in Janiuay, Iloilo.
Since 1953, when they were both in their teens, they were steadies. Respondent
even acted as escort to complainant when she reigned as Queen at the 1953 town
fiesta. Complainant first acceded to sexual congress with respondent sometime in
1960. Their intimacy yielded a son, Rafael Barranco, born on December 11, 1964. 1 It
was after the child was born, complainant alleged, that respondent first promised he
would marry her after he passes the bar examinations. Their relationship continued
and respondent allegedly made more than twenty or thirty promises of marriage. He
gave only P10.00 for the child on the latter's birthdays. Her trust in him and their
relationship ended in 1971, when she learned that respondent married another
woman. Hence, this petition.
Upon complainant's motion, the Court authorized the taking of testimonies of
witnesses by deposition in 1972. On February 18, 1974, respondent filed a
Manifestation and Motion to Dismiss the case citing complainant's failure to comment
on the motion of Judge Cuello seeking to be relieved from the duty to take aforesaid
testimonies by deposition. Complainant filed her comment required and that she
remains interested in the resolution of the present case. On June 18, 1974, the Court
denied respondent's motion to dismiss.
On October 2, 1980, the Court once again denied a motion to dismiss on the ground
of abandonment filed by respondent on September 17, 1979. 2 Respondent's third
motion to dismiss was noted in the Court's Resolution dated September 15, 1982. 3 In
1988, respondent repeated his request, citing his election as a member of the
Sangguniang Bayan of Janiuay, Iloilo from 1980-1986, his active participation in civic
organizations and good standing in the community as well as the length of time this
case has been pending as reasons to allow him to take his oath as a lawyer. 4
On September 29, 1988, the Court resolved to dismiss the complaint for failure of
complainant to prosecute the case for an unreasonable period of time and to allow
Simeon Barranco, Jr. to take the lawyer's oath upon payment of the required fees. 5
Respondent's hopes were again dashed on November 17, 1988 when the Court, in
response to complainant's opposition, resolved to cancel his scheduled oath-taking.
On June 1, 1993, the Court referred the case to the Integrated Bar of the Philippines
(IBP) for investigation, report and recommendation.
The IBP's report dated May 17, 1997 recommended the dismissal of the case and
that respondent be allowed to take the lawyer's oath.
We agree.
Respondent was prevented from taking the lawyer's oath in 1971 because of the
charge of gross immorality made by complainant. To recapitulate, respondent bore an
illegitimate child with his sweetheart, Patricia Figueroa, who also claims that he did
not fulfill his promise to marry her after he passes the bar examinations.
We find that these facts do not constitute gross immorality warranting the permanent
exclusion of respondent from the legal profession. His engaging in premarital sexual
relations with complainant and promises to marry suggests a doubtful moral character
on his part but the same does not constitute grossly immoral conduct. The Court has
held that to justify suspension or disbarment the act complained of must not only be
immoral, but grossly immoral. "A grossly immoral act is one that is so corrupt and
false as to constitute a criminal act or so unprincipled or disgraceful as to be
reprehensible to a high degree." 6 It is a willful, flagrant, or shameless act which
shows a moral indifference to the opinion of respectable members of the community. 7
We find the ruling in Arciga v. Maniwang 8 quite relevant because mere intimacy
between a man and a woman, both of whom possess no impediment to marry,
voluntarily carried on and devoid of any deceit on the part of respondent, is neither so
corrupt nor so unprincipled as to warrant the imposition of disciplinary sanction
against him, even if as a result of such relationship a child was born out of wedlock. 9
Respondent and complainant were sweethearts whose sexual relations were
evidently consensual. We do not find complainant's assertions that she had been
forced into sexual intercourse, credible. She continued to see and be respondent's
girlfriend even after she had given birth to a son in 1964 and until 1971. All those
years of amicable and intimate relations refute her allegations that she was forced to
have sexual congress with him. Complainant was then an adult who voluntarily and
actively pursued their relationship and was not an innocent young girl who could be
easily led astray. Unfortunately, respondent chose to marry and settle permanently
with another woman. We cannot castigate a man for seeking out the partner of his
dreams, for marriage is a sacred and perpetual bond which should be entered into
because of love, not for any other reason.

We cannot help viewing the instant complaint as an act of revenge of a woman

scorned, bitter and unforgiving to the end. It is also intended to make respondent
suffer severely and it seems, perpetually, sacrificing the profession he worked very
hard to be admitted into. Even assuming that his past indiscretions are ignoble, the
twenty-six years that respondent has been prevented from being a lawyer constitute
sufficient punishment therefor. During this time there appears to be no other
indiscretion attributed to him. 10 Respondent, who is now sixty-two years of age,
should thus be allowed, albeit belatedly, to take the lawyer's oath.

WHEREFORE, the instant petition is hereby DISMISSED. Respondent Simeon

Barranco, Jr. is ALLOWED to take his oath as a lawyer upon payment of the proper
fees.

SO ORDERED.

Padilla, Regalado, Davide, Jr., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Francisco and Panganiban, JJ., concur.

Narvasa, C.J., Hermosisima, Jr. and Torres Jr., JJ., are on leave.