Cir

v Primetown Property The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right
[13]
CORONA, J.: to claim a refund or credit commenced on that date.

The tax court applied Article 13 of the Civil Code which states:
[1] [2]
This petition for review on certiorari seeks to set aside the August 1, 2003 decision of the
Court of Appeals (CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying Art. 13. When the law speaks of years, months, days or nights, it shall be
[3]
reconsideration. understood that years are of three hundred sixty-five days each; months,
of thirty days; days, of twenty-four hours, and nights from sunset to
On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc., sunrise.
applied for the refund or credit of income tax respondent paid in 1997. In Yap's letter to
petitioner revenue district officer Arturo V. Parcero of Revenue District No. 049 (Makati) of the If the months are designated by their name, they shall be computed by the
[4]
Bureau of Internal Revenue (BIR), he explained that the increase in the cost of labor and number of days which they respectively have.
materials and difficulty in obtaining financing for projects and collecting receivables caused the
[5]
real estate industry to slowdown. As a consequence, while business was good during the first In computing a period, the first day shall be excluded, and the last included.
[6]
quarter of 1997, respondent suffered losses amounting to P71,879,228 that year. (emphasis supplied)

According to Yap, because respondent suffered losses, it was not liable for income
[7]
taxes. Nevertheless, respondent paid its quarterly corporate income tax and remitted
creditable withholding tax from real estate sales to the BIR in the total amount Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for
[8] [9]
of P26,318,398.32. Therefore, respondent was entitled to tax refund or tax credit. the filing of judicial claims was equivalent to 730 days. Because the year 2000 was a leap year,
[14]
respondent's petition, which was filed 731 days after respondent filed its final adjusted
[15]
On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional return, was filed beyond the reglementary period.
[10]
documents to support its claim. Respondent complied but its claim was not acted upon.
[11] [16]
Thus, on April 14, 2000, it filed a petition for review in the Court of Tax Appeals (CTA). Respondent moved for reconsideration but it was denied. Hence, it filed an appeal in the
[17]
CA.
On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year
[12] [18]
prescriptive period for filing a judicial claim for tax refund or tax credit. It invoked Section On August 1, 2003, the CA reversed and set aside the decision of the CTA. It ruled that Article
229 of the National Internal Revenue Code (NIRC): 13 of the Civil Code did not distinguish between a regular year and a leap year. According to
the CA:
Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit
or proceeding shall be maintained in any court for the recovery of any The rule that a year has 365 days applies, notwithstanding the fact that a
[19]
national internal revenue tax hereafter alleged to have been erroneously particular year is a leap year.
or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, or of any sum alleged to have been In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to
excessively or in any manner wrongfully collected, until a claim for April 14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or
refund or credit has been duly filed with the Commissioner; but such suit a total of 730 days. A statute which is clear and explicit shall be neither interpreted nor
[20]
or proceeding may be maintained, whether or not such tax, penalty, or construed.
sum has been paid under protest or duress.
[21]
Petitioners moved for reconsideration but it was denied. Thus, this appeal.
In any case, no such suit or proceeding shall be filed after the expiration
of two (2) years from the date of payment of the tax or penalty Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly
[22]
regardless of any supervening cause that may arise after construed against claimants. Section 229 of the NIRC should be strictly applied against
payment: Provided, however, That the Commissioner may, even without respondent inasmuch as it has been consistently held that the prescriptive period (for the filing
a claim therefor, refund or credit any tax, where on the face of the return of tax refunds and tax credits) begins to run on the day claimants file their final adjusted
[23]
upon which payment was made, such payment appears clearly to have returns. Hence, the claim should have been filed on or before April 13, 2000 or within 730
been erroneously paid. (emphasis supplied) days, reckoned from the time respondent filed its final adjusted return.


The conclusion of the CA that respondent filed its petition for review in the CTA within the two- encompasses entirely the subject matter of the former law and they cannot be logically or
[33]
year prescriptive period provided in Section 229 of the NIRC is correct. Its basis, however, is reasonably reconciled.
not.
Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code
The rule is that the two-year prescriptive period is reckoned from the filing of the final adjusted of 1987 deal with the same subject matter the computation of legal periods. Under the Civil
[24]
return. But how should the two-year prescriptive period be computed? Code, a year is equivalent to 365 days whether it be a regular year or a leap year. Under the
Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless
As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it to state, under the Administrative Code of 1987, the number of days is irrelevant.
[25]
is understood to be equivalent to 365 days. In National Marketing Corporation v. Tecson, we
ruled that a year is equivalent to 365 days regardless of whether it is a regular year or a leap There obviously exists a manifest incompatibility in the manner of computing legal periods
[26]
year. under the Civil Code and the Administrative Code of 1987. For this reason, we hold that Section
31, Chapter VIII, Book I of the Administrative Code of 1987, being the more recent law, governs
[27]
However, in 1987, EO 292 or the Administrative Code of 1987 was enacted. Section 31, the computation of legal periods. Lex posteriori derogat priori.
Chapter VIII, Book I thereof provides:
Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the
Sec. 31. Legal Periods. Year shall be understood to be twelve calendar two-year prescriptive period (reckoned from the time respondent filed its final adjusted
[34]
months; month of thirty days, unless it refers to a specific calendar month return on April 14, 1998) consisted of 24 calendar months, computed as follows:
in which case it shall be computed according to the number of days the
st
specific month contains; day, to a day of twenty-four hours and; night from Year 1 1 calendar month April 15, 1998 to May 14, 1998
nd
sunrise to sunset. (emphasis supplied) 2 calendar month May 15, 1998 to June 14, 1998
rd
3 calendar month June 15, 1998 to July 14, 1998
th
4 calendar month July 15, 1998 to August 14, 1998
th
A calendar month is a month designated in the calendar without regard to the number of days 5 calendar month August 15, 1998 to September 14, 1998
[28] th
it may contain. It is the period of time running from the beginning of a certain numbered 6 calendar month September 15, 1998 to October 14, 1998
th
day up to, but not including, the corresponding numbered day of the next month, and if there 7 calendar month October 15, 1998 to November 14, 1998
th
is not a sufficient number of days in the next month, then up to and including the last day of 8 calendar month November 15, 1998 to December 14, 1998
[29] th
that month. To illustrate, one calendar month from December 31, 2007 will be from January 9 calendar month December 15, 1998 to January 14, 1999
th
1, 2008 to January 31, 2008; one calendar month from January 31, 2008 will be from February 10 calendar month January 15, 1999 to February 14, 1999
[30] th
1, 2008 until February 29, 2008. 11 calendar month February 15, 1999 to March 14, 1999
th
12 calendar month March 15, 1999 to April 14, 1999
th
A law may be repealed expressly (by a categorical declaration that the law is revoked and Year 2 13 calendar month April 15, 1999 to May 14, 1999
th
abrogated by another) or impliedly (when the provisions of a more recent law cannot be 14 calendar month May 15, 1999 to June 14, 1999
[31] th
reasonably reconciled with the previous one). Section 27, Book VII (Final Provisions) of the 15 calendar month June 15, 1999 to July 14, 1999
th
Administrative Code of 1987 states: 16 calendar month July 15, 1999 to August 14, 1999
th
17 calendar month August 15, 1999 to September 14, 1999
th
18 calendar month September 15, 1999 to October 14, 1999
th
Sec. 27. Repealing clause. All laws, decrees, orders, rules and regulation, 19 calendar month October 15, 1999 to November 14, 1999
th
or portions thereof, inconsistent with this Code are hereby repealed or 20 calendar month November 15, 1999 to December 14, 1999
st
modified accordingly. 21 calendar month December 15, 1999 to January 14, 2000
nd
22 calendar month January 15, 2000 to February 14, 2000
rd
23 calendar month February 15, 2000 to March 14, 2000
th
24 calendar month March 15, 2000 to April 14, 2000
A repealing clause like Sec. 27 above is not an express repealing clause because it fails to
[32]
identify or designate the laws to be abolished. Thus, the provision above
only impliedly repealed all laws inconsistent with the Administrative Code of 1987.
We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day
th
Implied repeals, however, are not favored. An implied repeal must have been clearly and of the 24 calendar month from the day respondent filed its final adjusted return. Hence, it
unmistakably intended by the legislature. The test is whether the subsequent law was filed within the reglementary period.
Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of Tax Appeals
which is ordered to expeditiously proceed to hear C.T.A. Case No. 6113 entitled Primetown
Property Group, Inc. v. Commissioner of Internal Revenue and Arturo V. Parcero.

No costs.

SO ORDERED.










































 9. Claims for refund are construed strictly against the claimant for the same partake
13
COMMISSIONER OF INTERNAL REVENUE, Petitioner, of the nature of exemption from taxation.
vs. Trial ensued, after which, on January 4, 2008, the Second Division of the CTA rendered a
AICHI FORGING COMPANY OF ASIA, INC., Respondent. Decision partially granting respondents claim for refund/credit. Pertinent portions of the
D E C I S I O N Decision read:
DEL CASTILLO, J.: For a VAT registered entity whose sales are zero-rated, to validly claim a refund, Section 112
A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, (A) of the NIRC of 1997, as amended, provides:
privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the return SEC. 112. Refunds or Tax Credits of Input Tax.
of taxes erroneously or illegally collected. In both cases, a taxpayer must prove not only his (A) Zero-rated or Effectively Zero-rated Sales. Any VAT-registered person, whose sales are
entitlement to a refund but also his compliance with the procedural due process as non- zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable
observance of the prescriptive periods within which to file the administrative and the judicial quarter when the sales were made, apply for the issuance of a tax credit certificate or refund
claims would result in the denial of his claim. of creditable input tax due or paid attributable to such sales, except transitional input tax, to
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the the extent that such input tax has not been applied against output tax: x x x
1 2
July 30, 2008 Decision and the October 6, 2008 Resolution of the Court of Tax Appeals Pursuant to the above provision, petitioner must comply with the following requisites: (1) the
(CTA) En Banc. taxpayer is engaged in sales which are zero-rated or effectively zero-rated; (2) the taxpayer is
Factual Antecedents VAT-registered; (3) the claim must be filed within two years after the close of the taxable
Respondent Aichi Forging Company of Asia, Inc., a corporation duly organized and existing quarter when such sales were made; and (4) the creditable input tax due or paid must be
under the laws of the Republic of the Philippines, is engaged in the manufacturing, producing, attributable to such sales, except the transitional input tax, to the extent that such input tax
3
and processing of steel and its by-products. It is registered with the Bureau of Internal has not been applied against the output tax.
4
Revenue (BIR) as a Value-Added Tax (VAT) entity and its products, "close impression die steel The Court finds that the first three requirements have been complied [with] by petitioner.
forgings" and "tool and dies," are registered with the Board of Investments (BOI) as a pioneer With regard to the first requisite, the evidence presented by petitioner, such as the Sales
5
status. Invoices (Exhibits "II" to "II-262," "JJ" to "JJ-431," "KK" to "KK-394" and "LL") shows that it is
On September 30, 2004, respondent filed a claim for refund/credit of input VAT for the period engaged in sales which are zero-rated.
July 1, 2002 to September 30, 2002 in the total amount of 3,891,123.82 with the petitioner The second requisite has likewise been complied with. The Certificate of Registration with OCN
Commissioner of Internal Revenue (CIR), through the Department of Finance (DOF) One-Stop 1RC0000148499 (Exhibit "C") with the BIR proves that petitioner is a registered VAT taxpayer.
6
Shop Inter-Agency Tax Credit and Duty Drawback Center. In compliance with the third requisite, petitioner filed its administrative claim for refund on
Proceedings before the Second Division of the CTA September 30, 2004 (Exhibit "N") and the present Petition for Review on September 30, 2004,
7
On even date, respondent filed a Petition for Review with the CTA for the refund/credit of the both within the two (2) year prescriptive period from the close of the taxable quarter when
same input VAT. The case was docketed as CTA Case No. 7065 and was raffled to the Second the sales were made, which is from September 30, 2002.
Division of the CTA. As regards, the fourth requirement, the Court finds that there are some documents and claims
In the Petition for Review, respondent alleged that for the period July 1, 2002 to September of petitioner that are baseless and have not been satisfactorily substantiated.
8
30, 2002, it generated and recorded zero-rated sales in the amount of 131,791,399.00, which x x x x
was paid pursuant to Section 106(A) (2) (a) (1), (2) and (3) of the National Internal Revenue In sum, petitioner has sufficiently proved that it is entitled to a refund or issuance of a tax
9
Code of 1997 (NIRC); that for the said period, it incurred and paid input VAT amounting to credit certificate representing unutilized excess input VAT payments for the period July 1, 2002
10
3,912,088.14 from purchases and importation attributable to its zero-rated sales; and that to September 30, 2002, which are attributable to its zero-rated sales for the same period, but
in its application for refund/credit filed with the DOF One-Stop Shop Inter-Agency Tax Credit in the reduced amount of 3,239,119.25, computed as follows:
11
and Duty Drawback Center, it only claimed the amount of 3,891,123.82. Amount of Claimed Input VAT 3,891,123.82
12
In response, petitioner filed his Answer raising the following special and affirmative defenses, Less:
to wit: Exceptions as found by the ICPA 41,020.37
4. Petitioners alleged claim for refund is subject to administrative investigation by
the Bureau;
Net Creditable Input VAT 3,850,103.45
5. Petitioner must prove that it paid VAT input taxes for the period in question;
6. Petitioner must prove that its sales are export sales contemplated under Sections Less:
106(A) (2) (a), and 108(B) (1) of the Tax Code of 1997; Output VAT Due 610,984.20
7. Petitioner must prove that the claim was filed within the two (2) year period Excess Creditable Input VAT 3,239,119.25
prescribed in Section 229 of the Tax Code;
8. In an action for refund, the burden of proof is on the taxpayer to establish its right WHEREFORE, premises considered, the present Petition for Review is PARTIALLY GRANTED.
to refund, and failure to sustain the burden is fatal to the claim for refund; and Accordingly, respondent is hereby ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE
in favor of petitioner [in] the reduced amount of THREE MILLION TWO HUNDRED THIRTY NINE
THOUSAND ONE HUNDRED NINETEEN AND 25/100 PESOS (3,239,119.25), representing the In addition, We do not agree with the petitioner's contention that the 1997 NIRC requires the
unutilized input VAT incurred for the months of July to September 2002. previous filing of an administrative claim for refund prior to the judicial claim. This should not
14
SO ORDERED. be the case as the law does not prohibit the simultaneous filing of the administrative and
Dissatisfied with the above-quoted Decision, petitioner filed a Motion for Partial judicial claims for refund. What is controlling is that both claims for refund must be filed within
15
Reconsideration, insisting that the administrative and the judicial claims were filed beyond the two-year prescriptive period.
the two-year period to claim a tax refund/credit provided for under Sections 112(A) and 229 In sum, the Court En Banc finds no cogent justification to disturb the findings and conclusion
of the NIRC. He reasoned that since the year 2004 was a leap year, the filing of the claim for spelled out in the assailed January 4, 2008 Decision and March 13, 2008 Resolution of the CTA
tax refund/credit on September 30, 2004 was beyond the two-year period, which expired on Second Division. What the instant petition seeks is for the Court En Banc to view and appreciate
16 17
September 29, 2004. He cited as basis Article 13 of the Civil Code, which provides that when the evidence in their own perspective of things, which unfortunately had already been
the law speaks of a year, it is equivalent to 365 days. In addition, petitioner argued that the considered and passed upon.
simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and WHEREFORE, the instant Petition for Review is hereby DENIED DUE COURSE and DISMISSED
18
229 of the NIRC. According to the petitioner, a prior filing of an administrative claim is a for lack of merit. Accordingly, the January 4, 2008 Decision and March 13, 2008 Resolution of
19
"condition precedent" before a judicial claim can be filed. He explained that the rationale of the CTA Second Division in CTA Case No. 7065 entitled, "AICHI Forging Company of Asia, Inc.
such requirement rests not only on the doctrine of exhaustion of administrative remedies but petitioner vs. Commissioner of Internal Revenue, respondent" are hereby AFFIRMED in toto.
22
also on the fact that the CTA is an appellate body which exercises the power of judicial review SO ORDERED.
20 23
over administrative actions of the BIR. Petitioner sought reconsideration but the CTA En Banc denied his Motion for
The Second Division of the CTA, however, denied petitioners Motion for Partial Reconsideration.
Reconsideration for lack of merit. Petitioner thus elevated the matter to the CTA En Banc via a Issue
21
Petition for Review. Hence, the present recourse where petitioner interposes the issue of whether respondents
Ruling of the CTA En Banc judicial and administrative claims for tax refund/credit were filed within the two-year
On July 30, 2008, the CTA En Banc affirmed the Second Divisions Decision allowing the partial prescriptive period provided in Sections 112(A) and 229 of
24
tax refund/credit in favor of respondent. However, as to the reckoning point for counting the the NIRC.
two-year period, the CTA En Banc ruled: Petitioners Arguments
Petitioner argues that the administrative and judicial claims were filed beyond the period Petitioner maintains that respondents administrative and judicial claims for tax refund/credit
25
allowed by law and hence, the honorable Court has no jurisdiction over the same. In addition, were filed in violation of Sections 112(A) and 229 of the NIRC. He posits that pursuant to
26
petitioner further contends that respondent's filing of the administrative and judicial [claims] Article 13 of the Civil Code, since the year 2004 was a leap year, the filing of the claim for tax
effectively eliminates the authority of the honorable Court to exercise jurisdiction over the refund/credit on September 30, 2004 was beyond the two-year period, which expired on
27
judicial claim. September 29, 2004.
We are not persuaded. Petitioner further argues that the CTA En Banc erred in applying Section 114(A) of the NIRC in
Section 114 of the 1997 NIRC, and We quote, to wit: determining the start of the two-year period as the said provision pertains to the compliance
28
SEC. 114. Return and Payment of Value-added Tax. requirements in the payment of VAT. He asserts that it is Section 112, paragraph (A), of the
(A) In General. Every person liable to pay the value-added tax imposed under this Title shall same Code that should apply because it specifically provides for the period within which a
29
file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days claim for tax refund/ credit should be made.
following the close of each taxable quarter prescribed for each taxpayer: Provided, however, Petitioner likewise puts in issue the fact that the administrative claim with the BIR and the
30
That VAT-registered persons shall pay the value-added tax on a monthly basis. judicial claim with the CTA were filed on the same day. He opines that the simultaneous filing
[x x x x ] of the administrative and the judicial claims contravenes Section 229 of the NIRC, which
31
Based on the above-stated provision, a taxpayer has twenty five (25) days from the close of requires the prior filing of an administrative claim. He insists that such procedural
each taxable quarter within which to file a quarterly return of the amount of his gross sales or requirement is based on the doctrine of exhaustion of administrative remedies and the fact
receipts. In the case at bar, the taxable quarter involved was for the period of July 1, 2002 to that the CTA is an appellate body exercising judicial review over administrative actions of the
32
September 30, 2002. Applying Section 114 of the 1997 NIRC, respondent has until October 25, CIR.
2002 within which to file its quarterly return for its gross sales or receipts [with] which it Respondents Arguments
complied when it filed its VAT Quarterly Return on October 20, 2002. For its part, respondent claims that it is entitled to a refund/credit of its unutilized input VAT
In relation to this, the reckoning of the two-year period provided under Section 229 of the 1997 for the period July 1, 2002 to September 30, 2002 as a matter of right because it has
33
NIRC should start from the payment of tax subject claim for refund. As stated above, substantially complied with all the requirements provided by law. Respondent likewise
respondent filed its VAT Return for the taxable third quarter of 2002 on October 20, 2002. defends the CTA En Banc in applying Section 114(A) of the NIRC in computing the prescriptive
Thus, respondent's administrative and judicial claims for refund filed on September 30, 2004 period for the claim for tax refund/credit. Respondent believes that Section 112(A) of the NIRC
34
were filed on time because AICHI has until October 20, 2004 within which to file its claim for must be read together with Section 114(A) of the same Code.
refund. As to the alleged simultaneous filing of its administrative and judicial claims, respondent
contends that it first filed an administrative claim with the One-Stop Shop Inter-Agency Tax
 35
Credit and Duty Drawback Center of the DOF before it filed a judicial claim with the CTA. To been excessively or in any manner wrongfully collected, until a claim for refund or credit has
36
prove this, respondent points out that its Claimant Information Sheet No. 49702 and BIR been duly filed with the Commissioner; but such suit or proceeding may be maintained,
37
Form No. 1914 for the third quarter of 2002, which were filed with the DOF, were attached whether or not such tax, penalty or sum has been paid under protest or duress.
as Annexes "M" and "N," respectively, to the Petition for Review filed with the In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from
38
CTA. Respondent further contends that the non-observance of the 120-day period given to the date of payment of the tax or penalty regardless of any supervening cause that may arise
the CIR to act on the claim for tax refund/credit in Section 112(D) is not fatal because what is after payment: Provided, however, That the Commissioner may, even without written claim
39
important is that both claims are filed within the two-year prescriptive period. In support therefor, refund or credit any tax, where on the face of the return upon which payment was
thereof, respondent cites Commissioner of Internal Revenue v. Victorias Milling Co., made, such payment appears clearly to have been erroneously paid. (Emphasis supplied.)
40
Inc. where it was ruled that "[i]f, however, the [CIR] takes time in deciding the claim, and the Hence, the CTA En Banc ruled that the reckoning of the two-year period for filing a claim for
period of two years is about to end, the suit or proceeding must be started in the [CTA] before refund/credit of unutilized input VAT should start from the date of payment of tax and not
41 43
the end of the two-year period without awaiting the decision of the [CIR]." Lastly, respondent from the close of the taxable quarter when the sales were made.
argues that even if the period had already lapsed, it may be suspended for reasons of equity The pivotal question of when to reckon the running of the two-year prescriptive period,
42
considering that it is not a jurisdictional requirement. however, has already been resolved in Commissioner of Internal Revenue v. Mirant Pagbilao
44
Our Ruling Corporation, where we ruled that Section 112(A) of the NIRC is the applicable provision in
The petition has merit. determining the start of the two-year period for claiming a refund/credit of unutilized input
Unutilized input VAT must be claimed within two years after the close of the taxable quarter VAT, and that Sections 204(C) and 229 of the NIRC are inapplicable as "both provisions apply
45
when the sales were made only to instances of erroneous payment or illegal collection of internal revenue taxes." We
In computing the two-year prescriptive period for claiming a refund/credit of unutilized input explained that:
VAT, the Second Division of the CTA applied Section 112(A) of the NIRC, which states: The above proviso [Section 112 (A) of the NIRC] clearly provides in no uncertain terms
SEC. 112. Refunds or Tax Credits of Input Tax. that unutilized input VAT payments not otherwise used for any internal revenue tax due the
(A) Zero-rated or Effectively Zero-rated Sales Any VAT-registered person, whose sales are taxpayer must be claimed within two years reckoned from the close of the taxable quarter
zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable when the relevant sales were made pertaining to the input VAT regardless of whether said
quarter when the sales were made, apply for the issuance of a tax credit certificate or refund tax was paid or not. As the CA aptly puts it, albeit it erroneously applied the aforequoted Sec.
of creditable input tax due or paid attributable to such sales, except transitional input tax, to 112 (A), "[P]rescriptive period commences from the close of the taxable quarter when the sales
the extent that such input tax has not been applied against output tax: Provided, however, were made and not from the time the input VAT was paid nor from the time the official receipt
That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 was issued." Thus, when a zero-rated VAT taxpayer pays its input VAT a year after the pertinent
(B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly transaction, said taxpayer only has a year to file a claim for refund or tax credit of the unutilized
accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas creditable input VAT. The reckoning frame would always be the end of the quarter when the
(BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero- pertinent sales or transaction was made, regardless when the input VAT was paid. Be that as
rated sale and also in taxable or exempt sale of goods or properties or services, and the amount it may, and given that the last creditable input VAT due for the period covering the progress
of creditable input tax due or paid cannot be directly and entirely attributed to any one of the billing of September 6, 1996 is the third quarter of 1996 ending on September 30, 1996, any
transactions, it shall be allocated proportionately on the basis of the volume of sales. claim for unutilized creditable input VAT refund or tax credit for said quarter prescribed two
(Emphasis supplied.) years after September 30, 1996 or, to be precise, on September 30, 1998. Consequently, MPCs
The CTA En Banc, on the other hand, took into consideration Sections 114 and 229 of the NIRC, claim for refund or tax credit filed on December 10, 1999 had already prescribed.
which read: Reckoning for prescriptive period under
SEC. 114. Return and Payment of Value-Added Tax. Secs. 204(C) and 229 of the NIRC inapplicable
(A) In General. Every person liable to pay the value-added tax imposed under this Title shall To be sure, MPC cannot avail itself of the provisions of either Sec. 204(C) or 229 of the NIRC
file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days which, for the purpose of refund, prescribes a different starting point for the two-year
following the close of each taxable quarter prescribed for each taxpayer: Provided, however, prescriptive limit for the filing of a claim therefor. Secs. 204(C) and 229 respectively provide:
That VAT-registered persons shall pay the value-added tax on a monthly basis. Sec. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes.
Any person, whose registration has been cancelled in accordance with Section 236, shall file a The Commissioner may
return and pay the tax due thereon within twenty-five (25) days from the date of cancellation x x x x
of registration: Provided, That only one consolidated return shall be filed by the taxpayer for (c) Credit or refund taxes erroneously or illegally received or penalties imposed without
his principal place of business or head office and all branches. authority, refund the value of internal revenue stamps when they are returned in good
x x x x condition by the purchaser, and, in his discretion, redeem or change unused stamps that have
SEC. 229. Recovery of tax erroneously or illegally collected. been rendered unfit for use and refund their value upon proof of destruction. No credit or
No suit or proceeding shall be maintained in any court for the recovery of any national internal refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the
revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of Commissioner a claim for credit or refund within two (2) years after the payment of the tax or
any penalty claimed to have been collected without authority, or of any sum alleged to have
penalty: Provided, however, That a return filed showing an overpayment shall be considered Administrative Code of 1987, which states that a year is composed of 12 calendar months, it is
50
as a written claim for credit or refund. the latter that must prevail following the legal maxim, Lex posteriori derogat priori. Thus:
x x x x Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code
Sec. 229. Recovery of Tax Erroneously or Illegally Collected. No suit or proceeding shall be of 1987 deal with the same subject matter the computation of legal periods. Under the Civil
maintained in any court for the recovery of any national internal revenue tax hereafter alleged Code, a year is equivalent to 365 days whether it be a regular year or a leap year. Under the
to have been erroneously or illegally assessed or collected, or of any penalty claimed to have Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless
been collected without authority, of any sum alleged to have been excessively or in any manner to state, under the Administrative Code of 1987, the number of days is irrelevant.
wrongfully collected without authority, or of any sum alleged to have been excessively or in There obviously exists a manifest incompatibility in the manner of
any manner wrongfully collected, until a claim for refund or credit has been duly filed with the computing legal periods under the Civil Code and the Administrative Code of 1987. For this
Commissioner; but such suit or proceeding may be maintained, whether or not such tax, reason, we hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being
penalty, or sum has been paid under protest or duress. the more recent law, governs the computation of legal periods. Lex posteriori derogat priori.
In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the
the date of payment of the tax or penalty regardless of any supervening cause that may arise two-year prescriptive period (reckoned from the time respondent filed its final adjusted return
after payment: Provided, however, That the Commissioner may, even without a written claim on April 14, 1998) consisted of 24 calendar months, computed as follows:
therefor, refund or credit any tax, where on the face of the return upon which payment was
Year 1 1st calendar month April 15, 1998 to May 14, 1998
made, such payment appears clearly to have been erroneously paid.
Notably, the above provisions also set a two-year prescriptive period, reckoned from date of 2nd calendar month May 15, 1998 to June 14, 1998
payment of the tax or penalty, for the filing of a claim of refund or tax credit. Notably too, both
provisions apply only to instances of erroneous payment or illegal collection of internal 3rd calendar month June 15, 1998 to July 14, 1998
revenue taxes.
MPCs creditable input VAT not erroneously paid 4th calendar month July 15, 1998 to August 14, 1998
For perspective, under Sec. 105 of the NIRC, creditable input VAT is an indirect tax which can
be shifted or passed on to the buyer, transferee, or lessee of the goods, properties, or services 5th calendar month August 15, 1998 to September 14, 1998
of the taxpayer. The fact that the subsequent sale or transaction involves a wholly-tax exempt
client, resulting in a zero-rated or effectively zero-rated transaction, does not, standing alone, 6th calendar month September 15, 1998 to October 14, 199
deprive the taxpayer of its right to a refund for any unutilized creditable input VAT, albeit the
erroneous, illegal, or wrongful payment angle does not enter the equation. 7th calendar month October 15, 1998 to November 14, 199
x x x x
Considering the foregoing discussion, it is clear that Sec. 112 (A) of the NIRC, providing a two- 8th calendar month November 15, 1998 to December 14, 19
year prescriptive period reckoned from the close of the taxable quarter when the relevant
sales or transactions were made pertaining to the creditable input VAT, applies to the instant 9th calendar month December 15, 1998 to January 14, 1999
46
case, and not to the other actions which refer to erroneous payment of taxes. (Emphasis
supplied.) 10th calendar month January 15, 1999 to February 14, 1999
In view of the foregoing, we find that the CTA En Banc erroneously applied Sections 114(A) and
11th calendar month February 15, 1999 to March 14, 1999
229 of the NIRC in computing the two-year prescriptive period for claiming refund/credit of
unutilized input VAT. To be clear, Section 112 of the NIRC is the pertinent provision for the
12th calendar month March 15, 1999 to April 14, 1999
refund/credit of input VAT. Thus, the two-year period should be reckoned from the close of
the taxable quarter when the sales were made. Year 2 13th calendar month April 15, 1999 to May 14, 1999
The administrative claim was timely filed
Bearing this in mind, we shall now proceed to determine whether the administrative claim was 14th calendar month May 15, 1999 to June 14, 1999
timely filed.
47
Relying on Article 13 of the Civil Code, which provides that a year is equivalent to 365 days, 15th calendar month June 15, 1999 to July 14, 1999
and taking into account the fact that the year 2004 was a leap year, petitioner submits that the
two-year period to file a claim for tax refund/ credit for the period July 1, 2002 to September 16th calendar month July 15, 1999 to August 14, 1999
48
30, 2002 expired on September 29, 2004.
We do not agree. 17th calendar month August 15, 1999 to September 14, 199
49
In Commissioner of Internal Revenue v. Primetown Property Group, Inc., we said that as
between the Civil Code, which provides that a year is equivalent to 365 days, and the 18th calendar month September 15, 1999 to October 14, 19
 zero-rated may, within two years after the close of the taxable quarter when the sales were
19th calendar month October 15, 1999 to November 14, 1999
made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or
20th calendar month November 15, 1999 to December 14, paid 1999 attributable to such sales." The phrase "within two (2) years x x x apply for the issuance
of a tax credit certificate or refund" refers to applications for refund/credit filed with the CIR
21st calendar month and not to appeals made to the CTA. This is apparent in the first paragraph of subsection (D)
December 15, 1999 to January 14, 2000
of the same provision, which states that the CIR has "120 days from the submission of complete
22nd calendar month documents in support of the application filed in accordance with Subsections (A) and (B)"
January 15, 2000 to February 14, 2000
within which to decide on the claim.
23rd calendar month February 15, 2000 to March 14, 2000 In fact, applying the two-year period to judicial claims would render nugatory Section 112(D)
of the NIRC, which already provides for a specific period within which a taxpayer should appeal
24th calendar month March 15, 2000 to April 14, 2000 the decision or inaction of the CIR. The second paragraph of Section 112(D) of the NIRC
envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-
We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day
day period; and (2) when no decision is made after the 120-day period. In both instances, the
of the 24th calendar month from the day respondent filed its final adjusted return. Hence, it
51 taxpayer has 30 days within which to file an appeal with the CTA. As we see it then, the 120-
was filed within the reglementary period.
day period is crucial in filing an appeal with the CTA.
Applying this to the present case, the two-year period to file a claim for tax refund/credit for 53
With regard to Commissioner of Internal Revenue v. Victorias Milling, Co., Inc. relied upon by
the period July 1, 2002 to September 30, 2002 expired on September 30, 2004. Hence,
respondent, we find the same inapplicable as the tax provision involved in that case is Section
respondents administrative claim was timely filed.
306, now Section 229 of the NIRC. And as already discussed, Section 229 does not apply to
The filing of the judicial claim was premature
refunds/credits of input VAT, such as the instant case.
However, notwithstanding the timely filing of the administrative claim, we
In fine, the premature filing of respondents claim for refund/credit of input VAT before the
are constrained to deny respondents claim for tax refund/credit for having been filed in
CTA warrants a dismissal inasmuch as no jurisdiction was acquired by the CTA.
violation of Section 112(D) of the NIRC, which provides that:
WHEREFORE, the Petition is hereby GRANTED. The assailed July 30, 2008 Decision and the
SEC. 112. Refunds or Tax Credits of Input Tax.
October 6, 2008 Resolution of the Court of Tax Appeals are hereby REVERSED and SET ASIDE.
x x x x
The Court of Tax Appeals Second Division is DIRECTED to dismiss CTA Case No. 7065 for having
(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. In proper cases,
been prematurely filed.
the Commissioner shall grant a refund or issue the tax credit certificate for creditable input
SO ORDERED.
taxes within one hundred twenty (120) days from the date of submission of complete

documents in support of the application filed in accordance with Subsections (A) and (B)

hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part

of the Commissioner to act on the application within the period prescribed above, the taxpayer

affected may, within thirty (30) days from the receipt of the decision denying the claim or after

the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim

with the Court of Tax Appeals. (Emphasis supplied.)

Section 112(D) of the NIRC clearly provides that the CIR has "120 days, from the date of the

submission of the complete documents in support of the application [for tax refund/credit],"

within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayers

recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the

CIR. However, if after the 120-day period the CIR fails to act on the application for tax

refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30

days.

In this case, the administrative and the judicial claims were simultaneously filed on September

30, 2004. Obviously, respondent did not wait for the decision of the CIR or the lapse of the

120-day period. For this reason, we find the filing of the judicial claim with the CTA premature.

Respondents assertion that the non-observance of the 120-day period is not fatal to the filing

of a judicial claim as long as both the administrative and the judicial claims are filed within the
52
two-year prescriptive period has no legal basis.

There is nothing in Section 112 of the NIRC to support respondents view. Subsection (A) of the

said provision states that "any VAT-registered person, whose sales are zero-rated or effectively

G.R. No. 183994 June 30, 2014 1. WHETHER OR NOT THE DISMISSAL OF THE CRIMINAL CASES AGAINST PETITIONER
WILLIAM CO a.k.a. XU QUING HE, Petitioner, ONTHE GROUND OF DENIAL OF HIS RIGHT TO SPEEDY TRIAL CONSTITUTES FINAL
vs. DISMISSAL OF THESE CASES;
1
NEW PROSPERITY PLASTIC PRODUCTS, represented by ELIZABETH UY, Respondent. 2. WHETHER OR NOT THE METC ACTED WITH JURISDICTION IN REVIVING THE
D E C I S I O N CRIMINAL CASES AGAINST PETITIONER WHICH WERE DISMISSED ON THE GROUND
PERALTA, J.: OF DENIAL OF HIS RIGHT TO SPEEDY TRIAL; and
Assailed in this petition for review on certiorari under Rule 45 of the 1997 Revised Rules on 3. ASSUMING POR GRATIA ARGUMENTITHE CASES WERE ONLY PROVISIONALLY
2 3
Civil Procedure (Rules) are the April 30, 2008 and August 1, 2008 Resolutions of the Court of DISMISSED:
Appeals (CA) in CA-G.R. SP No. 102975, which dismissed the petition and denied the motion a. WHETHER THE ONE-YEAR TIMEBAR OF THEIR REVIVAL IS COMPUTED
4
for reconsideration, respectively. In effect, the CA affirmed the January 28, 2008 Decision of FROM ISSUANCE OF THE ORDER OF PROVISIONAL DISMISSAL;
the Regional Trial Court (RTC) Branch 121 of Caloocan City, which annulled and set aside the b. WHETHER THE ACTUAL NUMBER OF DAYS IN A YEAR IS THE BASIS FOR
5 6
Orders dated September 4, 2006 and November 16, 2006 of the Metropolitan Trial Court COMPUTING THE ONE-YEAR TIME BAR;
(MeTC), Branch 50 of Caloocan City, permanently dismissing Criminal Case Nos. 206655-59, c. WHETHER THE PROVISIONALLY DISMISSED CASES AGAINST PETITIONER
206661-77 and 209634. ARE REVIVED IPSO FACTO BY THE FILING OF MOTION TO REVIVE THESE
23
The facts are simple and undisputed: CASES.
Respondent New Prosperity Plastic Products, represented by Elizabeth Uy (Uy), is the private Co argues that the June 9, 2003 Order provisionally dismissing Criminal Case Nos. 206655-59,
complainant in Criminal Case Nos. 206655-59, 206661-77 and 209634 for Violation of Batas 206661-77 and 209634 should be considered as a final dismissal on the ground that his right
Pambansa (B.P.) Bilang 22 filed against petitioner William Co (Co), which were raffled to the to speedy trial was denied. He reasons out that from his arraignment on March 4, 2002 until
MeTC Branch. 49 of Caloocan City. In the absence of Uy and the private counsel, the cases were the initial trial on June 9, 2003, there was already a "vexatious, capricious and oppressive"
24
provisionally dismissed on June 9, 2003 in open court pursuant to Section 8, Rule 117 of the delay, which is in violation of Section 6 of Republic Act 8493 (Speedy Trial Act of 1998) and
7 25
Revised Rules of Criminal Procedure (Rules). Uy received a copy of the June9, 2003 Order on Section 2, Paragraph 2, Rule 119 of the Revised Rules of Criminal Procedure mandating that
8
July 2, 2003, while her counsel-of-record received a copy a day after. On July 2, 2004, Uy, the entire trial period should not exceed 180 days from the first day of trial. As the dismissal is
9
through counsel, filed a Motion to Revive the Criminal Cases. Hon. Belen B. Ortiz, then deemed final, Co contends that the MeTC lost its jurisdiction over the cases and cannot
Presiding Judge of the MeTC Branch 49, granted the motion on October 14, 2004 and denied reacquire jurisdiction over the same based on a mere motion because its revival would already
10
Cos motion for reconsideration. When Co moved for recusation, Judge Ortiz inhibited herself put him in double jeopardy.
11
from handling the criminal cases per Order dated January 10, 2005. The cases were, Assuming that the criminal cases were only provisionally dismissed, Co further posits that such
thereafter, raffled to the MeTC Branch 50 of Caloocan City. On March 17, 2005, Co filed a dismissal became permanent one year after the issuance of the June 9, 2003 Order, not after
petition for certiorari and prohibition with prayer for the issuance of a temporary restraining notice to the offended party. He also insists that both the filing of the motion to revive and the
order (TRO)/writ of preliminary injunction (WPI) before the RTC of Caloocan City challenging trial courts issuance of the order granting the revival must be within the one-year period.
12
the revival of the criminal cases. It was, however, dismissed for lack of merit on May 23, Lastly, even assuming that the one-year period to revive the criminal cases started on July 2,
13
2005. Cos motion for reconsideration was, subsequently, denied on December 16, 2003 when Uy received the June 9, 2003 Order, Co asserts that the motion was filed one day
14
2005. Co then filed a petition for review on certiorari under Rule 45 before the Supreme late since year 2004 was a leap year.
15
Court, which was docketed as G.R. No. 171096. We dismissed the petition per Resolution The petition is unmeritorious.
16
dated February 13, 2006. There being no motion for reconsideration filed, the dismissal At the outset, it must be noted that the issues raised in this petition were also the meat of the
17
became final and executory on March 20, 2006. controversy in Cos previous petition in G.R. No. 171096, which We dismissed per Resolution
Before the MeTC Branch 50 where Criminal Case Nos. 206655-59, 206661-77 and 209634 were dated February 13, 2006. Such dismissal became final and executory on March 20, 2006. While
re-raffled after the inhibition of Judge Ortiz, Co filed a "Motion for Permanent Dismissal" on the first petition was dismissed mainly due to procedural infirmities, this Court nonetheless
18
July 13, 2006. Uy opposed the motion, contending that the motion raised the same issues stated therein that "[i]n any event, the petition lacks sufficient showing that respondent court
19
already resolved with finality by this Court in G.R. No. 171096. In spite of this, Judge Esteban had committed any reversible error in the questioned judgment to warrant the exercise by this
20
V. Gonzaga issued an Order dated September 4, 2006 granting Cos motion. When the court Court of its discretionary appellate jurisdiction in this case." Hence, upon the finality of Our
21
subsequently denied Uys motion for reconsideration on November 16, 2006, Uy filed a February 13, 2006 Resolution in G.R. No. 171096, the same already constitutes as res judicata
petition for certiorari before the RTC of Caloocan City. On January 28, 2008, Hon. Judge between the parties. On this ground alone, this petition should have been dismissed outright.
Adoracion G. Angeles of the RTC Branch 121 acted favorably on the petition, annulling and Even if We are to squarely resolve the issues repeatedly raised in the present petition, Cos
setting aside the Orders dated September 4, 2006 and November 16, 2006 and directing the arguments are nonetheless untenable on the grounds as follows:
22
MeTC Branch 50 to proceed with the trial of the criminal cases. Co then filed a petition for First, Cos charge that his right to a speedy trial was violated is baseless. Obviously, he failed
certiorari before the CA, which, as aforesaid, dismissed the petition and denied his motion for to show any evidence that the alleged "vexatious, capricious and oppressive" delay in the trial
reconsideration. Hence, this present petition with prayer for TRO/WPI. was attended with malice or that the same was made without good cause or justifiable motive
According to Co, the following issues need to be resolved in this petition: on the part of the prosecution. This Court has emphasized that "speedy trial is a relative term
26
and necessarily a flexible concept." In determining whether the accused's right to speedy trial
 27
was violated, the delay should be considered in view of the entirety of the proceedings. The it should not be literally interpreted as such. Of course, there is a vital need to satisfy the basic
factors to balance are the following: (a) duration of the delay; (b) reason therefor; (c) assertion requirements of due process; thus, said in one case:
28
of the right or failure to assert it; and (d) prejudice caused by such delay. Surely, mere Although the second paragraph of the new rule states that the order of dismissal shall become
mathematical reckoning of the time involved would not suffice as the realities of everyday life permanent one year after the issuance thereof without the case having been revived, the
must be regarded in judicial proceedings which, after all, do not exist in a vacuum, and that provision should be construed to mean that the order of dismissal shall become permanent
29
particular regard must be given to the facts and circumstances peculiar to each case. "While one year after service of the order of dismissal on the public prosecutor who has control of the
the Court recognizes the accused's right to speedy trial and adheres to a policy of speedy prosecution without the criminal case having been revived. The public prosecutor cannot be
36
administration of justice, we cannot deprive the State of a reasonable opportunity to fairly expected to comply with the timeline unless he is served with a copy of the order of dismissal.
prosecute criminals. Unjustified postponements which prolong the trial for an unreasonable We hasten to add though that if the offended party is represented by a private counsel the
30
length of time are what offend the right of the accused to speedy trial." better rule is that the reckoning period should commence to run from the time such private
Second, Co is burdened to establish the essential requisites of the first paragraph of Section 8, counsel was actually notified of the order of provisional dismissal. When a party is represented
Rule 117 of the Rules, which are conditions sine qua non to the application of the time-bar in by a counsel, notices of all kinds emanating from the court should be sent to the latter at
37
the second paragraph thereof, to wit: (1) the prosecution with the express conformity of the his/her given address. Section 2, Rule 13 of the Rules analogously provides that if any party
38
accused or the accused moves for a provisional (sin perjuicio) dismissal of the case; or both the has appeared by counsel, service upon the former shall be made upon the latter.
prosecution and the accused move for a provisional dismissal of the case; (2) the offended Fourth, the contention that both the filing of the motion to revive the case and the court order
party is notified of the motion for a provisional dismissal of the case; (3) the court issues an reviving it must be made prior to the expiration of the one-year period is unsustainable. Such
order granting the motion and dismissing the case provisionally; and (4) the public prosecutor interpretation is not found in the Rules. Moreover, to permit otherwise would definitely put
31
is served with a copy of the order of provisional dismissal of the case. In this case, it is the offended party at the mercy of the trial court, which may wittingly or unwittingly not
apparent from the records that there is no notice of any motion for the provisional dismissal comply. Judicial notice must be taken of the fact that most, if not all, of our trial court judges
of Criminal Cases Nos. 206655-59, 206661-77 and 209634 or of the hearing thereon which was have to deal with clogged dockets in addition to their administrative duties and functions.
served on the private complainant at least three days before said hearing as mandated by Hence, they could not be expected to act at all times on all pending decisions, incidents, and
32
Section 4, Rule 15 of the Rules. The fact is that it was only in open court that Co moved for related matters within the prescribed period of time. It is likewise possible that some of them,
provisional dismissal "considering that, as per records, complainant had not shown any interest motivated by ill-will or malice, may simply exercise their whims and caprices in not issuing the
33
to pursue her complaint." The importance of a prior notice to the offended party of a motion order of revival on time.
34
for provisional dismissal is aptly explained in People v. Lacson: Fifth, the fact that year 2004 was a leap year is inconsequential to determine the timeliness of
x x x It must be borne in mind that in crimes involving private interests, the new rule requires Uys motion to revive the criminal cases. What is material instead is Cos categorical admission
that the offended party or parties or the heirs of the victims must be given adequate a priori that Uy is represented by a private counsel who only received a copy of the June 9, 2003 Order
notice of any motion for the provisional dismissal of the criminal case. Such notice may be on July 3, 2003. Therefore, the motion was not belatedly filed on July 2, 2004. Since the period
served on the offended party or the heirs of the victim through the private prosecutor, if there for filing a motion to revive is reckoned from the private counsel's receipt of the order of
is one, or through the public prosecutor who in turn must relay the notice to the offended provisional dismissal, it necessarily follows that the reckoning period for the permanent
party or the heirs of the victim to enable them to confer with him before the hearing or appear dismissal is likewise the private counsel's date of receipt of the order of provisional dismissal.
in court during the hearing. The proof of such service must be shown during the hearing on the And Sixth, granting for the sake of argument that this Court should take into account 2004 as
motion, otherwise, the requirement of the new rule will become illusory. Such notice will a leap year and that the one-year period to revive the case should be reckoned from the date
enable the offended party or the heirs of the victim the opportunity to seasonably and of receipt of the order of provisional dismissal by Uy, We still hold that the motion to revive
effectively comment on or object to the motion on valid grounds, including: (a) the collusion the criminal cases against Co was timely filed. A year is equivalent to 365 days regardless of
39
between the prosecution and the accused for the provisional dismissal of a criminal case whether it is a regular year or a leap year. Equally so, under the Administrative Code of 1987,
thereby depriving the State of its right to due process; (b) attempts to make witnesses a yearis composed of 12 calendar months. The number of days is irrelevant. This was our ruling
40
unavailable; or (c) the provisional dismissal of the case with the consequent release of the in Commissioner of Internal Revenue v. Primetown Property Group, Inc., which was
accused from detention would enable him to threaten and kill the offended party or the other subsequently reiterated in Commissioner of Internal Revenue v. Aichi Forging Company of Asia,
41
prosecution witnesses or flee from Philippine jurisdiction, provide opportunity for the Inc., thus:
destruction or loss of the prosecutions physical and other evidence and prejudice the rights x x x [In] 1987, EO 292 or the Administrative Code of 1987 was enacted. Section 31, Chapter
of the offended party to recover on the civil liability of the accused by his concealment or VIII, Book I thereof provides:
furtive disposition of his property or the consequent lifting of the writ of preliminary Sec. 31.Legal Periods.- "Year" shall be understood to be twelve calendar months; "month" of
35
attachment against his property. thirty days, unless it refers to a specific calendar month in which case it shall be computed
Third, there is evident want of jurisprudential support on Cos supposition that the dismissal according to the number of days the specific month contains; "day", to a day of twenty-four
of the cases became permanent one year after the issuance of the June 9, 2003 Order and not hours and; "night" from sunrise to sunset. (emphasis supplied)
after notice to the offended party. When the Rules states that the provisional dismissal shall A calendar month is "a month designated in the calendar without regard to the number of days
become permanent one year after the issuance of the order temporarily dismissing the case, it may contain." It is the "period of time running from the beginning of a certain numbered day
up to, but not including, the corresponding numbered day of the next month, and if there is
not a sufficient number of days in the next month, then up to and including the last day of that Criminal Case Nos. 206655-59, 206661-77 and 209634, are hereby AFFIRMED. Costs of suit to
month." To illustrate, one calendar month from December 31, 2007 will be from January 1, be paid by the petitioner.
2008 to January 31, 2008; one calendar month from January 31, 2008 will be from February 1, The Commission on Bar Discipline-Integrated Bar of the Philippines is DIRECTED to investigate
42
2008 until February 29, 2008. Atty. Oscar C. Maglaque for his acts that appear to have violated the Lawyer's Oath, the Code
Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the of Professional Responsibility, and the Rule on Forum Shopping.
one-year period reckoned from the time Uy received the order of dismissal on July2, 2003 SO ORDERED.
consisted of 24 calendar months, computed as follows:
1st calendar month July 3, 2003 to August 2, 2003
2nd calendar month August 3, 2003 to September 2, 2003
3rd calendar month September 3, 2003 to October 2, 2003
4th calendar month October 3, 2003 to November 2, 2003
5th calendar month November 3, 2003 to December 2, 2003
6th calendar month December 3, 2003 to January 2, 2004
7th calendar month January 3, 2004 to February 2, 2004
8th calendar month February 3, 2004 to March 2, 2004
9th calendar month March 3, 2004 to April 2, 2004
10th calendar month April 3, 2004 to May 2, 2004
11th calendar month May 3, 2004 to June 2, 2004
12th calendar month June 3, 2004 to July 2, 2004
In the end, We find it hard to disregard the thought that the instant petition was filed as a
dilatory tactic to prosecute Criminal Case Nos. 206655-59, 206661-77 and 209634. As correctly
pointed out by Uy since the time when the "Motion for Permanent Dismissal" was filed, the
issues raised herein were already resolved with finality by this Court in G.R. No. 171096. Verily,
Co, acting through the guidance and advice of his counsel, Atty. Oscar C. Maglaque, adopted a
worthless and vexatious legal maneuver for no purpose other than to delay the trial court
proceedings. It appears that Atty. Maglaques conduct contravened the Code of Professional
Responsibility which enjoins lawyers to observe the rules of procedure and not to misuse them
to defeat the ends of justice (Rule 10.03, Canon 10) as well as not to unduly delay a case or
misuse court processes (Rule 12.04, Canon 12). The Lawyers Oath also upholds in particular:
x x x I will not wittingly or willingly promote or sue any groundless, false or unlawful suit, nor
give aid nor consent to the same; I will delay no man for money or malice, and will conduct
myself as a lawyer according to the best of my knowledge and discretion with all good fidelity
as well to the courts as to my clients x x x.1wphi1
This Court has repeatedly impressed upon counsels that the need for the prompt termination
of litigation is essential to an effective and efficient administration of justice. In Spouses Aguilar
43
v. Manila Banking Corporation, We said:
The Court reminds petitioners' counsel of the duty of lawyers who, as officers of the court,
must see to it that the orderly administration of justice must not be unduly impeded. It is the
duty of a counsel to advise his client, ordinarily a layman on the intricacies and vagaries of the
law, on the merit or lack of merit of his case. If he finds that his client's cause is defenseless,
then it is his bounden duty to advise the latter to acquiesce and submit, rather than traverse
the incontrovertible. A lawyer must resist the whims and caprices of his client, and temper his
client's propensity to litigate. A lawyers oath to uphold the cause of justice is superior to his
44
duty to his client; its primacy is indisputable.
WHEREFORE, premises considered, the Petition is DENIED. The April 30, 2008 and August 1,
2008 Resolutions of the Court of Appeals, respectively, in CA-G.R. SP No. 102975, which
affirmed the January 28, 2008 Decision of the Regional Trial Court, Branch 121 of Caloocan
City, annulling and setting aside the Orders dated September 4, 2006 and November 16, 2006
of the Metropolitan Trial Court, Branch 50 of Caloocan City that permanently dismissed
SOLEDAD L. LAVADIA, Petitioner, "JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E. ONGKIKO, married to Sonia
vs. P.G. Ongkiko (25/100); GREGORIO R. PURUGANAN, married to Paz A. Puruganan (17/100); and
HEIRS OF JUAN LUCES LUNA, represented by GREGORIO Z. LUNA and EUGENIA ZABALLERO- TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x" Subsequently, 8/100 share
LUNA,Respondents. of ATTY. LUNA and 17/100 share of Atty. Gregorio R. Puruganan in the condominium unit was
D E C I S I O N sold to Atty. Mario E. Ongkiko, for which a new CCT No. 21761 was issued on February 7, 1992
BERSAMIN, J.: in the following names:
Divorce between Filipinos is void and ineffectual under the nationality rule adopted by "JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E. ONGKIKO, married to Sonia
Philippine law. Hence, any settlement of property between the parties of the first marriage P.G. Ongkiko (50/100); TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x"
involving Filipinos submitted as an incident of a divorce obtained in a foreign country lacks Sometime in 1992, LUPSICON was dissolved and the condominium unit was partitioned by the
competent judicial approval, and cannot be enforceable against the assets of the husband who partners but the same was still registered in common under CCT No. 21716. The parties
contracts a subsequent marriage. stipulated that the interest of ATTY. LUNA over the condominium unit would be 25/100 share.
The Case ATTY. LUNA thereafter established and headed another law firm with Atty. Renato G. Dela
The petitioner, the second wife of the late Atty. Juan Luces Luna, appeals the adverse decision Cruzand used a portion of the office condominium unit as their office. The said law firm lasted
1
promulgated on November 11, 2005, whereby the Court of Appeals (CA) affirmed with until the death of ATTY. JUAN on July 12, 1997.
modification the decision rendered on August 27, 2001 by the Regional Trial Court (RTC), After the death of ATTY. JUAN, his share in the condominium unit including the lawbooks,
2
Branch 138, in Makati City. The CA thereby denied her right in the 25/100 pro indiviso share office furniture and equipment found therein were taken over by Gregorio Z. Luna, ATTY.
of the husband in a condominium unit, and in the law books of the husband acquired during LUNAs son of the first marriage. Gregorio Z. Luna thenleased out the 25/100 portion of the
the second marriage. condominium unit belonging to his father to Atty. Renato G. De la Cruz who established his
Antecedents own law firm named Renato G. De la Cruz & Associates.
The antecedent facts were summarized by the CA as follows: The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit as well as the law books,
ATTY. LUNA, a practicing lawyer, was at first a name partner in the prestigious law firm Sycip, office furniture and equipment became the subject of the complaint filed by SOLEDAD against
Salazar, Luna, Manalo, Hernandez & Feliciano Law Offices at that time when he was living with the heirs of ATTY. JUAN with the RTC of Makati City, Branch 138, on September 10, 1999,
his first wife, herein intervenor-appellant Eugenia Zaballero-Luna (EUGENIA), whom he initially docketed as Civil Case No. 99-1644. The complaint alleged that the subject properties were
married ina civil ceremony conducted by the Justice of the Peace of Paraaque, Rizal on acquired during the existence of the marriage between ATTY. LUNA and SOLEDAD through
September 10, 1947 and later solemnized in a church ceremony at the Pro-Cathedral in San their joint efforts that since they had no children, SOLEDAD became co-owner of the said
Miguel, Bulacan on September 12, 1948. In ATTY. LUNAs marriage to EUGENIA, they begot properties upon the death of ATTY. LUNA to the extent of pro-indiviso share consisting of
seven (7) children, namely: Regina Maria L. Nadal, Juan Luis Luna, Araceli Victoria L. Arellano, her share in the said properties plus her share in the net estate of ATTY. LUNA which was
Ana Maria L. Tabunda, Gregorio Macario Luna, Carolina Linda L. Tapia, and Cesar Antonio Luna. bequeathed to her in the latters last will and testament; and thatthe heirs of ATTY. LUNA
After almost two (2) decades of marriage, ATTY. LUNA and EUGENIA eventually agreed to live through Gregorio Z. Luna excluded SOLEDAD from her share in the subject properties. The
apart from each other in February 1966 and agreed to separation of property, to which end, complaint prayed that SOLEDAD be declared the owner of the portion of the subject
they entered into a written agreement entitled "AGREEMENT FOR SEPARATION AND properties;that the same be partitioned; that an accounting of the rentals on the condominium
PROPERTY SETTLEMENT" dated November 12, 1975, whereby they agreed to live separately unit pertaining to the share of SOLEDAD be conducted; that a receiver be appointed to
and to dissolve and liquidate their conjugal partnership of property. preserve ad administer the subject properties;and that the heirs of ATTY. LUNA be ordered to
3
On January 12, 1976, ATTY. LUNA obtained a divorce decree of his marriage with EUGENIA pay attorneys feesand costs of the suit to SOLEDAD.
from the Civil and Commercial Chamber of the First Circumscription of the Court of First Ruling of the RTC
Instance of Sto. Domingo, Dominican Republic. Also in Sto.Domingo, Dominican Republic, on On August 27, 2001, the RTC rendered its decision after trial upon the aforementioned
4
the same date, ATTY. LUNA contracted another marriage, this time with SOLEDAD. Thereafter, facts, disposing thusly:
ATTY. LUNA and SOLEDAD returned to the Philippines and lived together as husband and wife WHEREFORE, judgment is rendered as follows:
until 1987. (a) The 24/100 pro-indiviso share in the condominium unit located at the SIXTH
Sometime in 1977, ATTY. LUNA organized a new law firm named: Luna, Puruganan, Sison and FLOOR of the KALAW LEDESMA CONDOMINIUM PROJECT covered by Condominium
Ongkiko (LUPSICON) where ATTY. LUNA was the managing partner. Certificate of Title No. 21761 consisting of FIVE HUNDRED SEVENTEEN (517/100)
On February 14, 1978, LUPSICON through ATTY. LUNA purchased from Tandang Sora SQUARE METERS is adjudged to have been acquired by Juan Lucas Luna through his
Development Corporation the 6th Floor of Kalaw-Ledesma Condominium sole industry;
Project(condominium unit) at Gamboa St., Makati City, consisting of 517.52 square meters, for (b) Plaintiff has no right as owner or under any other concept over the condominium
1,449,056.00, to be paid on installment basis for 36months starting on April 15, 1978. Said unit, hence the entry in Condominium Certificate of Title No. 21761 of the Registry
condominium unit was to be usedas law office of LUPSICON. After full payment, the Deed of of Deeds of Makati with respect to the civil status of Juan Luces Luna should be
Absolute Sale over the condominium unit was executed on July 15, 1983, and CCT No. 4779 changed from "JUAN LUCES LUNA married to Soledad L. Luna" to "JUAN LUCES LUNA
was issued on August 10, 1983, which was registered bearing the following names: married to Eugenia Zaballero Luna";
 (c) Plaintiff is declared to be the owner of the books Corpus Juris, Fletcher on not terminate his prior marriage with EUGENIA because foreign divorce between Filipino
10
Corporation, American Jurisprudence and Federal Supreme Court Reports found in citizens is not recognized in our jurisdiction. x x x
the condominium unit and defendants are ordered to deliver them to the plaintiff as x x x x
soon as appropriate arrangements have been madefor transport and storage. WHEREFORE, premises considered, the assailed August 27, 2001 Decision of the RTC of
No pronouncement as to costs. MakatiCity, Branch 138, is hereby MODIFIEDas follows:
5
SO ORDERED. (a) The 25/100 pro-indiviso share in the condominium unit at the SIXTH FLOOR of the
Decision of the CA KALAW LEDESMA CONDOMINIUM PROJECT covered by Condominium Certificate of
6
Both parties appealed to the CA. Title No. 21761 consisting of FIVE HUNDRED SEVENTEEN (517/100) (sic) SQUARE
On her part, the petitioner assigned the following errors to the RTC, namely: METERS is hereby adjudged to defendants-appellants, the heirs of Juan Luces Luna
I. THE LOWER COURT ERRED IN RULING THAT THE CONDOMINIUM UNIT WAS and Eugenia Zaballero-Luna (first marriage), having been acquired from the sole
ACQUIRED THRU THE SOLE INDUSTRY OF ATTY. JUAN LUCES LUNA; funds and sole industry of Juan Luces Luna while marriage of Juan Luces Luna and
II. THE LOWER COURT ERRED IN RULING THAT PLAINTIFFAPPELLANT DID NOT Eugenia Zaballero-Luna (first marriage) was still subsisting and valid;
CONTRIBUTE MONEY FOR THE ACQUISITION OF THE CONDOMINIUM UNIT; (b) Plaintiff-appellant Soledad Lavadia has no right as owner or under any other
III. THE LOWER COURT ERRED IN GIVING CREDENCE TO PORTIONS OF THE concept over the condominium unit, hence the entry in Condominium Certificate of
TESTIMONY OF GREGORIO LUNA, WHO HAS NO ACTUAL KNOWLEDGE OF THE Title No. 21761 of the Registry of Deeds ofMakati with respect to the civil status of
ACQUISITION OF THE UNIT, BUT IGNORED OTHER PORTIONS OF HIS TESTIMONY Juan Luces Luna should be changed from "JUAN LUCES LUNA married to Soledad L.
FAVORABLE TO THE PLAINTIFF-APPELLANT; Luna" to "JUAN LUCES LUNA married to Eugenia Zaballero Luna";
IV. THE LOWER COURT ERRED IN NOT GIVING SIGNIFICANCE TO THE FACT THAT THE (c) Defendants-appellants, the heirs of Juan Luces Luna and Eugenia Zaballero-
CONJUGAL PARTNERSHIP BETWEEN LUNA AND INTERVENOR-APPELLANT WAS Luna(first marriage) are hereby declared to be the owner of the books Corpus Juris,
ALREADY DISSOLVED AND LIQUIDATED PRIOR TO THE UNION OF PLAINTIFF- Fletcher on Corporation, American Jurisprudence and Federal Supreme Court
APPELLANT AND LUNA; Reports found in the condominium unit.
V. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE ABSENCE OF No pronouncement as to costs.
11
THE DISPOSITION OF THE CONDOMINIUM UNIT IN THE HOLOGRAPHIC WILL OF THE SO ORDERED.
12 13
PLAINTIFF-APPELLANT; On March 13, 2006, the CA denied the petitioners motion for reconsideration.
VI. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE FACTTHAT Issues
THE NAME OF PLAINTIFF-APPELLANT DID NOT APPEAR IN THE DEED OF ABSOLUTE In this appeal, the petitioner avers in her petition for review on certiorarithat:
SALE EXECUTED BY TANDANG SORA DEVELOPMENT CORPORATION OVER THE A. The Honorable Court of Appeals erred in ruling that the Agreement for Separation
CONDOMINIUM UNIT; and Property Settlement executed by Luna and Respondent Eugenia was
VII. THE LOWER COURT ERRED IN RULING THAT NEITHER ARTICLE 148 OF THE unenforceable; hence, their conjugal partnership was not dissolved and liquidated;
FAMILYCODE NOR ARTICLE 144 OF THE CIVIL CODE OF THE PHILIPPINES ARE B. The Honorable Court of Appeals erred in not recognizing the Dominican Republic
APPLICABLE; courts approval of the Agreement;
VIII. THE LOWER COURT ERRED IN NOT RULING THAT THE CAUSE OF ACTION OF THE C. The Honorable Court of Appeals erred in ruling that Petitioner failed to adduce
INTERVENOR-APPELLANT HAS BEEN BARRED BY PESCRIPTION AND LACHES; and sufficient proof of actual contribution to the acquisition of purchase of the
IX. THE LOWER COURT ERRED IN NOT EXPUNGING/DISMISSING THE INTERVENTION subjectcondominium unit; and
7
FOR FAILURE OF INTERVENOR-APPELLANT TO PAY FILING FEE. D. The Honorable Court of Appeals erred in ruling that Petitioner was not entitled to
14
In contrast, the respondents attributedthe following errors to the trial court, to wit: the subject law books.
I. THE LOWER COURT ERRED IN HOLDING THAT CERTAIN FOREIGN LAW BOOKS IN The decisive question to be resolved is who among the contending parties should be entitled
THE LAW OFFICE OF ATTY. LUNA WERE BOUGHT WITH THE USE OF PLAINTIFFS to the 25/100 pro indivisoshare in the condominium unit; and to the law books (i.e., Corpus
MONEY; Juris, Fletcher on Corporation, American Jurisprudence and Federal Supreme Court Reports).
II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF PROVED BY The resolution of the decisive question requires the Court to ascertain the law that should
PREPONDERANCE OF EVIDENCE (HER CLAIM OVER) THE SPECIFIED FOREIGN LAW determine, firstly, whether the divorce between Atty. Luna and Eugenia Zaballero-Luna
BOOKS FOUND IN ATTY. LUNAS LAW OFFICE; and (Eugenia) had validly dissolved the first marriage; and, secondly, whether the second marriage
III. THE LOWER COURT ERRED IN NOT HOLDING THAT, ASSUMING PLAINTIFF PAID entered into by the late Atty. Luna and the petitioner entitled the latter to any rights in
FOR THE SAID FOREIGN LAW BOOKS, THE RIGHT TO RECOVER THEM HAD property. Ruling of the Court
8
PRESCRIBED AND BARRED BY LACHES AND ESTOPPEL. We affirm the modified decision of the CA.
9
On November 11, 2005, the CA promulgated its assailed modified decision, holding and ruling: 1. Atty. Lunas first marriage with Eugenia
EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA until the latters death on July subsisted up to the time of his death
12, 1997. The absolute divorce decree obtained by ATTY. LUNA inthe Dominican Republic did 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 and divide equally, upon the dissolution of the marriage or of the partnership, the net gains or
nationality rule, to the effect that Philippine laws relating to family rights and duties, or to the benefits obtained indiscriminately by either spouse during the marriage.
status, condition and legal capacity of persons were binding upon citizens of the Philippines, The conjugal partnership of gains subsists until terminated for any of various causes of
15
although living abroad. Pursuant to the nationality rule, Philippine laws governed thiscase by termination enumerated in Article 175 of the Civil Code, viz:
virtue of bothAtty. Luna and Eugenio having remained Filipinos until the death of Atty. Luna Article 175. The conjugal partnership of gains terminates:
on July 12, 1997 terminated their marriage. (1) Upon the death of either spouse;
From the time of the celebration ofthe first marriage on September 10, 1947 until the present, (2) When there is a decree of legal separation;
absolute divorce between Filipino spouses has not been recognized in the Philippines. The non- (3) When the marriage is annulled;
recognition of absolute divorce between Filipinos has remained even under the Family (4) In case of judicial separation of property under Article 191.
16 17
Code, even if either or both of the spouses are residing abroad. Indeed, the only two types The mere execution of the Agreement by Atty. Luna and Eugenia did not per sedissolve and
of defective marital unions under our laws have beenthe void and the voidable marriages. As liquidate their conjugal partnership of gains. The approval of the Agreement by a competent
such, the remedies against such defective marriages have been limited to the declaration of court was still required under Article 190 and Article 191 of the Civil Code, as follows:
nullity ofthe marriage and the annulment of the marriage. Article 190. In the absence of an express declaration in the marriage settlements, the
It is true that on January 12, 1976, the Court of First Instance (CFI) of Sto. Domingo in the separation of property between spouses during the marriage shall not take place save in virtue
Dominican Republic issued the Divorce Decree dissolving the first marriage of Atty. Luna and of a judicial order. (1432a)
18
Eugenia. Conformably with the nationality rule, however, the divorce, even if voluntarily Article 191. The husband or the wife may ask for the separation of property, and it shall be
obtained abroad, did not dissolve the marriage between Atty. Luna and Eugenia, which decreed when the spouse of the petitioner has been sentenced to a penalty which carries with
subsisted up to the time of his death on July 12, 1997. This finding conforms to the it civil interdiction, or has been declared absent, or when legal separation has been granted.
19
Constitution, which characterizes marriage as an inviolable social institution, and regards it x x x x
as a special contract of permanent union between a man and a woman for the establishment The husband and the wife may agree upon the dissolution of the conjugal partnership during
20
of a conjugal and family life. The non-recognition of absolute divorce in the Philippines is a the marriage, subject to judicial approval. All the creditors of the husband and of the wife, as
manifestation of the respect for the sanctity of the marital union especially among Filipino well as of the conjugal partnership shall be notified of any petition for judicialapproval or the
citizens. It affirms that the extinguishment of a valid marriage must be grounded only upon the voluntary dissolution of the conjugal partnership, so that any such creditors may appear atthe
death of either spouse, or upon a ground expressly provided bylaw. For as long as this public hearing to safeguard his interests. Upon approval of the petition for dissolution of the conjugal
policy on marriage between Filipinos exists, no divorce decree dissolving the marriage between partnership, the court shall take such measures as may protect the creditors and other third
them can ever be given legal or judicial recognition and enforcement in this jurisdiction. persons.
2. The Agreement for Separation and Property Settlement After dissolution of the conjugal partnership, the provisions of articles 214 and 215 shall apply.
was void for lack of court approval The provisions of this Code concerning the effect of partition stated in articles 498 to 501 shall
The petitioner insists that the Agreement for Separation and Property Settlement (Agreement) be applicable. (1433a)
that the late Atty. Luna and Eugenia had entered into and executed in connection with the But was not the approval of the Agreement by the CFI of Sto. Domingo in the Dominican
divorce proceedings before the CFI of Sto. Domingo in the Dominican Republic to dissolve and Republic sufficient in dissolving and liquidating the conjugal partnership of gains between the
liquidate their conjugal partnership was enforceable against Eugenia. Hence, the CA late Atty. Luna and Eugenia?
committed reversible error in decreeing otherwise. The query is answered in the negative. There is no question that the approval took place only
The insistence of the petitioner was unwarranted. as an incident ofthe action for divorce instituted by Atty. Luna and Eugenia, for, indeed, the
Considering that Atty. Luna and Eugenia had not entered into any marriage settlement prior justifications for their execution of the Agreement were identical to the grounds raised in the
21
to their marriage on September 10, 1947, the system of relative community or conjugal action for divorce. With the divorce not being itself valid and enforceable under Philippine
partnership of gains governed their property relations. This is because the Spanish Civil Code, law for being contrary to Philippine public policy and public law, the approval of the Agreement
the law then in force at the time of their marriage, did not specify the property regime of the was not also legally valid and enforceable under Philippine law. Consequently, the conjugal
spouses in the event that they had not entered into any marriage settlement before or at the partnership of gains of Atty. Luna and Eugenia subsisted in the lifetime of their marriage.
time of the marriage. Article 119 of the Civil Codeclearly so provides, to wit: 3. Atty. Lunas marriage with Soledad, being bigamous,
Article 119. The future spouses may in the marriage settlements agree upon absolute or was void; properties acquired during their marriage
relative community of property, or upon complete separation of property, or upon any other were governed by the rules on co-ownership
regime. In the absence of marriage settlements, or when the same are void, the system of What law governed the property relations of the second marriage between Atty. Luna and
relative community or conjugal partnership of gains as established in this Code, shall govern Soledad?
the property relations between husband and wife. The CA expressly declared that Atty. Lunas subsequent marriage to Soledad on January 12,
22
Article 142 of the Civil Codehas defined a conjugal partnership of gains thusly: 1976 was void for being bigamous, on the ground that the marriage between Atty. Luna and
Article 142. By means of the conjugal partnership of gains the husband and wife place in a Eugenia had not been dissolved by the Divorce Decree rendered by the CFI of Sto. Domingo in
common fund the fruits of their separate property and the income from their work or industry, 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 had the financial capacity to make the contributions and purchases; and that Atty. Luna could
of the Civil Codeclearly states: not acquire the properties on his own due to the meagerness of the income derived from his
Article 71. All marriages performed outside the Philippines in accordance with the laws in force law practice.
in the country where they were performed, and valid there as such, shall also be valid in this Did the petitioner discharge her burden of proof on the co-ownership?
country, except bigamous, polygamous, or incestuous marriages as determined by Philippine In resolving the question, the CA entirely debunked the petitioners assertions on her actual
law. contributions through the following findings and conclusions, namely:
Bigamy is an illegal marriage committed by contracting a second or subsequent marriage SOLEDAD was not able to prove by preponderance of evidence that her own independent
before the first marriage has been legally dissolved, or before the absent spouse has been funds were used to buy the law office condominium and the law books subject matter in
23
declared presumptively dead by means of a judgment rendered in the proper proceedings. A contentionin this case proof that was required for Article 144 of the New Civil Code and
24
bigamous marriage is considered void ab initio. Article 148 of the Family Code to apply as to cases where properties were acquired by a man
Due to the second marriage between Atty. Luna and the petitioner being void ab initioby virtue and a woman living together as husband and wife but not married, or under a marriage which
of its being bigamous, the properties acquired during the bigamous marriage were governed was void ab initio. Under Article 144 of the New Civil Code, the rules on co-ownership would
by the rules on co-ownership, conformably with Article 144 of the Civil Code, viz: govern. But this was not readily applicable to many situations and thus it created a void at first
Article 144. When a man and a woman live together as husband and wife, but they are not because it applied only if the parties were not in any way incapacitated or were without
married, ortheir marriage is void from the beginning, the property acquired by eitheror both impediment to marry each other (for it would be absurd to create a co-ownership where there
of them through their work or industry or their wages and salaries shall be governed by the still exists a prior conjugal partnership or absolute community between the man and his lawful
rules on co-ownership.(n) wife). This void was filled upon adoption of the Family Code. Article 148 provided that: only
In such a situation, whoever alleges co-ownership carried the burden of proof to confirm such the property acquired by both of the parties through their actual joint contribution of money,
fact.1wphi1 To establish co-ownership, therefore, it became imperative for the petitioner to property or industry shall be owned in common and in proportion to their respective
offer proof of her actual contributions in the acquisition of property. Her mere allegation of contributions. Such contributions and corresponding shares were prima faciepresumed to be
co-ownership, without sufficient and competent evidence, would warrant no relief in her equal. However, for this presumption to arise, proof of actual contribution was required. The
25
favor. As the Court explained in Saguid v. Court of Appeals: same rule and presumption was to apply to joint deposits of money and evidence of credit. If
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co- one of the parties was validly married to another, his or her share in the co-ownership accrued
ownership ofproperties acquired by the parties to a bigamous marriage and an adulterous to the absolute community or conjugal partnership existing in such valid marriage. If the party
relationship, respectively, we ruled that proof of actual contribution in the acquisition of the who acted in bad faith was not validly married to another, his or her share shall be forfeited in
property is essential. The claim of co-ownership of the petitioners therein who were parties to the manner provided in the last paragraph of the Article 147. The rules on forfeiture applied
the bigamous and adulterousunion is without basis because they failed to substantiate their even if both parties were in bad faith. Co-ownership was the exception while conjugal
allegation that they contributed money in the purchase of the disputed properties. Also in partnership of gains was the strict rule whereby marriage was an inviolable social institution
Adriano v. Court of Appeals, we ruled that the fact that the controverted property was titled and divorce decrees are not recognized in the Philippines, as was held by the Supreme Court
in the name of the parties to an adulterous relationship is not sufficient proof of coownership in the case of Tenchavez vs. Escao, G.R. No. L-19671, November 29, 1965, 15 SCRA 355, thus:
absent evidence of actual contribution in the acquisition of the property. x x x x
As in other civil cases, the burden of proof rests upon the party who, as determined by the As to the 25/100pro-indivisoshare of ATTY. LUNA in the condominium unit, SOLEDAD failed to
pleadings or the nature of the case, asserts an affirmative issue. Contentions must be proved prove that she made an actual contribution to purchase the said property. She failed to
by competent evidence and reliance must be had on the strength of the partys own evidence establish that the four (4) checks that she presented were indeed used for the acquisition of
and not upon the weakness of the opponents defense. This applies with more vigor where, as the share of ATTY. LUNA in the condominium unit. This was aptly explained in the Decision of
in the instant case, the plaintiff was allowed to present evidence ex parte.1wphi1 The plaintiff the trial court, viz.:
is not automatically entitled to the relief prayed for. The law gives the defendantsome measure "x x x The first check, Exhibit "M" for 55,000.00 payable to Atty. Teresita Cruz Sison was issued
of protection as the plaintiff must still prove the allegations in the complaint. Favorable relief on January 27, 1977, which was thirteen (13) months before the Memorandum of Agreement,
can be granted only after the court isconvinced that the facts proven by the plaintiff warrant Exhibit "7" was signed. Another check issued on April 29, 1978 in the amount of 97,588.89,
such relief. Indeed, the party alleging a fact has the burden of proving it and a mereallegation Exhibit "P" was payable to Banco Filipino. According to the plaintiff, thiswas in payment of the
26
is not evidence. loan of Atty. Luna. The third check which was for 49,236.00 payable to PREMEX was dated
The petitioner asserts herein that she sufficiently proved her actual contributions in the May 19, 1979, also for payment of the loan of Atty. Luna. The fourth check, Exhibit "M", for
purchase of the condominium unit in the aggregate amount of at least 306,572.00, consisting 4,072.00 was dated December 17, 1980. None of the foregoing prove that the amounts
in direct contributions of 159,072.00, and in repaying the loans Atty. Luna had obtained from delivered by plaintiff to the payees were for the acquisition of the subject condominium unit.
27
Premex Financing and Banco Filipino totaling 146,825.30; and that such aggregate The connection was simply not established. x x x"
contributions of 306,572.00 corresponded to almost the entire share of Atty. Luna in the SOLEDADs claim that she made a cash contribution of 100,000.00 is unsubstantiated. Clearly,
purchase of the condominium unit amounting to 362,264.00 of the units purchase price of there is no basis for SOLEDADs claim of co-ownership over the 25/100 portion of the
28
1,449,056.00. The petitioner further asserts that the lawbooks were paid for solely out of condominium unit and the trial court correctly found that the same was acquired through the
29
her personal funds, proof of which Atty. Luna had even sent her a "thank you" note; that she 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
30
headed.
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
31
her burden of proof. Her mere allegations on her contributions, not being evidence, did not
serve the purpose. In contrast, given the subsistence of the first marriage between Atty. Luna
and Eugenia, the presumption that Atty. Luna acquired the properties out of his own personal
funds and effort remained. It should then be justly concluded that the properties in litislegally
pertained to their conjugal partnership of gains as of the time of his death. Consequently, the
sole ownership of the 25/100 pro indivisoshare of Atty. Luna in the condominium unit, and of
the lawbooks pertained to the respondents as the lawful heirs of Atty. Luna.
WHEREFORE, the Court AFFIRMS the decision promulgated on November 11, 2005; and
ORDERS the petitioner to pay the costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice















 [13] [14]
BAYOT v CA 378. Rebecca, however, later moved and secured approval of the motion to withdraw the
VELASCO, JR., J.: petition.

[15]
The Case On May 29, 1996, Rebecca executed an Affidavit of Acknowledgment stating
under oath that she is an American citizen; that, since 1993, she and Vicente have been living
Before us are these two petitions interposed by petitioner Maria Rebecca separately; and that she is carrying a child not of Vicente.
Makapugay Bayot impugning certain issuances handed out by the Court of Appeals (CA) in CA-
G.R. SP No. 68187. On March 21, 2001, Rebecca filed another petition, this time before the Muntinlupa
[16]
City RTC, for declaration of absolute nullity of marriage on the ground of Vicentes alleged
[1]
In the first, a petition for certiorari under Rule 65 and docketed as G.R. No. psychological incapacity. Docketed as Civil Case No. 01-094 and entitled as Maria Rebecca
[2]
155635, Rebecca assails and seeks to nullify the April 30, 2002 Resolution of the CA, as Makapugay Bayot v. Vicente Madrigal Bayot, the petition was eventually raffled to Branch 256
[3]
reiterated in another Resolution of September 2, 2002, granting a writ of preliminary of the court. In it, Rebecca also sought the dissolution of the conjugal partnership of gains with
injunction in favor of private respondent Vicente Madrigal Bayot staving off the trial courts application for support pendente lite for her and Alix. Rebecca also prayed that Vicente be
grant of support pendente lite to Rebecca. ordered to pay a permanent monthly support for their daughter Alix in the amount of PhP
220,000.
[4]
The second, a petition for review under Rule 45, docketed G.R. No. 163979, assails
[5] [17]
the March 25, 2004 Decision of the CA, (1) dismissing Civil Case No. 01-094, a suit On June 8, 2001, Vicente filed a Motion to Dismiss on, inter alia, the grounds of
for declaration of absolute nullity of marriage with application for support commenced by lack of cause of action and that the petition is barred by the prior judgment of divorce. Earlier,
Rebecca against Vicente before the Regional Trial Court (RTC) in Muntinlupa City; and (2) on June 5, 2001, Rebecca filed and moved for the allowance of her application for
setting aside certain orders and a resolution issued by the RTC in the said case. 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.
The Facts
Meanwhile, Vicente, who had in the interim contracted another marriage, and
Vicente and Rebecca were married on April 20, 1979 in Sanctuario de San Jose, Rebecca commenced several criminal complaints against each other. Specifically, Vicente filed
[6]
Greenhills, Mandaluyong City. On its face, the Marriage Certificate identified Rebecca, then adultery and perjury complaints against Rebecca. Rebecca, on the other hand, charged Vicente
[7]
26 years old, to be an American citizen born in Agaa, Guam, USA to Cesar Tanchiong with bigamy and concubinage.
Makapugay, American, and Helen Corn Makapugay, American.
Ruling of the RTC on the Motion to Dismiss
On November 27, 1982 in San Francisco, California, Rebecca gave birth to Marie and Motion for Support Pendente Lite
Josephine Alexandra or Alix. From then on, Vicente and Rebeccas marital relationship seemed
[18]
to have soured as the latter, sometime in 1996, initiated divorce proceedings in the Dominican On August 8, 2001, the RTC issued an Order denying Vicentes motion to dismiss
Republic. Before the Court of the First Instance of the Judicial District of Santo Domingo, Civil Case No. 01-094 and granting Rebeccas application for support pendente lite, disposing as
Rebecca personally appeared, while Vicente was duly represented by counsel. On February 22, follows:
[8]
1996, the Dominican court issued Civil Decree No. 362/96, ordering the dissolution of the
couples marriage and leaving them to remarry after completing the legal requirements, but Wherefore, premises considered, the Motion to Dismiss filed by
giving them joint custody and guardianship over Alix. Over a year later, the same court would the respondent is DENIED. Petitioners Application in Support of the Motion
[9]
issue Civil Decree No. 406/97, settling the couples property relations pursuant to an for Support Pendente Lite is hereby GRANTED. Respondent is hereby
[10]
Agreement they executed on December 14, 1996. Said agreement specifically stated that ordered to remit the amount of TWO HUNDRED AND TWENTY THOUSAND
the conjugal property which they acquired during their marriage consist[s] only of the real PESOS (Php 220,000.00) a month to Petitioner as support for the duration
property and all the improvements and personal properties therein contained at 502 Acacia of the proceedings relative to the instant Petition.
[11]
Avenue, Alabang, Muntinlupa.
[19]
SO ORDERED.
Meanwhile, on March 14, 1996, or less than a month from the issuance of Civil
[12]
Decree No. 362/96, Rebecca filed with the Makati City RTC a petition dated January 26,
1996, with attachments, for declaration of nullity of marriage, docketed as Civil Case No. 96-

 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 To the CA, the RTC ought to have granted Vicentes motion to dismiss on the basis of
taken up during actual trial. As to the grant of support pendente lite, the trial court held that a the following premises:
mere allegation of adultery against Rebecca does not operate to preclude her from receiving
legal support. (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
[20] [27]
Following the denial of his motion for reconsideration of the above August 8, cause of action. Applying said rule in the light of the essential elements of a cause of
[28]
2001 RTC order, Vicente went to the CA on a petition for certiorari, with a prayer for the action, Rebecca had no cause of action against Vicente for declaration of nullity of marriage.
[21]
issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction. His
petition was docketed as CA-G.R. SP No. 68187. (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
Grant of Writ of Preliminary Injunction by the CA 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 Vicentes capacity to contract
[22]
On January 9, 2002, the CA issued the desired TRO. On April 30, 2002, the another marriage.
appellate court granted, via a Resolution, the issuance of a writ of preliminary injunction, the
decretal portion of which reads: (3) Rebeccas 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
IN VIEW OF ALL THE FOREGOING, pending final resolution of the Filipino citizenship was also doubtful as it was not shown that her father, at the time of her
petition at bar, let the Writ of Preliminary Injunction be ISSUED in this case, birth, was still a Filipino citizen. The Certification of Birth of Rebecca issued by the Government
enjoining the respondent court from implementing the assailed Omnibus of Guam also did not indicate the nationality of her father.
Order dated August 8, 2001 and the Order dated November 20, 2001, and (4) Rebecca was estopped from denying her American citizenship, having professed
from conducting further proceedings in Civil Case No. 01-094, upon the to have that nationality status and having made representations to that effect during
posting of an injunction bond in the amount of P250,000.00. 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
[23]
SO ORDERED. 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.

[24]
Rebecca moved but was denied reconsideration of the aforementioned April 30, (5) Assuming that she had dual citizenship, being born of a purportedly Filipino father
[25]
2002 resolution. In the meantime, on May 20, 2002, the preliminary injunctive writ was in Guam, USA which follows the jus soli principle, Rebeccas representation and assertion about
issued. Rebecca also moved for reconsideration of this issuance, but the CA, by Resolution being an American citizen when she secured her foreign divorce precluded her from denying
dated September 2, 2002, denied her motion. her citizenship and impugning the validity of the divorce.

The adverted CA resolutions of April 30, 2002 and September 2, 2002 are presently Rebecca seasonably filed a motion for reconsideration of the above Decision, but this
[29]
being assailed in Rebeccas petition for certiorari, docketed under G.R. No. 155635. recourse was denied in the equally assailed June 4, 2004 Resolution. Hence, Rebeccas
Petition for Review on Certiorari under Rule 45, docketed under G.R. No. 163979.
Ruling of the CA
The Issues
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 In G.R. No. 155635, Rebecca raises four (4) assignments of errors as grounds for the
relation to the case. The fallo of the presently assailed CA Decision reads: allowance of her petition, all of which converged on the proposition that the CA erred in
enjoining the implementation of the RTCs orders which would have entitled her to support
IN VIEW OF THE FOREGOING, the petition is GRANTED. The pending final resolution of Civil Case No. 01-094.
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 In G.R. No. 163979, Rebecca urges the reversal of the assailed CA decision submitting as
Case No. 01-094, for failure to state a cause of action. No pronouncement follows:
as to costs. I

[26]
SO ORDERED. THE COURT OF APPEALS GRAVELY ERRED IN NOT MENTIONING AND NOT
TAKING INTO CONSIDERATION IN ITS APPRECIATION OF THE FACTS THE
 FACT OF PETITIONERS FILIPINO CITIZENSHIP AS CATEGORICALLY STATED the principle of jus soli is followed in this American territory granting American citizenship to
AND ALLEGED IN HER PETITION BEFORE THE COURT A QUO. those who are born there; and (3) she was, and may still be, a holder of an American
[33]
passport.
II
And as aptly found by the CA, Rebecca had consistently professed, asserted, and
THE COURT OF APPEALS GRAVELY ERRED IN RELYING ONLY ON ANNEXES represented herself as an American citizen, particularly: (1) during her marriage as shown in
TO THE PETITION IN RESOLVING THE MATTERS BROUGHT BEFORE IT. the marriage certificate; (2) in the birth certificate of Alix; and (3) when she secured the divorce
[34]
from the Dominican Republic. Mention may be made of the Affidavit of Acknowledgment in
III which she stated being an American citizen.

THE COURT OF APPEALS GRAVELY ERRED IN FAILING TO CONSIDER THAT It is true that Rebecca had been issued by the Bureau of Immigration (Bureau) of
RESPONDENT IS ESTOPPED FROM CLAIMING THAT HIS MARRIAGE TO Identification (ID) Certificate No. RC 9778 and a Philippine Passport. On its face, ID Certificate
PETITIONER HAD ALREADY BEEN DISSOLVED BY VIRTUE OF HIS No. RC 9778 would tend to show that she has indeed been recognized as a Filipino citizen. It
SUBSEQUENT AND CONCURRENT ACTS. cannot be over-emphasized, however, that such recognition was given only on June 8,
2000 upon the affirmation by the Secretary of Justice of Rebeccas recognition pursuant to the
IV Order of Recognition issued by Bureau Associate Commissioner Edgar L. Mendoza.

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THERE WAS For clarity, we reproduce in full the contents of ID Certificate No. RC 9778:
ABUSE OF DISCRETION ON THE PART OF THE TRIAL COURT, MUCH LESS A
[30]
GRAVE ABUSE. To Whom It May Concern:

We shall first address the petition in G.R. No. 163979, its outcome being This is to certify that *MARIA REBECCA MAKAPUGAY
determinative of the success or failure of the petition in G.R. No. 155635. BAYOT* whose photograph and thumbprints are affixed hereto and
partially covered by the seal of this Office, and whose other particulars are
Three legal premises need to be underscored at the outset. First, a divorce obtained as follows:
abroad by an alien married to a Philippine national may be recognized in the Philippines,
[31]
provided the decree of divorce is valid according to the national law of the foreigner. Second, Place of Birth: Guam, USA Date of Birth: March 5, 1953
the reckoning point is not the citizenship of the divorcing parties at birth or at the time of Sex: female Civil Status: married Color of Hair: brown
marriage, but their citizenship at the time a valid divorce is obtained abroad. And third, an Color of Eyes: brown Distinguishing marks on face: none
absolute divorce secured by a Filipino married to another Filipino is contrary to our concept of
[32]
public policy and morality and shall not be recognized in this jurisdiction. 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
Given the foregoing perspective, the determinative issue tendered in G.R. No. Recognition JBL 95-213 signed by Associate Commissioner Jose B. Lopez
155635, i.e., the propriety of the granting of the motion to dismiss by the appellate court, dated October 6, 1995, and duly affirmed by Secretary of Justice Artemio
st
resolves itself into the questions of: first, whether petitioner Rebecca was a Filipino citizen at G. Tuquero in his 1 Indorsement dated June 8, 2000.
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 Issued for identification purposes only. NOT VALID for travel
effects? purposes.

th
The Courts Ruling Given under my hand and seal this 11 day of October, 1995

The petition is bereft of merit. (SGD) EDGAR L. MENDOZA
ASSO. COMMISSIONER
Rebecca an American Citizen in the Purview of This Case
Official Receipt No. 5939988
There can be no serious dispute that Rebecca, at the time she applied for and issued at Manila
obtained her divorce from Vicente, was an American citizen and remains to be one, absent dated Oct. 10, 1995 for P 2,000
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)
 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
st
Recognition on October 6, 1995; (2) the 1 Indorsement of Secretary of Justice Artemio G.
Tuquero affirming Rebeccas recognition as a Filipino citizen was issued on June 8, 2000 or When Divorce Was Granted Rebecca, She Was not a
almost five years from the date of the order of recognition; and (3) ID Certificate No. RC 9778 Filipino Citizen and Was not Yet Recognized as One
was purportedly issued on October 11, 1995 after the payment of the PhP 2,000 fee
on October 10, 1995 per OR No. 5939988. 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
What begs the question is, however, how the above certificate could have been was not yet recognized as, a Filipino citizen when she secured the February 22, 1996 judgment
issued by the Bureau on October 11, 1995 when the Secretary of Justice issued the required of divorce from the Dominican Republic.
affirmation only on June 8, 2000. No explanation was given for this patent aberration. There
st
seems to be no error with the date of the issuance of the 1 Indorsement by Secretary of Justice The Court notes and at this juncture wishes to point out that Rebecca voluntarily
Tuquero as this Court takes judicial notice that he was the Secretary of Justice from February withdrew her original petition for declaration of nullity (Civil Case No. 96-378 of the Makati
16, 2000 to January 22, 2001. There is, thus, a strong valid reason to conclude that the City RTC) obviously because she could not show proof of her alleged Filipino citizenship then.
certificate in question must be spurious. 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,
Under extant immigration rules, applications for recognition of Filipino citizenship on February 22, 1996, the foreign divorce decree in question. Consequently, there was no
require the affirmation by the DOJ of the Order of Recognition issued by the Bureau. Under mention about said divorce in the petition. Significantly, the only documents appended as
Executive Order No. 292, also known as the 1987 Administrative Code, specifically in its Title annexes to said original petition were:the Vicente-Rebecca Marriage Contract (Annex A) and
III, Chapter 1, Sec. 3(6), it is the DOJ which is tasked to provide immigration and naturalization Birth Certificate of Alix (Annex B). If indeed ID Certificate No. RC 9778 from the Bureau was
regulatory services and implement the laws governing citizenship and the admission and stay truly issued on October 11, 1995, is it not but logical to expect that this piece of document be
of aliens. Thus, the confirmation by the DOJ of any Order of Recognition for Filipino citizenship appended to form part of the petition, the question of her citizenship being crucial to her case?
issued by the Bureau is required.
As may be noted, the petition for declaration of absolute nullity of marriage under
[35]
Pertinently, Bureau Law Instruction No. RBR-99-002 on Recognition as a Filipino Civil Case No. 01-094, like the withdrawn first petition, also did not have the ID Certificate from
Citizen clearly provides: 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
[36]
The Bureau [of Immigration] through its Records Section shall Opposition (To Respondents Motion to Dismiss dated 31 May 2001) did Rebecca attach as
automatically furnish the Department of Justice an official copy of its Order Annex C ID Certificate No. RC 9778.
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 At any rate, the CA was correct in holding that the RTC had sufficient basis to dismiss
pursuant to Executive Order No. 292. No Identification Certificate shall be the petition for declaration of absolute nullity of marriage as said petition, taken together with
issued before the date of confirmation by the Secretary of Justice and any Vicentes motion to dismiss and Rebeccas opposition to motion, with their respective
Identification Certificate issued by the Bureau pursuant to an Order of attachments, clearly made out a case of lack of cause of action, which we will expound later.
Recognition shall prominently indicate thereon the date of confirmation
by the Secretary of Justice. (Emphasis ours.) Validity of Divorce Decree

Going to the second core issue, we find Civil Decree Nos. 362/96 and 406/97 valid.
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 First, at the time of the divorce, as above elucidated, Rebecca was still to be
st
1 Indorsement confirming the order of recognition. It may be too much to attribute to recognized, assuming for argument that she was in fact later recognized, as a Filipino citizen,
coincidence this unusual sequence of close events which, to us, clearly suggests that prior to but represented herself in public documents as an American citizen. At the very least, she
said affirmation or confirmation, Rebecca was not yet recognized as a Filipino citizen. The same chose, before, during, and shortly after her divorce, her American citizenship to govern her
sequence would also imply that ID Certificate No. RC 9778 could not have been issued in 1995, marital relationship. Second, she secured personally said divorce as an American citizen, as is
as Bureau Law Instruction No. RBR-99-002 mandates that no identification certificate shall be evident in the text of the Civil Decrees, which pertinently declared:
issued before the date of confirmation by the Secretary of Justice. Logically, therefore, the
affirmation or confirmation of Rebeccas recognition as a Filipino citizen through the IN THIS ACTION FOR DIVORCE in which the parties expressly submit to the
st
1 Indorsement issued only on June 8, 2000 by Secretary of Justice Tuquero corresponds to jurisdiction of this court, by reason of the existing incompatibility of
the eventual issuance of Rebeccas passport a few days later, or on June 13, 2000 to be exact. temperaments x x x. The parties MARIA REBECCA M. BAYOT, of United
 States nationality, 42 years of age, married, domiciled and residing at 502 (b) In case of a judgment against a person, the judgment is
Acacia Ave., Ayala Alabang, Muntin Lupa, Philippines, x x x, who personally presumptive evidence of a right as between the parties and their
appeared before this court, accompanied by DR. JUAN ESTEBAN OLIVERO, successors in interest by a subsequent title; but the judgment
attorney, x x x and VICENTE MADRIGAL BAYOT, of Philippine nationality, of may be repelled by evidence of a want of jurisdiction, want of
43 years of age, married and domiciled and residing at 502 Acacia Ave., notice to the party, collusion, fraud, or clear mistake of law or
Ayala Alabang, Muntin Lupa, Filipino, appeared before this court fact.
represented by DR. ALEJANDRO TORRENS, attorney, x x x, revalidated by
th
special power of attorney given the 19 of February of 1996, signed before It is essential that there should be an opportunity to challenge
the Notary Public Enrico L. Espanol of the City of Manila, duly legalized and the foreign judgment, in order for the court in this jurisdiction to properly
[37]
authorizing him to subscribe all the acts concerning this case. (Emphasis determine its efficacy. In this jurisdiction, our Rules of Court clearly provide
ours.) that with respect to actions in personam, as distinguished from actions in
rem, a foreign judgment merely constitutes prima facieevidence of the
justness of the claim of a party and, as such, is subject to proof to the
[41]
contrary.
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 As the records show, Rebecca, assisted by counsel, personally secured the foreign
[38]
Vicente and Rebecca were properly adjudicated through their Agreement executed divorce while Vicente was duly represented by his counsel, a certain Dr. Alejandro Torrens, in
on December 14, 1996 after Civil Decree No. 362/96 was rendered on February 22, 1996, and said proceedings. As things stand, the foreign divorce decrees rendered and issued by
duly affirmed by Civil Decree No. 406/97 issued on March 4, 1997. Veritably, the foreign the Dominican Republic court are valid and, consequently, bind both Rebecca and Vicente.
divorce secured by Rebecca was valid.
Finally, the fact that Rebecca may have been duly recognized as a Filipino citizen by
To be sure, the Court has taken stock of the holding in Garcia v. Recio that a foreign force of the June 8, 2000 affirmation by Secretary of Justice Tuquero of the October 6, 1995
divorce can be recognized here, provided the divorce decree is proven as a fact and as valid Bureau Order of Recognition will not, standing alone, work to nullify or invalidate the foreign
[39]
under the national law of the alien spouse. Be this as it may, the fact that Rebecca was divorce secured by Rebecca as an American citizen on February 22, 1996. For as we stressed
clearly an American citizen when she secured the divorce and that divorce is recognized and at the outset, in determining whether or not a divorce secured abroad would come within the
[40]
allowed in any of the States of the Union, the presentation of a copy of foreign divorce pale of the countrys policy against absolute divorce, the reckoning point is the citizenship of
[42]
decree duly authenticated by the foreign court issuing said decree is, as here, sufficient. the parties at the time a valid divorce is obtained.

It bears to stress that the existence of the divorce decree has not been denied, but Legal Effects of the Valid Divorce
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 Given the validity and efficacy of divorce secured by Rebecca, the same shall be given
mistake of fact or law, albeit both appeared to have the opportunity to do so. The same holds a res judicata effect in this jurisdiction. As an obvious result of the divorce decree obtained,
true with respect to the decree of partition of their conjugal property. As this Court explained the marital vinculum between Rebecca and Vicente is considered severed; they are both freed
in Roehr v. Rodriguez: 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
Before our courts can give the effect of res judicata to a foreign judgment between MARIA REBECCA M. BAYOT and VICENTE MADRIGAL BAYOT is hereby dissolved x x
[43]
[of divorce] x x x, it must be shown that the parties opposed to the x leaving them free to remarry after completing the legal requirements.
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, Consequent to the dissolution of the marriage, Vicente could no longer be subject to
1997 Rules of Civil Procedure), to wit: a husbands obligation under the Civil Code. He cannot, for instance, be obliged to live with,
[44]
observe respect and fidelity, and render support to Rebecca.
SEC. 50. Effect of foreign judgments.The effect of a
judgment of a tribunal of a foreign country, having jurisdiction to The divorce decree in question also brings into play the second paragraph of Art. 26
pronounce the judgment is as follows: of the Family Code, providing as follows:

Art. 26. x x x x
(a) In case of a judgment upon a specific thing, the judgment
is conclusive upon the title to the thing; 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 Upon the foregoing disquisitions, it is abundantly clear to the Court that Rebecca
shall likewise have capacity to remarry under Philippine law. (As amended lacks, under the premises, cause of action. Philippine Bank of Communications v. Trazo explains
by E.O. 227) the concept and elements of a cause of action, thus:

A cause of action is an act or omission of one party in violation
In Republic v. Orbecido III, we spelled out the twin elements for the applicability of of the legal right of the other. A motion to dismiss based on lack
the second paragraph of Art. 26, thus: of cause of action hypothetically admits the truth of the allegations in the
x x x [W]e state the twin elements for the application of complaint. The allegations in a complaint are sufficient to constitute
Paragraph 2 of Article 26 as follows: a cause of action against the defendants if, hypothetically admitting the
1. There is a valid marriage that has been celebrated between facts alleged, the court can render a valid judgment upon the same in
a Filipino citizen and a foreigner; and accordance with the prayer therein. A cause of action exists if the
2. A valid divorce is obtained abroad by the alien spouse following elements are present, namely: (1) a right in favor of the plaintiff
capacitating him or her to remarry. by whatever means and under whatever law it arises or is created; (2) an
The reckoning point is not the citizenship of the parties at the obligation on the part of the named defendant to respect or not to violate
time of the celebration of the marriage, but their citizenship at the time a such right; and (3) an act or omission on the part of such defendant
valid divorce is obtained abroad by the alien spouse capacitating the latter violative of the right of the plaintiff or constituting a breach of the
[45]
to remarry. obligation of the defendant to the plaintiff for which the latter may
[49]
maintain an action for recovery of damages.
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. One thing is clear from a perusal of Rebeccas underlying petition before the RTC,
Vicentes motion to dismiss and Rebeccas opposition thereof, with the documentary evidence
Not to be overlooked of course is the fact that Civil Decree No. 406/97 and the attached therein: The petitioner lacks a cause of action for declaration of nullity of marriage, a
Agreement executed on December 14, 1996 bind both Rebecca and Vicente as regards their suit which presupposes the existence of a marriage.
property relations. The Agreement provided that the ex-couples conjugal property consisted
only their family home, thus: 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
[50]
9. That the parties stipulate that the conjugal property which ambiguous, indefinite, or uncertain. With the valid foreign divorce secured by Rebecca,
they acquired during their marriage consists only of the real property and there is no more marital tie binding her to Vicente.There is in fine no more marriage to be
all the improvements and personal properties therein contained at 502 dissolved or nullified.
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, The Court to be sure does not lose sight of the legal obligation of Vicente and
[46]
x x x. (Emphasis ours.) 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
This property settlement embodied in the Agreement was affirmed by the divorce age on November 27, 2000, or four months before her mother initiated her petition for
court which, per its second divorce decree, Civil Decree No. 406/97 dated March 4, 1997, declaration of nullity. She would now be 26 years old. Hence, the issue of back support, which
th
ordered that, THIRD: That the agreement entered into between the parties dated 14 day of allegedly had been partly shouldered by Rebecca, is best litigated in a separate civil action for
December 1996 in Makati City, Philippines shall survive in this Judgment of divorce by reimbursement.In this way, the actual figure for the support of Alix can be proved as well as
reference but not merged and that the parties are hereby ordered and directed to comply with the earning capacity of both Vicente and Rebecca. The trial court can thus determine what
[47]
each and every provision of said agreement. Vicente owes, if any, considering that support includes provisions until the child concerned
shall have finished her education.
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 Upon the foregoing considerations, the Court no longer need to delve into the issue
[48]
and Vicentes conjugal property was not limited to their family home in Ayala Alabang. tendered in G.R. No. 155635, that is, Rebeccas 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.
No Cause of Action in the Petition for Nullity of Marriage 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.

SO ORDERED.

PRESBITERO J. VELASCO, JR.
Associate Justice

WE CONCUR:



































G.R. No. 205487 November 12, 2014 pay, he executed a Dacion en Pagodated February 2, 2003, in favorof Orion covering Unit No.
ORION SAVINGS BANK, Petitioner, 536. Orion, however, did not register the Dacion en Pago, until October 15, 2003.
vs. On October 28, 2003, Suzuki executed an Affidavit of Adverse Claim over Parking Slot No. 42
SHIGEKANE SUZUKI, Respondent. (covered by CCT No. 9118) and this was annotated as Entry No. 4712/C-No. 9118 in the parking
D E C I S I O N lots title.
BRION, J.: On January 27, 2004, Suzuki filed a complaint for specific performance and damages against
1
Before us is the Petition for Review on Certiorari filed by petitioner Orion Savings Bank (Orion) Kang and Orion. At the pre-trial, the parties made the following admissions and stipulations:
2
under Rule 45 of the Rules of Court, assailing the decision dated August 23, 2012 and the 1. That as of August 26, 2003, Kang was the registered owner of Unit No. 536 and
3
resolution dated January 25, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 94104. Parking Slot No. 42;
The Factual Antecedents 2. That the mortgage in favor ofOrion supposedly executed by Kang, with Entry No.
In the first week of August 2003, respondent Shigekane Suzuki (Suzuki), a Japanese national, 66432/C-10186 dated February 2, 1999, was subsequently cancelled by Entry No.
met with Ms. Helen Soneja (Soneja) to inquire about a condominium unit and a parking slot at 73232/T No. 10186 dated June 16, 2000;
Cityland Pioneer, Mandaluyong City, allegedly owned by Yung Sam Kang (Kang), a Korean 3. That the alleged Dacion en Pagowas never annotated in CCT Nos. 18186 and 9118;
national and a Special Resident Retiree's Visa (SRRV) holder. 4. That Orion only paid the appropriate capital gains tax and the documentary stamp
At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by Condominium Certificate tax for the alleged Dacion en Pago on October 15, 2003;
4 5
of Title (CCT) No. 18186] and Parking Slot No. 42 [covered by CCT No. 9118] were for sale for 5. That Parking Slot No. 42, covered by CCT No. 9118, was never mortgaged to Orion;
3,000,000.00. Soneja likewise assured Suzuki that the titles to the unit and the parking slot and
were clean. After a brief negotiation, the parties agreed to reduce the price to 2,800,000.00. 6. That when Suzuki bought the properties, he went to Orion to obtain possession of
6
On August 5, 2003, Suzuki issued Kang a Bank of the Philippine Island (BPI) Check No. 83349 for the titles.
7
One Hundred Thousand Pesos (100,000.00) as reservation fee. On August 21, 2003, Suzuki The RTC Ruling
8 14
issued Kang another check, BPI Check No. 83350, this time for 2,700,000.00 representing the In its decision dated June 29, 2009, the Regional Trial Court (RTC), Branch 213, Mandaluyong
remaining balance of the purchase price. Suzuki and Kang then executed a Deed of Absolute City ruled infavor of Suzuki and ordered Orion to deliver the CCT Nos. 18186 and 9118 to
9
Sale dated August 26, 2003 covering Unit No. 536 and Parking Slot No. 42. Soon after, Suzuki Suzuki.
took possession of the condominium unit and parking lot, and commenced the renovation of The court found that Suzuki was an innocent purchaser for value whose rights over the
the interior of the condominium unit. properties prevailed over Orions. The RTC further noted that Suzuki exerted efforts to verify
Kang thereafter made several representations with Suzuki to deliver the titles to the the status of the properties but he did not find any existing encumbrance inthe titles. Although
properties, which were then allegedly in possession of Alexander Perez (Perez, Orions Loans Orion claims to have purchased the property by way of a Dacion en Pago, Suzuki only learned
Officer) for safekeeping. Despite several verbal demands, Kang failed to deliver the documents. about it two (2) months after he bought the properties because Orion never bothered to
Suzuki later on learned that Kang had left the country, prompting Suzuki to verify the status of register or annotate the Dacion en Pagoin CCT Nos. 18186 and 9116.
the properties with the Mandaluyong City Registry of Deeds. The RTC further ordered Orion and Kang to jointly and severally pay Suzuki moral damages,
Before long, Suzuki learned that CCT No. 9118 representing the title to the Parking Slot No. 42 exemplary damages, attorneys fees, appearance fees, expenses for litigation and cost ofsuit.
contained no annotations although it remained under the name of Cityland Pioneer. This Orion timely appealed the RTC decision with the CA.
notwithstanding, Cityland Pioneer, through Assistant Vice President Rosario D. Perez, certified The CA Ruling
10 11
that Kang had fully paid the purchase price of Unit. No. 536 and Parking Slot No. 42. CCT On August 23, 2012, the CA partially granted Orions appeal and sustained the RTC insofar as
No. 18186 representing the title to the condominium unit had no existing encumbrance, it upheld Suzukis right over the properties. The CA further noted that Entry No. 73321/C-10186
except for anannotation under Entry No. 73321/C-10186 which provided that any conveyance pertaining to the withdrawal of investment of an SRRV only serves as a warning to an SRRV
or encumbrance of CCT No. 18186 shall be subject to approval by the Philippine Retirement holder about the implications of a conveyance of a property investment. It deviated from the
Authority (PRA). Although CCT No. 18186 contained Entry No. 66432/C-10186 dated February RTC ruling, however, by deleting the award for moral damages, exemplary damages, attorneys
2, 1999 representing a mortgage in favor of Orion for a 1,000,000.00 loan, that annotation fees, expenses for litigation and cost of suit.
was subsequently cancelled on June 16, 2000 by Entry No. 73232/T. No. 10186. Despite the Orion sought a reconsideration of the CA decision but the CA denied the motion in its January
cancellation of the mortgage to Orion, the titles to the properties remained in possession of 25, 2013 resolution. Orion then filed a petition for review on certiorariunder Rule 45 with this
Perez. Court.
12
To protect his interests, Suzuki thenexecuted an Affidavit of Adverse Claim dated September The Petition and Comment
15
8, 2003, withthe Registry of Deeds of Mandaluyong City, annotated as Entry No. 3292/C-No. Orions petition is based on the following grounds/arguments:
13
18186 in CCT No. 18186. Suzuki then demanded the delivery of the titles. Orion, (through 1. The Deed of Sale executed by Kang in favor of Suzuki is null and void. Under Korean
Perez), however, refused to surrender the titles, and cited the need to consult Orions legal law, any conveyance of a conjugal property should be made with the consent of both
counsel as its reason. spouses;
On October 14, 2003, Suzuki received a letter from Orions counsel dated October 9, 2003, 2. Suzuki is not a buyer in good faith for he failed to check the owners duplicate
stating that Kang obtained another loan in the amount of 1,800,000.00. When Kang failed to copies of the CCTs;
 3. Knowledge of the PRA restriction under Entry No. 73321/C-10186, which prohibits SEC. 24. Proof of official record. The record of public documents referred to in paragraph
any conveyance or encumbrance of the property investment, defeats the alleged (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication
claim of good faith by Suzuki; and thereof or by a copy attested by the officer having the legal custody of the record, or by his
4. Orion should not be faulted for exercising due diligence. deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that
16
In his Comment, Suzuki asserts that the issue on spousal consent was belatedly raised on such officer has the custody. If the office in which the record is kept is in a foreign country, the
appeal. Moreover, proof of acquisition during the marital coverture is a condition sine qua certificate may be made by a secretary of the embassy or legation, consul general, consul, vice
17
nonfor the operation of the presumption of conjugal ownership. Suzuki additionally consul, or consular agent or by any officer in the foreign service of the Philippines stationed in
maintains that he is a purchaser in good faith, and is thus entitled to the protection of the law. the foreign country inwhich the record is kept, and authenticated by the seal of his office.
The Courts Ruling (Emphasis supplied)
We deny the petition for lack of merit. SEC. 25. What attestation ofcopy must state. Whenever a copy of a document or record is
The Court may inquire into conclusions of fact when the inference made is manifestly mistaken attested for the purpose of the evidence, the attestation must state, in substance, that the
In a Rule 45 petition, the latitude of judicial review generally excludes a factual and evidentiary copy is a correct copy of the original, or a specific part thereof, as the case may be. The
re-evaluation, and the Court ordinarily abides by the uniform factual conclusions of the trial attestation must be under the official seal of the attesting officer, if there be any, or if he be
18
court and the appellate court. In the present case, while the courts below both arrived at the the clerk of a court having a seal, under the seal of such court.
same conclusion, there appears tobe an incongruence in their factual findings and the legal Accordingly, matters concerning the title and disposition of real property shall be governed by
principle they applied to the attendant factual circumstances. Thus, we are compelled to Philippine law while issues pertaining to the conjugal natureof the property shall be governed
examine certain factual issues in the exercise of our sound discretion to correct any mistaken by South Korean law, provided it is proven as a fact.
19
inference that may have been made. In the present case, Orion, unfortunately failed to prove the South Korean law on the conjugal
Philippine Law governs the transfer of real property ownership ofproperty. It merely attached a "Certification from the Embassy of the Republic of
29
Orion believes that the CA erred in not ruling on the issue of spousal consent. We cannot Korea" to prove the existence of Korean Law. This certification, does not qualify as sufficient
uphold this position, however, because the issue of spousal consent was only raised on appeal proof of the conjugal nature of the property for there is no showing that it was properly
30
to the CA. It is a well-settled principle that points of law, theories, issues, and arguments not authenticated bythe seal of his office, as required under Section 24 of Rule 132.
brought to the attention of the trial court cannot be raised for the first time on appeal and Accordingly, the International Law doctrine of presumed-identity approachor processual
20
considered by a reviewing court. To consider these belated arguments would violate basic presumption comes into play, i.e., where a foreign law is not pleaded or, evenif pleaded, is not
31
principles of fairplay, justice, and due process. proven, the presumption is that foreign law is the same as Philippine Law.
Having said these, we shall nonetheless discuss the issues Orion belatedly raised, if only to put Under Philippine Law, the phrase "Yung Sam Kang married to' Hyun Sook Jung" is merely
32
an end to lingering doubts on the correctness of the denial of the present petition. descriptive of the civil status of Kang. In other words, the import from the certificates of title
It is a universal principle thatreal or immovable property is exclusively subject to the laws of is that Kang is the owner of the properties as they are registered in his name alone, and that
21
the country or state where it is located. The reason is found in the very nature of immovable he is married to Hyun Sook Jung.
property its immobility. Immovables are part of the country and so closely connected to it We are not unmindful that in numerous cases we have held that registration of the property
22
that all rights over them have their natural center of gravity there. in the name of only one spouse does not negate the possibility of it being conjugal or
33
Thus, all matters concerning the titleand disposition ofreal property are determined by what community property. In those cases, however, there was proof that the properties, though
is known as the lex loci rei sitae, which can alone prescribe the mode by which a title canpass registered in the name of only one spouse, were indeed either conjugal or community
23 34
from one person to another, or by which an interest therein can be gained or lost. This properties. Accordingly, we see no reason to declare as invalid Kangs conveyance in favor of
general principle includes all rules governing the descent, alienation and transfer of immovable Suzuki for the supposed lack of spousal consent.
24
property and the validity, effect and construction of wills and other conveyances. The petitioner failed to adduce sufficient evidence to prove the due execution of the Dacion
This principle even governs the capacity of the person making a deed relating to immovable en Pago
property, no matter what its nature may be. Thus, an instrument will be ineffective to transfer Article 1544 of the New Civil Codeof the Philippines provides that:
title to land if the person making it is incapacitated by the lex loci rei sitae, even though under ART. 1544. If the same thing should have been sold to different vendees, the ownership shall
the law of his domicile and by the law of the place where the instrument is actually made, his be transferred to the person who may have first taken possession thereof in good faith, if it
25
capacity is undoubted. should be movable property.
On the other hand, property relations between spouses are governed principally by the Should it be immovable property, the ownership shall belong to the person acquiring it who in
26
national law of the spouses. However, the party invoking the application of a foreign law has good faith first recorded it in the Registry of Property.
the burden of proving the foreign law. The foreign law is a question of fact to be properly Should there be no inscription, the ownership shall pertain to the person who in good faith
27
pleaded and proved as the judge cannot take judicial notice of a foreign law. He is presumed was first in the possession; and, in the absence thereof, to the person who presents the oldest
28
to know only domestic or the law of the forum. title, provided there is good faith.
To prove a foreign law, the party invoking it must present a copy thereof and comply with The application of Article 1544 of the New Civil Code presupposes the existence of two or more
Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads: duly executed contracts of sale. In the present case, the Deed of Sale dated August 26,
 35 36
2003 between Suzuki and Kang was admitted by Orion and was properly identified by Second, Perez, the supposed person who prepared the Dacion en Pago,appears to only have a
37
Suzukis witness Ms. Mary Jane Samin (Samin). vague idea of the transaction he supposedly prepared. During his cross-examination, he
It is not disputed, too, that the Deed of Sale dated August 26, 2003 was consummated. In a testified:
contract of sale, the seller obligates himself to transfer the ownership of the determinate thing ATTY. DE CASTRO:
sold, and to deliver the same to the buyer, who obligates himself to pay a price certain to the Q: And were you the one who prepared this [dacion en pago] Mr. witness?
38
seller. The execution of the notarized deed of saleand the actual transfer of possession A: Yes, sir. I personally prepared this.
39
amounted to delivery that produced the legal effect of transferring ownership to Suzuki. x x x x
On the other hand, although Orion claims priority in right under the principle of prius tempore, Q: So this 1.8 million pesos is already inclusive of all the penalties, interest and
potior jure (i.e.,first in time, stronger in right), it failedto prove the existence and due execution surcharge due from Mr. Yung Sam Kang?
of the Dacion en Pagoin its favor. A: Its just the principal, sir.
At the outset, Orion offered the Dacion en Pagoas Exhibit "5"with submarkings "5-a" to "5-c" Q: So you did not state the interest [and] penalties?
to prove the existence of the February 6, 2003 transaction in its Formal Offer dated July 20, A: In the [dacion en pago], we do not include interest, sir. We may actually
2008. Orion likewise offered in evidence the supposed promissory note dated September 4, includethat but....
2002 as Exhibit "12"to prove the existence of the additional 800,000.00 loan. The RTC, Q: Can you read the Second Whereas Clause, Mr. Witness?
however, denied the admission of Exhibits "5" and "12,"among others, in its order dated A: Whereas the first party failed to pay the said loan to the second party and as of
40
August 19, 2008 "since the same [were] not identified in court by any witness." February 10, 2003, the outstanding obligation which is due and demandable
Despite the exclusion of its most critical documentary evidence, Orion failed to make a tender principal and interest and other charges included amounts to 1,800,000.00 pesos,
ofexcluded evidence, as provided under Section 40, Rule 132 of the Rules of Court. For this sir.
reason alone, we are prevented from seriously considering Exhibit "5" and its submarkings and x x x x
Exhibit "12" in the present petition. Q: You are now changing your answer[.] [I]t now includes interest and other charges,
Moreover, even if we consider Exhibit "5" and its submarkings and Exhibit "12" in the present based on this document?
43
petition, the copious inconsistencies and contradictions in the testimonial and documentary A: Yes, based on that document, sir.
evidence of Orion, militate against the conclusion that the Dacion en Pagowas duly executed. Third, the Dacion en Pago,mentioned that the 1,800,000.00 loan was secured by a
First, there appears to be no due and demandable obligation when the Dacion en Pago was real estate mortgage. However, no document was ever presented to prove this real
executed, contrary to the allegations of Orion. Orions witness Perez tried to impress upon the estate mortgage aside from it being mentioned in the Dacion en Pago itself.
RTC that Kang was in default in his 1,800,000.00 loan. During his direct examination, he ATTY. DE CASTRO:
stated: Q: Would you know if there is any other document like a supplement to that Credit
ATTY. CRUZAT: Line Agreement referring to this 1.8 million peso loan by Mr. Yung Sam Kang which
Q: Okay, so this loan of 1.8 million, what happened to this loan, Mr. Witness? says that there was a subsequent collateralization or security given by Mr. Yung
A: Well it became past due, there has been delayed interest payment by Mr. [Sam]
Kangand... Kang for the loan?
Q: So what did you do after there were defaults[?] x x x x
44
A: We have to secure the money or the investment of the bank through loans and A: The [dacion en pago], sir.
we have executed a dacion en pagobecause Mr. Kang said he has no money. So we Fourth,the Dacion en Pago was first mentioned only two (2) months after Suzuki and Samin
just execute[d] the dacion en pago rather than going through the Foreclosure demanded the delivery of the titles sometime in August 2003,and after Suzuki caused the
proceedings. annotation of his affidavit of adverse claim. Records show that it was only on October 9, 2003,
x x x x when Orion, through its counsel, Cristobal Balbin Mapile & Associates first spoke of the Dacion
45
Q: Can you tell the court when was this executed? en Pago. Not even Perez mentioned any Dacion en Pago on October 1, 2003, when he
41
A: February 6, 2003, your Honor. personally received a letter demanding the delivery of the titles.Instead, Perez refused to
46
A reading of the supposed promissory note, however, shows that there was nodefault to speak accept the letter and opted to first consult with his lawyer.
of when the supposed Dacion en Pagowas executed. Notably, even the October 9, 2003 letter contained material inconsistencies in its recital of
Based on the promissory note, Kangs loan obligation wouldmature only on August 27, 2003. facts surrounding the execution of the Dacion en Pago. In particular, it mentioned that "on
Neither can Orion claim that Kang had been in default in his installment payments because the [September 4, 2002], after paying the original loan, [Kang] applied and was granted a new
wordings of the promissory note provide that "[t]he principal of this loanand its interest and Credit Line Facility by [Orion] x x x for ONE MILLION EIGHT HUNDRED THOUSAND PESOS
other charges shall be paid by me/us in accordance hereunder: SINGLE PAYMENT (1,800,000.00)." Perez, however, testified that there was "no cash movement" in the original
42
LOANS. "There was thus no due and demandable loan obligation when the alleged Dacion en 1,000,000.00 loan. In his testimony, he said:
Pago was executed. COURT:
x x x x
 Q: Would you remember what was the subject matter of that real estate mortgage their prima facievalidity was overthrown by the highly questionable circumstances
52
for that first 1,000,000.00 loan? surrounding their execution.
A: Its a condominium Unit in Cityland, sir. Effect of the PRA restriction on
x x x x the validity of Suzukis title to the
Q: Would you recall if there was any payment by Mr. Yung Sam Kang of this property
1,000,000.00 loan? Orion argues that the PRA restriction in CCT No. 18186 affects the conveyance to Suzuki. In
A: None sir. particular, Orion assails the status of Suzuki as a purchaser in good faith in view of the express
53
Q: No payments? PRA restriction contained in CCT No. 18186.
A: None sir. We reject this suggested approachoutright because, to our mind, the PRA restriction cannot
Q: And from 1999 to 2002, there was no payment, either by way of payment to the affect the conveyance in favor of Suzuki. On this particular point, we concur withthe following
principal, by way ofpayment of interest, there was no payment by Mr. Yung Sam findings of the CA:
Kang of this loan? x x x the annotation merely servesas a warning to the owner who holds a Special Resident
A: Literally, there was no actual cash movement, sir. Retirees Visa(SRRV) that he shall lose his visa if he disposes his property which serves as his
Q: There was no actual cash? investment in order to qualify for such status. Section 14 of the Implementing Investment
A: Yes, sir. Guidelines under Rule VIII-A of the Rules and Regulations Implementing Executive Order No.
Q: And yet despite no payment, the bank Orion Savings Bank still extended an 1037, Creating the Philippine Retirement Park System Providing Funds Therefor and For Other
800,000.00 additional right? Purpose ( otherwise known as the Philippine Retirement Authority) states:
47
A: Yes, sir. Section 14. Should the retiree-investor withdraw his investment from the Philippines, or
Fifth, it is undisputed that notwithstanding the supposed execution of theDacion en Pago on transfer the same to another domestic enterprise, orsell, convey or transfer his condominium
February 2, 2003, Kang remained in possession of the condominium unit. In fact, nothing in unit or units to another person, natural or juridical without the prior approval of the Authority,
the records shows that Orion even bothered to take possession of the property even six (6) the Special Resident Retirees Visa issued to him, and/or unmarried minor child or children[,]
months after the supposed date of execution of the Dacion en Pago. Kang was even able to may be cancelled or revoked by the Philippine Government, through the appropriate
54
transfer possession of the condominium unit to Suzuki, who then made immediate government department or agency, upon recommendation of the Authority.
improvements thereon. If Orion really purchased the condominium unit on February 2, 2003 Moreover, Orion should not be allowed to successfully assail the good faith of Suzuki on the
and claimed to be its true owner, why did it not assert its ownership immediately after the basis of the PRA restriction. Orion knew of the PRA restriction when it transacted with Kang.
alleged sale took place? Why did it have to assert its ownership only after Suzuki demanded Incidentally, Orion admitted accommodating Kangs request to cancel the mortgage
the delivery of the titles? These gaps have remained unanswered and unfilled. annotation despite the lack of payment to circumvent the PRA restriction. Orion, thus, is
48
In Suntay v. CA, we held that the most prominent index of simulation is the complete absence estopped from impugning the validity of the conveyance in favor of Suzuki on the basis of the
of anattempt on the part of the vendee to assert his rights of ownership over the property in PRA restriction that Orion itself ignored and "attempted" to circumvent.
question. After the sale, the vendee should have entered the land and occupied the premises. With the conclusion that Orion failed to prove the authenticity of the Dacion en Pago, we see
The absence of any attempt on the part of Orion to assert its right of dominion over the no reason for the application of the rules on double sale under Article 1544 of the New Civil
property allegedly soldto it is a clear badge of fraud. That notwithstanding the execution of the Code. Suzuki, moreover, successfully adduced sufficient evidence to establish the validity of
Dacion en Pago, Kang remained in possession of the disputed condominium unit from the conveyance in his favor.
time of the execution of the Dacion en Pagountil the propertys subsequent transfer to Suzuki WHEREFORE, premises considered, we DENY the petition for lack of merit. Costs against
unmistakably strengthens the fictitious nature of the Dacion en Pago. petitioner Orion Savings Bank.
These circumstances, aside from the glaring inconsistencies in the documents and testimony SO ORDERED.
of Orions witness, indubitably prove the spurious nature of the Dacion en Pago. ARTURO D. BRION
The fact that the Dacion en Pago Associate Justice
is a notarized document does not WE CONCUR:
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
49
considered as containing all the terms of the agreement. While a notarized document enjoys
this presumption, "the fact that a deed is notarized is not a guarantee of the validity of its
50
contents." The presumption of regularity of notarized documents is not absolute and may be
51
rebutted by clear and convincing evidence to the contrary.
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
 18
NORMA A. DEL SOCORRO, for and in behalf of her minor child RODERIGO NORJO VAN respondent filed his Opposition. Pending the resolution thereof, respondent was
19
WILSEM, Petitioner, arraigned. Subsequently, without the RTC-Cebu having resolved the application of the
vs. protection order, respondent filed a Motion to Dismiss on the ground of: (1) lack of jurisdiction
20
ERNST JOHAN BRINKMAN VAN WILSEM, Respondent. over the offense charged; and (2) prescription of the crime charged.
21
D E C I S I O N On February 19, 2010, the RTC-Cebu issued the herein assailed Order, dismissing the instant
PERALTA, J.: criminal case against respondent on the ground that the facts charged in the information do
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court not constitute an offense with respect to the respondent who is an alien, the dispositive part
1
seeking to reverse and set aside the Orders dated February 19, 2010 and September 1, 2010, of which states:
respectively, of the Regional Trial Court of Cebu City (RTC-Cebu), which dismissed the criminal WHEREFORE, the Court finds that the facts charged in the information do not constitute an
case entitled People of the Philippines v. Ernst Johan Brinkman Van Wilsem, docketed as offense with respect to the accused, he being an alien, and accordingly, orders this case
Criminal Case No. CBU-85503, for violation of Republic Act (R.A.) No. 9262, otherwise known DISMISSED.
as the Anti-Violence Against Women and Their Children Act of 2004. The bail bond posted by accused Ernst Johan Brinkman Van Wilsem for his provisional liberty
The following facts are culled from the records: is hereby cancelled (sic) and ordered released.
Petitioner Norma A. Del Socorro and respondent Ernst Johan Brinkman Van Wilsem contracted SO ORDERED.
2 22
marriage in Holland on September 25, 1990. On January 19, 1994, they were blessed with a Cebu City, Philippines, February 19, 2010.
son named Roderigo Norjo Van Wilsem, who at the time of the filing of the instant petition Thereafter, petitioner filed her Motion for Reconsideration thereto reiterating respondents
3 23
was sixteen (16) years of age. obligation to support their child under Article 195 of the Family Code, thus, failure to do so
Unfortunately, their marriage bond ended on July 19, 1995 by virtue of a Divorce Decree issued makes him liable under R.A. No. 9262 which "equally applies to all persons in the Philippines
4 24
by the appropriate Court of Holland. At that time, their son was only eighteen (18) months who are obliged to support their minor children regardless of the obligors nationality."
5 6 25
old. Thereafter, petitioner and her son came home to the Philippines. On September 1, 2010, the lower court issued an Order denying petitioners Motion for
According to petitioner, respondent made a promise to provide monthly support to their son Reconsideration and reiterating its previous ruling. Thus:
in the amount of Two Hundred Fifty (250) Guildene (which is equivalent to Php17,500.00 more x x x The arguments therein presented are basically a rehash of those advanced earlier in the
7
or less). However, since the arrival of petitioner and her son in the Philippines, respondent memorandum of the prosecution. Thus, the court hereby reiterates its ruling that since the
8
never gave support to the son, Roderigo. accused is a foreign national he is not subject to our national law (The Family Code) in regard
Not long thereafter, respondent cameto the Philippines and remarried in Pinamungahan, to a parents duty and obligation to givesupport to his child. Consequently, he cannot be
9
Cebu, and since then, have been residing thereat. Respondent and his new wife established a charged of violating R.A. 9262 for his alleged failure to support his child. Unless it is conclusively
business known as Paree Catering, located at Barangay Tajao, Municipality of Pinamungahan, established that R.A. 9262 applies to a foreigner who fails to give support tohis child,
10
Cebu City. To date, all the parties, including their son, Roderigo, are presently living in Cebu notwithstanding that he is not bound by our domestic law which mandates a parent to give
11
City. such support, it is the considered opinion of the court that no prima faciecase exists against
On August 28, 2009, petitioner, through her counsel, sent a letter demanding for support from the accused herein, hence, the case should be dismissed.
12
respondent. However, respondent refused to receive the letter. WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.
Because of the foregoing circumstances, petitioner filed a complaint affidavit with the SO ORDERED.
26
Provincial Prosecutor of Cebu City against respondent for violation of Section 5, paragraph E(2) Cebu City, Philippines, September 1, 2010.
of R.A. No. 9262 for the latters unjust refusal to support his minor child with Hence, the present Petition for Review on Certiorari raising the following issues:
13
petitioner. Respondent submitted his counter-affidavit thereto, to which petitioner also 1. Whether or not a foreign national has an obligation to support his minor child
14
submitted her reply-affidavit. Thereafter, the Provincial Prosecutor of Cebu City issued a under Philippine law; and
Resolution recommending the filing of an information for the crime charged against herein 2. Whether or not a foreign national can be held criminally liable under R.A. No. 9262
27
respondent. for his unjustified failure to support his minor child.
The information, which was filed with the RTC-Cebu and raffled to Branch 20 thereof, states At the outset, let it be emphasized that We are taking cognizance of the instant petition despite
that: the fact that the same was directly lodged with the Supreme Court, consistent with the ruling
28
That sometime in the year 1995 and up to the present, more or less, in the Municipality of in Republic v. Sunvar Realty Development Corporation, which lays down the instances when
Minglanilla, Province of Cebu, Philippines, and within the jurisdiction of this Honorable Court, a ruling of the trial court may be brought on appeal directly to the Supreme Court without
the above-named accused, did then and there wilfully, unlawfully and deliberately deprive, violating the doctrine of hierarchy of courts, to wit:
refuse and still continue to deprive his son RODERIGO NORJO VAN WILSEM, a fourteen (14) x x x Nevertheless, the Rules do not prohibit any of the parties from filing a Rule 45 Petition
year old minor, of financial support legally due him, resulting in economic abuse to the victim. with this Court, in case only questions of law are raised or involved. This latter situation was
15
CONTRARY TO LAW. one that petitioners found themselves in when they filed the instant Petition to raise only
Upon motion and after notice and hearing, the RTC-Cebu issued a Hold Departure Order questions of law. In Republic v. Malabanan, the Court clarified the three modes of appeal from
16
against respondent. Consequently, respondent was arrested and, subsequently, posted decisions of the RTC, to wit: (1) by ordinary appeal or appeal by writ of error under Rule 41,
17
bail. Petitioner also filed a Motion/Application of Permanent Protection Order to which 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 Furthermore, being still aliens, they are not in position to invoke the provisions of the Civil
rendered by the RTC in the exercise of its appellate jurisdiction; and (3) by a petition for review Code of the Philippines, for that Code cleaves to the principle that family rights and duties are
on certiorari before the Supreme Court under Rule 45. "The first mode of appeal is taken to governed by their personal law, i.e.,the laws of the nation to which they belong even when
39
the [Court of Appeals] on questions of fact or mixed questions of fact and law. The second staying in a foreign country (cf. Civil Code, Article 15).
mode of appeal is brought to the CA on questions of fact, of law, or mixed questions of fact It cannot be gainsaid, therefore, that the respondent is not obliged to support petitioners son
and law. The third mode of appealis elevated to the Supreme Court only on questions of law." under Article195 of the Family Code as a consequence of the Divorce Covenant obtained in
(Emphasis supplied) Holland. This does not, however, mean that respondent is not obliged to support petitioners
There is a question of law when the issue does not call for an examination of the probative son altogether.
value of the evidence presented or of the truth or falsehood of the facts being admitted, and In international law, the party who wants to have a foreign law applied to a dispute or case has
40
the doubt concerns the correct application of law and jurisprudence on the matter. The the burden of proving the foreign law. In the present case, respondent hastily concludes that
resolution of the issue must rest solely on what the law provides on the given set of being a national of the Netherlands, he is governed by such laws on the matter of provision of
29 41
circumstances. and capacity to support. While respondent pleaded the laws of the Netherlands in advancing
Indeed, the issues submitted to us for resolution involve questions of law the response his position that he is not obliged to support his son, he never proved the same.
thereto concerns the correct application of law and jurisprudence on a given set of facts, It is incumbent upon respondent to plead and prove that the national law of the Netherlands
i.e.,whether or not a foreign national has an obligation to support his minor child under does not impose upon the parents the obligation to support their child (either before, during
42
Philippine law; and whether or not he can be held criminally liable under R.A. No. 9262 for his or after the issuance of a divorce decree), because Llorente v. Court of Appeals, has already
unjustified failure to do so. enunciated that:
It cannot be negated, moreover, that the instant petition highlights a novel question of law True, foreign laws do not prove themselves in our jurisdiction and our courts are not
concerning the liability of a foreign national who allegedly commits acts and omissions authorized to takejudicial notice of them. Like any other fact, they must be alleged and
43
punishable under special criminal laws, specifically in relation to family rights and duties. The proved.
inimitability of the factual milieu of the present case, therefore, deserves a definitive ruling by In view of respondents failure to prove the national law of the Netherlands in his favor, the
this Court, which will eventually serve as a guidepost for future cases. Furthermore, dismissing doctrine of processual presumption shall govern. Under this doctrine, if the foreign law
the instant petition and remanding the same to the CA would only waste the time, effort and involved is not properly pleaded and proved, our courts will presume that the foreign law is
44
resources of the courts. Thus, in the present case, considerations of efficiency and economy in the same as our local or domestic or internal law. Thus, since the law of the Netherlands as
the administration of justice should prevail over the observance of the hierarchy of courts. regards the obligation to support has not been properly pleaded and proved in the instant
Now, on the matter of the substantive issues, We find the petition meritorious. Nonetheless, case, it is presumed to be the same with Philippine law, which enforces the obligation of
we do not fully agree with petitioners contentions. parents to support their children and penalizing the non-compliance therewith.
45
To determine whether or not a person is criminally liable under R.A. No. 9262, it is imperative Moreover, while in Pilapil v. Ibay-Somera, the Court held that a divorce obtained in a foreign
that the legal obligation to support exists. land as well as its legal effects may be recognized in the Philippines in view of the nationality
30
Petitioner invokes Article 195 of the Family Code, which provides the parents obligation to principle on the matter of status of persons, the Divorce Covenant presented by respondent
support his child. Petitioner contends that notwithstanding the existence of a divorce decree does not completely show that he is notliable to give support to his son after the divorce
31
issued in relation to Article 26 of the Family Code, respondent is not excused from complying decree was issued. Emphasis is placed on petitioners allegation that under the second page of
with his obligation to support his minor child with petitioner. the aforesaid covenant, respondents obligation to support his child is specifically
46
On the other hand, respondent contends that there is no sufficient and clear basis presented stated, which was not disputed by respondent.
32
by petitioner that she, as well as her minor son, are entitled to financial support. Respondent We likewise agree with petitioner that notwithstanding that the national law of respondent
also added that by reason of the Divorce Decree, he is not obligated topetitioner for any states that parents have no obligation to support their children or that such obligation is not
33
financial support. punishable by law, said law would still not find applicability,in light of the ruling in Bank of
34 47
On this point, we agree with respondent that petitioner cannot rely on Article 195 of the New America, NT and SA v. American Realty Corporation, to wit:
35
Civil Code in demanding support from respondent, who is a foreign citizen, since Article 15 of In the instant case, assuming arguendo that the English Law on the matter were properly
the New Civil Code stresses the principle of nationality. In other words, insofar as Philippine pleaded and proved in accordance with Section 24, Rule 132 of the Rules of Court and the
laws are concerned, specifically the provisions of the Family Code on support, the same only jurisprudence laid down in Yao Kee, et al. vs. Sy-Gonzales, said foreign law would still not find
applies to Filipino citizens. By analogy, the same principle applies to foreigners such that they applicability.
36
are governed by their national law with respect to family rights and duties. Thus, when the foreign law, judgment or contract is contrary to a sound and established public
The obligation to give support to a child is a matter that falls under family rights and duties. policy of the forum, the said foreign law, judgment or order shall not be applied.
Since the respondent is a citizen of Holland or the Netherlands, we agree with the RTC-Cebu Additionally, prohibitive laws concerning persons, their acts or property, and those which have
that he is subject to the laws of his country, not to Philippinelaw, as to whether he is obliged for their object public order, public policy and good customs shall not be rendered ineffective
37
to give support to his child, as well as the consequences of his failure to do so. by laws or judgments promulgated, or by determinations or conventions agreed upon in a
38
In the case of Vivo v. Cloribel, the Court held that foreign country.
The public policy sought to be protected in the instant case is the principle imbedded in our In addition, considering that respondent is currently living in the Philippines, we find strength
jurisdiction proscribing the splitting up of a single cause of action. in petitioners claim that the Territoriality Principle in criminal law, in relation to Article 14 of
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent 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
If two or more suits are instituted on the basis of the same cause of action, the filing of one or territory, subject to the principle of public international law and to treaty stipulations." On this
a judgment upon the merits in any one is available as a ground for the dismissal of the others. score, it is indisputable that the alleged continuing acts of respondent in refusing to support
Moreover, foreign law should not be applied when its application would work undeniable his child with petitioner is committed here in the Philippines as all of the parties herein are
injustice to the citizens or residents of the forum. To give justice is the most important function residents of the Province of Cebu City. As such, our courts have territorial jurisdiction over the
of law; hence, a law, or judgment or contract that is obviously unjust negates the fundamental offense charged against respondent. It is likewise irrefutable that jurisdiction over the
48
principles of Conflict of Laws. respondent was acquired upon his arrest.
Applying the foregoing, even if the laws of the Netherlands neither enforce a parents Finally, we do not agree with respondents argument that granting, but not admitting, that
obligation to support his child nor penalize the noncompliance therewith, such obligation is there is a legal basis for charging violation of R.A. No. 9262 in the instant case, the criminal
52
still duly enforceable in the Philippines because it would be of great injustice to the child to be liability has been extinguished on the ground of prescription of crime under Section 24 of
denied of financial support when the latter is entitled thereto. R.A. No. 9262, which provides that:
We emphasize, however, that as to petitioner herself, respondent is no longer liable to support SECTION 24. Prescriptive Period. Acts falling under Sections 5(a) to 5(f) shall prescribe in
49
his former wife, in consonance with the ruling in San Luis v. San Luis, to wit: twenty (20) years. Acts falling under Sections 5(g) to 5(I) shall prescribe in ten (10) years.
As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longerbe The act of denying support to a child under Section 5(e)(2) and (i) of R.A. No. 9262 is a
53
considered marriedto the alien spouse. Further, she should not be required to perform her continuing offense, which started in 1995 but is still ongoing at present. Accordingly, the
marital duties and obligations. It held: crime charged in the instant case has clearly not prescribed.
To maintain, as private respondent does, that, under our laws, petitioner has to be considered Given, however, that the issue on whether respondent has provided support to petitioners
still married to private respondent and still subject to a wife's obligations under Article 109, et. child calls for an examination of the probative value of the evidence presented, and the truth
seq. of the Civil Code cannot be just. Petitioner should not be obliged to live together with, and falsehood of facts being admitted, we hereby remand the determination of this issue to
observe respect and fidelity, and render support to private respondent. The latter should not the RTC-Cebu which has jurisdiction over the case.
continue to be one of her heirs with possible rights to conjugal property. She should not be WHEREFORE, the petition is GRANTED. The Orders dated February 19, 2010 and September 1,
discriminated against in her own country if the ends of justice are to be served. (Emphasis 2010, respectively, of the Regional Trial Court of the City of Cebu are hereby REVERSED and
50
added) SET ASIDE. The case is REMANDED to the same court to conduct further proceedings based on
Based on the foregoing legal precepts, we find that respondent may be made liable under the merits of the case.
Section 5(e) and (i) of R.A. No. 9262 for unjustly refusing or failing to give support topetitioners SO ORDERED.
son, to wit: DIOSDADO M. PERALTA
SECTION 5. Acts of Violence Against Women and Their Children.- The crime of violence against Associate Justice
women and their children is committed through any of the following acts: WE CONCUR:
x x x x
(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:
x x x x
(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
51
financial support or custody of minor childrenof access to the woman's child/children.
Under the aforesaid special law, the deprivation or denial of financial support to the child is
considered anact of violence against women and children.

LAND BANK OF THE PHILIPPINES v Ong Branch Head, told Alfredo and his counsel Atty. Ireneo de Lumen that there was nothing
Velasco jr wrong with the agreement with the Spouses Sy but provided them with requirements for
the assumption of mortgage. They were also told that Alfredo should pay part of the
This is an appeal from the October 20, 2009 Decision of the Court of Appeals (CA) in CA-G.R. principal which was computed at PhP 750,000 and to update due or accrued interests on
CR-CV No. 84445 entitled Alfredo Ong v. Land Bank of the Philippines, which affirmed the the promissory notes so that Atty. Hingco could easily approve the assumption of mortgage.
Decision of the Regional Trial Court (RTC), Branch 17 in Tabaco City. Two weeks later, Alfredo issued a check for PhP 750,000 and personally gave it to Atty.
Hingco. A receipt was issued for his payment. He also submitted the other documents
The Facts required by Land Bank, such as financial statements for 1994 and 1995. Atty. Hingco then
informed Alfredo that the certificate of title of the Spouses Sy would be transferred in his
[4]
On March 18, 1996, spouses Johnson and Evangeline Sy secured a loan from Land name but this never materialized. No notice of transfer was sent to him.
Bank Legazpi City in the amount of PhP 16 million. The loan was secured by three (3)
residential lots, five (5) cargo trucks, and a warehouse. Under the loan agreement, PhP 6 Alfredo later found out that his application for assumption of mortgage was not
million of the loan would be short-term and would mature on February 28, 1997, while the approved by Land Bank. The bank learned from its credit investigation report that the Ongs
balance of PhP 10 million would be payable in seven (7) years. The Notice of Loan Approval had a real estate mortgage in the amount of PhP 18,300,000 with another bank that was
dated February 22, 1996 contained an acceleration clause wherein any default in payment past due. Alfredo claimed that this was fully paid later on. Nonetheless, Land Bank
[1]
of amortizations or other charges would accelerate the maturity of the loan. foreclosed the mortgage of the Spouses Sy after several months. Alfredo only learned of the
foreclosure when he saw the subject mortgage properties included in a Notice of
Subsequently, however, the Spouses Sy found they could no longer pay their Foreclosure of Mortgage and Auction Sale at the RTC in Tabaco, Albay. Alfredos other
loan. On December 9, 1996, they sold three (3) of their mortgaged parcels of land for PhP counsel, Atty. Madrilejos, subsequently talked to Land Banks lawyer and was told that the
[5]
150,000 to Angelina Gloria Ong, Evangelines mother, under a Deed of Sale with Assumption PhP 750,000 he paid would be returned to him.
[2]
of Mortgage. The relevant portion of the document is quoted as follows:
On December 12, 1997, Alfredo initiated an action for recovery of sum of money
WHEREAS, we are no longer in a position to settle our obligation with damages against Land Bank in Civil Case No. T-1941, as Alfredos payment was not
with the bank; returned by Land Bank. Alfredo maintained that Land Banks foreclosure without informing
NOW THEREFORE, for and in consideration of the sum of ONE him of the denial of his assumption of the mortgage was done in bad faith. He argued that
HUNDRED FIFTY THOUSAND PESOS (P150,000.00) Philippine Currency, we he was lured into believing that his payment of PhP 750,000 would cause Land Bank to
hereby these presents SELL, CEDE, TRANSFER and CONVEY, by way of sale approve his assumption of the loan of the Spouses Sy and the transfer of the mortgaged
[6]
unto ANGELINA GLORIA ONG, also of legal age, Filipino citizen, married to properties in his and his wifes name. He also claimed incurring expenses for attorneys fees
[7]
Alfredo Ong, and also a resident of Tabaco, Albay, Philippines, their heirs and of PhP 150,000, filing fee of PhP 15,000, and PhP 250,000 in moral damages.
assigns, the above-mentioned debt with the said LAND BANK OF THE
PHILIPPINES, and by reason hereof they can make the necessary Testifying for Land Bank, Atty. Hingco claimed during trial that as branch manager she had no
representation with the bank for the proper restructuring of the loan with authority to approve loans and could not assure anybody that their assumption of mortgage
the said bank in their favor; would be approved. She testified that the breakdown of Alfredos payment was as follows:

That as soon as our obligation has been duly settled, the bank is PhP 101,409.59 applied to principal
authorized to release the mortgage in favor of the vendees and for this 216,246.56 accrued interests receivable
purpose VENDEES can register this instrument with the Register of Deeds for 396,571.77 interests
the issuance of the titles already in their names. 18,766.10 penalties
16,805.98 accounts receivable
IN WITNESS WHEREOF, we have hereunto affixed our signatures ----------------
th
this 9 day of December 1996 at Tabaco, Albay, Philippines. Total: 750,000.00

(signed) (signed) According to Atty. Hingco, the bank processes an assumption of mortgage as a new loan, since
EVANGELINE O. SY JOHNSON B. SY the new borrower is considered a new client. They used character, capacity, capital, collateral,
Vendor Vendor and conditions in determining who can qualify to assume a loan. Alfredos proposal to assume
[8]
the loan, she explained, was referred to a separate office, the Lending Center.
During cross-examination, Atty. Hingco testified that several months after Alfredo made the
Evangelines father, petitioner Alfredo Ong, later went to Land Bank to inform it tender of payment, she received word that the Lending Center rejected Alfredos loan
[3]
about the sale and assumption of mortgage. Atty. Edna Hingco, the Legazpi City Land Bank application. She stated that it was the Lending Center and not her that should have informed
Alfredo about the denial of his and his wifes assumption of mortgage. She added that although On January 5, 2010, the CA denied Land Banks motion for reconsideration for lack of
she told Alfredo that the agreement between the spouses Sy and Alfredo was valid between merit. Hence, Land Bank appealed to us.
them and that the bank would accept payments from him, Alfredo did not pay any further
amount so the foreclosure of the loan collaterals ensued. She admitted that Alfredo demanded The Issues
the return of the PhP 750,000 but said that there was no written demand before the case
against the bank was filed in court. She said that Alfredo had made the payment of PhP 750,000 I
even before he applied for the assumption of mortgage and that the bank received the said
amount because the subject account was past due and demandable; and the Deed of Whether the Court of Appeals erred in holding that Art. 1236 of the Civil
[9]
Assumption of Mortgage was not used as the basis for the payment. Code does not apply and in finding that there is no novation.

The Ruling of the Trial Court II

The RTC held that the contract approving the assumption of mortgage was not perfected as a Whether the Court of Appeals misconstrued the evidence and the law
result of the credit investigation conducted on Alfredo. It noted that Alfredo was not even when it affirmed the trial court decisions ordering Land Bank to pay Ong
informed of the disapproval of the assumption of mortgage but was just told that the accounts the amount of Php750,000.00 with interest at 12% annum.
of the spouses Sy had matured and gone unpaid. It ruled that under the principle of equity and
justice, the bank should return the amount Alfredo had paid with interest at 12% per annum III
computed from the filing of the complaint. The RTC further held that Alfredo was entitled to
[10]
attorneys fees and litigation expenses for being compelled to litigate. Whether the Court of Appeals committed reversible error when it affirmed
the award of Php50,000.00 to Ong as attorneys fees and expenses of
The dispositive portion of the RTC Decision reads: litigation.

WHEREFORE, premises considered, a decision is rendered, The Ruling of this Court
ordering defendant bank to pay plaintiff, Alfredo Ong the amount of
P750,000.00 with interest at 12% per annum computed from Dec. 12, 1997 We affirm with modification the appealed decision.
and attorneys fees and litigation expenses of P50,000.00.
Recourse is against Land Bank
Costs against defendant bank.
[11]
SO ORDERED. Land Bank contends that Art. 1236 of the Civil Code backs their claim that Alfredo should have
sought recourse against the Spouses Sy instead of Land Bank. Art. 1236 provides:

The Ruling of the Appellate Court The creditor is not bound to accept payment or performance by a third
person who has no interest in the fulfillment of the obligation, unless there
On appeal, Land Bank faulted the trial court for (1) holding that the payment of PhP 750,000 is a stipulation to the contrary.
made by Ong was one of the requirements for the approval of his proposal to assume the
mortgage of the Sy spouses; (2) erroneously ordering Land Bank to return the amount of PhP Whoever pays for another may demand from the debtor what he has paid,
750,000 to Ong on the ground of its failure to effect novation; and (3) erroneously affirming except that if he paid without the knowledge or against the will of the
the award of PhP 50,000 to Ong as attorneys fees and litigation expenses. debtor, he can recover only insofar as the payment has been beneficial to
the debtor.
[12]
The CA affirmed the RTC Decision. It held that Alfredos recourse is not against the Sy
spouses. According to the appellate court, the payment of PhP 750,000 was for the approval
of his assumption of mortgage and not for payment of arrears incurred by the Sy spouses. As We agree with Land Bank on this point as to the first part of paragraph 1 of Art.
such, it ruled that it would be incorrect to consider Alfredo a third person with no interest in 1236. Land Bank was not bound to accept Alfredos payment, since as far as the former was
the fulfillment of the obligation under Article 1236 of the Civil Code. Although Land Bank was concerned, he did not have an interest in the payment of the loan of the Spouses Sy. However,
not bound by the Deed between Alfredo and the Spouses Sy, the appellate court found that in the context of the second part of said paragraph, Alfredo was not making payment to fulfill
Alfredo and Land Banks active preparations for Alfredos assumption of mortgage essentially the obligation of the Spouses Sy. Alfredo made a conditional payment so that the properties
novated the agreement. subject of the Deed of Sale with Assumption of Mortgage would be titled in his name. It is
clear from the records that Land Bank required Alfredo to make payment before his
assumption of mortgage would be approved. He was informed that the certificate of title
would be transferred accordingly. He, thus, made payment not as a debtor but as a the two obligations can stand together, each one having its independent
prospective mortgagor. But the trial court stated: existence. x x x (Emphasis supplied.)


[T]he contract was not perfected or consummated because of Furthermore, Art. 1293 of the Civil Code states:
the adverse finding in the credit investigation which led to the disapproval
of the proposed assumption. There was no evidence presented that Novation which consists in substituting a new debtor in the place of the
plaintiff was informed of the disapproval. What he received was a letter original one, may be made even without the knowledge or against the will
dated May 22, 1997 informing him that the account of spouses Sy had of the latter, but not without the consent of the creditor. Payment by the
matured but there [were] no payments. This was sent even before the new debtor gives him rights mentioned in articles 1236 and 1237.
conduct of the credit investigation on June 20, 1997 which led to the
[13]
disapproval of the proposed assumption of the loans of spouses Sy.
We do not agree, then, with the CA in holding that there was a novation in the contract
between the parties. Not all the elements of novation were present. Novation must be
Alfredo, as a third person, did not, therefore, have an interest in the fulfillment of the expressly consented to. Moreover, the conflicting intention and acts of the parties underscore
obligation of the Spouses Sy, since his interest hinged on Land Banks approval of his the absence of any express disclosure or circumstances with which to deduce a clear and
[15]
application, which was denied. The circumstances of the instant case show that the second unequivocal intent by the parties to novate the old agreement. Land Bank is thus correct
paragraph of Art. 1236 does not apply. As Alfredo made the payment for his own interest and when it argues that there was no novation in the following:
not on behalf of the Spouses Sy, recourse is not against the latter. And as Alfredo was not
paying for another, he cannot demand from the debtors, the Spouses Sy, what he has paid. [W]hether or not Alfredo Ong has an interest in the obligation and
payment was made with the knowledge or consent of Spouses Sy, he may
Novation of the loan agreement still pay the obligation for the reason that even before he paid the amount
of P750,000.00 on January 31, 1997, the substitution of debtors was already
Land Bank also faults the CA for finding that novation applies to the instant case. It perfected by and between Spouses Sy and Spouses Ong as evidenced by a
reasons that a substitution of debtors was made without its consent; thus, it was not bound to Deed of Sale with Assumption of Mortgage executed by them on December
recognize the substitution under the rules on novation. 9, 1996. And since the substitution of debtors was made without the consent
of Land Bank a requirement which is indispensable in order to effect a
On the matter of novation, Spouses Benjamin and Agrifina Lim v. M.B. Finance novation of the obligation, it is therefore not bound to recognize the
[14]
Corporation provides the following discussion: substitution of debtors. Land Bank did not intervene in the contract between
Spouses Sy and Spouses Ong and did not expressly give its consent to this
[16]
Novation, in its broad concept, may either be extinctive or substitution.
modificatory. It is extinctive when an old obligation is terminated by the
creation of a new obligation that takes the place of the former; it is merely
modificatory when the old obligation subsists to the extent it remains Unjust enrichment
compatible with the amendatory agreement. An extinctive novation
results either by changing the object or principal conditions (objective or Land Bank maintains that the trial court erroneously applied the principle of equity
real), or by substituting the person of the debtor or subrogating a third and justice in ordering it to return the PhP 750,000 paid by Alfredo. Alfredo was allegedly in
person in the rights of the creditor (subjective or personal). Under this bad faith and in estoppel. Land Bank contends that it enjoyed the presumption of regularity
mode, novation would have dual functions one to extinguish an existing and was in good faith when it accepted Alfredos tender of PhP 750,000. It reasons that it did
obligation, the other to substitute a new one in its place requiring a not unduly enrich itself at Alfredos expense during the foreclosure of the mortgaged
conflux of four essential requisites: (1) a previous valid obligation; (2) an properties, since it tendered its bid by subtracting PhP 750,000 from the Spouses Sys
agreement of all parties concerned to a new contract; (3) the outstanding loan obligation. Alfredos recourse then, according to Land Bank, is to have his
extinguishment of the old obligation; and (4) the birth of a valid new payment reimbursed by the Spouses Sy.
obligation. x x x
We rule that Land Bank is still liable for the return of the PhP 750,000 based on the
In order that an obligation may be extinguished by another which principle of unjust enrichment. Land Bank is correct in arguing that it has no obligation as
substitutes the same, it is imperative that it be so declared in unequivocal creditor to recognize Alfredo as a person with interest in the fulfillment of the obligation. But
terms, or that the old and the new obligations be on every point while Land Bank is not bound to accept the substitution of debtors in the subject real estate
incompatible with each other. The test of incompatibility is whether or not
 [22]
mortgage, it is estopped by its action of accepting Alfredos payment from arguing that it does his daughters loan had not been paid. Land Bank made Alfredo believe that with the
not have to recognize Alfredo as the new debtor. The elements of estoppel are: payment of PhP 750,000, he would be able to assume the mortgage of the Spouses Sy. The act
of receiving payment without returning it when demanded is contrary to the adage of giving
First, the actor who usually must have knowledge, notice or someone what is due to him. The outcome of the application would have been different had
suspicion of the true facts, communicates something to another in a Land Bank first conducted the credit investigation before accepting Alfredos payment. He
misleading way, either by words, conduct or silence; second, the other in would have been notified that his assumption of mortgage had been disapproved; and he
fact relies, and relies reasonably or justifiably, upon that communication; would not have taken the futile action of paying PhP 750,000. The procedure Land Bank took
third, the other would be harmed materially if the actor is later permitted in acting on Alfredos application cannot be said to have been fair and proper.
to assert any claim inconsistent with his earlier conduct; and fourth, the
actor knows, expects or foresees that the other would act upon the As to the claim that the trial court erred in applying equity to Alfredos case, we hold that
information given or that a reasonable person in the actors position would Alfredo had no other remedy to recover from Land Bank and the lower court properly
[17]
expect or foresee such action. exercised its equity jurisdiction in resolving the collection suit. As we have held in one case:

By accepting Alfredos payment and keeping silent on the status of Alfredos Equity, as the complement of legal jurisdiction, seeks to reach and
application, Land Bank misled Alfredo to believe that he had for all intents and purposes complete justice where courts of law, through the inflexibility of their
stepped into the shoes of the Spouses Sy. rules and want of power to adapt their judgments to the special
circumstances of cases, are incompetent to do so. Equity regards the spirit
The defense of Land Bank Legazpi City Branch Manager Atty. Hingco that it was the and not the letter, the intent and not the form, the substance rather than
[23]
banks Lending Center that should have notified Alfredo of his assumption of mortgage the circumstance, as it is variously expressed by different courts.
disapproval is unavailing. The Lending Centers lack of notice of disapproval, the Tabaco Branchs
silence on the disapproval, and the banks subsequent actions show a failure of the bank as a
whole, first, to notify Alfredo that he is not a recognized debtor in the eyes of the bank; Another claim made by Land Bank is the presumption of regularity it enjoys and that
and second, to apprise him of how and when he could collect on the payment that the bank it was in good faith when it accepted Alfredos tender of PhP 750,000.
no longer had a right to keep.
We turn then on the principle upon which Land Bank must return Alfredos payment. The defense of good faith fails to convince given Land Banks actions. Alfredo was not
Unjust enrichment exists when a person unjustly retains a benefit to the loss of another, or treated as a mere prospective borrower. After he had paid PhP 750,000, he was made to sign
when a person retains money or property of another against the fundamental principles of bank documents including a promissory note and real estate mortgage. He was assured by
[18]
justice, equity and good conscience. There is unjust enrichment under Art. 22 of the Civil Atty. Hingco that the titles to the properties covered by the Spouses Sys real estate mortgage
Code when (1) a person is unjustly benefited, and (2) such benefit is derived at the expense of would be transferred in his name, and upon payment of the PhP 750,000, the account would
[19] [24]
or with damages to another. be considered current and renewed in his name.

Additionally, unjust enrichment has been applied to actions called accion in rem Land Bank posits as a defense that it did not unduly enrich itself at Alfredos expense
verso. In order that the accion in rem verso may prosper, the following conditions must concur: during the foreclosure of the mortgaged properties, since it tendered its bid by subtracting PhP
(1) that the defendant has been enriched; (2) that the plaintiff has suffered a loss; (3) that the 750,000 from the Spouses Sys outstanding loan obligation. It is observed that this is the first
enrichment of the defendant is without just or legal ground; and (4) that the plaintiff has no time Land Bank is revealing this defense. However, issues, arguments, theories, and causes not
[20] [25]
other action based on contract, quasi-contract, crime, or quasi-delict. The principle of unjust raised below may no longer be posed on appeal. Land Banks contention, thus, cannot be
enrichment essentially contemplates payment when there is no duty to pay, and the person entertained at this point.
[21]
who receives the payment has no right to receive it.
Land Bank further questions the lower courts decision on the basis of the
The principle applies to the parties in the instant case, as, Alfredo, having been inconsistencies made by Alfredo on the witness stand. It argues that Alfredo was not a credible
deemed disqualified from assuming the loan, had no duty to pay petitioner bank and the latter witness and his testimony failed to overcome the presumption of regularity in the performance
had no right to receive it. of regular duties on the part of Land Bank.

This claim, however, touches on factual findings by the trial court, and we defer to these
Moreover, the Civil Code likewise requires under Art. 19 that [e]very person must, in the findings of the trial court as sustained by the appellate court. These are generally binding on
exercise of his rights and in the performance of his duties, act with justice, give everyone his us. While there are exceptions to this rule, Land Bank has not satisfactorily shown that any of
[26]
due, and observe honesty and good faith. Land Bank, however, did not even bother to inform them is applicable to this issue. Hence, the rule that the trial court is in a unique position to
[27]
Alfredo that it was no longer approving his assumption of the Spouses Sys mortgage. Yet it observe the demeanor of witnesses should be applied and respected in the instant case.
acknowledged his interest in the loan when the branch head of the bank wrote to tell him that
In sum, we hold that Land Bank may not keep the PhP 750,000 paid by Alfredo as it had already
foreclosed on the mortgaged lands. The next question is the propriety of the imposition of interest and the proper
imposable rate of applicable interest. The RTC granted the rate of 12% per annum which was
Interest and attorneys fees affirmed by the CA. From the above-quoted guidelines, however, the proper imposable
interest rate is 6% per annum pursuant to Art. 2209 of the Civil Code.Sunga-Chan v. Court of
As to the applicable interest rate, we reiterate the guidelines found in Eastern Appeals is illuminating in this regard:
[28]
Shipping Lines, Inc. v. Court of Appeals:
In Reformina v. Tomol, Jr., the Court held that the legal interest at
12% per annum under Central Bank (CB) Circular No. 416 shall be adjudged
II. With regard particularly to an award of interest in the concept only in cases involving the loan or forbearance of money. And for
of actual and compensatory damages, the rate of interest, as well as the transactions involving payment of indemnities in the concept of damages
accrual thereof, is imposed, as follows: arising from default in the performance of obligations in generaland/or for
money judgment not involving a loan or forbearance of money, goods, or
1. When the obligation is breached, and it consists in the credit, the governing provision is Art. 2209 of the Civil Code prescribing a
payment of a sum of money, i.e., a loan or forbearance of money, the yearly 6% interest. Art. 2209 pertinently provides:
interest due should be that which may have been stipulated in
writing. Furthermore, the interest due shall itself earn legal interest from Art. 2209. If the obligation consists in the payment of a
the time it is judicially demanded. In the absence of stipulation, the rate sum of money, and the debtor incurs in delay, the indemnity for
of interest shall be 12% per annum to be computed from default, i.e., damages, there being no stipulation to the contrary, shall be the
from judicial or extrajudicial demand under and subject to the provisions payment of the interest agreed upon, and in the absence of
of Article 1169 of the Civil Code. stipulation, the legal interest, which is six per cent per annum.

2. When an obligation, not constituting a loan or forbearance of The term forbearance, within the context of usury law, has been
money, is breached, an interest on the amount of damages awarded may described as a contractual obligation of a lender or creditor to refrain, during
be imposed at the discretion of the court at the rate of 6% per annum. No a given period of time, from requiring the borrower or debtor to repay the
interest, however, shall be adjudged on unliquidated claims or damages loan or debt then due and payable.
except when or until the demand can be established with reasonable
certainty. Accordingly, where the demand is established with reasonable Eastern Shipping Lines, Inc. synthesized the rules on the imposition
certainty, the interest shall begin to run from the time the claim is made of interest, if proper, and the applicable rate, as follows: The 12% per annum
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty rate under CB Circular No. 416 shall apply only to loans or forbearance of
cannot be so reasonably established at the time the demand is made, the money, goods, or credits, as well as to judgments involving such loan or
interest shall begin to run only from the date the judgment of the court is forbearance of money, goods, or credit, while the 6% per annum under Art.
made (at which time the quantification of damages may be deemed to 2209 of the Civil Code applies when the transaction involves the payment
have been reasonably ascertained). The actual base for the computation of indemnities in the concept of damage arising from the breach or a delay
of legal interest shall, in any case, be on the amount finally adjudged. in the performance of obligations in general, with the application of both
rates reckoned from the time the complaint was filed until the [adjudged]
3. When the judgment of the court awarding a sum of money amount is fully paid. In either instance, the reckoning period for the
becomes final and executory, the rate of legal interest, whether the case commencement of the running of the legal interest shall be subject to the
falls under paragraph 1 or paragraph 2, above, shall be 12% per annum condition that the courts are vested with discretion, depending on the
[30]
from such finality until its satisfaction, this interim period being deemed equities of each case, on the award of interest. (Emphasis supplied.)
to be by then an equivalent to a forbearance of credit.

Based on our ruling above, forbearance of money refers to the contractual obligation of the
No evidence was presented by Alfredo that he had sent a written demand to Land Bank before lender or creditor to desist for a fixed period from requiring the borrower or debtor to repay
he filed the collection suit. Only the verbal agreement between the lawyers of the parties on the loan or debt then due and for which 12% per annum is imposed as interest in the absence
[29]
the return of the payment was mentioned. Consequently, the obligation of Land Bank to of a stipulated rate. In the instant case, Alfredos conditional payment to Land Bank does not
return the payment made by Alfredo upon the formers denial of the latters application for constitute forbearance of money, since there was no agreement or obligation for Alfredo to
assumption of mortgage must be reckoned from the date of judicial demand on December 12, pay Land Bank the amount of PhP 750,000, and the obligation of Land Bank to return what
1997, as correctly determined by the trial court and affirmed by the appellate court.
Alfredo has conditionally paid is still in dispute and has not yet been determined. Thus, it
cannot be said that Land Banks alleged obligation has become a forbearance of money.

On the award of attorneys fees, attorneys fees and expenses of litigation were
awarded because Alfredo was compelled to litigate due to the unjust refusal of Land Bank to
refund the amount he paid. There are instances when it is just and equitable to award
[31]
attorneys fees and expenses of litigation. Art. 2208 of the Civil Code pertinently states:

In the absence of stipulation, attorneys fees and expenses of
litigation, other than judicial costs, cannot be recovered, except:

x x x x

(2) When the defendants act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to protect his
interest.


Given that Alfredo was indeed compelled to litigate against Land Bank and incur
expenses to protect his interest, we find that the award falls under the exception above and
is, thus, proper given the circumstances.

On a final note. The instant case would not have been litigated had Land Bank been more
circumspect in dealing with Alfredo. The bank chose to accept payment from Alfredo even
before a credit investigation was underway, a procedure worsened by the failure to even
inform him of his credit standings impact on his assumption of mortgage. It was, therefore,
negligent to a certain degree in handling the transaction with Alfredo. It should be
remembered that the business of a bank is affected with public interest and it should observe
[32]
a higher standard of diligence when dealing with the public.

WHEREFORE, the appeal is DENIED. The CA Decision in CA-G.R. CR-CV No. 84445
is AFFIRMED with MODIFICATION in that the amount of PhP 750,000 will earn interest at 6%
per annum reckoned from December 12, 1997, and the total aggregate monetary awards will
in turn earn 12% per annum from the finality of this Decision until fully paid.

SO ORDERED.













 Subsequently, PHILAB made partial deliveries of office and laboratory furniture to
UNIVERSITY OF THE PHILIPPINES, petitioner, vs. PHILAB INDUSTRIES, INC., respondent. BIOTECH after having been duly inspected by their representatives and FEMF Executive
D E C I S I O N Assistant Lirio.
CALLEJO, SR., J.: On August 24, 1982, FEMF remitted P600,000 to PHILAB as downpayment for the
[1]
Before the Court is a petition for review on certiorari of the Decision of the Court of laboratory furniture for the BIOTECH project, for which PHILAB issued Official Receipt No. 253
[2]
Appeals in CA-G.R. CV No. 44209, as well as its Resolution denying the petitioners motion for to FEMF. On October 22, 1982, FEMF made another partial payment of P800,000 to PHILAB,
[3]
the reconsideration thereof. The Court of Appeals set aside the Decision of Branch 150 of the for which the latter issued Official Receipt No. 256 to FEMF. The remittances were in the form
Regional Trial Court (RTC) of Makati City, which dismissed the complaint of the respondent of checks drawn by FEMF and delivered to PHILAB, through Padolina.
against the petitioner for sum of money and damages. On October 16, 1982, UP, through Emil Q. Javier, the Chancellor of UP Los Baos and
The Facts of the Case FEMF, represented by its Executive Officer, Rolando Gapud, executed a Memorandum of
Sometime in 1979, the University of the Philippines (UP) decided to construct an Agreement (MOA) in which FEMF agreed to grant financial support and donate sums of money
integrated system of research organization known as the Research Complex. As part of the to UP for the construction of buildings, installation of laboratory and other capitalization for
project, laboratory equipment and furniture were purchased for the National Institute of the project, not to exceed P29,000,000.00. The obligations of FEMF under the MOA are the
Biotechnology and Applied Microbiology (BIOTECH) at the UP Los Baos. Providentially, the following:
Ferdinand E. Marcos Foundation (FEMF) came forward and agreed to fund the acquisition of ARTICLE II
the laboratory furniture, including the fabrication thereof. OBLIGATIONS OF THE FOUNDATION
Renato E. Lirio, the Executive Assistant of the FEMF, gave the go-signal to BIOTECH to 2.1. The FOUNDATION, in carrying out its principal objectives of promoting philantrophic and
contact a corporation to accomplish the project. On July 23, 1982, Dr. William Padolina, the scientific projects through financial support to such projects that will contribute to the
Executive Deputy Director of BIOTECH, arranged for Philippine Laboratory Industries, Inc. countrys economic development, shall grant such financial support and donate such sums of
(PHILAB), to fabricate the laboratory furniture and deliver the same to BIOTECH for the money to the RESEARCH COMPLEX as may be necessary for the construction of buildings,
BIOTECH Building Project, for the account of the FEMF. Lirio directed Padolina to give the go- installation of laboratories, setting up of offices and physical plants and facilities and other
signal to PHILAB to proceed with the fabrication of the laboratory furniture, and requested capital investment of the RESEARCH COMPLEX and/or any of its component Research Institutes
Padolina to forward the contract of the project to FEMF for its approval. not to exceed P29 Million. For this purpose, the FOUNDATION shall:
On July 13, 1982, Padolina wrote Lirio and requested for the issuance of the purchase (a) Acquire and donate to the UNIVERSITY the site for the RESEARCH COMPLEX; and
order and downpayment for the office and laboratory furniture for the project, thus: (b) Donate or cause to be donated to the UNIVERSITY the sum of TWENTY-NINE MILLION PESOS
1. Supply and Installation of Laboratory furniture for the BIOTECH Building Project (P29,000,000.00) for the construction of the buildings of the National Institutes of
Amount : P2,934,068.90 Biotechnology and Applied Microbiology (BIOTECH) and the installation of their laboratories
Supplier : Philippine Laboratory Furniture Co., and their physical plants and other facilities to enable them to commence operations.
College, Laguna 2.2. In addition, the FOUNDATION shall, subject to the approval of the Board of Trustees of the
Attention: Mr. Hector C. Navasero FOUNDATION, continue to support the activities of the RESEARCH COMPLEX by way of
President recurrent additional grants and donations for specific research and development projects
Downpayment : 40% or P1,173,627.56 which may be mutually agreed upon and, from time to time, additional grants and donations
2. Fabrication and Supply of office furniture for the BIOTECH Building Project of such amounts as may be necessary to provide the RESEARCH COMPLEX and/or any of its
Amount : P573,375.00 Research Institutes with operational flexibility especially with regard to incentives to staff
Supplier : Trans-Oriental Woodworks, Inc. purchase of equipment/facilities, travel abroad, recruitment of local and expatriate staff and
st
1 Avenue, Bagumbayan such other activities and inputs which are difficult to obtain under usual government rules and
[6]
Tanyag, Taguig, Metro Manila regulations.
[4] [7]
Downpayment : 50% or P286,687.50 The Board of Regents of the UP approved the MOA on November 25, 1982.
Padolina assured Lirio that the contract would be prepared as soon as possible before In the meantime, Navasero promised to submit the contract for the installation of
the issuance of the purchase orders and the downpayment for the goods, and would be laboratory furniture to BIOTECH, by January 12, 1983. However, Navasero failed to do so. In a
transmitted to the FEMF as soon as possible. Letter dated February 1, 1983, BIOTECH reminded Navasero of the need to submit the contract
[8]
In a Letter dated July 23, 1982, Padolina informed Hector Navasero, the President of so that it could be submitted to FEMF for its evaluation and approval. Instead of submitting
PHILAB, to proceed with the fabrication of the laboratory furniture, per the directive of FEMF the said contract, PHILAB submitted to BIOTECH an accomplishment report on the project as
[9]
Executive Assistant Lirio. Padolina also requested for copies of the shop drawings and a sample of February 28, 1983, and requested payment thereon. By May 1983, PHILAB had completed
[5]
contract for the project, and that such contract and drawings had to be finalized before the 78% of the project, amounting to P2,288,573.74 out of the total cost of P2,934,068.90. The
down payment could be remitted to the PHILAB the following week. However, PHILAB failed FEMF had already paid forty percent (40%) of the total cost of the project. On May 12, 1983,
[10]
to forward any sample contract. Padolina wrote Lirio and furnished him the progress billing from PHILAB. 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 4. After the completion of the delivery and installation of said laboratory furnitures
[11]
of a check, for which PHILAB issued Official Receipt No. 202 to FEMF through Padolina. and equipment at defendants BIOTECH Laboratory, defendant paid three (3)
On July 1, 1984, PHILAB submitted to BIOTECH Invoice No. 01643 in the amount times on installment basis:
of P702,939.40 for the final payment of laboratory furniture. Representatives from BIOTECH, a) P600,000.00 as per Official Receipt No. 253 dated August 24, 1982;
PHILAB, and Lirio for the FEMF, conducted a verification of the accomplishment of the work b) P800,000.00 as per Official Receipt No. 256 dated October 22, 1982;
and confirmed the same. BIOTECH forwarded the invoice to Lirio on December 18, 1984 for its c) P836,119.52 as per Official Receipt No. 202 dated August 11, 1983;
[12]
payment. Lirio, in turn, forwarded the invoice to Gapud, presumably sometime in the early thus leaving a balance of PESOS: SEVEN HUNDRED TWO THOUSAND NINE HUNDRED
part of 1985. However, the FEMF failed to pay the bill. PHILAB reiterated its request for THIRTY-NINE & 40/100 (P702,939.40).
[13]
payment through a letter on May 9, 1985. BIOTECH again wrote Lirio on March 21, 1985, 5. That notwithstanding repeated demands for the past eight years, defendant
[14]
requesting the payment of PHILABs bill. It sent another letter to Gapud, on November 22, arrogantly and maliciously made plaintiff believe that it was going to pay the
[15]
1985, again appealing for the payment of PHILABs bill. In a Letter to BIOTECH dated balance aforestated, that was why plaintiffs President and General Manager
December 5, 1985, PHILAB requested payment of P702,939.40 plus interest thereon himself, HECTOR C. NAVASERO, personally went to and from UP Los Baos to
[16]
of P224,940.61. There was, however, no response from the FEMF. On February 24, 1986, talk with defendants responsible officers in the hope of expecting payment,
[17]
PHILAB wrote BIOTECH, appealing for the payment of its bill even on installment basis. when, in truth and in fact, defendant had no intention to pay whatsoever right
President Marcos was ousted from office during the February 1986 EDSA Revolution. On from the start on a misplaced ground of technicalities. Some of plaintiffs
March 26, 1986, Navasero wrote BIOTECH requesting for its much-needed assistance for the demand letters since year 1983 up to the present are hereto attached as
payment of the balance already due plus interest of P295,234.55 for its fabrication and supply Annexes A, B, C, D, E, F, G, and H hereof;
[18]
of laboratory furniture. 6. That by reason of defendants malicious, evil and unnecessary
On April 22, 1986, PHILAB wrote President Corazon C. Aquino asking her help to secure misrepresentations that it was going to pay its obligation and asking plaintiff
[19]
the payment of the amount due from the FEMF. The letter was referred to then Budget so many red tapes and requirements to submit, compliance of all of which took
Minister Alberto Romulo, who referred the letter to then UP President Edgardo Angara on June plaintiff almost eight (8) years to finish, when, in truth and in fact, defendant
9, 1986. On September 30, 1986, Raul P. de Guzman, the Chancellor of UP Los Baos, wrote had no intention to pay, defendant should be ordered to pay plaintiff no less
then Chairman of the Presidential Commission on Good Government (PCGG) Jovito Salonga, than PESOS: ONE HUNDRED THOUSAND (P100,000.00) exemplary damages, so
submitting PHILABs claim to be officially entered as accounts payable as soon as the assets of that other government institutions may be warned that they must not unjustly
[20] [23]
FEMF were liquidated by the PCGG. enrich themselves at the expense of the people they serve.
In the meantime, the PCGG wrote UP requesting for a copy of the relevant contract and In its answer, UP denied liability and alleged that PHILAB had no cause of action against
[21]
the MOA for its perusal. it because it was merely the donee/beneficiary of the laboratory furniture in the BIOTECH; and
Chancellor De Guzman wrote Navasero requesting for a copy of the contract executed that the FEMF, which funded the project, was liable to the PHILAB for the purchase price of
between PHILAB and FEMF. In a Letter dated October 20, 1987, Navasero informed De Guzman the laboratory furniture. UP specifically denied obliging itself to pay for the laboratory furniture
that PHILAB and FEMF did not execute any contract regarding the fabrication and delivery of supplied by PHILAB.
laboratory furniture to BIOTECH. After due proceedings, the trial court rendered judgment dismissing the complaint
Exasperated, PHILAB filed a complaint for sum of money and damages against UP. In the without prejudice to PHILABs recourse against the FEMF. The fallo of the decision reads:
complaint, PHILAB prayed that it be paid the following: WHEREFORE, this case is hereby DISMISSED for lack of merit without prejudice to plaintiff's
(1) PESOS: SEVEN HUNDRED TWO THOUSAND NINE HUNDRED THIRTY NINE & recourse to the assets of the Marcos Foundation for the unpaid balance of P792,939.49.
[24]
40/100 (P702,939.40) plus an additional amount (as shall be determined SO ORDERED.
during the hearing) to cover the actual cost of money which at the time of Undaunted, PHILAB appealed to the Court of Appeals (CA) alleging that the trial court
transaction the value of the peso was eleven to a dollar (P11.00:$1) and erred in finding that:
twenty seven (27%) percent interest on the total amount from August 1982 1. the contract for the supply and installation of subject laboratory furniture and
until fully paid; equipment was between PHILAB and the Marcos Foundation; and,
(2) PESOS: ONE HUNDRED THOUSAND (P100,000.00) exemplary damages; 2. the Marcos Foundation, not the University of the Philippines, is liable to pay the
[25]
(3) FIFTY THOUSAND [PESOS] (P50,000.00) as and for attorneys fees; and respondent the balance of the purchase price.
[22]
(4) Cost of suit. The CA reversed and set aside the decision of the RTC and held that there was never a
PHILAB alleged, inter alia, that: contract between FEMF and PHILAB. Consequently, PHILAB could not be bound by the MOA
3. Sometime in August 1982, defendant, through its officials, particularly MR. between the FEMF and UP since it was never a party thereto. The appellate court ruled that,
WILLIAM PADOLINA, Director, asked plaintiff to supply and install several although UP did not bind itself to pay for the laboratory furniture; nevertheless, it is liable to
laboratory furnitures and equipment at BIOTECH, a research laboratory of PHILAB under the maxim: No one should unjustly enrich himself at the expense of another.
herein defendant located at its campus in College, Laguna, for a total contract The Present Petition
price of PESOS: TWO MILLION NINE HUNDRED THIRTY-NINE THOUSAND FIFTY- Upon the denial of its motion for reconsideration of the appellate courts decision, UP,
EIGHT & 90/100 (P2,939,058.90); now the petitioner, filed its petition for review contending that:
 I. THE COURT OF APPEALS ERRED WHEN IT FAILED TO APPLY THE LAW ON or explicit words between parties but is to be deduced from conduct of the parties, language
CONTRACTS BETWEEN PHILAB AND THE MARCOS FOUNDATION. used, or things done by them, or other pertinent circumstances attending the transaction. To
II. THE COURT OF APPEALS ERRED IN APPLYING THE LEGAL PRINCIPLE OF UNJUST create contracts implied in fact, circumstances must warrant inference that one expected
[32]
ENRICHMENT WHEN IT HELD THAT THE UNIVERSITY, AND NOT THE MARCOS compensation and the other to pay. An implied-in-fact contract requires the parties intent
[26] [33]
FOUNDATION, IS LIABLE TO PHILAB. to enter into a contract; it is a true contract. The conduct of the parties is to be viewed as a
Prefatorily, the doctrinal rule is that pure questions of facts may not be the subject of reasonable man would view it, to determine the existence or not of an implied-in-fact
[34]
appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as this mode of appeal contract. The totality of the acts/conducts of the parties must be considered to determine
[27]
is generally restricted to questions of law. However, this rule is not absolute. The Court may their intention. An implied-in-fact contract will not arise unless the meeting of minds is
[35]
review the factual findings of the CA should they be contrary to those of the trial indicated by some intelligent conduct, act or sign.
[28]
court. Correspondingly, this Court may review findings of facts when the judgment of the In this case, the respondent was aware, from the time Padolina contacted it for the
[29]
CA is premised on a misapprehension of facts. fabrication and supply of the laboratory furniture until the go-signal was given to it to fabricate
On the first assigned error, the petitioner argues that the CA overlooked the evidentiary and deliver the furniture to BIOTECH as beneficiary, that the FEMF was to pay for the same.
effect and substance of the corresponding letters and communications which support the Indeed, Padolina asked the respondent to prepare the draft of the contract to be received by
statements of the witnesses showing affirmatively that an implied contract of sale existed the FEMF prior to the execution of the parties (the respondent and FEMF), but somehow, the
between PHILAB and the FEMF. The petitioner furthermore asserts that no contract existed respondent failed to prepare one. The respondent knew that the petitioner was merely the
between it and the respondent as it could not have entered into any agreement without the donee-beneficiary of the laboratory furniture and not the buyer; nor was it liable for the
requisite public bidding and a formal written contract. payment of the purchase price thereof. From the inception, the FEMF paid for the bills and
The respondent, on the other hand, submits that the CA did not err in not applying the statement of accounts of the respondent, for which the latter unconditionally issued receipts
law on contracts between the respondent and the FEMF. It, likewise, attests that it was never to and under the name of the FEMF. Indeed, witness Lirio testified:
privy to the MOA entered into between the petitioner and the FEMF. The respondent adds Q: Now, did you know, Mr. Witness, if PHILAB Industries was aware that it was the
that what the FEMF donated was a sum of money equivalent to P29,000,000, and not the Marcos Foundation who would be paying for this particular transaction for
laboratory equipment supplied by it to the petitioner. The respondent submits that the the completion of this particular transaction?
petitioner, being the recipient of the laboratory furniture, should not enrich itself at the A: I think they are fully aware.
expense of the respondent. Q: What is your basis for saying so?
The petition is meritorious. A: First, I think they were appraised by Dr. Padolina. Secondly, there were
It bears stressing that the respondents cause of action is one for sum of money occasions during our inspection in Los Baos, at the installation site, there
predicated on the alleged promise of the petitioner to pay for the purchase price of the were occasions, two or three occasions, when we met with Mr. Navasero
furniture, which, despite demands, the petitioner failed to do. However, the respondent failed who is the President, I think, or manager of PHILAB, and we appraised him
to prove that the petitioner ever obliged itself to pay for the laboratory furniture supplied by that it was really between the foundation and him to which includes (sic) the
it. Hence, the respondent is not entitled to its claim against the petitioner. construction company constructing the building. He is fully aware that it is
[36]
There is no dispute that the respondent is not privy to the MOA executed by the the foundation who (sic) engaged them and issued the payments.
petitioner and FEMF; hence, it is not bound by the said agreement. Contracts take effect only The respondent, in its Letter dated March 26, 1986, informed the petitioner and sought
[30]
between the parties and their assigns. A contract cannot be binding upon and cannot be its assistance for the collection of the amount due from the FEMF:
enforced against one who is not a party to it, even if he is aware of such contract and has acted Dear Dr. Padolina:
[31]
with knowledge thereof. Likewise admitted by the parties, is the fact that there was no May we request for your much-needed assistance in the payment of the balance still due us
written contract executed by the petitioner, the respondent and FEMF relating to the on the laboratory furniture we supplied and installed two years ago?
fabrication and delivery of office and laboratory furniture to the BIOTECH. Even the CA failed Business is still slow and we will appreciate having these funds as soon as possible to keep up
to specifically declare that the petitioner and the respondent entered into a contract of sale our operations.
over the said laboratory furniture. The parties are in accord that the FEMF had remitted to the We look forward to hearing from you regarding this matter.
respondent partial payments via checks drawn and issued by the FEMF to the respondent, Very truly yours,
[37]
through Padolina, in the total amount of P2,288,573.74 out of the total cost of the project PHILAB INDUSTRIES, INC.
of P2,934,068.90 and that the respondent received the said checks and issued receipts therefor The respondent even wrote former President Aquino seeking her assistance for the
to the FEMF. There is also no controversy that the petitioner did not pay a single centavo for payment of the amount due, in which the respondent admitted it tried to collect from her
the said furniture delivered by the respondent that the petitioner had been using ever since. predecessor, namely, the former President Ferdinand E. Marcos:
We agree with the petitioner that, based on the records, an implied-in-fact contract of YOUR EXCELLENCY:
sale was entered into between the respondent and FEMF. A contract implied in fact is one At the instance of the national government, subject laboratory furnitures were supplied by our
implied from facts and circumstances showing a mutual intention to contract. It arises where company to the National Institute of Biotechnology & Applied Microbiology (BIOTECH),
the intention of the parties is not expressed, but an agreement in fact creating an obligation. University of the Philippines, Los Baos, Laguna, in 1984.
It is a contract, the existence and terms of which are manifested by conduct and not by direct
Out of the total contract price of PESOS: TWO MILLION NINE HUNDRED THIRTY-NINE acquired the laboratory furniture under the MOA with FEMF; hence, it is entitled to keep the
THOUSAND FIFTY-EIGHT & 90/100 (P2,939,058.90), the previous administration had so far paid laboratory furniture.
us the sum of P2,236,119.52 thus leaving a balance of PESOS: ONE MILLION FOUR HUNDRED IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Decision of the
TWELVE THOUSAND SEVEN HUNDRED FORTY-EIGHT & 61/100 (P1,412.748.61) inclusive of Court of Appeals is REVERSED AND SET ASIDE. The Decision of the Regional Trial Court, Makati
interest of 24% per annum and 30% exchange rate adjustment. City, Branch 150, is REINSTATED. No costs.
On several occasions, we have tried to collect this amount from your predecessor, the latest SO ORDERED.
of which was subject invoice (01643) we submitted to DR. W. PADOLINA, deputy director of Puno, (Chairman), Austria-Martinez, and Tinga, JJ., concur.
BIOTECH. But this, notwithstanding, our claim has remained unacted upon up to now. Copy of Chico-Nazario, J., on leave.
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
[38]
of and derives benefit from.
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
[39]
sense that the term unjustly could mean illegally or unlawfully.
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
[40]
keep the benefit. 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
[41]
confer benefit by mistake, fraud, coercion, or request. Unjust enrichment is not itself a
theory of reconvey. Rather, it is a prerequisite for the enforcement of the doctrine of
[42]
restitution.
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
[43]
other action based on contract, quasi-contract, crime or quasi-delict.
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
[44]
principle of accion in rem verso will not lie.
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

WILLAWARE PRODUCTS CORPORATION, Petitioner, originated the use of these plastic automotive parts, it still has no exclusive right to use,
vs. manufacture and sell these as it has no patent over these products. Furthermore, [respondent]
JESICHRIS MANUFACTURING CORPORATION, Respondent. is not the only exclusive manufacturer of these plastic-made automotive parts as there are
3
D E C I S I O N other establishments which were already openly selling them to the public.
PERALTA, J.: After trial on the merits, the RTC ruled in favor of respondent. It ruled that petitioner clearly
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court invaded the rights or interest of respondent by deliberately copying and performing acts
1 2
seeking to set aside the Decision dated November 24, 2010 and Resolution dated February amounting to unfair competition. The RTC further opined that under the circumstances, in
10, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 86744. order for respondents property rights to be preserved, petitioners acts of manufacturing
The facts, as found by the Regional Trial Court (RTC), are as follows: similar plastic-made automotive parts such as those of respondents and the selling of the
[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed this present sameproducts to respondents customers, which it cultivated over the years, will have to be
complaint for damages for unfair competition with prayer for permanent injunction to enjoin enjoined. The dispositive portion of the decision reads:
[petitioner] Willaware Products Corporation ([petitioner] for short) from manufacturing and WHEREFORE, premises considered, the court finds the defendant liable to plaintiff Two Million
distributing plastic-made automotive parts similar to those of [respondent]. (2,000,000.00) Pesos, as actual damages, One Hundred Thousand (100,000.00) Pesos as
[Respondent] alleged that it is a duly registeredpartnership engaged in the manufacture and attorneys fees and One Hundred Thousand (100,000.00) Pesos for exemplary damages. The
distribution of plastic and metal products, with principal office at No. 100 Mithi Street, court hereby permanently [enjoins] defendant from manufacturing the plastic-made
Sampalukan, Caloocan City. Since its registration in 1992, [respondent] has been automotive parts as those manufactured by plaintiffs.
4
manufacturing in its Caloocan plant and distributing throughout the Philippines plastic-made SO ORDERED.
automotive parts. [Petitioner], on the other hand, which is engaged in the manufacture and Thus, petitioner appealed to the CA.
distribution of kitchenware items made of plastic and metal has its office near that of On appeal, petitioner asserts that ifthere is no intellectual property protecting a good
[respondent]. [Respondent] further alleged that in view of the physical proximity of belonging to another,the copying thereof for production and selling does not add up to unfair
[petitioners] office to [respondents] office, and in view of the fact that some of the competition as competition is promoted by law to benefit consumers. Petitioner further
[respondents] employeeshad transferred to [petitioner], [petitioner] had developed contends that it did not lure away respondents employees to get trade secrets. It points out
familiarity with [respondents] products, especially its plastic-made automotive parts. that the plastic spare parts sold by respondent are traded in the market and the copying of
That sometime in November 2000, [respondent] discovered that [petitioner] had been these can be done by simplybuying a sample for a mold to be made.
manufacturing and distributing the same automotive parts with exactly similar design, same Conversely, respondent averred that copyright and patent registrations are immaterial for an
material and colors but was selling these products at a lower price as [respondents] plastic- unfair competition case to prosper under Article 28 of the Civil Code. It stresses that the
made automotive parts and to the same customers. characteristics of unfair competition are present in the instant case as the parties are trade
[Respondent] alleged that it had originated the use of plastic in place of rubber in the rivals and petitioners acts are contrary to good conscience for deliberately copying its
manufacture ofautomotive underchassis parts such as spring eye bushing, stabilizer bushing, products and employing its former employees.
shock absorberbushing, center bearing cushions, among others. [Petitioners] manufacture of In a Decision dated November 24,2010, the CA affirmed with modification the ruling of the
the same automotive parts with plastic materialwas taken from [respondents] idea of using RTC. Relevant portions of said decision read:
plastic for automotive parts. Also, [petitioner] deliberately copied [respondents] products all Despite the evidence showing thatWillaware took dishonest steps in advancing its business
of which acts constitute unfair competition, is and are contrary to law, morals, good customs interest against Jesichris, however, the Court finds no basis for the award by the RTC of actual
and public policy and have caused [respondent] damages in terms oflost and unrealizedprofits damages. One is entitled to actual damages as one has duly proven. The testimony of Quejada,
in the amount of TWO MILLION PESOS as of the date of [respondents] complaint. who was engaged by Jesichris in 2001 to audit its business, only revealed that there was a
Furthermore, [petitioners] tortuous conduct compelled [respondent] to institute this action discrepancy between the sales of Jesichris from 2001 to 2002. No amount was mentioned. As
and thereby to incur expenses in the way of attorneys fees and other litigation expenses in for Exhibit "Q," which is a copy of the comparative income statement of Jesichris for 1999-
the amount of FIVE HUNDRED THOUSAND PESOS (500,000.00). 2002, it shows the decline of the sales in 2002 in comparison with those made in 2001 but it
In its Answer, [petitioner] denies all the allegations of the [respondent] except for the following does not disclose if this pertains to the subject automotive parts or to the other products of
facts: that it is engaged in the manufacture and distribution of kitchenware items made of Jesichris like plates.
plastic and metal and that theres physical proximity of [petitioners] office to [respondent]s In any event, it was clearly shown that there was unfair competition on the part of Willaware
office, and that someof [respondents] employees had transferred to [petitioner] and that over that prejudiced Jesichris. It is only proper that nominal damages be awarded in the amount of
the years [petitioner] had developed familiarity with [respondents] products, especially its Two Hundred Thousand Pesos (200,000.00) in order to recognize and vindicate Jesichris
plastic made automotive parts. rights. The RTCs award of attorneys fees and exemplary damages is also maintained.
As its Affirmative Defenses, [petitioner] claims that there can be no unfair competition as the x x x x
plastic-made automotive parts are mere reproductions of original parts and their construction WHEREFORE, premises considered, the Decision dated April 15, 2003 of the Regional Trial
and composition merely conforms to the specificationsof the original parts of motor vehicles Court of Caloocan City, Branch 131, in Civil Case No. C-19771 is hereby MODIFIED. The award
they intend to replace. Thus, [respondent] cannot claim that it "originated" the use of plastic of Two Million Pesos (2,000,000.00) actual damages is deleted and in its place, Two Hundred
for these automotive parts. Even assuming for the sake of argument that [respondent] indeed Thousand Pesos nominal damages is awarded.
 5
SO ORDERED. good conscience" as petitioner admitted having employed respondents formeremployees,
Dissatisfied, petitioner moved for reconsideration. However, the same was denied for lack of deliberately copied respondents products and even went to the extent of selling these
10
merit by the CA in a Resolution dated February 10, 2011. products to respondents customers.
Hence, the present Petition for Review wherein petitioner raises the following issues for our To bolster this point, the CA correctly pointed out that petitioners hiring of the former
resolution: employees of respondent and petitioners act of copying the subject plastic parts of
(1) Whether or not there is unfair competition under human relations when the respondent were tantamount to unfair competition, viz.:
parties are not competitors and there is actually no damage on the part of Jesichris? The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with
(2) Consequently, if there is no unfair competition, should there be moral damages the business of [respondent].1wphi1 [Petitioners] acts can be characterized as executed with
and attorneys fees? mischievous subtle calculation. To illustrate, in addition to the findings of the RTC, the Court
(3) Whether or not the addition of nominal damages is proper although no rights observes that [petitioner] is engaged in the production of plastic kitchenware previous to its
have been established? manufacturing of plasticautomotive spare parts, it engaged the services of the then mold
(4) If ever the right of Jesichris refersto its copyright on automotive parts, should it setter and maintenance operator of [respondent], De Guzman, while he was employed by the
be considered in the light of the said copyrights were considered to be void by no latter. De Guzman was hired by [petitioner] in order to adjust its machinery since quality plastic
less than this Honorable Court in SC GR No. 161295? automotive spare parts were not being made. It baffles the Court why [petitioner] cannot rely
(5) If the right involved is "goodwill" then the issue is: whether or not Jesichris has onits own mold setter and maintenance operator to remedy its problem. [Petitioners]
6
established "goodwill?" engagement of De Guzman indicates that it is banking on his experience gained from working
In essence, the issue for our resolution is: whether or not petitioner committed acts amounting for [respondent].
to unfair competition under Article 28 of the Civil Code. Another point we observe is that Yabut, who used to be a warehouse and delivery man of
Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil Code [respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this
7
on humanrelations, and not unfair competition under Republic Act No. 8293, as the present accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the
suit is a damage suit and the products are not covered by patent registration. A fortiori, the same position he occupied with [respondent]. These sequence of events relating to his
11
existence of patent registration is immaterial in the present case. employment by [petitioner] is suspect too like the situation with De Guzman.
The concept of "unfair competition"under Article 28 is very much broader than that covered Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of
by intellectual property laws. Under the present article, which follows the extended concept suddenly shifting his business from manufacturing kitchenware to plastic-made automotive
of "unfair competition" in American jurisdictions, the term coverseven cases of discovery of parts; his luring the employees of the respondent to transfer to his employ and trying to
12
trade secrets of a competitor, bribery of his employees, misrepresentation of all kinds, discover the trade secrets of the respondent.
interference with the fulfillment of a competitors contracts, or any malicious interference with Moreover, when a person starts an opposing place of business, not for the sake of profit to
8
the latters business. himself, but regardless of loss and for the sole purpose of driving his competitor out of business
With that settled, we now come to the issue of whether or not petitioner committed acts so that later on he can take advantage of the effects of his malevolent purpose, he is guilty of
13
amounting tounfair competition under Article 28 of the Civil Code. wanton wrong. As aptly observed by the courta quo, the testimony of petitioners witnesses
We find the petition bereft of merit. indicate that it acted in bad faith in competing with the business of respondent, to wit:
Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or [Petitioner], thru its General Manager, William Salinas, Jr., admitted that it was never engaged
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or in the business of plastic-made automotive parts until recently, year 2000:
any other unjust, oppressive or high-handed method shall give rise to a right of action by the Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic)
person who thereby suffers damage." not? Manufacturer of kitchenware and distributor ofkitchenware, is it not? Mr. Salinas: Yes,
From the foregoing, it is clear thatwhat is being sought to be prevented is not competitionper sir. Atty. Bautista: And you said you have known the [respondent] Jesichris Manufacturing Co.,
sebut the use of unjust, oppressive or high- handed methods which may deprive others of a you have known it to be manufacturing plastic automotive products, is it not? Mr. Salinas: Yes,
fair chance to engage in business or to earn a living. Plainly,what the law prohibits is unfair sir. Atty. Bautista: In fact, you have been (sic) physically become familiar with these products,
competition and not competition where the means usedare fair and legitimate. plastic automotive products of Jesichris? Mr. Salinas: Yes, sir.
In order to qualify the competition as "unfair," it must have two characteristics: (1) it must How [petitioner] was able to manufacture the same products, in terms of color, size, shape
involve an injury to a competitor or trade rival, and (2) it must involve acts which are and composition as those sold by Jesichris was due largely to the sudden transfer ofJesichris
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or employees to Willaware.
otherwise unlawful; in the language of our law, these include force, intimidation, deceit, Atty. Bautista: Since when have you been familiar with Jesichris Manufacturing Company?
machination or any other unjust, oppressive or high-handed method. The public injury or Mr. Salinas: Since they transferred there (sic) our place.
interest is a minor factor; the essence of the matter appears to be a private wrong perpetrated Atty. Bautista: And that was in what year? Mr. Salinas: Maybe four (4) years. I dont know the
9
by unconscionable means. exact date.
Here, both characteristics are present. Atty. Bautista: And some of the employees of Jesichris Manufacturing Co. have transferred to
First, both parties are competitors or trade rivals, both being engaged in the manufacture of your company, is it not?
plastic-made automotive parts. Second, the acts of the petitioner were clearly "contrary to Mr. Salinas: Yes, sir.
Atty. Bautista: How many, more or less?
Mr. Salinas: More or less, three (3).
Atty. Bautista: And when, in what year or month did they transfer to you?
Mr. Salinas: First, November 1.
Atty. Bautista: Year 2000?
Mr. Salinas: Yes sir. And then the other maybe February, this year. And the other one, just one
month ago.
That [petitioner] was clearly outto take [respondent] out of business was buttressed by the
testimony of [petitioners] witness, Joel Torres:
Q: Are you familiar with the [petitioner], Willaware Product Corporation?
A: Yes, sir.
Q: Will you kindly inform this court where is the office of this Willaware Product Corporation
(sic)?
A: At Mithi Street, Caloocan City, sir.
Q: And Mr. Witness, sometime second Saturday of January 2001, will you kindly inform this
court what unusual even (sic) transpired between you and Mr. Salinas on said date?
A: There was, sir.
Q: What is that?
A: Sir, I was walking at that time together with my wife going to the market and then I passed
by the place where they were having a drinking spree, sir.
Q: You mentioned they, who were they who were drinking at that time?
A: I know one Jun Molina, sir.
Q: And who else was there?
A: William Salinas, sir.
Q: And will you kindly inform us what happened when you spotted upon them drinking?
A: Jun Molina called me, sir.
Q: And what happened after that?
A: At that time, he offered mea glass of wine and before I was able to drink the wine, Mr.
Salinas uttered something, sir.
Q: And what were those words uttered by Mr. Salinas to you?
A: "O, ano naapektuhan na kayo sa ginaya (sic) ko sa inyo?"
Q: And what did you do after that, after hearing those words?
A: And he added these words, sir. "sabihin mo sa amo mo, dalawang taon na lang pababagsakin
ko na siya."
Q: Alright, hearing those words, will you kindly tell this court whom did you gather to be
referred to as your "amo"?
14
A: Mr. Jessie Ching, sir.
In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
However, since the award of Two Million Pesos (2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (200,000.00) in nominal damages is
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (50,000.00).
WHEREFORE, the instant petition is DENIED. The Decision dated November 24, 2010 and
Resolution dated February 10, 2011 of the Court of Appeals in CA-G.R. CV No. 86744 are hereby
AFFIRMED with MODIFICATION that the award of attorney's fees be lowered to Fifty Thousand
Pesos (50,000.00).
SO ORDERED.


G.R. No. 141309 June 19, 2007 Republic and therefore the latter is the one responsible for her acts; (2) the complaint states
no cause of action for lack of allegation of malice or bad faith; and (3) the certification against
LIWAYWAY VINZONS-CHATO, petitioner, forum shopping was signed by respondents counsel in violation of the rule that it is the
vs. plaintiff or the principal party who should sign the same.
FORTUNE TOBACCO CORPORATION, respondent. On September 29, 1997, the RTC denied petitioners motion to dismiss holding that to rule on
D E C I S I O N the allegations of petitioner would be to prematurely decide the merits of the case without
YNARES-SANTIAGO, J.: allowing the parties to present evidence. It further held that the defect in the certification
1
Petitioner assails the May 7, 1999 Decision of the Court of Appeals in CA-G.R. SP No. 47167, against forum shopping was cured by respondents submission of the corporate secretarys
2
which affirmed the September 29, 1997 Order of the Regional Trial Court (RTC) of Marikina, certificate authorizing its counsel to execute the certification against forum shopping. The
Branch 272, in Civil Case No. 97-341-MK, denying petitioners motion to dismiss. The complaint dispositive portion thereof, states:
filed by respondent sought to recover damages for the alleged violation of its constitutional WHEREFORE, foregoing premises considered, the motion to dismiss filed by the
rights arising from petitioners issuance of Revenue Memorandum Circular No. 37-93 (RMC 37- defendant Liwayway Vinzons-Chato and the motion to strike out and expunge from
3
93), which the Court declared invalid in Commissioner of Internal Revenue v. Court of Appeals. the record the said motion to dismiss filed by plaintiff Fortune Tobacco Corporation
Petitioner Liwayway Vinzons-Chato was then the Commissioner of Internal Revenue while are both denied on the grounds aforecited. The defendant is ordered to file her
respondent Fortune Tobacco Corporation is an entity engaged in the manufacture of different answer to the complaint within ten (10) days from receipt of this Order.
13
brands of cigarettes, among which are "Champion," "Hope," and "More" cigarettes. SO ORDERED.
On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA 7654), which took effect The case was elevated to the Court of Appeals via a petition for certiorari under Rule 65.
on July 3, 1993. Prior to its effectivity, cigarette brands Champion," "Hope," and "More" were However, same was dismissed on the ground that under Article 32 of the Civil Code, liability
considered local brands subjected to an ad valorem tax at the rate of 20-45%. However, on may arise even if the defendant did not act with malice or bad faith. The appellate court
July 1, 1993, or two days before RA 7654 took effect, petitioner issued RMC 37-93 reclassifying ratiocinated that Section 38, Book I of the Administrative Code is the general law on the civil
"Champion," "Hope," and "More" as locally manufactured cigarettes bearing a foreign liability of public officers while Article 32 of the Civil Code is the special law that governs the
4
brand subject to the 55% ad valorem tax. RMC 37-93 in effect subjected "Hope," "More," instant case. Consequently, malice or bad faith need not be alleged in the complaint for
5
and "Champion" cigarettes to the provisions of RA 7654, specifically, to Sec. 142, (c)(1) on damages. It also sustained the ruling of the RTC that the defect of the certification against
locally manufactured cigarettes which are currently classified and taxed at 55%, and which forum shopping was cured by the submission of the corporate secretarys certificate giving
imposes an ad valorem tax of "55% provided that the minimum tax shall not be less than Five authority to its counsel to execute the same.
6
Pesos (P5.00) per pack." Undaunted, petitioner filed the instant recourse contending that the suit is grounded on her
On July 2, 1993, at about 5:50 p.m., BIR Deputy Commissioner Victor A. Deoferio, Jr. acts done in the performance of her functions as a public officer, hence, it is Section 38, Book
sent via telefax a copy of RMC 37-93 to Fortune Tobacco but it was addressed to no one in I of the Administrative Code which should be applied. Under this provision, liability will attach
particular. On July 15, 1993, Fortune Tobacco received, by ordinary mail, a certified xerox copy only when there is a clear showing of bad faith, malice, or gross negligence. She further averred
of RMC 37-93. On July 20, 1993, respondent filed a motion for reconsideration requesting the that the Civil Code, specifically, Article 32 which allows recovery of damages for violation of
7
recall of RMC 37-93, but was denied in a letter dated July 30, 1993. The same letter assessed constitutional rights, is a general law on the liability of public officers; while Section 38, Book I
respondent for ad valorem tax deficiency amounting to P9,598,334.00 (computed on the basis of the Administrative Code is a special law on the superior public officers liability, such that, if
8
of RMC 37-93) and demanded payment within 10 days from receipt thereof. On August 3, the complaint, as in the instant case, does not allege bad faith, malice, or gross negligence, the
1993, respondent filed a petition for review with the Court of Tax Appeals (CTA), which on same is dismissible for failure to state a cause of action. As to the defect of the certification
9
September 30, 1993, issued an injunction enjoining the implementation of RMC 37-93. In its against forum shopping, she urged the Court to strictly construe the rules and to dismiss the
decision dated August 10, 1994, the CTA ruled that RMC 37-93 is defective, invalid, and complaint.
unenforceable and further enjoined petitioner from collecting the deficiency tax assessment Conversely, respondent argued that Section 38 which treats in general the public officers
issued pursuant to RMC No. 37-93. This ruling was affirmed by the Court of Appeals, and finally "acts" from which civil liability may arise, is a general law; while Article 32 which deals
10
by this Court in Commissioner of Internal Revenue v. Court of Appeals. It was held, among specifically with the public officers violation of constitutional rights, is a special provision
others, that RMC 37-93, has fallen short of the requirements for a valid administrative which should determine whether the complaint states a cause of action or not. Citing the case
14
issuance. of Lim v. Ponce de Leon, respondent alleged that under Article 32 of the Civil Code, it is
11
On April 10, 1997, respondent filed before the RTC a complaint for damages against enough that there was a violation of the constitutional rights of the plaintiff and it is not
petitioner in her private capacity. Respondent contended that the latter should be held liable required that said public officer should have acted with malice or in bad faith. Hence, it
for damages under Article 32 of the Civil Code considering that the issuance of RMC 37-93 concluded that even granting that the complaint failed to allege bad faith or malice, the motion
violated its constitutional right against deprivation of property without due process of law and to dismiss for failure to state a cause of action should be denied inasmuch as bad faith or malice
the right to equal protection of the laws. are not necessary to hold petitioner liable.
12
Petitioner filed a motion to dismiss contending that: (1) respondent has no cause of action The issues for resolution are as follows:
against her because she issued RMC 37-93 in the performance of her official function and (1) May a public officer be validly sued in his/her private capacity for acts done in
within the scope of her authority. She claimed that she acted merely as an agent of the connection with the discharge of the functions of his/her office?
 (2) Which as between Article 32 of the Civil Code and Section 38, Book I of the The circumstance that the special law is passed before or after the general act does not change
Administrative Code should govern in determining whether the instant complaint the principle. Where the special law is later, it will be regarded as an exception to, or a
states a cause of action? qualification of, the prior general act; and where the general act is later, the special statute will
(3) Should the complaint be dismissed for failure to comply with the rule on be construed as remaining an exception to its terms, unless repealed expressly or by necessary
21
certification against forum shopping? implication.
22
(4) May petitioner be held liable for damages? Thus, in City of Manila v. Teotico, the Court held that Article 2189 of the Civil Code which
On the first issue, the general rule is that a public officer is not liable for damages which a holds provinces, cities, and municipalities civilly liable for death or injuries by reason of
person may suffer arising from the just performance of his official duties and within the scope defective conditions of roads and other public works, is a special provision and should prevail
15
of his assigned tasks. An officer who acts within his authority to administer the affairs of the over Section 4 of Republic Act No. 409, the Charter of Manila, in determining the liability for
office which he/she heads is not liable for damages that may have been caused to another, as defective street conditions. Under said Charter, the city shall not be held for damages or
it would virtually be a charge against the Republic, which is not amenable to judgment for injuries arising from the failure of the local officials to enforce the provision of the charter, law,
16
monetary claims without its consent. However, a public officer is by law not immune from or ordinance, or from negligence while enforcing or attempting to enforce the same. As
damages in his/her personal capacity for acts done in bad faith which, being outside the scope explained by the Court:
17
of his authority, are no longer protected by the mantle of immunity for official actions. Manila maintains that the former provision should prevail over the latter, because
Specifically, under Section 38, Book I of the Administrative Code, civil liability may arise where Republic Act 409 is a special law, intended exclusively for the City of Manila, whereas
there is bad faith, malice, or gross negligence on the part of a superior public officer. And, the Civil Code is a general law, applicable to the entire Philippines.
under Section 39 of the same Book, civil liability may arise where the subordinate public The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is
officers act is characterized by willfulness or negligence. Thus true that, insofar as its territorial application is concerned, Republic Act No. 409 is a
Sec. 38. Liability of Superior Officers. (1) A public officer shall not be civilly liable special law and the Civil Code a general legislation; but, as regards the subject matter
for acts done in the performance of his official duties, unless there is a clear showing of the provisions above quoted, Section 4 of Republic Act 409 establishes a general
of bad faith, malice or gross negligence. rule regulating the liability of the City of Manila for "damages or injury to persons or
x x x x property arising from the failure of" city officers "to enforce the provisions of" said
Section 39. Liability of Subordinate Officers. No subordinate officer or employee Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal
shall be civilly liable for acts done by him in good faith in the performance of his Board, or other officers while enforcing or attempting to enforce said provisions."
duties. However, he shall be liable for willful or negligent acts done by him which are Upon the other hand, Article 2189 of the Civil Code constitutes a particular
contrary to law, morals, public policy and good customs even if he acts under orders prescription making "provinces, cities and municipalities . . . liable for damages for
or instructions of his superior. the death of, or injury suffered by, any person by reason" specifically "of the
18
In addition, the Court held in Cojuangco, Jr. v. Court of Appeals, that a public officer who defective condition of roads, streets, bridges, public buildings, and other public
directly or indirectly violates the constitutional rights of another, may be validly sued for works under their control or supervision." In other words, said section 4 refers to
damages under Article 32 of the Civil Code even if his acts were not so tainted with malice or liability arising from negligence, in general, regardless of the object thereof,
bad faith. whereas Article 2189 governs liability due to "defective streets," in particular.
Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private Since the present action is based upon the alleged defective condition of a road,
23
capacity for acts done in the course of the performance of the functions of the office, where said Article 2189 is decisive thereon.
24
said public officer: (1) acted with malice, bad faith, or negligence; or (2) where the public officer In the case of Bagatsing v. Ramirez, the issue was which law should govern the publication
violated a constitutional right of the plaintiff. of a tax ordinance, the City Charter of Manila, a special act which treats ordinances in general
Anent the second issue, we hold that the complaint filed by respondent stated a cause of action and which requires their publication before enactment and after approval, or the Tax Code, a
and that the decisive provision thereon is Article 32 of the Civil Code. general law, which deals in particular with "ordinances levying or imposing taxes, fees or other
A general statute is one which embraces a class of subjects or places and does not omit any charges," and which demands publication only after approval. In holding that it is the Tax Code
subject or place naturally belonging to such class. A special statute, as the term is generally which should prevail, the Court elucidated that:
understood, is one which relates to particular persons or things of a class or to a particular There is no question that the Revised Charter of the City of Manila is a special act
19
portion or section of the state only. since it relates only to the City of Manila, whereas the Local Tax Code is a general law
A general law and a special law on the same subject are statutes in pari materia and should, because it applies universally to all local governments. Blackstone defines general
accordingly, be read together and harmonized, if possible, with a view to giving effect to both. law as a universal rule affecting the entire community and special law as one relating
The rule is that where there are two acts, one of which is special and particular and the other to particular persons or things of a class. And the rule commonly said is that a prior
general which, if standing alone, would include the same matter and thus conflict with the special law is not ordinarily repealed by a subsequent general law. The fact that one
special act, the special law must prevail since it evinces the legislative intent more clearly than is special and the other general creates a presumption that the special is to be
that of a general statute and must not be taken as intended to affect the more particular and considered as remaining an exception of the general, one as a general law of the
specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order land, the other as the law of a particular case. However, the rule readily yields to a
20
to give its words any meaning at all. situation where the special statute refers to a subject in general, which the general
 27
statute treats in particular. Th[is] exactly is the circumstance obtaining in the case Article 32 was patterned after the "tort" in American law. A tort is a wrong, a tortious act
at bar. Section 17 of the Revised Charter of the City of Manila speaks of "ordinance" which has been defined as the commission or omission of an act by one, without right, whereby
28
in general, i.e., irrespective of the nature and scope thereof, whereas, Section 43 another receives some injury, directly or indirectly, in person, property, or reputation. There
of the Local Tax Code relates to "ordinances levying or imposing taxes, fees or other are cases in which it has been stated that civil liability in tort is determined by the conduct and
charges" in particular. In regard, therefore, to ordinances in general, the Revised not by the mental state of the tortfeasor, and there are circumstances under which the motive
Charter of the City of Manila is doubtless dominant, but, that dominant force loses of the defendant has been rendered immaterial. The reason sometimes given for the rule is
its continuity when it approaches the realm of "ordinances levying or imposing that otherwise, the mental attitude of the alleged wrongdoer, and not the act itself, would
29
taxes, fees or other charges" in particular. There, the Local Tax Code controls. Here, determine whether the act was wrongful. Presence of good motive, or rather, the absence
as always, a general provision must give way to a particular provision. Special of an evil motive, does not render lawful an act which is otherwise an invasion of anothers
provision governs. legal right; that is, liability in tort is not precluded by the fact that defendant acted without evil
30
Let us examine the provisions involved in the case at bar. Article 32 of the Civil Code provides: intent.
ART. 32. Any public officer or employee, or any private individual, who directly or The clear intention therefore of the legislature was to create a distinct cause of action in the
indirectly obstructs, defeats, violates, or in any manner impedes or impairs any of nature of tort for violation of constitutional rights, irrespective of the motive or intent of the
31
the following rights and liberties of another person shall be liable to the latter for defendant. This is a fundamental innovation in the Civil Code, and in enacting the
damages: Administrative Code pursuant to the exercise of legislative powers, then President Corazon C.
x x x x Aquino, could not have intended to obliterate this constitutional protection on civil liberties.
32
(6) The right against deprivation of property without due process of law; In Aberca v. Ver, it was held that with the enactment of Article 32, the principle of
x x x x accountability of public officials under the Constitution acquires added meaning and assumes
(8) The right to the equal protection of the laws; a larger dimension. No longer may a superior official relax his vigilance or abdicate his duty to
x x x x supervise his subordinates, secure in the thought that he does not have to answer for the
The rationale for its enactment was explained by Dean Bocobo of the Code Commission, as transgressions committed by the latter against the constitutionally protected rights and
follows: liberties of the citizen. Part of the factors that propelled people power in February 1986 was
"DEAN BOCOBO. Article 32, regarding individual rights, Attorney Cirilo Paredes the widely held perception that the government was callous or indifferent to, if not actually
proposes that Article 32 be so amended as to make a public official liable for violation responsible for, the rampant violations of human rights. While it would certainly be too naive
of another persons constitutional rights only if the public official acted maliciously to expect that violators of human rights would easily be deterred by the prospect of facing
or in bad faith. The Code Commission opposes this suggestion for these reasons: damage suits, it should nonetheless be made clear in no uncertain terms that Article 32 of the
"The very nature of Article 32 is that the wrong may be civil or criminal. It is not Civil Code makes the persons who are directly, as well as indirectly, responsible for the
necessary therefore that there should be malice or bad faith. To make such a transgression, joint tortfeasors.
requisite would defeat the main purpose of Article 32 which is the effective On the other hand, Sections 38 and 39, Book I of the Administrative Code, laid down the rule
protection of individual rights. Public officials in the past have abused their powers on the civil liability of superior and subordinate public officers for acts done in the performance
on the pretext of justifiable motives or good faith in the performance of their duties. of their duties. For both superior and subordinate public officers, the presence of bad faith,
Precisely, the object of the Article is to put an end to official abuse by the plea of malice, and negligence are vital elements that will make them liable for damages. Note that
good faith. In the United States this remedy is in the nature of a tort. while said provisions deal in particular with the liability of government officials, the subject
"Mr. Chairman, this article is firmly one of the fundamental articles introduced in the thereof is general, i.e., "acts" done in the performance of official duties, without specifying the
New Civil Code to implement democracy. There is no real democracy if a public action or omission that may give rise to a civil suit against the official concerned.
official is abusing and we made the article so strong and so comprehensive that it Contrarily, Article 32 of the Civil Code specifies in clear and unequivocal terms a particular
concludes an abuse of individual rights even if done in good faith, that official is specie of an "act" that may give rise to an action for damages against a public officer, and that
liable. As a matter of fact, we know that there are very few public officials who openly is, a tort for impairment of rights and liberties. Indeed, Article 32 is the special provision that
and definitely abuse the individual rights of the citizens. In most cases, the abuse is deals specifically with violation of constitutional rights by public officers. All other actionable
justified on a plea of desire to enforce the law to comply with ones duty. And so, if acts of public officers are governed by Sections 38 and 39 of the Administrative Code. While
we should limit the scope of this article, that would practically nullify the object of the Civil Code, specifically, the Chapter on Human Relations is a general law, Article 32 of the
the article. Precisely, the opening object of the article is to put an end to abuses same Chapter is a special and specific provision that holds a public officer liable for and allows
which are justified by a plea of good faith, which is in most cases the plea of officials redress from a particular class of wrongful acts that may be committed by public officers.
25
abusing individual rights." Compared thus with Section 38 of the Administrative Code, which broadly deals with civil
The Code Commission deemed it necessary to hold not only public officers but also private liability arising from errors in the performance of duties, Article 32 of the Civil Code is the
individuals civilly liable for violation of the rights enumerated in Article 32 of the Civil Code. It specific provision which must be applied in the instant case precisely filed to seek damages for
is not necessary that the defendant under this Article should have acted with malice or bad violation of constitutional rights.
faith, otherwise, it would defeat its main purpose, which is the effective protection of The complaint in the instant case was brought under Article 32 of the Civil Code. Considering
26
individual rights. It suffices that there is a violation of the constitutional right of the plaintiff. that bad faith and malice are not necessary in an action based on Article 32 of the Civil Code,
the failure to specifically allege the same will not amount to failure to state a cause of action.
The courts below therefore correctly denied the motion to dismiss on the ground of failure to
state a cause of action, since it is enough that the complaint avers a violation of a constitutional
right of the plaintiff.
Anent the issue on non-compliance with the rule against forum shopping, the subsequent
submission of the secretarys certificate authorizing the counsel to sign and execute the
certification against forum shopping cured the defect of respondents complaint. Besides, the
33
merits of the instant case justify the liberal application of the rules.
WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of
Appeals dated May 7, 1999 which affirmed the Order of the Regional Trial Court of Marikina,
Branch 272, denying petitioners motion to dismiss, is AFFIRMED. The Presiding Judge,
Regional Trial Court of Marikina, Branch 272, is hereby DIRECTED to continue with the
proceedings in Civil Case No. 97-341-MK with dispatch.
With costs.
SO ORDERED.


































 4.3 DEPENDENTSEleven Thousand Five Hundred Fifty Pesos
CONTINENTAL STEEL V MONTAO (Php11,550.00) in case of death of the employees legitimate dependents
(parents, spouse, and children). In case the employee is single, this benefit
covers the legitimate parents, brothers and sisters only with proper legal
[4]
CHICO-NAZARIO, J.: document to be presented (e.g. death certificate).


Before Us is a Petition for Review on Certiorari, under Rule 45 of the Rules of Court, The claim was based on the death of Hortillanos unborn child. Hortillanos wife,
[1] [2]
assailing the Decision dated 27 February 2008 and the Resolution dated 9 May 2008 of the Marife V. Hortillano, had a premature delivery on 5 January 2006 while she was in the
[3] th [5]
Court of Appeals in CA-G.R. SP No. 101697, affirming the Resolution dated 20 November 38 week of pregnancy. According to the Certificate of Fetal Death dated 7 January 2006,
2007 of respondent Accredited Voluntary Arbitrator Atty. Allan S. Montao (Montao) granting the female fetus died during labor due to fetal Anoxia secondary to uteroplacental
[6]
bereavement leave and other death benefits to Rolando P. Hortillano (Hortillano), grounded insufficiency.
on the death of his unborn child.
Continental Steel immediately granted Hortillanos claim for paternity leave but
The antecedent facts of the case are as follows: denied his claims for bereavement leave and other death benefits, consisting of the death and
[7]
accident insurance.
Hortillano, an employee of petitioner Continental Steel Manufacturing Corporation
(Continental Steel) and a member of respondent Nagkakaisang Manggagawa ng Centro Steel Seeking the reversal of the denial by Continental Steel of Hortillanos claims for
Corporation-Solidarity of Trade Unions in the Philippines for Empowerment and Reforms bereavement and other death benefits, the Union resorted to the grievance machinery
(Union) filed on 9 January 2006, a claim for Paternity Leave, Bereavement Leave and Death provided in the CBA. Despite the series of conferences held, the parties still failed to settle
[8]
and Accident Insurance for dependent, pursuant to the Collective Bargaining Agreement (CBA) their dispute, prompting the Union to file a Notice to Arbitrate before the National
concluded between Continental and the Union, which reads: Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment
[9]
(DOLE), National Capital Region (NCR). In a Submission Agreement dated 9 October 2006,
ARTICLE X: LEAVE OF ABSENCE the Union and Continental Steel submitted for voluntary arbitration the sole issue of whether
Hortillano was entitled to bereavement leave and other death benefits pursuant to Article X,
x x x x Section 2

Section 2. BEREAVEMENT LEAVEThe Company agrees to grant a
[10]
bereavement leave with pay to any employee in case of death of the and Article XVIII, Section 4.3 of the CBA. The parties mutually chose Atty. Montao, an
[11]
employees legitimate dependent (parents, spouse, children, brothers and Accredited Voluntary Arbitrator, to resolve said issue.
sisters) based on the following:
When the preliminary conferences again proved futile in amicably settling the
[12] [13]
2.1 Within Metro Manila up to Marilao, Bulacan - 7 days dispute, the parties proceeded to submit their respective Position Papers, Replies, and
[14]
Rejoinders to Atty. Montao.
2.2 Provincial/Outside Metro Manila - 11 days
The Union argued that Hortillano was entitled to bereavement leave and other death
x x x x benefits pursuant to the CBA. The Union maintained that Article X, Section 2 and Article XVIII,
Section 4.3 of the CBA did not specifically state that the dependent should have first been born
ARTICLE XVIII: OTHER BENEFITS alive or must have acquired juridical personality so that his/her subsequent death could be
covered by the CBA death benefits. The Union cited cases wherein employees of MKK Steel
x x x x Corporation (MKK Steel) and Mayer Steel Pipe Corporation (Mayer Steel), sister companies of
Continental Steel, in similar situations as Hortillano were able to receive death benefits under
Section 4. DEATH AND ACCIDENT INSURANCEThe Company shall similar provisions of their CBAs.
grant death and accidental insurance to the employee or his family in the
following manner: The Union mentioned in particular the case of Steve L. Dugan (Dugan), an employee
of Mayer Steel, whose wife also prematurely delivered a fetus, which had already died prior to
x x x x the delivery. Dugan was able to receive paternity leave, bereavement leave, and voluntary
[15]
contribution under the CBA between his union and Mayer Steel. Dugans child was only 24
weeks in the womb and died before labor, as opposed to Hortillanos child who was already 37-
38 weeks in the womb and only died during labor. On the otherhand, for the entitlement to benefit for death and
accident insurance as provided under Article XVIII, Section 4, paragraph
The Union called attention to the fact that MKK Steel and Mayer Steel are located in (4.3) of the parties CBA, four (4) indispensable elements must be present:
the same compound as Continental Steel; and the representatives of MKK Steel and Mayer (a) there is death; (b) such death must be of employees dependent; (c)
Steel who signed the CBA with their respective employees unions were the same as the such dependent must be legitimate; and (d) proper legal document to be
[18]
representatives of Continental Steel who signed the existing CBA with the Union. presented.

Finally, the Union invoked Article 1702 of the Civil Code, which provides that all
doubts in labor legislations and labor contracts shall be construed in favor of the safety of and Atty. Montao found that there was no dispute that the death of an employees
decent living for the laborer. legitimate dependent occurred. The fetus had the right to be supported by the parents from
the very moment he/she was conceived. The fetus had to rely on another for support; he/she
On the other hand, Continental Steel posited that the express provision of the CBA could not have existed or sustained himself/herself without the power or aid of someone else,
did not contemplate the death of an unborn child, a fetus, without legal personality. It claimed specifically, his/her mother. Therefore, the fetus was already a dependent, although he/she
that there are two elements for the entitlement to the benefits, namely: (1) death and (2) died during the labor or delivery. There was also no question that Hortillano and his wife were
status as legitimate dependent, none of which existed in Hortillanos case. Continental Steel, lawfully married, making their dependent, unborn child, legitimate.
[16]
relying on Articles 40, 41 and 42 of the Civil Code, contended that only one with civil
personality could die. Hence, the unborn child never died because it never acquired juridical In the end, Atty. Montao decreed:
personality. Proceeding from the same line of thought, Continental Steel reasoned that a fetus
that was dead from the moment of delivery was not a person at all. Hence, the WHEREFORE, premises considered, a resolution is hereby
term dependent could not be applied to a fetus that never acquired juridical personality. A rendered ORDERING [herein petitioner Continental Steel] to pay Rolando
fetus that was delivered dead could not be considered a dependent, since it never needed any P. Hortillano the amount of Four Thousand Nine Hundred Thirty-Nine
support, nor did it ever acquire the right to be supported. Pesos (P4,939.00), representing his bereavement leave pay and the
amount of Eleven Thousand Five Hundred Fifty Pesos (P11,550.00)
Continental Steel maintained that the wording of the CBA was clear and representing death benefits, or a total amount of P16,489.00
unambiguous. Since neither of the parties qualified the terms used in the CBA, the legally
accepted definitions thereof were deemed automatically accepted by both parties. The failure The complaint against Manuel Sy, however, is ORDERED
of the Union to have unborn child included in the definition of dependent, as used in the CBA DISMISSED for lack of merit.
the death of whom would have qualified the parent-employee for bereavement leave and
other death benefits bound the Union to the legally accepted definition of the latter term. All other claims are DISMISSED for lack of merit.

Continental Steel, lastly, averred that similar cases involving the employees of its Further, parties are hereby ORDERED to faithfully abide with the
sister companies, MKK Steel and Mayer Steel, referred to by the Union, were irrelevant and herein dispositions.
incompetent evidence, given the separate and distinct personalities of the companies. Neither
could the Union sustain its claim that the grant of bereavement leave and other death benefits
to the parent-employee for the loss of an unborn child constituted company practice. Aggrieved, Continental Steel filed with the Court of Appeals a Petition for Review
[19]
on Certiorari, under Section 1, Rule 43 of the Rules of Court, docketed as CA-G.R. SP No.
On 20 November 2007, Atty. Montao, the appointed Accredited Voluntary 101697.
[17]
Arbitrator, issued a Resolution ruling that Hortillano was entitled to bereavement leave with
pay and death benefits. Continental Steel claimed that Atty. Montao erred in granting Hortillanos claims for
bereavement leave with pay and other death benefits because no death of an
Atty. Montao identified the elements for entitlement to said benefits, thus: employees dependent had occurred. The death of a fetus, at whatever stage of pregnancy, was
excluded from the coverage of the CBA since what was contemplated by the CBA was the death
of a legal person, and not that of a fetus, which did not acquire any juridical
This Office declares that for the entitlement of the benefit of bereavement personality. Continental Steel pointed out that its contention was bolstered by the fact that
leave with pay by the covered employees as provided under Article X, the term death was qualified by the phrase legitimate dependent. It asserted that the status
Section 2 of the parties CBA, three (3) indispensable elements must be of a child could only be determined upon said childs birth, otherwise, no such appellation can
present: (1) there is death; (2) such death must be of employees be had. Hence, the conditions sine qua non for Hortillanos entitlement to bereavement leave
dependent; and (3) such dependent must be legitimate. and other death benefits under the CBA were lacking.
 As Atty. Montao identified, the elements for bereavement leave under Article X, Section 2 of
The Court of Appeals, in its Decision dated 27 February 2008, affirmed Atty. Montaos the CBA are: (1) death; (2) the death must be of a dependent, i.e., parent, spouse, child,
Resolution dated 20 November 2007. The appellate court interpreted deathto mean as follows: brother, or sister, of an employee; and (3) legitimate relations of the dependent to the
employee. The requisites for death and accident insurance under Article XVIII, Section 4(3) of
the CBA are: (1) death; (2) the death must be of a dependent, who could be a parent, spouse,
[Herein petitioner Continental Steels] exposition on the legal or child of a married employee; or a parent, brother, or sister of a single employee; and (4)
sense in which the term death is used in the CBA fails to impress the Court, presentation of the proper legal document to prove such death, e.g., death certificate.
and the same is irrelevant for ascertaining the purpose, which the grant of
bereavement leave and death benefits thereunder, is intended to serve. It is worthy to note that despite the repeated assertion of Continental Steel that the
While there is no arguing with [Continental Steel] that the acquisition of provisions of the CBA are clear and unambiguous, its fundamental argument for denying
civil personality of a child or fetus is conditioned on being born alive upon Hortillanos claim for bereavement leave and other death benefits rests on the purportedly
delivery, it does not follow that such event of premature delivery of a fetus proper interpretation of the terms death and dependent as used in the CBA. If the provisions
could never be contemplated as a death as to be covered by the CBA of the CBA are indeed clear and unambiguous, then there is no need to resort to the
provision, undoubtedly an event causing loss and grief to the affected interpretation or construction of the same. Moreover, Continental Steel itself admitted that
employee, with whom the dead fetus stands in a legitimate neither management nor the Union sought to define the pertinent terms for bereavement
relation. [Continental Steel] has proposed a narrow and technical leave and other death benefits during the negotiation of the CBA.
significance to the term death of a legitimate dependent as condition for The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil Code for the
granting bereavement leave and death benefits under the CBA. Following legal definition of death is misplaced. Article 40 provides that a conceived child acquires
[Continental Steels] theory, there can be no experience of death to speak personality only when it is born, and Article 41 defines when a child is considered born. Article
of. The Court, however, does not share this view. A dead fetus simply 42 plainly states that civil personality is extinguished by death.
cannot be equated with anything less than loss of human life, especially for
the expectant parents. In this light, bereavement leave and death benefits First, the issue of civil personality is not relevant herein. Articles 40, 41 and 42 of the
are meant to assuage the employee and the latters immediate family, Civil Code on natural persons, must be applied in relation to Article 37 of the same Code, the
extend to them solace and support, rather than an act conferring legal very first of the general provisions on civil personality, which reads:
status or personality upon the unborn child. [Continental Steels] insistence
that the certificate of fetal death is for statistical purposes only sadly Art. 37. Juridical capacity, which is the fitness to be the subject
[20]
misses this crucial point. of legal relations, is inherent in every natural person and is lost only
through death. Capacity to act, which is the power to do acts with legal
effect, is acquired and may be lost.
Accordingly, the fallo of the 27 February 2008 Decision of the Court of Appeals reads:

WHEREFORE, premises considered, the present petition is We need not establish civil personality of the unborn child herein since his/her juridical
hereby DENIED for lack of merit. The assailed Resolution dated November capacity and capacity to act as a person are not in issue. It is not a question before us whether
20, 2007 of Accredited Voluntary Arbitrator Atty. Allan S. Montao is hereby the unborn child acquired any rights or incurred any obligations prior to his/her death that
AFFIRMED and UPHELD. were passed on to or assumed by the childs parents. The rights to bereavement leave and
other death benefits in the instant case pertain directly to the parents of the unborn child upon
[21]
With costs against [herein petitioner Continental Steel]. the latters death.

Second, Sections 40, 41 and 42 of the Civil Code do not provide at all a definition
[22]
In a Resolution dated 9 May 2008, the Court of Appeals denied the Motion for of death. Moreover, while the Civil Code expressly provides that civil personality may be
[23]
Reconsideration of Continental Steel. extinguished by death, it does not explicitly state that only those who have acquired juridical
personality could die.
Hence, this Petition, in which Continental Steel persistently argues that the CBA is clear and
[24]
unambiguous, so that the literal and legal meaning of death should be applied. Only one with And third, death has been defined as the cessation of life. Life is not synonymous with civil
juridical personality can die and a dead fetus never acquired a juridical personality. personality. One need not acquire civil personality first before he/she could die. Even a child
inside the womb already has life. No less than the Constitution recognizes the life of the
[25]
We are not persuaded. unborn from conception, that the State must protect equally with the life of the mother. If
the unborn already has life, then the cessation thereof even prior to the child being delivered,
qualifies as death.
 the loss of a loved one. It cannot be said that the parents grief and sense of loss arising from
Likewise, the unborn child can be considered a dependent under the CBA. As Continental Steel the death of their unborn child, who, in this case, had a gestational life of 38-39 weeks but died
itself defines, a dependent is one who relies on another for support; one not able to exist or during delivery, is any less than that of parents whose child was born alive but died
sustain oneself without the power or aid of someone else. Under said general subsequently.
[26]
definition, even an unborn child is a dependent of its parents.Hortillanos child could not
have reached 38-39 weeks of its gestational life without depending upon its mother, Being for the benefit of the employee, CBA provisions on bereavement leave and other death
Hortillanos wife, for sustenance. Additionally, it is explicit in the CBA provisions in question benefits should be interpreted liberally to give life to the intentions thereof.Time and again,
that the dependent may be the parent, spouse, or child of a married employee; or the parent, the Labor Code is specific in enunciating that in case of doubt in the interpretation of any law
[29]
brother, or sister of a single employee. The CBA did not provide a qualification for the child or provision affecting labor, such should be interpreted in favor of labor. In the same way,
dependent, such that the child must have been born or must have acquired civil personality, the CBA and CBA provisions should be interpreted in favor of labor. In Marcopper Mining v.
[30]
as Continental Steel avers. Without such qualification, then child shall be understood in its National Labor Relations Commission, we pronounced:
more general sense, which includes the unborn fetus in the mothers womb.
Finally, petitioner misinterprets the declaration of the Labor
The term legitimate merely addresses the dependent childs status in relation to Arbiter in the assailed decision that "when the pendulum of judgment
[27]
his/her parents. In Angeles v. Maglaya, we have expounded on who is a legitimate child, viz: swings to and fro and the forces are equal on both sides, the same must
be stilled in favor of labor." While petitioner acknowledges that all doubts
A legitimate child is a product of, and, therefore, implies a valid and lawful in the interpretation of the Labor Code shall be resolved in favor of labor,
marriage. Remove the element of lawful union and there is strictly no it insists that what is involved-here is the amended CBA which is essentially
legitimate filiation between parents and child. Article 164 of the Family a contract between private persons. What petitioner has lost sight of is the
Code cannot be more emphatic on the matter: Children conceived or born avowed policy of the State, enshrined in our Constitution, to accord utmost
during the marriage of the parents are legitimate. (Emphasis ours.) protection and justice to labor, a policy, we are, likewise, sworn to uphold.

In Philippine Telegraph & Telephone Corporation v. NLRC [183
[28]
Conversely, in Briones v. Miguel, we identified an illegitimate child to be as SCRA 451 (1990)], we categorically stated that:
follows:
When conflicting interests of labor and
The fine distinctions among the various types of illegitimate capital are to be weighed on the scales of social justice,
children have been eliminated in the Family Code. Now, there are only two the heavier influence of the latter should be counter-
classes of children -- legitimate (and those who, like the legally adopted, balanced by sympathy and compassion the law must
have the rights of legitimate children) and illegitimate. All accord the underprivileged worker.
children conceived and born outside a valid marriage are illegitimate,
unless the law itself gives them legitimate status. (Emphasis ours.) Likewise, in Terminal Facilities and Services Corporation v.
NLRC [199 SCRA 265 (1991)], we declared:

Any doubt concerning the rights of labor
It is apparent that according to the Family Code and the afore-cited jurisprudence, should be resolved in its favor pursuant to the social
the legitimacy or illegitimacy of a child attaches upon his/her conception. In the present case, justice policy.
it was not disputed that Hortillano and his wife were validly married and that their child was
conceived during said marriage, hence, making said child legitimate upon her conception.
IN VIEW WHEREOF, the Petition is DENIED. The Decision dated 27 February 2008
Also incontestable is the fact that Hortillano was able to comply with the fourth element and Resolution dated 9 May 2008 of the Court of Appeals in CA-G.R. SP No. 101697, affirming
entitling him to death and accident insurance under the CBA, i.e., presentation of the death the Resolution dated 20 November 2007 of Accredited Voluntary Arbitrator Atty. Allan S.
certificate of his unborn child. Montao, which granted to Rolando P. Hortillano bereavement leave pay and other death
benefits in the amounts of Four Thousand Nine Hundred Thirty-Nine Pesos (P4,939.00) and
Given the existence of all the requisites for bereavement leave and other death benefits under Eleven Thousand Five Hundred Fifty Pesos (P11,550.00), respectively, grounded on the death
the CBA, Hortillanos claims for the same should have been granted by Continental Steel. of his unborn child, are AFFIRMED. Costs against Continental Steel Manufacturing Corporation.

We emphasize that bereavement leave and other death benefits are granted to an employee SO ORDERED.
to give aid to, and if possible, lessen the grief of, the said employee and his family who suffered