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Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

SPOUSES WILFREDO PALADA G.R. No. 172227


and BRIGIDA PALADA,*
Petitioners,
Present:

CORONA, C. J., Chairperson,


- versus- LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.
SOLIDBANK CORPORATION and
SHERIFF MAYO DELA CRUZ, Promulgated:
Respondents. June 29, 2011
x--------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

Allegations of bad faith and fraud must be proved by clear and convincing
evidence.[1]
This Petition for Review on Certiorari[2] under Rule 45 of the Rules of Court
assails the January 11, 2006 Decision[3] of the Court of Appeals (CA) in CA-G.R. CV
No. 84236 which dismissed the complaint filed by the petitioners against the respondents
and declared as valid the real estate mortgage and certificate of sale. Also assailed is
the April 12, 2006 Resolution[4]which denied the motion for reconsideration thereto.

Factual Antecedents

In February or March 1997, petitioners, spouses Wilfredo and Brigida Palada,


applied for a P3 million loan broken down as follows: P1 million as additional working
capital under the bills discounting line; P500,000.00 under the bills purchase line;
and P1.5 million under the time loan from respondent Solidbank Corporation (bank).[5]

On March 17, 1997, petitioners received from the bank the amount of P1 million
as additional working capital evidenced by a promissory note[6] and secured by a real
estate mortgage[7] in favor of the bank covering several real properties situated
in Santiago City.[8]

Due to the failure of petitioners to pay the obligation, the bank foreclosed the
mortgage and sold the properties at public auction.[9]

On August 19, 1999, petitioners filed a Complaint[10] for nullity of real estate
mortgage and sheriffs certificate of sale[11] with prayer for damages, docketed as Civil
Case No. 35-2779, against the bank and respondent Sheriff Mayo dela Cruz (sheriff)
before the Regional Trial Court (RTC) of Santiago City, Branch 35.[12] Petitioners alleged
that the bank, without their knowledge and consent, included their properties covered by
Transfer Certificate of Title (TCT) Nos. T-225131 and T-225132,[13] among the list of
properties mortgaged; that it was only when they received the notice of sale from the
sheriff in August 1998 that they found out about the inclusion of the said properties; that
despite their objection, the sheriff proceeded with the auction sale; and that the auction
sale was done in Santiago City in violation of the stipulation on venue in the real estate
mortgage.[14]

The bank, in its Answer,[15] denied the material allegations of the Complaint and
averred that since petitioners were collaterally deficient, they offered TCT Nos. T-
237695, T-237696, T-225131 and T-225132 as additional collateral;[16] that although the
said properties were at that time mortgaged to the Philippine National Bank (PNB), the
bank accepted the offer and caused the annotation of the mortgage in the original copies
with the Register of Deeds with the knowledge and consent of petitioners;[17] and that
when petitioners obligation to PNB was extinguished, they delivered the titles of the four
properties to the bank.[18]

Ruling of the Regional Trial Court

On October 21, 2004, the RTC rendered a Decision[19] declaring the real estate
mortgage void for lack of sufficient consideration. According to the RTC, the real estate
mortgage lacks consideration because the loan contract was not perfected due to the
failure of the bank to deliver the full P3 million to petitioners.[20] The RTC also found the
bank guilty of fraud and bad faith, thereby ordering it to pay petitioners moral and
exemplary damages, and attorneys fees. The RTC ruled:

Furthermore, it appears that the defendant unilaterally changed the


term and condition of their loan contract by releasing only P1M of the P3M
approved loan. The defendant, in so doing, violated their principal contract
of loan in bad faith, and should be held liable therefor.

Likewise, the defendant bank acted in bad faith when it made it


appear that the mortgage was executed by the plaintiffs on June 16, 1997,
when the document was acknowledged before Atty. German Balot, more
so, when it made it appear that the mortgage was registered with the
Register of Deeds allegedly on the same date, when in truth and in fact, the
plaintiffs executed said mortgage sometime [in] March, 1997, obviously
much earlier than June 16, 1997; for, if indeed the mortgage was executed
on said date, June 16, 1997, it should have been written on the mortgage
contract itself. On the contrary, the date and place of execution [were left
blank]. Amazingly, defendant claims that it was the plaintiffs who [had the]
mortgage notarized by Atty. Balot; such claim however is contrary or
against its own interest, because, the defendant should be the most
interested party in the genuineness and due execution of material important
papers and documents such as the mortgage executed in its favor to ensure
the protection of its interest embodied in said documents, and the act of
leaving the notarization of such a very important document as a mortgage
executed in its favor is contrary to human nature and experience, more so
against its interest; hence, the claim is untrue.

Moreover, the defendant also appears to have been motivated by bad


faith amounting to fraud when it was able to register the mortgage with the
Register of Deeds at the time when the collateral certificates of titles were
still in the custody and possession of another mortgagee bank (PNB) due
also to an existing/subsisting mortgage covering the same. Definitely, the
defendant resorted to some machinations or fraudulent means in registering
the contract of mortgage with the Register of Deeds. This should not be
countenanced.

Thus, on account of defendants bad faith, plaintiffs suffered mental


anguish, serious anxiety, besmirched reputation, wounded feelings, moral
shock and social humiliation, which entitle them to the award of moral
damages, more so, that it was shown that defendants bad faith was the
proximate cause of these damages plaintiffs suffered.

xxxx

WHEREFORE, with all the foregoing considerations, judgment is


hereby rendered in favor of the plaintiffs and against the defendant as
follows:

1. DECLARING as null and void the undated real estate mortgage


between the plaintiffs and the defendant, appearing as Doc. No. 553; Page
No. 29; Book No. 28; Series of 1997; (Exhibits B for the plaintiffs, Exhibit
1 for the defendant);

2. Likewise DECLARING as null and void the Sheriffs


Foreclosure and the Certificate of Sale, dated October 7, 1998 (Exhibit F to
F-3);

3. ORDERING the defendant to pay the plaintiffs the


following damages:

a) Php 1,000,000.00, moral damages;


b) Php 500,000.00, exemplary damages; and
c) Php 50,000.00, Attorneys fee; and

4. ORDERING the defendant to pay the cost of litigation,


including plaintiffs counsels court appearance at Php1,500.00 each.

SO ORDERED.[21]
Ruling of the Court of Appeals

On appeal, the CA reversed the ruling of the RTC. The CA said that based on the
promissory note and the real estate mortgage contract, the properties covered by TCT
Nos. T-225131 and T-225132 were mortgaged to secure the loan in the amount of P1
million, and not the P3 million loan applied by petitioners.[22] As to the venue of the
auction sale, the CA declared that since the properties subject of the case are
in Santiago City, the holding of the auction sale in Santiago City was proper[23] pursuant
to Sections 1[24] and 2[25] of Act No. 3135.[26] The CA likewise found no fraud or bad faith
on the part of the bank to warrant the award of damages by the RTC, thus:

The List of Properties Mortgaged printed at the dorsal side of the


real estate mortgage contract particularly includes the subject parcels of
land covered by TCT No. T-225132 and TCT No. T-225131.Below the
enumeration, the signatures of [petitioners] clearly appear. The document
was notarized before Notary Public German M. Balot. We therefore find no
cogent reason why the validity of the real estate mortgage covering the two
subject properties should not be sustained.

Settled is the rule in our jurisdiction that a notarized document has in


its favor the presumption of regularity, and to overcome the same, there
must be evidence that is clear, convincing and more than merely
preponderant; otherwise the document should be upheld. Clearly, the
positive presumption of the due execution of the subject real estate
mortgage outweighs [petitioners] bare and unsubstantiated denial that the
parcels of land covered by TCT Nos. T-225132 and T-225131 were among
those intended to secure the loan of One Million Pesos. Their imputation of
fraud among the officials of [the bank] is weak and unpersuasive. x x x

xxxx

We also note why despite the alleged non-approval of [petitioners]


application for additional loan, the owners copy of TCT Nos. T-225131 and
T-225132 remained in the possession of [the bank].[Petitioners] claim that
they were still hoping to obtain an additional loan in the future appears to
this court as a weak explanation. The continued possession by the bank of
the certificates of title merely supports the banks position that the parcels of
land covered by these titles were actually mortgaged to secure the payment
of the One Million Peso loan.

xxxx

WHEREFORE, in view of the foregoing, the assailed decision of


the Regional Trial Court, Branch 35 of Santiago City in Civil Case No. 35-
2779 is hereby ANNULLED and SET ASIDE and a new one entered:

(1) DISMISSING the complaint filed by the plaintiffs-


appellees against the defendants-appellants; and

(2) Declaring VALID the questioned real estate mortgage and


certificate of sale.

SO ORDERED.[27]

On February 1, 2006, petitioners moved for reconsideration but the CA denied the
same in its Resolution dated April 12, 2006.[28]

Issues

Hence, the present recourse, where petitioners allege that:

(A)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS
DISCRETION IN ANNULLING OR REVERSING THE FINDINGS OF
BRANCH 35, REGIONAL TRIAL COURT OF SANTIAGO CITY
THEREBY IN EFFECT DISMISSING THE COMPLAINT FILED BY
THE PETITIONERS AGAINST RESPONDENTS SOLIDBANK
CORPORATION AND SHERIFF MAYO DELA CRUZ.

(B)
THE COURT OF APPEALS ERRED IN DECLARING VALID THE
REAL ESTATE MORTGAGE EXECUTED BETWEEN THE
PETITIONERS AND RESPONDENT SOLIDBANK CORPORATION
AND IN SUSTAINING THE VALIDITY OF THE CERTIFICATE
OF SALE ISSUED BY RESPONDENT SHERIFF MAYO DELA
CRUZ.

(C)
THE COURT OF APPEALS ERRED IN MISAPPRECIATING THE
FINDINGS OF FACTS OF BRANCH
[29]
35, REGIONAL TRIAL COURT OF SANTIAGO CITY.

Simply put, the core issue in this case is the validity of the real estate
mortgage and the auction sale.

Petitioners Arguments

Petitioners echo the ruling of the RTC that the real estate mortgage and certificate
of sale are void because the bank failed to deliver the full amount of the loan. They
likewise impute bad faith and fraud on the part of the bank in including TCT Nos. T-
225131 and T-225132 in the list of properties mortgaged. They insist that they did not
sign the dorsal portion of the real estate mortgage contract, which contains the list of
properties mortgaged, because at that time the dorsal portion was still blank;[30] and that
TCT Nos. T-225131 and T-225132 were not intended to be included in the list of
mortgaged properties because these titles were still mortgaged with the PNB at the time
the real estate mortgage subject of this case was executed.[31]Moreover, they claim that
they delivered the titles of these properties to the bank as additional collateral for their
additional loans, and not for the P1 million loan.[32]

Respondent banks Arguments

The bank denies petitioners allegations of fraud and bad faith and argues that the real
estate mortgage which was properly notarized enjoys the presumption of regularity.[33] It
maintains that TCT Nos. T-225131 and T-225132 were mortgaged as additional
collateral for the P1 million loan.[34]

Our Ruling

The petition is bereft of merit.

The loan contract was perfected.

Under Article 1934[35] of the Civil Code, a loan contract is perfected only upon the
delivery of the object of the contract.

In this case, although petitioners applied for a P3 million loan, only the amount
of P1 million was approved by the bank because petitioners became collaterally deficient
when they failed to purchase TCT No. T-227331 which had an appraised value
of P1,944,000.00.[36] Hence, on March 17, 1997, only the amount of P1 million was
released by the bank to petitioners.[37]

Upon receipt of the approved loan on March 17, 1997, petitioners executed a
promissory note for the amount of P1 million.[38] As security for the P1 million loan,
petitioners on the same day executed in favor of the bank a real estate mortgage over the
properties covered by TCT Nos. T-237695, T-237696, T-237698, T-143683, T-143729,
T-225131 and T-225132. Clearly, contrary to the findings of the RTC, the loan contract
was perfected on March 17, 1997 when petitioners received the P1 million loan, which
was the object of both the promissory note and the real estate mortgage executed by
petitioners in favor of the bank.

Claims of fraud and bad faith are

unsubstantiated.

Petitioners claim that there was fraud and bad faith on the part of the bank in the
execution and notarization of the real estate mortgage contract.

We do not agree.

There is nothing on the face of the real estate mortgage contract to arouse any
suspicion of insertion or forgery. Below the list of properties mortgaged are the signatures
of petitioners.[39] Except for the bare denials of petitioner, no other evidence was
presented to show that the signatures appearing on the dorsal portion of the real estate
mortgage contract are forgeries.

Likewise flawed is petitioners reasoning that TCT Nos. T-225131 and T-225132
could not have been included in the list of properties mortgaged as these were still
mortgaged with the PNB at that time. Under our laws, a mortgagor is allowed to take a
second or subsequent mortgage on a property already mortgaged, subject to the prior
rights of the previous mortgages.[40]

As to the RTCs finding that the x x x bank acted in bad faith when it made it
appear that the mortgage was executed by the [petitioners] on June 16, 1997, when the
document was acknowledged before Atty. German, x x x when in truth and in fact, the
[petitioners] executed said mortgage sometime in March, 1997 x x x, we find the same
without basis. A careful perusal of the real estate mortgage contract would show that the
bank did not make it appear that the real estate mortgage was executed on June 16, 1997,
the same day that it was notarized, as the date of execution of the real estate mortgage
contract was left blank.[41] And the mere fact that the date of execution was left blank
does not prove bad faith. Besides, any irregularity in the notarization or even the lack of
notarization does not affect the validity of the document. Absent any clear and
convincing proof to the contrary, a notarized document enjoys the presumption of
regularity and is conclusive as to the truthfulness of its contents.[42]

All told, we find no error on the part of the CA in sustaining the validity of the real
estate mortgage as well as the certificate of sale.

WHEREFORE, the petition is hereby DENIED. The assailed January 11, 2006
Decision of the Court of Appeals and its April 12, 2006 Resolution in CA-G.R. CV No.
84236 are hereby AFFIRMED.
SO ORDERED.
Facts: Spouses Palada applied for a 3M loan with the respondent Solidbank. Petitioners received
the amount of 1M and secured the same with a deed of real estate mortgage of several
properties in favor of the respondent. Due to failure of the petitioners to pay their obligation,
Solidbank foreclosed said properties covered by the mortgage and sold the same. Petitioners
filed for declaration of nullity of the mortgage upon the ground, among others, that the loan
contract was not perfected because the bank delivered only 1M instead of the whole loan amount
of 3M.

Issue: Was the contract of loan perfected?

Held: Yes, the loan contract was perfected. Under Article 1934 of the Civil Code, a loan contract
is perfected only upon the delivery of the object of the contract. In this case, although
petitioners applied for a P3 million loan, only the amount of P1 million was approved by the bank
because petitioners became collaterally deficient when they failed to purchase TCT No. T-227331
which had an appraised value of P1,944,000.00. Hence, on March 17, 1997, only the amount of
P1 million was released by the bank to petitioners.

THIRD DIVISION

[G.R. No. 107132. October 8, 1999]

MAXIMA HEMEDES, petitioner, vs. THE HONORABLE COURT OF


APPEALS, DOMINIUM REALTY AND CONSTRUCTION
CORPORATION, ENRIQUE D. HEMEDES, and R & B INSURANCE
CORPORATION, respondents.

[G.R. No. 108472. October 8, 1999]

R & B INSURANCE CORPORATION, petitioner, vs. THE HONORABLE


COURT OF APPEALS DOMINIUM REALTY AND
CONSTRUCTION CORPORATION, ENRIQUE D. HEMEDES and
MAXIMA HEMEDES, respondents.

DECISION
GONZAGA_REYES, J.:

Assailed in these petitions for review on certiorari is the decision[1] of the


eleventh division of the Court of Appeals in CA-G.R. CV No. 22010 promulgated
on September 11, 1992 affirming in toto the decision of Branch 24 of the Regional
Trial Court of Laguna in Civil Case No. B-1766 dated February 22, 1989,[2] and
the resolution dated December 29, 1992 denying petitioner R & B Insurance
Corporations (R & B Insurance) motion for reconsideration. As the factual
antecedents and issues are the same, we shall decide the petitions jointly.
The instant controversy involves a question of ownership over an unregistered
parcel of land, identified as Lot No. 6, plan Psu-111331, with an area of 21,773
square meters, situated in Sala, Cabuyao, Laguna. It was originally owned by the
late Jose Hemedes, father of Maxima Hemedes and Enrique D. Hemedes. On
March 22, 1947 Jose Hemedes executed a document entitled Donation Inter Vivos
With Resolutory Conditions[3] whereby he conveyed ownership over the subject
land, together with all its improvements, in favor of his third wife, Justa Kauapin,
subject to the following resolutory conditions:

(a) Upon the death or remarriage of the DONEE, the title to the property donated
shall revert to any of the children, or their heirs, of the DONOR expressly
designated by the DONEE in a public document conveying the property to the
latter; or

(b) In absence of such an express designation made by the DONEE before her
death or remarriage contained in a public instrument as above provided, the title to
the property shall automatically revert to the legal heirs of the DONOR in
common.

Pursuant to the first condition abovementioned, Justa Kausapin executed on


September 27, 1960 a Deed of Conveyance of Unregistered Real Property by
Reversion[4] conveying to Maxima Hemedes the subject property under the
following terms -

That the said parcel of land was donated unto me by the said Jose Hemedes, my
deceased husband, in a deed of DONATION INTER VIVOS WITH
RESOLUTORY CONDITIONS executed by the donor in my favor, and duly
accepted by me on March 22, 1947, before Notary Public Luis Bella in Cabuyao,
Laguna;

That the donation is subject to the resolutory conditions appearing in the said deed
of DONATION INTER VIVOS WITH RESOLUTORY CONDITIONS, as
follows:

(a) Upon the death or remarriage of the DONEE, the title to the property donated
shall revert to any of the children, or their heirs, of the DONOR expressly
designated by the DONEE in a public document conveying the property to the
latter; or

(b) In absence of such an express designation made by the DONEE before her
death or remarriage contained in a public instrument as above provided, the title to
the property shall automatically revert to the legal heirs of the DONOR in
common.

That, wherefore, in virtue of the deed of donation above mentioned and in the
exercise of my right and privilege under the terms of the first resolutory condition
therein contained and hereinabove reproduced, and for and in consideration of my
love and affection, I do hereby by these presents convey, transfer, and deed unto
my designee, MAXIMA HEMEDES, of legal age, married to RAUL
RODRIGUEZ, Filipino and resident of No. 15 Acacia Road, Quezon City, who is
one of the children and heirs of my donor, JOSE HEMEDES, the ownership of,
and title to the property hereinabove described, and all rights and interests therein
by reversion under the first resolutory condition in the above deed of donation;
Except the possession and enjoyment of the said property which shall remain
vested in me during my lifetime, or widowhood and which upon my death or
remarriage shall also automatically revert to, and be transferred to my designee,
Maxima Hemedes.

Maxima Hemedes, through her counsel, filed an application for registration and
confirmation of title over the subject unregistered land. Subsequently, Original
Certificate of Title (OCT) No. (0-941) 0-198[5] was issued in the name of Maxima
Hemedes married to Raul Rodriguez by the Registry of Deeds of Laguna on June
8, 1962, with the annotation that Justa Kausapin shall have the usufructuary rights
over the parcel of land herein described during her lifetime or widowhood.
It is claimed by R & B Insurance that on June 2, 1964, Maxima Hemedes and
her husband Raul Rodriguez constituted a real estate mortgage over the subject
property in its favor to serve as security for a loan which they obtained in the
amount of P6,000.00. On February 22, 1968, R & B Insurance extrajudicially
foreclosed the mortgage since Maxima Hemedes failed to pay the loan even after it
became due on August 2, 1964. The land was sold at a public auction on May 3,
1968 with R & B Insurance as the highest bidder and a certificate of sale was
issued by the sheriff in its favor. Since Maxima Hemedes failed to redeem the
property within the redemption period, R & B Insurance executed an Affidavit of
Consolidation dated March 29, 1974 and on May 21, 1975 the Register of Deeds of
Laguna cancelled OCT No. (0-941) 0-198 and issued Transfer Certificate of Title
(TCT) No. 41985 in the name of R & B Insurance. The annotation of usufruct in
favor of Justa Kausapin was maintained in the new title.[6]
Despite the earlier conveyance of the subject land in favor of Maxima
Hemedes, Justa Kausapin executed a Kasunduan on May 27, 1971 whereby she
transferred the same land to her stepson Enrique D. Hemedes, pursuant to the
resolutory condition in the deed of donation executed in her favor by her late
husband Jose Hemedes. Enrique D. Hemedes obtained two declarations of real
property - in 1972, and again, in 1974, when the assessed value of the property was
raised. Also, he has been paying the realty taxes on the property from the time
Justa Kausapin conveyed the property to him in 1971 until 1979. In the cadastral
survey of Cabuyao, Laguna conducted from September 8, 1974 to October 10,
1974, the property was assigned Cadastral No. 2990, Cad. 455-D, Cabuyao
Cadastre, in the name of Enrique Hemedes. Enrique Hemedes is also the named
owner of the property in the records of the Ministry of Agrarian Reform office at
Calamba, Laguna.
On February 28, 1979, Enriques D. Hemedes sold the property to Dominium
Realty and Construction Corporation (Dominium). On April 10, 1981, Justa
Kausapin executed an affidavit affirming the conveyance of the subject property in
favor of Enrique D. Hemedes as embodied in the Kasunduan dated May 27, 1971,
and at the same time denying the conveyance made to Maxima Hemedes.
On May 14, 1981, Dominium leased the property to its sister corporation Asia
Brewery, Inc. (Asia Brewery) who, even before the signing of the contract of lease,
constructed two warehouses made of steel and asbestos costing about
P10,000,000.00 each. Upon learning of Asia Brewerys constructions upon the
subject property, R & B Insurance sent it a letter on March 16, 1981 informing the
former of its ownership of the property as evidenced by TCT No. 41985 issued in
its favor and of its right to appropriate the constructions since Asia Brewery is a
builder in bad faith. On March 27, 1981, a conference was held between R & B
Insurance and Asia Brewery but they failed to arrive at an amicable settlement.
On May 8, 1981, Maxima Hemedes also wrote a letter addressed to Asia
Brewery wherein she asserted that she is the rightful owner of the subject property
by virtue of OCT No. (0-941) 0-198 and that, as such, she has the right to
appropriate Asia Brewerys constructions, to demand its demolition, or to compel
Asia Brewery to purchase the land. In another letter of the same date addressed to
R & B Insurance, Maxima Hemedes denied the execution of any real estate
mortgage in favor of the latter.
On August 27, 1981, Dominium and Enrique D. Hemedes filed a
complaint[7] with the Court of First Instance of Binan, Laguna for the annulment of
TCT No. 41985 issued in favor of R & B Insurance and/or the reconveyance to
Dominium of the subject property. Specifically, the complaint alleged that
Dominium was the absolute owner of the subject property by virtue of the
February 28, 1979 deed of sale executed by Enrique D. Hemedes, who in turn
obtained ownership of the land from Justa Kausapin, as evidenced by the
Kasunduan dated May 27, 1971. The plaintiffs asserted that Justa Kausapin never
transferred the land to Maxima Hemedes and that Enrique D. Hemedes had no
knowledge of the registration proceedings initiated by Maxima Hemedes.
After considering the merits of the case, the trial court rendered judgment on
February 22, 1989 in favor of plaintiffs Dominium and Enrique D. Hemedes, the
dispositive portion of which states

WHEREFORE, judgment is hereby rendered:

(a) Declaring Transfer Certificate of Title No. 41985 of the Register of


Deeds of Laguna null and void and ineffective;
(b) Declaring Dominium Realty and Construction Corporation the absolute
owner and possessor of the parcel of land described in paragraph 3 of the
complaint;
(c) Ordering the defendants and all persons acting for and/or under them to
respect such ownership and possession of Dominium Realty and
Construction Corporation and to forever desist from asserting adverse
claims thereon nor disturbing such ownership and possession; and
(d) Directing the Register of Deeds of Laguna to cancel said Transfer
Certificate of Title No. 41985 in the name of R & B Insurance
Corporation, and in lieu thereof, issue a new transfer certificate of title in
the name of Dominium Realty and Construction Corporation. No
pronouncement as to costs and attorneys fees.[8]
Both R & B Insurance and Maxima Hemedes appealed from the trial courts
decision. On September 11, 1992 the Court of Appeals affirmed the assailed
decision in toto and on December 29, 1992, it denied R & B Insurances motion for
reconsideration. Thus, Maxima Hemedes and R & B Insurance filed their
respective petitions for review with this Court on November 3, 1992 and February
22, 1993, respectively.
In G.R. No. 107132[9], petitioner Maxima Hemedes makes the following
assignment of errors as regards public respondents ruling
I

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN APPLYING


ARTICLE 1332 OF THE NEW CIVIL CODE IN DECLARING AS SPURIOUS
THE DEED OF CONVEYANCE OF UNREGISTERED REAL PROPERTY BY
REVERSION EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF
PETITIONER MAXIMA HEMEDES.

II

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING


AS VOID AND OF NO LEGAL EFFECT THE KASUNDUAN DATED 27 MAY
1971 EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF RESPONDENT
ENRIQUE HEMEDES AND THE SALE OF THE SUBJECT PROPERTY BY
RESPONDENT ENRIQUE HEMEDES IN FAVOR OF RESPONDENT
DOMINIUM REALTY AND CONSTRUCTION CORPORATION.

III

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING


RESPONDENTS ENRIQUE AND DOMINIUM IN BAD FAITH.

IV

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN DECLARING


THAT ORIGINAL CERTIFICATE OF TITLE NO. (0-941) 0-198 ISSUED IN
THE NAME OF PETITIONER MAXIMA HEMEDES NULL AND VOID.

RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT NO


LOAN WAS OBTAINED BY PETITIONER MAXIMA HEMEDES FROM
RESPONDENT R & B INSURANCE CORPORATION.

VI

RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT NO


REAL ESTATE MORTGAGE OVER THE SUBJECT PROPERTY WAS
EXECUTED BY PETITIONER MAXIMA HEMEDES IN FAVOR OF
RESPONDENT R & B INSURANCE CORPORATION.

VII

RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT THE


VALID TITLE COVERING THE SUBJECT PROPERTY IS THE ORIGINAL
CERTIFICATE OF TITLE NO. (0-941) 0-198 IN THE NAME OF PETITIONER
MAXIMA HEMEDES AND NOT THE TRANSFER CERTIFICATE OF TITLE
(TCT) NO. 41985 IN THE NAME OF R & B INSURANCE CORPORATION.[10]

Meanwhile, in G.R. No. 108472[11], petitioner R & B Insurance assigns almost


the same errors, except with regards to the real estate mortgage allegedly executed
by Maxima Hemedes in its favor.Specifically, R & B Insurance alleges that:
I

RESPONDENT COURT ERRONEOUSLY ERRED IN APPLYING ARTICLE


1332 OF THE CIVIL CODE.

II

RESPONDENT COURT SERIOUSLY ERRED IN GIVING CREDENCE ON


(sic) THE KASUNDUAN BY AND BETWEEN JUSTA KAUSAPIN AND
ENRIQUE NOTWITHSTANDING THE FACT THAT JUSTA KAUSAPIN BY
WAY OF A DEED OF CONVEYANCE OF UNREGISTERED REAL
PROPERTY BY REVERSION CEDED THE SUBJECT PROPERTY TO
MAXIMA SOME ELEVEN (11) YEARS EARLIER.

III
RESPONDENT COURT SERIOUSLY ERRED IN GIVING CREDENCE ON
(sic) THE AFFIDAVIT OF REPUDIATION OF JUSTA KAUSAPIN
NOTWITHSTANDING THE FACT THAT SHE IS A BIAS (sic) WITNESS
AND EXECUTED THE SAME SOME TWENTY-ONE (21) YEARS AFTER
THE EXECUTION OF THE DEED OF CONVEYANCE IN FAVOR OF
MAXIMA.

IV

RESPONDENT COURT SERIOUSLY ERRED IN NOT FINDING THAT THE


COMPLAINT OF ENRIQUE AND DOMINIUM HAS PRESCRIBED AND/OR
THAT ENRIQUE AND DOMINIUM WERE GUILTY OF LACHES.

RESPONDENT COURT SERIOUSLY ERRED IN FINDING R & B AS A


MORTGAGEE NOT IN GOOD FAITH.

VI

RESPONDENT COURT SERIOUSLY ERRED IN NOT GRANTING THE


DAMAGES PRAYED FOR BY R & B IN ITS COUNTERCLAIM AND
CROSSCLAIM.[12]

The primary issue to be resolved in these consolidated petitions is which of the


two conveyances by Justa Kausapin, the first in favor of Maxima Hemedes and the
second in favor of Enrique D. Hemedes, effectively transferred ownership over the
subject land.
The Register of Deeds of Laguna issued OCT No. (0-941) 0-198 in favor of
Maxima Hemedes on the strength of the Deed of Conveyance of Unregistered Real
Property by Reversion executed by Justa Kausapin. Public respondent upheld the
trial courts finding that such deed is sham and spurious and has no evidentiary
value under the law upon which claimant Maxima Hemedes may anchor a valid
claim of ownership over the property. In ruling thus, it gave credence to the April
10, 1981 affidavit executed by Justa Kausapin repudiating such deed of
conveyance in favor of Maxima Hemedes and affirming the authenticity of the
Kasunduan in favor of Enrique D. Hemedes. Also, it considered as pivotal the fact
that the deed of conveyance in favor of Maxima Hemedes was in English and that
it was not explained to Justa Kausapin, although she could not read nor understand
English; thus, Maxima Hemedes failed to discharge her burden, pursuant to Article
1332 of the Civil Code, to show that the terms thereof were fully explained to Justa
Kausapin. Public respondent concluded by holding that the registration of the
property on the strength of the spurious deed of conveyance is null and void and
does not confer any right of ownership upon Maxima Hemedes. [13]
Maxima Hemedes argues that Justa Kausapins affidavit should not be given
any credence since she is obviously a biased witness as it has been shown that she
is dependent upon Enrique D. Hemedes for her daily subsistence, and she was most
probably influenced by Enrique D. Hemedes to execute the Kasunduan in his
favor. She also refutes the applicability of article 1332. It is her contention that for
such a provision to be applicable, there must be a party seeking to enforce a
contract; however, she is not enforcing the Deed of Conveyance of Unregistered
Real Property by Reversion as her basis in claiming ownership, but rather her
claim is anchored upon OCT No. (0-941) 0-198 issued in her name, which
document can stand independently from the deed of conveyance. Also, there exist
various circumstances which show that Justa Kausapin did in fact execute and
understand the deed of conveyance in favor of Maxima Hemedes. First, the
Donation Intervivos With Resolutory Conditions executed by Jose Hemedes in
favor of Justa Kausapin was also in English, but she never alleged that she did not
understand such document. Secondly, Justa Kausapin failed to prove that it was not
her thumbmark on the deed of conveyance in favor of Maxima Hemedes and in
fact, both Enrique D. Hemedes and Dominium objected to the request of Maxima
Hemedes counsel to obtain a specimen thumbmark of Justa Kausapin.[14]
Public respondents finding that the Deed of Conveyance of Unregistered Real
Property By Reversion executed by Justa Kausapin in favor of Maxima Hemedes
is spurious is not supported by the factual findings in this case.. It is grounded upon
the mere denial of the same by Justa Kausapin. A party to a contract cannot just
evade compliance with his contractual obligations by the simple expedient of
denying the execution of such contract. If, after a perfect and binding contract has
been executed between the parties, it occurs to one of them to allege some defect
therein as a reason for annulling it, the alleged defect must be conclusively proven,
since the validity and fulfillment of contracts cannot be left to the will of one of the
contracting parties.[15]
Although a comparison of Justa Kausapins thumbmark with the thumbmark
affixed upon the deed of conveyance would have easily cleared any doubts as to
whether or not the deed was forged, the records do not show that such evidence
was introduced by private respondents and the lower court decisions do not make
mention of any comparison having been made.[16] It is a legal presumption that
evidence willfully suppressed would be adverse if produced.[17] The failure of
private respondents to refute the due execution of the deed of conveyance by
making a comparison with Justa Kausapins thumbmark necessarily leads one to
conclude that she did in fact affix her thumbmark upon the deed of donation in
favor of her stepdaughter.
Moreover, public respondents reliance upon Justa Kausapins repudiation of the
deed of conveyance is misplaced for there are strong indications that she is a
biased witness. The trial court found that Justa Kausapin was dependent upon
Enrique D. Hemedes for financial assistance.[18] Justa Kausapins own testimony
attests to this fact -
Atty. Conchu:
Q: Aling Justa, can you tell the Honorable Court why you donated this particular
property to Enrique Hemedes?
A: Because I was in serious condition and he was the one supporting me
financially.
Q: As of today, Aling Justa are you continuing to receive any assistance from
Enrique Hemedes?
A: Yes Sir.
(TSN pp. 19 and 23, November 17, 1981)[19]
Even Enrique Hemedes admitted that Justa Kausapin was dependent upon him for
financial support. The transcripts state as follows:
Atty. Mora:
Now you said that Justa Kausapin has been receiving from you advances for
food, medicine & other personal or family needs?
E. Hemedes:
A: Yes.
Q: Was this already the practice at the time this Kasunduan was executed?
A: No that was increased, no, no, after this document.
xxx xx xxx
Q: And because of these accommodations that you have given to Justa
Kausapin; Justa Kausapin has in turn treated you very well because shes
very grateful for that, is it not?
A: I think thats human nature.
Q: Answer me categorically, Mr. Hemedes shes very grateful?
A: Yes she might be grateful but not very grateful.
(TSN, p. 34, June 15, 1984)[20]
A witness is said to be biased when his relation to the cause or to the parties is
such that he has an incentive to exaggerate or give false color to his statements, or
to suppress or to pervert the truth, or to state what is false.[21] At the time the
present case was filed in the trial court in 1981, Justa Kausapin was already 80
years old, suffering from worsening physical infirmities and completely dependent
upon her stepson Enrique D. Hemedes for support. It is apparent that Enrique D.
Hemedes could easily have influenced his aging stepmother to donate the subject
property to him. Public respondent should not have given credence to a witness
that was obviously biased and partial to the cause of private respondents. Although
it is a well-established rule that the matter of credibility lies within the province of
the trial court, such rule does not apply when the witness credibility has been put in
serious doubt, such as when there appears on the record some fact or circumstance
of weight and influence, which has been overlooked or the significance of which
has been misinterpreted.[22]
Finally, public respondent was in error when it sustained the trial courts
decision to nullify the Deed of Conveyance of Unregistered Real Property by
Reversion for failure of Maxima Hemedes to comply with article 1332 of the Civil
Code, which states:

When one of the parties is unable to read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged, the person enforcing the
contract must show that the terms thereof have been fully explained to the former.

Article 1332 was intended for the protection of a party to a contract who is at a
disadvantage due to his illiteracy, ignorance, mental weakness or other
handicap.[23] This article contemplates a situation wherein a contract has been
entered into, but the consent of one of the parties is vitiated by mistake or fraud
committed by the other contracting party.[24] This is apparent from the ordering of
the provisions under Book IV, Title II, Chapter 2, section 1 of the Civil Code, from
which article 1332 is taken. Article 1330 states that -

A contract where consent is given through mistake, violence, intimidation, undue


influence, or fraud is voidable.

This is immediately followed by provisions explaining what constitutes mistake,


violence, intimidation, undue influence, or fraud sufficient to vitiate consent. [25] In
order that mistake may invalidate consent, it should refer to the substance of the
thing which is the object of the contract, or to those conditions which have
principally moved one or both parties to enter into the contract.[26] Fraud, on the
other hand, is present when, through insidious words or machinations of one of the
contracting parties, the other is induced to enter into a contract which, without
them, he would not have agreed to.[27] Clearly, article 1332 assumes that the
consent of the contracting party imputing the mistake or fraud was given, although
vitiated, and does not cover a situation where there is a complete absence of
consent.
In this case, Justa Kausapin disclaims any knowledge of the Deed of
Conveyance of Unregistered Real Property by Reversion in favor of Maxima
Hemedes. In fact, she asserts that it was only during the hearing conducted on
December 7, 1981 before the trial court that she first caught a glimpse of the deed
of conveyance and thus, she could not have possibly affixed her thumbmark
thereto.[28] It is private respondents own allegations which render article 1332
inapplicable for it is useless to determine whether or not Justa Kausapin was
induced to execute said deed of conveyance by means of fraud employed by
Maxima Hemedes, who allegedly took advantage of the fact that the former could
not understand English, when Justa Kausapin denies even having seen the
document before the present case was initiated in 1981.
It has been held by this Court that mere preponderance of evidence is not
sufficient to overthrow a certificate of a notary public to the effect that the grantor
executed a certain document and acknowledged the fact of its execution before
him. To accomplish this result, the evidence must be so clear, strong and
convincing as to exclude all reasonable controversy as to the falsity of the
certificate, and when the evidence is conflicting, the certificate will be
upheld.[29] In the present case, we hold that private respondents have failed to
produce clear, strong, and convincing evidence to overcome the positive value of
the Deed of Conveyance of Unregistered Real Property by Reversion a notarized
document. The mere denial of its execution by the donor will not suffice for the
purpose.
In upholding the deed of conveyance in favor of Maxima Hemedes, we must
concomitantly rule that Enrique D. Hemedes and his transferee, Dominium, did not
acquire any rights over the subject property. Justa Kausapin sought to transfer to
her stepson exactly what she had earlier transferred to Maxima Hemedes the
ownership of the subject property pursuant to the first condition stipulated in the
deed of donation executed by her husband. Thus, the donation in favor of Enrique
D. Hemedes is null and void for the purported object thereof did not exist at the
time of the transfer, having already been transferred to his sister. [30] Similarly, the
sale of the subject property by Enrique D. Hemedes to Dominium is also a nullity
for the latter cannot acquire more rights than its predecessor-in-interest and is
definitely not an innocent purchaser for value since Enrique D. Hemedes did not
present any certificate of title upon which it relied.
The declarations of real property by Enrique D. Hemedes, his payment of
realty taxes, and his being designated as owner of the subject property in the
cadastral survey of Cabuyao, Laguna and in the records of the Ministry of Agrarian
Reform office in Calamba, Laguna cannot defeat a certificate of title, which is an
absolute and indefeasible evidence of ownership of the property in favor of the
person whose name appears therein.[31] Particularly, with regard to tax declarations
and tax receipts, this Court has held on several occasions that the same do not by
themselves conclusively prove title to land.[32]
We come now to the question of whether or not R & B Insurance should be
considered an innocent purchaser of the land in question. At the outset, we note
that both the trial court and appellate court found that Maxima Hemedes did in fact
execute a mortgage over the subject property in favor of R & B Insurance. This
finding shall not be disturbed because, as we stated earlier, it is a rule that the
factual findings of the trial court, especially when affirmed by the Court of
Appeals, are entitled to respect, and should not be disturbed on appeal.[33]
In holding that R & B Insurance is not a mortgagee in good faith, public
respondent stated that the fact that the certificate of title of the subject property
indicates upon its face that the same is subject to an encumbrance, i.e. usufructuary
rights in favor of Justa Kausapin during her lifetime or widowhood, should have
prompted R & B Insurance to ...investigate further the circumstances behind this
encumbrance on the land in dispute, but which it failed to do. Also, public
respondent considered against R & B Insurance the fact that it made it appear in
the mortgage contract that the land was free from all liens, charges, taxes and
encumbrances.[34]
R & B Insurance alleges that, contrary to public respondents ruling, the
presence of an encumbrance on the certificate of title is not reason for the
purchaser or a prospective mortgagee to look beyond the face of the certificate of
title. The owner of a parcel of land may still sell the same even though such land is
subject to a usufruct; the buyers title over the property will simply be restricted by
the rights of the usufructuary. Thus, R & B Insurance accepted the mortgage
subject to the usufructuary rights of Justa Kausapin. Furthermore, even assuming
that R & B Insurance was legally obliged to go beyond the title and search for any
hidden defect or inchoate right which could defeat its right thereto, it would not
have discovered anything since the mortgage was entered into in 1964, while the
Kasunduan conveying the land to Enrique D. Hemedes was only entered into in
1971 and the affidavit repudiating the deed of conveyance in favor of Maxima
Hemedes was executed by Justa Kausapin in 1981.[35]
We sustain petitioner R & B Insurances claim that it is entitled to the protection
of a mortgagee in good faith.
It is a well-established principle that every person dealing with registered land
may safely rely on the correctness of the certificate of title issued and the law will
in no way oblige him to go behind the certificate to determine the condition of the
property.[36] An innocent purchaser for value[37] is one who buys the property of
another without notice that some other person has a right to or interest in such
property and pays a full and fair price for the same at the time of such purchase or
before he has notice of the claim of another person.[38]
The annotation of usufructuary rights in favor of Justa Kausapin upon Maxima
Hemedes OCT dose not impose upon R & B Insurance the obligation to investigate
the validity of its mortgagors title.Usufruct gives a right to enjoy the property of
another with the obligation of preserving its form and substance.[39] The
usufructuary is entitled to all the natural, industrial and civil fruits of the
property[40]and may personally enjoy the thing in usufruct, lease it to another, or
alienate his right of usufruct, even by a gratuitous title, but all the contracts he may
enter into as such usufructuary shall terminate upon the expiration of the
usufruct.[41]
Clearly, only the jus utendi and jus fruendi over the property is transferred to
the usufructuary.[42] The owner of the property maintains the jus disponendi or the
power to alienate, encumber, transform, and even destroy the same. [43] This right is
embodied in the Civil Code, which provides that the owner of property the usufruct
of which is held by another, may alienate it, although he cannot alter the propertys
form or substance, or do anything which may be prejudicial to the usufructuary.[44]
There is no doubt that the owner may validly mortgage the property in favor of
a third person and the law provides that, in such a case, the usufructuary shall not
be obliged to pay the debt of the mortgagor, and should the immovable be attached
or sold judicially for the payment of the debt, the owner shall be liable to the
usufructuary for whatever the latter may lose by reason thereof.[45]
Based on the foregoing, the annotation of usufructuary rights in favor of Justa
Kausapin is not sufficient cause to require R & B Insurance to investigate Maxima
Hemedes title, contrary to public respondents ruling, for the reason that Maxima
Hemedes ownership over the property remained unimpaired despite such
encumbrance. R & B Insurance had a right to rely on the certificate of title and was
not in bad faith in accepting the property as a security for the loan it extended to
Maxima Hemedes.
Even assuming in gratia argumenti that R & B Insurance was obligated to look
beyond the certificate of title and investigate the title of its mortgagor, still, it
would not have discovered any better rights in favor of private
respondents. Enrique D. Hemedes and Dominium base their claims to the property
upon the Kasunduan allegedly executed by Justa Kausapin in favor of Enrique
Hemedes. As we have already stated earlier, such contract is a nullity as its subject
matter was inexistent. Also, the land was mortgaged to R & B Insurance as early as
1964, while the Kasunduan was executed only in 1971 and the affidavit of Justa
Kausapin affirming the conveyance in favor of Enrique D. Hemedes was executed
in 1981. Thus, even if R & B Insurance investigated the title of Maxima Hemedes,
it would not have discovered any adverse claim to the land in derogation of its
mortgagors title. We reiterate that at no point in time could private respondents
establish any rights or maintain any claim over the land.
It is a well-settled principle that where innocent third persons rely upon the
correctness of a certificate of title and acquire rights over the property, the court
cannot just disregard such rights. Otherwise, public confidence in the certificate of
title, and ultimately, the Torrens system, would be impaired for everyone dealing
with registered property would still have to inquire at every instance whether the
title has been regularly or irregularly issued.[46] Being an innocent mortgagee for
value, R & B Insurance validly acquired ownership over the property, subject only
to the usufructuary rights of Justa Kausapin thereto, as this encumbrance was
properly annotated upon its certificate of title.
The factual findings of the trial court, particularly when affirmed by the
appellate court, carry great weight and are entitled to respect on appeal, except
under certain circumstances.[47] One such circumstance that would compel the
Court to review the factual findings of the lower courts is where the lower courts
manifestly overlooked certain relevant facts not disputed by the parties and which,
if properly considered, would justify a different conclusion.[48] Also, it is axiomatic
that the drawing of the proper legal conclusions from such factual findings are
within the peculiar province of this Court.[49]
As regards R & B Insurances prayer that Dominium be ordered to demolish the
warehouses or that it be declared the owner thereof since the same were built in
bad faith, we note that such warehouses were constructed by Asia Brewery, not by
Dominium. However, despite its being a necessary party in the present case, the
lower courts never acquired jurisdiction over Asia Brewery, whether as a plaintiff
or defendant, and their respective decisions did not pass upon the constructions
made upon the subject property. Courts acquire jurisdiction over a party plaintiff
upon the filing of the complaint, while jurisdiction over the person of a party
defendant is acquired upon the service of summons in the manner required by law
or by his voluntary appearance. As a rule, if a defendant has not been summoned,
the court acquires no jurisdiction over his person, and any personal judgment
rendered against such defendant is null and void.[50] In the present case, since Asia
Brewery is a necessary party that was not joined in the action, any judgment
rendered in this case shall be without prejudice to its rights.[51]
As to its claim for moral damages, we hold that R & B Insurance is not entitled
to the same for it has not alleged nor proven the factual basis for the same. Neither
is it entitled to exemplary damages, which may only be awarded if the claimant is
entitled to moral, temperate, liquidated or compensatory damages.[52] R & B
Insurances claim for attorneys fees must also fail. The award of attorneys fees is
the exception rather than the rule and counsels fees are not to be awarded every
time a party wins a suit. Its award pursuant to article 2208 of the Civil Code
demands factual, legal and equitable justification and cannot be left to speculation
and conjecture.[53] Under the circumstances prevailing in the instant case, there is
no factual or legal basis for an award of attorneys fees.
WHEREFORE, the assailed decision of public respondent and its resolution
dated February 22, 1989 are REVERSED. We uphold petitioner R & B Insurances
assertion of ownership over the property in dispute, as evidenced by TCT No.
41985, subject to the usufructuary rights of Justa Kausapin, which encumbrance
has been properly annotated upon the said certificate of title. No pronouncement as
to costs.
SO ORDERED.
Panganiban, and Purisima, JJ., concur.
Melo, J., please see dissenting opinion.
Vitug, J., please see Separate (Concurring) Opinion.
FACTS: Jose Hemedes executed a document entitled “Donation Inter Vivos With Resolutory Conditions”
conveying ownership a parcel of land, together with all its improvements, in favor of his third wife, Justa
Kauapin, subject to the resolutory condition that upon the latter’s death or remarriage, the title to the property
donated shall revert to any of the children, or heirs, of the DONOR expressly designated by the DONEE.
Pursuant to said condition, Justa Kausapin executed a “Deed of Conveyance of Unregistered Real Property by
Reversion” conveying to Maxima Hemedes the subject property.

Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage over the subject
property in favor of R & B Insurance to serve as security for a loan which they obtained.

R & B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay the loan even.
The land was sold at a public auction with R & B Insurance as the highest bidder. A new title was subsequently
issued in favor the R&B. The annotation of usufruct in favor of Justa Kausapin was maintained in the new title.

Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa Kausapin executed a
“Kasunduan” whereby she transferred the same land to her stepson Enrique D. Hemedes, pursuant to the
resolutory condition in the deed of donation executed in her favor by her late husband Jose Hemedes. Enrique
D. Hemedes obtained two declarations of real property, when the assessed value of the property was raised.
Also, he has been paying the realty taxes on the property from the time Justa Kausapin conveyed the property
to him. In the cadastral survey, the property was assigned in the name of Enrique Hemedes. Enrique
Hemedes is also the named owner of the property in the records of the Ministry of Agrarian Reform office at
Calamba, Laguna.

Enriques D. Hemedes sold the property to Dominium Realty and Construction Corporation (Dominium).

Dominium leased the property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who made
constructions therein. Upon learning of Asia Brewery’s constructions, R & B Insurance sent it a letter informing
the former of its ownership of the property. A conference was held between R & B Insurance and Asia Brewery
but they failed to arrive at an amicable settlement.
Maxima Hemedes also wrote a letter addressed to Asia Brewery asserting that she is the rightful owner of the
subject property and denying the execution of any real estate mortgage in favor of R&B.

Dominium and Enrique D. Hemedes filed a complaint with the CFI for the annulment of TCT issued in favor of
R & B Insurance and/or the reconveyance to Dominium of the subject property alleging that Dominion was the
absolute owner of the land.

The trial court ruled in favor of Dominium and Enrique Hemedes.

ISSUE: W/N the donation in favor of Enrique Hemedes was valid?


HELD: NO. Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights over the subject
property. Justa Kausapin sought to transfer to her stepson exactly what she had earlier transferred to Maxima
Hemedes – the ownership of the subject property pursuant to the first condition stipulated in the deed of
donation executed by her husband. Thus, the donation in favor of Enrique D. Hemedes is null and void for the
purported object thereof did not exist at the time of the transfer, having already been transferred to his sister.
Similarly, the sale of the subject property by Enrique D. Hemedes to Dominium is also a nullity for the latter
cannot acquire more rights than its predecessor-in-interest and is definitely not an innocent purchaser for value
since Enrique D. Hemedes did not present any certificate of title upon which it relied.
The declarations of real property by Enrique D. Hemedes, his payment of realty taxes, and his being
designated as owner of the subject property in the cadastral survey of Cabuyao, Laguna and in the records of
the Ministry of Agrarian Reform office in Calamba, Laguna cannot defeat a certificate of title, which is an
absolute and indefeasible evidence of ownership of the property in favor of the person whose name appears
therein. Particularly, with regard to tax declarations and tax receipts, this Court has held on several occasions
that the same do not by themselves conclusively prove title to land.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. 1318 April 12, 1904

PRISCA NAVAL, ET AL., plaintiffs-appellees,


vs.
FRANCISCO ENRIQUEZ, ET AL., defendants-appellants.

Alfredo Chicote and Allison D. Gibbs for appellants.


Montagne and Dominguez for appellees.

MAPA, J.:

November 14, 1885, Don Jorge Enriquez, as heir of his deceased parents, Antonio
Enriquez and Doña Ciriaca Villanueva, whose estates were at that time still
undistributed, by public instrument sold to Don Victoriano Reyes his interest in
both estates, equivalent to a tenth part thereof, for the sum of 7,000 pesos. The
deed was executed in this city before Don Enrique Barrera, a notary public, who
certified in the document that the vendor received the said consideration at the time
of the execution of the instrument.

By another instrument executed April 15, 1886, before the same notary, Don
Enrique Barrera y Caldes, Don Victoriano Reyes sold to Doña Carmen de la
Cavada this interest in the estate of Don Antonio Enriquez and Doña Ciriaca
Villanueva, which by the deed above referred to, he had acquired from Don Jorge
Enriquez for the same consideration of 7,000 pesos, which money he received
from the purchaser in the presence of the notary, who so certifies in the deed itself.
The purchaser, Doña Carmen, was the wife of Don Francisco Enriquez, who was
the executor and administrator of the testamentary estate of Don Antonio Enriquez
at the dates of the execution of the two above mentioned.

The plaintiffs demand that these deeds be declared null and void, as well as the
contracts evidenced thereby, apparently solely so far as they refer to the estate of
Don Antonio Enriquez, no mention being made of the estate of Doña Ciriaca
Villanueva in the complaint. This relief is prayed for upon the following grounds:

(1) Because the said contracts were executed without consideration, it being
alleged with respect to this matter that Don Jorge Enriquez did not receive any
consideration for the sale made by him in favor of Don Victoriano Reyes, and that
the latter did not receive any sum whatever as a consideration for the sale in turn
executed by him in favor of Doña Carmen de la Cavada. Upon this ground the
plaintiffs contend that the deeds in question were consummated and were executed
for the purpose of deceiving and defrauding Don Jorge Enriquez and his family.

(2) Because Don Victoriano Reyes, the purchaser under the first deed, merely
acted as an intermediary at the request and instance of Don Francisco Enriquez for
the purpose of subsequently facilitating the acquisition by Doña Carmen de la
Cavada, his wife, of the hereditary share of Don Jorge Enriquez, the real acquirer
being Don Francisco Enriquez, the executor and administrator of the estate of Don
Antonio Enriquez. The conclusion of the plaintiffs is that as such executor Don
Francisco Enriquez was unable to acquire by his own act or that of any
intermediary the said hereditary portion of Don Jorge Enriquez under the
provisions of paragraph 3 of article 1459 of the Civil Code.

(a) The evidence introduced by the plaintiffs is not sufficient to authorize the
conclusion that there was no consideration for the sales referred to in the
complaint. It is true that Victoriano Reyes testified that he paid nothing to Don
Jorge Enriquez, and received nothing from Carmen de la Cavada as consideration
for either of the sales. But against this statement is the testimony of the notary, Don
Enrique Barrera y Caldes, before whom both contracts were executed, and that of
the defendants Francisco Enriquez and Doña Carmen de la Cavada, who expressly
affirm the contrary; and more especially the statement is contrary to the recitals of
the deeds themselves, which confirm the statements of the witnesses last referred
to. The deeds clearly and expressly recite the fact of the receipt by the respective
purchasers of the stipulated price or consideration of 7,000 pesos at the time and
place of the execution of the deeds.

These instruments having been executed with all the formalities prescribed by the
law, they are admissible as evidence against the contracting parties and their
successors with respect to recitals made therein by the former (Art. 1218, Civil
Code.) Their evidentiary force can not be overcome except by other evidence of
greater weight, sufficient to overcome the legal presumption of the regularity of
acts and contracts celebrated with all the legal requisites under the safeguard of a
notarial certificate. This presumption has not been rebutted in the present case, in
which the evidence against it, consisting of the sole testimony of Don Victoriano
Reyes, which, moreover, is expressly controverted by that of the other witnesses at
the trial, involves the improbable conclusion that the witness, as well as Jorge
Enriquez, from whom the plaintiffs derived title, the notary public, and the
attesting witnesses to both instruments consented to the commission of the grave
crime of falsification of public documents — for this would be the result were the
statements of the said Victoriano Reyes true — without having any interest in so
doing or expecting to derive any benefit from the commission of the crime, the
plaintiffs not having alleged or proven the existence of such an interest on their
part. It appears, on the contrary, from the testimony of Victoriano Reyes himself
that he received no compensation for his participation in the matter.

With respect to Jorge Enriquez, the conclusion, still more improbable if possible,
would be that he had voluntarily and spontaneously taken part in the commission
of a grave crime, which not only was not of the slightest benefit to himself, but the
commission of which is supposed to have had for its object the causing of harm to
him. The allegation is that the purpose of the crime was to deprive him, without the
slightest compensation, of his paternal and maternal inheritance, which according
to the complaint was the only possession of himself and his numerous family. This
is the most inexplicable and improbable aspect of the facts alleged in the
complaint. It is beyond comprehension, and we can not believe that Jorge
Enriquez, who according to the plaintiffs was absolutely without means of support
for himself and his family, would convey to another his large interest in the estate
without receiving any consideration therefor, and that to do this he would commit
the grave crime of falsification. To justify this conclusion it would be necessary to
suppose that Jorge Enriquez was absolutely devoid of intelligence or that he was
the victim or error, violence, intimidation, or fraud. But these are circumstances
which counsel for the plaintiffs have not demonstrated or even sought to
demonstrate.

An examination of the evidence leads us to the conclusion that the payment of the
consideration of 7,000 pesos expressed in the two deeds in question was actually
and really made, and that the allegation of the plaintiffs that the contracts of sale
evidenced by these deeds were made without consideration is unfounded.

At all events the action of which the plaintiffs might have availed themselves for
the purpose of having those contracts declared void upon the ground, even
admitting hypothetically that there was no consideration, is barred by the statute of
limitations, inasmuch as from the date of those contracts down to the death of
Jorge Enriquez, which occurred July 6, 1891, more than five year had passed and
more than fifteen before the filing of the complaint on January 9, 1902, nothing
having been done in the meantime on the part of the plaintiffs or the person under
whom they claim to interrupt the running of the statute. The action of nullity only
lasts four years, counted from the date of the consummation of the contract, when
the action is based, as in this case, upon the absence of consideration. (Art. 1301 of
the Civil Code.)

The contract of sale is consummated by the delivery of the purchase money and of
the thing sold. "When the sale is made by public instrument the execution of the
instrument is equivalent to the delivery of the thing which is the object of the
contract, unless from the instrument itself the contrary intention clearly appears."
(Art. 1462, par. 2, Civil Code.) And article 1464 provides that "With respect to
incorporeal property [to which class the hereditary right which was the object of
the contracts in question pertains], the provisions of paragraph 2 of article 1462
shall govern." In the deeds of sale executed by Victoriano Reyes in favor of Doña
Carmen de la Cavada we find the following: "In consequence he (the vendor) by
virtue of this title cedes and conveys all rights which he has or may have to the part
of the inheritance which is the object of this sale, to the end that the purchaser, in
the place and stead of the vendor, may exercise all the acts of ownership
corresponding to her right, to which end by means of the delivery of this instrument
and of his other title deeds he makes the transfer necessary to consummate the
contract, which upon his part he declares to be perfect and consummated from this
date."

In view of this clause and for the legal provisions above cited, it is evident that the
delivery of the things sold was effected by the mere execution of the deed of sale;
and it appearing from the deed itself that the consideration was delivered to the
vendor at the time, and the contrary not having been sufficiently proven, the
conclusion follows that the sale was consummated them and there, and that from
that time the period of four years fixed by law for the prescription of the action of
nullity must be counted in this case.

(b) The thing sold in the two contracts of sale mentioned in the complained was the
hereditary right of Don Jorge Enriquez, which evidently was not in charge of the
executor, Don Francisco Enriquez. Executors, even in those cases in which they
administer the property pertaining to the estate, do not administer the hereditary
rights of any heir. This right is vested entirely in the heirs, who retain it or transmit
it in whole or in part, as they may deem convenient, to some other person
absolutely independent of the executor, whose authority, whatever powers the
testator may have desired to confer upon him, do not and can not under any
circumstances in the slightest degree limit the power of the heirs to dispose of the
said right at will. That right does not form part of the property delivered to the
executor for administration.

This conclusion having been reached, we are of the opinion that article 1459 of the
Civil Code, cited by the plaintiffs to show the alleged incapacity of Don Francisco
Enriquez as executor of the will of Don Antonio Enriquez, to acquire by purchase
the hereditary right of Jorge Enriquez, has no application to the present case. The
prohibition which paragraph 3 of that article imposes upon executors refers to the
property confided to their care, and does not extend, therefore, to property not
falling within this class. Legal provisions of a prohibitive character must be strictly
construed, and should not be extended to cases not expressly comprised within
their text.

Consequently, even upon the supposition that the executor, Don Francisco
Enriquez, was the person who really acquired the hereditary rights of Jorge
Enriquez, the sale in question would not for that reason be invalid, the executor,
Don Francisco Enriquez, not being legally incapable of acquiring the hereditary
right in question as the plaintiffs erroneously suppose.

This being so, the question as to whether the money paid by Doña Carmen de la
Cavada for the purchase of the said right was her sole and exclusive property, or
whether it was the property of her husband Don Francisco Enriquez, or whether it
was the property of the community of goods existing between them, is absolutely
unimportant, for, be the fact as it may, the conclusion must always be that the
incapacity to purchase, alleged as one of the legal grounds upon which the
complaint rests, does not exist.

Enough has been said to show that the action brought by the plaintiffs is devoid of
foundation. It is not, therefore, necessary to decide the other questions raised by
the parties at the trial.

The judgment of the court below is reversed and the complaint dismissed, without
costs in either instance. So ordered.
FACTS: Don Jorge Enriquez as heirs of his deceased parents (Don Antonio Enriquez and Dona
Ciriaca Villanueva , whose estates were at that time still undistributed, by public document sold
to Don Victoriano Reyes his interest in both estates. The deed was executed before Don
Enrique Barrera, a notary public. Another instrument was executed before the same notary
public where Don Victoriano Reyes sold to Dona Carmen the interest in the estates which he
had acquired from Don Jorge Enriquez. The purchaser, Dona Carmen was the wife of Don
Francisco Enriquez (defendant) who was the executor and administrator of the testamentary
estate of Don Antonio Enriquez at the time the two deeds were executed.
The plaintiffs demand that these deeds be declared null and void, as well as the
contracts evidenced thereby. Apparently solely so far as they refer to the estate of Don Antonio
Enriquez, no mention being made of the estate of Dona Ciriaca Villanueva in the complaint.
The plaintiffs contended that the deeds in question were consummated and were
executed for the purpose of deceiving and defrauding Don Jorge Enriquez and his family. The
conclusion of the plaintiffs was that as such executor Don Francisco was unable to acquire by
his own act or that of any intermediary the said hereditary portion of Don Jorge under the
provisions of Article 1459, paragraph 3 of the Civil Code.

ISSUE: WON Don Francisco Enriquez as executor and administrator of estate of Don Antonio is
incapacitated to acquire by purchase the hereditary right of Jorge Enriquez.

RULING: NO! The thing sold in the two contracts of sale mentioned in the complaint was the
hereditary right of Don Jorge Enriquez, which evidently was not in charge of the executor Don
Francisco Enriquez. Executors, even in those cases in which they administer the property
pertaining to estate, do not administer the hereditary rights of any heirs. This right is vested
entirely in the heirs who retain it or transmit it in whole or in part, as they may deem
convenient, to some other person absolutely, whatever powers the testator may have desired
to confer upon him, do not and cannot under any circumstances in the slightest degree limit
the power of the heirs to dispose of the said right at will. That right does not form part of the
property delivered to the executor for administration.
Further, Article 1459 of the Civil Code has no application to the present case. The
prohibition which Article 145, paragraph 3 imposes upon executors refers to the property
confided to their care and does not extend, therefore, to property not falling within this class.
Consequently, even upon the supposition that the executor (Don Francisco) was the person
who really acquired the hereditary rights of Don Jorge, the sale in question would not for that
reason be invalid, the executor not being legally incapacitated of acquiring the hereditary right
in question as the plaintiffs erroneously suppose.
The action brought by the plaintiffs is devoid of foundation.

Arellano, C. J., Torres, Cooper, McDonough and Johnson, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 179786 July 24, 2013


JOSIELENE LARA CHAN, Petitioner,
vs.
JOHNNY T. CHAN, Respondent.

DECISION

ABAD, J.:

This case is about the propriety of issuing a subpoena duces tecum for the
production and submission in court of the respondent husband's hospital record in a
case for declaration of nullity of marriage where one of the issues is his mental
fitness as a husband.

The Facts and the Case

On February 6, 2006 petitioner Josielene Lara Chan (Josielene) filed before the
Regional Trial Court (RTC) of Makati City, Branch 144 a petition for the
declaration of nullity of her marriage to respondent Johnny Chan (Johnny), the
dissolution of their conjugal partnership of gains, and the award of custody of their
children to her. Josielene claimed that Johnny failed to care for and support his
family and that a psychiatrist diagnosed him as mentally deficient due to incessant
drinking and excessive use of prohibited drugs. Indeed, she had convinced him to
undergo hospital confinement for detoxification and rehabilitation.

Johnny resisted the action, claiming that it was Josielene who failed in her wifely
duties. To save their marriage, he agreed to marriage counseling but when he and
Josielene got to the hospital, two men forcibly held him by both arms while
another gave him an injection. The marriage relations got worse when the police
temporarily detained Josielene for an unrelated crime and released her only after
the case against her ended. By then, their marriage relationship could no longer be
repaired.

During the pre-trial conference, Josielene pre-marked the Philhealth Claim


Form1 that Johnny attached to his answer as proof that he was forcibly confined at
the rehabilitation unit of a hospital. The form carried a physician’s handwritten
note that Johnny suffered from "methamphetamine and alcohol abuse." Following
up on this point, on August 22, 2006 Josielene filed with the RTC a request for the
issuance of a subpoena duces tecum addressed to Medical City, covering Johnny’s
medical records when he was there confined. The request was accompanied by a
motion to "be allowed to submit in evidence" the records sought by subpoena
duces tecum.2

Johnny opposed the motion, arguing that the medical records were covered by
physician-patient privilege. On September 13, 2006 the RTC sustained the
opposition and denied Josielene’s motion. It also denied her motion for
reconsideration, prompting her to file a special civil action of certiorari before the
Court of Appeals (CA) in CA-G.R. SP 97913, imputing grave abuse of discretion
to the RTC.

On September 17, 2007 the CA3 denied Josielene’s petition. It ruled that, if courts
were to allow the production of medical records, then patients would be left with
no assurance that whatever relevant disclosures they may have made to their
physicians would be kept confidential. The prohibition covers not only testimonies,
but also affidavits, certificates, and pertinent hospital records. The CA added that,
although Johnny can waive the privilege, he did not do so in this case. He attached
the Philhealth form to his answer for the limited purpose of showing his alleged
forcible confinement.

Question Presented

The central question presented in this case is:

Whether or not the CA erred in ruling that the trial court correctly denied the
issuance of a subpoena duces tecum covering Johnny’s hospital records on the
ground that these are covered by the privileged character of the physician-patient
communication.

The Ruling of the Court

Josielene requested the issuance of a subpoena duces tecum covering the hospital
records of Johnny’s confinement, which records she wanted to present in court as
evidence in support of her action to have their marriage declared a nullity.
Respondent Johnny resisted her request for subpoena, however, invoking the
privileged character of those records. He cites Section 24(c), Rule 130 of the Rules
of Evidence which reads:

SEC. 24. Disqualification by reason of privileged communication.— The


following persons cannot testify as to matters learned in confidence in the
following cases:

xxxx

(c) A person authorized to practice medicine, surgery or obstetrics cannot in a civil


case, without the consent of the patient, be examined as to any advice or treatment
given by him or any information which he may have acquired in attending such
patient in a professional capacity, which information was necessary to enable him
to act in that capacity, and which would blacken the reputation of the patient.

The physician-patient privileged communication rule essentially means that a


physician who gets information while professionally attending a patient cannot in a
civil case be examined without the patient’s consent as to any facts which would
blacken the latter’s reputation. This rule is intended to encourage the patient to
open up to the physician, relate to him the history of his ailment, and give him
access to his body, enabling the physician to make a correct diagnosis of that
ailment and provide the appropriate cure. Any fear that a physician could be
compelled in the future to come to court and narrate all that had transpired between
him and the patient might prompt the latter to clam up, thus putting his own health
at great risk.4

1. The case presents a procedural issue, given that the time to object to the
admission of evidence, such as the hospital records, would be at the time they are
offered. The offer could be made part of the physician’s testimony or as
independent evidence that he had made entries in those records that concern the
patient’s health problems.

Section 36, Rule 132, states that objections to evidence must be made after the
offer of such evidence for admission in court. Thus:
SEC. 36. Objection.— Objection to evidence offered orally must be made
immediately after the offer is made.

Objection to a question propounded in the course of the oral examination of a


witness shall be made as soon as the grounds therefor shall become reasonably
apparent.

An offer of evidence in writing shall be objected to within three (3) days after
notice of the offer unless a different period is allowed by the court.

In any case, the grounds for the objections must be specified.

Since the offer of evidence is made at the trial, Josielene’s request for subpoena
duces tecum is premature. She will have to wait for trial to begin before making a
request for the issuance of a subpoena duces tecum covering Johnny’s hospital
records. It is when those records are produced for examination at the trial, that
Johnny may opt to object, not just to their admission in evidence, but more so to
their disclosure. Section 24(c), Rule 130 of the Rules of Evidence quoted above is
about non-disclosure of privileged matters.

2. It is of course possible to treat Josielene’s motion for the issuance of a subpoena


duces tecum covering the hospital records as a motion for production of
documents, a discovery procedure available to a litigant prior to trial. Section 1,
Rule 27 of the Rules of Civil Procedure provides:

SEC. 1. Motion for production or inspection; order.— Upon motion of any party
showing good cause therefor, the court in which an action is pending may (a) order
any party to produce and permit the inspection and copying or photographing, by
or on behalf of the moving party, of any designated documents, papers, books,
accounts, letters, photographs, objects or tangible things, not privileged, which
constitute or contain evidence material to any matter involved in the action and
which are in his possession, custody or control; or (b) order any party to permit
entry upon designated land or other property in his possession or control for the
purpose of inspecting, measuring, surveying, or photographing the property or any
designated relevant object or operation thereon. The order shall specify the time,
place and manner of making the inspection and taking copies and photographs, and
may prescribe such terms and conditions as are just. (Emphasis supplied)

But the above right to compel the production of documents has a limitation: the
documents to be disclosed are "not privileged."

Josielene of course claims that the hospital records subject of this case are not
privileged since it is the "testimonial" evidence of the physician that may be
regarded as privileged. Section 24(c) of Rule 130 states that the physician "cannot
in a civil case, without the consent of the patient, be examined" regarding their
professional conversation. The privilege, says Josielene, does not cover the
hospital records, but only the examination of the physician at the trial.

To allow, however, the disclosure during discovery procedure of the hospital


records—the results of tests that the physician ordered, the diagnosis of the
patient’s illness, and the advice or treatment he gave him—would be to allow
access to evidence that is inadmissible without the
patient’s consent. Physician memorializes all these information in the patient’s
records. Disclosing them would be the equivalent of compelling the physician to
testify on privileged matters he gained while dealing with the patient, without the
latter’s prior consent.

3. Josielene argues that since Johnny admitted in his answer to the petition before
the RTC that he had been confined in a hospital against his will and in fact
attached to his answer a Philhealth claim form covering that confinement, he
should be deemed to have waived the privileged character of its records. Josielene
invokes Section 17, Rule 132 of the Rules of Evidence that provides:

SEC. 17. When part of transaction, writing or record given in evidence, the
remainder admissible.— When part of an act, declaration, conversation, writing or
record is given in evidence by one party, the whole of the same subject may be
inquired into by the other, and when a detached act, declaration, conversation,
writing or record is given in evidence, any other act, declaration, conversation,
writing or record necessary to its understanding may also be given in
evidence.1âwphi1

But, trial in the case had not yet begun. Consequently, it cannot be said that Johnny
had already presented the Philhealth claim form in evidence, the act contemplated
above which would justify Josielene into requesting an inquiry into the details of
his hospital confinement. Johnny was not yet bound to adduce evidence in the case
when he filed his answer. Any request for disclosure of his hospital records would
again be premature.

For all of the above reasons, the CA and the RTC were justified in denying
Josielene her request for the production in court of Johnny’s hospital records.

ACCORDINGLY, the Court DENIES the petition and AFFIRMS the Decision of
the Court of Appeals in CA-G.R. SP 97913 dated September 17, 2007.

SO ORDERED.
Facts:

Petitioner wife filed against respondent husband a petition for the declaration of nullity of marriage, with the
dissolution of their conjugal partnership of gains, and the award of custody of their children to her, claiming that
respondent husband failed to care for and support his family and that a psychiatrist diagnosed him as mentally
deficient due to incessant drinking and excessive use of prohibited drugs.

Respondent husband claims that it was the wife who failed in her duties. And that he initially agreed to marriage
counseling to save their marriage, but upon arriving at the hospital, two men forcibly held him by both arms while
another gave him an injection. He attached a Philhealth Claim Form to his answer as proof that he was forcibly
confined at the rehabilitation unit of a hospital. However, that same form carried a physician's handwritten note that
the husband suffered from methamphetamine and alcohol abuse.

Based on the physician's handwritten statement, petitioner wife requested for the issuance of a subpoena duces
tecum addressed to Medical City, for the production of the Husband's medical records. The husband opposed,
arguing that the medical records were covered by physician-patient privilege. The request of the wife was denied by
the trial court. CA affirmed.

Issue:

Did the CA erred in ruling that the trial court correctly denied the issuance of a subpoena duces tecum covering the
husband's hospital records on the ground that these are covered by the privileged character of the physician-patient
communication?

Held:
No. The issuance of a subpoena duces tecum is premature. Petitioner wife made the request before trial started. She
will have to wait for trial to begin before making a request for the issuance of a subpoena duces tecum covering her
husband's hospital records. It is when those records are produced for examination at the trial, that the husband may
opt to object, not just to their admission in evidence, but more so to their disclosure.

It is of course possible to treat Josielene’s motion for the issuance of a subpoena duces tecum covering the hospital
records as a motion for production of documents, a discovery procedure available to a litigant prior to trial. Section
1, Rule 27 of the Rules of Civil Procedure provides: x x x
But the above right to compel the production of documents has a limitation: the documents to be disclosed are “not
privileged.”

Petitioner wife, of course, claims that the hospital records subject of this case are not privileged since it is the
“testimonial” evidence of the physician that may be regarded as privileged. Section 24(c) of Rule 130 states that the
physician “cannot in a civil case, without the consent of the patient, be examined” regarding their professional
conversation. The privilege, according to her, does not cover the hospital records, but only the examination of the
physician at the trial.

To allow, however, the disclosure during discovery procedure of the hospital records—the results of tests that the
physician ordered, the diagnosis of the patient’s illness, and the advice or treatment he gave him— would be
to allow access to evidence that is inadmissible without the patient’s consent. Physician memorializes all these
information in the patient’s records. Disclosing them would be the equivalent of compelling the physician to testify
on privileged matters he gained while dealing with the patient, without the latter’s prior consent.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. 105938 September 20, 1996

TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ,


JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN
and EDUARDO U. ESCUETA, petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF
THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT, and RAUL S.
ROCO, respondents.

G.R. No. 108113 September 20, 1996

PARAJA G. HAYUDINI, petitioner,


vs.
THE SANDIGANBAYAN and THE REPUBLIC OF THE
PHILIPPINES, respondents.

KAPUNAN, J.:

These case touch the very cornerstone of every State's judicial system, upon which
the workings of the contentious and adversarial system in the Philippine legal
process are based — the sanctity of fiduciary duty in the client-lawyer relationship.
The fiduciary duty of a counsel and advocate is also what makes the law profession
a unique position of trust and confidence, which distinguishes it from any other
calling. In this instance, we have no recourse but to uphold and strengthen the
mantle of protection accorded to the confidentiality that proceeds from the
performance of the lawyer's duty to his client.
The facts of the case are undisputed.

The matters raised herein are an offshoot of the institution of the Complaint on
July 31, 1987 before the Sandiganbayan by the Republic of the Philippines,
through the Presidential Commission on Good Government against Eduardo M.
Cojuangco, Jr., as one of the principal defendants, for the recovery of alleged ill-
gotten wealth, which includes shares of stocks in the named corporations in PCGG
Case No. 33 (Civil Case No. 0033), entitled "Republic of the Philippines versus
Eduardo Cojuangco, et al."1

Among the dependants named in the case are herein petitioners Teodoro Regala,
Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A. Vinluan,
Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and herein private
respondent Raul S. Roco, who all were then partners of the law firm Angara,
Abello, Concepcion, Regala and Cruz Law Offices (hereinafter referred to as the
ACCRA Law Firm). ACCRA Law Firm performed legal services for its clients,
which included, among others, the organization and acquisition of business
associations and/or organizations, with the correlative and incidental services
where its members acted as incorporators, or simply, as stockholders. More
specifically, in the performance of these services, the members of the law firm
delivered to its client documents which substantiate the client's equity
holdings, i.e., stock certificates endorsed in blank representing the shares registered
in the client's name, and a blank deed of trust or assignment covering said shares.
In the course of their dealings with their clients, the members of the law firm
acquire information relative to the assets of clients as well as their personal and
business circumstances. As members of the ACCRA Law Firm, petitioners and
private respondent Raul Roco admit that they assisted in the organization and
acquisition of the companies included in Civil Case No. 0033, and in keeping with
the office practice, ACCRA lawyers acted as nominees-stockholders of the said
corporations involved in sequestration proceedings.2

On August 20, 1991, respondent Presidential Commission on Good Government


(hereinafter referred to as respondent PCGG) filed a "Motion to Admit Third
Amended Complaint" and "Third Amended Complaint" which excluded private
respondent Raul S. Roco from the complaint in PCGG Case No. 33 as party-
defendant.3Respondent PCGG based its exclusion of private respondent Roco as
party-defendant on his undertaking that he will reveal the identity of the principal/s
for whom he acted as nominee/stockholder in the companies involved in PCGG
Case No. 33.4

Petitioners were included in the Third Amended Complaint on the strength of the
following allegations:

14. Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C.


Concepcion, Teodoro Regala, Avelino V. Cruz, Rogelio A. Vinluan,
Eduardo U. Escueta, Paraja G. Hayudini and Raul Roco of the Angara
Concepcion Cruz Regala and Abello law offices (ACCRA) plotted,
devised, schemed conspired and confederated with each other in
setting up, through the use of the coconut levy funds, the financial and
corporate framework and structures that led to the establishment of
UCPB, UNICOM, COCOLIFE, COCOMARK, CIC, and more than
twenty other coconut levy funded corporations, including the
acquisition of San Miguel Corporation shares and its
institutionalization through presidential directives of the coconut
monopoly. Through insidious means and machinations, ACCRA,
being the wholly-owned investment arm, ACCRA Investments
Corporation, became the holder of approximately fifteen million
shares representing roughly 3.3% of the total outstanding capital stock
of UCPB as of 31 March 1987. This ranks ACCRA Investments
Corporation number 44 among the top 100 biggest stockholders of
UCPB which has approximately 1,400,000 shareholders. On the other
hand, corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of February, 1984.5

In their answer to the Expanded Amended Complaint, petitioners ACCRA lawyers


alleged that:

4.4 Defendants-ACCRA lawyers' participation in the acts with which


their codefendants are charged, was in furtherance of legitimate
lawyering.

4.4.1 In the course of rendering professional and legal


services to clients, defendants-ACCRA lawyers, Jose C.
Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and
Eduardo U. Escueta, became holders of shares of stock in
the corporations listed under their respective names in
Annex "A" of the expanded Amended Complaint as
incorporating or acquiring stockholders only and, as
such, they do not claim any proprietary interest in the
said shares of stock.

4.5 Defendant ACCRA-lawyer Avelino V. Cruz was one of the


incorporators in 1976 of Mermaid Marketing Corporation, which was
organized for legitimate business purposes not related to the
allegations of the expanded Amended Complaint. However, he has
long ago transferred any material interest therein and therefore denies
that the "shares" appearing in his name in Annex "A" of the expanded
Amended Complaint are his assets.6

Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed a
separate answer denying the allegations in the complaint implicating him in the
alleged ill-gotten wealth.7

Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR


OPPOSITION" dated October 8, 1991 with Counter-Motion that respondent
PCGG similarly grant the same treatment to them (exclusion as parties-defendants)
as accorded private respondent Roco.8 The Counter-Motion for dropping
petitioners from the complaint was duly set for hearing on October 18, 1991 in
accordance with the requirements of Rule 15 of the Rules of Court.

In its "Comment," respondent PCGG set the following conditions precedent for the
exclusion of petitioners, namely: (a) the disclosure of the identity of its clients; (b)
submission of documents substantiating the lawyer-client relationship; and (c) the
submission of the deeds of assignments petitioners executed in favor of its client
covering their respective
shareholdings.9
Consequently, respondent PCGG presented supposed proof to substantiate
compliance by private respondent Roco of the conditions precedent to warrant the
latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to
respondent PCGG of the counsel of respondent Roco dated May 24, 1989
reiterating a previous request for reinvestigation by the PCGG in PCGG Case No.
33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as
Attachment to the letter aforestated in (a); and (c) Letter of the Roco, Bunag, and
Kapunan Law Offices dated September 21, 1988 to the respondent PCGG in behalf
of private respondent Roco originally requesting the reinvestigation and/or re-
examination of the evidence of the PCGG against Roco in its Complaint in PCGG
Case No. 33. 10

It is noteworthy that during said proceedings, private respondent Roco did not
refute petitioners' contention that he did actually not reveal the identity of the client
involved in PCGG Case No. 33, nor had he undertaken to reveal the identity of the
client for whom he acted as nominee-stockholder. 11

On March 18, 1992, respondent Sandiganbayan promulgated the Resolution,


herein questioned, denying the exclusion of petitioners in PCGG Case No. 33, for
their refusal to comply with the conditions required by respondent PCGG. It held:

xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e. their principal, and
that will be their choice. But until they do identify their clients,
considerations of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The ACCRA lawyers
cannot excuse themselves from the consequences of their acts until
they have begun to establish the basis for recognizing the privilege;
the existence and identity of the client.

This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his


agency and that Roco has apparently identified his principal, which
revelation could show the lack of cause against him. This in turn has
allowed the PCGG to exercise its power both under the rules of
Agency and under Section 5 of E.O. No. 14-A in relation to the
Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA
72).

The PCGG has apparently offered to the ACCRA lawyers the same
conditions availed of by Roco; full disclosure in exchange for
exclusion from these proceedings (par. 7, PCGG's COMMENT dated
November 4, 1991). The ACCRA lawyers have preferred not to make
the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for


keeping them as party defendants. In the same vein, they cannot
compel the PCGG to be accorded the same treatment accorded to
Roco.
Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by


the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the
same treatment by the PCGG as accorded to Raul S. Roco is DENIED
for lack of merit. 12

ACCRA lawyers moved for a reconsideration of the above resolution but the same
was denied by the respondent Sandiganbayan. Hence, the ACCRA lawyers filed
the petition for certiorari, docketed as G.R. No. 105938, invoking the following
grounds:

The Honorable Sandiganbayan gravely abused its discretion in


subjecting petitioners ACCRA lawyers who undisputably acted as
lawyers in serving as nominee-stockholders, to the strict application of
the law of agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in


not considering petitioners ACCRA lawyers and Mr. Roco as
similarly situated and, therefore, deserving of equal treatment.

1. There is absolutely no evidence that Mr. Roco had


revealed, or had undertaken to reveal, the identities of the
client(s) for whom he acted as nominee-stockholder.

2. Even assuming that Mr. Roco had revealed, or had


undertaken to reveal, the identities of the client(s), the
disclosure does not constitute a substantial distinction as
would make the classification reasonable under the equal
protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and


undue preference in favor of Mr. Roco in violation of the
equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in


not holding that, under the facts of this case, the attorney-client
privilege prohibits petitioners ACCRA lawyers from revealing the
identity of their client(s) and the other information requested by the
PCGG.

1. Under the peculiar facts of this case, the attorney-client


privilege includes the identity of the client(s).

2. The factual disclosures required by the PCGG are not


limited to the identity of petitioners ACCRA lawyers'
alleged client(s) but extend to other privileged matters.

IV
The Honorable Sandiganbayan committed grave abuse of discretion in
not requiring that the dropping of party-defendants by the PCGG must
be based on reasonable and just grounds and with due consideration to
the constitutional right of petitioners ACCRA lawyers to the equal
protection of the law.

Petitioner Paraja G. Hayudini, likewise, filed his own motion for reconsideration of
the March 18, 1991 resolution which was denied by respondent Sandiganbayan.
Thus, he filed a separate petition for certiorari, docketed as G.R. No. 108113,
assailing respondent Sandiganbayan's resolution on essentially the same grounds
averred by petitioners in G.R. No. 105938.

Petitioners contend that the exclusion of respondent Roco as party-defendant in


PCGG Case No. 33 grants him a favorable treatment, on the pretext of his alleged
undertaking to divulge the identity of his client, giving him an advantage over
them who are in the same footing as partners in the ACCRA law firm. Petitioners
further argue that even granting that such an undertaking has been assumed by
private respondent Roco, they are prohibited from revealing the identity of their
principal under their sworn mandate and fiduciary duty as lawyers to uphold at all
times the confidentiality of information obtained during such lawyer-client
relationship.

Respondent PCGG, through its counsel, refutes petitioners' contention, alleging


that the revelation of the identity of the client is not within the ambit of the lawyer-
client confidentiality privilege, nor are the documents it required (deeds of
assignment) protected, because they are evidence of nominee status. 13

In his comment, respondent Roco asseverates that respondent PCGG acted


correctly in excluding him as party-defendant because he "(Roco) has not filed an
Answer. PCGG had therefore the right to dismiss Civil Case No.0033 as to Roco
'without an order of court by filing a notice of dismissal'," 14 and he has undertaken
to identify his principal. 15

Petitioners' contentions are impressed with merit.

It is quite apparent that petitioners were impleaded by the PCGG as co-defendants


to force them to disclose the identity of their clients. Clearly, respondent PCGG is
not after petitioners but the "bigger fish" as they say in street parlance. This ploy is
quite clear from the PCGG's willingness to cut a deal with petitioners — the names
of their clients in exchange for exclusion from the complaint. The statement of the
Sandiganbayan in its questioned resolution dated March 18, 1992 is explicit:

ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e, their principal, and
that will be their choice. But until they do identify their clients,
considerations of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The ACCRA lawyers
cannot excuse themselves from the consequences of their acts until
they have begun to establish the basis for recognizing the
privilege; the existence and identity of the client.
This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein. (Emphasis ours)

In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third
Division, entitled "Primavera Farms, Inc., et al. vs. Presidential Commission on
Good Government" respondent PCGG, through counsel Mario Ongkiko,
manifested at the hearing on December 5, 1991 that the PCGG wanted to establish
through the ACCRA that their "so called client is Mr. Eduardo Cojuangco;" that "it
was Mr. Eduardo Cojuangco who furnished all the monies to those subscription
payments in corporations included in Annex "A" of the Third Amended
Complaint; that the ACCRA lawyers executed deeds of trust and deeds of
assignment, some in the name of particular persons; some in blank.

We quote Atty. Ongkiko:

ATTY. ONGKIKO:

With the permission of this Hon. Court. I propose to establish through


these ACCRA lawyers that, one, their so-called client is Mr. Eduardo
Cojuangco. Second, it was Mr. Eduardo Cojuangco who furnished all
the monies to these subscription payments of these corporations who
are now the petitioners in this case. Third, that these lawyers executed
deeds of trust, some in the name of a particular person, some in blank.
Now, these blank deeds are important to our claim that some of the
shares are actually being held by the nominees for the late President
Marcos. Fourth, they also executed deeds of assignment and some of
these assignments have also blank assignees. Again, this is important
to our claim that some of the shares are for Mr. Conjuangco and some
are for Mr. Marcos. Fifth, that most of thes e corporations are really
just paper corporations. Why do we say that? One: There are no really
fixed sets of officers, no fixed sets of directors at the time of
incorporation and even up to 1986, which is the crucial year. And not
only that, they have no permits from the municipal authorities in
Makati. Next, actually all their addresses now are care of Villareal
Law Office. They really have no address on records. These are some
of the principal things that we would ask of these nominees
stockholders, as they called themselves. 16

It would seem that petitioners are merely standing in for their clients as defendants
in the complaint. Petitioners are being prosecuted solely on the basis of activities
and services performed in the course of their duties as lawyers. Quite obviously,
petitioners' inclusion as co-defendants in the complaint is merely being used as
leverage to compel them to name their clients and consequently to enable the
PCGG to nail these clients. Such being the case, respondent PCGG has no valid
cause of action as against petitioners and should exclude them from the Third
Amended Complaint.

II

The nature of lawyer-client relationship is premised on the Roman Law concepts


of locatio conductio operarum(contract of lease of services) where one person lets
his services and another hires them without reference to the object of which the
services are to be performed, wherein lawyers' services may be compensated
by honorarium or for hire, 17 and mandato (contract of agency) wherein a friend on
whom reliance could be placed makes a contract in his name, but gives up all that
he gained by the contract to the person who requested him. 18 But the lawyer-client
relationship is more than that of the principal-agent and lessor-lessee.

In modern day perception of the lawyer-client relationship, an attorney is more


than a mere agent or servant, because he possesses special powers of trust and
confidence reposed on him by his client. 19 A lawyer is also as independent as the
judge of the court, thus his powers are entirely different from and superior to those
of an ordinary agent.20 Moreover, an attorney also occupies what may be
considered as a "quasi-judicial office" since he is in fact an officer of the
Court 21 and exercises his judgment in the choice of courses of action to be taken
favorable to his client.

Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct
and duties that breathe life into it, among those, the fiduciary duty to his client
which is of a very delicate, exacting and confidential character, requiring a very
high degree of fidelity and good faith, 22 that is required by reason of necessity and
public interest 23 based on the hypothesis that abstinence from seeking legal advice
in a good cause is an evil which is fatal to the administration of justice. 24

It is also the strict sense of fidelity of a lawyer to his client that


distinguishes him from any other professional in society. This
conception is entrenched and embodies centuries of established and
stable tradition. 25 In Stockton v. Ford,26 the U. S. Supreme Court
held:

There are few of the business relations of life involving a higher trust
and confidence than that of attorney and client, or generally speaking,
one more honorably and faithfully discharged; few more anxiously
guarded by the law, or governed by the sterner principles of morality
and justice; and it is the duty of the court to administer them in a
corresponding spirit, and to be watchful and industrious, to see that
confidence thus reposed shall not be used to the detriment or prejudice
of the rights of the party bestowing it. 27

In our jurisdiction, this privilege takes off from the old Code of Civil Procedure
enacted by the Philippine Commission on August 7, 1901. Section 383 of the Code
specifically "forbids counsel, without authority of his client to reveal any
communication made by the client to him or his advice given thereon in the course
of professional employment." 28Passed on into various provisions of the Rules of
Court, the attorney-client privilege, as currently worded provides:

Sec. 24. Disqualification by reason of privileged communication. —


The following persons cannot testify as to matters learned in
confidence in the following cases:

xxx xxx xxx

An attorney cannot, without the consent of his client, be examined as


to any communication made by the client to him, or his advice given
thereon in the course of, or with a view to, professional employment,
can an attorney's secretary, stenographer, or clerk be examined,
without the consent of the client and his employer, concerning any
fact the knowledge of which has been acquired in such capacity. 29
Further, Rule 138 of the Rules of Court states:

Sec. 20. It is the duty of an attorney: (e) to maintain inviolate the


confidence, and at every peril to himself, to preserve the secrets of his
client, and to accept no compensation in connection with his client's
business except from him or with his knowledge and approval.

This duty is explicitly mandated in Canon 17 of the Code of Professional


Responsibility which provides that:

Canon 17. A lawyer owes fidelity to the cause of his client and he
shall be mindful of the trust and confidence reposed in him.

Canon 15 of the Canons of Professional Ethics also demands a lawyer's fidelity to


client:

The lawyers owes "entire devotion to the interest of the client, warm
zeal in the maintenance and defense of his rights and the exertion of
his utmost learning and ability," to the end that nothing be taken or be
withheld from him, save by the rules of law, legally applied. No fear
of judicial disfavor or public popularity should restrain him from the
full discharge of his duty. In the judicial forum the client is entitled to
the benefit of any and every remedy and defense that is authorized by
the law of the land, and he may expect his lawyer to assert every such
remedy or defense. But it is steadfastly to be borne in mind that the
great trust of the lawyer is to be performed within and not without the
bounds of the law. The office of attorney does not permit, much less
does it demand of him for any client, violation of law or any manner
of fraud or chicanery. He must obey his own conscience and not that
of his client.

Considerations favoring confidentially in lawyer-client relationships are many and


serve several constitutional and policy concerns. In the constitutional sphere, the
privilege gives flesh to one of the most sacrosanct rights available to the accused,
the right to counsel. If a client were made to choose between legal representation
without effective communication and disclosure and legal representation with all
his secrets revealed then he might be compelled, in some instances, to either opt to
stay away from the judicial system or to lose the right to counsel. If the price of
disclosure is too high, or if it amounts to self incrimination, then the flow of
information would be curtailed thereby rendering the right practically nugatory.
The threat this represents against another sacrosanct individual right, the right to be
presumed innocent is at once self-evident.

Encouraging full disclosure to a lawyer by one seeking legal services opens the
door to a whole spectrum of legal options which would otherwise be circumscribed
by limited information engendered by a fear of disclosure. An effective lawyer-
client relationship is largely dependent upon the degree of confidence which exists
between lawyer and client which in turn requires a situation which encourages a
dynamic and fruitful exchange and flow of information. It necessarily follows that
in order to attain effective representation, the lawyer must invoke the privilege not
as a matter of option but as a matter of duty and professional responsibility.
The question now arises whether or not this duty may be asserted in refusing to
disclose the name of petitioners' client(s) in the case at bar. Under the facts and
circumstances obtaining in the instant case, the answer must be in the affirmative.

As a matter of public policy, a client's identity should not be shrouded in


mystery 30 Under this premise, the general rule in our jurisdiction as well as in the
United States is that a lawyer may not invoke the privilege and refuse to divulge
the name or identity of this client. 31

The reasons advanced for the general rule are well established.

First, the court has a right to know that the client whose privileged information is
sought to be protected is flesh and blood.

Second, the privilege begins to exist only after the attorney-client relationship has
been established. The attorney-client privilege does not attach until there is a
client.

Third, the privilege generally pertains to the subject matter of the relationship.

Finally, due process considerations require that the opposing party should, as a
general rule, know his adversary. "A party suing or sued is entitled to know who
his opponent is." 32 He cannot be obliged to grope in the dark against unknown
forces. 33

Notwithstanding these considerations, the general rule is however qualified by


some important exceptions.

1) Client identity is privileged where a strong probability exists that revealing the
client's name would implicate that client in the very activity for which he sought
the lawyer's advice.

In Ex-Parte Enzor, 34 a state supreme court reversed a lower court order requiring a
lawyer to divulge the name of her client on the ground that the subject matter of
the relationship was so closely related to the issue of the client's identity that the
privilege actually attached to both. In Enzor, the unidentified client, an election
official, informed his attorney in confidence that he had been offered a bribe to
violate election laws or that he had accepted a bribe to that end. In her testimony,
the attorney revealed that she had advised her client to count the votes correctly,
but averred that she could not remember whether her client had been, in fact,
bribed. The lawyer was cited for contempt for her refusal to reveal his client's
identity before a grand jury. Reversing the lower court's contempt orders, the state
supreme court held that under the circumstances of the case, and under the
exceptions described above, even the name of the client was privileged.

U .S. v. Hodge and Zweig,35 involved the same exception, i.e. that client identity is
privileged in those instances where a strong probability exists that the disclosure of
the client's identity would implicate the client in the very criminal activity for
which the lawyer's legal advice was obtained.

The Hodge case involved federal grand jury proceedings inquiring into the
activities of the "Sandino Gang," a gang involved in the illegal importation of
drugs in the United States. The respondents, law partners, represented key
witnesses and suspects including the leader of the gang, Joe Sandino.
In connection with a tax investigation in November of 1973, the IRS issued
summons to Hodge and Zweig, requiring them to produce documents and
information regarding payment received by Sandino on behalf of any other person,
and vice versa. The lawyers refused to divulge the names. The Ninth Circuit of the
United States Court of Appeals, upholding non-disclosure under the facts and
circumstances of the case, held:

A client's identity and the nature of that client's fee arrangements may
be privileged where the person invoking the privilege can show that a
strong probability exists that disclosure of such information would
implicate that client in the very criminal activity for which legal
advice was sought Baird v. Koerner, 279 F. 2d at 680. While in Baird
Owe enunciated this rule as a matter of California law, the rule also
reflects federal law. Appellants contend that the Baird exception
applies to this case.

The Baird exception is entirely consonant with the principal policy


behind the attorney-client privilege. "In order to promote freedom of
consultation of legal advisors by clients, the apprehension of
compelled disclosure from the legal advisors must be removed; hence,
the law must prohibit such disclosure except on the client's consent." 8
J. Wigmore, supra sec. 2291, at 545. In furtherance of this policy, the
client's identity and the nature of his fee arrangements are, in
exceptional cases, protected as confidential communications. 36

2) Where disclosure would open the client to civil liability; his identity is
privileged. For instance, the peculiar facts and circumstances of Neugass
v. Terminal Cab Corporation,37 prompted the New York Supreme Court to allow a
lawyer's claim to the effect that he could not reveal the name of his client because
this would expose the latter to civil litigation.

In the said case, Neugass, the plaintiff, suffered injury when the taxicab she was
riding, owned by respondent corporation, collided with a second taxicab, whose
owner was unknown. Plaintiff brought action both against defendant corporation
and the owner of the second cab, identified in the information only as John Doe. It
turned out that when the attorney of defendant corporation appeared on preliminary
examination, the fact was somehow revealed that the lawyer came to know the
name of the owner of the second cab when a man, a client of the insurance
company, prior to the institution of legal action, came to him and reported that he
was involved in a car accident. It was apparent under the circumstances that the
man was the owner of the second cab. The state supreme court held that the reports
were clearly made to the lawyer in his professional capacity. The court said:

That his employment came about through the fact that the insurance
company had hired him to defend its policyholders seems immaterial.
The attorney is such cases is clearly the attorney for the policyholder
when the policyholder goes to him to report an occurrence
contemplating that it would be used in an action or claim against
him. 38

xxx xxx xxx

All communications made by a client to his counsel, for the purpose


of professional advice or assistance, are privileged, whether they
relate to a suit pending or contemplated, or to any other matter proper
for such advice or aid; . . . And whenever the communication made,
relates to a matter so connected with the employment as attorney or
counsel as to afford presumption that it was the ground of the address
by the client, then it is privileged from disclosure. . .

It appears . . . that the name and address of the owner of the second
cab came to the attorney in this case as a confidential communication.
His client is not seeking to use the courts, and his address cannot be
disclosed on that theory, nor is the present action pending against him
as service of the summons on him has not been effected. The
objections on which the court reserved decision are sustained. 39

In the case of Matter of Shawmut Mining Company,40 the lawyer involved was
required by a lower court to disclose whether he represented certain clients in a
certain transaction. The purpose of the court's request was to determine whether the
unnamed persons as interested parties were connected with the purchase of
properties involved in the action. The lawyer refused and brought the question to
the State Supreme Court. Upholding the lawyer's refusal to divulge the names of
his clients the court held:

If it can compel the witness to state, as directed by the order appealed


from, that he represented certain persons in the purchase or sale of
these mines, it has made progress in establishing by such evidence
their version of the litigation. As already suggested, such testimony by
the witness would compel him to disclose not only that he was
attorney for certain people, but that, as the result of communications
made to him in the course of such employment as such attorney, he
knew that they were interested in certain transactions. We feel sure
that under such conditions no case has ever gone to the length of
compelling an attorney, at the instance of a hostile litigant, to disclose
not only his retainer, but the nature of the transactions to which it
related, when such information could be made the basis of a suit
against his client. 41

3) Where the government's lawyers have no case against an attorney's client unless,
by revealing the client's name, the said name would furnish the only link that
would form the chain of testimony necessary to convict an individual of a crime,
the client's name is privileged.

In Baird vs. Korner,42 a lawyer was consulted by the accountants and the lawyer of
certain undisclosed taxpayers regarding steps to be taken to place the undisclosed
taxpayers in a favorable position in case criminal charges were brought against
them by the U.S. Internal Revenue Service (IRS).

It appeared that the taxpayers' returns of previous years were probably incorrect
and the taxes understated. The clients themselves were unsure about whether or not
they violated tax laws and sought advice from Baird on the hypothetical possibility
that they had. No investigation was then being undertaken by the IRS of the
taxpayers. Subsequently, the attorney of the taxpayers delivered to Baird the sum
of $12, 706.85, which had been previously assessed as the tax due, and another
amount of money representing his fee for the advice given. Baird then sent a check
for $12,706.85 to the IRS in Baltimore, Maryland, with a note explaining the
payment, but without naming his clients. The IRS demanded that Baird identify the
lawyers, accountants, and other clients involved. Baird refused on the ground that
he did not know their names, and declined to name the attorney and accountants
because this constituted privileged communication. A petition was filed for the
enforcement of the IRS summons. For Baird's repeated refusal to name his clients
he was found guilty of civil contempt. The Ninth Circuit Court of Appeals held
that, a lawyer could not be forced to reveal the names of clients who employed him
to pay sums of money to the government voluntarily in settlement of undetermined
income taxes, unsued on, and with no government audit or investigation into that
client's income tax liability pending. The court emphasized the exception that a
client's name is privileged when so much has been revealed concerning the legal
services rendered that the disclosure of the client's identity exposes him to possible
investigation and sanction by government agencies. The Court held:

The facts of the instant case bring it squarely within that exception to
the general rule. Here money was received by the government, paid
by persons who thereby admitted they had not paid a sufficient
amount in income taxes some one or more years in the past. The
names of the clients are useful to the government for but one purpose
— to ascertain which taxpayers think they were delinquent, so that it
may check the records for that one year or several years. The
voluntary nature of the payment indicates a belief by the taxpayers
that more taxes or interest or penalties are due than the sum previously
paid, if any. It indicates a feeling of guilt for nonpayment of taxes,
though whether it is criminal guilt is undisclosed. But it may well be
the link that could form the chain of testimony necessary to convict an
individual of a federal crime. Certainly the payment and the feeling of
guilt are the reasons the attorney here involved was employed — to
advise his clients what, under the circumstances, should be done. 43

Apart from these principal exceptions, there exist other situations which could
qualify as exceptions to the general rule.

For example, the content of any client communication to a lawyer lies within the
privilege if it is relevant to the subject matter of the legal problem on which the
client seeks legal assistance. 44 Moreover, where the nature of the attorney-client
relationship has been previously disclosed and it is the identity which is intended to
be confidential, the identity of the client has been held to be privileged, since such
revelation would otherwise result in disclosure of the entire transaction. 45

Summarizing these exceptions, information relating to the identity of a client may


fall within the ambit of the privilege when the client's name itself has an
independent significance, such that disclosure would then reveal client
confidences. 46

The circumstances involving the engagement of lawyers in the case at bench,


therefore, clearly reveal that the instant case falls under at least two exceptions to
the general rule. First, disclosure of the alleged client's name would lead to
establish said client's connection with the very fact in issue of the case, which is
privileged information, because the privilege, as stated earlier, protects the subject
matter or the substance (without which there would be not attorney-client
relationship).

The link between the alleged criminal offense and the legal advice or legal service
sought was duly establishes in the case at bar, by no less than the PCGG itself. The
key lies in the three specific conditions laid down by the PCGG which constitutes
petitioners' ticket to non-prosecution should they accede thereto:

(a) the disclosure of the identity of its clients;

(b) submission of documents substantiating the lawyer-client


relationship; and

(c) the submission of the deeds of assignment petitioners executed in


favor of their clients covering their respective shareholdings.

From these conditions, particularly the third, we can readily deduce that the clients
indeed consulted the petitioners, in their capacity as lawyers, regarding the
financial and corporate structure, framework and set-up of the corporations in
question. In turn, petitioners gave their professional advice in the form of, among
others, the aforementioned deeds of assignment covering their client's
shareholdings.

There is no question that the preparation of the aforestated documents was part and
parcel of petitioners' legal service to their clients. More important, it constituted an
integral part of their duties as lawyers. Petitioners, therefore, have a legitimate fear
that identifying their clients would implicate them in the very activity for which
legal advice had been sought, i.e., the alleged accumulation of ill-gotten wealth in
the aforementioned corporations.

Furthermore, under the third main exception, revelation of the client's name would
obviously provide the necessary link for the prosecution to build its case, where
none otherwise exists. It is the link, in the words of Baird, "that would inevitably
form the chain of testimony necessary to convict the (client) of a . . . crime." 47

An important distinction must be made between a case where a client takes on the
services of an attorney for illicit purposes, seeking advice about how to go around
the law for the purpose of committing illegal activities and a case where a client
thinks he might have previously committed something illegal and consults his
attorney about it. The first case clearly does not fall within the privilege because
the same cannot be invoked for purposes illegal. The second case falls within the
exception because whether or not the act for which the client sought advice turns
out to be illegal, his name cannot be used or disclosed if the disclosure leads to
evidence, not yet in the hands of the prosecution, which might lead to possible
action against him.

These cases may be readily distinguished, because the privilege cannot be invoked
or used as a shield for an illegal act, as in the first example; while the prosecution
may not have a case against the client in the second example and cannot use the
attorney client relationship to build up a case against the latter. The reason for the
first rule is that it is not within the professional character of a lawyer to give advice
on the commission of a crime. 48 The reason for the second has been stated in the
cases above discussed and are founded on the same policy grounds for which the
attorney-client privilege, in general, exists.

In Matter of Shawmut Mining Co., supra, the appellate court therein stated that
"under such conditions no case has ever yet gone to the length of compelling an
attorney, at the instance of a hostile litigant, to disclose not only his retainer, but
the nature of the transactions to which it related, when such information could be
made the basis of a suit against his client." 49 "Communications made to an
attorney in the course of any personal employment, relating to the subject thereof,
and which may be supposed to be drawn out in consequence of the relation in
which the parties stand to each other, are under the seal of confidence and entitled
to protection as privileged communications."50 Where the communicated
information, which clearly falls within the privilege, would suggest possible
criminal activity but there would be not much in the information known to the
prosecution which would sustain a charge except that revealing the name of the
client would open up other privileged information which would substantiate the
prosecution's suspicions, then the client's identity is so inextricably linked to the
subject matter itself that it falls within the protection. The Baird exception,
applicable to the instant case, is consonant with the principal policy behind the
privilege, i.e., that for the purpose of promoting freedom of consultation of legal
advisors by clients, apprehension of compelled disclosure from attorneys must be
eliminated. This exception has likewise been sustained in In re Grand Jury
Proceedings51 and Tillotson v. Boughner.52 What these cases unanimously seek to
avoid is the exploitation of the general rule in what may amount to a fishing
expedition by the prosecution.

There are, after all, alternative source of information available to the prosecutor
which do not depend on utilizing a defendant's counsel as a convenient and readily
available source of information in the building of a case against the latter.
Compelling disclosure of the client's name in circumstances such as the one which
exists in the case at bench amounts to sanctioning fishing expeditions by lazy
prosecutors and litigants which we cannot and will not countenance. When the
nature of the transaction would be revealed by disclosure of an attorney's retainer,
such retainer is obviously protected by the privilege. 53 It follows that petitioner
attorneys in the instant case owe their client(s) a duty and an obligation not to
disclose the latter's identity which in turn requires them to invoke the privilege.

In fine, the crux of petitioners' objections ultimately hinges on their expectation


that if the prosecution has a case against their clients, the latter's case should be
built upon evidence painstakingly gathered by them from their own sources and
not from compelled testimony requiring them to reveal the name of their clients,
information which unavoidably reveals much about the nature of the transaction
which may or may not be illegal. The logical nexus between name and nature of
transaction is so intimate in this case the it would be difficult to simply dissociate
one from the other. In this sense, the name is as much "communication" as
information revealed directly about the transaction in question itself, a
communication which is clearly and distinctly privileged. A lawyer cannot reveal
such communication without exposing himself to charges of violating a principle
which forms the bulwark of the entire attorney-client relationship.

The uberrimei fidei relationship between a lawyer and his client therefore imposes
a strict liability for negligence on the former. The ethical duties owing to the client,
including confidentiality, loyalty, competence, diligence as well as the
responsibility to keep clients informed and protect their rights to make decisions
have been zealously sustained. In Milbank, Tweed, Hadley and McCloy
v. Boon,54 the US Second District Court rejected the plea of the petitioner law firm
that it breached its fiduciary duty to its client by helping the latter's former agent in
closing a deal for the agent's benefit only after its client hesitated in proceeding
with the transaction, thus causing no harm to its client. The Court instead ruled that
breaches of a fiduciary relationship in any context comprise a special breed of
cases that often loosen normally stringent requirements of causation and damages,
and found in favor of the client.

To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and Shipley
P.A. v. Scheller55 requiring strict obligation of lawyers vis-a-vis clients. In this
case, a contingent fee lawyer was fired shortly before the end of completion of his
work, and sought payment quantum meruit of work done. The court, however,
found that the lawyer was fired for cause after he sought to pressure his client into
signing a new fee agreement while settlement negotiations were at a critical stage.
While the client found a new lawyer during the interregnum, events forced the
client to settle for less than what was originally offered. Reiterating the principle of
fiduciary duty of lawyers to clients in Meinhard v. Salmon56 famously attributed to
Justice Benjamin Cardozo that "Not honesty alone, but the punctilioof an honor the
most sensitive, is then the standard of behavior," the US Court found that the
lawyer involved was fired for cause, thus deserved no attorney's fees at all.

The utmost zeal given by Courts to the protection of the lawyer-client


confidentiality privilege and lawyer's loyalty to his client is evident in the duration
of the protection, which exists not only during the relationship, but extends even
after the termination of the relationship. 57

Such are the unrelenting duties required by lawyers vis-a-vis their clients because
the law, which the lawyers are sworn to uphold, in the words of Oliver Wendell
Holmes, 58 ". . . is an exacting goddess, demanding of her votaries in intellectual
and moral discipline." The Court, no less, is not prepared to accept respondents'
position without denigrating the noble profession that is lawyering, so extolled by
Justice Holmes in this wise:

Every calling is great when greatly pursued. But what other gives such
scope to realize the spontaneous energy of one's soul? In what other
does one plunge so deep in the stream of life — so share its passions
its battles, its despair, its triumphs, both as witness and actor? . . . But
that is not all. What a subject is this in which we are united — this
abstraction called the Law, wherein as in a magic mirror, we see
reflected, not only in our lives, but the lives of all men that have been.
When I think on this majestic theme my eyes dazzle. If we are to
speak of the law as our mistress, we who are here know that she is a
mistress only to be won with sustained and lonely passion — only to
be won by straining all the faculties by which man is likened to God.

We have no choice but to uphold petitioners' right not to reveal the identity of their
clients under pain of the breach of fiduciary duty owing to their clients, because the
facts of the instant case clearly fall within recognized exceptions to the rule that the
client's name is not privileged information.

If we were to sustain respondent PCGG that the lawyer-client confidential


privilege under the circumstances obtaining here does not cover the identity of the
client, then it would expose the lawyers themselves to possible litigation by their
clients in view of the strict fiduciary responsibility imposed on them in the exercise
of their duties.

The complaint in Civil Case No. 0033 alleged that the defendants therein,
including herein petitioners and Eduardo Cojuangco, Jr. conspired with each
other in setting up through the use of coconut levy funds the financial and
corporate framework and structures that led to the establishment of UCPB,
UNICOM and others and that through insidious means and machinations,
ACCRA, using its wholly-owned investment arm, ACCRA Investment
Corporation, became the holder of approximately fifteen million shares
representing roughly 3.3% of the total capital stock of UCPB as of 31 March
1987. The PCGG wanted to establish through the ACCRA lawyers that Mr.
Cojuangco is their client and it was Cojuangco who furnished all the monies
to the subscription payment; hence, petitioners acted as dummies, nominees
and/or agents by allowing themselves, among others, to be used as
instrument in accumulating ill-gotten wealth through government
concessions, etc., which acts constitute gross abuse of official position and
authority, flagrant breach of public trust, unjust enrichment, violation of the
Constitution and laws of the Republic of the Philippines.

By compelling petitioners, not only to reveal the identity of their clients, but
worse, to submit to the PCGG documents substantiating the client-lawyer
relationship, as well as deeds of assignment petitioners executed in favor of
its clients covering their respective shareholdings, the PCGG would exact
from petitioners a link "that would inevitably form the chain of testimony
necessary to convict the (client) of a crime."

III

In response to petitioners' last assignment of error, respondents alleged that


the private respondent was dropped as party defendant not only because of
his admission that he acted merely as a nominee but also because of his
undertaking to testify to such facts and circumstances "as the interest of truth
may require, which includes . . . the identity of the principal."59

First, as to the bare statement that private respondent merely acted as a


lawyer and nominee, a statement made in his out-of-court settlement with
the PCGG, it is sufficient to state that petitioners have likewise made the
same claim not merely out-of-court but also in the Answer to plaintiff's
Expanded Amended Complaint, signed by counsel, claiming that their acts
were made in furtherance of "legitimate lawyering."60 Being "similarly
situated" in this regard, public respondents must show that there exist other
conditions and circumstances which would warrant their treating the private
respondent differently from petitioners in the case at bench in order to evade
a violation of the equal protection clause of the Constitution.

To this end, public respondents contend that the primary consideration


behind their decision to sustain the PCGG's dropping of private respondent
as a defendant was his promise to disclose the identities of the clients in
question. However, respondents failed to show — and absolute nothing
exists in the records of the case at bar — that private respondent actually
revealed the identity of his client(s) to the PCGG. Since the undertaking
happens to be the leitmotif of the entire arrangement between Mr. Roco and
the PCGG, an undertaking which is so material as to have justified PCGG's
special treatment exempting the private respondent from prosecution,
respondent Sandiganbayan should have required proof of the undertaking
more substantial than a "bare assertion" that private respondent did indeed
comply with the undertaking. Instead, as manifested by the PCGG, only
three documents were submitted for the purpose, two of which were mere
requests for re-investigation and one simply disclosed certain clients which
petitioners (ACCRA lawyers) were themselves willing to reveal. These were
clients to whom both petitioners and private respondent rendered legal
services while all of them were partners at ACCRA, and were not the clients
which the PCGG wanted disclosed for the alleged questioned transactions.61

To justify the dropping of the private respondent from the case or the filing
of the suit in the respondent court without him, therefore, the PCGG should
conclusively show that Mr. Roco was treated as species apart from the rest
of the ACCRA lawyers on the basis of a classification which made
substantial distinctions based on real differences. No such substantial
distinctions exist from the records of the case at bench, in violation of the
equal protection clause.

The equal protection clause is a guarantee which provides a wall of


protection against uneven application of status and regulations. In the
broader sense, the guarantee operates against uneven application of legal
norms so
that all persons under similar circumstances would be accorded the same
treatment. 62 Those who fall within a particular class ought to be treated alike
not only as to privileges granted but also as to the liabilities imposed.

. . . What is required under this constitutional guarantee is the uniform


operation of legal norms so that all persons under similar
circumstances would be accorded the same treatment both in the
privileges conferred and the liabilities imposed. As was noted in a
recent decision: "Favoritism and undue preference cannot be allowed.
For the principle is that equal protection and security shall be given to
every person under circumstances, which if not identical are
analogous. If law be looked upon in terms of burden or charges, those
that fall within a class should be treated in the same fashion, whatever
restrictions cast on some in the group equally binding the rest.63

We find that the condition precedent required by the respondent PCGG of


the petitioners for their exclusion as parties-defendants in PCGG Case No.
33 violates the lawyer-client confidentiality privilege. The condition also
constitutes a transgression by respondents Sandiganbayan and PCGG of the
equal protection clause of the Constitution.64 It is grossly unfair to exempt
one similarly situated litigant from prosecution without allowing the same
exemption to the others. Moreover, the PCGG's demand not only touches
upon the question of the identity of their clients but also on documents
related to the suspected transactions, not only in violation of the attorney-
client privilege but also of the constitutional right against self-incrimination.
Whichever way one looks at it, this is a fishing expedition, a free ride at the
expense of such rights.

An argument is advanced that the invocation by petitioners of the privilege


of attorney-client confidentiality at this stage of the proceedings is premature
and that they should wait until they are called to testify and examine as
witnesses as to matters learned in confidence before they can raise their
objections. But petitioners are not mere witnesses. They are co-principals in
the case for recovery of alleged ill-gotten wealth. They have made their
position clear from the very beginning that they are not willing to testify and
they cannot be compelled to testify in view of their constitutional right
against self-incrimination and of their fundamental legal right to maintain
inviolate the privilege of attorney-client confidentiality.

It is clear then that the case against petitioners should never be allowed to
take its full course in the Sandiganbayan. Petitioners should not be made to
suffer the effects of further litigation when it is obvious that their inclusion
in the complaint arose from a privileged attorney-client relationship and as a
means of coercing them to disclose the identities of their clients. To allow
the case to continue with respect to them when this Court could nip the
problem in the bud at this early opportunity would be to sanction an unjust
situation which we should not here countenance. The case hangs as a real
and palpable threat, a proverbial Sword of Damocles over petitioners' heads.
It should not be allowed to continue a day longer.

While we are aware of respondent PCGG's legal mandate to recover ill-


gotten wealth, we will not sanction acts which violate the equal protection
guarantee and the right against self-incrimination and subvert the lawyer-
client confidentiality privilege.

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of


respondent Sandiganbayan (First Division) promulgated on March 18, 1992
and May 21, 1992 are hereby ANNULLED and SET ASIDE. Respondent
Sandiganbayan is further ordered to exclude petitioners Teodoro D. Regala,
Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Victor P. Lazatin,
Eduardo U. Escueta and Paraja G. Hayuduni as parties-defendants in SB
Civil Case No. 0033 entitled "Republic of the Philippines v. Eduardo
Cojuangco, Jr., et al."

SO ORDERED.

Bellosillo, Melo and Francisco, JJ., concur.

Padilla, Panganiban and Torres, Jr., JJ., concur in the result.

Romero and Hermosisima, Jr., JJ., took no part.

Mendoza, J., is on leave.

Separate Opinions

VITUG, J., concurring:

The legal profession, despite all the unrestrained calumny hurled against it,
is still the noblest of professions. It exists upon the thesis that, in an orderly
society that is opposed to all forms of anarchy, it so occupies, as it should,
an exalted position in the proper dispensation of justice. In time, principles
have evolved that would help ensure its effective ministration. The
protection of confidentiality of the lawyer-client relationship is one, and it
has since been an accepted firmament in the profession. It allows the lawyer
and the client to institutionalize a unique relationship based on full trust and
confidence essential in a justice system that works on the basis of
substantive and procedural due process. To be sure, the rule is not without its
pitfalls, and demands against it may be strong, but these problems are, in the
ultimate analysis, no more than mere tests of vigor that have made and will
make that rule endure.

I see in the case before us, given the attendant circumstances already
detailed in the ponencia, a situation of the Republic attempting to establish a
case not on what it perceives to be the strength of its own evidence but on
what it could elicit from a counsel against his client. I find it unreasonable
for the Sandiganbayan to compel petitioners to breach the trust reposed on
them and succumb to a thinly disguised threat of incrimination.

Accordingly, I join my other colleague who vote for the GRANT of the
petition.

DAVIDE, JR., J.: dissenting

The impressive presentation of the case in the ponencia of Mr. Justice


Kapunan makes difficult the espousal of a dissenting view. Nevertheless, I
do not hesitate to express that view because I strongly feel that this Court
must confine itself to the key issue in this special civil action
for certiorari, viz., whether or not the Sandiganbayan acted with grave abuse
of discretion in not excluding the defendants, the petitioners herein, from the
Third Amended Complaint in Civil Case No. 0033. That issue,
unfortunately, has been simply buried under the avalanche of authorities
upholding the sanctity of lawyer-client relationship which appears to me to
be prematurely invoked.

From the undisputed facts disclosed by the pleadings and summarized in


the ponencia, I cannot find my way clear to a conclusion that the
Sandiganbayan committed grave abuse of discretion in not acting favorably
on the petitioners' prayer in their Comment to the PCGG's Motion to Admit
Third Amended Complaint.

The prerogative to determine who shall be made defendants in a civil case is


initially vested in the plaintiff, or the PCGG in this case. The control of the
Court comes in only when the issue of "interest" (§ 2, Rule 3, Rules of
Court) as, e.g., whether an indispensable party has not been joined, or
whether there is a misjoinder of parties (§ 7, 8, and 9, Id.), is raised.

In the case below, the PCGG decided to drop or exclude from the complaint
original co-defendant Raul Roco because he had allegedly complied with the
condition prescribed by the PCGG, viz., undertake that he will reveal the
identity of the principals for whom he acted as nominee/stockholder in the
companies involved in PCGG Case No. 0033. In short, there was an
agreement or compromise settlement between the PCGG and Roco.
Accordingly, the PCGG submitted a Third Amended Complaint without
Roco as a defendant. No obstacle to such an agreement has been insinuated.
If Roco's revelation violated the confidentiality of a lawyer-client
relationship, he would be solely answerable therefor to his principals/clients
and, probably, to this Court in an appropriate disciplinary action if
warranted. There is at all no showing that Civil Case No. 0033 cannot
further be proceeded upon or that any judgment therein cannot be binding
without Roco remaining as a defendant. Accordingly, the admission of the
Third Amended Complaint cannot be validly withheld by the
Sandiganbayan.

Are the petitioners, who did not file a formal motion to be excluded but only
made the request to that effect as a rider to their Comment to the Motion to
Admit Third Amended Complaint, entitled to be excluded from the Third
Amended Complaint such that denial thereof would constitute grave abuse
of discretion on the Sandiganbayan's part? To me, the answer is clearly in
the negative.

The petitioners seek to be accorded the same benefit granted to or to be


similarly treated as Roco. Reason and logic dictate that they cannot, unless
they too would make themselves like Roco. Otherwise stated, they must first
voluntarily adopt for themselves the factual milieu created by Roco and must
bind themselves to perform certain obligations as Roco. It is precisely for
this that in response to the petitioners' comment on the aforementioned
Motion to Admit Third Amended Complaint the PCGG manifested that it is
willing to accord the petitioners the treatment it gave Roco provided they
would do what Roco had done, that is, disclose the identity of their
principals/clients and submit documents substantiating their claimed lawyer-
client relationship with the said principals/clients, as well as copies of deeds
of assignments the petitioners executed in favor of their principals/clients.
The petitioners did not do so because they believed that compliance thereof
would breach the sanctity of their fiduciary duty in a lawyer-client
relationship.

It, indeed, appears that Roco has complied with his obligation as a
consideration for his exclusion from the Third Amended Complaint. The
Sandiganbayan found that

5. The PCGG is satisfied that defendant Roco has demonstrated his


agency and that Roco has apparently identified his principal, which
revelation could show the lack of action against him. This in turn has
allowed the PCGG to exercise its power both under the rules of
agency and under Section 5 of E.O. No. 14-1 in relation to the
Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA
72).

As a matter of fact, the PCGG presented evidence to substantiate Roco's


compliance. The ponencia itself so stated, thus:

. . . respondent PCGG presented evidence to substantiate compliance


by private respondent Roco of the conditions precedent to warrant the
latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a)
Letter to respondent PCGG of the counsel of respondent Roco dated
May 24, 1989 reiterating a previous request for reinvestigation by the
PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989
executed by private respondent Roco as Attachment to the letter
aforestated in (a); and (c) Letter of Roco, Bunag, and Kapunan Law
Offices dated September 21, 1988 to the respondent in behalf of
private respondent Roco originally requesting the reinvestigation
and/or re-examination of evidence by the PCGG it Complaint in
PCGG Case No. 33. (Id., 5-6).

These are the pieces of evidence upon which the Sandiganbayan founded its
conclusion that the PCGG was satisfied with Roco's compliance. The
petitioners have not assailed such finding as arbitrary.

The ponencia's observation then that Roco did not refute the petitioners'
contention that he did not comply with his obligation to disclose the identity
of his principals is entirely irrelevant.

In view of their adamantine position, the petitioners did not, therefore, allow
themselves to be like Roco. They cannot claim the same treatment, much
less compel the PCGG to drop them as defendants, for nothing whatsoever.
They have no right to make such a demand for until they shall have
complied with the conditions imposed for their exclusion, they cannot be
excluded except by way of a motion to dismiss based on the grounds
allowed by law (e.g., those enumerated in § 1, Rule 16, Rules of Court). The
rule of confidentiality under the lawyer-client relationship is not a cause to
exclude a party. It is merely aground for disqualification of a witness (§ 24,
Rule 130, Rules of Court) and may only be invoked at the appropriate
time, i.e., when a lawyer is under compulsion to answer as witness, as when,
having taken the witness stand, he is questioned as to such confidential
communicator or advice, or is being otherwise judicially coerced to produce,
through subpoena duces tecum or otherwise, letters or other documents
containing the same privileged matter. But none of the lawyers in this case is
being required to testify about or otherwise reveal "any [confidential]
communication made by the client to him, or his advice given thereon in the
course of, or with a view to, professional employment." What they are being
asked to do, in line with their claim that they had done the acts ascribed to
them in pursuance of their professional relation to their clients, is to identify
the latter to the PCGG and the Court; but this, only if they so choose in order
to be dropped from the complaint, such identification being the condition
under which the PCGG has expressed willingness to exclude them from the
action. The revelation is entirely optional, discretionary, on their part. The
attorney-client privilege is not therefor applicable.

Thus, the Sandiganbayan did not commit any abuse of discretion when it
denied the petitioners' prayer for their exclusion as party-defendants because
they did not want to abide with any of the conditions set by the PCGG.
There would have been abuse if the Sandiganbayan granted the prayer
because then it would have capriciously, whimsically, arbitrarily, and
oppressively imposed its will on the PCGG.

Again, what the petitioners want is their exclusion from the Third Amended
Complaint or the dismissal of the case insofar as they are concerned because
either they are invested with immunity under the principle of confidentiality
in a lawyer-client relationship, or the claims against them in Civil Case No.
0033 are barred by such principle.
Even if we have to accommodate this issue, I still submit that the lawyer-
client privilege provides the petitioners no refuge. They are sued as principal
defendants in Civil Case No. 0033, a case of the recovery of alleged ill-
gotten wealth. Conspiracy is imputed to the petitioners therein. In short, they
are, allegedly, conspirators in the commission of the acts complained of for
being nominees of certain parties.

Their inclusion as defendants in justified under § 15, Article XI of the


Constitution — which provides that the right of the State to recover
properties unlawfully acquired by public officials or employees, from them
or from their nominees or transferees, shall not be barred by prescription,
laches or estoppel — and E.O. No. 1 of 28 February 1986, E.O. No. 2 of 12
March 1986, E.O. No. 14 of 7 May 1986, and the Rules and Regulations of
the PCGG. Furthermore, § 2, Rule 110 of the Rules of Court requires that
the complaint or information should be "against all persons who appear to be
responsible for the offense involved."

Hypothetically admitting the allegations in the complaint in Civil Case No.


0033, I find myself unable to agree with the majority opinion that the
petitioners are immune from suit or that they have to be excluded as
defendants, or that they cannot be compelled to reveal or disclose the
identity of their principals, all because of the sacred lawyer-client privilege.

This privilege is well put in Rule 130 of the Rules of Court, to wit:

§ 24. Disqualification by reason of privileged communication. — The


following persons cannot testify as to matters learned in confidence in
the following cases:

xxx xxx xxx

(b) An attorney cannot, without the consent of his client, be examined


as to any communication made by the client to him, or his advice
given thereon in the course of, or with a view to, professional
employment, nor can an attorney's secretary, stenographer, or clerk be
examined, without the consent of the client and his employer,
concerning any fact the knowledge of which has been acquired in
such capacity.

The majority seeks to expand the scope of the Philippine rule on the lawyer-
client privilege by copious citations of American jurisprudence which
includes in the privilege the identity of the client under the exceptional
situations narrated therein. From the plethora of cases cited, two facts stand
out in bold relief. Firstly, the issue of privilege contested therein arose in
grand jury proceedings on different States, which are preliminary
proceedings before the filing of the case in court, and we are not even told
what evidentiary rules apply in the said hearings. In the present case, the
privilege is invoked in the court where it was already filed and presently
pends, and we have the foregoing specific rules above-quoted. Secondly, and
more important, in the cases cited by the majority, the lawyers concerned
were merely advocating the cause of their clients but were not indicted for
the charges against their said clients. Here, the counsel themselves are co-
defendants duly charged in court as co-conspirators in the offenses charged.
The cases cited by the majority evidently do not apply to them.
Hence, I wish to repeat and underscore the fact that the lawyer-client
privilege is not a shield for the commission of a crime or against the
prosecution of the lawyer therefor. I quote, with emphases supplied, from 81
AM JUR 2d, Witnesses, § 393 to 395, pages 356-357:

§ 393. Effect of unlawful purpose.

The existence of an unlawful purpose prevents the attorney-client


privilege from attaching. The attorney-client privilege does not
generally exist where the representation is sought to further criminal
or fraudulent conduct either past, present, or future. Thus, a
confidence received by an attorney in order to advance a criminal or
fraudulent purpose is beyond the scope of the privilege.

Observation: The common-law rule that the privilege


protecting confidential communications between attorney
and client is lost if the relation is abused by a client who
seeks legal assistance to perpetrate a crime or fraud has
been codified.

§ 394. Attorney participation.

The attorney-client privilege cannot be used to protect a client in the


perpetration of a crime in concert with the attorney, even where the
attorney is not aware of his client's purpose. The reason for the rule is
that it is not within the professional character of a lawyer to give
advised on the commission of crime. Professional responsibility does
not countenance the use of the attorney-client privilege as a
subterfuge, and all conspiracies, either active or passive, which are
calculated to hinder the administration of justice will vitiate the
privilege. In some jurisdictions, however, this exception to the rule of
privilege in confined to such intended acts in violation of the law as
are mala in se, as distinguished from those which are merely mala
prohibita.

§ 395. Communication in contemplation of crime.

Communications between attorney and client having to do with the


client's contemplated criminal acts, or in aid or furtherance thereof,
are not covered by the cloak of privilege ordinarily existing in
reference to communications between attorney and client. But, the
mere charge of illegality, not supported by evidence, will not defeat
the privilege; there must be at least prima facie evidence that the
illegality has some foundation in fact.

Underhill also states:

There are many other cases to the same effect, for the rule
is prostitution of the honorable relation of attorney and client will not
be permitted under the guise of privilege, and every communication
made to an attorney by a client for a criminal purpose is a conspiracy
or attempt at a conspiracy which is not only lawful to divulge, but
which the attorney under certain circumstances may be bound to
disclose at once in the interest of justice. In accordance with this rule,
where a forged will or other false instrument has come into possession
of an attorney through the instrumentality of the accused, with the
hope and expectation that the attorney would take some action in
reference thereto, and the attorney does act, in ignorance of the true
character of the instrument, there is no privilege, inasmuch as full
confidence has been withheld. The attorney is then compelled to
produce a forged writing against the client. The fact that the attorney
is not cognizant of the criminal or wrongful purpose, or, knowing it,
attempts to dissuade his client, is immaterial. The attorney's ignorance
of his client's intentions deprives the information of a professional
character as full confidence has been withheld. (H.C. Underhill, A
Treatise on the Law of Criminal Case Evidence, vol. 2, Fifth ed.
(1956), Sec. 332, pp. 836-837; emphasis mine).

125 AMERICAN LAW REPORTS ANNOTATED, 516-519, summarizes


the rationale of the rule excepting communications with respect to
contemplated criminal or fraudulent acts, thus:

c. Rationale of rule excepting communications with respect to


contemplated criminal or fraudulent act.

Various reasons have been announced as being the foundation for the
holdings that communications with respect to contemplated criminal
or fraudulent acts are not privileged.

The reason perhaps most frequently advanced is that in such cases


there is no professional employment, properly speaking. Standard
F. Ins. Co v. Smithhart (1919) 183 Ky 679, 211 SW. 441, 5 ALR
972; Cummings v. Com. (1927) 221 Ky 301, 298 SW 943; Strong
v. Abner (1937) 268 Ky 502, 105 SW(2d) 599; People v. Van
Alstine (1885) 57 Mich 69, 23 NW 594; Hamil &
Co. v. England (1892) 50 Mo App 338; Carney v. United R. Co.
(1920) 205 Mo App 495, 226 SW 308; Matthews v. Hoagland(1891)
48 NJ Eq 455, 21 A 1054; Covency v. Tannahill (1841) 1 Hill (NY)
33, 37 AM Dec 287; People ex rel. Vogelstein v. Warden (1934) 150
Misc 714, 270 NYS 362 (affirmed without opinion in (1934) 242 App
Div 611, 271 NYS 1059); Russell v. Jackson (1851) 9 Hare 387, 68
Eng Reprint 558; Charlton v. Coombes (1863) 4 Giff 372, 66 Eng
Reprint 751; Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR;
Re Postlethwaite (1887) LR 35 Ch Div (Eng) 722.

In Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR, the court


said: "In order that the rule may apply, there must be both
professional confidence and professional employment, but if the client
has a criminal object in view in his communications with his solicitor
one of these elements must necessarily be absent. The client must
either conspire with his solicitor or deceive him. If his criminal object
is avowed, the client does not consult his adviser professionally,
because it cannot be the solicitor's business to further any criminal
object. If the client does not avow his object, he reposes no
confidence, for the state of facts which is the foundation of the
supposed confidence does not exist. The solicitor's advice is obtained
by a fraud."
So, in Standard F. Ins. Co. v. Smithhart (1919) 183 Ky 679, 211 SW
441, 5 ALR 972, the court said: "The reason of the principle which
holds such communications not to be privileged is that it is not within
the professional character of a lawyer to give advice upon such
subjects, and that it is no part of the profession of an attorney or
counselor at law to be advising persons as to how they may commit
crimes or frauds, or how they may escape the consequences of
contemplated crimes and frauds. If the crime or fraud has already been
committed and finished, a client may advise with an attorney in regard
to it, and communicate with him freely, and the communications
cannot be divulged as evidence without the consent of the client,
because it is a part of the business and duty of those engaged in the
practice of the profession of law, when employed and relied upon for
that purpose, to give advice to those who have made infractions of the
laws; and, to enable the attorney to properly advise and to properly
represent the client in court or when prosecutions are threatened, it is
conducive to the administration of justice that the client shall be free
to communicate to his attorney all the facts within his knowledge, and
that he may be assured that a communication made by him shall not
be used to his prejudice."

The protection which the law affords to communications between


attorney and client has reference to those which are legitimately and
properly within the scope of a lawful employment, and does not
extend to communications made in contemplation of a crime, or
perpetration of a fraud. Strong v. Abner (1937) 368 Ky 502, 105 SW
(2d) 599.

The court in People v. Van Alstine (1885) 57 Mich 69, 23 NW 594, in


holding not privileged communications to an attorney having for their
object the communication of a crime, said: "They then partake of the
nature of a conspiracy, or attempted conspiracy, and it is not only
lawful to divulge such communications, but under certain
circumstances it might become the duty of the attorney to do so.The
interests of public justice require that no such shield from merited
exposure shall be interposed to protect a person who takes counsel
how he can safely commit a crime. The relation of attorney and client
cannot exist for the purpose of counsel in concocting crimes."

And in Coveney v. Tannahill (1841) 1 Hill (NY) 33, 37 Am Dec 287,


the court was of the opinion that there could be no such relation as
that of attorney and client, either in the commission of a crime, or in
the doing of a wrong by force or fraud to an individual, the privileged
relation of attorney and client existing only for lawful and honest
purposes.

If the client consults the attorney at law with reference to the


perpetration of a crime, and they co-operate in effecting it, there is no
privilege, inasmuch as it is no part of the lawyer's duty to aid in crime
— he ceases to be counsel and becomes a criminal. Matthews
v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054.
The court cannot permit it to be said that the contriving of a fraud
forms part of the professional business of an attorney or
solicitor. Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751.

If the client does not frankly and freely reveal his object and intention
as well as facts, there is not professional confidence, and therefore no
privilege. Matthews v. Hoagland (NJ) supra. See to the same
effect Carney v. United R. Co. (1920) 205 Mo App 495, 226 SW 308.

There is no valid claim of privilege in regard to the production of


documents passing between solicitor and client, when the transaction
impeached is charged to be based upon fraud, that is the matter to be
investigated, and it is thought better that the alleged privilege should
suffer than that honestly and fair dealing should appear to be violated
with impunity. Smith v. Hunt (1901) 1 Ont L Rep 334.

In Tichborne v. Lushington, shorthand Notes (Eng) p. 5211 (cited in


Reg. v. Cox (1884) LR 14 QB Div (Eng) 172 — CCR), the chief
justice said "I believe the law is, and properly is, that if a party
consults an attorney, and obtains advice for what afterwards turns out
to be the commission of a crime or a fraud, that party so consulting
the attorney has no privilege whatever to close the lips of the attorney
from stating the truth. Indeed, if any such privilege should be
contended for, or existing, it would work most grievous hardship on
an attorney, who, after he had been consulted upon what subsequently
appeared to be a manifest crime and fraud, would have his lips closed,
and might place him in a very serious position of being suspected to
be a party to the fraud, and without his having an opportunity of
exculpating himself . . . There is no privilege in the case which I have
suggested of a party consulting another, a professional man, as to
what may afterwards turn out to be a crime or fraud, and the best
mode of accomplishing it."

In Garside v. Outram (1856) 3 Jur NS (Eng) 39, although the question


of privilege as to communications between attorney and client was not
involved, the question directly involved being the competency of a
clerk in a business establishment to testify as to certain information
which he acquired while working in the establishment, the court
strongly approved of a view as stated arguendo for plaintiff,
in Annesley v. Anglesea (1743) 17 How St Tr (Eng) 1229, as follows:
"I shall claim leave to consider whether an attorney may be examined
as to any matter which came to his knowledge as an attorney. If he is
employed as an attorney in any unlawful or wicked act, his duty to the
public obliges him to disclose it; no private obligations can dispense
with that universal one which lies on every member of society to
discover every design which may be formed, contrary to the laws of
society, to destroy the public welfare. For this reason, I apprehend
that if a secret which is contrary to the public good, such as a design
to commit treason, murder, or perjury, comes to the knowledge of an
attorney, even in a cause where he is concerned, the obligation to the
public must dispense with the private obligation to the client."

The court in McMannus v. State (1858) 2 Head (Tenn) 213, said; "It
would be monstrous to hold that if counsel was asked and obtained in
reference to a contemplated crime that the lips of the attorney would
be sealed, when the facts might become important to the ends of
justice in the prosecution of crime. In such a case the relation cannot
be taken to exist. Public policy would forbid it."

And the court in Lanum v. Patterson (1909) 151 Ill App 36, observed
that this rule was not in contravention of sound public policy, but on
the contrary, tended to the maintenance of a higher standard of
professional ethics by preventing the relation of attorney and client
from operating as a cloak for fraud.

Communications of a client to an attorney are not privileged if they


were a request for advice as to how to commit a fraud, it being in such
a case not only the attorney's privilege, but his duty, to disclose the
facts to the court. Will v. Tornabells & Co. (1907) 3 Porto Rico Fed
Rep 125. The court said: "We say this notwithstanding the comments
of opposing counsel as to the indelicacy of his position because of his
being now on the opposite side of the issue that arose as a
consequence of the communication he testifies about, and is interested
in the cause to the extent of a large contingent fee, as he confesses."

The object of prohibiting the disclosure of confidential


communications is to protect the client, and not to make the attorney
an accomplice or permit him to aid in the commission of a
crime. People vs. Petersen (1901) 60 App Div 118, NYS 941.

The seal of personal confidence can never be used to cover a


transaction which is in itself a crime. People v. Farmer (1909) 194
NY 251, 87 NE 457.

As to disclosing the identity of a client, 81 AM JUR 2d, Witnesses, § 410


and 411, pages 366-368, states:

§ 410. Name or identity of client.

Disclosure of a client's identity is necessary proof of the existence of


the attorney-client relationship and is not privileged information.
Thus, the attorney-client privilege is inapplicable even though the
information was communicated confidentially to the attorney in his
professional capacity and, in some cases, in spite of the fact that the
attorney may have been sworn to secrecy, where an inquiry is directed
to an attorney as to the name or identity of his client. This general rule
applies in criminal cases, as well as in civil actions. Where an
undisclosed client is a party to an action, the opposing party has a
right to know with whom he is contending or who the real party in
interest is, if not the nominal adversary.

§ 411. Disclosure of identity of client as breach of confidentiality.

The revelation of the identification of a client is not usually


considered privileged, except where so much has been divulged with
regard to to legal services rendered or the advice sought, that to reveal
the client's name would be to disclose the whole relationship and
confidential communications. However, even where the subject matter
of the attorney-client relationship has already been revealed, the
client's name has been deemed privileged.

Where disclosure of the identity of a client might harm the client by


being used against him under circumstances where there are no
countervailing factors, then the identity is protected by the attorney-
client privilege.

In criminal proceedings, a client's name may be privileged if


information already obtained by the tribunal, combined with the
client's identity, might expose him to criminal prosecution for acts
subsequent to, and because of, which he had sought the advice of his
attorney.

Although as a general rule, the identity of a defendant in a criminal


prosecution is a matter of public record and, thus, not covered by the
attorney-client privilege, where the attorney has surrendered to the
authorities physical evidence in his possession by way of the attorney-
client relationship, the state must prove the connection between the
piece of physical evidence and the defendant without in any way
relying on the testimony of the client's attorney who initially received
the evidence and, thus, the attorney may not be called to the stand and
asked to disclose the identity of the client. However, an attorney
cannot refuse to reveal the identity of a person who asked him to
deliver stolen property to the police department, whether a bona fide
attorney-client relationship exists between them, inasmuch as the
transaction was not a legal service or done in the attorney's
professional capacity.

Distinction: Where an attorney was informed by a male


client that his female acquaintance was possibly involved
in [a] his-and-run accident, the identity of the female did
not come within scope of attorney-client privilege
although the identity of the male client was protected.
(emphases supplied)

WIGMORE explains why the identity of a client is not within the lawyer-
client privilege in this manner:

§ 2313. Identity of client or purpose of suit. — The identity of the


attorney's client or the name of the real party in interest will seldom be
a matter communicated in confidence because the procedure of
litigation ordinarily presupposes a disclosure of these facts.
Furthermore, so far as a client may in fact desire secrecy and may be
able to secure action without appearing as a party to the proceedings,
it would be improper to sanction such a wish. Every litigant is in
justice entitled to know the identity of his opponents. He cannot be
obliged to struggle in the dark against unknown forces. He has by
anticipation the right, in later proceedings, if desired, to enforce the
legal responsibility of those who may have maliciously sued or
prosecuted him or fraudulently evaded his claim. He has as much right
to ask the attorney "Who fees your fee?" as to ask the witness
(966 supra). "Who maintains you during this trial?" upon the analogy
of the principle already examined (2298 supra), the privilege cannot
be used to evade a client's responsibility for the use of legal
process. And if it is necessary for the purpose to make a plain
exception to the rule of confidence, then it must be made. (Wigmore
on Evidence, vol. 8, (1961), p. 609; emphases supplied).

In 114 ALR, 1322, we also find the following statement:

1. Name or identity.

As is indicated in 28 R.C.L. p. 563, it appears that the rule making


communications between attorney and client privileged from
disclosure ordinarily does not apply where the inquiry is confined to
the fact of the attorney's employment and the name of the person
employing him, since the privilege presupposes the relationship of
client and attorney, and therefore does not attach to its creation.

At the present stage of the proceedings below, the petitioners have not
shown that they are so situated with respect to their principals as to bring
them within any of the exceptions established by American jurisprudence.
There will be full opportunity for them to establish that fact at the trial where
the broader perspectives of the case shall have been presented and can be
better appreciated by the court. The insistence for their exclusion from the
case is understandable, but the reasons for the hasty resolution desired is
naturally suspect.

We do not even have to go beyond our shores for an authority that the
lawyer-client privilege cannot be invoked to prevent the disclosure of a
client's identity where the lawyer and the client are conspirators in the
commission of a crime or a fraud. Under our jurisdiction, lawyers are
mandated not to counsel or abet activities aimed at defiance of the law or at
lessening confidence in the legal system (Rule 1.02, Canon 1, Code of
Professional Responsibility) and to employ only fair and honest means to
attain the lawful objectives of his client (Rule 19.01, Canon 19, Id.). And
under the Canons of Professional Ethics, a lawyer must steadfastly bear in
mind that his great trust is to be performed within and not without the
bounds of the law (Canon 15, Id.), that he advances the honor of his
profession and the best interest of his client when he renders service or gives
advice tending to impress upon the client and his undertaking exact
compliance with the strictest principles of moral law (Canon 32, Id.). These
canons strip a lawyer of the lawyer-client privilege whenever he conspires
with the client in the commission of a crime or a fraud.

I then vote to DENY, for want of merit, the instant petition.

Narvasa, C.J. and Regalado, J., concur.

PUNO, J., dissenting:

This is an important petition for certiorari to annul the resolutions of the


respondent Sandiganbayan denying petitioners' motion to be excluded from
the Complaint for recovery of alleged ill-gotten wealth on the principal
ground that as lawyers they cannot be ordered to reveal the identity of their
client.
First, we fast forward the facts. The Presidential Commission on Good
Government (PCGG) filed Civil Case No. 33 before
the Sandiganbayan against Eduardo M. Cojuangco, Jr., for the recovery of
alleged ill-gotten wealth. Sued as co-defendants are the petitioners in the
cases at bar — lawyers Teodoro Regala, Edgardo J. Angara, Avelino V.
Cruz, Jose Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo
Escueta and Paraja Hayudini. Also included as a co-defendant is lawyer
Raul Roco, now a duly elected senator of the Republic. All co-defendants
were then partners of the law firm, Angara, Abello, Concepcion, Regala and
Cruz Law Offices, better known as the ACCRA Law Firm. The Complaint
against Cojuangco, Jr., and the petitioners alleged, inter alia, viz:

xxx xxx xxx

The wrongs committed by defendants acting singly or collectively and


in unlawful concert with one another, include the misappropriation
and theft of public funds, plunder of the nation's wealth, extortion,
blackmail, bribery, embezzlement and other acts of corruption,
betrayal of public trust and brazen abuse of power as more fully
described (in the subsequent paragraphs of the complaint), all at the
expense and to the grave and irreparable damage of Plaintiff and the
Filipino people.

Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C.


Concepcion, Teodoro D. Regala, Avelino V. Cruz, Regalio A.
Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul S. Roco of
Angara, Concepcion, Cruz, Regala, and Abello law offices (ACCRA)
plotted, devised, schemed, conspired and confederated with each other
in setting up, through the use of the coconut levy funds, the financial
and corporate framework and structures that led to the establishment
of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC and more than
twenty other coconut levy funded corporations, including the
acquisition of the San Miguel Corporation shares and the
institutionalization through presidential directives of the coconut
monopoly. through insidious means and machinations, ACCRA, using
its wholly-owned investment arm, ACCRA Investments Corporation,
became the holder of approximately fifteen million shares
representing roughly 3.3% of the total outstanding capital stock of
UCPB as of 31 March 1987. This ranks ACCRA Investments
Corporation number 44 among the top 100 biggest stockholders of
UCPB which has approximately 1,400,000 shareholders. On the other
hand, corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of 7 June 1984.

In their Answer, petitioners alleged that the legal services offered and made
available by their firm to its clients include: (a) organizing and acquiring
business organizations, (b) acting as incorporators or stockholders thereof,
and (c) delivering to clients the corresponding documents of their equity
holdings (i.e., certificates of stock endorsed in blank or blank deeds of trust
or assignment). They claimed that their activities were "in furtherance of
legitimate lawyering."

In the course of the proceedings in the Sandiganbayan, the PCGG filed a


Motion to Admit Third Amended Complaint and the Third Amended
Complaint excluding lawyer Roco as party defendant. Lawyer Roco was
excluded on the basis of his promise to reveal the identity of the principals
for whom he acted as nominee/stockholder in the companies involved in the
case.

The Sandiganbayan ordered petitioners to comment on the motion. In their


Comment, petitioners demanded that they be extended the same privilege as
their co-defendant Roco. They prayed for their exclusion from the
complaint. PCGG agreed but set the following conditions: (1) disclosure of
the identity of their client; (2) submission of documents substantiating their
lawyer-client relationship; and (3) submission of the deeds of assignment
petitioners executed in favor of their client covering their respective
shareholdings. The same conditions were imposed on lawyer Roco.

Petitioners refused to comply with the PCGG conditions contending that the
attorney-client privilege gives them the right not to reveal the identity of
their client. They also alleged that lawyer Roco was excluded though he did
not in fact reveal the identity of his clients. On March 18, 1992, the
Sandiganbayan denied the exclusion of petitioners in Case No. 33. It held:

xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e., their principal,
and that will be their choice. But until they do identify their clients,
considerations of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to the debated. The ACCRA lawyers
cannot excuse themselves from the consequences of their acts until
they have begun to establish the basis for recognizing the privilege;
the existence and identity of the client.

This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his


agency and that Roco has apparently identified his principal, which
revelation could show the lack of course against him. This in turn has
allowed the PCGG to exercise its power both under the rules of
Agency and under Section 5 of E.O. No. 14-A in relation to the
Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA
72).

The PCGG has apparently offered to the ACCRA lawyers the same
conditions availed of by Roco; full disclosure in exchange for
exclusion from these proceedings (par. 7, PCGG's COMMENT dated
November 4, 1991). The ACCRA lawyers have preferred not to make
the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for


keeping them as a party defendants. In the same vein, they cannot
compel the PCGG to be accorded the same treatment accorded to
Roco.

Neither can this Court.


WHEREFORE, the Counter Motion dated October 8, 1991 filed by
the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the
same treatment by the PCGG as accorded to Raul S. Roco is DENIED
for lack of merit.

Sandiganbayan later denied petitioners' motions for reconsideration in its


resolutions dated May 21, 1988 and September 3, 1992.

In this petition for certiorari, petitioners contend:

The Honorable Sandiganbayan gravely abused its discretion in


subjecting petitioners ACCRA lawyers who indisputably acted as
lawyers in serving as nominee-stockholders, to the strict application of
the law agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in


not considering petitioners ACCRA lawyers and Mr. Roco as
similarly situated and, therefore, deserving of equal treatment.

1. There is absolutely no evidence that Mr. Roco had


revealed, or had undertaken to reveal, the identities of the
client(s) for whom he acted as nominee-stockholder.

2. Even assuming that Mr. Roco had revealed, or had


undertaken to reveal, the identities of the client(s), the
disclosure does not constitute a substantial distinction as
would make the classification reasonable under the equal
protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and


undue preference in favor of Mr. Roco and violation of
the equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in


not holding that, under the facts of this case, the attorney-client
privilege prohibits petitioners ACCRA lawyers from revealing the
identity of their client(s) and the other information requested by the
PCGG.

1. Under the peculiar facts of this case, the attorney-client


privilege includes the identity of the client(s).

2. The factual disclosures required by the PCGG are not


limited to the identity of petitioners ACCRA lawyers'
alleged client(s) but extend to other privileged matters.

IV
The Honorable Sandiganbayan committed grave abuse of discretion in
not requiring that the dropping of party-defendants by the PCGG must
be based on reasonable and just grounds and with due consideration to
the constitutional right of petitioners ACCRA lawyers to the equal
protection of the law.

The petition at bar is atypical of the usual case where the hinge issue
involves the applicability of attorney-client privilege. It ought to be noted
that petitioners were included as defendants in Civil Case No. 33 as
conspirators. Together with Mr. Cojuangco, Jr., they are charged with
having ". . . conspired and confederated with each other in setting up,
through the use of the coconut levy funds, the financial and corporate
framework and structures that led to the establishment of UCPB, UNICOM,
COCOLIFE, COCOMARK, CICI and more than twenty other coconut levy
funded corporations, including the acquisition of San Miguel Corporation
shares and the institutionalization through presidential directives of the
coconut monopoly." To stress, petitioners are charged with having conspired
in the commission of crimes. The issue of attorney-client privilege arose
when PCGG agreed to exclude petitioners from the complaint on condition
they reveal the identity of their client. Petitioners refused to comply and
assailed the condition on the ground that to reveal the identity of their client
will violate the attorney-client privilege.

It is thus necessary to resolve whether the Sandiganbayan committed grave


abuse of discretion when it rejected petitioners' thesis that to reveal the
identity of their client would violate the attorney-client privilege. The
attorney-client privilege is the oldest of the privileges for confidential
communications known to the common law.1 For the first time in this
jurisdiction, we are asked to rule whether the attorney-client privilege
includes the right not to disclose the identity of client. The issue poses a
trilemma for its resolution requires the delicate balancing of three opposing
policy considerations. One overriding policy consideration is the need for
courts to discover the truth for truth alone is the true touchstone of
justice.2 Equally compelling is the need to protect the adversary system of
justice where truth is best extracted by giving a client broad privilege to
confide facts to his counsel.3 Similarly deserving of sedulous concern is the
need to keep inviolate the constitutional right against self-incrimination and
the right to effective counsel in criminal litigations. To bridle at center the
centrifugal forces of these policy considerations, courts have followed to
prudential principle that the attorney-client privilege must not be
expansively construed as it is in derogation of the search for
truth.4Accordingly, a narrow construction has been given to the privilege
and it has been consistently held that "these competing societal interests
demand that application of the privilege not exceed that which is necessary
to effect the policy considerations underlying the privilege, i.e., the privilege
must be upheld only in those circumstances for which it was created.'" 5

Prescinding from these premises, our initial task is to define in clear strokes
the substantive content of the attorney-client privilege within the context of
the distinct issues posed by the petition at bar. With due respect, I like to
start by stressing the irreducible principle that the attorney-client privilege
can never be used as a shield to commit a crime or a fraud. Communications
to an attorney having for their object the commission of a crime ". . . partake
the nature of a conspiracy, and it is not only lawful to divulge such
communications, but under certain circumstances it might become the duty
of the attorney to do so. The interests of public justice require that no such
shield from merited exposure shall be interposed to protect a person who
takes counsel how he can safely commit a crime. The relation of attorney
and client cannot exist for the purpose of counsel in concocting crimes." 6 In
the well chosen words of retired Justice Quiason, a lawyer is not a gun for
hire.7 I hasten to add, however, that a mere allegation that a lawyer
conspired with his client to commit a crime or a fraud will not defeat the
privilege.8 As early as 1933, no less than the Mr. Justice Cardozo held
in Clark v. United States9 that: "there are early cases apparently to the effect
that a mere charge of illegality, not supported by any evidence, will set the
confidences free . . . But this conception of the privilege is without support .
. . To drive the privilege away, there must be 'something to give colour to the
charge;' there must beprima facie evidence that it has foundation in fact." In
the petition at bar, however, the PCGG appears to have relented on its
original stance as spelled out in its Complaint that petitioners are co-
conspirators in crimes and cannot invoke the attorney-client privilege. The
PCGG has agreed to exclude petitioners from the Complaint provided they
reveal the identity of their client. In fine, PCGG has conceded that petitioner
are entitled to invoke the attorney-client privilege if they reveal their client's
identity.

Assuming then that petitioners can invoke the attorney-client privilege since
the PCGG is no longer proceeding against them as co-conspirators in crimes,
we should focus on the more specific issue of whether the attorney-client
privilege includes the right not to divulge the identity of a client as
contended by the petitioners. As a general rule, the attorney-client privilege
does not include the right of non-disclosure of client identity. The general
rule, however, admits of well-etched exceptions which the Sandiganbayan
failed to recognize. The general rule and its exceptions are accurately
summarized in In re Grand Jury Investigation,10viz:

The federal forum is unanimously in accord with the general rule that
the identity of a client is, with limited exceptions, not within the
protective ambit of the attorney-client privilege. See: In re Grand Jury
Proceedings (Pavlick), 680 F.2d 1026, 1027 (5th Cir. 1982) (en banc);
In re Grand Jury Proceedings (Jones), 517 F. 2d 666, 670-71 (5th Cir.
1975); In re Grand Jury Proceedings (Fine), 651 F. 2d 199, 204 (5th
Cir. 1981); Frank v. Tomlinson, 351 F.2d 384 (5th Cir. 1965), cert.
denied, 382 U.S. 1082, 86 S.Ct. 648, 15 L.Ed.2d 540 (1966); In re
Grand Jury Witness (Salas), 695 F.2d 359, 361 (9th Cir. 1982); In re
Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d
363, 365 (9th Cir. 1982); In re Grand Jury Proceedings (Lawson), 600
F.2d 215, 218 (9th Cir. 1979).

The Circuits have embraced various "exceptions" to the general rule


that the identity of a client is not within the protective ambit of the
attorney-client privilege. All such exceptions appear to be firmly
grounded in the Ninth Circuit's seminal decision in Baird v. Koerner,
279 F.2d 633 (9th Cir. 1960). In Baird the IRS received a letter from
an attorney stating that an enclosed check in the amount of $12,706
was being tendered for additional amounts due from undisclosed
taxpayers. When the IRS summoned the attorney to ascertain the
identity of the delinquent taxpayers the attorney refused identification
assertion the attorney-client privilege. The Ninth Circuit, applying
California law, adjudged that the "exception" to the general rule as
pronounced in Ex parte McDonough, 170 Cal. 230, 149 P. 566 (1915)
controlled:

The name of the client will be considered privileged


matter where the circumstances of the case are such that
the name of the client is material only for the purpose of
showing an acknowledgment of guilt on the part of such
client of the very offenses on account of which the
attorney was employed.

Baird, supra, 279 F.2d at 633. The identity of the Baird taxpayer was
adjudged within this exception to the general rule. The Ninth Circuit
has continued to acknowledge this exception.

A significant exception to this principle of non-


confidentiality holds that such information may be
privileged when the person invoking the privilege is able
to show that a strong possibility exists that disclosure of
the information would implicate the client in the very
matter for which legal advice was sought in the first case.

In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695


F.2d 363, 365 (9th Cir. 1982). Accord: United States v. Hodge and
Zweig, 548 F.2d 1347, 1353 (9th Cir. 1977); In re Grand Jury
Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979); United
States v. Sherman, 627 F.2d 189, 190-91 (9th Cir. 1980); In re Grand
Jury Witness (Salas), 695 F.2d 359, 361 (9th Cir. 1982). This
exception, which can perhaps be most succinctly characterized as the
"legal advice" exception, has also been recognized by other circuits.
See: In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449 U.S.
994, 101 S. Ct. 531, 66 L.Ed.2d 291 (1980); In re Grand Jury
Investigation (Tinari), 631 F.2d 17, 19 (3d Cir 1980), cert. denied, 449
U.S.1083, 101 S.Ct. 869-70, 66 L.Ed.2d 808 (1981). Since the legal
advice exception is firmly grounded in the policy of protecting
confidential communications, this Court adopts and applies its
principles herein. See: In re Grand Jury Subpoenas Duces Tecum
(Marger/Merenbach), supra.

It should be observed, however that the legal advice exception may be


defeated through a prima facieshowing that the legal representation
was secured in furtherance of present or intended continuing illegality,
as where the legal representation itself is part of a larger conspiracy.
See: In re Grand Jury Subpoenas Decus Tecum
(Marger/Merenbach), supra, 695 F.2d at 365 n. 1; In re Walsh, 623
F.2d 489, 495 (7th Cir.), cert. denied, 449, U.S. 994, 101 S.Ct. 531, 66
L.Ed. 2d 291 (1980); In re Grand Jury Investigation (Tinari), 631 F.2d
17, 19 (3d Cir 1980); cert. denied, 449 U.S. 1083, 101 S.Ct. 869, 66
L.Ed. 2d 808 (1981); In re Grand Jury Proceedings (Lawson), 600
F.2d 215, 218 (9th Cir. 1979); United States v. Friedman, 445 F.2d
1076, 1086 (9th Cir. 1971). See also: Clark v. United States, 289 U.S.
1, 15, 53, S.Ct. 465, 469, 77, L.Ed. 993 (1933); In re Grand Jury
Proceedings (Pavlick), 680 F.2d 1026, 1028-29 (5th Cir. 1982 (en
banc).

Another exception to the general rule that the identity of a client is not
privileged arises where disclosure of the identity would be tantamount
to disclosing an otherwise protected confidential communication. In
Baird, supra, the Ninth Circuit observed:

If the identification of the client conveys information


which ordinarily would be conceded to be part of the
usual privileged communication between attorney and
client, then the privilege should extend to such
identification in the absence of another factors.

Id., 279 F.2d at 632. Citing Baird, the Fourth Circuit promulgated the
following exception:

To the general rule is an exception, firmly embedded as


the rule itself. The privilege may be recognized where so
much of the actual communication has already been
disclosed that identification of the client amounts to
disclosure of a confidential communication.

NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965). Accord: United
States v. Tratner, 511 F.2d 248, 252 (7th Cir. 1975); Colton v. United
States, 306 F.2d 633, 637 (2d Cir. 1962), cert. denied, 371 U.S. 951,
83 S.Ct. 505, 9 L.Ed.2d 499 1963); Tillotson v. Boughner, 350 F.2d
663, 666 (7th Cir. 1965); United States v. Pape, 144 F.2d 778, 783 (2d
Cir. 1944). See also: Chirac v. Reinecker, 24 U.S. (11 Wheat) 280, 6
L.Ed. 474 (1826). The Seventh Circuit has added to
the Harvey exception the following emphasized caveat:

The privilege may be recognized where so much of the


actual communication has already been disclosed [not
necessarily by the attorney, but by independent sources
as well] that identification of the client [or of fees paid]
amounts to disclosure of a confidential communication.

United States vs. Jeffers, 532 F.2d 1101, 1115 (7th Cir. 1976
(emphasis added). The Third Circuit, applying this exception, has
emphasized that it is the link between the client and
the communication, rather than the link between the client and the
possibility of potential criminal prosecution, which serves to bring the
client's identity within the protective ambit of the attorney-client
privilege. See: In re Grand Jury Empanelled February 14, 1978
(Markowitz), 603 F.2d 469, 473 n. 4 (3d Cir. 1979). Like the "legal
advice" exception, this exception is also firmly rooted in principles of
confidentiality.

Another exception, articulated in the Fifth Circuit's en banc decision


of In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026 (5th Cir.
1982 (en banc), is recognized when disclosure of the identity of the
client would provide the "last link" of evidence:
We have long recognized the general rule that matters
involving the payment of fees and the identity of clients
are not generally privileged. In re Grand Jury
Proceedings, (United States v. Jones), 517 F.2d 666 (5th
Cir. 1975); see cases collected id. at 670 n. 2. There we
also recognized, however, a limited and narrow exception
to the general rule, one that obtains when the disclosure
of the client's identity by his attorney would have
supplied the last link in an existing chain of incriminating
evidence likely to lead to the client's indictment.

I join the majority in holding that the Sandiganbayan committed grave abuse
of discretion when it misdelineated the metes and bounds of the attorney-
client privilege by failing to recognize the exceptions discussed above.

Be that as it may, I part ways with the majority when it ruled that petitioners
need not prove they fall within the exceptions to the general rule. I
respectfully submit that the attorney-client privilege is not a magic mantra
whose invocation will ipso facto and ipso jure drape he who invokes it with
its protection. Plainly put, it is not enough to assert the privilege.11 The
person claiming the privilege or its exceptions has the obligation to present
the underlying facts demonstrating the existence of the privilege.12 When
these facts can be presented only by revealing the very information sought to
be protected by the privilege, the procedure is for the lawyer to move for an
inspection of the evidence in an in camera hearing.13 The hearing can even
be in camera and ex-parte. Thus, it has been held that "a well-recognized
means for an attorney to demonstrate the existence of an exception to the
general rule, while simultaneously preserving confidentiality of the identity
of his client, is to move the court for an in camera ex-
parte hearing.14 Without the proofs adduced in these in camera hearings, the
Court has no factual basis to determine whether petitioners fall within any of
the exceptions to the general rule.

In the case at bar, it cannot be gainsaid that petitioners have not adduced
evidence that they fall within any of the above mentioned exceptions for as
aforestated, the Sandiganbayan did not recognize the exceptions, hence, the
order compelling them to reveal the identity of their client. In ruling that
petitioners need not further establish the factual basis of their claim that they
fall within the exceptions to the general rule, the majority held:

The circumstances involving the engagement of lawyers in the case at


bench therefore clearly reveal that the instant case falls under at least
two exceptions to the general rule. First, disclosure of the alleged
client's name would lead to establish said client's connection with the
very fact in issue of the case, which is privileged information, because
the privilege, as stated earlier, protects the subject matter or the
substance (without which there would be no attorney-client
relationship). Furthermore, under the third main exception, revelation
of the client's name would obviously provide the necessary link for
the prosecution to build its case, where none otherwise exists. It is the
link, in the word of Baird, "that would inevitably form the chain of
testimony necessary to convict the (client) of a . . . crime.
I respectfully submit that the first and third exceptions relied upon by the
majority are not self-executory but need factual basis for their successful
invocation. The first exception as cited by the majority is ". . . where a
strong probability exists that revealing the clients' name would implicate that
client in the very activity for which he sought the lawyer's advice." It seems
to me evident that "the very activity for which he sought the lawyer's advice"
is a question of fact which must first be established before there can be any
ruling that the exception can be invoked. The majority cites Ex Parte
Enzor, 15 and
U S v. Hodge and Zweig,16 but these cases leave no doubt that the "very
activity" for which the client sought the advice of counsel was properly
proved. In both cases, the "very activity" of the clients reveal they sought
advice on their criminal activities. Thus, in Enzor, the majority opinion
states that the "unidentified client, an election official, informed his attorney
in confidence that he had been offered a bribe to violate election laws or that
he had accepted a bribe to that end."17 In Hodge, the "very activity" of the
clients deals with illegal importation of drugs. In the case at bar, there is no
inkling whatsoever about the "very activity" for which the clients of
petitioners sought their professional advice as lawyers. There is nothing in
the records that petitioners were consulted on the "criminal activities" of
their client. The complaint did allege that petitioners and their client
conspired to commit crimes but allegations are not evidence.

So it is with the third exception which as related by the majority is "where


the government's lawyers have no case against an attorney's client unless, by
revealing the client's name, the said name would furnish the only link that
would form the chain of testimony necessary to convict an individual of a
crime."18 Again, the rhetorical questions that answer themselves are: (1) how
can we determine that PCGG has "no case" against petitioners without
presentation of evidence? and (2) how can we determine that the name of the
client is the only link without presentation of evidence as to the other links?
The case of Baird vs. Koerner19 does not support the "no need for evidence"
ruling of the majority. In Baird, as related by the majority itself, "a lawyer
was consulted by the accountants and the lawyer of certain undisclosed
taxpayers regarding steps to be taken to place the undisclosed taxpayers in a
favorable position in case criminal charges were brought against them by the
US Internal Revenue Service (IRS). It appeared that the taxpayers' returns of
previous years were probably incorrect and the taxes understated.20 Once
more, it is clear that the Baird court was informed of the activity of the client
for which the lawyer was consulted and the activity involved probable
violation of the tax laws. Thus, the Court held:

The facts of the instant case bring it squarely within that exception to
the general rule. Here money was received by the government, paid
by persons who thereby admitted they had not paid a sufficient
amount in income taxes some one or more years in the past. The
names of the clients are useful to the government for but one purpose
— to ascertain which taxpayers think they were delinquent, so that it
may check the records for that one year or several years. The
voluntary nature of the payment indicates a belief by the taxpayers
that more tax or interest or penalties are due than the sum previously
paid, if any. It indicates a feeling of guilt for nonpayment of taxes,
though whether it is criminal guilt is undisclosed. But it may well be
the link that could form the chain of testimony necessary to convict an
individual of a federal crime. Certainly the payment and the feeling of
guilt are the reasons the attorney here involved was employed — to
advise his clients what, under the circumstances, should be done.

In fine, the factual basis for the ruling in Baird was properly established by
the parties. In the case at bar, there is no evidence about the subject matter of
the consultation made by petitioners' client. Again, the records do not show
that the subject matter is criminal in character except for the raw allegations
in the Complaint. Yet, this is the unstated predicate of the majority ruling
that revealing the identity of the client ". . . would furnish the only link that
would form the chain of testimony necessary to convict an individual of a
crime." The silent implication is unflattering and unfair to petitioners who
are marquee names in the legal profession and unjust to their undisclosed
client.

Finally, it ought to be obvious that petitioners' right to claim the attorney-


client privilege is resolutory of the Complaint against them, and hence
should be decided ahead and independently of their claim to equal protection
of the law. Pursuant to the rule in legal hermeneutics that courts should not
decide constitutional issues unless unavoidable, I also respectfully submit
that there is no immediate necessity to resolve petitioners' claim to equal
protection of the law at this stage of the proceedings.

IN VIEW WHEREOF, I respectfully register a qualified dissent from the majority opinion.
FACTS OF THE CASE
The Presidential Commission on Good Government (PCGG), raised a complaint before the Sandiganbayan (SB) against
Eduardo M. Cojuangco, Jr. and TeodoroRegala and his partners in the ACCRA law firm, for the recovery of alleged ill-
gotten wealth, which includes shares of stocks in the named corporations in PCGG Case No. 33 (Civil Case No. 0033),
entitled "Republic of the Philippines versus Eduardo Cojuangco, et al."

During the course of the proceedings, PCGG filed a "Motion to Admit Third Amended Complaint" which excluded private
respondent Raul S. Roco from the complaint on his undertaking that he will reveal the identity of the principal/s for whom
he acted as nominee/stockholder.

In their answer to the Expanded Amended Complaint, ACCRA lawyers requested that PCGG similarly grant the same
treatment to them as accorded Roco. The PCGG has offered to the ACCRA lawyers the same conditions availed of by Roco
but the ACCRA lawyers have refused to disclose the identities of their clients. ACCRA lawyers filed the petition for
certiorari, invoking that the Honorable Sandiganbayan gravely abused its discretion:
 In subjecting petitioners ACCRA lawyers who acted to the strict application of the law of agency
 In not considering petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving of
equal treatment.
 In not holding that, under the facts of this case, the attorney-client privilege prohibits petitioners ACCRA lawyers
from revealing the identity of their client(s) and other information requested by PCGG.
 In not requiring that the dropping of party-defendants by the PCGG must be based on reasonable and just
grounds and with due consideration to equal protection of the law

ISSUE
Whether or not client’s identity in a case involving and acquiring companies allegedly sourced from ill-gotten wealth is
privileged and disclosure of such is unethical.

RULING
The court held that the client identity in this case is privileged. As a matter of public policy, a client's identity should not
be shrouded in mystery. This general rule is however qualified by some important exceptions:

1) Client identity is privileged where a strong probability exists that revealing the client's name would implicate that
client in the very activity for which he sought the lawyer's advice.
2) Where disclosure would open the client to civil liability
3) Where the government's lawyers have no case against an attorney's client unless, by revealing the client's name, the
said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a
crime.

The circumstances involving the engagement of lawyers in the case at bench, therefore, clearly reveal that the instant
case falls under the first and third exception.

The attorney-client privilege, as currently worded in the Rules of Court provides thedisqualification by reason of privileged
communication. Rule 138 of the Rules of Court further emphasizes the importance of maintaining client confidence.
Furthermore, this duty is explicitly mandated in Canon 17 of the Code of Professional Responsibility.Canon 15 of the
Canons of Professional Ethics also demands a lawyer's fidelity to client.

The Resolutions of respondent Sandiganbayan are hereby annulled and set aside.

SECOND DIVISION

IN RE: PETITION FOR CANCELLATION G.R. No. 177861


AND CORRECTION OF ENTRIES IN THE
RECORD OF BIRTH,

EMMA K. LEE, Present:


Petitioner,
CARPIO, J., Chairperson,
- versus - ABAD,
VILLARAMA, JR.,*
PEREZ,** and
MENDOZA, JJ.
COURT OF APPEALS, RITA K. LEE,
LEONCIO K. LEE, LUCIA K. LEE-ONG,
JULIAN K. LEE, MARTIN K. LEE,
ROSA LEE-VANDERLEK, MELODY
LEE-CHIN, HENRY K. LEE, NATIVIDAD
LEE-MIGUEL, VICTORIANO K. LEE,
and THOMAS K. LEE, represented by Promulgated:
RITA K. LEE, as Attorney-in-Fact,
Respondents. July 13, 2010

x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

This case is about the grounds for quashing a subpoena ad testificandum and
a parents right not to testify in a case against his children.

The Facts and the Case

Spouses Lee Tek Sheng (Lee) and Keh Shiok Cheng (Keh) entered the Philippines in
the 1930s as immigrants from China. They had 11 children, namely, Rita K. Lee,
Leoncio K. Lee, Lucia K. Lee-Ong, Julian K. Lee, Martin K. Lee, Rosa Lee-
Vanderlek, Melody Lee-Chin, Henry K. Lee, Natividad Lee-Miguel, Victoriano K.
Lee, and Thomas K. Lee (collectively, the Lee-Keh children).

In 1948, Lee brought from China a young woman named Tiu Chuan (Tiu),
supposedly to serve as housemaid. The respondent Lee-Keh children believe that
Tiu left the Lee-Keh household, moved into another property of Lee nearby, and
had a relation with him.

Shortly after Keh died in 1989, the Lee-Keh children learned that Tius
children with Lee (collectively, the Lees other children) claimed that they, too,
were children of Lee and Keh. This prompted the Lee-Keh children to request the
National Bureau of Investigation (NBI) to investigate the matter. After conducting
such an investigation, the NBI concluded in its report:

[I]t is very obvious that the mother of these 8 children is certainly


not KEH SHIOK CHENG, but a much younger woman, most
probably TIU CHUAN. Upon further evaluation and analysis by
these Agents, LEE TEK SHENG is in a quandary in fixing the age
of KEH SHIOK CHENG possibly to conform with his grand
design of making his 8 children as their own legitimate children,
consequently elevating the status of his second family and secure
their future. The doctor lamented that this complaint would not
have been necessary had not the father and his second family kept
on insisting that the 8 children are the legitimate children of KEH
SHIOK CHENG.[1]

The NBI found, for example, that in the hospital records, the eldest of the
Lees other children, Marcelo Lee (who was recorded as the 12th child of Lee and
Keh), was born of a 17-year-old mother, when Keh was already 38 years old at the
time. Another of the Lees other children, Mariano Lee, was born of a 23-year-old
mother, when Keh was then already 40 years old, and so forth. In other words, by
the hospital records of the Lees other children, Kehs declared age did not coincide
with her actual age when she supposedly gave birth to such other children,
numbering eight.

On the basis of this report, the respondent Lee-Keh children filed two
separate petitions, one of them before the Regional Trial Court (RTC) of Caloocan
City[2] in Special Proceeding C-1674 for the deletion from the certificate of live
birth of the petitioner Emma Lee, one of Lees other children, the name Keh and
replace the same with the name Tiu to indicate her true mothers name.

In April 2005 the Lee-Keh children filed with the RTC an ex parte request
for the issuance of a subpoena ad testificandum to compel Tiu, Emma Lees
presumed mother, to testify in the case. The RTC granted the motion but Tiu
moved to quash the subpoena, claiming that it was oppressive and violated Section
25, Rule 130 of the Rules of Court, the rule on parental privilege, she being Emma
Lees stepmother.[3] On August 5, 2005 the RTC quashed the subpoena it issued for
being unreasonable and oppressive considering that Tiu was already very old and
that the obvious object of the subpoena was to badger her into admitting that she
was Emma Lees mother.

Because the RTC denied the Lee-Keh childrens motion for reconsideration,
they filed a special civil action of certiorari before the Court of Appeals (CA) in
CA-G.R. SP 92555. On December 29, 2006 the CA rendered a decision, [4] setting
aside the RTCs August 5, 2005 Order. The CA ruled that only a subpoena duces
tecum, not a subpoena ad testificandum, may be quashed for being oppressive or
unreasonable under Section 4, Rule 21 of the Rules of Civil Procedure. The CA
also held that Tius advanced age alone does not render her incapable of
testifying. The party seeking to quash the subpoena for that reason must prove that
she would be unable to withstand the rigors of trial, something that petitioner
Emma Lee failed to do.

Since the CA denied Emma Lees motion for reconsideration by resolution of


May 8, 2007,[5] she filed the present petition with this Court.

The Question Presented

The only question presented in this case is whether or not the CA erred in
ruling that the trial court may compel Tiu to testify in the correction of entry case
that respondent Lee-Keh children filed for the correction of the certificate of birth
of petitioner Emma Lee to show that she is not Kehs daughter.

The Ruling of the Court

Petitioner Emma Lee claims that the RTC correctly quashed the subpoena ad
testificandum it issued against Tiu on the ground that it was unreasonable and
oppressive, given the likelihood that the latter would be badgered on oral
examination concerning the Lee-Keh childrens theory that she had illicit relation
with Lee and gave birth to the other Lee children.

But, as the CA correctly ruled, the grounds citedunreasonable and


oppressiveare proper for subpoena ad duces tecum or for the production of
documents and things in the possession of the witness, a command that has a
tendency to infringe on the right against invasion of privacy. Section 4, Rule 21 of
the Rules of Civil Procedure, thus provides:

SECTION 4. Quashing a subpoena. The court may quash a


subpoena duces tecum upon motion promptly made and, in any
event, at or before the time specified therein if it is unreasonable
and oppressive, or the relevancy of the books, documents or
things does not appear, or if the person in whose behalf the
subpoena is issued fails to advance the reasonable cost of the
production thereof.

Notably, the Court previously decided in the related case of Lee v. Court of
Appeals[6] that the Lee-Keh children have the right to file the action for correction
of entries in the certificates of birth of Lees other children, Emma Lee
included. The Court recognized that the ultimate object of the suit was to establish
the fact that Lees other children were not children of Keh. Thus:

It is precisely the province of a special proceeding such as


the one outlined under Rule 108 of the Revised Rules of Court to
establish the status or right of a party, or a particular fact. The
petitions filed by private respondents for the correction of entries
in the petitioners' records of birth were intended to establish that
for physical and/or biological reasons it was impossible for Keh
Shiok Cheng to have conceived and given birth to the petitioners
as shown in their birth records. Contrary to petitioners'
contention that the petitions before the lower courts were actually
actions to impugn legitimacy, the prayer therein is not to declare
that petitioners are illegitimate children of Keh Shiok Cheng, but
to establish that the former are not the latter's children. There is
nothing to impugn as there is no blood relation at all between Keh
Shiok Cheng and petitioners.[7] (Underscoring supplied)

Taking in mind the ultimate purpose of the Lee-Keh childrens action,


obviously, they would want Tiu to testify or admit that she is the mother of Lees
other children, including petitioner Emma Lee. Keh had died and so could not give
testimony that Lees other children were not hers. The Lee-Keh children have,
therefore, a legitimate reason for seeking Tius testimony and, normally, the RTC
cannot deprive them of their right to compel the attendance of such a material
witness.

But petitioner Emma Lee raises two other objections to requiring Tiu to
come to court and testify: a) considering her advance age, testifying in court would
subject her to harsh physical and emotional stresses; and b) it would violate her
parental right not to be compelled to testify against her stepdaughter.

1. Regarding the physical and emotional punishment that would be inflicted


on Tiu if she were compelled at her age and condition to come to court to testify,
petitioner Emma Lee must establish this claim to the satisfaction of the trial
court. About five years have passed from the time the Lee-Keh children sought the
issuance of a subpoena for Tiu to appear before the trial court. The RTC would
have to update itself and determine if Tius current physical condition makes her fit
to undergo the ordeal of coming to court and being questioned. If she is fit, she
must obey the subpoena issued to her.

Tiu has no need to worry that the oral examination might subject her to
badgering by adverse counsel. The trial courts duty is to protect every witness
against oppressive behavior of an examiner and this is especially true where the
witness is of advanced age.[8]

2. Tiu claimed before the trial court the right not to testify against her
stepdaughter, petitioner Emma Lee, invoking Section 25, Rule 130 of the Rules of
Evidence, which reads:

SECTION 25. Parental and filial privilege.- No person may


be compelled to testify against his parents, other direct
ascendants, children or other direct descendants.

The above is an adaptation from a similar provision in Article 315 of the


Civil Code that applies only in criminal cases. But those who revised the Rules of
Civil Procedure chose to extend the prohibition to all kinds of actions, whether
civil, criminal, or administrative, filed against parents and other direct ascendants
or descendants.

But here Tiu, who invokes the filial privilege, claims that she is the
stepmother of petitioner Emma Lee. The privilege cannot apply to them because
the rule applies only to direct ascendants and descendants, a family tie connected
by a common ancestry. A stepdaughter has no common ancestry by her
stepmother. Article 965 thus provides:

Art. 965. The direct line is either descending or ascending. The


former unites the head of the family with those who descend from
him. The latter binds a person with those from whom he descends.

Consequently, Tiu can be compelled to testify against petitioner Emma Lee.

WHEREFORE, the Court DENIES the petition and AFFIRMS the


decision and resolution of the Court of Appeals in CA-G.R. SP 92555.

SO ORDERED.
The Facts and the Case

Spouses (Lee) and Keh entered the Philippines in the 1930sas immigrants from China. They had 11
children. In 1948, Leebrought from China a young woman (Tiu), as housemaid.Respondent Lee-Keh’s
children believed that Tiu left the household andhad a relation with him.Shortly after Keh died in 1989,
the Lee-Keh children learned thatTiu’s children with Lee (collectively, the Lee’s other children)
claimedthat they, too, were children of Lee and Keh. This prompted the Lee-Keh children to request the
(NBI) to investigate the matter. After conducting such an investigation, the NBI concluded in its report it
is notKEH SHIOK CHENG, but a much younger woman, most probablyTIU CHUAN. The NBI found, for
example, that in the hospitalrecords Keh’s declared age did not coincide with her actual age whenshe
supposedly gave birth to such other children, numbering eight.On the basis of this report, the
respondent Lee-Keh children filed twoseparate petitions, one of them before the (RTC) for the deletion
fromthe certificate of live birth of the petitioner Emma Lee, one of Lee’sother children, the name Keh
and replace the same with the nameTiu to indicate her true mother’s name.In April 2005 the Lee-Keh
children filed with the RTC an ex parterequest for the issuance of a subpoena ad testificandum to
compelTiu, Emma Lee’s presumed mother, to testify in the case. However, later on, the subpoena was
quashed by the RTC as it was oppressive and violated Section 25, Rule130 of the Rules of Court, the rule
on parental privilege, she being Emma Lee’s stepmother.

CA rendered a decision setting aside the RTC’s Order on the ground that only a subpoena ducestecum,
not a subpoena adtestificandum, may be quashed for being oppressive or unreasonable under Section 4,
Rule 21 of the Rules of CivilProcedure. The CA also held that Tiu’s advanced age alonedoes not render
her incapable of testifying. The party seekingto quash the subpoena for that reason must prove that
shewould be unable to withstand the rigors of trial, something thatpetitioner Emma Lee failed to do.

ISSUE:Whether or not court may compelTiu to testify in the correction of entry case that respondent
Lee-Kehchildren filed for the correction of the certificate of birth of petitioner Emma Lee to show that
she is not Keh’s daughter.

HELD:Under Section 25, Rule 130 of the Rules of Evidence “No personmay be compelled to testify
against his parents, other directascendants, children or other direct descendants.”The afore-quoted rule
is an adaptation from a similar provision in Article 315 of the Civil Code that applies only in criminal
cases.

Butthose who revised the Rules of Civil Procedure chose to extendthe prohibition to all kinds of actions,
whether civil, criminal, or administrative, filed against parents and other direct ascendantsor
descendants.

In Emma Lee vs. Court of Appeals, the person (TIU) who invokes thefilial privilege, claims that she is the
stepmother of petitioner EmmaLee.

The SC declared that the privilege cannot applyto them because the rule applies only to "direct"
ascendantsand descendants, a family tie connected by a common ancestry.A stepdaughter has no
common ancestry by her stepmother .Relative thereto, Article 965 of the New Civil Code provides:
“Thedirect line is either descending or ascending. The former unites thehead of the family with those
who descend from him. The latter bindsa person with those from whom he descends.”

Consequently, Tiucan be compelled to testify against petitioner Emma Lee.

EN BANC

[G.R. No. 131636. March 5, 2003]

PEOPLE OF THE PHILIPPINES, appellee, vs. ARTEMIO


INVENCION y SORIANO, appellant.

DECISION
DAVIDE, JR., C.J.:

Before us for automatic review[1] is the Decision[2] dated 22 September 1997 of


the Regional Trial Court of Tarlac, Tarlac, Branch 65, in Criminal Case No. 9375,
finding accused-appellant Artemio Invencion y Soriano guilty beyond reasonable
doubt of the crime of rape committed against his 16-year-old daughter Cynthia P.
Invencion, and sentencing him to suffer the penalty of death and to pay Cynthia the
sum of P50,000 as moral damages and P25,000 as exemplary damages, as well as
the costs of suit.
Artemio was charged before the Regional Trial Court of Tarlac with thirteen
counts of rape in separate complaints docketed as Criminal Cases Nos. 9363 to
9375, all dated 17 October 1996. The cases were consolidated and jointly tried. At
his arraignment Artemio entered a plea of not guilty in each case.
The witnesses presented by the prosecution in its evidence in chief were Elven
Invencion, Eddie Sicat, Gloria Pagala, Dr. Rosario Fider, and Atty. Florencio
Canlas. Presented as rebuttal witnesses were Gloria Pagala and Celestino Navarro.
Elven Invencion, an 8-year-old grade two pupil of Sapang Tagalog Elementary
School in Tarlac, Tarlac, testified that he is a half-brother of Cynthia and son of
Artemio with his second common-law wife. Sometime before the end of the school
year in 1996, while he was sleeping in one room with his father Artemio, Cynthia,
and two other younger brothers, he was awakened by Cynthias loud cries. Looking
towards her, he saw his father on top of Cynthia, doing a pumping motion. After
about two minutes, his father put on his short pants.[3]
Elven further declared that Artemio was a very strict and cruel father and a
drunkard. He angrily prohibited Cynthia from entertaining any of her
suitors. Whenever he was drunk, he would maul Elven and quarrel with his
stepfather, Celestino Navarro.[4]
Eddie Sicat, a 40-year-old farmer and neighbor of Artemio in Barangay Sapang
Tagalog, Tarlac, Tarlac, testified that on the second week of March 1996, between
6:00 and 7:00 a.m., while he was passing by the house of Artemio on his way to
the field to catch fish, he heard somebody crying. He then peeped through a small
opening in the destroyed portion of the sawaliwall of Artemios house. He saw
Cynthia lying on her back and crying, while her father was on top of her, doing a
pumping motion. Eddie observed them for about fifteen seconds, and then he left
and proceeded to the field to catch fish. [5] He reported what he had witnessed to
Artemios stepfather, Celestino, later that morning.[6]
Gloria Pagala, the mother of Cynthia and former common-law wife of
Artemio, testified that she and Artemio started living together in Guimba, Nueva
Ecija, in February 1969. Out of their common-law relationship, they had six
children, one of whom was Cynthia. In March 1982, she and Artemio parted ways
permanently. Later, Gloria and her children lived in Pura, Tarlac. When Artemios
mother died sometime in 1996, Cynthia lived with Artemio in a small one-room
dwelling owned by Celestino and located in Barangay Sapang Tagalog, Tarlac,
Tarlac.[7] On 30 August 1996, her son Novelito told her that Cynthia was pregnant.
Gloria then went to the house of Artemio and asked Cynthia about her condition.
The latter confessed that she had been sexually abused by her father. Gloria then
went to the office of the National Bureau of Investigation (NBI) in Tarlac and
reported what Artemio had done to their daughter Cynthia.[8]
Dr. Rosario Fider of Tarlac Provincial Hospital testified that she examined
Cynthia on 16 September 1996. She found Cynthia to be five to six months
pregnant and to have incomplete, healed hymenal lacerations at 3, 5, 8 oclock
positions, which could have been caused by sexual intercourse or any foreign body
inserted in her private part.[9]
Atty. Florencio Canlas, an NBI agent, testified that on 18 September 1996,
Cynthia, accompanied by her mother, complained before him and NBI Supervising
Agent Rolando Vergara that she was raped by her father Artemio. She then
executed a written statement,[10] which she subscribed and sworn to before Atty.
Canlas.[11]
The defense did not present Artemio as a witness. Instead, his counsel de parte,
Atty. Isabelo Salamida, took the witness stand and testified for the defense. He
declared that on 24 June 1997 (the same day when he testified before the court),
between 10:45 and 11:00 a.m., he and his secretary went to the house of Artemio
in Barangay Sapang Tagalog. The hut was made of sawali. Its door was
padlocked, and its windows were shut. When he went around the house and tried to
peep through the old sawali walls on the front and left and right sides of the hut, he
could not see anything inside the room where Artemio and his children used to
sleep. Although it was then about noontime, it was dark inside. [12] Atty. Salamida
then concluded that prosecution witness Eddie Sicat was not telling the truth when
he declared having seen what Artemio did to Cynthia when he peeped through a
small opening in the sawali wall of the house in the early morning sometime on the
second week of March 1996.
On rebuttal, Gloria Pagala testified that the house where Artemio used to live
was a small hut with some destroyed portions in its sawali walls. When she went
there to visit her children sometime in December 1995, there was a hole in front
and at the sidewall of the hut facing a vacant lot where people passed by to fish in
a nearby brook.[13] When she went to the place again sometime in September 1996
after she was informed of Cynthias pregnancy, she noticed that the destroyed
portions of the huts sawali walls were not yet repaired.[14]
The second rebuttal witness Celestino Navarro, stepfather of Artemio, testified
that he is the owner of the small house where Artemio and his children used to
reside. At the time that Artemio and his children, including Cynthia, were living in
that house, the huts old sawali walls had some small holes in them, thus
confirming the testimony of Eddie Sicat. After Artemio was arrested on the basis
of Cynthias complaint before the NBI, Celestino made some repairs in the hut by,
among other things, placing galvanized iron sheets to cover the holes at the
destroyed portions of the sawali walls. Thereafter, a person named Alvin occupied
the house.[15]
In its Decision of 22 September 1997, the trial court convicted Artemio in
Criminal Case No. 9375. It, however, acquitted him in all the other twelve cases
for lack of evidence.
In his Appellants Brief, Artemio contends that the trial court erred in
I

... BELIEVING THE TESTIMONIES OF THE PROSECUTION WITNESSES;

II

NOT DISMISSING THIS CASE FOR FAILURE OF THE PROSECUTION TO


PROVE [HIS] GUILT BEYOND REASONABLE DOUBT.

Artemio attacks the competency and credibility of Elven as a witness. He


argues that Elven, as his son, should have been disqualified as a witness against
him under Section 20(c), Rule 130 of the Rules of Court.[16] Besides, Elvens
testimony appears not to be his but what the prosecution wanted him to say, as the
questions asked were mostly leading questions. Moreover, Elven had ill-motive in
testifying against him, as he (Artemio) was cruel to him.
In another attempt to cast doubt on the credibility of the prosecution witnesses,
Artemio points to the following inconsistencies in their testimonies: (1) as to the
time of the commission of the crime, Elven testified having seen Artemio on top of
his sister one night in March 1996, while Eddie Sicat testified having seen them in
the same position between 6:00 and 7:00 a.m.in the second week of March 1996;
(2) as to the residence of Cynthia in 1996, Gloria testified that the former was
living with her in Guimba from November 1995 to September 1996, while Elven
and Eddie declared that she was in Sapang Tagalog in March 1996; and (3) as to
the residence of Artemio, Jr., Gloria stated that he was living with the appellant,
but later she declared that he was living with her in Pura.
Artemio also argues that since his house had no electricity and was dark even
at daytime, it was impossible for Elven and Eddie to see him allegedly doing
pumping motion on top of Cynthia. In his Reply Brief, he likewise urges us to
disregard the testimonies of rebuttal witnesses Celestino and Gloria. According to
him, Celestino had an ax to grind against him (Artemio) because he had been
badgering Celestino for his share of the lot where the hut stands, which was owned
by Artemios deceased mother. On the other hand, Gloria wanted to get rid of
Artemio because she was already cohabiting with another man.
In the Appellees Brief, the Office of the Solicitor General (OSG) prays for the
affirmation of Artemios conviction and sentence, but recommends that a civil
indemnity in the amount of P75,000 be awarded in addition to the awards of moral
and exemplary damages.
We find no cogent reason to overturn the findings of the trial court on the
culpability of Artemio.
It is doctrinally settled that the factual findings of the trial court, especially on
the credibility of the witnesses, are accorded great weight and respect and will not
be disturbed on appeal. This is so because the trial court has the advantage of
observing the witnesses through the different indicators of truthfulness or
falsehood, such as the angry flush of an insisted assertion, the sudden pallor of a
discovered lie, the tremulous mutter of a reluctant answer, the forthright tone of a
ready reply, the furtive glance, the blush of conscious shame, the hesitation, the
yawn, the sigh, the candor or lack of it, the scant or full realization of the solemnity
of an oath, or the carriage and mien.[17] This rule, however, admits of exceptions, as
where there exists a fact or circumstance of weight and influence that has been
ignored or misconstrued by the court, or where the trial court has acted arbitrarily
in its appreciation of the facts.[18] We do not find any of these exceptions in the
case at bar.
As to the competency of Elven to testify, we rule that such is not affected by
Section 25, Rule 130 of the Rules of Court,[19] otherwise known as the rule on filial
privilege. This rule is not strictly a rule on disqualification because a descendant is
not incompetent or disqualified to testify against an ascendant.[20] The rule refers to
a privilege not to testify, which can be invoked or waived like other privileges. As
correctly observed by the lower court, Elven was not compelled to testify against
his father; he chose to waive that filial privilege when he voluntarily testified
against Artemio. Elven declared that he was testifying as a witness against his
father of his own accord and only to tell the truth.[21]
Neither can Artemio challenge the prosecutions act of propounding leading
questions on Elven. Section 10(c) of Rule 132 of the Rules of Court[22] expressly
allows leading questions when the witness is a child of tender years like Elven.
The alleged ulterior motive of Elven in testifying against his father also
deserves scant consideration. Such insinuation of ill-motive is too lame and flimsy.
As observed by the OSG, Elven, who was of tender age, could not have subjected
himself to the ordeal of a public trial had he not been compelled by a motive other
than to bring to justice the despoiler of his sisters virtue. There is no indication that
Elven testified because of anger or any ill-motive against his father, nor is there
any showing that he was unduly pressured or influenced by his mother or by
anyone to testify against his father. The rule is that where there is no evidence that
the principal witness for the prosecution was actuated by improper motive, the
presumption is that he was not so actuated and his testimony is entitled to full
credence.[23]
We find as inconsequential the alleged variance or difference in the time that
the rape was committed, i.e., during the night as testified to by Elven, or between
6:00 and 7:00 a.m. per the testimony of Eddie. The exact time or date of the
commission of rape is not an element of the crime. What is decisive in a rape
charge is that the commission of the rape by the accused has been sufficiently
proved. Inconsistencies and discrepancies as to minor matters irrelevant to the
elements of the crime cannot be considered grounds for acquittal.[24] In this case,
we believe that the crime of rape was, indeed, committed as testified to by Elven
and Eddie.
The alleged inconsistencies in the testimonies of both Elven and Gloria do not
impair the credibility of these witnesses. We agree with the trial court that they are
minor inconsistencies, which do not affect the credibility of the witnesses. We
have held in a number of cases that inconsistencies in the testimonies of witnesses
that refer to minor and insignificant details do not destroy the witnesses
credibility.[25] On the contrary, they may even be considered badges of veracity or
manifestations of truthfulness on the material points in the testimonies. What is
important is that the testimonies agree on essential facts and substantially
corroborate a consistent and coherent whole.[26]
Artemios allegation that it was impossible for both Elven and Eddie to have
seen and witnessed the crime because the room was dark even at daytime was
convincingly disputed by rebuttal witnesses Gloria Pagala and Celestino Navarro.
Furthermore, as observed by the OSG, even if the hut was without electricity,
Elven could not have been mistaken in his identification of Artemio because he
had known the latter for a long time. Moreover, Elven was at the time only two
meters away from Cynthia and Artemio. Even without sufficient illumination,
Elven, who was jostled out of his sleep by Cynthias loud cry, could observe the
pumping motion made by his father.[27]
The alleged ill-motives on the part of Gloria and Celestino were not
sufficiently proved. Nothing in the records suggests any reason that would
motivate Gloria to testify falsely against Artemio, who is the father of her other
children. Moreover, we have repeatedly held that no mother would subject her
child to the humiliation, disgrace, and trauma attendant to the prosecution for rape
if she were not motivated solely by the desire to have the person responsible for
her childs defilement incarcerated.[28] As for Celestino, he testified that the lot
where the hut stands is owned by his daughter Erlinda, and not by Artemios
mother.[29] At any rate, even without Celestinos testimony, Artemios conviction
would stand.
The remaining issue for our resolution is the correctness of the penalty of death
imposed by the trial court. The death penalty was imposed because of the trial
courts appreciation of the special qualifying circumstances that Artemio is the
father of the victim and the latter was less than 18 years old at the time the crime
was committed.
Article 335 of the Revised Penal Code, as amended by R.A. No. 7659, which is
the governing law in this case, pertinently reads:

Article 335. When and how rape is committed.

The crime of rape shall be punished by reclusion perpetua.

...

The death penalty shall also be imposed if the crime of rape is committed with any
of the following circumstances:

1. when the victim is under eighteen (18) years of age and the offender is a
parent, ascendant, step-parent, guardian, relative by consanguinity or
affinity within the third civil degree, or the common-law spouse of the
parent of the victim.

To justify the imposition of the death penalty in a rape committed by a father


on a daughter, the minority of the victim and her relationship with the offender,
which are special qualifying circumstances, must be alleged in the complaint or
information and proved by the prosecution during the trial by the quantum of proof
required for conviction. The accusatory portion of the complaint in Criminal Case
No. 9375 reads as follows:

That on or about the month of March 1996 at Sapang Tagalog, Municipality of


Tarlac, Province of Tarlac, Philippines, and within the jurisdiction of this
Honorable Court, the said accused Artemio S. Invencion did then and there
willfully, unlawfully and feloniously by using force and intimidation have carnal
knowledge of his daughter Cynthia P. Invencion who was sixteen (16) years old, in
their house.

CONTRARY TO LAW.[30]

Although the relationship of Cynthia with her father Artemio was alleged in the
complaint and duly established by evidence during trial, the allegation in the
complaint regarding her age was not clearly proved.
In the very recent case of People v. Pruna,[31] we set the guidelines in
appreciating age either as an element of the crime or as a qualifying circumstance:

1. The best evidence to prove the age of the offended party is an original or
certified true copy of the certificate of live birth of such party.

2. In the absence of a certificate of live birth, similar authentic documents


such as baptismal certificate and school records which show the date of
birth of the victim would suffice to prove age.

3. If the certificate of live birth or authentic document is shown to have


been lost or destroyed or otherwise unavailable, the testimony, if clear
and credible, of the victims mother or a member of the family either by
affinity or consanguinity who is qualified to testify on matters respecting
pedigree such as the exact age or date of birth of the offended party
pursuant to Section 40, Rule 130 of the Rules on Evidence shall be
sufficient under the following circumstances:

a. If the victim is alleged to be below 3 years of age and what is sought


to be proved is that she is less than 7 years old;

b. If the victim is alleged to be below 7 years of age and what is sought


to be proved is that she is less than 12 years old;

c. If the victim is alleged to be below 12 years of age and what is


sought to be proved is that she is less than 18 years old.

4. In the absence of a certificate of live birth, authentic document, or the


testimony of the victims mother or relatives concerning the victims age,
the complainants testimony will suffice provided that it is expressly and
clearly admitted by the accused.

5. It is the prosecution that has the burden of proving the age of the
offended party. The failure of the accused to object to the testimonial
evidence regarding age shall not be taken against him.

6. The trial court should always make a categorical finding as to the age of
the victim.

In the present case, no birth certificate or any similar authentic document was
presented and offered in evidence to prove Cynthias age. The statement in the
medical certificate showing Cynthias age is not proof thereof, since a medical
certificate does not authenticate the date of birth of the victim. Moreover, pursuant
to Pruna, Glorias testimony regarding Cynthias age was insufficient, since Cynthia
was alleged to be 16 years old already at the time of the rape and what is sought to
be proved is that she was then 18 years old. Moreover, the trial court did not even
make a categorical finding on Cynthias minority. Finally, the silence of Artemio or
his failure to object to the testimonial evidence regarding Cynthias age could not
be taken against him.
It must be stressed that the severity of death penalty, especially its irreversible
and final nature once carried out, makes the decision-making process in capital
offenses aptly subject to the most exacting rules of procedure and
evidence.[32] Accordingly, in the absence of sufficient proof of Cynthias minority,
Artemio cannot be convicted of qualified rape and sentenced to suffer the death
penalty. He should only be convicted of simple rape and meted the penalty
of reclusion perpetua.
As regards the civil liability of Artemio, the awards of moral damages in the
amount of P50,000 and exemplary damages in the amount of P25,000 are
insufficient. Civil indemnity, which is mandatory upon the finding of the fact of
rape,[33] should also be awarded. In simple rape, the civil indemnity for the victim
shall not be less than P50,000.
WHEREFORE, the decision of the Regional Trial Court, Branch 65, Tarlac,
Tarlac, in Criminal Case No. 9375 is hereby AFFIRMED with the modification
that that accused Artemio Invencion y Soriano is held guilty beyond reasonable
doubt as principal of the crime of simple rape, and is sentenced to suffer the
penalty of reclusion perpetua and to pay the victim Cynthia Invencion the sums
of P50,000 as indemnity; P50,000 as moral damages; and P25,000 as exemplary
damages.
Costs de oficio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing,
Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo,
Sr. and Azcuna, JJ., concur.
Ynares-Santiago, and Corona, JJ., on leave.

THIRD DIVISION

MAXIMO ALVAREZ, G.R. No. 143439


Petitioner,
Present:

PANGANIBAN, J.,
Chairman,
- versus - SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES, and
GARCIA, JJ.

SUSAN RAMIREZ,
Respondent. Promulgated:
October 14, 2005
x---------------------------------------------------------------------------------------------x

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari[1] assailing the Decision[2] of the


Court of Appeals dated May 31, 2000 in CA-G.R. SP No. 56154, entitled SUSAN
RAMIREZ, petitioner, versus, HON. BENJAMIN M. AQUINO, JR., as JUDGE
RTC, MALABON, MM, BR. 72, and MAXIMO ALVAREZ, respondents.

Susan Ramirez, herein respondent, is the complaining witness in Criminal Case


No. 19933-MN for arson[3] pending before the Regional Trial Court, Branch 72,
Malabon City. The accused is Maximo Alvarez, herein petitioner. He is the
husband of Esperanza G. Alvarez, sister of respondent.

On June 21, 1999, the private prosecutor called Esperanza Alvarez to the witness
stand as the first witness against petitioner, her husband. Petitioner and his counsel
raised no objection.

Esperanza testified as follows:

ATTY. ALCANTARA:

We are calling Mrs. Esperanza Alvarez, the wife of the


accused, Your Honor.

COURT:

Swear in the witness.

xxx

ATTY. MESIAH: (sic)

Your Honor, we are offering the testimony of this witness for


the purpose of proving that the accused Maximo Alvarez committed
all the elements of the crime being charged particularly that accused
Maximo Alvarez pour on May 29, 1998 gasoline in the house located
at Blk. 5, Lot 9, Phase 1-C, Dagat-dagatan, Navotas, Metro Manila,
the house owned by his sister-in-law Susan Ramirez; that accused
Maximo Alvarez after pouring the gasoline on the door of the house
of Susan Ramirez ignited and set it on fire; that the accused at the time
he successfully set the house on fire (sic) of Susan Ramirez knew that
it was occupied by Susan Ramirez, the members of the family as well
as Esperanza Alvarez, the estranged wife of the accused; that as a
consequence of the accused in successfully setting the fire to the
house of Susan Ramirez, the door of said house was burned and
together with several articles of the house, including shoes, chairs and
others.

COURT:

You may proceed.

xxx

DIRECT EXAMINATION

ATTY. ALCANTARA:

xxx

Q: When you were able to find the source, incidentally what was the
source of that scent?
A: When I stand by the window, sir, I saw a man pouring the gasoline
in the house of my sister (and witness pointing to the person of
the accused inside the court room).

Q: For the record, Mrs. Witness, can you state the name of that
person, if you know?
A: He is my husband, sir, Maximo Alvarez.

Q: If that Maximo Alvarez you were able to see, can you identify
him?
A: Yes, sir.

Q: If you can see him inside the Court room, can you please point
him?
A: Witness pointing to a person and when asked to stand and asked
his name, he gave his name as Maximo Alvarez.[4]

In the course of Esperanzas direct testimony against petitioner, the latter


showed uncontrolled emotions, prompting the trial judge to suspend the
proceedings.

On June 30, 1999, petitioner, through counsel, filed a motion[5] to disqualify


Esperanza from testifying against him pursuant to Rule 130 of the Revised Rules
of Court on marital disqualification.

Respondent filed an opposition[6] to the motion. Pending resolution of the motion,


the trial court directed the prosecution to proceed with the presentation of the other
witnesses.
On September 2, 1999, the trial court issued the questioned Order disqualifying
Esperanza Alvarez from further testifying and deleting her testimony from the
records.[7]The prosecution filed a motion for reconsideration but was denied in the
other assailed Order dated October 19, 1999.[8]

This prompted respondent Susan Ramirez, the complaining witness in


Criminal Case No. 19933-MN, to file with the Court of Appeals a petition
for certiorari[9]with application for preliminary injunction and temporary
restraining order.[10]

On May 31, 2000, the Appellate Court rendered a Decision nullifying and setting
aside the assailed Orders issued by the trial court.

Hence, this petition for review on certiorari.

The issue for our resolution is whether Esperanza Alvarez can testify against
her husband in Criminal Case No. 19933-MN.

Section 22, Rule 130 of the Revised Rules of Court provides:

Sec. 22. Disqualification by reason of marriage. During their


marriage, neither the husband nor the wife may testify for or against
the other without the consent of the affected spouse, except in a civil
case by one against the other, or in a criminal case for a crime
committed by one against the other or the latters direct descendants or
ascendants.

The reasons given for the rule are:

1. There is identity of interests between husband and wife;


2. If one were to testify for or against the other, there is consequent danger
of perjury;
3. The policy of the law is to guard the security and confidences of private
life, even at the risk of an occasional failure of justice, and to prevent
domestic disunion and unhappiness; and
4. Where there is want of domestic tranquility there is danger of punishing
one spouse through the hostile testimony of the other.[11]

But like all other general rules, the marital disqualification rule has its own
exceptions, both in civil actions between the spouses and in criminal cases for
offenses committed by one against the other. Like the rule itself, the exceptions are
backed by sound reasons which, in the excepted cases, outweigh those in support
of the general rule. For instance, where the marital and domestic relations are so
strained that there is no more harmony to be preserved nor peace and tranquility
which may be disturbed, the reason based upon such harmony and tranquility fails.
In such a case, identity of interests disappears and the consequent danger of perjury
based on that identity is non-existent. Likewise, in such a situation, the security
and confidences of private life, which the law aims at protecting, will be nothing
but ideals, which through their absence, merely leave a void in the unhappy
home.[12]

In Ordoo vs. Daquigan,[13] this Court held:

We think that the correct rule, which may be adopted in this


jurisdiction, is that laid down in Cargil vs. State, 35 ALR 133, 220
Pac. 64, 25 Okl. 314, wherein the court said:

The rule that the injury must amount to a physical


wrong upon the person is too narrow; and the rule that
any offense remotely or indirectly affecting domestic
harmony comes within the exception is too broad. The
better rule is that, when an offense directly attacks, or
directly and vitally impairs, the conjugal relation, it
comes within the exception to the statute that one shall
not be a witness against the other except in a criminal
prosecution for a crime committee (by) one against the
other.

Obviously, the offense of arson attributed to petitioner, directly impairs the


conjugal relation between him and his wife Esperanza. His act, as embodied in the
Information for arson filed against him, eradicates all the major aspects of marital
life such as trust, confidence, respect and love by which virtues the conjugal
relationship survives and flourishes.

As correctly observed by the Court of Appeals:

The act of private respondent in setting fire to the house of his


sister-in-law Susan Ramirez, knowing fully well that his wife was
there, and in fact with the alleged intent of injuring the latter, is an act
totally alien to the harmony and confidences of marital relation which
the disqualification primarily seeks to protect. The criminal act
complained of had the effect of directly and vitally impairing the
conjugal relation. It underscored the fact that the marital and domestic
relations between her and the accused-husband have become so
strained that there is no more harmony, peace or tranquility to be
preserved. The Supreme Court has held that in such a case, identity is
non-existent. In such a situation, the security and confidences of
private life which the law aims to protect are nothing but ideals which
through their absence, merely leave a void in the unhappy home.
(People v. Castaeda, 271 SCRA 504). Thus, there is no longer any
reason to apply the Marital Disqualification Rule.

It should be stressed that as shown by the records, prior to the commission of


the offense, the relationship between petitioner and his wife was already strained.
In fact, they were separated de facto almost six months before the incident. Indeed,
the evidence and facts presented reveal that the preservation of the marriage
between petitioner and Esperanza is no longer an interest the State aims to protect.

At this point, it bears emphasis that the State, being interested in laying the
truth before the courts so that the guilty may be punished and the innocent
exonerated, must have the right to offer the direct testimony of Esperanza, even
against the objection of the accused, because (as stated by this Court
in Francisco[14]), it was the latter himself who gave rise to its necessity.

WHEREFORE, the Decision of the Court of Appeals is AFFIRMED. The trial


court, RTC, Branch 72, Malabon City, is ordered to allow Esperanza Alvarez to
testify against petitioner, her husband, in Criminal Case No. 19933-MN. Costs
against petitioner.

SO ORDERED.

THIRD DIVISION

[G.R. No. 127745. April 22, 2003]

FELICITO G. SANSON, CELEDONIA SANSON-SAQUIN, ANGELES A.


MONTINOLA, EDUARDO A. MONTINOLA, JR., petitioners-
appellants, vs.HONORABLE COURT OF APPEALS, FOURTH
DIVISION and MELECIA T. SY, as Administratrix of the Intestate
Estate of the Late Juan Bon Fing Sy, respondents-appellees.

DECISION
CARPIO MORALES, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court assailing the Court of Appeals Decision of May 31, 1996 and
Resolution of December 9, 1996.
On February 7, 1990, herein petitioner-appellant Felicito G. Sanson (Sanson),
in his capacity as creditor, filed before the Regional Trial Court (RTC) of Iloilo
City a petition, docketed as Special Proceedings No. 4497, for the settlement of the
estate of Juan Bon Fing Sy (the deceased) who died on January 10, 1990. Sanson
claimed that the deceased was indebted to him in the amount of P603,000.00 and
to his sister Celedonia Sanson-Saquin (Celedonia) in the amount of P360,000.00.[1]
Petitioners-appellants Eduardo Montinola, Jr. and his mother Angeles
Montinola (Angeles) later filed separate claims against the estate, alleging that the
deceased owed them P50,000.00 and P150,000.00, respectively.[2]
By Order of February 12, 1991, Branch 28 of the Iloilo RTC to which the
petition was raffled, appointed Melecia T. Sy, surviving spouse of the deceased, as
administratrix of his estate, following which she was issued letters of
administration.[3]
During the hearing of the claims against the estate, Sanson, Celedonia, and
Jade Montinola, wife of claimant Eduardo Montinola, Jr., testified on the
transactions that gave rise thereto, over the objection of the administratrix who
invoked Section 23, Rule 130 of the Revised Rules of Court otherwise known as
the Dead Mans Statute which reads:

SEC. 23. Disqualification by reason of death or insanity of adverse party.Parties or


assignors of parties to a case, or persons in whose behalf a case is prosecuted,
against an executor or administrator or other representative of a deceased person,
or against a person of unsound mind, upon a claim or demand against the estate of
such deceased person or against such person of unsound mind, cannot testify as to
any matter of fact occurring before the death of such deceased person or before
such person became of unsound mind. (Emphasis supplied)

Sanson, in support of the claim of his sister Celedonia, testified that she had a
transaction with the deceased which is evidenced by six checks [4] issued by him
before his death; before the deceased died, Celedonia tried to enforce settlement of
the checks from his (the deceaseds) son Jerry who told her that his father would
settle them once he got well but he never did; and after the death of the deceased,
Celedonia presented the checks to the bank for payment but were dishonored [5] due
to the closure of his account.[6]
Celedonia, in support of the claim of her brother Sanson, testified that she
knew that the deceased issued five checks[7] to Sanson in settlement of a debt; and
after the death of the deceased, Sanson presented the checks to the bank for
payment but were returned due to the closure of his account.[8]
Jade, in support of the claims of her husband Eduardo Montinola, Jr. and
mother-in-law Angeles, testified that on separate occasions, the deceased
borrowed P50,000 and P150,000 from her husband and mother-in-law,
respectively, as shown by three checks issued by the deceased,[9] two to Angeles
and the other[10] to Eduardo Montinola, Jr.; before the deceased died or sometime
in August 1989, they advised him that they would be depositing the checks, but he
told them not to as he would pay them cash, but he never did; and after the
deceased died on January 10, 1990, they deposited the checks but were dishonored
as the account against which they were drawn was closed,[11] hence, their legal
counsel sent a demand letter[12] dated February 6, 1990 addressed to the deceaseds
heirs Melicia, James, Mini and Jerry Sy, and Symmels I & II but the checks have
remained unsettled.[13]
The administratrix, denying having any knowledge or information sufficient to
form a belief as to the truth of the claims, nevertheless alleged that if they ever
existed, they had been paid and extinguished, are usurious and illegal and are, in
any event, barred by prescription.[14] And she objected to the admission of the
checks and check return slips-exhibits offered in evidence by the claimants upon
the ground that the witnesses who testified thereon are disqualified under the Dead
Mans Statute.
Specifically with respect to the checks-exhibits identified by Jade, the
administratrix asserted that they are inadmissible because Jade is the daughter-in-
law of claimant Angeles and wife of claimant Eduardo Montinola, Jr., hence, she is
covered by the above-said rule on disqualification.
At all events, the administratrix denied that the checks-exhibits were issued by
the deceased and that the return slips were issued by the depository/clearing
bank.[15]
After the claimants rested their case, the administratrix filed four separate
manifestations informing the trial court that she was dispensing with the
presentation of evidence against their claims.[16]
Finding that the Dead Mans Statute does not apply to the witnesses who
testified in support of the subject claims against the estate, the trial court issued an
Order of December 8, 1993,[17] the dispositive portion of which reads:

WHEREFORE, Judicial Administratrix Melecia T. Sy, is hereby ordered, to pay,


in due course of administration, creditors-claimants Felicito G. Sanson, in the
amount of P603,500.00; Celedonia S. Saquin, in the amount of
P315,000.00;[18] Angeles A. Montinola, in the amount of P150,000.00 and Eduardo
Montinola, Jr., in the amount of P50,000.00, from the assets and/or properties of
the above-entitled intestate estate.

On appeal by the administratrix upon the following assignment of errors:


I.

THE LOWER COURT ERRED IN NOT DISMISSING THE CLAIM[S] FOR


FAILURE TO PAY THE FILING FEES THEREON

II.

THE LOWER COURT ERRED IN NOT DISMISSING THE CLAIM[S]


BECAUSE [THEY ARE] ALREADY BARRED BY THE LAW OF
LIMITATIONS OR STATUTE OF NON-CLAIMS

III.

THE LOWER COURT ERRED IN NOT HOLDING THAT CLAIMANT[S]


EVIDENCE OF THE CLAIM IS INCOMPETENT UNDER THE DEAD MANS
STATUTE, AND INADMISSIBLE

IV.

THE ALLEGED CHECKS ARE INADMISSIBLE AS PRIVATE


DOCUMENTS,[19]

the Court of Appeals set aside the December 8, 1993 Order of the trial court, by
Decision of May 31, 1996, disposing as follows:

WHEREFORE, the order appealed from is hereby set aside and another order is
entered dismissing the claims of:
1. Felicito G. Sanson, in the amount of P603,500.00;

2. Celdonia S. Saquin, in the amount of P315,000.00;[20]

3. Angeles A. Montinola, in the amount of P150,000.00; and

4. Eduardo Montinola, Jr., in the amount of P50,000.00 against the estate of the
deceased JUAN BON FING SY.

No pronouncement as to costs.

SO ORDERED. (Underscoring supplied)

The claimants Motion for Reconsideration[21] of the Court of Appeals decision


having been denied by Resolution of December 9, 1996,[22] they filed the present
petition anchored on the following assigned errors:

FIRST ASSIGNED ERROR

RESPONDENT COURT OF APPEALS, 4TH DIVISION, ERRED IN FINDING


THAT THE TESTIMONY OF JADE MONTINOLA IS INSUFFICIENT TO
PROVE THE CLAIMS OF CLAIMANTS ANGELES A. MONTINOLA AND
EDUARDO A. MONTINOLA, JR..

SECOND ASSIGNED ERROR

RESPONDENT COURT OF APPEALS, 4TH DIVISION, ERRED IN FINDING


THAT CLAIMANT FELICITO G. SANSON IS DISQUALIFIED TO TESTIFY
[ON] THE CLAIM OF CELEDONIA SANSON-SA[Q]UIN AND VI[C]E
VERSA. (Underscoring in the original)[23]

With respect to the first assigned error, petitioners argue that since the
administratrix did not deny the testimony of Jade nor present any evidence to
controvert it, and neither did she deny the execution and genuineness of the checks
issued by the deceased (as well as the check return slips issued by the clearing
bank), it was error for the Court of Appeals to find the evidence of the Montinolas
insufficient to prove their claims.
The administratrix counters that the due execution and authenticity of the
checks-exhibits of the Montinolas were not duly proven since Jade did not
categorically state that she saw the filling up and signing of the checks by the
deceased, hence, her testimony is self-serving; besides, as Jade had identical and
unitary interest with her husband and mother-in-law, her testimony was a
circumvention of the Dead Mans Statute.[24]
The administratrixs counter-argument does not lie. Relationship to a party has
never been recognized as an adverse factor in determining either the credibility of
the witness orsubject only to well recognized exceptions none of which is here
presentthe admissibility of the testimony. At most, closeness of relationship to a
party, or bias, may indicate the need for a little more caution in the assessment of a
witness testimony but is not necessarily a negative element which should be taken
as diminishing the credit otherwise accorded to it.[25]
Jades testimony on the genuineness of the deceaseds signature on the checks-
exhibits of the Montinolas is clear:
xxx
Q: Showing to you this check dated July 16, 1989, Far East Bank and Trust
Company Check No. 84262, in the amount of P100,000.00, is this the
check you are referring to?
A: Yes, sir.
Q: There appears a signature in the face of the check. Whose signature is
this?
A: That is the signature of Mr. Sy.
Q: Why do you know that this is the signature of Mr. Sy?
A: Because he signed this check I was . . . I was present when he signed
this check.
xxx
Q: Showing to you this check dated September 8, 1989, is this the check
you are referring to?
A: Yes, sir.
Q: Why do you know that this is his signature?
A: I was there when he signed the same.
xxx
Q: Showing to you this Far East Bank and Trust Company Check No.
84262 dated July 6, 1989, in the amount of P50,000.00, in the name of
Eduardo Montinola, are you referring to this check?
A: Yes, sir.
Q: Whose signature is this appearing on the face of this check?
A: Mr. Sys signature.
Q: Why do you know that it is his signature?
A: I was there when he signed the same.
x x x[26] (Emphasis supplied)
The genuineness of the deceaseds signature having been shown, he is prima
facie presumed to have become a party to the check for value, following Section 24
of the Negotiable Instruments Law which reads:

Section 24. Presumption of Consideration. Every negotiable instrument is


deemed prima facie to have been issued for a valuable consideration; and
every person whose signature appears thereon to have become a party thereto
for value. (Underscoring and italics in the original; emphasis supplied),

Since, with respect to the checks issued to the Montinolas, the prima
facie presumption was not rebutted or contradicted by the administratrix who
expressly manifested that she was dispensing with the presentation of evidence
against their claims, it has become conclusive.
As for the administratrixs invocation of the Dead Mans Statute, the same does
not likewise lie. The rule renders incompetent: 1) parties to a case; 2) their
assignors; or 3) persons in whose behalf a case is prosecuted.

xxx
The rule is exclusive and cannot be construed to extend its scope by implication so
as to disqualify persons not mentioned therein. Mere witnesses who are not
included in the above enumeration are not prohibited from testifying as to a
conversation or transaction between the deceased and a third person, if he took no
active part therein.

x x x[27] (Underscoring supplied)

Jade is not a party to the case. Neither is she an assignor nor a person in whose
behalf the case is being prosecuted. She testified as a witness to the transaction. In
transactions similar to those involved in the case at bar, the witnesses are
commonly family members or relatives of the parties. Should their testimonies be
excluded due to their apparent interest as a result of their relationship to the parties,
there would be a dearth of evidence to prove the transactions. In any event, as will
be discussed later, independently of the testimony of Jade, the claims of the
Montinolas would still prosper on the basis of their documentary evidencethe
checks.
As to the second assigned error, petitioners argue that the testimonies of
Sanson and Celedonia as witnesses to each others claim against the deceased are
not covered by the Dead Mans Statute;[28] besides, the administratrix waived the
application of the law when she cross-examined them.
The administratrix, on the other hand, cites the ruling of the Court of Appeals
in its decision on review, the pertinent portion of which reads:

The more logical interpretation is to prohibit parties to a case, with like interest,
from testifying in each others favor as to acts occurring prior to the death of the
deceased.

Since the law disqualifies parties to a case or assignors to a case without


distinguishing between testimony in his own behalf and that in behalf of others, he
should be disqualified from testifying for his co-parties. The law speaks of parties
or assignors of parties to a case. Apparently, the testimonies of Sanson and Saquin
on each others behalf, as co-parties to the same case, falls under the prohibition.
(Citation omitted; underscoring in the original and emphasis supplied)

But Sansons and Celedonias claims against the same estate arose from separate
transactions. Sanson is a third party with respect to Celedonias claim. And
Celedonia is a third party with respect to Sansons claim. One is not thus
disqualified to testify on the others transaction.
In any event, what the Dead Mans Statute proscribes is the admission
of testimonial evidence upon a claim which arose before the death of the
deceased. The incompetency is confined to the giving of testimony.[29] Since the
separate claims of Sanson and Celedonia are supported by checks-
documentary evidence, their claims can be prosecuted on the bases of said checks.
This brings this Court to the matter of the authenticity of the signature of the
deceased appearing on the checks issued to Sanson and Celedonia. By Celedonias
account, she knows the signature of the deceased.
xxx
Q: Showing to you these checks already marked as Exhibit A to E, please
go over these checks if you know the signatures of the late Juan Bon
Fing Sy? on these checks?
A: Yes, sir.
Q: Insofar as the amount that he borrowed from you, he also issued checks?
A: Yes, sir.
Q: And therefore, you know his signature?
A: Yes, sir.
x x x[30]
Sanson testified too that he knows the signature of the deceased:
xxx
Q: I show you now checks which were already marked as Exhibit A to G-1
Saquin, please go over this if these are the checks that you said was
issued by the late Juan Bon Fing Sy in favor of your sister?
A: Yes, these are the same che[c]ks.
Q: Do you know the signature of the late Juan Bon Fing Sy?
A: Yes, sir.
Q: And these signatures are the same signatures that you know?
A: Yes, sir.
x x x[31]
While the foregoing testimonies of the Sanson siblings have not faithfully
discharged the quantum of proof under Section 22, Rule 132 of the Revised Rules
on Evidence which reads:

Section 22. How genuineness of handwriting proved. The handwriting of a person


may be proved by any witness who believes it to be the handwriting of such person
because he has seen the person write, or has seen writing purporting to be his upon
which the witness has acted or been charged and has thus acquired knowledge of
the handwriting of such person. x x x,

not only did the administratrix fail to controvert the same; from a
comparison[32] with the naked eye of the deceaseds signature appearing on each of
the checks-exhibits of the Montinolas with that of the checks-exhibits of the
Sanson siblings all of which checks were drawn from the same account, they
appear to have been affixed by one and the same hand.
In fine, as the claimants-herein petitioners have, by their evidence,
substantiated their claims against the estate of the deceased, the burden of evidence
had shifted to the administratrix who, however, expressly opted not to discharge
the same when she manifested that she was dispensing with the presentation of
evidence against the claims.
WHEREFORE, the impugned May 31, 1996 Decision of the Court of
Appeals is hereby SET ASIDE and another rendered ordering the intestate estate of
the late Juan Bon Fing Sy, through Administratrix Melecia T. Sy, to pay:
1) Felicito G. Sanson, the amount of P603,500.00;
2) Celedonia S. Saquin, the amount of P315.000.00;[33]
3) Angeles Montinola, the amount of P150,000.00; and
4) Eduardo Montinola, Jr., the amount of P50,000.00.
representing unsettled checks issued by the deceased.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Corona, JJ., concur.

SECOND DIVISION

[A.C. No. 5108. May 26, 2005]

ROSA F. MERCADO, complainant, vs. ATTY. JULITO D.


VITRIOLO, respondent.

DECISION
PUNO, J.:

Rosa F. Mercado filed the instant administrative complaint against Atty. Julito
D. Vitriolo, seeking his disbarment from the practice of law. The complainant
alleged that respondent maliciously instituted a criminal case for falsification of
public document against her, a former client, based on confidential information
gained from their attorney-client relationship.
Let us first hearken to the facts.
Complainant is a Senior Education Program Specialist of the Standards
Development Division, Office of Programs and Standards while respondent is a
Deputy Executive Director IV of the Commission on Higher Education (CHED).[1]
Complainants husband filed Civil Case No. 40537 entitled Ruben G. Mercado
v. Rosa C. Francisco, for annulment of their marriage with the Regional Trial
Court (RTC) of Pasig City. This annulment case had been dismissed by the trial
court, and the dismissal became final and executory on July 15, 1992.[2]
In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, died. On
February 7, 1994, respondent entered his appearance before the trial court as
collaborating counsel for complainant.[3]
On March 16, 1994, respondent filed his Notice of Substitution of
Counsel,[4] informing the RTC of Pasig City that he has been appointed as counsel
for the complainant, in substitution of Atty. de Leon.
It also appears that on April 13, 1999, respondent filed a criminal action
against complainant before the Office of the City Prosecutor, Pasig City, entitled
Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F. Mercado, and docketed as I.S. No.
PSG 99-9823, for violation of Articles 171 and 172 (falsification of public
document) of the Revised Penal Code.[5] Respondent alleged that complainant
made false entries in the Certificates of Live Birth of her children, Angelica and
Katelyn Anne. More specifically, complainant allegedly indicated in said
Certificates of Live Birth that she is married to a certain Ferdinand Fernandez, and
that their marriage was solemnized on April 11, 1979, when in truth, she is legally
married to Ruben G. Mercado and their marriage took place on April 11, 1978.
Complainant denied the accusations of respondent against her. She denied
using any other name than Rosa F. Mercado. She also insisted that she has gotten
married only once, on April 11, 1978, to Ruben G. Mercado.
In addition, complainant Mercado cited other charges against respondent that
are pending before or decided upon by other tribunals (1) libel suit before the
Office of the City Prosecutor, Pasig City;[6] (2) administrative case for dishonesty,
grave misconduct, conduct prejudicial to the best interest of the service, pursuit of
private business, vocation or profession without the permission required by Civil
Service rules and regulations, and violations of the Anti-Graft and Corrupt
Practices Act, before the then Presidential Commission Against Graft and
Corruption;[7] (3) complaint for dishonesty, grave misconduct, and conduct
prejudicial to the best interest of the service before the Office of the Ombudsman,
where he was found guilty of misconduct and meted out the penalty of one month
suspension without pay;[8] and, (4) the Information for violation of Section 7(b)(2)
of Republic Act No. 6713, as amended, otherwise known as the Code of Conduct
and Ethical Standards for Public Officials and Employees before the
Sandiganbayan.[9]
Complainant Mercado alleged that said criminal complaint for falsification of
public document (I.S. No. PSG 99-9823) disclosed confidential facts and
information relating to the civil case for annulment, then handled by respondent
Vitriolo as her counsel. This prompted complainant Mercado to bring this action
against respondent. She claims that, in filing the criminal case for falsification,
respondent is guilty of breaching their privileged and confidential lawyer-client
relationship, and should be disbarred.
Respondent filed his Comment/Motion to Dismiss on November 3, 1999 where
he alleged that the complaint for disbarment was all hearsay, misleading and
irrelevant because all the allegations leveled against him are subject of separate
fact-finding bodies. Respondent claimed that the pending cases against him are not
grounds for disbarment, and that he is presumed to be innocent until proven
otherwise.[10] He also states that the decision of the Ombudsman finding him guilty
of misconduct and imposing upon him the penalty of suspension for one month
without pay is on appeal with the Court of Appeals. He adds that he was found
guilty, only of simple misconduct, which he committed in good faith.[11]
In addition, respondent maintains that his filing of the criminal complaint for
falsification of public documents against complainant does not violate the rule on
privileged communication between attorney and client because the bases of the
falsification case are two certificates of live birth which are public documents and
in no way connected with the confidence taken during the engagement of
respondent as counsel. According to respondent, the complainant confided to him
as then counsel only matters of facts relating to the annulment case. Nothing was
said about the alleged falsification of the entries in the birth certificates of her two
daughters. The birth certificates are filed in the Records Division of CHED and are
accessible to anyone.[12]
In a Resolution dated February 9, 2000, this Court referred the administrative
case to the Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.[13]
The IBP Commission on Bar Discipline set two dates for hearing but
complainant failed to appear in both. Investigating Commissioner Rosalina R.
Datiles thus granted respondents motion to file his memorandum, and the case was
submitted for resolution based on the pleadings submitted by the parties.[14]
On June 21, 2003, the IBP Board of Governors approved the report of
investigating commissioner Datiles, finding the respondent guilty of violating the
rule on privileged communication between attorney and client, and recommending
his suspension from the practice of law for one (1) year.
On August 6, 2003, complainant, upon receiving a copy of the IBP report and
recommendation, wrote Chief Justice Hilario Davide, Jr., a letter of desistance. She
stated that after the passage of so many years, she has now found forgiveness for
those who have wronged her.
At the outset, we stress that we shall not inquire into the merits of the various
criminal and administrative cases filed against respondent. It is the duty of the
tribunals where these cases are pending to determine the guilt or innocence of the
respondent.
We also emphasize that the Court is not bound by any withdrawal of the
complaint or desistance by the complainant. The letter of complainant to the Chief
Justice imparting forgiveness upon respondent is inconsequential in disbarment
proceedings.
We now resolve whether respondent violated the rule on privileged
communication between attorney and client when he filed a criminal case for
falsification of public document against his former client.
A brief discussion of the nature of the relationship between attorney and client
and the rule on attorney-client privilege that is designed to protect such relation is
in order.
In engaging the services of an attorney, the client reposes on him special
powers of trust and confidence. Their relationship is strictly personal and highly
confidential and fiduciary. The relation is of such delicate, exacting and
confidential nature that is required by necessity and public interest.[15] Only by
such confidentiality and protection will a person be encouraged to repose his
confidence in an attorney. The hypothesis is that abstinence from seeking legal
advice in a good cause is an evil which is fatal to the administration of
justice.[16] Thus, the preservation and protection of that relation will encourage a
client to entrust his legal problems to an attorney, which is of paramount
importance to the administration of justice.[17] One rule adopted to serve this
purpose is the attorney-client privilege: an attorney is to keep inviolate his clients
secrets or confidence and not to abuse them.[18] Thus, the duty of a lawyer to
preserve his clients secrets and confidence outlasts the termination of the attorney-
client relationship,[19] and continues even after the clients death.[20] It is the glory of
the legal profession that its fidelity to its client can be depended on, and that a man
may safely go to a lawyer and converse with him upon his rights or supposed rights
in any litigation with absolute assurance that the lawyers tongue is tied from ever
disclosing it.[21] With full disclosure of the facts of the case by the client to his
attorney, adequate legal representation will result in the ascertainment and
enforcement of rights or the prosecution or defense of the clients cause.
Now, we go to the rule on attorney-client privilege. Dean Wigmore cites the
factors essential to establish the existence of the privilege, viz:

(1) Where legal advice of any kind is sought (2) from a professional legal adviser
in his capacity as such, (3) the communications relating to that purpose, (4) made
in confidence (5) by the client, (6) are at his instance permanently protected (7)
from disclosure by himself or by the legal advisor, (8) except the protection be
waived.[22]

In fine, the factors are as follows:


(1) There exists an attorney-client relationship, or a prospective attorney-client
relationship, and it is by reason of this relationship that the client made the
communication.
Matters disclosed by a prospective client to a lawyer are protected by the rule
on privileged communication even if the prospective client does not thereafter
retain the lawyer or the latter declines the employment.[23] The reason for this is to
make the prospective client free to discuss whatever he wishes with the lawyer
without fear that what he tells the lawyer will be divulged or used against him, and
for the lawyer to be equally free to obtain information from the prospective
client.[24]
On the other hand, a communication from a (prospective) client to a lawyer for
some purpose other than on account of the (prospective) attorney-client relation is
not privileged. Instructive is the case of Pfleider v. Palanca,[25] where the client
and his wife leased to their attorney a 1,328-hectare agricultural land for a period
of ten years. In their contract, the parties agreed, among others, that a specified
portion of the lease rentals would be paid to the client-lessors, and the remainder
would be delivered by counsel-lessee to client's listed creditors. The client alleged
that the list of creditors which he had confidentially supplied counsel for the
purpose of carrying out the terms of payment contained in the lease contract was
disclosed by counsel, in violation of their lawyer-client relation, to parties whose
interests are adverse to those of the client. As the client himself, however, states, in
the execution of the terms of the aforesaid lease contract between the parties, he
furnished counsel with the confidential list of his creditors. We ruled that this
indicates that client delivered the list of his creditors to counsel not because of the
professional relation then existing between them, but on account of the lease
agreement. We then held that a violation of the confidence that accompanied the
delivery of that list would partake more of a private and civil wrong than of a
breach of the fidelity owing from a lawyer to his client.
(2) The client made the communication in confidence.
The mere relation of attorney and client does not raise a presumption of
confidentiality.[26] The client must intend the communication to be confidential.[27]
A confidential communication refers to information transmitted by voluntary
act of disclosure between attorney and client in confidence and by means which, so
far as the client is aware, discloses the information to no third person other than
one reasonably necessary for the transmission of the information or the
accomplishment of the purpose for which it was given.[28]
Our jurisprudence on the matter rests on quiescent ground. Thus, a compromise
agreement prepared by a lawyer pursuant to the instruction of his client and
delivered to the opposing party,[29] an offer and counter-offer for settlement,[30] or a
document given by a client to his counsel not in his professional capacity, [31] are
not privileged communications, the element of confidentiality not being present.[32]
(3) The legal advice must be sought from the attorney in his professional
capacity.[33]
The communication made by a client to his attorney must not be intended for
mere information, but for the purpose of seeking legal advice from his attorney as
to his rights or obligations. The communication must have been transmitted by a
client to his attorney for the purpose of seeking legal advice.[34]
If the client seeks an accounting service,[35] or business or personal
assistance,[36] and not legal advice, the privilege does not attach to a
communication disclosed for such purpose.
Applying all these rules to the case at bar, we hold that the evidence on record
fails to substantiate complainants allegations. We note that complainant did not
even specify the alleged communication in confidence disclosed by respondent. All
her claims were couched in general terms and lacked specificity. She contends that
respondent violated the rule on privileged communication when he instituted a
criminal action against her for falsification of public documents because the
criminal complaint disclosed facts relating to the civil case for annulment then
handled by respondent. She did not, however, spell out these facts which will
determine the merit of her complaint. The Court cannot be involved in a guessing
game as to the existence of facts which the complainant must prove.
Indeed, complainant failed to attend the hearings at the IBP. Without any
testimony from the complainant as to the specific confidential information
allegedly divulged by respondent without her consent, it is difficult, if not
impossible to determine if there was any violation of the rule on privileged
communication. Such confidential information is a crucial link in establishing a
breach of the rule on privileged communication between attorney and client. It is
not enough to merely assert the attorney-client privilege.[37] The burden of proving
that the privilege applies is placed upon the party asserting the privilege.[38]
IN VIEW WHEREOF, the complaint against respondent Atty. Julito D.
Vitriolo is hereby DISMISSED for lack of merit.
SO ORDERED.
Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
Tinga, J., out of the country.

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 196049 June 26, 2013

MINORU FUJIKI, PETITIONER,


vs.
MARIA PAZ GALELA MARINAY, SHINICHI MAEKARA, LOCAL CIVIL
REGISTRAR OF QUEZON CITY, AND THE ADMINISTRATOR AND
CIVIL REGISTRAR GENERAL OF THE NATIONAL STATISTICS
OFFICE,RESPONDENTS.

DECISION

CARPIO, J.:

The Case

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

The Facts

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


Maria Paz Galela Marinay (Marinay) in the Philippines2 on 23 January 2004. The
marriage did not sit well with petitioner’s parents. Thus, Fujiki could not bring his
wife to Japan where he resides. Eventually, they lost contact with each other.

In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the
first marriage being dissolved, Marinay and Maekara were married on 15 May
2008 in Quezon City, Philippines. Maekara brought Marinay to Japan. However,
Marinay allegedly suffered physical abuse from Maekara. She left Maekara and
started to contact Fujiki.3

Fujiki and Marinay met in Japan and they were able to reestablish their
relationship. In 2010, Fujiki helped Marinay obtain a judgment from a family court
in Japan which declared the marriage between Marinay and Maekara void on the
ground of bigamy.4 On 14 January 2011, Fujiki filed a petition in the RTC entitled:
"Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of
Marriage)." Fujiki prayed that (1) the Japanese Family Court judgment be
recognized; (2) that the bigamous marriage between Marinay and Maekara be
declared void ab initiounder Articles 35(4) and 41 of the Family Code of the
Philippines;5 and (3) for the RTC to direct the Local Civil Registrar of Quezon City
to annotate the Japanese Family Court judgment on the Certificate of Marriage
between Marinay and Maekara and to endorse such annotation to the Office of the
Administrator and Civil Registrar General in the National Statistics Office (NSO).6

The Ruling of the Regional Trial Court

A few days after the filing of the petition, the RTC immediately issued an Order
dismissing the petition and withdrawing the case from its active civil docket.7 The
RTC cited the following provisions of the Rule on Declaration of Absolute Nullity
of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-
SC):

Sec. 2. Petition for declaration of absolute nullity of void marriages. –

(a) Who may file. – A petition for declaration of absolute nullity of void marriage
may be filed solely by the husband or the wife.

xxxx

Sec. 4. Venue. – The petition shall be filed in the Family Court of the province or
city where the petitioner or the respondent has been residing for at least six months
prior to the date of filing, or in the case of a non-resident respondent, where he
may be found in the Philippines, at the election of the petitioner. x x x

The RTC ruled, without further explanation, that the petition was in "gross
violation" of the above provisions. The trial court based its dismissal on Section
5(4) of A.M. No. 02-11-10-SC which provides that "[f]ailure to comply with any
of the preceding requirements may be a ground for immediate dismissal of the
petition."8 Apparently, the RTC took the view that only "the husband or the wife,"
in this case either Maekara or Marinay, can file the petition to declare their
marriage void, and not Fujiki.

Fujiki moved that the Order be reconsidered. He argued that A.M. No. 02-11-10-
SC contemplated ordinary civil actions for declaration of nullity and annulment of
marriage. Thus, A.M. No. 02-11-10-SC does not apply. A petition for recognition
of foreign judgment is a special proceeding, which "seeks to establish a status, a
right or a particular fact,"9 and not a civil action which is "for the enforcement or
protection of a right, or the prevention or redress of a wrong."10 In other words, the
petition in the RTC sought to establish (1) the status and concomitant rights of
Fujiki and Marinay as husband and wife and (2) the fact of the rendition of the
Japanese Family Court judgment declaring the marriage between Marinay and
Maekara as void on the ground of bigamy. The petitioner contended that the
Japanese judgment was consistent with Article 35(4) of the Family Code of the
Philippines11 on bigamy and was therefore entitled to recognition by Philippine
courts.12

In any case, it was also Fujiki’s view that A.M. No. 02-11-10-SC applied only to
void marriages under Article 36 of the Family Code on the ground of
psychological incapacity.13 Thus, Section 2(a) of A.M. No. 02-11-10-SC provides
that "a petition for declaration of absolute nullity of void marriages may be filed
solely by the husband or the wife." To apply Section 2(a) in bigamy would be
absurd because only the guilty parties would be permitted to sue. In the words of
Fujiki, "[i]t is not, of course, difficult to realize that the party interested in having a
bigamous marriage declared a nullity would be the husband in the prior, pre-
existing marriage."14 Fujiki had material interest and therefore the personality to
nullify a bigamous marriage.

Fujiki argued that Rule 108 (Cancellation or Correction of Entries in the Civil
Registry) of the Rules of Court is applicable. Rule 108 is the "procedural
implementation" of the Civil Register Law (Act No. 3753)15 in relation to Article
413 of the Civil Code.16 The Civil Register Law imposes a duty on the "successful
petitioner for divorce or annulment of marriage to send a copy of the final decree
of the court to the local registrar of the municipality where the dissolved or
annulled marriage was solemnized."17 Section 2 of Rule 108 provides that entries
in the civil registry relating to "marriages," "judgments of annulments of marriage"
and "judgments declaring marriages void from the beginning" are subject to
cancellation or correction.18 The petition in the RTC sought (among others) to
annotate the judgment of the Japanese Family Court on the certificate of marriage
between Marinay and Maekara.

Fujiki’s motion for reconsideration in the RTC also asserted that the trial court
"gravely erred" when, on its own, it dismissed the petition based on improper
venue. Fujiki stated that the RTC may be confusing the concept of venue with the
concept of jurisdiction, because it is lack of jurisdiction which allows a court to
dismiss a case on its own. Fujiki cited Dacoycoy v. Intermediate Appellate
Court19 which held that the "trial court cannot pre-empt the defendant’s prerogative
to object to the improper laying of the venue by motu proprio dismissing the
case."20Moreover, petitioner alleged that the trial court should not have
"immediately dismissed" the petition under Section 5 of A.M. No. 02-11-10-SC
because he substantially complied with the provision.
On 2 March 2011, the RTC resolved to deny petitioner’s motion for
reconsideration. In its Resolution, the RTC stated that A.M. No. 02-11-10-SC
applies because the petitioner, in effect, prays for a decree of absolute nullity of
marriage.21 The trial court reiterated its two grounds for dismissal, i.e. lack of
personality to sue and improper venue under Sections 2(a) and 4 of A.M. No. 02-
11-10-SC. The RTC considered Fujiki as a "third person"22 in the proceeding
because he "is not the husband in the decree of divorce issued by the Japanese
Family Court, which he now seeks to be judicially recognized, x x x."23 On the
other hand, the RTC did not explain its ground of impropriety of venue. It only
said that "[a]lthough the Court cited Sec. 4 (Venue) x x x as a ground for dismissal
of this case[,] it should be taken together with the other ground cited by the Court x
x x which is Sec. 2(a) x x x."24

The RTC further justified its motu proprio dismissal of the petition based on Braza
v. The City Civil Registrar of Himamaylan City, Negros Occidental.25 The Court in
Braza ruled that "[i]n a special proceeding for correction of entry under Rule 108
(Cancellation or Correction of Entries in the Original Registry), the trial court has
no jurisdiction to nullify marriages x x x."26 Braza emphasized that the "validity of
marriages as well as legitimacy and filiation can be questioned only in a direct
action seasonably filed by the proper party, and not through a collateral attack such
as [a] petition [for correction of entry] x x x."27

The RTC considered the petition as a collateral attack on the validity of marriage
between Marinay and Maekara. The trial court held that this is a "jurisdictional
ground" to dismiss the petition.28 Moreover, the verification and certification
against forum shopping of the petition was not authenticated as required under
Section 529 of A.M. No. 02-11-10-SC. Hence, this also warranted the "immediate
dismissal" of the petition under the same provision.

The Manifestation and Motion of the Office of the Solicitor General and the
Letters of Marinay and Maekara

On 30 May 2011, the Court required respondents to file their comment on the
petition for review.30 The public respondents, the Local Civil Registrar of Quezon
City and the Administrator and Civil Registrar General of the NSO, participated
through the Office of the Solicitor General. Instead of a comment, the Solicitor
General filed a Manifestation and Motion.31

The Solicitor General agreed with the petition. He prayed that the RTC’s
"pronouncement that the petitioner failed to comply with x x x A.M. No. 02-11-10-
SC x x x be set aside" and that the case be reinstated in the trial court for further
proceedings.32 The Solicitor General argued that Fujiki, as the spouse of the first
marriage, is an injured party who can sue to declare the bigamous marriage
between Marinay and Maekara void. The Solicitor General cited Juliano-Llave v.
Republic33 which held that Section 2(a) of A.M. No. 02-11-10-SC does not apply
in cases of bigamy. In Juliano-Llave, this Court explained:

[t]he subsequent spouse may only be expected to take action if he or she had only
discovered during the connubial period that the marriage was bigamous, and
especially if the conjugal bliss had already vanished. Should parties in a
subsequent marriage benefit from the bigamous marriage, it would not be expected
that they would file an action to declare the marriage void and thus, in such
circumstance, the "injured spouse" who should be given a legal remedy is the one
in a subsisting previous marriage. The latter is clearly the aggrieved party as the
bigamous marriage not only threatens the financial and the property ownership
aspect of the prior marriage but most of all, it causes an emotional burden to the
prior spouse. The subsequent marriage will always be a reminder of the infidelity
of the spouse and the disregard of the prior marriage which sanctity is protected by
the Constitution.34

The Solicitor General contended that the petition to recognize the Japanese Family
Court judgment may be made in a Rule 108 proceeding.35 In Corpuz v. Santo
Tomas,36 this Court held that "[t]he recognition of the foreign divorce decree may
be made in a Rule 108 proceeding itself, as the object of special proceedings (such
as that in Rule 108 of the Rules of Court) is precisely to establish the status or right
of a party or a particular fact."37 While Corpuzconcerned a foreign divorce decree,
in the present case the Japanese Family Court judgment also affected the civil
status of the parties, especially Marinay, who is a Filipino citizen.

The Solicitor General asserted that Rule 108 of the Rules of Court is the procedure
to record "[a]cts, events and judicial decrees concerning the civil status of persons"
in the civil registry as required by Article 407 of the Civil Code. In other words,
"[t]he law requires the entry in the civil registry of judicial decrees that produce
legal consequences upon a person’s legal capacity and status x x x."38 The Japanese
Family Court judgment directly bears on the civil status of a Filipino citizen and
should therefore be proven as a fact in a Rule 108 proceeding.

Moreover, the Solicitor General argued that there is no jurisdictional infirmity in


assailing a void marriage under Rule 108, citing De Castro v. De
Castro39 and Niñal v. Bayadog40 which declared that "[t]he validity of a void
marriage may be collaterally attacked."41

Marinay and Maekara individually sent letters to the Court to comply with the
directive for them to comment on the petition.42 Maekara wrote that Marinay
concealed from him the fact that she was previously married to Fujiki.43Maekara
also denied that he inflicted any form of violence on Marinay.44 On the other hand,
Marinay wrote that she had no reason to oppose the petition.45 She would like to
maintain her silence for fear that anything she say might cause misunderstanding
between her and Fujiki.46

The Issues

Petitioner raises the following legal issues:

(1) Whether the Rule on Declaration of Absolute Nullity of Void Marriages


and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) is
applicable.

(2) Whether a husband or wife of a prior marriage can file a petition to


recognize a foreign judgment nullifying the subsequent marriage between
his or her spouse and a foreign citizen on the ground of bigamy.

(3) Whether the Regional Trial Court can recognize the foreign judgment in
a proceeding for cancellation or correction of entries in the Civil Registry
under Rule 108 of the Rules of Court.

The Ruling of the Court

We grant the petition.


The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to
recognize a foreign judgment relating to the status of a marriage where one of the
parties is a citizen of a foreign country. Moreover, in Juliano-Llave v.
Republic,47 this Court held that the rule in A.M. No. 02-11-10-SC that only the
husband or wife can file a declaration of nullity or annulment of marriage "does
not apply if the reason behind the petition is bigamy."48

I.

For Philippine courts to recognize a foreign judgment relating to the status of a


marriage where one of the parties is a citizen of a foreign country, the petitioner
only needs to prove the foreign judgment as a fact under the Rules of Court. To be
more specific, a copy of the foreign judgment may be admitted in evidence and
proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39, Section
48(b) of the Rules of Court.49 Petitioner may prove the Japanese Family Court
judgment through (1) an official publication or (2) a certification or copy attested
by the officer who has custody of the judgment. If the office which has custody is
in a foreign country such as Japan, the certification may be made by the proper
diplomatic or consular officer of the Philippine foreign service in Japan and
authenticated by the seal of office.50

To hold that A.M. No. 02-11-10-SC applies to a petition for recognition of foreign
judgment would mean that the trial court and the parties should follow its
provisions, including the form and contents of the petition,51 the service of
summons,52 the investigation of the public prosecutor,53 the setting of pre-
trial,54 the trial55 and the judgment of the trial court.56 This is absurd because it will
litigate the case anew. It will defeat the purpose of recognizing foreign judgments,
which is "to limit repetitive litigation on claims and issues."57 The interpretation of
the RTC is tantamount to relitigating the case on the merits. In Mijares v.
Rañada,58 this Court explained that "[i]f every judgment of a foreign court were
reviewable on the merits, the plaintiff would be forced back on his/her original
cause of action, rendering immaterial the previously concluded litigation."59

A foreign judgment relating to the status of a marriage affects the civil status,
condition and legal capacity of its parties. However, the effect of a foreign
judgment is not automatic. To extend the effect of a foreign judgment in the
Philippines, Philippine courts must determine if the foreign judgment is consistent
with domestic public policy and other mandatory laws.60 Article 15 of the Civil
Code provides that "[l]aws relating to family rights and duties, or to the status,
condition and legal capacity of persons are binding upon citizens of the
Philippines, even though living abroad." This is the rule of lex nationalii in private
international law. Thus, the Philippine State may require, for effectivity in the
Philippines, recognition by Philippine courts of a foreign judgment affecting its
citizen, over whom it exercises personal jurisdiction relating to the status,
condition and legal capacity of such citizen.

A petition to recognize a foreign judgment declaring a marriage void does not


require relitigation under a Philippine court of the case as if it were a new petition
for declaration of nullity of marriage. Philippine courts cannot presume to know
the foreign laws under which the foreign judgment was rendered. They cannot
substitute their judgment on the status, condition and legal capacity of the foreign
citizen who is under the jurisdiction of another state. Thus, Philippine courts can
only recognize the foreign judgment as a fact according to the rules of evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or
final order against a person creates a "presumptive evidence of a right as between
the parties and their successors in interest by a subsequent title." Moreover, Section
48 of the Rules of Court states that "the judgment or final order may be repelled by
evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact." Thus, Philippine courts exercise limited review on
foreign judgments. Courts are not allowed to delve into the merits of a foreign
judgment. Once a foreign judgment is admitted and proven in a Philippine court, it
can only be repelled on grounds external to its merits, i.e. , "want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact." The
rule on limited review embodies the policy of efficiency and the protection of party
expectations,61 as well as respecting the jurisdiction of other states.62

Since 1922 in Adong v. Cheong Seng Gee,63 Philippine courts have recognized
foreign divorce decrees between a Filipino and a foreign citizen if they are
successfully proven under the rules of evidence.64 Divorce involves the dissolution
of a marriage, but the recognition of a foreign divorce decree does not involve the
extended procedure under A.M. No. 02-11-10-SC or the rules of ordinary trial.
While the Philippines does not have a divorce law, Philippine courts may,
however, recognize a foreign divorce decree under the second paragraph of Article
26 of the Family Code, to capacitate a Filipino citizen to remarry when his or her
foreign spouse obtained a divorce decree abroad.65

There is therefore no reason to disallow Fujiki to simply prove as a fact the


Japanese Family Court judgment nullifying the marriage between Marinay and
Maekara on the ground of bigamy. While the Philippines has no divorce law, the
Japanese Family Court judgment is fully consistent with Philippine public policy,
as bigamous marriages are declared void from the beginning under Article 35(4) of
the Family Code. Bigamy is a crime under Article 349 of the Revised Penal Code.
Thus, Fujiki can prove the existence of the Japanese Family Court judgment in
accordance with Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b)
of the Rules of Court.

II.

Since the recognition of a foreign judgment only requires proof of fact of the
judgment, it may be made in a special proceeding for cancellation or correction of
entries in the civil registry under Rule 108 of the Rules of Court. Rule 1, Section 3
of the Rules of Court provides that "[a] special proceeding is a remedy by which a
party seeks to establish a status, a right, or a particular fact." Rule 108 creates a
remedy to rectify facts of a person’s life which are recorded by the State pursuant
to the Civil Register Law or Act No. 3753. These are facts of public consequence
such as birth, death or marriage,66 which the State has an interest in recording. As
noted by the Solicitor General, in Corpuz v. Sto. Tomas this Court declared that
"[t]he recognition of the foreign divorce decree may be made in a Rule 108
proceeding itself, as the object of special proceedings (such as that in Rule 108 of
the Rules of Court) is precisely to establish the status or right of a party or a
particular fact."67

Rule 108, Section 1 of the Rules of Court states:

Sec. 1. Who may file petition. — Any person interested in any act, event, order
or decree concerning the civil status of persons which has been recorded in the
civil register, may file a verified petition for the cancellation or correction of any
entry relating thereto, with the Regional Trial Court of the province where the
corresponding civil registry is located. (Emphasis supplied)

Fujiki has the personality to file a petition to recognize the Japanese Family Court
judgment nullifying the marriage between Marinay and Maekara on the ground of
bigamy because the judgment concerns his civil status as married to Marinay. For
the same reason he has the personality to file a petition under Rule 108 to cancel
the entry of marriage between Marinay and Maekara in the civil registry on the
basis of the decree of the Japanese Family Court.

There is no doubt that the prior spouse has a personal and material interest in
maintaining the integrity of the marriage he contracted and the property relations
arising from it. There is also no doubt that he is interested in the cancellation of an
entry of a bigamous marriage in the civil registry, which compromises the public
record of his marriage. The interest derives from the substantive right of the spouse
not only to preserve (or dissolve, in limited instances68) his most intimate human
relation, but also to protect his property interests that arise by operation of law the
moment he contracts marriage.69 These property interests in marriage include the
right to be supported "in keeping with the financial capacity of the family" 70 and
preserving the property regime of the marriage.71

Property rights are already substantive rights protected by the Constitution,72 but a
spouse’s right in a marriage extends further to relational rights recognized under
Title III ("Rights and Obligations between Husband and Wife") of the Family
Code.73 A.M. No. 02-11-10-SC cannot "diminish, increase, or modify" the
substantive right of the spouse to maintain the integrity of his marriage.74 In any
case, Section 2(a) of A.M. No. 02-11-10-SC preserves this substantive right by
limiting the personality to sue to the husband or the wife of the union recognized
by law.

Section 2(a) of A.M. No. 02-11-10-SC does not preclude a spouse of a subsisting
marriage to question the validity of a subsequent marriage on the ground of
bigamy. On the contrary, when Section 2(a) states that "[a] petition for declaration
of absolute nullity of void marriage may be filed solely by the husband or the
wife"75—it refers to the husband or the wife of the subsisting marriage. Under
Article 35(4) of the Family Code, bigamous marriages are void from the
beginning. Thus, the parties in a bigamous marriage are neither the husband nor the
wife under the law. The husband or the wife of the prior subsisting marriage is the
one who has the personality to file a petition for declaration of absolute nullity of
void marriage under Section 2(a) of A.M. No. 02-11-10-SC.

Article 35(4) of the Family Code, which declares bigamous marriages void from
the beginning, is the civil aspect of Article 349 of the Revised Penal Code,76 which
penalizes bigamy. Bigamy is a public crime. Thus, anyone can initiate prosecution
for bigamy because any citizen has an interest in the prosecution and prevention of
crimes.77 If anyone can file a criminal action which leads to the declaration of
nullity of a bigamous marriage,78 there is more reason to confer personality to sue
on the husband or the wife of a subsisting marriage. The prior spouse does not only
share in the public interest of prosecuting and preventing crimes, he is also
personally interested in the purely civil aspect of protecting his marriage.

When the right of the spouse to protect his marriage is violated, the spouse is
clearly an injured party and is therefore interested in the judgment of the
suit.79 Juliano-Llave ruled that the prior spouse "is clearly the aggrieved party as
the bigamous marriage not only threatens the financial and the property ownership
aspect of the prior marriage but most of all, it causes an emotional burden to the
prior spouse."80 Being a real party in interest, the prior spouse is entitled to sue in
order to declare a bigamous marriage void. For this purpose, he can petition a court
to recognize a foreign judgment nullifying the bigamous marriage and judicially
declare as a fact that such judgment is effective in the Philippines. Once
established, there should be no more impediment to cancel the entry of the
bigamous marriage in the civil registry.

III.

In Braza v. The City Civil Registrar of Himamaylan City, Negros Occidental, this
Court held that a "trial court has no jurisdiction to nullify marriages" in a special
proceeding for cancellation or correction of entry under Rule 108 of the Rules of
Court.81 Thus, the "validity of marriage[] x x x can be questioned only in a direct
action" to nullify the marriage.82 The RTC relied on Braza in dismissing the
petition for recognition of foreign judgment as a collateral attack on the marriage
between Marinay and Maekara.

Braza is not applicable because Braza does not involve a recognition of a foreign
judgment nullifying a bigamous marriage where one of the parties is a citizen of
the foreign country.

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


cannot substitute for an action to invalidate a marriage. A direct action is necessary
to prevent circumvention of the substantive and procedural safeguards of marriage
under the Family Code, A.M. No. 02-11-10-SC and other related laws. Among
these safeguards are the requirement of proving the limited grounds for the
dissolution of marriage,83 support pendente lite of the spouses and children,84 the
liquidation, partition and distribution of the properties of the spouses,85 and the
investigation of the public prosecutor to determine collusion.86 A direct action for
declaration of nullity or annulment of marriage is also necessary to prevent
circumvention of the jurisdiction of the Family Courts under the Family Courts Act
of 1997 (Republic Act No. 8369), as a petition for cancellation or correction of
entries in the civil registry may be filed in the Regional Trial Court "where the
corresponding civil registry is located."87 In other words, a Filipino citizen cannot
dissolve his marriage by the mere expedient of changing his entry of marriage in
the civil registry.

However, this does not apply in a petition for correction or cancellation of a civil
registry entry based on the recognition of a foreign judgment annulling a marriage
where one of the parties is a citizen of the foreign country. There is neither
circumvention of the substantive and procedural safeguards of marriage under
Philippine law, nor of the jurisdiction of Family Courts under R.A. No. 8369. A
recognition of a foreign judgment is not an action to nullify a marriage. It is an
action for Philippine courts to recognize the effectivity of a foreign
judgment, which presupposes a case which was already tried and decided
under foreign law. The procedure in A.M. No. 02-11-10-SC does not apply in a
petition to recognize a foreign judgment annulling a bigamous marriage where one
of the parties is a citizen of the foreign country. Neither can R.A. No. 8369 define
the jurisdiction of the foreign court.

Article 26 of the Family Code confers jurisdiction on Philippine courts to extend


the effect of a foreign divorce decree to a Filipino spouse without undergoing trial
to determine the validity of the dissolution of the marriage. The second paragraph
of Article 26 of the Family Code provides that "[w]here a marriage between a
Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter
validly obtained abroad by the alien spouse capacitating him or her to remarry, the
Filipino spouse shall have capacity to remarry under Philippine law." In Republic
v. Orbecido,88 this Court recognized the legislative intent of the second paragraph
of Article 26 which is "to avoid the absurd situation where the Filipino spouse
remains married to the alien spouse who, after obtaining a divorce, is no longer
married to the Filipino spouse"89 under the laws of his or her country. The second
paragraph of Article 26 of the Family Code only authorizes Philippine courts to
adopt the effects of a foreign divorce decree precisely because the Philippines does
not allow divorce. Philippine courts cannot try the case on the merits because it is
tantamount to trying a case for divorce.

The second paragraph of Article 26 is only a corrective measure to address the


anomaly that results from a marriage between a Filipino, whose laws do not allow
divorce, and a foreign citizen, whose laws allow divorce. The anomaly consists in
the Filipino spouse being tied to the marriage while the foreign spouse is free to
marry under the laws of his or her country. The correction is made by extending in
the Philippines the effect of the foreign divorce decree, which is already effective
in the country where it was rendered. The second paragraph of Article 26 of the
Family Code is based on this Court’s decision in Van Dorn v. Romillo90 which
declared that the Filipino spouse "should not be discriminated against in her own
country if the ends of justice are to be served."91

The principle in Article 26 of the Family Code applies in a marriage between a


Filipino and a foreign citizen who obtains a foreign judgment nullifying the
marriage on the ground of bigamy. The Filipino spouse may file a petition abroad
to declare the marriage void on the ground of bigamy. The principle in the second
paragraph of Article 26 of the Family Code applies because the foreign spouse,
after the foreign judgment nullifying the marriage, is capacitated to remarry under
the laws of his or her country. If the foreign judgment is not recognized in the
Philippines, the Filipino spouse will be discriminated—the foreign spouse can
remarry while the Filipino spouse cannot remarry.

Under the second paragraph of Article 26 of the Family Code, Philippine courts are
empowered to correct a situation where the Filipino spouse is still tied to the
marriage while the foreign spouse is free to marry. Moreover, notwithstanding
Article 26 of the Family Code, Philippine courts already have jurisdiction to extend
the effect of a foreign judgment in the Philippines to the extent that the foreign
judgment does not contravene domestic public policy. A critical difference
between the case of a foreign divorce decree and a foreign judgment nullifying a
bigamous marriage is that bigamy, as a ground for the nullity of marriage, is fully
consistent with Philippine public policy as expressed in Article 35(4) of the Family
Code and Article 349 of the Revised Penal Code. The Filipino spouse has the
option to undergo full trial by filing a petition for declaration of nullity of marriage
under A.M. No. 02-11-10-SC, but this is not the only remedy available to him or
her. Philippine courts have jurisdiction to recognize a foreign judgment nullifying
a bigamous marriage, without prejudice to a criminal prosecution for bigamy.

In the recognition of foreign judgments, Philippine courts are incompetent to


substitute their judgment on how a case was decided under foreign law. They
cannot decide on the "family rights and duties, or on the status, condition and legal
capacity" of the foreign citizen who is a party to the foreign judgment. Thus,
Philippine courts are limited to the question of whether to extend the effect of a
foreign judgment in the Philippines. In a foreign judgment relating to the status of
a marriage involving a citizen of a foreign country, Philippine courts only decide
whether to extend its effect to the Filipino party, under the rule of lex
nationalii expressed in Article 15 of the Civil Code.

For this purpose, Philippine courts will only determine (1) whether the foreign
judgment is inconsistent with an overriding public policy in the Philippines; and
(2) whether any alleging party is able to prove an extrinsic ground to repel the
foreign judgment, i.e. want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact. If there is neither inconsistency with public
policy nor adequate proof to repel the judgment, Philippine courts should, by
default, recognize the foreign judgment as part of the comity of nations. Section
48(b), Rule 39 of the Rules of Court states that the foreign judgment is already
"presumptive evidence of a right between the parties." Upon recognition of the
foreign judgment, this right becomes conclusive and the judgment serves as the
basis for the correction or cancellation of entry in the civil registry. The
recognition of the foreign judgment nullifying a bigamous marriage is a subsequent
event that establishes a new status, right and fact92 that needs to be reflected in the
civil registry. Otherwise, there will be an inconsistency between the recognition of
the effectivity of the foreign judgment and the public records in the
Philippines.1âwphi1

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


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

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

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

SO ORDERED.

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

THIRD DIVISION

BAGUIO TRINITY DEVELOPERS, G.R. No. 188381


INC., herein represented by
RICARDO JULIAN,
Petitioner, Present:
VELASCO, JR., J., Chairperson,
- versus - PERALTA,
ABAD,
SERENO,* and
PERLAS-BERNABE, JJ.
THE HEIRS OF JOSE RAMOS
and THE HEIRS OF LEOPOLDO
and VICTORINA NEPA; and the Promulgated:
HONORABLE COURT OF APPEALS,
Respondents. December 14, 2011

x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

The case is about a) the requirement in a petition for annulment of judgment


of the submission of a certified true copy of the assailed judgment or order and b)
laches as a bar to a property owners action to annul a reconstituted version of his
title registered in another persons name.

The Facts and the Case

Spouses Meliton Grabiles and Leona Calderon (the Grabiles) were the original
registered owners of a 2,933-square-meter lot in Rosario, La Union.[1] After a
number of successive transfers the lot was eventually sold to petitioner Baguio
Trinity Developers, Inc. on January 3, 1994, resulting in the issuance of Transfer
Certificate of Title T-38340 in its name.

It appears, however, that in 1985 Anastacio Laroco and Leona Javier filed a
reconstitution proceeding before Branch 31 of the Regional Trial Court (RTC) of
Agoo, La Union, covering the Grabiles original title. But for some reasons, the
RTCs order of October 20, 1986 directed the reconstitution of the title in the name
of one Maria Bernal. This order was annotated on the Grabiles Original Certificate
of Title (OCT) 1082 issued by the Register of Deeds of La Union.

In 1986, Melicia Silva filed a second petition purportedly on behalf of the


Grabiles for the reconstitution of their original title also before Branch 31 of the
RTC of Agoo. In its order of October 28, 1986, the RTC ordered the reconstitution
of the title in the name of the Grabiles as OCT RO-4717. Entry 89953 of this
reconstituted original title stated that the property had been sold in 1939 to a
certain Jose Ramos. So, too, in 1944, the southern portion of the lot, covering
1,372 square meters, was sold to Quirini Parrocha who in turn sold it in 1955 to the
spouses Leopoldo and Victorina Nepa (the Nepas). Respondents in this case are the
heirs of these two buyers, Jose Ramos and the Nepas (the Ramos and Nepa heirs).
On September 14, 1995 petitioner Baguio Trinity filed a complaint for recovery
and declaration of nullity of title and damages before the Municipal Trial Court
(MTC) of Rosario, La Union, against the Ramos and Nepa heirs who held
reconstituted titles over the property. Since Baguio Trinity presented the issue on
the validity of the reconstituted titles issued by the RTC, a superior court, the MTC
dismissed the complaint for lack of jurisdiction.

On December 3, 1997 petitioner Baguio Trinity filed a second complaint for


recovery of property, declaration of nullity of title, and damages before the RTC of
Agoo, Branch 32. But, by Order of May 31, 2004, the RTC dismissed the
complaint for lack of jurisdiction after finding that the assessed value of the subject
property was below P20,000.00. Moreover, the court said that it could not annul an
order issued by a co-equal court. The RTC also denied Baguio Trinitys motion for
reconsideration, prompting it to file a petition for certiorari with the Court of
Appeals (CA) on October 13, 2004. On September 13, 2007[2] the CA dismissed
the petition, stating that Baguio Trinitys remedy should have been a petition to
annul judgment under Rule 47 of the Rules of Court.

Three years later from the time the RTC dismissed the complaint or on
December 20, 2007 petitioner Baguio Trinity filed with the CA a petition for
annulment of the reconstitution orders that the RTC of Agoo, Branch 31, issued on
October 20, 1986 and October 28, 1986, impleading the Ramos and Nepa heirs.
Baguio Trinity claimed that the RTC had no jurisdiction to order reconstitution for
the Grabiles title since this was not lost. Further, the Grabiles could not have
authorized anyone to institute the proceedings on their behalf since they had been
long dead. Thus, the orders should be annulled for lack of jurisdiction.

On May 8, 2008 the CA[3] dismissed the petition on the grounds that it failed to
attach a) a certified copy of the RTC Order dated October 20, 1986, and b) copies
of the affidavits of witnesses and the documents, and the pleadings filed during the
reconstitution proceedings, the notices of hearing, and the titles issued to
petitioners predecessors-in-interest in support of petitioners cause of action.
Further, petitioner paid insufficient docket fees.

Petitioner Baguio Trinity filed a motion for reconsideration and attached a copy of
the affidavit of Cresencio Aspiras, their immediate predecessor, together with
copies of reconstituted titles issued to previous owners to show the chain of
ownership before Baguio Trinity acquired title to the property. It also paid the
deficiency in the docket fees and explained that a certified true copy of the assailed
Order cannot be obtained because the records were destroyed during the July 16,
1990 earthquake per RTC Certification of November 14, 2007.

But the CA denied petitioners motion of November 7, 2008, citing Section 4, par. 2
of Rule 47 which provides that a certified copy of the judgment or final order shall
be attached to the original copy of the petition. The mandatory tenor of the
requirement, said the CA, precluded Baguio Trinitys submission of some other
copy of such judgment or final order.

In any event, the CA held that the petition was barred by laches since Baguio
Trinity had notice of the reconstitution orders as early as 1995 when it filed an
action (the first that it filed) for declaration of nullity of titles and damages before
the MTC, a wrong court. Baguio Trinity filed its action to annul the orders of
reconstitution with the CA only on December 21, 2007 or 12 years after that court
affirmed the RTC order dismissing the complaint (the second action filed) before
the RTC of Agoo, Branch 32.

Because the CA denied petitioner Baguio Trinitys motion for reconsideration of its
ruling in its resolution of April 24, 2009, petitioner has taken recourse to this
Court.

The Issue

The only issue before this Court is whether or not the CA erred in dismissing
petitioner Baguio Trinitys action for annulment of judgment a) by reason of its
failure to comply with the requirement of submission of certified true copies of the
assailed RTC orders; and b) on ground of laches.

The Courts Rulings

One. In denying the petition before it, one of the grounds the CA gave was
that petitioner Baguio Trinity failed to attach to its petition for annulment of
judgment a certified copy of the judgment or final order, which requirement is
mandatory. Without it, the court would have no bases to form a decision. Besides,
said the CA, petitioner could have obtained a certified copy of the same from the
Land Registration Authority (LRA) which is usually furnished a copy, just as
petitioner was able to secure a copy of the October 28, 1986 Order from the
LRA. The Register of Deeds is also usually furnished a copy of such order.

Evidently, when Section 4, Rule 47 of the Rules of Civil Procedure provided that a
certified copy of the judgment or final order or resolution shall be attached to the
original copy of the petition intended for the court and indicated as such by the
petitioner, it wanted to ensure that the Court is shown a genuine copy of the
challenged judgment or final order before it acts on the petition.

The Court is aware of the necessity of mandating strict compliance with procedural
rules. Here, however, the 1990 earthquake resulted in the loss or destruction of the
RTC records of the case. The administration of justice cannot stop to grind because
of such loss and no one should suffer or benefit from it.
And who can issue a certified copy of the lost orders? The answer is that it can be
issued by the public officer in custody of the original of the document. [4] Here, it is
the clerk of court of the RTC that issued the challenged reconstitution orders. But
the clerk of court issued a certification, conformably with Section 28 of Rule 132,
that the relevant records are no longer available having been lost to an
earthquake. That the record custodian could no longer issue a certified copy should
not of course prevent an aggrieved party from pursuing his petition. The rules
allow such party to submit appropriate secondary evidence.

Section 5, Rule 130 of the Rules of Evidence provides that when the original
document has been lost and its unavailability has been established, a party may
prove its contents by a copy or by a recital of its contents in some authentic
document or by the testimony of witnesses in the order stated. Copies of the
challenged reconstitution orders from the LRA or the Register of Deeds are of
course available to petitioner Baguio Trinity. But it could just as validly submit
faithful copies of its challenged reconstitution orders, authenticated by a verified
statement that these are copies of the original orders. The Baguio Trinity
did. Consequently, the CA had no valid reason denying its petition for failure to
attach a copy of the assailed reconstitution orders.

Notably, the respondent Ramos and Nepa heirs have not questioned the
authenticity of the submitted copies. At any rate, the Court notes that petitioner
Baguio Trinity attached certified machine copies of the assailed Orders supplied by
the LRA as annexes to the present petition.

As for copies of documents and pleadings filed during the reconstitution


proceedings, the notices of hearing, and the titles issued to petitioners
predecessors-in-interest, which the CA wanted petitioner Baguio Trinity to submit,
these could very well be adduced during the hearing since their relevance could
hardly be discerned until the issues have been joined.

Two. The CA also dismissed petitioners action for annulment of final orders on the
further ground that such action is already barred by laches. The CA pointed out
that petitioner Baguio Trinity learned of the reconstitution orders as early as
1995. Still, the action for the annulment of those orders was filed only 12 years
later on December 21, 2007.

The RTC of Agoo ordered the reconstitution of the Grabiles title when, if
Baguio Trinitys allegations were to be believed, the original of such title actually
existed and had since been replaced through subsequent sales, terminating their
ownership of the property. As things now stand, two sets of titles covering the
same property, one based on transactions emanating from the original and another
based on the reconstituted titles exist. One has to give way to the other.
Petitioner Baguio Trinity initially brought an action to annul the
reconstituted versions of the Grabiles title before the MTC of Rosario, La Union,
on September 14, 1995 but that court dismissed the same for lack of jurisdiction
and opined that it should be filed with the RTC.

Baguio Trinity filed a second action on December 3, 1997 for recovery of


property, declaration of nullity of the titles, and damages before the RTC of Agoo,
Branch 32, against the Ramos and Nepa heirs who held the reconstituted titles. But
the RTC dismissed the action on May 31, 2004 saying that it cannot annul the
orders issued by a co-equal court. This, the CA Sixth Division affirmed and held
that Baguio Trinity should have availed itself of a petition for annulment under
Rule 47.

Baguio Trinity finally filed before the CA an action for annulment of the
reconstitution orders on the ground that the RTC did not have jurisdiction to issue
them. It is not right for the CA to dismiss such action by reason of laches simply
because no inaction is evident on Baguio Trinitys part. In fact, it had been an
unintentional object of relay between the lower courts which contributed to the
delay in the proceedings.

The petition for annulment alleged serious charges which if true can
invalidate respondents title. Such title had been subjected to two reconstitution
proceedings that could have divested the true owner of title over his property. The
conflict between the two sets of titles has to be resolved. The present standoff
cannot remain indefinitely under a titling system that assures the existence of only
one valid title for every piece of registered land. Evidently, laches cannot bar an
action sought to relieve such intolerable standoff.

WHEREFORE, the Court GRANTS the petition and sets aside the Court of
Appeals Resolutions dated May 8, 2008 and November 7, 2008 and directs such
court to hear and decide the merits of the petition for annulment of judgment.

SO ORDERED.

THIRD DIVISION

HEIRS OF GORGONIO G.R. No. 177505


MEDINA, namely: LEONOR T.
MEDINA, RAMON T. MEDINA,
ABIEL T. MEDINA, ILUDIVINA
M. ROSARI, CONCEPCION DE
LA CRUZ, LEONOR M. Present:
BAKKER, SAMUEL T. MEDINA,
VICTOR T. MEDINA, YNARES-SANTIAGO, J.,
TERESITA M. SABADO,
JOSEFINA M. CANAS and Chairperson,
VERONICA M. DE GUZMAN.
AUSTRIA-MARTINEZ,
Petitioners,
CHICO-NAZARIO,
- versus - NACHURA, and

REYES, JJ.
BONIFACIO NATIVIDAD,
represented by PHILIP M.
NATIVIDAD,

Respondent. Promulgated:

November 27, 2008

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules
of Civil Procedure which seeks to set aside the Decision[1] of the Court of Appeals
dated 20 November 2006 in CA-G.R. CV No. 82160 affirming with modification
the Decision[2] of Branch 33 of the Regional Trial Court (RTC) of Guimba, Nueva
Ecija, in Civil Case No. 1165-G and its Resolution[3] dated 16 April 2007 denying
petitioners motion for reconsideration.

The factual antecedents are as follows:

On 16 May 1969, Tirso Medina, Pacifico M. Ruiz, Gorgonio D. Medina, Vivencio


M. Ruiz, and Dominica Medina, co-owners of a parcel of land (Lot 1199, Cad-162,
Guimba Cadastre, plan Ap-23418) situated in Poblacion, Municipality of Guimba,
Province of Nueva Ecija, containing an area of two thousand three hundred thirty
nine (2,339) square meters, agreed to divide and allot for themselves the said
land. A sketch[4] signed by the co-owners showed the respective portions of land
allotted to each. Gorgonio D. Medina received two portions of said land. One
portion was allotted to him alone, while the second portion was allotted to him
together with Tirso Medina and Pacifico M. Ruiz. This second portion is labeled as
Gorgonio Medina, Tirso Medina and Pacifico M. Ruiz which is adjacent to the
portion labeled as Dominica Medina.
On 29 March 1972, Gorgonio D. Medina, predecessor-in-interest of petitioners,
executed a Deed of Absolute Sale[5] whereby he sold to respondent Bonifacio
Natividad for P2,000.00 his share (1/3) in the second portion of land including the
improvements found therein.

Subsequently, a case for Partition with Damages, docketed as Civil Case No. 781-
G, was filed before the RTC of Guimba, Nueva Ecija, Branch 33, by Tirso Medina
against the co-owners of Lot 1199, among whom are Gorgonio Medina and
Bonifacio Natividad. Bonifacio Natividad had likewise already bought the share of
Dominica Medina in the land.

The parties entered into a compromise agreement which they submitted to the
Court. On 20 November 1989, the RTC approved the agreement and rendered its
decision based on the same.[6] The Compromise Agreement as quoted by the Court
reads:

COMPROMISE AGREEMENT

COME NOW the parties, assisted by their respective


counsel(s), and unto this Honorable Court respectfully submit this
Compromise Agreement in full and final settlement of their
differences, to wit:

1. The parties herein are the exclusive co-owners of that certain


parcel of land located at the Poblacion, Guimba, Nueva Ecija, known
as Lot 1199, Guimba Cadastre and more particularly described as
follows:

A parcel of land (Lot 1199, of the Cadastral


Survey of Guimba Cad. 162, plan Ap-23418, L.R. Case
No. G-51, L.R.C. Record No. N-40711), situated in the
Poblacion, Municipality of Guimba, Province of Nueva
Ecija. x x x containing an area of TWO THOUSAND
THREE HUNDRED AND THIRTY NINE (2,339)
SQUARE METERS, more or less. x x x.

xxxx

2. The herein parties recognize and acknowledge that their


respective shares in the property aforementioned as appearing in the
aforesaid Original Certificate of Title No. 130366 have been modified
by agreement between them to allot a portion thereof to their co-
owner, Vivencio M. Ruiz, to compensate for valuable services
rendered to the parties vis--vis the said property, separate and apart
from his rightful share therein as participating heir of Maria Medina;

3. The plaintiff Tirso Medina hereby withdraws any/all


statements appearing on record which he may have made in said case
in the course of his testimony therein, and hereby asks the Honorable
Court that said statements be expunged or withdrawn from the record;

4. The foregoing considered, the parties have determined that it


is to their mutual convenience and advantage, and in accord with their
common desire to preserve and maintain the existing family harmony
and solidarity to terminate their present community of ownership in
the property aforementioned by mutual agreement and adjudication, in
the manner appearing in the Sketch Plan of Partition attached as an
integral part hereof as Annex A where the property is subdivided into
Lot 1, 2, 3, 4, 5, and 6 and adjudicated, as follows:

a. To Bonifacio Natividad, Lot No. 1, consisting of 480 square


meters, more or less, representing the interests of Dominica Medina
which was sold to him per document of Sale of Rights, Waiver and
Renunciation appearing as Doc. No. 367; Page No. 75; Book No. 10;
Series of 1968 in the Notarial Register of Atty.

b. To VIVENCIO M. RUIZ, Lot No. 3 consisting of 370.21


square meters, more or less, as compensation for valuable services
rendered; free and clear from any/all liens or encumbrances
whatsoever or from the claims of any person whomsoever, except the
present tenant/s thereon;

c. To the heirs of MARIA MEDINA, Lot No. 2 consisting of


370.21 square meters, more or less, without prejudice to sales and
dispositions already made by the respective heirs of their interests and
participations therein;

d. To TIRSO MEDINA, Lot No. 4 consisting of 369.29 square


meters, more or less;
e. To the heirs of PACIFICO M. RUIZ, Lot No. 5 consisting of
369.29 square meters, more or less, and

f. To GORGONIA MEDINA, Lot No. 6, consisting of 369.29


square meters, more or less.[7]

On 8 October 1991, the trial court issued an order supplementing its decision
dated 20 November 1989 which reads in part:

[T[hat the parties thereafter, engaged the services of one common


geodetic engineer in the person of Rolly Francisco to conduct the
survey and effect the subdivision of Lot 1199, which was subdivided
into Lots A, B, C, D, E, and F, the area of which appears, thus:

Lot 1199-A with an area of 371 sq. ms., which lot now corresponds to
Lot No. 4 adjudicated to Tirso Medina;

Lot 1199-B with an area of 371 sq. ms., which lot now corresponds to
Lot No. 5 adjudicated to Pacifico Ruiz;

Lot 1199-C with an area of 371 sq. ms., which lot now
corresponds to Lot No. 6 adjudicated to Gorgonio Medina;

Lot 1199-D with an area of 482 sq. ms., which lot now
corresponds to Lot No. 1 adjudicated to Bonifacio Natividad;

Lot 1199-E with an area of 372 sq. ms., which lot now
corresponds to Lot No. 2 adjudicated to Heirs of Maria Medina; and

Lot 1199-F with an area of 372 sq. ms., which lot now
corresponds to Lot No. 3 adjudicated to Vivencio M. Ruiz; that in this
subdivision made by the geodetic engineer, there was no change in the
designation of the particular places adjudicated to the parties, except
the change in areas allotted after the actual survey made.
WHEREFORE, finding the motion to be in order, the Court
resolves to grant the same and hereby orders, that:

Lot 1199-A with an area of 371 sq. ms. is Lot 4, decision,


adjudicated to Tirso Medina;

Lot 1199-B with an area of 371 sq. ms. is Lot 5, decision,


adjudicated to Pacifico Ruiz;

Lot 1199-C with an area of 371 sq. ms. is Lot 6, decision,


adjudicated to Gorgonio Medina;

Lot 1199-D with an area of 482 sq. ms. is Lot 1, decision,


adjudicated to Bonifacio Natividad;

Lot 1199-E with an area of 372 sq. ms. is Lot 2, decision,


adjudicated to Heirs of Maria Medina;

Lot 1199-F with an area of 372 sq. ms. is Lot 3, decision,


adjudicated to Vivencio M. Ruiz.

This Order supplements the Decision dated November 20,


[8]
1989.

Pursuant to the court-approved partition, Lot 1199-C, measuring 371 square


meters, was registered in the name of Gorgonio Median for which Transfer
Certificate of Title (TCT) No. NT-230248 of the Registry of Deeds for
the Province of Nueva Ecija was issued to him.[9]

On 11 June 2001, Bonifacio Natividad, thru his alleged Attorney-In-Fact,


Philip M. Natividad, filed before the RTC of Guimba, Nueva Ecija, Branch 31, a
Complaint for Annulment of TCT No. NT-230248 and Damages.[10] It impleaded
as respondents Abiel Medina and Veronica de Guzman who are occupying the said
land. Bonifacio asks, among other things, that 1/3 of said land be surrendered to
him because he had bought the same from Gorgonio Medina. In the
Answer[11] filed by Abiel Medina and Veronica de Guzman, they argued, inter alia,
that Philip Natividad had no legal capacity to sue because the Special Power of
Attorney annexed to the Complaint did not grant him such authority. They further
added that the Complaint failed to implead all the parties-in-interest considering
that the ownership of the land covered by TCT No. NT-230248 had already passed
to eleven heirs of Gorgonio Medina.

Bonifacio, thru Philip, filed a Motion for Bill of Particulars[12] praying that
an order be issued by the court directing Abiel Medina and Veronica de Guzman to
give the names and present addresses of all the heirs of Gorgonio Medina. Said
motion was opposed.[13] In an order dated 15 October 2001, the trial court granted
the motion.[14]Defendants complied with the courts order and submitted the names
and addresses of all the heirs of Gorgonio Medina.[15]
On 7 January 2002, Bonifacio filed a Motion for Leave to Admit Amended
Complaint with prayer that summons upon eight heirs be made through
publication.[16] The Amended Complaint impleaded all the heirs of Gorgonio
Medina (petitioners herein). In said amended complaint, a special power of
attorney[17] dated 21 September 2001allegedly executed by Bonifacio Natividad in
the State of Washington, United States of America, and acknowledged before
Phyllis Perry, a Notary Public of the State of Washington, USA, was attached
authorizing Philip Natividad to:

1. To file all appropriate cases in court against the heirs of


Gorgonio Medina for the recovery of the lot that I purchased from
said Gorgonio Medina by virtue of Deed of Absolute Sale executed
on March 29, 1972 and notarized by Atty. Inocencio B. Garampil
under Doc. No. 435, Page No. 87, Book No. 1, Series of 1972,
which lot is now titled in the name of Gorgonio Medina under
Transfer Certificate of Title No. NT-230248;

2. To institute all legal actions/cases in court for the annulment of


said Transfer Certificate of Title No. NT -230248 which now
covers the lot I bought from Gorgonio Medina;

3. To represent me in all proceedings/hearings of the above-


mentioned case/s up to its termination;

4. To enter into a fair and reasonable compromise agreement and


do all acts for the protection and preservation of my rights and
interest over the above-mentioned lot;
5. To negotiate/transact with all persons, secure and sign all
necessary documents for the attainment of the above purposes.

In an Order dated[18] 30 January 2002, the trial court approved the motion
and admitted the Amended Complaint. It directed the issuance of the
corresponding summons, the same to be published in a newspaper of general
circulation for three consecutive weeks. As to plaintiffs authority to sue, the trial
court ruled that said issue had been settled by the special power of attorney
attached to the Amended Complaint.

On 17 May 2002, the heirs of Gorgonio Medina filed a Motion to


Dismiss[19] which the trial court denied on 20 August 2002.[20] On 10 September
2002, the heirs filed their Answer raising the following defenses: prescription,
laches, lack of cause of action, lack of legal capacity to sue by Attorney-in-Fact,
indefeasibility of TCT No. NT-230248 and lack of jurisdiction over the case for
failure of the plaintiff to comply with the mandatory requirement of
the Katarungang Pambarangay. Plaintiff filed his Reply dated 18 September
2002 specifically denying the allegations contained in the Answer with
Compulsory Counterclaim.[21]

During the Pre-Trial, the parties stipulated the following facts and issues:

a. TCT No. N-230248 in the name of Gorgonio Medina covers 371


square meters. This title was one of the titles issued as transfer from
Original Certificate of Title No. 130366.[22]

b. TCT No. 230248 came into being by virtue of the decision in Civil
Case No. 781-G, a case of partition among Gorgonio Medina and his
co-heirs decided by RTC Branch 33.

c. The late Gorgonio Medina executed a Deed of Absolute Sale over


1/3 portion of his share in a parcel of land (Lot 1199, CAD-162
Guimba Cadastre) owned in common by him and his co-heirs.

d. The land subject of the deed of sale is not the one covered by TCT
No. 230248.

Issues:
1. Whether the deed of sale of sale may be given effect
notwithstanding the fact that the subject thereof is different from the
portion covered by TCT No. 230248.

2. Whether Mr. Philip Natividad is duly authorized to represent his


father, Bonifacio Natividad in this case.[23]

The parties manifested that after they shall have filed their respective memoranda,
the case shall be submitted for decision.

In its decision dated 10 December 2003, the trial court ruled in favor of Bonifacio
Natividad. The decretal portion of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff


ordering the defendants to convey to the plaintiff 1/3 portion of the lot
covered by TCT No. 230248 together with the improvements thereon
and to account for, and deliver to the plaintiff the income derived
therefrom from the institution of this case up to the execution of this
decision.

No pronouncement as to damages there being no reservation made by


the plaintiff to present evidence thereof.[24]

On the issue of Philip Natividads authority to represent his father, the court ruled
that it was convinced that Philip was authorized to represent his father by virtue of
a notarized special power of attorney executed by Bonifacio attached to the
amended complaint. It explained that the document was a public document as
defined under Section 20, paragraph (a) of Rule 132 of the Rules of Court, the
same having been notarized by a notary public for the State of Washington,
USA. In the absence of any evidence to show that said special power of attorney
was falsified, it was sufficient authority for Mr. Natividad to represent his father.

The trial court likewise ruled that the deed of absolute sale executed by Gorgonio
Medina in favor of Bonifacio Natividad may be given effect notwithstanding the
fact that the portion of Lot 1199 specified as its object was different from the
portion adjudicated to Gorgonio Medina. It declared that the 1/3 portion of the land
covered by TCT No. NT-230248 shall be deemed the object of the deed of sale. It
agreed with Bonifacio that what was sold by Gorgonio Medina to him (Bonifacio)
was his share, right and participation in the land known as Lot 1199. At the time of
the sale, Lot 1199 was not yet divided. Gorgonio Medina specified a portion
of Lot 1199, expecting that portion to be adjudicated to him, but his expectation
did not materialize because a different portion was adjudicated to him during the
partition. It added that justice demanded that a portion of what was adjudicated to
him be considered as the object of the deed of sale.

The trial court further ruled that prescription and laches did not set in. Since there
was an express trust created between Gorgonio Medina and Bonifacio Natividad,
the action to compel the defendants to convey the property to Bonifacio did not
prescribe. It explained that it is only when the trustee repudiates the trust that the
prescriptive period of 10 years commences to run. In the instant case, Gorgonio
Medina (trustee) repudiated the trust on 5 July 1993 when TCT No. NT-230248
was issued in his name. Thus, the filing of the complaint on 11 June 2001 was well
within the ten-year prescriptive period.

On 22 December 2003, the petitioner-heirs of Gorgonio Medina filed a Notice of


Appeal informing the trail court that they were appealing the decision to the Court
of Appeals.[25] A Notice of Appeal having been seasonably filed by the petitioners,
the entire records of the case were forwarded to the Court of Appeals.[26]

On 13 January 2004, Bonifacio Natividad filed a Motion for Execution Pending


Appeal[27] which the trial court denied, it having lost jurisdiction over the case
because the appeal was already perfected when the motion was filed.[28]

On 20 November 2006, the Court of Appeals rendered its decision affirming with
modification the decision of the trial court. It disposed of the case as follows:

WHEREFORE, the Decision of the RTC, Branch 33, Guimba, Nueva


Ecija, dated December 10, 2003, is hereby AFFIRMED with the
MODIFICATION ordering the defendants-appellants to convey to
plaintiff-appellee an area equivalent to 90 square meters of the land
covered by TCT No. NT-230248.[29]

The appellate court affirmed the findings of the trial court, but ruled that the trust
established between the parties was an implied or constructive trust, and not an
express trust. It added that what should be conveyed to Bonifacio Natividad was
only 1/3 of 270 square meters or 90 square meters, and not 1/3 of 371 square
meters since what was sold to him was only a part of one of the two portions
owned by Gorgonio Medina in the entire lot. Finally, it declared that the contention
that the Complaint should have been dismissed for lack of cause of action,
considering that the Special Power of Attorney executed abroad by Bonifacio
Natividad in favor of his son was not properly authenticated before a consular
officer, put a premium on technicalities at the expense of substantial
justice. Litigation, it said, should, as much as possible, be decided on the merits
and not on technicalities.

Petitioners filed a Motion for Reconsideration[30] which the Court of Appeals


denied in a resolution dated 16 April 2007.[31]

Hence, the instant petition raising the following issues:

WHETHER OR NOT THE COMPROMISE AGREEMENT THAT


THE TRIAL COURT APPROVED IN CIVIL CASE NO. 781-G
NOVATED THE DEED OF ABSOLUTE SALE DATED 29
MARCH 1972 BETWEEN GORGONIO MEDINA AND
BONIFACIO NATIVIDAD.

WHETHER OR NOT BONIFACIO NATIVIDAD IS ESTOPPED


BY LACHES.

WHETHER OR NOT THE REGISTRATION OF LOT NO. 1199-C


IN THE NAME OF GORGONIO MEDINA WAS IN FRAUD OF
BONIFACIO NATIVIDAD.

WHETHER OR NOT A CONSTRUCTIVE TRUST WAS


CREATED BETWEEN GORGONIO MEDINA AND BONIFACIO
NATIVIDAD.

WHETHER OR NOT BONIFACIO NATIVIDADS CAUSE OF


ACTION HAS ALREADY PRESCRIBED.

WHETHER OR NOT THE COMPLAINT STATES A CAUSE OF


ACTION.

Among the issues raised by petitioners the last is what we shall first
tackle. Petitioners contend that the Court of Appeals committed a very grave error
in not finding that the respondent was without any cause of action. Petitioners
argue:

The Complaint in this case was instituted by Philip M.


Natividad in the name of Bonifacio Natividad upon the strength of a
Special Power of Attorney executed by the latter
in Washington, U.S.A. While the document appears to have been
acknowledged before Phyllis Perry, a Notary Public for the
jurisdiction of the State of Washington, U.S.A., it was not presented
before a Philippine Consular Officer for the requisite authentication.

The Revised Rules on Evidence require that a document


acknowledged before a notary public being a public document, such
record if kept in a foreign country, should be accompanied with a
certificate that such officer has the custody thereof made by a
secretary of the embassy or legation, consul general, consul, vice
consul, or consular agent or by an officer in the foreign service of the
Philippines stationed in the foreign country in which the record is
kept, authenticated by the seal of his office. In the absence of the
requisite certification and authentication of the public document, the
same cannot be proved and, therefore, inadmissible as evidence.

Bonifacio Natividads Special Power of Attorney not having


been duly certified and authenticated, it cannot be duly proved. It is,
therefore, deemed as not having been executed for purposes of
instituting an action on his behalf. Without any valid authority to
institute the action on behalf of his father, Philip Natividad is deemed
to have instituted it on his own. Philip Natividad not being a party to
the Deed of Absolute Sale between Gorgonio Medina and Bonifacio
Natividad, he is undoubtedly not the real party in interest because he
does not have any material interest in the contract which is the source
of Bonifacio Natividads cause of action. He does not stand to be
benefited or injured by a judgment in the suit and neither is he entitled
to the avails of the suit.

Not being the real party in interest, and being deemed to have
brought the action on his own, Philip M. Natividad has no cause of
action.[32]

The trial court was convinced that Philip Natividad was authorized by his father
(Bonifacio) in this case by virtue of the special power of attorney that the latter
issued. The special power of attorney, it claims, is a public document, the same
having been notarized by a notary public of the State of Washington, USA. It said
that there being no evidence showing that said document had been falsified, the
same was sufficient authority for Philip to represent his father. The Court of
Appeals considered the fact that the special power of attorney was not properly
authenticated before a consular office to be a mere technicality and could not be
the basis for the dismissal of the complaint for lack of cause of action.
On his part, respondent said the notarized special power of attorney which
he appended to the complaint is a public document. It carries with it the
presumption of regularity and any suspicion on the authenticity and due execution
thereof cannot stand against said presumption absent evidence which is clear and
convincing.

The question to be answered is: Is the Special Power of Attorney supposedly


authorizing Philip Natividad to file the instant case in behalf of his father
admissible in evidence?

In Lopez v. Court of Appeals,[33] we have ruled that a special power of


attorney executed in a foreign country is, generally, not admissible in evidence as a
public document in our courts. In said case, we said:

Is the special power of attorney relied upon by Mrs. Ty a public


document? We find that it is. It has been notarized by a notary public
or by a competent public official with all the solemnities required by
law of a public document. When executed and acknowledged in
the Philippines, such a public document or a certified true copy
thereof is admissible in evidence. Its due execution and authentication
need not be proven unlike a private writing.

Section 25,[34] Rule 132 of the Rules of Court provides

Sec. 25. Proof of public or official record. An official record or


an entry therein, when admissible for any purpose, may be evidenced
by an official publication thereof or by a copy attested by the officer
having the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a
certificate that such officer has the custody. If the office in which the
record is kept is in a foreign country, the certificate may be made by a
secretary of embassy or legation, consul general, consul, vice consul,
or consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office.
From the foregoing provision, when the special power of
attorney is executed and acknowledged before a notary public or
other competent official in a foreign country, it cannot be
admitted in evidence unless it is certified as such in accordance
with the foregoing provision of the rules by a secretary of embassy
or legation, consul general, consul, vice consul, or consular agent
or by any officer in the foreign service of the Philippines stationed
in the foreign country in which the record is kept of said public
document and authenticated by the seal of his office. A city judge-
notary who notarized the document, as in this case, cannot issue such
certification.

Considering that the record of the case does not disclose any
compliance with the provisions of Section 25, Rule 132 of the Rules
of Court on the part of the petitioner, the special power of attorney in
question is not admissible in evidence. As such, Mrs. Priscilla L. Ty
cannot lawfully prosecute the case against the private respondents in
the name of her principal as her authority through a special power of
attorney had not been duly established in evidence. The litigation was
not commenced by the real party-in-interest or by one duly authorized
by the said party.

This being so, the Metropolitan Trial Court, the Regional Trial
Court and the Court of Appeals never acquired jurisdiction over the
person of the real party-in-interest Angelita Lopez. For lack of the
requisite jurisdiction, all the proceedings in the said courts are null
and void ab initio. All proceedings therein should be and are hereby
set aside.

Accordingly, it is Our considered opinion, and We so hold, that


a special power of attorney executed before a city judge-public notary
in a foreign country, without the certification or authentication
required under Section 25, Rule 132 of the Rules of Court, is not
admissible in evidence in Philippine courts. (Emphasis supplied.)

In the case under consideration, the supposed special power of attorney involved
was executed and acknowledged before Phyllis Perry, a Notary Public of the State
of Washington, USA. This being the case, a certification or authentication, as
required by Section 25 (now Section 24), Rules of Court, by a secretary of the
embassy or legation, consul general, consul, vice consul, or consular agent or by
any other officer in the foreign service of the Philippines stationed in the foreign
country in which the record is kept, and authenticated by the seal of his office, is
required. A notary public in a foreign country is not one of those who can issue the
required certificate.

The records are bereft of evidence showing that there was compliance with Section
25 (now Section 24). Non-compliance therewith will render the special power of
attorney not admissible in evidence. Not being duly established in evidence, the
special power of attorney cannot be used by Philip Natividad to represent his
father, Bonifacio Natividad, in this legal action against the petitioners. It is thus
clear that this case was not filed by the real party-in-interest (Bonifacio) or by one
duly authorized by said party. Not being a real party-in-interest and sans the
authority to pursue the case, Philip Natividad could not have validly commenced
this case. The special power of attorney executed before a notary public in a
foreign country without the requirements mentioned in Section 25 (now Section
24) of the Rules of Court cannot be admitted in evidence before Philippine courts.
Both lower courts and respondents contention that the lack of consular
authentication is a mere technicality that can be brushed aside in order to uphold
substantial justice, is untenable. The failure to have the special power of attorney
authenticated is not merely a technicality -- it is a question of
jurisdiction. In Lopez, we pronounced that jurisdiction over the person of the real
party-in-interest was never acquired by the courts. As a result, all proceedings in
the lower courts were declared null and void ab initio and thus set aside.
In the case before us, the Regional Trial Court and the Court of Appeals did
not acquire jurisdiction over the person of Bonifacio Natividad. Following our
pronouncement in Lopez, all proceedings before these courts are voided and set
aside. In light of this, we find no need to discuss the other issues raised.

WHEREFORE, premises considered, the instant petition


is GRANTED. All the proceedings before the Regional Trial Court of Guimba,
Nueva Ecija, Branch 33 (Civil Case No. 1165-G) and the Court of Appeals (CA-
G.R. CV No. 82160) are hereby declared void, and the case is
hereby DISMISSED. No costs.

SO ORDERED.

SECOND DIVISION

PEOPLE OF THE PHILIPPINES, G.R. No. 133188

Appellee,

Members:
PUNO, Chairman,

AUSTRIA-MARTINEZ,

- versus - CALLEJO, SR.,

TINGA, and

CHICO-NAZARIO, JJ.

Promulgated:

ELIZAR TOMAQUIN,

Appellant. July 23, 2004

x--------------------------------------------------------
---x

DECISION

AUSTRIA-MARTINEZ, J.:

Once again, the Court is confronted with the issue of the admissibility of an
extrajudicial confession. This appeal particularly involves the question of whether
a barangaycaptain who is a lawyer can be considered an independent counsel
within the purview of Section 12, Article III of the 1987 Constitution.

On December 17, 1996, the Cebu City Prosecutor filed an Information


charging appellant with Murder, committed as follows:
That on or about the 15th day of December, 1996, about 2:30
a.m., in the City of Cebu, Philippines, and within the jurisdiction of
this Honorable Court, the said accused, armed with a bladed
instrument (tres cantos), with deliberate intent, with intent to kill, with
treachery and evident premeditation, did then and there suddenly and
unexpectedly attack, assault and use personal violence upon one
Jaquelyn Luchavez Tatoy, by stabbing her with said bladed
instrument, hitting her on the vital parts of her body, thereby inflicting
upon her physical injuries causing:
CARDIO RESPIRATORY ARREST DUE TO SHOCK
& HEMORRHAGE SEC. TO STAB WOUNDS TO
THE TRUNK (POSTERIOR ASPECT)

as a consequence of which, Jaquelyn Luchavez Tatoy died almost


instantaneously.

CONTRARY TO LAW.[1]

On arraignment, appellant pleaded not guilty to the charge,[2] and trial


thereafter ensued.

There were no eyewitnesses to the incident, and the prosecutions evidence,


aside from appellants extrajudicial confession, was mainly circumstantial.

As presented by the prosecution, the facts are as follows:

At around 11:00 in the evening of December 14, 1996, appellant Elizar


Tomaquin @ Hapon, together with Rico and Romy Magdasal, Noel Labay, and a
certain Cardo, were drinking Red Horse beer in Itom Yuta, Lorega, Cebu
City. Appellant left the group at around 1:00 in the morning,

saying he has a headache. At the behest of Rico Magdasal, the group transferred to
Lorega proper. A few minutes later, they heard Rustica Isogan shouting for help as
the latter heard Jaquelyn[3] Tatoy, her goddaughter, asking for help. Isogan got two
flashlights and they proceeded upstairs to Jaquelyns house. The first to go up was a
certain Moises, followed by the brothers Rico and Romy Magdasal, while Noel
and Cardo remained downstairs. Rico noticed that the hinge and the walling of the
main door were damaged, as if it were kicked open, and only the light in the
kitchen was turned on. Rico also saw a black shoe on the stairs and another in
the sala, which he claims belong to appellant. When they went into the kitchen,
they saw Jaquelyn bloodied and sprawled face-up on the floor, with her head inside
a plastic container. Jaquelyn was brought to the hospital, where she expired. A
neighbor later found a tres cantos with blood on it by the stairs, which Rico also
identified to be appellants.[4] A certain Rey got the black pair of shoes and tres
cantosfor safekeeping which were later turned over to Policeman Tariao of the
Homicide Section, Ramos Police Station. The person who turned over the objects
to Policeman Tariao was not identified.[5]

At around 12:00 in the afternoon of December 15, 1996, barangay tanods


Julius Yosores and Armando Zabate of Lorega, Cebu City, searched for appellant
because of the information given by Rico Magdasal that the shoes and tres
cantos found in the scene of the crime belonged to appellant. Together with Rico,
they went to the house of Wilson Magdasal where appellant was temporarily
staying, and found him sleeping. Appellant was wearing a
bloodstained maong shorts. The tanods told appellant that he is a suspect in the
killing of Jaquelyn, and brought him to the house of barangay captain Atty.
Fortunato Parawan. There, appellant was asked about the shirt he was wearing and
he told them that it was in Wilson Magdasals house. It was Edgar Magdasal who
found his shirt, wet and bloodstained, among the soiled clothes. Atty. Parawan then
told his tanods to take appellant to the police station.[6]
In the morning of the next day, December 16, 1996, appellant was
investigated by SPO2 Mario Monilar of the Homicide Section, Ramos Police
Station in Cebu City. After being apprised of his constitutional rights, appellant
told SPO2 Monilar that he was willing to confess and asked for Atty. Parawan,
the barangay captain, to assist him. SPO2 Monilar called Atty. Parawan but the
latter told him that he will be available in the afternoon. When Atty. Parawan
arrived at 2:00 in the afternoon, he conferred with appellant for around fifteen
minutes. Atty. Parawan then called SPO2 Monilar and told him that appellant was
ready to give his statement.[7] Appellants extrajudicial confession, which was taken
down completely in the Cebuano dialect,[8] reads:

Pasiuna: Mr. ELIZAR TOMAQUIN, pahibaloon ko ikaw nga ubos sa


atong batakang balaod (Constitution) aduna kay
katungod nga pahibaloon sa imong mga katungod, sama
sa imong katungod sa pagpakahilum, ingon man duna
kay katungod sa pagdamgop/pagpilig sa abogado o
manlalaban aron motabang kanimo niining maong
imbestighasyon nga may kalabutan sa kamatayon ni
Jaqueline Tatoy niadtong mga alas 2:30 sa kaadlawon
kapin kongkulang niadtong petsa 15 sa bulan sa
Disyembra 1996, didto sa Brgy Lorega proper, Siyudad
sa Sugbo. Kong ugaling dili ka maka-abot pagbayad o
pagpangitago abogado aron motabang kanimo karon, ako
isip negrepresenttar sa Estado mohatag akong abogado
kanimo. Nasabtan ba kini nimo?
Tubag: OO, nasabtan ka ang akong katungod?

Pangutana: Pahabloon ko usab ikaw nga sumala usab sa atong


Batakang Balaod, anfg tanan nga imong isulti karon
dinhi, mahimong magamit ebedensya pabor o batok
kanimo sa bisan asaing husgado sa atong
nasud. Nasabtan be usab kini nimo?
Tubag: OO, nasabtan ko usab kanang taan.

Pangutana: Tinuod ba gayod nga nasabtan pag-ayo nimo anf mao


nimong mga katungod ug anadam ka ba nga moperma
karon dinhi timailhan sa imong tina-aw nga nga
pagsabut? ingon man andam ka ba sa pagsulti sa matuod
walay lain kon kili ang matuod lamang gayud?
Tubag: O
Tubag: Oo, andam ako nga mpemar Sir ug ania karon dinhi ai Atty
Parawan ang among Brgy Captain nga maoy akong giisip
nga abogado nga akong pinili nga maoy motabang
kanako karon.Aron sa pagmatuod, ako kining pirmahan
ning ika petsa 16 sa bulan sa Disyembre 1996.

...

Pangutana: Sunlion ko, andama bas a pagsulti sa matuod Elizar


Tomaquin kon dili ang matuod lamang gayud? Ingon
man andam ka ba nga modawat sa resulta o linugdangan
niini?
Tubag: Oo, andam gyud ako.

Pangutana: Palihog isulti ang imong ngalan inong man ang tanan nga
circumstacia o rmay kalambigitan sa imong pagkatawo,
sa imong grado, imong trabaho, imong pinuy-anan ug
uban pa?
Tubag: Ako si Elizar Tomaquin kinsa nagdala sa bansagon o apelyedo
sa akong mama sanglit dili man kasado and akong mama
ug papa. Ang apelyedo sa akong papa, Cabagui ug and
akon angga Hapon. Ako 19 anyos ang panuigon, ulitawo
ug kasamtangan nga nagpuyo sa Brgy Lorega proper
duol sa kapilaya San Roque apan ako lumad nga taga Bo.
Tunga, Moalboal, Cebu diin didto ano nakatungha sa
grade six.

Pangutana: Niadtong kaadlawon sa petsa 15 sa bulan sa Disyembre


1996, diin ka man?
Tubag: Sa sinugdanan nianang mga ala una kapin kon kulang kauba
ko sa pag-inom si Rico Magdasal didito sa Brgy Lorega
Proper ug taodtaod niadto nilakaw ako libot sa sitio Itom
Tuta ug dayon nakong saka sa balay nila ni Jaqueline
Tatoy sa Brgy Lorega nianang pagka mga alas 2:20 sa
maong petsa/kadlawon agii sa aberto nga bentana sa
akong tuyo sa pagkawat sa ilang colored nga TV.

Pangutana: Nganong nakahiabwo ka man na duna silay TV nga


colored?
Tubag: Suweto man ko kay permi ko magtan-awan sa ilang colored
TV.

Pangutana: Niadtong niagi ka sa ilang bentana aron pagkawat sa ilang


TV, diin ka man punta deretso.
Tubag: Deretso ako sa may lamesa sa ilang sala diin didto gibutang
ilang TV.

Pangutana: Nakuha ba gayod nimo anf maong TV?


Tubag: Wala, kay sa akong pag-alsa sa among TV nisyagit man si
Jaqueline Tatoy nga naghidga sa ilang may terrace ug
nidagan siya padulong sa kusina nila ug diha-diha akong
siyang ginsunod, gilayog ug gidunggab makadaghan
pinaagi sa akong tres kantps nga hinagiban (Gidtudo ni
Eliza rang Tres Kantos nga nakit-an didto sa patyang
lawas nga Jaqueline Tatoy).

Pangutana: Kapila nimo dunggaba ug diin maigo si Jaqueline Totay?


Tubag: Dili na ko nakahinumdom, ingon man dili sba ko
makahinumdom kon diin to siya maigo. Basta
manadaghan to nako siya dunggaba ginamit ko ang
akong Tres kantos.

Pangutana: Gawas nga imo to siyang gidunggab, wala ba nimo


pahimudsi and iyang pagkapbabye o wala ka bay plano
sa pag rape kaniya niadtong higayona?
Tubag: Wala gyud to nako siya pahimudsi og wala gyud koy tuyo sa
pag rape niya. Ang ako ra gyud nga tuyo mao ra gyud
and pagkawat sa ilang TV apan kay nisiyagit man siyang
nakaila man kayo siya nako, nahadlok kong mahibaw-an
sa ako untang pagkawat sa ilang TV, hinungdan nga ako
siyang gilayog ug gidunggab makadaghan.

Pangutana: Nganog nakahibawo or nakaila ka man nga si Jaqueline


Tatoy tong naisiyagit ug imong gidunggab?
Tubag: Duna ma hayag nga suga sa elektresidad sa ilang may kusina.

Pangutana: Kaila ba nimong daan si Jaqueline Tatoy?


Tubag: Oo, Sir ka saw ala pa ang among hitabo permi man kong
nagtan-awan sa ilang TV.

Pangutana: Human nim dunggaba si Jaqueline Tatoy unsa may sunod


nimonh gibuhat?
Tubag: Dihang sa akong pagtoo nga patay na siya, ako naidagan agi
sa pultahan nga akong gisikaran dayon kanaog subay sa
hagdan didto nabiyaan nako ang akong sapatos.

Pangutana: Diin ka man paduiong dagan?


Tubag: Didto ako padulong sa akong gipuya-an sa ilang Wilson
Magdasal sa maong Brgy.

Pangutana: Unya unsa may sunod nimonh gibuhat og nahibaw-an?


Tubag: Niadtong hapon sa petsa 15 sa bulan sa Disyembre 1996,
didtoy mga Brgy Tanods sa balay ni Wilson Magdasal
diin ila akong gipangutaan tali sa maong hitabo og igo
lan ako nitudlo sa akong white Slave shirt nga akong
gihumulan ug tubig sa planggana sa tumong nga makuha
ang mansa sa dugo nga pinisik sa akong paggdunggab
patay ni Jaqueline Tatoy.

Pangutana: Ngano ug unsa may diay kalabutan niadtong maong


slaveless white shirt nimo?
Tubag: Mao na ang akong gisul-ob dihang akog kawaton unta ang TV
nila ni Jaqueline ug sa iyang pagsiyagit ako siyang
gidunggab-dunggab patay. (Elizar Yomaquin postivo nga
nitudlo ug niangkon sa maong whitel sleve less shirt)

Pangutana: Kinign nia karon dinhi nga sapatos itom nga nakuha didto
so hagdan sa balay nila ni Jaqueline Tatoy human siya
nakit-i nga patay, unsa may imong ikasulti niini?
Tubag: Mao kana ang akong sapatos nga nabiyaan didto sa ilang
hagdan human sa hitabo ug gain sa akong pagdagan
akong napatiran kadtong ilang container.

Pangutana: Sa pagkakaron, wala na akoy ipangutana kanimo. Ikay


aduna ka pa bay ikasul ti o bakwion ba hinoon sa mao
nimong gipamahayag nga naglangkob sa duha ka pahina
lakip niining maong pahina?
Tubag: Wala na akoy ikadugang pagsulti ni bakwion ba hinnon. Nao
kana ang tanan.

Pangutana: Andam ka ba pagperme niini sa pagmatuod nga wlay tawo


nga nagpugos, naghulga, nagsaad ug gnate o nag hadlok
ba hinoon kon dili sa imong kaugalingon nga kabubut-on
lamang.
Tubag: Oo, andam ako pageram. Aron matuoron kining tanan kini
akong permaahn ning petsa 16 sa Diusyembre 1996,
Siyudad Sugbo, Pilipinas.[9]

On the witness stand, appellant did not deny that he had a drinking spree
with Rico Magdasal and three other persons. His version of the incident is that it
was Rico who committed the crime and not him. Appellant testified that Rico
asked his help in stealing the television set from the Tatoys residence. When
Jacquelyn saw them, she ran towards the kitchen but she did not reach it as Rico
had stabbed her on the back with the tres cantos. Appellant claims that it was Rico
who owns the tres cantos, as well as the pair of shoes, left inside Tatoys
house. Afraid of what happened, appellant went home to Wilson Magdasals house
and slept there. He was awakened the next morning by barangaytanod Julius
Yosores who kicked him. Yosores also boxed and poked a gun at him. Appellant
claims that Rico and Edgar Magdasal maltreated him in the presence
of barangaycaptain Atty. Fortunato Parawan when he was brought to the latters
house. He was made to admit committing the crime because Rico has a family
while he is single.[10]

Appellant also repudiated his extrajudicial confession, saying that Atty.


Parawan merely asked him to sign a blank sheet of paper and in exchange, Atty.
Parawan promised to assist and help him with his expenses.[11]

After trial, the Regional Trial Court of Cebu City (Branch 18) (RTC for
brevity) rendered its decision on October 24, 1997, convicting appellant of the
crime of Murder, to wit:
WHEREFORE, in view of all the foregoing considerations,
accused Elizar Tomaquin is found guilty beyond reasonable doubt of
the crime of Murder and is hereby imposed the penalty of
RECLUSION PERPERTUA, with the accessory penalties of the law;
to indemnify the heirs of Jaquelyn Tatoy in the sum of P50,000.00 and
to pay the costs. The accused is, however, credited in full during the
whole period of his detention provided he will signify in writing that
he will abide by all the rules and regulations of the penitentiary.

SO ORDERED.[12]

Hence, this appeal.


In his Brief, appellant raises the following Assignment of Errors:

1. THE TRIAL COURT ERRED WHEN SHE (SIC) CONVICTED


ACCUSED-APPELLANT BASED ON HIS
UNCOUNSELLED CONFESSION;

2. THE TRIAL COURT LIKEWISE ERRED WHEN SHE (SIC)


GAVE FULL CREDENCE AND FULL FAITH ON THE
TESTIMONY OF THE PROSECUTION WITNESSES;[13]

Appellants extrajudicial confession was taken and transcribed entirely in the


Cebuano dialect. Rule 132, Section 33 of the Revised Rules on Evidence provides:

Sec. 33. Documentary evidence in an unofficial language.--


Documents written in an unofficial language shall not be admitted as
evidence, unless accompanied with a translation into English or
Filipino. To avoid interruption of proceedings, parties or their
attorneys are directed to have such translation prepared before trial.

The rule is that when there is presented in evidence an exhibit written in any
language other than the official language (Filipino or English), if there is an appeal,
that exhibit should be translated by the official interpreter of the court, or a
translation should be agreed upon by the parties, and both original and translation
sent to this court.[14] In this case, there is no official translation of appellants
extrajudicial confession in the Filipino or English language. If the Court were to
strictly follow the rule, then appellants extrajudicial confession should not have
been admitted by the trial court as evidence for the prosecution.
Nevertheless, considering that appellant did not interpose any objection
thereto, and the parties and the judicial authorities or personnel concerned
appeared to be familiar with or knowledgeable of Cebuano in which the document
was written,[15] such extrajudicial confession was appropriately considered by the
trial court as evidence for the prosecution.

As stated at the outset, the crucial issue in this case is whether or not the
extrajudicial confession executed by appellant, with the assistance of Atty.
Fortunato Parawan, is admissible in evidence against him. There is no need at this
point to secure an official translation of the confession to English.

Section 12, Article III of the 1987 Constitution provides:

(1) Any person under investigation for the commission of an


offense shall have the right to be informed of his right to remain silent
and to have competent and independent counsel preferably of his own
choice. If the person cannot afford the services of counsel, he must be
provided with one. These rights cannot be waived except in writing
and in the presence of counsel.

The words competent and independent counsel in the constitutional


provision is not an empty rhetoric. It stresses the need to accord the accused, under
the uniquely stressful conditions of a custodial investigation, an informed judgment
on the choices explained to him by a diligent and capable lawyer.[16]

As heretofore stated, Atty. Fortunato Parawan, at that time, was


the barangay captain of Barangay Lorega, Cebu City. Under the 1991 Local
Government Code, a barangaycaptain performs the following duties and functions:

(a) The punong barangay, as the chief executive of the barangay


government, shall exercise such powers and perform such duties and
functions, as provided by this Code and other laws.

(b) For efficient, effective and economical governance, the


purpose of which is the general welfare of the barangay and its
inhabitants pursuant to Section 16 of this Code, the punong barangay
shall:

(1) Enforce all laws and ordinances which are


applicable within the barangay;

...

(3) Maintain public order in the barangay and, in


pursuance thereof, assist the city or municipal mayor and
the sanggunian members in the performance of their
duties and functions; . . .[17]

Simply put, Atty. Parawan, as barangay captain, is called upon to enforce the law
and ordinances in his barangay and ensure peace and order at all times.

In fact, as barangay captain, Atty. Parawan is deemed a person in authority


under Article 152 of the Revised Penal Code, to wit:

ART. 152. Persons in authority and agents of persons in


authority. Who shall be deemed as such. In applying the provisions of
the preceding and other articles of this Code, any person directly
vested with jurisdiction, whether as an individual or as a member of
some court or government corporation, board, or commission, shall be
deemed a person in authority. A barrio captain and a barangay
chairman shall also be deemed a person in authority.

On these bases, it is not legally possible to consider Atty. Parawan as an


independent counsel of appellant.

In People vs. Culala,[18] the Court reiterated the rule that a municipal
attorney cannot be an independent counsel because as a legal officer of the
municipality, he provides legal assistance and support to the mayor and the
municipality in carrying out the delivery of basic services to the people, including
the maintenance of peace and order, and it was seriously doubted whether he can
effectively undertake the defense of the accused without running into conflict of
interests. Thus, the Court held that he is no better than a fiscal or a prosecutor who
cannot represent the accused during custodial investigations.[19]

This is reiterated in People vs. Taliman,[20] and People vs. Velarde,[21] where
we further ruled that a municipal mayor cannot likewise be an independent counsel
as required by the Constitution.

Similarly in this case, considering that Atty. Parawans role as


a barangay captain, was a peacekeeping officer of his barangay and therefore in
direct conflict with the role of providing competent legal assistance to appellant
who was accused of committing a crime in his jurisdiction, Atty. Parawan could
not be considered as an independent counsel of appellant, when the latter executed
his extrajudicial confession. What the Constitution requires is the presence of an
independent and competent counsel, one who will effectively undertake his clients
defense without any intervening conflict of interest.[22]
Neither does Atty. Parawan qualify as a competent counsel, i.e., an effective
and vigilant counsel. An effective and vigilant counsel necessarily and logically
requires that the lawyer be present and able to advise and assist his client from the
time the confessant answers the first question asked by the investigating officer
until the signing of the extrajudicial confession. As held in People vs. Velarde:[23]

. . . The competent and independent lawyer so engaged should be


present at all stages of the interview, counseling or advising caution
reasonably at every turn of the investigation, and stopping the
interrogation once in a while either to give advice to the accused that
he may either continue, choose to remain silent or terminate the
interview.[24]

Moreover, the lawyer should ascertain that the confession is made


voluntarily and that the person under investigation fully understands the nature and
the consequence of his extrajudicial confession in relation to his constitutional
rights. A contrary rule would undoubtedly be antagonistic to the constitutional
rights to remain silent, to counsel and to be presumed innocent.[25]

The assistance rendered by Atty. Parawan to appellant cannot be fittingly


described as effective and vigilant. As testified by Atty. Parawan, hereinbelow
quoted verbatim, this was what transpired when he went to the Ramos police
station to assist appellant during the investigation:

Q What happened when you arrived at the Ramos Police Station at


around 2:00 oclock in the afternoon of December 16, 1996?
A I go (sic) to the room where Policeman Monilar and the accused
and had a conversation with the accused.

Q What transpired during that conversation with the accused.


A I asked him. Are you going to get me as your lawyer?

Q And may we know what did he answer?


A Yes, Cap. Okay Cap.

Q When you said Cap what did he mean by that word Cap.
A Being a Barangay Captain.

Q After the accused told you that you were his counsel of
choice. What did you do next if any?
A I informed Elizar Tomaquin that do you know what will be the
implication of your admission, you will be imprisoned.
Q After you asked him whether he knew of the implication of his
confession that could be because of that confession. What was
his reaction?
A Yes Cap. I know. And then I told him as follows: Because of this
confession you will be imprisoned.
Q And what did he say after you told him again that if he would
execute that affidavit of confession he would surely be
imprisoned?
A No I even continue that why did he do that?

Q And what did he answer?


A He answered to me that he was drunk at that time.

Q And so what transpired next?


A So I told him are you willing now to give your confession, then
policeman Monilar went inside the room and we had that
investigation.

Q Now how was the investigation of the accused done?


A It was made in a question and answer form.

Q And in what language were the questions framed?


A In the vernacular, vesaya.

Q What did you do during the question and answer form of


investigation?
A I just observed them.

Q But did you stay there until the whole taking of the confession was
over?
A Yes I was there in the presence of two persons coming from my
Barangay.

...

Q When you arrived and saw Mr. Monilar with the accused as an
Attorney did you immediately inquire what had happened
before you arrived like; Did you start the investigation? did you
inquire from that from Mr. Monilar?
A He was already preparing this top portion here.

INTERPRETER:

Q Witness pointing to the upper portion of the certification up to the


signature to that portion above the names typewritten thereon.

...

Q And that means to say that when he prepared this from the top most
portion to that portion immediately right before the typewritten
name Elizar Tomaquin and Atty. Fortunato Parawan you were
not around. Correct?
A I was not around but we have already a conversation earlier with
Monilar.[26]
Records also show that appellant was presented to SPO2 Monilar in the
morning of December 16, 1996. When appellant intimated that he was willing to
confess and requested the presence of Atty. Parawan, SPO2 Monilar called up
Atty. Parawan and informed him of appellants decision. Atty. Parawan arrived at
the Ramos Police Station only at 2:00 in the afternoon.[27] By the time Atty.
Parawan arrived, the investigation had already started and SPO2 Monilar had
already asked and elicited information from appellant. Worse, Atty. Parawan
merely observed during the entire investigation and failed to advise or explain to
appellant the questions being propounded by SPO2 Monilar. He did not even
bother to ask appellant if the extrajudicial confession he was about to execute was
being voluntarily given.

Moreover, that Atty. Parawan is not an effective and vigilant counsel is


bolstered by his own testimony that he already suspected appellant as having
committed the crime when the latter was brought to his house by the barangay
tanods, viz.:

Q Being an attorney naturally your first question to your arresting


tanods was where was he arrested and how was he arrested and
what is the reason why he was arrested. Correct?
A Yes.

...

Q You are telling this Court now Atty. Parawan that before the
Barangay Tanods could explain to you the circumstances of his
arrest you already started to ask questions like; Why did you
have blood in your pants. Where is your t-shirt you
wore. Where did you get that information since you were not in
the house of Jaqueline Tatoy when she was killed?
A It was like this. I heard that the victim suffered multiple stab
wounds. So when I saw blood stains with all probability it
might come from the victim. It was conclusion something like
when I saw that t-shirt stained with blood.

Q So you mean to this Court that you already reached the conclusion
of mine (sic) that Elizar Tomaquin one of your constituents in
the Barangay was already on your conclusion in mine (sic) the
killer of Jacquilyn Tatoy before your tanods turned it over to
the police for investigation. Is that what you are telling Atty.
Parawan?
A It is somewhat like that. That is why I ordered my tanod to bring
him to the Homicide.[28]

The Court cannot imagine how Atty. Parawan could have effectively
safeguarded appellants rights as an accused during the investigation when he
himself entertained the suspicion that appellant is guilty of the crime charged, and
naturally, he would want appellant to admit having committed it.
It was posited that appellant cannot challenge Atty. Parawans qualification
as a competent and independent counsel because he was his choice.

As provided in Section 12, Article III of the 1987 Constitution, (A)ny


person under investigation for the commission of an offense shall
have the right to have competent and independent counsel preferably of his own
choice. Ideally, the lawyer called to be present during such investigations should
be as far as reasonably possible, the choice of the individual undergoing
questioning, but the word "preferably" does not convey the message that the choice
of a lawyer by a person under investigation is exclusive as to preclude other
equally competent and independent attorneys from handling his defense.[29] What is
imperative is that the counsel should be competent and independent. That appellant
chose Atty. Parawan does not estop appellant from complaining about the latters
failure to safeguard his rights.

It appears that appellant chose Atty. Parawan because he was


the barangay captain of Brgy. Lorega where appellant resides, and apparently,
appellant trusts Atty. Parawan to protect his rights. The latter, however, fell short
in tending to the trust reposed on him. Appellant did not finish Grade 1 and does
not know how to read and write.[30] Asbetween him and Atty.
Parawan who presumably knows the intricacies of the law and appellants
predicament, Atty. Parawan should have known better and exercised his sound
judgment before conceding to appellants choice. But it did not occur to him to
inhibit himself from acting as appellants counsel and instead, he even let appellant
go through the investigation and execute the extrajudicial confession knowing fully
well that he was biased as regards appellants innocence. Quoted verbatim, Atty.
Parawan testified thus:

Q Atty. Parawan comparing yourself to the accused who is a graduate


of Batchelor (sic) of Law compared to your constituent who is
jobless, illiterate [and] of low intelligence. The question is
this: It did not occur to your mine (sic) to inhibit yourself
despite the request by telling the accused as barangay Captain
there could be a conflict of interest and bias that I would not be
in (sic) effective counsel or assistance to you. Did it not occur
toy our mine (sic) or not?
A It did not occur to my nime (sic).

...

Q But as experienced attorney you know very well that when you
assist a suspect in the police station and the circumstances he
was arrested the best assistance a lawyer could give is would be
to tell the accused to remain silent. Would you agree?

...
A It did not occur to my mine (sic) that time.[31]

Clearly, Atty. Parawan failed to meet the exacting standards of


an independent and competent counsel as required by the Constitution. Thus, the
extrajudicial confession executed by appellant, even if gospel truth, is deemed an
uncounselled confession and therefore, inadmissible in evidence.

In this regard, it may not be amiss to repeat the declaration of the Court
in People vs. Deniega,[32] stressing the role of the courts in ascertaining that
extrajudicial confessions meet the exacting standards of the Constitution:

Every so often, courts are confronted with the difficult task of


taking a hard look into the sufficiency of extra-judicial confessions
extracted by law enforcement authorities as the sole basis for
convicting accused individuals. In cases of crimes notable for their
brutality and ruthlessness, the impulse to find the culprits at any cost
occasionally tempts these agencies to take shortcuts and disregard
constitutional and legal safeguards intended to bring about a
reasonable assurance that only the guilty are punished. Our courts, in
the process of establishing guilt beyond reasonable doubt, play a
central role in bringing about this assurance by determining
whether or not the evidence gathered by law enforcement
agencies scrupulously meets exacting standards fixed by the
Constitution. If the standards are not met, the Constitution
provides the corresponding remedy by providing a strict
exclusionary rule, i.e., that "[a]ny confession or admission
obtained in violation of (Article III, Section 12(1) . . . hereof shall
be inadmissible in evidence."

Without appellants extrajudicial confession, the prosecutions case now


teeters precariously on circumstantial evidence, namely:

(1) Rico Magdasals testimony that:

(a) appellant left their drinking session at 1:00 in the morning of


December 16, 1996;
(b) the tres cantos and pair of shoes found inside Jaquelyns residence
belongs to appellant; and
(c) appellant was wearing a pair of maong shorts and
white sando shirt on the night of the crime, which blood-stained shirt was
found among the soiled clothes in Wilson Magdasals house;
(2) Medical Technologist Jude Daniel Mendozas testimony that the blood
stains on appellants sando shirt and the tres cantos was of human origin.[33]

These circumstances, however, are not sufficient to demonstrate positively


and convincingly that it was appellant who killed Jaquelyn.

Under Section 4, Rule 133 of the Rules of Court, circumstantial evidence


would be sufficient to convict if (a) there is more than one circumstance; (b) the
facts from which the inferences are derived are proven; and (c) the combination of
all the circumstances is such as to produce a conviction beyond reasonable
doubt.[34] As jurisprudentially formulated, a judgment of conviction based on
circumstantial evidence can be upheld only if the circumstances proven constitute
an unbroken chain which leads to one fair and reasonable conclusion pointing to
the accused, to the exclusion of all others, as the guilty person, i.e., the
circumstances proven must be consistent with each other, consistent with the
hypothesis that the accused is guilty, and at the same time inconsistent with any
other hypothesis except that of guilty.[35]

The circumstantial evidence in this case does not constitute an unbroken


chain leading to one fair and reasonable conclusion that appellant is the guilty
person.

For one, appellants act of leaving the drinking session at 1:00 in the morning
does not establish appellants whereabouts at the time the crime was
committed. There is nothing in the testimony of Rico Magdasal and the other
prosecution witnesses that will show if appellant indeed went to Jaquelyns house
after he left the group. No one saw him enter or leave her residence. If at all, what
was proved is that appellant was found by the barangay tanods sleeping at home in
the afternoon of the same day.

Added to that is the prosecutions failure to establish the chain of custody of


these valuable pieces of evidence.

Prosecution witness Armando Zabate testified that the pair of black shoes
and tres cantos were given to a certain Rey for safekeeping. These were later
turned over to a Policeman Tariao of the Ramos Police Station. Zabate, however,
did not identify the person who turned over the objects to the police.[36] There was
no showing who turned over those articles to the police and Rey was not presented
to identify if these were the same pair of shoes and tres cantos found in Jaquelyns
house and turned over to the police.Policeman Tariao was not called to the witness
stand so as to confirm if those articles were the same evidence turned over to him
and later presented in court. Ordinarily, it would not be indispensable for the
prosecution to allege and prove every single fact of the case. But in this case, the
pieces of evidence are crucial to the prosecutions case. Also, the fact that a civilian
obtained and received the evidence, the possibility that the integrity of these
articles could have been compromised cannot be ignored. The Court even noted
that during his direct examination, SPO2 Monilar was confused as to whether the
pair of shoes presented in court was the same ones that were turned over to the
police. It turned out that the marking he made on the shoes were washed off
because at one time, the shoes fell in the canal located in front of the police station
and they had to clean and wash the shoes![37] Such sloppy handling renders the
chain of custody of those pieces of evidence dubious, and damaging to the
prosecutions case.

And even if appellant did own the pair of shoes and tres cantos, the fact that
it was found in the scene of the crime merely proved that he was in the residence of
Jaquelyn at some point in time. But it does not prove when particularly he was
there, his authorship of the crime or his motive for being
there. While the motive of an accused in a criminal case is generally held to be
immaterial, not being an element of the crime, motive becomes important when, as
in this case, the evidence of the commission of the crime is purely
circumstantial.[38]

The prosecutions evidence that is perceived to be conclusive of appellants


guilt is mainly the testimony of Rico Magdasal. Such testimony, however, is
uncorroborated. The rule is that the testimony of one witness is sufficient to sustain
a conviction, if such testimony positively establishes the guilt of the accused
beyond reasonable doubt.[39]Moreover, the doctrine of long standing that the
testimony of a lone witness, if credible and positive, is sufficient to convict an
accused applies only to eyewitnesses. Thus, an uncorroborated circumstantial
evidence is certainly not sufficient for conviction when the evidence itself is in
serious doubt.[40] Ricos lone testimony is not sufficient to establish appellants guilt
beyond reasonable doubt.

In addition, appellant vehemently denied Ricos allegations. According to


appellant, it was Rico who actually owns the pair of shoes and tres cantos; that it
was he who bid appellant to go to the Tatoys residence and lift their TV set; and
that it was Rico who stabbed Jaquelyn. Considering appellants denial and his
different version of the incident, it became incumbent upon the prosecution to
rebut appellant's allegations with further evidence to corroborate the statement of
Rico. It must be noted that there were other persons present during their drinking
spree, namely, Romy Magdasal, Noel Labay, and a certain Cardo. These persons
could have been presented as witnesses to back up Ricos claim but the prosecution
did not do so. Rico testified that appellant owned the tres cantos found by the
stairs; but Rico also stated he only heard that the tres cantos was found by the
stairs.[41] Who found the tres cantos that was supposed to have been used to stab
Jaquelyn? The neighbor who allegedly found it by the stairs was not presented in
court to identify if the tres cantos presented by the prosecution was the alleged
weapon in the stabbing of Jaquelyn. Such failure of the prosecution to corroborate
the material points of Ricos testimony weakened their case.

The Court also has serious misgivings on the probative value of the
white sando shirt that appellant was allegedly wearing at the time of stabbing
Jaquelyn, which Edgar Magdasal later found bloodstained among the soiled
clothes.

First, when appellant was asked by the barangay tanods about the shirt he
was wearing, he told them that it was in Wilson Magdasals house. According
to barangay tanodArmando Zabate, it was Edgar Magdasal who found the shirt,
somewhat wet and bloody, among the soiled clothes.[42] Edgar Magdasal, however,
was not presented to testify as to where he found the shirt, the state the shirt was in
when he found it, and how he knew that it was the shirt worn by appellant.

Second, Medical Technologist Jude Daniel Mendoza testified that the


bloodstains on appellants sando shirt, as well as the tres cantos, were human
blood.[43] Mendoza, however, did not conduct further tests to ascertain the type of
blood found on these pieces of evidence nor did he match it with the victims blood
type,[44] hence, it does not connect the bloodstains to the herein victim. In People
vs. Rodriguez, the Court ruled that the maong pants allegedly belonging to
appellant and found positive of type O blood has no probative value since the
blood type of appellant and the victim were not taken for purposes of
comparison.[45]

The same ruling applies with regard to the bloodstains found on the tres
cantos.

Appellant enjoys in his favor the presumption of innocence until the contrary
is proven. Proof of the guilt of the accused should not be tainted with
ambiguity. Although appellants defense is weak, conviction must come from the
strength of the prosecution's evidence and not from the weakness of the defense. In
this case, the prosecutions evidence is not strong enough to justify a finding of
guilt beyond reasonable doubt.[46] Acquittal, therefore, is inevitable.

WHEREFORE, appellant Elizar Tomaquin is hereby ACQUITTED and


ordered RELEASED immediately, unless he is being detained for some other
legal cause.

The Director of the Bureau of Corrections is directed to cause the immediate


release of appellant unless he is being lawfully held for another cause, and to
inform this Court of the date of his release, or the ground for his continued
confinement, within ten (10) days from notice of herein decision.
Costs de oficio.

SO ORDERED.

Republic of the Philippines

Supreme Court

BaguioCity

FIRST DIVISION

ANNA LERIMA PATULA, G.R. No. 164457

Petitioner,

Present:

CORONA,C.J.,Chairperson,

-versus- LEONARDO-DE CASTRO,

BERSAMIN,

DEL CASTILLO, and

VILLARAMA, JR.,JJ.

Promulgated:

PEOPLE OF THE PHILIPPINES,

Respondent. April 11, 2012

x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

In the trial of everycriminal case, a judge must rigidlytest the States evidence
of guilt in order to ensure that such evidenceadheres to the basic rules of
admissibility before pronouncing an accused guilty of the crime charged upon such
evidence. Nothing less is demanded of the judge; otherwise, the guarantee of due
process of law is nullified.The accused need notadduceanythingto rebut evidence
that is discredited for failing the test.Acquittal should then follow.

Antecedents

Petitioner was charged withestafaunder an informationfiled in the Regional Trial


Court (RTC) in DumagueteCitythat averred:

That on or about and during the period from March 16 to 20, 1997 and
for sometime prior thereto, in the City of Dumaguete, Philippines, and
within the jurisdiction of this Honorable Court, the said accused,
being then a saleswoman of Footluckers Chain of Stores, Inc.,
Dumaguete City, having collected and received the total sum
of P131,286.97 from several customers of said company under the
express obligation to account for the proceeds of the sales and deliver
the collection to the said company, but far from complying with her
obligation and after a reasonable period of time despite repeated
demands therefore, and with intent to defraud the said company, did,
then and there willfully, unlawfully and feloniously fail to deliver the
said collection to the said company but instead, did, then and there
willfully unlawfully and feloniously misappropriate, misapply and
convert the proceeds of the sale to her own use and benefit, to the
damage and prejudice of the said company in the aforesaid amount
of P131,286.97.

Contrary to Art. 315, par 1 (b) of the Revised Penal Code.[1]

Petitioner pled not guiltyto the offense charged in the information. At pre-
trial, no stipulation of factswas had, and petitioner did not avail herself of plea
bargaining.Thereafter, trial on the merits ensued.

The Prosecutions first witness was Lamberto Go, who testified that he was
the branch manager of Footluckers Chain of Stores, Inc. (Footluckers) in
Dumaguete City since October 8, 1994; that petitioner was an employee of
Footluckers, starting as a saleslady in 1996 until she became a sales representative;
that as a sales representative she was authorized to take orders from wholesale
customers coming from different towns (like Bacong, Zamboanguita, Valencia,
Lumbangan and Mabinay in Negros Oriental, and Siquijor), and to collect
payments from them; that she could issue and sign official receipts of Footluckers
for the payments, which she would then remit; that she would then submit the
receipts for the payments for tallying and reconciliation; that at first her volume of
sales was quite high, but later on dropped, leading him to confront her; that she
responded that business was slow; that he summoned the accounting clerk to
verify; that the accounting clerk discovered erasures on some collection receipts;
that he decided to subject her to an audit by company auditor Karen Guivencan;
that he learned from a customer of petitioners that the customers outstanding
balance had already been fully paid although that balance appeared unpaid in
Footluckers records; and that one night later on, petitioner and her parents went to
his house to deny having misappropriated any money of Footluckers and to plead
for him not to push through with a case against her, promising to settle her account
on a monthly basis; and that she did not settle after that, but stopped reporting to
work.[2]

On March 7, 2002, Gos cross examination, re-direct examination and re-


crossexamination were completed.

The only other witness for the Prosecution was Karen Guivencan,
whomFootluckers employed as its store auditor since November 16, 1995 until her
resignation on March 31, 2001. She declared that Go had requested her to audit
petitioner after some customers had told him that they had already paid their
accounts but the office ledger had still reflected outstandingbalances for them; that
she first conducted her audit by going to the customers in places from Mabinay to
Zamboanguitain Negros Oriental, and then in Siquijor; thatshe discovered in the
course of her audit that the amounts appearing on the original copies of receipts in
the possession of around 50 customers varied from the amounts written on the
duplicate copies of the receipts petitioner submitted to the office; that upon
completing her audit, she submittedto Go a written report denominated as List of
Customers Covered by Saleswoman LERIMA PATULA w/ Differences in
Records as per Audit Duly Verified March 16-20, 1997 marked as Exhibit A; and
that based on the report, petitioner had misappropriated the total amount
ofP131,286.92.[3]

During Guivencans stint as a witness, the Prosecution marked the ledgers of


petitioners various customers allegedly with discrepancies as Exhibits B to YYand
their derivatives, inclusive. Each of the ledgers had a first column that contained
the dates of the entries, a second that identified the invoices by the number, a third
that statedthe debit, a fourth that noted the credit (or the amounts paid), and a fifth
that summed the balances (debit minus credit).Only 49 of theledgerswere formally
offered and admitted by the RTC because the 50thledger could no longer be found.

In the course of Guivencansdirect-examination,petitioners counsel


interposed a continuing objection on the ground that the figuresentered in Exhibits
B to YYand their derivatives, inclusive, were hearsay because the persons who had
made the entries were not themselves presented in court.[4]With that, petitioners
counsel did not anymore cross-examine Guivencan, apparently regarding her
testimony to be irrelevant because she thereby tended to prove falsification, an
offense not alleged in the information.
TheProsecution thenformally offered its documentary exhibits, including
Exhibits B to YYand their derivatives (like the originals and duplicates of the
receipts supposedly executed and issued by petitioner), inclusive, the confirmation
sheets used by Guivencan in auditing the accounts served by petitioner, and
Guivencans so-called Summary (Final Report) of Discrepancies.[5]

After the Prosecution rested its case, the Defense decided not to file a
demurrer to evidence although it had manifested the intention to do so, and instead
rested itscase.The Prosecution and Defense submitted their respective memoranda,
and submitted the case for decision.[6]

On January 28, 2004, the RTC, stating that inasmuch as petitioner had opted
not to present evidence for her defense the Prosecutions evidence remained
unrefuted and uncontroverted,[7]rendered its decision finding petitioner guilty
of estafa, to wit:

Wherefore, in the light of the foregoing facts and circumstances,


the Court finds ANNA LERIMA PATULA guilty beyond reasonable
doubt of the crime of Estafa under Art. 315 par (1b) of the Revised
Penal Code and accordingly, she is hereby sentenced to suffer an
INDETERMINATE PENALTY of imprisonment of 8 years and 1 day
of prision mayor as minimum to 18 years and 4 months of reclusion
temporal as maximum with all the accessory penalties provided by
law and to indemnify private complainant the amount of P131,286.92
with interest at 12% per annum until fully paid and to pay the costs.

Pursuant to Sec. 2, Rule 114 of the Revised Rules of Criminal


Procedure, the cash bail put up by the accused shall be effective only
until the promulgation of this judgment.

SO ORDERED.[8]

Petitioner filed a motion for reconsideration, butthe RTC denied the motion
on May 7, 2004.[9]

Issues

Insisting that the RTCs judgment grossly violated [her] Constitutional and
statutory right to be informed of the nature and cause of the accusation against her
because, while the charge against her is estafa under Art. 315, par. 1 (b) of the
Revised Penal Code, the evidence presented against her and upon which her
conviction was based, was falsification, an offense not alleged or included in the
Information under which she was arraigned and pleaded not guilty, and that said
judgment likewise blatantly ignored and manifestly disregarded the rules on
admission of evidence in that the documentary evidence admitted by the trial court
were all private documents, the due execution and authenticity of which were not
proved in accordance with Sec. 20 of Rule 132 of the Revised Rules on Evidence,
petitioner has directly appealed to the Court via petition for review on certiorari,
positing the following issues, to wit:

1. WHETHER THE ACCUSED OR ANY ACCUSED FOR


THAT MATTER , CHARGED OF ESTAFA UNDER ART. 315,
PAR. 1 (B) OF THE REVISED PENAL CODE CAN BE
CONVICTED UPON OR BY EVIDENCE OF FALSIFICATION
WHICH IS EVEN (SIC) NOT ALLEGED IN THE INFORMATION.

2. WHETHER THE ACCUSEDS CONSTITUTIONAL AND


STATUTORY RIGHT TO BE INFORMED OF THE NATURE AND
CAUSE OF THE ACCUSATION AGAINST HER WAS
VIOLATED WHEN SHE WAS CONVICTED UPON OR BY
EVIDENCE OF FALSIFICATION CONSIDERING THAT THE
CHARGE AGAINST HER IS ESTAFA THROUGH
MISAPPROPRIATION UNDER ART. 315, PAR. 1 (B) OF THE
REVISED PENAL CODE.

3. WHETHER OR NOT THE TRIAL COURT ERRED IN


ADMITTING IN EVIDENCE, EXHIBITS B TO YY-YY-2, ALL
PRIVATE DOCUMENTS, THE DUE EXECUTION AND
AUTHENTICITY OF WHICH WERE NOT PROVED IN
ACCORDANCE WITH SEC. 20, RULE 132 OF THE SAID
REVISED RULES ON EVIDENCE ASIDE FROM THE FACT
THAT SAID EXHIBITS TEND TO PROVE FALSIFICATION BY
THE ACCUSED, A CRIME NEITHER CHARGED NOR
ALLEGED IN THE INFORMATION.

4. WHETHER OR NOT THE TRIAL COURT ERRED IN


ADMITTING THE TESTIMONY OF KAREN GUIVENCAN
DESPITE THE OBJECTION THAT SAID TESTIMONY WHICH
TRIED TO PROVE THAT THE ACCUSED FALSIFIED EXHIBITS
B TO YY-YY-2INCLUSIVE VIOLATED THE ACCUSEDS
CONSTITUTIONAL RIGHT TO BE INFORMED OF THE
NATURE AND CAUSE OF THE ACCUSATION AGAINST HER,
FOR BEING IRRELEVANT AND IMMATERIAL SINCE THE
CHARGE AGAINST THE ACCUSED IS ESTAFA UNDER ART.
315, PAR. 1 (B) OF THE REVISED PENAL CODE.

5. WHETHER OR NOT THE TRIAL COURT ERRED IN


CONCLUDING THAT THE EVIDENCE OF THE PROSECUTION
REMAINS UNREFUTED AND UNCONTROVERTED DESPITE
ACCUSEDS OBJECTION THAT SAID EVIDENCE IS
IMMATERIAL AND IRRELEVANT TO THE CRIME CHARGED.

6. WHETHER OR NOT THE DEFENSES NOT CROSS-


EXAMINING KAREN GUIVENCAN FOR THE REASON THAT
HER TESTIMONY IS IMMATERIAL AND IRRELEVANT AS IT
TENDED TO PROVE AN OFFENSE NOT CHARGED IN
INFORMATION RESULTED IN THE ADMISSION OF SAID
TESTIMONY AS BEING UNREFUTED AND
UNCONTROVERTED, AND WHETHER OR NOT THE
DEFENSES OBJECTION WOULD NOT BE CONSIDERED
WAIVED IF THE DEFENSE CROSS-EXAMINED SAID
WITNESS.

7. WHETHER OR NOT THE TRIAL COURT ERRED IN


RULING THAT EXHIBIT A, WHICH IS THE LIST OF
CUSTOMERS COVERED BY SALESWOMAN LERIMA PATULA
WITH DIFFERENCE IN RECORD IS NOT HEARSAY AND SELF-
SERVING.[10]

The foregoing issues are now restatedas follows:

1. Whether or not the failure of the information for estafa to allege


the falsification of the duplicate receipts issued by petitioner to her
customersviolated petitioners right to be informed of the nature
and cause of the accusation;

2. Whether or not the RTC gravely erred in admitting evidence of


the falsification of the duplicate receiptsdespite the information not
alleging the falsification;

3. Whether or not the ledgers and receipts (Exhibits B to YY, and


their derivatives, inclusive) were admissible as evidence of
petitioners guilt for estafaas chargeddespite their not being duly
authenticated;and
4. Whether or not Guivencanstestimony onthe ledgers and receipts
(Exhibits B to YY, and their derivatives, inclusive) to prove
petitioners misappropriation or conversion wasinadmissible for
being hearsay.

Ruling

The petition is meritorious.

Failure of information to allege falsification

did not violate petitioners right to be informed

of thenatureand cause of the accusation

Petitioner contends that the RTC grossly violated her Constitutional right to
be informed of the nature and cause of the accusation when: (a) it held that the
information did not have to allege her falsification of the duplicate receipts, and (b)
when it convicted her of estafa under Article 315, paragraph 1(b) of the Revised
Penal Codeby relying on the evidence on falsification.

The contentionof petitioner cannot be sustained.

The Bill of Rights guaranteessome rightsto every person accused of a crime,


among them the right to be informed of the nature and cause of the accusation, viz:

Section 14. (1) No person shall be held to answer for a


criminal offense without due process of law.

(2) In all criminal prosecutions, the accused shall be presumed


innocent until the contrary is proved, and shall enjoy the right to be
heard by himself and counsel, to be informed of the nature and
cause of the accusation against him, to have a speedy, impartial, and
public trial, to meet the witnesses face to face, and to have
compulsory process to secure the attendance of witnesses and the
production of evidence in his behalf. However, after arraignment, trial
may proceed notwithstanding the absence of the accused provided that
he has been duly notified and his failure to appear is unjustifiable.

Rule 110 of the Revised Rules of Court, the rule then in effect when the
information was filed in the RTC, contained the following provisions on the proper
manner of alleging the nature and cause of the accusation in the information, to
wit:

Section 8.Designation of the offense. Whenever possible, a


complaint or information should state the designation given to the
offense by the statute, besides the statement of the acts or omissions
constituting the same, and if there is no such designation, reference
should be made to the section or subsection of the statute punishing it.
(7)

Section 9.Cause of accusation. The acts or omissions complained


of as constituting the offense must be stated in ordinary and concise
language without repetition, not necessarily in the terms of the statute
defining the offense, but in such form as is sufficient to enable a
person of common understanding to know what offense is intended to
be charged, and enable the court to pronounce proper judgment. (8)

The importance of the proper manner of alleging the nature and cause of the
accusation in the informationshould never be taken for granted by the State. An
accused cannot be convicted of an offense that is not clearly charged in the
complaint or information. To convict him of an offense other than that charged in
the complaint or information would be violative of the Constitutional right to be
informed of the nature and cause of the accusation.[11] Indeed, the accused cannot
be convicted of a crime, even if duly proven, unless the crime is alleged or
necessarily included in the information filed against him.

The crime of estafacharged against petitioner was defined and penalized by


Article 315, paragraph 1 (b), Revised Penal Code, viz:

Article 315. Swindling (estafa). Any person who shall defraud


another by any of the means mentioned hereinbelow shall be punished
by:

1st. The penalty of prision correccional in its maximum period


to prision mayor in its minimum period, if the amount of the fraud is
over 12,000 pesos but does not exceed 22,000 pesos, and if such
amount exceeds the latter sum, the penalty provided in this paragraph
shall be imposed in its maximum period, adding one year for each
additional 10,000 pesos; but the total penalty which may be imposed
shall not exceed twenty years. In such cases, and in connection with
the accessory penalties which may be imposed under the provisions of
this Code, the penalty shall be termed prision mayor or reclusion
temporal, as the case may be.

2nd. The penalty of prision correccional in its minimum and


medium periods, if the amount of the fraud is over 6,000 pesos but
does not exceed 12,000 pesos;

3rd. The penalty of arresto mayor in its maximum period


to prision correccional in its minimum period if such amount is over
200 pesos but does not exceed 6,000 pesos; and

4th. By arresto mayor in its maximum period, if such amount


does not exceed 200 pesos, provided that in the four cases mentioned,
the fraud be committed by any of the following means:

xxx

1. With unfaithfulness or abuse of confidence, namely:

xxx

(b) By misappropriating or converting, to the prejudice of


another, money, goods, or any other personal property received
by the offender in trust or on commission, or for administration,
or under any other obligation involving the duty to make delivery
of or to return the same, even though such obligation be totally or
partially guaranteed by a bond; or by denying having received
such money, goods, or other property.

xxx

The elements of the offense charged were as follows:


(a) That the offender received money, goods or other personal
property in trust, or on commission, or for administration, or under
any other obligation involving the duty to make delivery of, or to
return, the same;

(b) That the offender misappropriated or converted such money,


goods or other personal property, or denied his part in its receipt;

(c) That the misappropriation or conversion or denial was to the


prejudice of another; and

(d) That the offended party made a demand on the offender for the
delivery or return of such money, goods or other personal
property.[12]

According to the theory and proof of the Prosecution, petitioner misappropriated or


converted the sums paid by her customers, and later falsified the duplicates of the
receipts before turning such duplicates to her employer to show that the customers
had paid less than the amounts actually reflected on the original receipts.
Obviously, she committed the falsification in order to conceal her misappropriation
or conversion. Considering that the falsificationwas not an offense separate and
distinct from the estafacharged against her, the Prosecution could legitimately
prove her acts of falsification as its means of establishing her misappropriation or
conversion as an essential ingredient of the crime duly alleged in the information.
In that manner, her right to be informed of the nature and cause of the accusation
against her was not infringed or denied to her.

We consider it inevitable to conclude that the information herein completely


pleaded the estafa defined and penalized under Article 315, paragraph 1
(b), Revised Penal Codewithin the context of the substantive lawand the rules.
Verily, there was no necessity for the information to allege the acts of falsification
by petitioner because falsification was not an element of the estafacharged.

Not surprisingly,the RTC correctly dealt in its decision with petitioners


concern thuswise:

In her Memorandum, it is the contention of [the] accused that


[the] prosecutions evidence utterly fails to prove the crime charged.
According to the defense, the essence of Karen Guivencans testimony
is that the accused falsified the receipts issued to the customers served
by her by changing or altering the amounts in the duplicates of the
receipts and therefore, her testimony is immaterial and irrelevant as
the charge is misappropriation under Art. 315, paragraph (1b) of the
Revised Penal Code and there is no allegation whatsoever of any
falsification or alteration of amounts in the [i]nformation under which
the accused was arraigned and pleaded NOT GUILTY. Accused, thus,
maintains that the testimony of Karen Guivencan should therefore not
be considered at all as it tended to prove an offense not charged or
included in the [i]nformation and would violate [the] accuseds
constitutional and statutory right to be informed of the nature and
cause of the accusation against her. The Court is not in accord with
such posture of the accused.

It would seem that the accused is of the idea that because the
crime charged in the [i]nformation is merely [e]stafa and not
[e]stafa [t]hru [f]alsification of documents, the prosecution could
not prove falsification. Such argumentation is not correct. Since
the information charges accused only of misappropriation
pursuant to Art. 315, par. (1b) of the Revised [P]enal Code, the
Court holds that there is no necessity of alleging the falsification
in the Information as it is not an element of the crime charged.

Distinction should be made as to when the crimes of Estafa


and Falsification will constitute as one complex crime and when
they are considered as two separate offenses. The complex crime
of Estafa Through Falsification of Documents is committed when
one has to falsify certain documents to be able to obtain money or
goods from another person. In other words, the falsification is a
necessary means of committing estafa. However, if the
falsification is committed to conceal the misappropriation, two
separate offenses of estafa and falsification are committed. In the
instant case, when accused collected payments from the
customers, said collection which was in her possession was at her
disposal. The falsified or erroneous entries which she made on the
duplicate copies of the receipts were contrived to conceal some
amount of her collection which she did not remit to the
company xxx.[13]

II

Testimonial and documentary evidence,being hearsay,

did not prove petitioners guilt beyond reasonable doubt


Nonetheless, in all criminal prosecutions, the Prosecution bears the burden
to establish the guilt of the accused beyond reasonable doubt. In discharging this
burden, the Prosecutions duty is to prove each and every element of the crime
charged in the information to warrant a finding of guilt for that crime or for any
other crime necessarily included therein.[14] The Prosecution must further prove the
participation of the accused in the commission of the offense.[15]In doing all these,
the Prosecution must rely on the strength of its own evidence, and not anchor its
success upon the weakness of the evidence of the accused. The burden of proof
placed on the Prosecution arises from the presumption of innocence in favor of the
accused that no less than the Constitution has guaranteed.[16]Conversely, as to his
innocence, the accused has no burden of proof,[17]that he must then be acquitted
and set free should the Prosecution not overcome the presumption of innocence in
his favor.In other words, the weakness of the defense put up by the accused is
inconsequential in the proceedings for as long as the Prosecution has not
discharged its burden of proof in establishing the commission of the crime charged
and in identifying the accused as the malefactor responsible for it.

Did the Prosecution adduce evidence that proved beyond reasonable doubt
the guilt of petitioner for the estafa charged in the information?

To establish the elements of estafaearlier mentioned, the Prosecution


presented the testimonies of Go and Guivencan, and various documentsconsisting
of: (a) the receipts allegedly issued by petitioner to each of her customers upon
their payment, (b) the ledgers listing the accounts pertaining to each customer with
the corresponding notations of the receipt numbers for each of the payments, and
(c) the confirmation sheets accomplished by Guivencan herself. [18]The ledgers and
receipts were marked and formally offered as Exhibits B to YY, and their
derivatives, inclusive.

On his part, Go essentially described for the trial court the various duties of
petitioner as Footluckers sales representative. On her part, Guivencan conceded
having no personal knowledge of the amounts actually received by petitioner from
the customersor remitted by petitioner to Footluckers.This means that persons
other than Guivencan prepared Exhibits B to YY and their derivatives,
inclusive,and that Guivencan based her testimony on the entries found in the
receipts supposedly issued by petitioner and in the ledgers held by Footluckers
corresponding to each customer, as well as on the unsworn statements of some of
the customers. Accordingly, her being the only witness who testified on the entries
effectively deprived the RTC of the reasonable opportunity to validate and test the
veracity and reliability of the entries as evidence of petitioners misappropriation or
conversion through cross-examination by petitioner. The denial of that
opportunity rendered theentire proof of misappropriation or conversion hearsay,
and thus unreliable and untrustworthy for purposes of determining the guilt or
innocence of the accused.
To elucidate why the Prosecutions hearsay evidence was unreliable and
untrustworthy, and thus devoid of probative value, reference is made toSection 36
of Rule 130, Rules of Court, a rule that states that a witness can testify only to
those facts that she knows of her personal knowledge; that is, which are derived
from her own perception, except as otherwise provided in the Rules of Court. The
personal knowledge of a witness is a substantive prerequisite for accepting
testimonial evidence that establishes the truth of a disputed fact. A witness bereft
ofpersonal knowledge of the disputed fact cannot be called upon for that purpose
because her testimony derives its value not from the credit accorded to her as a
witness presently testifying but from the veracity and competency of the
extrajudicial source of her information.

In case a witness is permitted to testify based on what she has heard another
person say about the facts in dispute, the person from whom the witness derived the
information on the facts in dispute is not in court and under oath to be examined
and cross-examined. The weight of such testimony thendepends not upon
theveracity of the witness but upon the veracity of the other person giving the
information to the witness without oath. The information cannot be tested because
the declarant is not standing in court as a witness andcannot, therefore, be cross-
examined.

It is apparent, too, that a person who relates a hearsay is not obliged to enter
into any particular, to answer any question, to solve any difficulties, to reconcile
any contradictions, to explain any obscurities, to remove any ambiguities; and that
she entrenches herself in the simple assertion that she was told so, and leaves the
burden entirely upon the dead or absent author.[19] Thus, the rule against hearsay
testimony rests mainly on the ground that there was no opportunity to cross-
examine the declarant.[20] The testimony may have been given under oath and
before a court of justice, but if it is offered against a party who is afforded no
opportunity to cross-examine the witness, it is hearsay just the same.[21]

Moreover, the theory of the hearsay rule is that when a human utterance is
offered as evidence of the truth of the fact asserted, the credit of the assertor
becomes the basis of inference, and, therefore, the assertion can be received as
evidence only when made on the witness stand, subject to the test of cross-
examination. However, if an extrajudicial utterance is offered, not as an assertion to
prove the matter asserted but without reference to the truth of the matter asserted,
the hearsay rule does not apply. For example, in a slander case, if a prosecution
witness testifies that he heard the accused say that the complainant was a thief, this
testimony is admissible not to prove that the complainant was really a thief, but
merely to show that the accused uttered those words.[22] This kind of utterance
ishearsay in character but is not legal hearsay.[23]The distinction is, therefore,
between (a) the fact that the statement was made, to which the hearsay rule does
not apply, and (b) the truth of the facts asserted in the statement, to which the
hearsay rule applies.[24]
Section 36, Rule 130 of the Rules of Court is understandably not the only
rule that explains why testimony that is hearsay should be excluded from
consideration. Excluding hearsay also aims to preserve the right of the opposing
party to cross-examine the originaldeclarant claiming to have a direct knowledge
of the transaction or occurrence.[25]If hearsay is allowed, the right stands to be
denied because the declarant is not in court.[26]It is then to be stressed that the right
to cross-examine the adverse partys witness,

being the only means of testing the credibility of witnesses and their testimonies, is
essential to the administration of justice.

To address the problem of controlling inadmissible hearsay as evidence to


establish the truth in a dispute while also safeguardinga partys right to cross-
examine her adversarys witness,the Rules of Court offers two
solutions. The firstsolution is to require that allthe witnesses in a judicial trial or
hearing be examined only in courtunder oath or affirmation. Section 1, Rule 132 of
the Rules of Court formalizes this solution,viz:

Section 1. Examination to be done in open court. - The


examination of witnesses presented in a trial or hearing shall be done
in open court, and under oath or affirmation. Unless the witness is
incapacitated to speak, or the question calls for a different mode of
answer, the answers of the witness shall be given orally. (1a)

The secondsolution is to require that all witnesses besubject to the cross-


examination by the adverse party. Section 6, Rule 132 of the Rules of
Courtensuresthis solutionthusly:

Section 6. Cross-examination; its purpose and extent. Upon the


termination of the direct examination, the witness may be cross-
examined by the adverse party as to any matters stated in the direct
examination, or connected therewith, with sufficient fullness and
freedom to test his accuracy and truthfulness and freedom from
interest or bias, or the reverse, and to elicit all important facts bearing
upon the issue. (8a)

Although the second solution traces its existence to a Constitutional precept


relevant to criminal cases, i.e., Section 14, (2), Article III, of the
1987 Constitution,which guarantees that: In all criminal prosecutions, the accused
shall xxx enjoy the right xxx to meet the witnesses face to face xxx, the rule
requiring the cross-examination by the adverse party equally applies to non-
criminal proceedings.
We thus stress that the rule excluding hearsay as evidence is based upon
serious concerns about the trustworthiness and reliability of hearsay evidence due
to its not being given under oath or solemn affirmation and due to its not being
subjected to cross-examination by the opposing counsel to test the perception,
memory, veracity and articulateness of the out-of-court declarant or actor upon
whose reliability the worth of the out-of-court statement depends.[27]

Based on the foregoing considerations, Guivencans testimony as well as


Exhibits B to YY, and their derivatives, inclusive, must be entirely rejected as
proof of petitioners misappropriation or conversion.

III

Lack of their proper authentication rendered

Exhibits B to YY and their derivatives

inadmissible as judicial evidence

Petitioner also contends that the RTC grossly erred in admitting as evidence
Exhibits B to YY, and their derivatives, inclusive, despite their being private
documents that were not duly authenticated as required by Section 20, Rule 132 of
the Rules of Court.

Section 19, Rule 132 of the Rules of Courtdistinguishes between a public


document and a private document for the purpose of their presentation in
evidence, viz:

Section 19. Classes of documents. For the purpose of their


presentation in evidence, documents are either public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and public officers,
whether of the Philippines, or of a foreign country;

(b) Documents acknowledged before a notary public except last


wills and testaments, and
(c) Public records, kept in the Philippines, of private documents
required by law to be entered therein.

All other writings are private.

The nature of documents as either public or private determines how the


documents may be presented as evidence in court. A public document, by virtue of
its official or sovereign character, or because it has been acknowledged before a
notary public (except a notarial will) or a competent public official with the
formalities required by law, or because it is a public record of a private writing
authorized by law, is self-authenticating and requires no further authentication in
order to be presented as evidence in court.In contrast, a private document is any
other writing, deed, or instrument executed by a private person without the
intervention of a notary or other person legally authorized by which some
disposition or agreement is proved or set forth. Lacking the official or sovereign
character of a public document, or the solemnities prescribed by law, a private
document requires authentication in the manner allowed by law or the Rules of
Court before its acceptance as evidence in court. The requirement of authentication
of a private document is excused only in four instances, specifically: (a) when the
document is an ancient one within the context of Section 21,[28] Rule 132 of
the Rules of Court; (b) when the genuineness and authenticity of an actionable
document have not been specifically denied under oath by the adverse party;[29](c)
when thegenuineness and authenticity of the document

have been admitted;[30] or (d) when the document is not being offered as
genuine.[31]

There is no question that Exhibits B to YY and their derivatives were private


documents because private individuals executed or generated them for private or
business purposes or uses. Considering that none of the exhibits came under any of
the four exceptions, they could not be presented and admitted as evidence against
petitioner without the Prosecution dutifully seeing to their authentication in the
manner provided in Section20 of Rule 132 of the Rules of Court,viz:

Section 20. Proof of private documents. Before any private


document offered as authentic is received in evidence, its due
execution and authenticity must be proved either:

(a) By anyone who saw the document executed or written;


or
(b) By evidence of the genuineness of the signature or
handwriting of the maker.

Any other private document need only be identified as that which


it is claimed to be.

The Prosecutionattempted to have Go authenticate the signature of petitioner


in various receipts, to wit:

ATTY. ABIERA:
Q. Now, these receipts which you mentioned which do not tally with
the original receipts, do you have copies of these receipts?
A. Yes, I have a copy of these receipts, but its not now in my
possession.
Q. But when asked to present those receipts before this Honorable
Court, can you assure this

(Next Page)

ATTY ABIERA (continuing):


Honorable Court that you will be able to present those receipts?
A. Yes.
Q. You are also familiar with the signature of the accused in this
case, Anna Lerima Patula?
A. Yes.
Q. Why are you familiar with the signature of the accused in this
case?
A. I used to see her signatures in the payroll and in the receipts
also.
Q. Okay, I have here a machine copy of a receipt which we would
present this,or offer the same as soon as the original receipts
can be presented, but for purposes only of your testimony,
Im going to point to you a certain signature over this
receipt number FLDT96 20441, a receipt from Cirila
Askin, kindly go over the signature and tell the
Honorable Court whether you are familiar with the
signature?
A. Yes, that is her signature.
INTERPRETER:
Witness is pointing to a signature above the printed word collector.

(Next Page)

ATTY. ABIERA:
Q. Is this the only receipt wherein the name, the signature rather,
of the accused in this case appears?
A. That is not the only one, there are many receipts.
ATTY. ABIERA:
In order to save time, Your Honor, we will just be presenting the
original receipts Your Honor, because its quite voluminous,
so we will just forego with the testimony of the witness but
we will just present the same using the testimony of
another witness, for purposes of identifying the signature
of the accused. We will request that this signature which
has been identified to by the witness in this case be marked,
Your Honor, with the reservation to present the original
copy and present the same to offer as our exhibits but for the
meantime, this is only for the purposes of recording, Your
Honor, which we request the same, the receipt which has
just been identified awhile ago be marked as our Exhibit A
You Honor.
COURT:
Mark the receipt as Exhibit A.
ATTY. ABIERA:
And the signature be bracketed and be marked as Exhibit A-1.

(Next Page)

COURT:
Bracket the signature &mark it as Exh. A-1. What is the number of
that receipt?

ATTY. ABIERA:
Receipt No. 20441 dated August 4, 1996 the statement that: received
from Cirila Askin.[32]
xxx

As the excerpts indicate, Gos attempt at authentication of the signature of


petitioner on the receipt with serial number FLDT96 No. 20441 (a document that
was marked as Exhibit A, while the purported signature of petitioner thereon was
marked as Exhibit A-1) immediately fizzled out after the Prosecution admitted that
the document was a meremachinecopy, not the original. Thereafter, as if to soften
its failed attempt, the Prosecution expressly promised to produce at a later date the
originalsof the receipt with serial number FLDT96 No. 20441 and other receipts.
But that promise was not even true, because almost in the same breath the
Prosecution offered to authenticate the signature of petitioner on the
receiptsthrougha different witness (though then still unnamed). As matters turned
out in the end, the effort to have Go authenticate both themachinecopy of the
receiptwith serial number FLDT96 No. 20441 and the signature of petitioner on
that receipt was wasteful because the machine copy was inexplicablyforgotten and
was no longer evenincluded in the Prosecutions Offer of Documentary Evidence.

It is true that the original of the receipt bearing serial number FLDT96 No.
20441was subsequentlypresented as Exhibit Bthrough Guivencan. However,the
Prosecution did not establishthat the signature appearing on Exhibit B was the
same signature that Go had earliersought to identify to be the signature of
petitioner (Exhibit A-1) on the machine copy (Exhibit A). This is borne out by the
fact that the Prosecution abandoned Exhibit A as the marking nomenclature for the
machine copyof the receipt bearing serial number FLDT96 No. 20441 for all
intents and purposes of this case, and used the same nomenclature to referinstead
toan entirely differentdocument entitled List of Customers covered by ANA
LERIMA PATULA w/difference in Records as per Audit duly verified March 16-
20, 1997.

In her case, Guivencans identification of petitioners signature on two


receipts based alone on the fact that the signatures contained the legible family
name of Patula was ineffectual, and exposed yet another deep flaw infecting the
documentary evidence against petitioner. Apparently, Guivencan could not
honestly identify petitioners signature on the receipts either because she lacked
familiarity with such signature, or because she had not seen petitioner affix her
signature on the receipts, as the following excerpts from her testimony bear out:

ATTY. ZERNA to witness:

Q. There are two (2) receipts attached here in the


confirmation sheet, will you go over these Miss witness?

A. This was the last payment which is fully paid by the


customer. The other receipt is the one showing her payment
prior to the last payment.

COURT:

Q. Where did you get those two (2) receipts?

A. From the customer.

Q. And who issued those receipts?

A. The saleswoman, Miss Patula.

ATTY. ZERNA:

We pray, Your Honor, that this receipt identified be marked as Exhibit


B-3, receipt number 20441.

(Next Page)

COURT:

Mark it.

ATTY. ZERNA:

The signature of the collector be marked as


Q. By the way, there is a signature above the name of the
collector, are your familiar with that signature? (shown
to witness)

A. Yes.

Q. Whose signature is that?

A. Miss Patula.

Q. How do you know?

A. It can be recognized because of the word Patula.

Q. Are you familiar with her signature?

A. Yes.

ATTY. ZERNA:

We pray that the signature be bracketed and marked as Exhibit B-3-a

COURT:

Mark it.

ATTY. ZERNA:

The other receipt number 20045 be marked as Exhibit B-4 and the
signature as Exhibit B-4-a.

COURT:

Mark it.[33]

xxx

ATTY. ZERNA:

Q. Ms. Witness, here is a receipt colored white, number 26603 issued


to one Divina Cadilig. Will you please identify this receipt if
this is the receipt of your office?

A.Yes.

Q.There is a signature over the portion for the collector. Whose


signature is this?

A.Ms. Patula.

Q.How do you know that this is her signature?

A.Because we can read the Patula.[34]


We also have similar impressions of lack of proper authentication as to the ledgers
the Prosecution presented to prove the discrepancies between the
amountspetitioner hadallegedly received from the customers and the amounts she
had actually remitted to Footluckers. Guivencanexclusively relied on the entries of
the unauthenticated ledgersto support her audit report on petitioners supposed
misappropriation or conversion, revealing her lack of independent knowledge of
the veracity of the entries, as the following excerpts of her testimony show:
ATTY. ZERNA to witness:

Q. What is your basis of saying that your office records showed


that this Cecilia Askin has an account of P10,791.75?

ATTY. DIEZ:

The question answers itself, You Honor, what is the basis, office
record.

COURT:

Let the witness answer.

WITNESS:

A. I made the basis on our ledger in the office. I just copied that and
showed it to the customers for confirmation.

ATTY. ZERNA to witness:

Q. What about the receipts?

COURT:

Make a follow-up question and what was the result when you copied
that amount in the ledger and you had it confirmed by the
customers, what was the result when you had it confirmed
by the customers?

WITNESS:

A. She has no more balance but in our office she has still a balance
of P10,971.75.

ATTY. ZERNA to witness:

Q. Do you have a-whats the basis of saying that the balance of this
customer is still P10,971.75

(Next Page)
ATTY. ZERNA (continuing):

[i]n your office?

COURT:

That was already answered paero, the office has a ledger.

Q. Now, did you bring the ledger with you?

A. No, Maam.[35]

(Continuation of the Direct Examination of

Karen Guivencan on August 13, 2002)

ATTY. ZERNA to witness:

Q. Okay, You said there are discrepancies between the original and
the duplicate, will you please enlighten the Honorable
Court on that discrepancy which you said?

A. Like in this case of Cirila Askin, she has already fully paid. Her
ledger shows a zero balance she has fully paid while in the
original

(Next page)

WITNESS (continuing):

[r]eceipt she has a balance of Ten Thousand Seven hundred


Ninety-one Pesos and Seventy-five Centavos (10,791.75).

COURT:

Q. What about the duplicate receipt, how much is indicated there?

A. The customer has no duplicate copy because it was already


forwarded to the Manila Office.

Q. What then is your basis in the entries in the ledger showing that it
has already a zero balance?

A. This is the copy of the customer while in the office, in the original
receipt she has still a balance.

xxx

ATTY. ZERNA:
The confirmation sheet ---

COURT:

The confirmation sheet was the one you referred to as the receipt in
your earlier testimony? Is that what you referred to as the
receipts, the original receipts?

A. This is what I copied from the ledger.

Q. So where was that(sic) original receipt which you said showed that
that particular customer still has a balance of Ten Thousand
something?

A. The receipt is no longer here.

Q. You mean the entry of that receipt was already entered in the
ledger?

A. Yes.[36]

In the face of the palpable flaws infecting the Prosecutions evidence, it should
come as no surprise that petitioners counsel interposed timely objections. Yet, the
RTC mysteriously overruled the objections and allowedthe Prosecutionto present
the unauthenticated ledgers, as follows:

(Continuation of the Direct Examination of

Witness Karen Guivencan on September 11, 2002)

ATTY. ZERNA:

CONTINUATION OF DIRECT-EXAMINATION

Q Ms. Witness, last time around you were showing us several ledgers.
Where is it now?

A It is here.
Q Here is a ledger of one Divina Cadilig. This Divina Cadilig, how
much is her account in your office?

ATTY. DIEZ:

Your Honor please before the witness will proceed to answer the
question, let me interpose our objection on the ground
that this ledger has not been duly identified to by the
person who made the same. This witness will be
testifying on hearsay matters because the supposed
ledger was not identified to by the person who made the
same.

COURT:

Those ledgers were already presented in the last hearing. I think they
were already duly identified by this witness. As a matter of
fact, it was she who brought them to court

(Next Page)

COURT (cont.):

because these were the ledgers on file in their office.

ATTY. DIEZ

That is correct, Your Honor, but the person who made the entries is
not this witness, Your Honor. How do we know that the
entries there is (sic) correct on the receipts submitted to
their office.

COURT:

Precisely, she brought along the receipts also to support that. Let the
witness answer.

WITNESS:

A Its the office clerk in-charge.

COURT:

The one who prepared the ledger is the office clerk.

ATTY. ZERNA:

She is an auditor, Your Honor. She has been qualified and she is the
auditor of Footluckers.

COURT:
I think, I remember in the last setting also, she testified where those
entries were taken. So, you answer the query of counsel.

xxx

ATTY. DIEZ:

Your Honor please, to avoid delay, may I interpose a continuing


objection to the questions profounded(sic) on those
ledgers on the ground that, as I have said, it is hearsay.

COURT:

Okey(sic). Let the continuing objection be noted.

Q (To Witness) The clerk who allegedly was the one who prepared
the entries on those ledgers, is she still connected with
Footluckers?

A She is no longer connected now, Your Honor,

COURT:

Alright proceed.

(Next Page)

ATTY. ZERNA:

Your Honor, these are entries in the normal course of business.


So, exempt from the hearsay rule.

COURT:

Okey(sic), proceed.[37]

The mystery shrouding the RTCs soft treatment of the Prosecutions flawed
presentation was avoidable simply by the RTC adhering to the instructions of the
rules earlier quoted, as well as withSection 22 of Rule 132 of the Rules of
Court,which contains instructions on how to prove the genuineness of a
handwriting in a judicial proceeding, as follows:

Section 22. How genuineness of handwriting proved. The


handwriting of a person may be proved by any witness who believes it
to be the handwriting of such person because he has seen the person
write, or has seen writing purporting to be his upon which the
witness has acted or been charged, and has thus acquired knowledge
of the handwriting of such person. Evidence respecting the
handwriting may also be given by a comparison, made by the
witness or the court, with writings admitted or treated as
genuine by the party against whom the evidence is offered, or proved
to be genuine to the satisfaction of the judge. (Emphases supplied)

If it is already clear that Go and Guivencan had not themselves seen the
execution or signing of the documents,the Prosecution surely did not
authenticate Exhibits B to YY and their derivatives conformably with the
aforequoted rules. Hence, Exhibits B to YY, and their derivatives, inclusive, were
inescapably bereft of probative value as evidence. That was the onlyfair and just
result, as the Court held in Malayan Insurance Co., Inc. v. Philippine Nails and
Wires Corporation:[38]

On the first issue, petitioner Malayan Insurance Co., Inc.,


contends that Jeanne Kings testimony was hearsay because she
had no personal knowledge of the execution of the documents
supporting respondents cause of action, such as the sales contract,
invoice, packing list, bill of lading, SGS Report, and the Marine
Cargo Policy. Petitioner avers that even though King was personally
assigned to handle and monitor the importation of Philippine Nails
and Wires Corporation, herein respondent, this cannot be equated with
personal knowledge of the facts which gave rise to respondents cause
of action. Further, petitioner asserts, even though she personally
prepared the summary of weight of steel billets received by
respondent, she did not have personal knowledge of the weight of
steel billets actually shipped and delivered.

At the outset, we must stress that respondents cause of action is


founded on breach of insurance contract covering cargo consisting of
imported steel billets. To hold petitioner liable, respondent has to
prove, first, its importation of 10,053.400 metric tons of steel billets
valued at P67,156,300.00, and second, the actual steel billets delivered
to and received by the importer, namely the respondent. Witness
Jeanne King, who was assigned to handle respondents importations,
including their insurance coverage, has personal knowledge of the
volume of steel billets being imported, and therefore competent to
testify thereon. Her testimony is not hearsay, as this doctrine is
defined in Section 36, Rule 130 of the Rules of Court.However, she is
not qualified to testify on the shortage in the delivery of the
imported steel billets. She did not have personal knowledge of the
actual steel billets received. Even though she prepared the
summary of the received steel billets, she based the summary only
on the receipts prepared by other persons. Her testimony on steel
billets received was hearsay. It has no probative value even if not
objected to at the trial.

On the second issue, petitioner avers that King failed to properly


authenticate respondents documentary evidence. Under Section 20,
Rule 132, Rules of Court, before a private document is admitted
in evidence, it must be authenticated either by the person who
executed it, the person before whom its execution was
acknowledged, any person who was present and saw it executed,
or who after its execution, saw it and recognized the signatures, or
the person to whom the parties to the instruments had previously
confessed execution thereof. In this case, respondent admits that
King was none of the aforementioned persons. She merely made
the summary of the weight of steel billets based on the
unauthenticated bill of lading and the SGS report. Thus, the
summary of steel billets actually received had no proven real
basis, and Kings testimony on this point could not be taken at face
value.

xxx Under the rules on evidence, documents are either public or


private. Private documents are those that do not fall under any of the
enumerations in Section 19, Rule 132 of the Rules of Court.Section
20of the same law, in turn, provides that before any private document
is received in evidence, its due execution and authenticity must be
proved either by anyone who saw the document executed or written,
or by evidence of the genuineness of the signature or handwriting of
the maker. Here, respondents documentary exhibits are private
documents. They are not among those enumerated in Section 19,
thus, their due execution and authenticity need to be proved
before they can be admitted in evidence.With the exception
concerning the summary of the weight of the steel billets
imported, respondent presented no supporting evidence
concerning their authenticity. Consequently, they cannot be
utilized to prove less of the insured cargo and/or the short
delivery of the imported steel billets. In sum, we find no sufficient
competent evidence to prove petitioners liability.
That the Prosecutions evidence was left uncontested because petitioner
decided not to subject Guivencan to cross-examination, and did not tender her
contrary evidencewas inconsequential. Although the trial court had overruled the
seasonable objections to Guivencans testimony bypetitioners counsel due to the
hearsay character, it could not be denied thathearsay evidence, whether objected to
or not, had no probative value.[39]Verily, the flaws of the Prosecutions evidence
were fundamental and substantive, not merely technical and procedural, and were
defects that the adverse partys waiver of her cross-examination or failure to
rebutcould not set right or cure. Nor did the trial courts overruling of petitioners
objections imbue the flawed evidence with any virtue and value.

Curiously, the RTC excepted the entries in the ledgers from the application
of the hearsay rule by also terselystating that the ledgers were prepared in the
regular course of business.[40]Seemingly, the RTC applied Section 43, Rule 130 of
the Rules of Court, to wit:

Section 43. Entries in the course of business. Entries made at, or


near the time of the transactions to which they refer, by a person
deceased, or unable to testify, who was in a position to know the facts
therein stated, may be received as prima facie evidence, if such person
made the entries in his professional capacity or in the performance of
duty and in the ordinary or regular course of business or duty.

This was another grave error of the RTC.The terse yet sweeping mannerof
justifying the application of Section 43 was unacceptable due to the need to show
the concurrence of the several requisites before entries in the course of business
could be excepted from the hearsay rule. The requisites are as follows:

(a) The person who made the entry must be dead or unable to testify;

(b) The entries were made at or near the time of the transactions to
which they refer;

(c) The entrant was in a position to know the facts stated in the
entries;

(d) The entries were made in his professional capacity or in the


performance of a duty, whether legal, contractual, moral, or
religious;
(e) The entries were made in the ordinary or regular course of
business or duty.[41]

The Court has to acquit petitioner for failure of the State to establish her
guilt beyond reasonable doubt. The Court reiterates that in the trial of every
criminal case, a judge must rigidly test the States evidence of guilt in order to
ensure that such evidence adhered to the basic rules of admissibility before
pronouncing an accused guilty of the crime charged upon such evidence. The
failure of the judge to do so herein nullified the guarantee of due of process of law
in favor of the accused, who had no obligation to prove her innocence. Heracquittal
should follow.

IV

No reliable evidence on damage

Conformably with finding the evidence of guilt unreliable, the Court


declares that the disposition by the RTC ordering petitioner to indemnify
Footluckers in the amount of P131,286.92 with interest of 12% per annum until
fully paid was not yet shown to be factually founded. Yet, she cannot now be
absolved of civil liability on that basis. Heracquittal has to bedeclared as without
prejudice to the filing of a civil action against her for the recovery of any amount
that she may still owe to Footluckers.

WHEREFORE, the Court SETS ASIDE ANDREVERSESthe decision


convicting ANNA LERIMA PATULAof estafa as charged, and ACQUITS her
for failure of the Prosecution to prove her guilt beyond reasonable doubt, without
prejudice to a civil action brought against her for

the recoveryof any amount still owing in favor of Footluckers Chain of Stores, Inc.

No pronouncement on costs of suit.

SO ORDERED.

THIRD DIVISION

ATCI OVERSEAS G.R. No. 178551


CORPORATION, AMALIA
G. IKDAL and MINISTRY Present:
OF PUBLIC HEALTH-
KUWAIT CARPIO MORALES, Chairperson, J.,
Petitioners, BRION,
BERSAMIN,
VILLARAMA, JR., and
- versus - SERENO, JJ.

Promulgated:
October 11, 2010
MA. JOSEFA ECHIN,
Respondent.

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DECISION

CARPIO MORALES, J.:

Josefina Echin (respondent) was hired by petitioner ATCI Overseas


Corporation in behalf of its principal-co-petitioner, the Ministry of Public Health
of Kuwait (the Ministry), for the position of medical technologist under a two-year
contract, denominated as a Memorandum of Agreement (MOA), with a monthly
salary of US$1,200.00.

Under the MOA,[1] all newly-hired employees undergo a probationary period


of one (1) year and are covered by Kuwaits Civil Service Board Employment
Contract No. 2.

Respondent was deployed on February 17, 2000 but was terminated from
employment on February 11, 2001, she not having allegedly passed the
probationary period.

As the Ministry denied respondents request for reconsideration, she returned


to the Philippines on March 17, 2001, shouldering her own air fare.

On July 27, 2001, respondent filed with the National Labor Relations
Commission (NLRC) a complaint[2] for illegal dismissal against petitioner ATCI as
the local recruitment agency, represented by petitioner, Amalia Ikdal (Ikdal), and
the Ministry, as the foreign principal.

By Decision[3] of November 29, 2002, the Labor Arbiter, finding that


petitioners neither showed that there was just cause to warrant respondents
dismissal nor that she failed to qualify as a regular employee, held that respondent
was illegally dismissed and accordingly ordered petitioners to pay her
US$3,600.00, representing her salary for the three months unexpired portion of her
contract.

On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor
Arbiters decision by Resolution[4] of January 26, 2004. Petitioners motion for
reconsideration having been denied by Resolution [5] of April 22, 2004, they
appealed to the Court of Appeals, contending that their principal, the Ministry,
being a foreign government agency, is immune from suit and, as such, the
immunity extended to them; and that respondent was validly dismissed for her
failure to meet the performance rating within the one-year period as required under
Kuwaits Civil Service Laws. Petitioners further contended that Ikdal should not be
liable as an officer of petitioner ATCI.

By Decision[6] of March 30, 2007, the appellate court affirmed the NLRC
Resolution.

In brushing aside petitioners contention that they only acted as agent of the
Ministry and that they cannot be held jointly and solidarily liable with it, the
appellate court noted that under the law, a private employment agency shall
assume all responsibilities for the implementation of the contract of employment of
an overseas worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of
employment.

As to Ikdals liability, the appellate court held that under Sec. 10 of Republic
Act No. 8042, the Migrant and Overseas Filipinos Act of 1995, corporate officers,
directors and partners of a recruitment agency may themselves be jointly and
solidarily liable with the recruitment agency for money claims and damages
awarded to overseas workers.

Petitioners motion for reconsideration having been denied by the appellate


court by Resolution[7] of June 27, 2007, the present petition for review on certiorari
was filed.

Petitioners maintain that they should not be held liable because respondents
employment contract specifically stipulates that her employment shall be governed
by the Civil Service Law and Regulations of Kuwait. They thus conclude that it
was patent error for the labor tribunals and the appellate court to apply the Labor
Code provisions governing probationary employment in deciding the present case.

Further, petitioners argue that even the Philippine Overseas Employment


Act (POEA) Rules relative to master employment contracts (Part III, Sec. 2 of the
POEA Rules and Regulations) accord respect to the customs, practices, company
policies and labor laws and legislation of the host country.

Finally, petitioners posit that assuming arguendo that Philippine labor laws
are applicable, given that the foreign principal is a government agency which is
immune from suit, as in fact it did not sign any document agreeing to be held
jointly and solidarily liable, petitioner ATCI cannot likewise be held liable, more
so since the Ministrys liability had not been judicially determined as jurisdiction
was not acquired over it.

The petition fails.

Petitioner ATCI, as a private recruitment agency, cannot evade


responsibility for the money claims of Overseas Filipino workers (OFWs) which it
deploys abroad by the mere expediency of claiming that its foreign principal is a
government agency clothed with immunity from suit, or that such foreign
principals liability must first be established before it, as agent, can be held jointly
and solidarily liable.

In providing for the joint and solidary liability of private recruitment


agencies with their foreign principals, Republic Act No. 8042 precisely affords the
OFWs with a recourse and assures them of immediate and sufficient payment of
what is due them. Skippers United Pacific v. Maguad[8] explains:

. . . [T]he obligations covenanted in the recruitment agreement


entered into by and between the local agent and its foreign principal
are not coterminous with the term of such agreement so that if either
or both of the parties decide to end the agreement, the responsibilities of
such parties towards the contracted employees under the agreement do
not at all end, but the same extends up to and until the expiration of the
employment contracts of the employees recruited and employed pursuant
to the said recruitment agreement. Otherwise, this will render
nugatory the very purpose for which the law governing the
employment of workers for foreign jobs abroad was
enacted. (emphasis supplied)

The imposition of joint and solidary liability is in line with the policy of the state to
protect and alleviate the plight of the working class.[9] Verily, to allow petitioners
to simply invoke the immunity from suit of its foreign principal or to wait for the
judicial determination of the foreign principals liability before petitioner can be
held liable renders the law on joint and solidary liability inutile.

As to petitioners contentions that Philippine labor laws on probationary


employment are not applicable since it was expressly provided in respondents
employment contract, which she voluntarily entered into, that the terms of her
engagement shall be governed by prevailing Kuwaiti Civil Service Laws and
Regulations as in fact POEA Rules accord respect to such rules, customs and
practices of the host country, the same was not substantiated.

Indeed, a contract freely entered into is considered the law between the
parties who can establish stipulations, clauses, terms and conditions as they may
deem convenient, including the laws which they wish to govern their respective
obligations, as long as they are not contrary to law, morals, good customs, public
order or public policy.

It is hornbook principle, however, that the party invoking the application of


a foreign law has the burden of proving the law, under the doctrine of processual
presumptionwhich, in this case, petitioners failed to discharge. The Courts ruling
in EDI-Staffbuilders Intl., v. NLRC[10] illuminates:

In the present case, the employment contract signed by Gran


specifically states that Saudi Labor Laws will govern matters not
provided for in the contract (e.g. specific causes for termination,
termination procedures, etc.). Being the law intended by the parties (lex
loci intentiones) to apply to the contract, Saudi Labor Laws should
govern all matters relating to the termination of the employment of Gran.

In international law, the party who wants to have a foreign law


applied to a dispute or case has the burden of proving the foreign
law. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take
judicial notice of a foreign law. He is presumed to know only domestic
or forum law.

Unfortunately for petitioner, it did not prove the pertinent Saudi


laws on the matter; thus, the International Law doctrine
of presumed-identity approach or processual presumptioncomes into
play. Where a foreign law is not pleaded or, even if pleaded, is not
proved, the presumption is that foreign law is the same as ours.
Thus, we apply Philippine labor laws in determining the issues
presented before us. (emphasis and underscoring supplied)

The Philippines does not take judicial notice of foreign laws, hence, they
must not only be alleged; they must be proven. To prove a foreign law, the party
invoking it must present a copy thereof and comply with Sections 24 and 25
of Rule 132 of the Revised Rules of Court which reads:

SEC. 24. Proof of official record. The record of public documents


referred to in paragraph (a) of Section 19, when admissible for any
purpose, may be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of the record, or by
his deputy, and accompanied, if the record is not kept in the Philippines,
with a certificate that such officer has the custody. If the office in which
the record is kept is in a foreign country, the certificate may be
made by a secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country in which
the record is kept, and authenticated by the seal of his
office. (emphasis supplied)

SEC. 25. What attestation of copy must state. Whenever a copy of


a document or record is attested for the purpose of the evidence, the
attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be. The attestation
must be under the official seal of the attesting officer, if there be any, or
if he be the clerk of a court having a seal, under the seal of such court.

To prove the Kuwaiti law, petitioners submitted the following: MOA


between respondent and the Ministry, as represented by ATCI, which provides that
the employee is subject to a probationary period of one (1) year and that the host
countrys Civil Service Laws and Regulations apply; a translated copy[11] (Arabic to
English) of the termination letter to respondent stating that she did not pass the
probation terms, without specifying the grounds therefor, and a translated copy of
the certificate of termination,[12] both of which documents were certified by Mr.
Mustapha Alawi, Head of the Department of Foreign Affairs-Office of Consular
Affairs Inslamic Certification and Translation Unit; and respondents letter[13] of
reconsideration to the Ministry, wherein she noted that in her first eight (8) months
of employment, she was given a rating of Excellent albeit it changed due to
changes in her shift of work schedule.
These documents, whether taken singly or as a whole, do not sufficiently
prove that respondent was validly terminated as a probationary employee under
Kuwaiti civil service laws. Instead of submitting a copy of the pertinent
Kuwaiti labor laws duly authenticated and translated by Embassy officials
thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the MOA
and the termination letter which does not prove at all that Kuwaiti civil
service laws differ from Philippine laws and that under such Kuwaiti laws,
respondent was validly terminated. Thus the subject certifications read:

xxxx

This is to certify that the herein attached translation/s from Arabic to


English/Tagalog and or vice versa was/were presented to this Office for
review and certification and the same was/were found to be in
order. This Office, however, assumes no responsibility as to the
contents of the document/s.

This certification is being issued upon request of the interested party for
whatever legal purpose it may serve. (emphasis supplied)

Respecting Ikdals joint and solidary liability as a corporate officer, the same
is in order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 10. Money Claims.Notwithstanding any provision of law to


the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the
complaint, the claims arising out of an employer-employee relationship
or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual moral, exemplary and
other forms of damages.
The liability of the principal/employer and the recruitment/placement
agency for any and all claims under this section shall be joint and
several. This provision shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as
provided by law, shall be answerable for all money claims or damages
that may be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the
aforesaid claims and damages. (emphasis and underscoring supplied)

WHEREFORE, the petition is DENIED.

SO ORDERED.

SECOND DIVISION
MARISSA R. UNCHUAN, G.R. No. 172671

Petitioner,
Present:

QUISUMBING, J., Chairperson,

CARPIO MORALES,
- versus -
TINGA,

VELASCO, JR., and

BRION, JJ.
ANTONIO J.P. LOZADA, ANITA LOZADA
and THE REGISTER OF DEEDS
OF CEBU CITY, Promulgated:

Respondents. April 16, 2009

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DECISION
QUISUMBING, J.:

For review are the Decision[1] dated February 23, 2006 and
Resolution[2] dated April 12, 2006 of the Court of Appeals in CA-G.R. CV. No.
73829. The appellate court had affirmed with modification the Order[3] of the
Regional Trial Court (RTC) of Cebu City, Branch 10 reinstating its
Decision[4] dated June 9, 1997.

The facts of the case are as follows:

Sisters Anita Lozada Slaughter and Peregrina Lozada Saribay were the
registered co-owners of Lot Nos. 898-A-3 and 898-A-4 covered by Transfer
Certificates of Title (TCT) Nos. 53258[5] and 53257[6] in Cebu City.

The sisters, who were based in the United States, sold the lots to their
nephew Antonio J.P. Lozada (Antonio) under a Deed of Sale[7] dated March 11,
1994. Armed with a Special Power of Attorney[8] from Anita, Peregrina went to
the house of their brother, Dr. Antonio Lozada (Dr. Lozada), located at 4356
Faculty Avenue, Long Beach California.[9] Dr. Lozada agreed to advance the
purchase price of US$367,000 or P10,000,000 for Antonio, his nephew. The Deed
of Sale was later notarized and authenticated at the Philippine Consuls Office. Dr.
Lozada then forwarded the deed, special power of attorney, and owners copies of
the titles to Antonio in the Philippines. Upon receipt of said documents, the latter
recorded the sale with the Register of Deeds of Cebu. Accordingly, TCT Nos.
128322[10] and 128323[11] were issued in the name of Antonio Lozada.
Pending registration of the deed, petitioner Marissa R. Unchuan caused the
annotation of an adverse claim on the lots. Marissa claimed that Anita donated an
undivided share in the lots to her under an unregistered Deed of
Donation[12] dated February 4, 1987.

Antonio and Anita brought a case against Marissa for quieting of title with
application for preliminary injunction and restraining order. Marissa for her part,
filed an action to declare the Deed of Sale void and to cancel TCT Nos. 128322 and
128323. On motion, the cases were consolidated and tried jointly.

At the trial, respondents presented a notarized and duly authenticated sworn


statement, and a videotape where Anita denied having donated land in favor of
Marissa. Dr. Lozada testified that he agreed to advance payment for Antonio in
preparation for their plan to form a corporation. The lots are to be eventually infused
in the capitalization of Damasa Corporation, where he and Antonio are to have 40%
and 60% stake, respectively. Meanwhile, Lourdes G. Vicencio, a witness for
respondents confirmed that she had been renting the ground floor of Anitas house
since 1983, and tendering rentals to Antonio.

For her part, Marissa testified that she accompanied Anita to the office of
Atty. Cresencio Tomakin for the signing of the Deed of Donation. She allegedly
kept it in a safety deposit box but continued to funnel monthly rentals to
Peregrinas account.

A witness for petitioner, one Dr. Cecilia Fuentes, testified on Peregrinas


medical records. According to her interpretation of said records, it was physically
impossible for Peregrina to have signed the Deed of Sale on March 11, 1994,
when she was reported to be suffering from edema. Peregrina died on April 4,
1994.

In a Decision dated June 9, 1997, RTC Judge Leonardo B. Caares disposed of


the consolidated cases as follows:
WHEREFORE, judgment is hereby rendered in Civil Case No. CEB-16145, to wit:

1. Plaintiff Antonio J.P. Lozada is declared the absolute owner of the properties
in question;

2. The Deed of Donation (Exh. 9) is declared null and void, and Defendant
Marissa R. Unchuan is directed to surrender the original thereof to the Court for
cancellation;

3. The Register of Deeds of Cebu City is ordered to cancel the annotations of the
Affidavit of Adverse Claim of defendant Marissa R. Unchuan on TCT Nos. 53257 and
53258 and on such all other certificates of title issued in lieu of the aforementioned
certificates of title;
4. Defendant Marissa R. Unchuan is ordered to pay Antonio J.P. Lozada and
Anita Lozada Slaughter the sum of P100,000.00 as moral damages; exemplary damages
of P50,000.00; P50,000.00 for litigation expenses and attorneys fees of P50,000.00; and

5. The counterclaims of defendant Marissa R. Unchuan [are] DISMISSED.

In Civil Case No. CEB-16159, the complaint is hereby DISMISSED.

In both cases, Marissa R. Unchuan is ordered to pay the costs of suit.

SO ORDERED.[13]

On motion for reconsideration by petitioner, the RTC of Cebu City, Branch


10, with Hon. Jesus S. dela Pea as Acting Judge, issued an Order[14] dated April 5,
1999. Said order declared the Deed of Sale void, ordered the cancellation of the
new TCTs in Antonios name, and directed Antonio to pay Marissa P200,000 as
moral damages, P100,000 as exemplary damages, P100,000 attorneys fees
and P50,000 for expenses of litigation. The trial court also declared the Deed of
Donation in favor of Marissa valid. The RTC gave credence to the medical records
of Peregrina.

Respondents moved for reconsideration. On July 6, 2000, now with Hon.


Soliver C. Peras, as Presiding Judge, the RTC of Cebu City, Branch 10, reinstated the
Decision dated June 9, 1997, but with the modification that the award of damages,
litigation expenses and attorneys fees were disallowed.

Petitioner appealed to the Court of Appeals. On February 23, 2006 the


appellate court affirmed with modification the July 6, 2000 Order of the RTC. It,
however, restored the award of P50,000 attorneys fees and P50,000 litigation
expenses to respondents.

Thus, the instant petition which raises the following issues:


I.

WHETHER THE COURT OF APPEALS ERRED AND VIOLATED PETITIONERS RIGHT TO DUE
PROCESS WHEN IT FAILED TO RESOLVE PETITIONERS THIRD ASSIGNED ERROR.

II.

WHETHER THE HONORABLE SUPREME COURT MAY AND SHOULD REVIEW THE
CONFLICTING FACTUAL FINDINGS OF THE HONORABLE REGIONAL TRIAL COURT IN ITS
OWN DECISION AND RESOLUTIONS ON THE MOTIONS FOR RECONSIDERATION, AND
THAT OF THE HONORABLE COURT OF APPEALS.

III.

WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONERS


CASE IS BARRED BY LACHES.
IV.

WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE DEED OF
DONATION EXECUTED IN FAVOR OF PETITIONER IS VOID.

V.

WHETHER THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT ANITA
LOZADAS VIDEOTAPED STATEMENT IS HEARSAY.[15]

Simply stated, the issues in this appeal are: (1) Whether the Court of
Appeals erred in upholding the Decision of the RTC which declared Antonio J.P.
Lozada the absolute owner of the questioned properties; (2) Whether the Court
of Appeals violated petitioners right to due process; and (3) Whether petitioners
case is barred by laches.

Petitioner contends that the appellate court violated her right to due
process when it did not rule on the validity of the sale between the sisters Lozada
and their nephew, Antonio. Marissa finds it anomalous that Dr. Lozada, an
American citizen, had paid the lots for Antonio. Thus, she accuses the latter of
being a mere dummy of the former.Petitioner begs the Court to review the
conflicting factual findings of the trial and appellate courts on Peregrinas medical
condition on March 11, 1994 and Dr. Lozadas financial capacity to advance
payment for Antonio. Likewise, petitioner assails the ruling of the Court of
Appeals which nullified the donation in her favor and declared her case barred by
laches. Petitioner finally challenges the admissibility of the videotaped statement
of Anita who was not presented as a witness.

On their part, respondents pray for the dismissal of the petition for
petitioners failure to furnish the Register of Deeds of Cebu City with a copy
thereof in violation of Sections 3[16] and 4,[17] Rule 45 of the Rules. In addition,
they aver that Peregrinas unauthenticated medical records were merely falsified
to make it appear that she was confined in the hospital on the day of the
sale. Further, respondents question the credibility of Dr. Fuentes who was neither
presented in court as an expert witness[18] nor professionally involved in
Peregrinas medical care.

Further, respondents impugn the validity of the Deed of Donation in favor


of Marissa. They assert that the Court of Appeals did not violate petitioners right
to due process inasmuch as it resolved collectively all the factual and legal issues
on the validity of the sale.

Faithful adherence to Section 14,[19] Article VIII of the 1987 Constitution is


indisputably a paramount component of due process and fair play. The parties to
a litigation should be informed of how it was decided, with an explanation of the
factual and legal reasons that led to the conclusions of the court.[20]

In the assailed Decision, the Court of Appeals reiterates the rule that a
notarized and authenticated deed of sale enjoys the presumption of regularity,
and is admissible without further proof of due execution. On the basis thereof, it
declared Antonio a buyer in good faith and for value, despite petitioners
contention that the sale violates public policy. While it is a part of the right of
appellant to urge that the decision should directly meet the issues presented for
resolution,[21] mere failure by the appellate court to specify in its decision all
contentious issues raised by the appellant and the reasons for refusing to believe
appellants contentions is not sufficient to hold the appellate courts decision
contrary to the requirements of the law[22] and the Constitution.[23] So long as the
decision of the Court of Appeals contains the necessary findings of facts to
warrant its conclusions, we cannot declare said court in error if it withheld any
specific findings of fact with respect to the evidence for the defense.[24] We will
abide by the legal presumption that official duty has been regularly
performed,[25] and all matters within an issue in a case were laid down before the
court and were passed upon by it.[26]

In this case, we find nothing to show that the sale between the sisters Lozada
and their nephew Antonio violated the public policy prohibiting aliens from owning
lands in the Philippines. Even as Dr. Lozada advanced the money for the payment
of Antonios share, at no point were the lots registered in Dr. Lozadas name. Nor
was it contemplated that the lots be under his control for they are actually to be
included as capital of Damasa Corporation. According to their agreement, Antonio
and Dr. Lozada are to hold 60% and 40% of the shares in said corporation,
respectively. Under Republic Act No. 7042,[27] particularly Section 3,[28] a
corporation organized under the laws of the Philippines of which at least 60% of
the capital stock outstanding and entitled to vote is owned and held by citizens of
the Philippines, is considered a Philippine National. As such, the corporation may
acquire disposable lands in the Philippines. Neither did petitioner present proof to
belie Antonios capacity to pay for the lots subjects of this case.

Petitioner, likewise, calls on the Court to ascertain Peregrinas physical ability


to execute the Deed of Sale on March 11, 1994. This essentially necessitates a
calibration of facts, which is not the function of this Court.[29] Nevertheless, we have
sifted through the Decisions of the RTC and the Court of Appeals but found no
reason to overturn their factual findings. Both the trial court and appellate court
noted the lack of substantial evidence to establish total impossibility for Peregrina to
execute the Deed of Sale.

In support of its contentions, petitioner submits a copy of Peregrinas


medical records to show that she was confined at
the Martin Luther Hospital from February 27, 1994until she died on April 4,
1994. However, a Certification[30] from Randy E. Rice, Manager for the Health
Information Management of the hospital undermines the authenticity of said
medical records. In the certification, Rice denied having certified or having mailed
copies of Peregrinas medical records to the Philippines. As a rule, a document to
be admissible in evidence, should be previously authenticated, that is, its due
execution or genuineness should be first shown.[31] Accordingly, the
unauthenticated medical records were excluded from the evidence. Even
assuming that Peregrina was confined in the cited hospital, the Deed of Sale was
executed on March 11, 1994, a month before Peregrina reportedly succumbed to
Hepato Renal Failure caused by Septicemia due to Myflodysplastic
Syndrome.[32] Nothing in the records appears to show that Peregrina was so
incapacitated as to prevent her from executing the Deed of Sale. Quite the
contrary, the records reveal that close to the date of the sale, specifically on
March 9, 1994, Peregrina was even able to issue checks[33] to pay for her
attorneys professional fees and her own hospital bills. At no point in the course of
the trial did petitioner dispute this revelation.

Now, as to the validity of the donation, the provision of Article 749 of the
Civil Code is in point:
ART. 749. In order that the donation of an immovable may be
valid, it must be made in a public document, specifying therein the
property donated and the value of the charges which the donee must
satisfy.
The acceptance may be made in the same deed of donation or in a
separate public document, but it shall not take effect unless it is done
during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall
be notified thereof in an authentic form, and this step shall be noted in
both instruments.

When the law requires that a contract be in some form in order that it may be
valid or enforceable, or that a contract be proved in a certain way, that requirement
is absolute and indispensable.[34] Here, the Deed of Donation does not appear to be
duly notarized. In page three of the deed, the stamped name of Cresencio Tomakin
appears above the words Notary Public until December 31, 1983 but below it were
the typewritten words Notary Public until December 31, 1987. A closer examination
of the document further reveals that the number 7 in 1987 and Series of 1987 were
merely superimposed.[35] This was confirmed by petitioners nephew Richard
Unchuan who testified that he saw petitioners husband write 7 over 1983 to make it
appear that the deed was notarized in 1987. Moreover, a Certification[36] from Clerk
of Court Jeoffrey S. Joaquino of the Notarial Records Division disclosed that the
Deed of Donation purportedly identified in Book No. 4, Document No. 48, and Page
No. 35 Series of 1987 was not reported and filed with said office. Pertinent to this,
the Rules require a party producing a document as genuine which has been altered
and appears to have been altered after its execution, in a part material to the question
in dispute, to account for the alteration. He may show that the alteration was made
by another, without his concurrence, or was made with the consent of the parties
affected by it, or was otherwise properly or innocently made, or that the alteration
did not change the meaning or language of the instrument. If he fails to do that, the
document shall, as in this case, not be admissible in evidence.[37]

Remarkably, the lands described in the Deed of Donation are covered by


TCT Nos. 73645[38] and 73646,[39] both of which had been previously cancelled by
an Order[40] dated April 8, 1981 in LRC Record No. 5988. We find it equally
puzzling that on August 10, 1987, or six months after Anita supposedly donated
her undivided share in the lots to petitioner, the Unchuan Development
Corporation, which was represented by petitioners husband, filed suit to compel
the Lozada sisters to surrender their titles by virtue of a sale. The sum of all the
circumstances in this case calls for no other conclusion than that the Deed of
Donation allegedly in favor of petitioner is void. Having said that, we deem it
unnecessary to rule on the issue of laches as the execution of the deed created no
right from which to reckon delay in making any claim of rights under the
instrument.
Finally, we note that petitioner faults the appellate court for not excluding the
videotaped statement of Anita as hearsay evidence. Evidence is hearsay when its
probative force depends, in whole or in part, on the competency and credibility of
some persons other than the witness by whom it is sought to be produced. There are
three reasons for excluding hearsay evidence: (1) absence of cross-examination; (2)
absence of demeanor evidence; and (3) absence of oath.[41] It is a hornbook doctrine
that an affidavit is merely hearsay evidence where its maker did not take the witness
stand.[42] Verily, the sworn statement of Anita was of this kind because she did not
appear in court to affirm her averments therein.Yet, a more circumspect examination
of our rules of exclusion will show that they do not cover admissions of a
party;[43] the videotaped statement of Anita appears to belong to this class. Section
26 of Rule 130 provides that the act, declaration or omission of a party as to a
relevant fact may be given in evidence against him. It has long been settled that
these admissions are admissible even if they are hearsay.[44] Indeed, there is a vital
distinction between admissions against interest and declaration against
interest. Admissions against interest are those made by a party to a litigation or by
one in privity with or identified in legal interest with such party, and are admissible
whether or not the declarant is available as a witness. Declaration against interest are
those made by a person who is neither a party nor in privity with a party to the suit,
are secondary evidence and constitute an exception to the hearsay rule. They are
admissible only when the declarant is unavailable as a witness.[45] Thus, a mans acts,
conduct, and declaration, wherever made, if voluntary, are admissible against him,
for the reason that it is fair to presume that they correspond with the truth, and it is
his fault if they do not.[46] However, as a further qualification, object evidence, such
as the videotape in this case, must be authenticated by a special testimony showing
that it was a faithful reproduction.[47] Lacking this, we are constrained to exclude as
evidence the videotaped statement of Anita. Even so, this does not detract from our
conclusion concerning petitioners failure to prove, by preponderant evidence, any
right to the lands subject of this case.

Anent the award of moral damages in favor of respondents, we find no factual


and legal basis therefor. Moral damages cannot be awarded in the absence of a
wrongful act or omission or fraud or bad faith. When the action is filed in good faith
there should be no penalty on the right to litigate. One may have erred, but error
alone is not a ground for moral damages.[48] The award of moral damages must be
solidly anchored on a definite showing that respondents actually experienced
emotional and mental sufferings. Mere allegations do not suffice; they must be
substantiated by clear and convincing proof.[49] As exemplary damages can be
awarded only after the claimant has shown entitlement to moral damages,[50] neither
can it be granted in this case.

WHEREFORE, the instant petition is DENIED. The Decision


dated February 23, 2006, and Resolution dated April 12, 2006 of the Court of
Appeals in CA-G.R. CV. No. 73829 are AFFIRMED with
MODIFICATION. The awards of moral damages and exemplary damages in
favor of respondents are deleted. No pronouncement as to costs.

SO ORDERED.
THIRD DIVISION

G.R. No. 143340 August 15, 2001


LILIBETH SUNGA-CHAN and CECILIA SUNGA, petitioners,
vs.
LAMBERTO T. CHUA, respondent.

GONZAGA-REYES, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court of the Decision 1 of the Court
of Appeals dated January 31, 2000 in the case entitled "Lamberto T. Chua vs. Lilibeth Sunga Chan and Cecilia
Sunga" and of the Resolution dated May 23, 2000 denying the motion for reconsideration of herein petitioners
Lilibeth Sunga and Cecilia Sunga (hereafter collectively referred to as petitioners).

The pertinent facts of this case are as follows:

On June 22, 1992, Lamberto T. Chua (hereafter respondent) filed a complaint against Lilibeth Sunga Chan
(hereafter petitioner Lilibeth) and Cecilia Sunga (hereafter petitioner Cecilia), daughter and wife, respectively of
the deceased Jacinto L. Sunga (hereafter Jacinto), for "Winding Up of Partnership Affairs, Accounting,
Appraisal and Recovery of Shares and Damages with Writ of Preliminary Attachment" with the Regional Trial
Court, Branch 11, Sindangan, Zamboanga del Norte.

Respondent alleged that in 1977, he verbally entered into a partnership with Jacinto in the distribution of
Shellane Liquefied Petroleum Gas (LPG) in Manila. For business convenience, respondent and Jacinto
allegedly agreed to register the business name of their partnership, SHELLITE GAS APPLIANCE CENTER
(hereafter Shellite), under the name of Jacinto as a sole proprietorship. Respondent allegedly delivered his
initial capital contribution of P100,000.00 to Jacinto while the latter in turn produced P100,000.00 as his
counterpart contribution, with the intention that the profits would be equally divided between them. The
partnership allegedly had Jacinto as manager, assisted by Josephine Sy (hereafter Josephine), a sister of the
wife respondent, Erlinda Sy. As compensation, Jacinto would receive a manager's fee or remuneration of 10%
of the gross profit and Josephine would receive 10% of the net profits, in addition to her wages and other
remuneration from the business.

Allegedly, from the time that Shellite opened for business on July 8, 1977, its business operation went quite
and was profitable. Respondent claimed that he could attest to success of their business because of the
volume of orders and deliveries of filled Shellane cylinder tanks supplied by Pilipinas Shell Petroleum
Corporation. While Jacinto furnished respondent with the merchandise inventories, balance sheets and net
worth of Shellite from 1977 to 1989, respondent however suspected that the amount indicated in these
documents were understated and undervalued by Jacinto and Josephine for their own selfish reasons and for
tax avoidance.

Upon Jacinto's death in the later part of 1989, his surviving wife, petitioner Cecilia and particularly his daughter,
petitioner Lilibeth, took over the operations, control, custody, disposition and management of Shellite without
respondent's consent. Despite respondent's repeated demands upon petitioners for accounting, inventory,
appraisal, winding up and restitution of his net shares in the partnership, petitioners failed to comply. Petitioner
Lilibeth allegedly continued the operations of Shellite, converting to her own use and advantage its properties.

On March 31, 1991, respondent claimed that after petitioner Lilibeth ran out the alibis and reasons to evade
respondent's demands, she disbursed out of the partnership funds the amount of P200,000.00 and partially
paid the same to respondent. Petitioner Lilibeth allegedly informed respondent that the P200,000.00
represented partial payment of the latter's share in the partnership, with a promise that the former would make
the complete inventory and winding up of the properties of the business establishment. Despite such
commitment, petitioners allegedly failed to comply with their duty to account, and continued to benefit from the
assets and income of Shellite to the damage and prejudice of respondent.

On December 19, 1992, petitioners filed a Motion to Dismiss on the ground that the Securities and Exchange
Commission (SEC) in Manila, not the Regional Trial Court in Zamboanga del Norte had jurisdiction over the
action. Respondent opposed the motion to dismiss.

On January 12, 1993, the trial court finding the complaint sufficient in from and substance denied the motion to
dismiss.

On January 30, 1993, petitioners filed their Answer with Compulsory Counter-claims, contending that they are
not liable for partnership shares, unreceived income/profits, interests, damages and attorney's fees, that
respondent does not have a cause of action against them, and that the trial court has no jurisdiction over the
nature of the action, the SEC being the agency that has original and exclusive jurisdiction over the case. As
counterclaim, petitioner sought attorney's fees and expenses of litigation.

On August 2, 1993, petitioner filed a second Motion to Dismiss this time on the ground that the claim for
winding up of partnership affairs, accounting and recovery of shares in partnership affairs, accounting and
recovery of shares in partnership assets/properties should be dismissed and prosecuted against the estate of
deceased Jacinto in a probate or intestate proceeding.

On August 16, 1993, the trial denied the second motion to dismiss for lack of merit.

On November 26, 1993, petitioners filed their Petition for Certiorari, Prohibition and Mandamus with the Court
of Appeals docketed as CA-G.R. SP No. 32499 questioning the denial of the motion to dismiss.
On November 29, 1993, petitioners filed with the trial court a Motion to Suspend Pre-trial Conference.

On December 13, 1993, the trial court granted the motion to suspend pre-trial conference.

On November 15, 1994, the Court of Appeals denied the petition for lack of merit.

On January 16, 1995, this Court denied the petition for review on certiorari filed by petitioner, "as petitioners
failed to show that a reversible error was committed by the appellate court."2

On February 20, 1995, entry of judgment was made by the Clerk of Court and the case was remanded to the
trial court on April 26, 1995.

On September 25, 1995, the trial court terminated the pre-trial conference and set the hearing of the case of
January 17, 1996. Respondent presented his evidence while petitioners were considered to have waived their
right to present evidence for their failure to attend the scheduled date for reception of evidence despite notice.

On October 7, 1997, the trial court rendered its Decision ruling for respondent. The dispositive of the Decision
reads:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants, as
follows:

(1) DIRECTING them to render an accounting in acceptable form under accounting


procedures and standards of the properties, assets, income and profits of the Shellite Gas
Appliance Center Since the time of death of Jacinto L. Sunga, from whom they continued the
business operations including all businesses derived from Shellite Gas Appliance Center,
submit an inventory, and appraisal of all these properties, assets, income, profits etc. to the
Court and to plaintiff for approval or disapproval;

(2) ORDERING them to return and restitute to the partnership any and all properties, assets,
income and profits they misapplied and converted to their own use and advantage the legally
pertain to the plaintiff and account for the properties mentioned in pars. A and B on pages 4-5
of this petition as basis;

(3) DIRECTING them to restitute and pay to the plaintiff ½ shares and interest of the plaintiff
in the partnership of the listed properties, assets and good will (sic) in schedules A, B and C,
on pages 4-5 of the petition;

(4) ORDERING them to pay the plaintiff earned but unreceived income and profits from the
partnership from 1988 to May 30, 1992, when the plaintiff learned of the closure of the store
the sum of P35,000.00 per month, with legal rate of interest until fully paid;

(5) ORDERING them to wind up the affairs of the partnership and terminate its business
activities pursuant to law, after delivering to the plaintiff all the ½ interest, shares, participation
and equity in the partnership, or the value thereof in money or money's worth, if the properties
are not physically divisible;

(6) FINDING them especially Lilibeth Sunga-Chan guilty of breach of trust and in bad faith and
hold them liable to the plaintiff the sum of P50,000.00 as moral and exemplary damages; and,

(7) DIRECTING them to reimburse and pay the sum of P25,000.00 as attorney's (sic) and
P25,000.00 as litigation expenses.

NO special pronouncements as to COSTS.

SO ORDERED."3

On October 28, 1997, petitioners filed a Notice of Appeal with the trial court, appealing the case to the Court of
Appeals.

On January 31, 2000, the Court of Appeals dismissed the appeal. The dispositive portion of the Decision reads:

"WHEREFORE, the instant appeal is dismissed. The appealed decision is AFFIRMED in all respects."4

On May 23, 2000, the Court of Appeals denied the motion for reconsideration filed by petitioner.

Hence, this petition wherein petitioner relies upon following grounds:

"1. The Court of Appeals erred in making a legal conclusion that there existed a partnership between
respondent Lamberto T. Chua and the late Jacinto L. Sunga upon the latter'' invitation and offer and
that upon his death the partnership assets and business were taken over by petitioners.
2. The Court of Appeals erred in making the legal conclusion that laches and/or prescription did not
apply in the instant case.

3. The Court of Appeals erred in making the legal conclusion that there was competent and credible
evidence to warrant the finding of a partnership, and assuming arguendo that indeed there was a
partnership, the finding of highly exaggerated amounts or values in the partnership assets and profits." 5

Petitioners question the correctness of the finding of the trial court and the Court of Appeals that a partnership
existed between respondent and Jacinto from 1977 until Jacinto's death. In the absence of any written
document to show such partnership between respondent and Jacinto, petitioners argues that these courts were
proscribes from hearing the testimonies of respondent and his witness, Josephine, to prove the alleged
partnership three years after Jacinto's death. To support this argument, petitioners invoke the "Dead Man's
Statute' or "Survivorship Rule" under Section 23, Rule 130 of the Rules of Court that provides:

"SEC. 23. Disqualification by reason of death or insanity of adverse party. – Parties or assignors of
parties to a case, or persons in whose behalf a case is prosecuted, against an executor or
administrator or other representative of a deceased person, or against a person of unsound mind,
upon a claim or demand against the estate of such deceased person, or against such person of
unsound mind, cannot testify as to any matter of fact occurring before the death of such deceased
person or before such person became of unsound mind."

Petitioners thus implore this Court to rule that the testimonies of respondent and his alter ego, Josephine,
should not have been admitted to prove certain claims against a deceased person (Jacinto), now represented
by petitioners.

We are not persuaded.

A partnership may be constituted in any form, except where immovable property of real rights are contributed
thereto, in which case a public instrument shall necessary.6 Hence, based on the intention of the parties, as
gathered from the facts and ascertained from their language and conduct, a verbal contract of partnership may
arise.7 The essential profits that must be proven to that a partnership was agreed upon are (1) mutual
contribution to a common stock, and (2) a joint interest in the profits.8 Understandably so, in view of the absence
of the written contract of partnership between respondent and Jacinto, respondent resorted to the introduction
of documentary and testimonial evidence to prove said partnership. The crucial issue to settle then is to
whether or not the "Dead Man's Statute" applies to this case so as to render inadmissible respondent's
testimony and that of his witness, Josephine.

The "Dead Man's Statute" provides that if one party to the alleged transaction is precluded from testifying by
death, insanity, or other mental disabilities, the surviving party is not entitled to the undue advantage of giving
his own uncontradicted and unexplained account of the transaction.9 But before this rule can be successfully
invoked to bar the introduction of testimonial evidence, it is necessary that:

"1. The witness is a party or assignor of a party to case or persons in whose behalf a case in
prosecuted.

2. The action is against an executor or administrator or other representative of a deceased person or a


person of unsound mind;

3. The subject-matter of the action is a claim or demand against the estate of such deceased person or
against person of unsound mind;

4. His testimony refers to any matter of fact of which occurred before the death of such deceased
person or before such person became of unsound mind."10

Two reasons forestall the application of the "Dead Man's Statute" to this case.

First, petitioners filed a compulsory counterclaim11 against respondents in their answer before the trial court, and
with the filing of their counterclaim, petitioners themselves effectively removed this case from the ambit of the
"Dead Man's Statute".12 Well entrenched is the rule that when it is the executor or administrator or
representatives of the estates that sets up the counterclaim, the plaintiff, herein respondent, may testify to
occurrences before the death of the deceased to defeat the counterclaim.13 Moreover, as defendant in the
counterclaim, respondent is not disqualified from testifying as to matters of facts occurring before the death of
the deceased, said action not having been brought against but by the estate or representatives of the
deceased.14

Second, the testimony of Josephine is not covered by the "Dead Man's Statute" for the simple reason that she
is not "a party or assignor of a party to a case or persons in whose behalf a case is prosecuted." Records show
that respondent offered the testimony of Josephine to establish the existence of the partnership between
respondent and Jacinto. Petitioners' insistence that Josephine is the alter ego of respondent does not make her
an assignor because the term "assignor" of a party means "assignor of a cause of action which has arisen, and
not the assignor of a right assigned before any cause of action has arisen."15 Plainly then, Josephine is merely a
witness of respondent, the latter being the party plaintiff.
We are not convinced by petitioners' allegation that Josephine's testimony lacks probative value because she
was allegedly coerced coerced by respondent, her brother-in-law, to testify in his favor, Josephine merely
declared in court that she was requested by respondent to testify and that if she were not requested to do so
she would not have testified. We fail to see how we can conclude from this candid admission that Josephine's
testimony is involuntary when she did not in any way categorically say that she was forced to be a witness of
respondent.

Also, the fact that Josephine is the sister of the wife of respondent does not diminish the value of her testimony
since relationship per se, without more, does not affect the credibility of witnesses.16

Petitioners' reliance alone on the "Dead Man's Statute" to defeat respondent's claim cannot prevail over the
factual findings of the trial court and the Court of Appeals that a partnership was established between
respondent and Jacinto. Based not only on the testimonial evidence, but the documentary evidence as well, the
trial court and the Court of Appeals considered the evidence for respondent as sufficient to prove the formation
of partnership, albeit an informal one.

Notably, petitioners did not present any evidence in their favor during trial. By the weight of judicial precedents,
a factual matter like the finding of the existence of a partnership between respondent and Jacinto cannot be
inquired into by this Court on review.17 This Court can no longer be tasked to go over the proofs presented by
the parties and analyze, assess and weigh them to ascertain if the trial court and the appellate court were
correct in according superior credit to this or that piece of evidence of one party or the other. 18 It must be also
pointed out that petitioners failed to attend the presentation of evidence of respondent. Petitioners cannot now
turn to this Court to question the admissibility and authenticity of the documentary evidence of respondent
when petitioners failed to object to the admissibility of the evidence at the time that such evidence was
offered.19

With regard to petitioners' insistence that laches and/or prescription should have extinguished respondent's
claim, we agree with the trial court and the Court of Appeals that the action for accounting filed by respondents
three (3) years after Jacinto's death was well within the prescribed period. The Civil Code provides that an
action to enforce an oral contract prescribes in six (6) years20 while the right to demand an accounting for a
partner's interest as against the person continuing the business accrues at the date of dissolution, in the
absence of any contrary agreement.21 Considering that the death of a partner results in the dissolution of the
partnership22 , in this case, it was Jacinto's death that respondent as the surviving partner had the right to an
account of his interest as against petitioners. It bears stressing that while Jacinto's death dissolved the
partnership, the dissolution did not immediately terminate the partnership. The Civil Code23 expressly provides
that upon dissolution, the partnership continues and its legal personality is retained until the complete winding
up of its business, culminating in its termination.24

In a desperate bid to cast doubt on the validity of the oral partnership between respondent and Jacinto,
petitioners maintain that said partnership that had initial capital of P200,000.00 should have been registered
with the Securities and Exchange Commission (SEC) since registration is mandated by the Civil Code, True,
Article 1772 of the Civil Code requires that partnerships with a capital of P3,000.00 or more must register with
the SEC, however, this registration requirement is not mandatory. Article 1768 of the Civil Code 25 explicitly
provides that the partnership retains its juridical personality even if it fails to register. The failure to register the
contract of partnership does not invalidate the same as among the partners, so long as the contract has the
essential requisites, because the main purpose of registration is to give notice to third parties, and it can be
assumed that the members themselves knew of the contents of their contract.26 In the case at bar, non-
compliance with this directory provision of the law will not invalidate the partnership considering that the totality
of the evidence proves that respondent and Jacinto indeed forged the partnership in question.

WHEREFORE, in view of the foregoing, the petition is DENIED and the appealed decision is AFFIRMED.

SO ORDERED. 1âwphi1.nêt

Melo, Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.

Republic of the Philippines


Supreme Court
Manila

SECOND DIVISION
REPUBLIC OF THE PHILIPPINES G. R. No. 171701
Petitioner,
Present:

BRION, J.,
- versus Acting Chairperson,
VILLARAMA, JR.,
PEREZ,
SERENO, and
MA. IMELDA IMEE R. MARCOS- REYES, JJ.
MANOTOC, FERDINAND
BONGBONG R. MARCOS, JR.,
GREGORIO MA. ARANETA III,
IRENE R. MARCOS-ARANETA, Promulgated:
YEUNG CHUN FAN, YEUNG
CHUN HO, YEUNG CHUN KAM,
and PANTRANCO EMPLOYEES February 8, 2012
ASSOCIATION (PEA)-PTGWO,
Respondents.
x--------------------------------------------------x

DECISION

SERENO, J.:
Before this Court is a Petition for Review filed by the Republic of the
Philippines assailing the Resolutions[1] issued by the Sandiganbayan in connection
with an alleged portion of the Marcoses supposed ill-gotten wealth.
This case involves P200 billion of the Marcoses alleged accumulated ill-
gotten wealth. It also includes the alleged use of the media networks IBC-13, BBC-
2 and RPN-9 for the Marcos familys personal benefit; the alleged use of De Soleil
Apparel for dollar salting; and the alleged illegal acquisition and operation of the
bus company Pantranco North Express, Inc. (Pantranco).

The Facts

After the EDSA People Power Revolution in 1986, the first executive act of
then President Corazon C. Aquino was to create the Presidential Commission on
Good Government (PCGG). Pursuant to Executive Order No. 1, the PCGG was
given the following mandate:
Sec. 2. The Commission shall be charged with the task of assisting the
President in regard to the following matters:
(a) The recovery of all ill-gotten wealth accumulated by former
President Ferdinand E. Marcos, his immediate family, relatives,
subordinates and close associates, whether located in the
Philippines or abroad, including the takeover or sequestration of
all business enterprises and entities owned or controlled by them,
during his administration, directly or through nominees, by taking
undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship.
(b) The investigation of such cases of graft and corruption as the
President may assign to the Commission from time to time.
(c) The adoption of safeguards to ensure that the above practices
shall not be repeated in any manner under the new government,
and the institution of adequate measures to prevent the occurrence
of corruption.
Sec. 3. The Commission shall have the power and authority:
(a) To conduct investigation as may be necessary in order to
accomplish and carry out the purposes of this order.
(b) To sequester or place or cause to be placed under its control or
possession any building or office wherein any ill-gotten wealth or
properties may be found, and any records pertaining thereto, in
order to prevent their destruction, concealment or disappearance
which would frustrate or hamper the investigation or otherwise
prevent the Commission from accomplishing its task.
(c) To provisionally take over in the public interest or to prevent
its disposal or dissipation, business enterprises and properties
taken over by the government of the Marcos Administration or by
entities or persons close to former President Marcos, until the
transactions leading to such acquisition by the latter can be
disposed of by the appropriate authorities.
(d) To enjoin or restrain any actual or threatened commission of
facts by any person or entity that may render moot and academic,
or frustrate, or otherwise make ineffectual the efforts of the
Commission to carry out its tasks under this order.
(e) To administer oaths, and issue subpoena requiring the
attendance and testimony of witnesses and/or the production of
such books, papers, contracts, records, statement of accounts and
other documents as may be material to the investigation
conducted by the Commission.
(f) To hold any person in direct or indirect contempt and impose
the appropriate penalties, following the same procedures and
penalties provided in the Rules of Court.
(g) To seek and secure the assistance of any office, agency or
instrumentality of the government.
(h) To promulgate such rules and regulations as may be necessary
to carry out the purpose of this order.

Thus, numerous civil and criminal cases were subsequently filed. One of the
civil cases filed before the Sandiganbayan to recover the Marcoses alleged ill-
gotten wealth was Civil Case No. 0002, now subject of this Petition.

On 16 July 1987, the PCGG, acting on behalf of the Republic and assisted
by the Office of the Solicitor General (OSG), filed a Complaint for Reversion,
Reconveyance, Restitution, Accounting and Damages against Ferdinand E.
Marcos, who was later substituted by his estate upon his death; Imelda R. Marcos;
and herein respondents Imee Marcos-Manotoc, Irene Marcos-Araneta, Bongbong
Marcos, Tomas Manotoc, and Gregorio Araneta III.
On 1 October 1987, the PCGG filed an amended Complaint to add
Constante Rubio as defendant.
Again on 9 February 1988, it amended the Complaint, this time to include as
defendants Nemesio G. Co and herein respondents Yeung Chun Kam, Yeung Chun
Ho, and Yeung Chun Fan.

For the third time, on 23 April 1990, the PCGG amended its Complaint,
adding to its growing list of defendants Imelda Cojuangco, the estate of Ramon
Cojuangco, and Prime Holdings, Inc.[2]

The PCGG filed a fourth amended Complaint, which was later denied by the
Sandiganbayan in its Resolution dated 2 September 1998.

The allegations contained in the Complaint specific to herein respondents


are the following:[3]
29. Defendants Imelda (IMEE) R. Marcos-Manotoc, Tomas Manotoc,
Irene R. Manotoc (sic) Araneta, Gregorio Ma. Araneta III, and Ferdinand R.
Marcos, Jr., actively collaborated, with Defendants Ferdinand E. Marcos and
Imelda R. Marcos among others, in confiscating and/or unlawfully appropriating
funds and other property, and in concealing the same as described above. In
addition, each of the said Defendants, either by taking undue advantage of their
relationship with Defendants Ferdinand E. Marcos and Imelda R. Marcos, or by
reason of the above-described active collaboration, unlawfully acquired or
received property, shares of stocks in corporations, illegal payments such as
commissions, bribes or kickbacks, and other forms of improper privileges,
income, revenues and benefits. Defendant Araneta in particular made use of
Asialand Development Corporation which is included in Annex A hereof as
corporate vehicle to benefit in the manner stated above.

31. Defendants Nemesio G. Co, Yeung Chun Kam, Yeung Chun Ho and
Yeung Chun Fan are the controlling stockholders of Glorious Sun Fashion
Manufacturing Corporation (Phils.). Through Glorious Sun (Phils.), they acted as
fronts or dummies, cronies or otherwise willing tools of spouses Ferdinand and
Imelda Marcos and/or the family, particularly of Defendant Imelda (Imee)
Marcos-Manotoc, in the illegal salting of foreign exchange[4] by importing denim
fabrics from only one supplier a Hong Kong based corporation which was also
owned and controlled by defendant Hong Kong investors, at prices much higher
than those being paid by other users of similar materials to the grave and
irreparable damage of Plaintiff.

Thus, petitioner set forth the following causes of action in its Complaint: [5]

32. First Cause of Action: BREACH OF PUBLIC TRUST A public office


is a public trust. By committing all the acts described above, Defendants
repeatedly breached public trust and the law, making them liable solidarily to
Plaintiff. The funds and other property acquired by Defendants following, or as a
result of, their breach of public trust, some of which are mentioned or described
above, estimated to amount to ₱200 billion are deemed to have been acquired for
the benefit of Plaintiff and are, therefore, impressed with constructive trust in
favor of Plaintiff and the Filipino people. Consequently, Defendants are solidarily
liable to restore or reconvey to Plaintiff all such funds and property thus
impressed with constructive trust for the benefit of Plaintiff and the Filipino
people.

33. Second Cause of Action: ABUSE OF RIGHT AND POWER


(a) Defendants, in perpetrating the unlawful acts described above,
committed abuse of right and power which caused untold misery, sufferings and
damages to Plaintiff. Defendants violated, among others Articles 19, 20, and 21 of
the Civil Code of the Philippines;
(b) As a result of the foregoing acts, Defendants acquired the title to the
beneficial interest in funds and other property and concealed such title, funds and
interest through the use of relatives, business associates, nominees, agents, or
dummies. Defendants are, therefore, solidarily liable to Plaintiff to return and
reconvey all such funds and other property unlawfully acquired by them estimated
at TWO HUNDRED BILLION PESOS, or alternatively, to pay Plaintiff,
solidarily, by way of indemnity, the damage caused to Plaintiff equivalent to the
amount of such funds or the value of other property not returned or restored to
Plaintiff, plus interest thereon from the date of unlawful acquisition until full
payment thereof.
34. Third Cause of Action: UNJUST ENRICHMENT
Defendants illegally accumulated funds and other property whose
estimated value is ₱200 billion in violation of the laws of the Philippines and in
breach of their official functions and fiduciary obligations. Defendants, therefore,
have unjustly enriched themselves to the grave and irreparable damage and
prejudice of Plaintiff. Defendants have an obligation at law, independently of
breach of trust and abuse of right and power, and as an alternative, to solidarily
return to Plaintiff such funds and other property with which Defendants, in gross
evident bad faith, have unjustly enriched themselves or, in default thereof, restore
to Plaintiff the amount of such funds and the value of the other property including
those which may have been wasted, and/or lost estimated at ₱200 billion with
interest thereon from the date of unlawful acquisition until full payment thereof.
35. Fourth Cause of Action: ACCOUNTING
The Commission, acting pursuant to the provisions of the applicable law,
believe that Defendants, acting singly or collectively, in unlawful concert with
one another, and with the active collaboration of third persons, subject of separate
suits, acquired funds, assets and property during the incumbency of Defendant
public officers, manifestly out of proportion to their salaries, to their other lawful
income and income from legitimately acquired property. Consequently, they are
required to show to the satisfaction of this Honorable Court that they have
lawfully acquired all such funds, assets and property which are in excess of their
legal net income, and for this Honorable Court to decree that the Defendants are
under obligation to account to Plaintiff with respect to all legal or beneficial
interests in funds, properties and assets of whatever kind and wherever located in
excess of the lawful earnings or lawful income from legitimately acquired
property.
36. Fifth Cause of Action LIABILITY FOR DAMAGES
(a) By reason of the unlawful acts set forth above, Plaintiff and the
Filipino people have suffered actual damages in an amount representing the
pecuniary loss sustained by the latter as a result of the Defendants unlawful acts,
the approximate value and interest of which, from the time of their wrongful
acquisition, are estimated at ₱200 billion plus expenses which Plaintiff has been
compelled to incur and shall continue to incur in its effort to recover Defendants
ill-gotten wealth all over the world, which expenses are reasonably estimated at
₱250 million. Defendants are, therefore, jointly and severally liable to Plaintiff for
actual damages in an amount reasonably estimated at ₱200 Billion Pesos and to
reimburse expenses for recovery of Defendants ill-gotten wealth estimated to cost
₱250 million or in such amount as are proven during the trial.
(b) As a result of Defendants acts described above, Plaintiff and the
Filipino people had painfully endured and suffered moral damages for more than
twenty long years, anguish, fright, sleepless nights, serious anxiety, wounded
feelings and moral shock as well as besmirched reputation and social humiliation
before the international community.
(c) In addition, Plaintiff and the Filipino people are entitled to temperate
damages for their sufferings which, by their very nature are incapable of
pecuniary estimation, but which this Honorable Court may determine in the
exercise of its sound discretion.
(d) Defendants, by reason of the above described unlawful acts, have
violated and invaded the inalienable right of Plaintiff and the Filipino people to a
fair and decent way of life befitting a Nation with rich natural and human
resources. This basic and fundamental right of Plaintiff and the Filipino people
should be recognized and vindicated by awarding nominal damages in an amount
to be determined by the Honorable Court in the exercise of its sound discretion.
(e) By way of example and correction for the public good and in order to
ensure that Defendants unlawful, malicious, immoral and wanton acts are not
repeated, said Defendants are solidarily liable to Plaintiff for exemplary damages.

In the meantime, the Pantranco Employees Association-PTGWO (PEA-


PTGWO), a union of Pantranco employees, moved to intervene before the
Sandiganbayan. The former alleged that the trust funds in the account of Pantranco
North Express, Inc. (Pantranco) amounting to ₱55 million rightfully belonged to
the Pantranco employees, pursuant to the money judgment the National Labor
Relations Commission (NLRC) awarded in favor of the employees and against
Pantranco. Thus, PEA-PTGWO contested the allegation of petitioner that the
assets of Pantranco were ill-gotten because, otherwise, these assets would be
returned to the government and not to the employees.
Thereafter, petitioner presented and formally offered its evidence against
herein respondents. However, the latter objected to the offer primarily on the
ground that the documents violated the best evidence rule of the Rules of Court, as
these documents were unauthenticated; moreover, petitioner had not provided any
reason for its failure to present the originals.

On 11 March 2002, the Sandiganbayan issued a Resolution[6] admitting the


pieces of evidence while expressing some reservation, to wit:
WHEREFORE, taking note of the objections of accused Marcoses and
the reply thereto by the plaintiff, all the documentary exhibits formally offered by
the prosecution are hereby admitted in evidence; however, their evidentiary value
shall be left to the determination of the Court.

SO ORDERED.

Imelda R. Marcos; Imee Marcos-Manotoc and Bongbong Marcos, Jr.; Irene


Marcos-Araneta and Gregorio Ma. Araneta III; Yeung Chun Kam, Yeung Chun Ho
and Yeung Chun Fan; and the PEA-PTGWO subsequently filed their respective
Demurrers to Evidence.

On 6 December 2005, the Sandiganbayan issued the assailed


Resolution,[7] which granted all the Demurrers to Evidence except the one filed by
Imelda R. Marcos. The dispositive portion reads:
WHEREFORE, premises considered, the Demurrer to Evidence filed by
defendant Imelda R. Marcos is hereby DENIED. The Demurrer to Evidence filed
by defendants Maria Imelda Marcos Manotoc, Ferdinand Marcos, Jr., Irene
Marcos Araneta, Gregorio Maria Araneta III, Yeung Chun Kam, Yeung Chun
Fan, Yeung Chun Ho, and intervenor PEA-PTGWO, are hereby GRANTED. The
sequestration orders on the properties in the name of defendant Gregorio Maria
Araneta III, are accordingly ordered lifted.
SO ORDERED.
The Sandiganbayan denied Imelda R. Marcos Demurrer primarily because
she had categorically admitted that she and her husband owned properties
enumerated in the Complaint, while stating that these properties had been lawfully
acquired. The court held that the evidence presented by petitioner constituted
a prima facie case against her, considering that the value of the properties involved
was grossly disproportionate to the Marcos spouses lawful income. Thus, this
admission and the fact that Imelda R. Marcos was the compulsory heir and
administratrix of the Marcos estate were the primary reasons why the court held
that she was responsible for accounting for the funds and properties alleged to be
ill-gotten.

Secondly, the court pointed out that Rolando Gapud, whose deposition was
taken in Hong Kong, referred to her as one directly involved in amassing ill-gotten
wealth. The court also considered the compromise agreement between petitioner
and Antonio O. Floirendo, who disclosed that he had performed several business
transactions upon the instructions of the Marcos spouses.

With regard to the siblings Imee Marcos-Manotoc and Bongbong Marcos,


Jr., the court noted that their involvement in the alleged illegal activities was never
established. In fact, they were never mentioned by any of the witnesses presented.
Neither did the documentary evidence pinpoint any specific involvement of the
Marcos children.

Moreover, the court held that the evidence, in particular, exhibits


P, Q,[9] R,[10] S,[11] and T,[12] were considered hearsay, because their originals
[8]

were not presented in court, nor were they authenticated by the persons who
executed them. Furthermore, the court pointed out that petitioner failed to provide
any valid reason why it did not present the originals in court. These exhibits were
supposed to show the interests of Imee Marcos-Manotok in the media networks
IBC-13, BBC-2 and RPN-9, all three of which she had allegedly acquired illegally.
These exhibits also sought to prove her alleged participation in dollar salting
through De Soleil Apparel.
Finally, the court held that the relationship of respondents to the Marcos
spouses was not enough reason to hold the former liable.

In the matter of the spouses Irene Marcos and Gregorio Araneta III, the court
similarly held that there was no testimonial or documentary evidence that
supported petitioners allegations against the couple. Again, petitioner failed to
present the original documents that supposedly supported the allegations against
them. Instead, it merely presented photocopies of documents that sought to prove
how the Marcoses used the Potencianos[13] as dummies in acquiring and operating
the bus company Pantranco.

Meanwhile, as far as the Yeungs were concerned, the court found the
allegations against them baseless. Petitioner failed to demonstrate how their
business, Glorious Sun Fashion Garments Manufacturing, Co. Phils. (Glorious
Sun), was used as a vehicle for dollar salting; or to show that they themselves were
dummies of the Marcoses. Again, the court held that the documentary evidence
relevant to this allegation was inadmissible for being mere photocopies, and that
the affiants had not been presented as witnesses.
Finally, the court also granted the Demurrer filed by PEA-PTGWO. While
the court held that there was no evidence to show that Pantranco was illegally
acquired, the former nevertheless held that there was a need to first determine the
ownership of the disputed funds before they could be ordered released to the
rightful owner.

On 20 December 2005, petitioner filed its Motion for Partial


Reconsideration, insisting that there was a preponderance of evidence to show that
respondents Marcos siblings and Gregorio Araneta III had connived with their
parents in acquiring ill-gotten wealth. It pointed out that respondents were
compulsory heirs to the deposed President and were thus obliged to render an
accounting and to return the ill-gotten wealth.

Moreover, petitioner asserted that the evidence established that the Yeungs
were dummies of the Marcoses, and that the Pantranco assets were part of the
Marcoses alleged ill-gotten wealth.

Finally, petitioner questioned the courts ruling that the evidence previously
admitted was later held to be inadmissible in evidence against respondents, thus,
depriving the former of due process.
Inadvertently, petitioner was not able to serve a copy of the motion on
respondents Imee Marcos-Manotoc and Bongbong Marcos, Jr. But upon realizing
the oversight, it immediately did so and filed the corresponding Manifestation and
Motion before the court. Nonetheless, this inadvertence prompted Imee Marcos-
Manotoc and Bongbong Marcos, Jr. to file their Motion for Entry of Judgment.
On 2 March 2006, the court issued the second assailed
Resolution,[14] denying petitioners Motion. The court pointed out its reservation in
its Resolution dated 12 March 2002, wherein it said that it would still assess and
weigh the evidentiary value of the admitted evidence. Furthermore, it said that
even if it included the testimonies of petitioners witnesses, these were not
substantial to hold respondents liable. Thus, the court said:
WHEREFORE, there being no sufficient reason to set aside the
resolution dated December 6, 2005, the plaintiffs Motion for Partial
Reconsideration is hereby DENIED. The plaintiffs Motion and
Manifestation dated January 18, 2006 is GRANTED in the interest of justice.
The Motion for Entry of Judgment filed by defendants Imee Marcos and
Bongbong Marcos is DENIED.

SO ORDERED.

Hence, this Petition.

Petitioner raises the same issues it raised in its Motion for Reconsideration
filed before the Sandiganbayan, to wit:[15]
I. THE SANDIGANBAYAN ERRED IN GRANTING THE DEMURRER
TO EVIDENCE FILED BY RESPONDENTS MA. IMELDA (IMEE) R.
MARCOS AND FERDINAND (BONGBONG) R. MARCOS, JR.,
CONSIDERING THAT MORE THAN PREPONDERANT EVIDENCE
ON RECORD CLEARLY DEMONSTRATES THEIR CONNIVANCE
WITH FORMER PRESIDENT FERDINAND E. MARCOS AND
OTHER MARCOS DUMMIES AND ABUSED THEIR POWER AND
INFLUENCE IN UNLAWFULLY AMASSING FUNDS FROM THE
NATIONAL TREASURY.
II. PETITION PROVED, BY MORE THAN PREPONDERANT
EVIDENCE, THAT RESPONDENT-SPOUSES GREGORIO ARANETA
III AND IRENE MARCOS ARANETA CONNIVED WITH FORMER
PRESIDENT MARCOS IN UNLAWFULLY ACQUIRING BUSINESS
INTERESTS WHICH ARE GROSSLY DISADVANTAGEOUS TO THE
GOVERNMENT, AND IN A MANNER PROHIBITED UNDER THE
CONSTITUTION AND ANTI-GRAFT STATUTES.
III. RESPONDENTS IMEE, BONGBONG, AND IRENE MARCOS ARE
COMPULSORY HEIRS OF FORMER PRESIDENT MARCOS AND
ARE EQUALLY OBLIGED TO RENDER AN ACCOUNTING AND
RETURN THE ALLEGED ILL-GOTTEN WEALTH OF THE
MARCOSES.

IV. THERE EXISTS CONCRETE EVIDENCE PROVING THAT


RESPONDENTS YEUNG CHUN KAM, YEUNG CHUN FAN, AND
YEUNG CHUN HO ACTED AS DUMMIES FOR THE MARCOSES,
AND USED THE CORPORATION, GLORIOUS SUN, AS A CONDUIT
IN AMASSING THE ILL-GOTTEN WEALTH. ACCORDINGLY, THE
SANDIGANBAYAN ERRED IN GRANTING THEIR DEMURRER TO
EVIDENCE.

V. THE DEMURRER TO EVIDENCE FILED BY INTERVENOR PEA-


PTGWO WITH RESPECT TO THE PANTRANCO ASSETS SHOULD
NOT HAVE BEEN GRANTED SINCE AMPLE EVIDENCE PROVES
THAT THE SAID ASSETS INDUBITABLY FORM PART OF THE
MARCOS ILL-GOTTEN WEALTH, AS BUTTRESSED BY THE FACT
THAT NO JUDICIAL DETERMINATION HAS BEEN MADE AS TO
WHOM THESE ASSETS RIGHTFULLY BELONG.

VI. THE SANDIGANBAYANS RULING WHICH REJECTED


PEITITONERS DOCUMENTARY EXHIBITS ALLEGEDLY FOR
BEING INADMISSIBLE DIRECTLY CONTRADICTS ITS EARLIER
RULING ADMITTING ALL SAID DOCUMENTARY EVIDENCE
AND WAS RENDERED IN A MANNER THAT DEPRIVED
PETITIONERS RIGHT TO DUE PROCESS OF LAW.

There is some merit in petitioners contention.

The Marcos Siblings and


Gregorio Araneta III

Closely analyzing petitioners Complaint and the present Petition for Review,
it is clear that the Marcos siblings are being sued in two capacities: first, as co-
conspirators in the alleged accumulation of ill-gotten wealth; and second, as the
compulsory heirs of their father, Ferdinand E. Marcos.[16]

With regard to the first allegation, as contained in paragraph 29 of its Third


Amended Complaint quoted above, petitioner accused the Marcos siblings of
having collaborated with, participated in, and/or benefitted from their parents
alleged accumulation of ill-gotten wealth. In particular, as far as Imee Marcos-
Manotoc was concerned, she was accused of dollar salting by using Glorious Sun
to import denim fabrics from one supplier at prices much higher than those paid by
other users of similar materials. It was also alleged that the Marcoses personally
benefitted from the sequestered media networks IBC-13, BBC-2, and RPN-9, in
which Imee Marcos had a substantial interest.
Irene Marcos-Araneta, on the other hand, was accused of having conspired
with her husband, respondent Gregorio Araneta III, in his being President Marcos
conduit to Pantranco, thereby paving the way for the Presidents ownership of the
company in violation of Article VII, Section 4, paragraph 2 of the 1973
Constitution.[17]
To prove the general allegations against the Marcos siblings, petitioner
primarily relied on the Sworn Statement[18] and the Deposition[19] of one of the
financial advisors of President Marcos, Rolando C. Gapud, taken in Hong Kong on
various dates.

Meanwhile, to prove the participation and interests of Imee Marcos-Manotoc


in De Soleil Apparel and the media networks, petitioner relied on the Affidavits of
Ramon S. Monzon,[20] Yeung Kwok Ying,[21] and Rodolfo V. Puno;[22] and the
transcript of stenographic notes (TSN) taken during the PCGG hearing held on 8
June 1987.[23]
As to spouses Irene Marcos-Araneta and Gregorio Araneta III, petitioner
submitted the Articles of Incorporation of Northern Express Transport, Inc.; [24] the
Memorandum of Agreement[25] and the Purchase Agreement[26] between Pantranco
and Batangas Laguna Tayabas Bus Company, Inc. (BLTBCo.); the Confidential
Memorandum regarding the sale of the Pantranco assets;[27] the Affidavit[28] and the
letter to the PCGG[29] of Dolores A. Potenciano, owner of BLTBCo.; the
Affidavit[30] and the Memorandum[31]of Eduardo Fajardo, who was then the Senior
Vice-President of the Account Management Group of the Philippine National Bank
(PNB), which was in turn the creditor for the Pantranco sale; and the Affidavit of
Florencio P. Lucio, who was the Senior Account Specialist of the National
Investment and Development Corporation.[32]

Petitioner contends that these documents fall under the Rules third
exception, that is, these documents are public records in the custody of a public
officer or are recorded in a public office. It is its theory that since these documents
were collected by the PCGG, then, necessarily, the conditions for the exception to
apply had been met. Alternatively, it asserts that the documents were offered to
prove not only the truth of the recitals of the documents, but also of other external
or collateral facts.[33]

The Courts Ruling

Petitioner failed to observe the


best evidence rule.

It is petitioners burden to prove the allegations in its Complaint. For relief to


be granted, the operative act on how and in what manner the Marcos siblings
participated in and/or benefitted from the acts of the Marcos couple must be clearly
shown through a preponderance of evidence. Should petitioner fail to discharge
this burden, the Court is constrained and is left with no choice but to uphold the
Demurrer to Evidence filed by respondents.

First, petitioner does not deny that what should be proved are the contents of
the documents themselves. It is imperative, therefore, to submit the original
documents that could prove petitioners allegations.
Thus, the photocopied documents are in violation Rule 130, Sec. 3 of the
Rules of Court, otherwise known as the best evidence rule, which mandates that
the evidence must be the original document itself. The origin of the best evidence
rule can be found and traced to as early as the 18th century in Omychund v.
Barker,[34] wherein the Court of Chancery said:
The judges and sages of the law have laid it down that there is but one
general rule of evidence, the best that the nature of the case will admit.

The rule is, that if the writings have subscribing witnesses to them,
they must be proved by those witnesses.
The first ground judges have gone upon in departing from strict rules, is an
absolute strict necessity. Secondly, a presumed necessity. In the case of writings,
subscribed by witnesses, if all are dead, the proof of one of their hands is
sufficient to establish the deed: where an original is lost, a copy may be admitted;
if no copy, then a proof by witnesses who have heard the deed, and yet it is a
thing the law abhors to admit the memory of man for evidence.

Petitioner did not even attempt to provide a plausible reason why the
originals were not presented, or any compelling ground why the court should admit
these documents as secondary evidence absent the testimony of the witnesses who
had executed them.
In particular, it may not insist that the photocopies of the documents fall
under Sec. 7 of Rule 130, which states:
Evidence admissible when original document is a public record. ─ When
the original of a document is in the custody of a public officer or is recorded in a
public office, its contents may be proved be a certified copy issued by the public
officer in custody thereof.

Secs. 19 and 20 of Rule 132 provide:


SECTION 19. Classes of documents. ─ For the purpose of their
presentation in evidence, documents are either public or private.
Public documents are:
(a) The written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and public
officers, whether of the Philippines, or of a foreign country;
(b) Documents acknowledged before a notary public except last
wills and testaments; and
(c) Public records, kept in the Philippines, of private documents
required by law to be entered therein.
All other writings are private.

SECTION 20. Proof of private document. Before any private document


offered as authentic is received in evidence, its due execution and
authenticity must be proved either:
(a) By anyone who saw the document executed or written; or
(b) By evidence of the genuineness of the signature or
handwriting of the maker.
Any other private document need only be identified as that which
it is claimed to be.
The fact that these documents were collected by the PCGG in the course of
its investigations does not make them per se public records referred to in the
quoted rule.

Petitioner presented as witness its records officer, Maria Lourdes Magno,


who testified that these public and private documents had been gathered by and
taken into the custody of the PCGG in the course of the Commissions investigation
of the alleged ill-gotten wealth of the Marcoses. However, given the purposes for
which these documents were submitted, Magno was not a credible witness who
could testify as to their contents. To reiterate, [i]f the writings have subscribing
witnesses to them, they must be proved by those witnesses. Witnesses can testify
only to those facts which are of their personal knowledge; that is, those derived
from their own perception.[35] Thus, Magno could only testify as to how she
obtained custody of these documents, but not as to the contents of the documents
themselves.

Neither did petitioner present as witnesses the affiants of these Affidavits or


Memoranda submitted to the court. Basic is the rule that, while affidavits may be
considered as public documents if they are acknowledged before a notary public,
these Affidavits are still classified as hearsay evidence. The reason for this rule is
that they are not generally prepared by the affiant, but by another one who uses his
or her own language in writing the affiant's statements, parts of which may thus be
either omitted or misunderstood by the one writing them. Moreover, the adverse
party is deprived of the opportunity to cross-examine the affiants. For this reason,
affidavits are generally rejected for being hearsay, unless the affiants themselves
are placed on the witness stand to testify thereon.[36]
As to the copy of the TSN of the proceedings before the PCGG, while it may
be considered as a public document since it was taken in the course of the PCGGs
exercise of its mandate, it was not attested to by the legal custodian to be a correct
copy of the original. This omission falls short of the requirement of Rule 132, Secs.
24 and 25 of the Rules of Court.[37]

In summary, we adopt the ruling of the Sandiganbayan, to wit:


Further, again contrary to the theory of the plaintiff, the presentation of the
originals of the aforesaid exhibits is not validly excepted under Rule 130, Section
3 (a), (b), and (d) of the Rules of Court. Under paragraph (d), when the original
document is a public record in the custody of a public officer or is recorded in a
public office, presentation of the original thereof is excepted. However, as earlier
observed, all except one of the exhibits introduced by the plaintiff were not
necessarily public documents. The transcript of stenographic notes (TSN) of the
proceedings purportedly before the PCGG, the plaintiffs exhibit Q, may be a
public document, but what was presented by the plaintiff was a mere photocopy
of the purported TSN. The Rules provide that when the original document is in
the custody of a public officer or is recorded in a public office, its contents may
be proved by a certified copy issued by the public officer in custody thereof.
Exhibit Q was not a certified copy and it was not even signed by the stenographer
who supposedly took down the proceedings.
The rest of the above-mentioned exhibits cannot likewise be excepted
under paragraphs (a) and (b) of Section 3. Section 5 of the same Rule provides
that when the original documents has been lost or destroyed, or cannot be
produced in court, the offeror, upon proof of its execution or existence and the
cause of its unavailability without bad faith on his part, may prove its contents by
a copy, or by a recital of its contents in some authentic document, or by the
testimony of witnesses in the order stated. Thus, in order that secondary evidence
may be admissible, there must be proof by satisfactory evidence of (1) due
execution of the original; (2) loss, destruction or unavailability of all such
originals and (3) reasonable diligence and good faith in the search for or attempt
to produce the original. None of these requirements were complied with by the
plaintiff. Similar to exhibit Q, exhibits P, R, S, and T were all photocopies. P, R,
and T were affidavits of persons who did not testify before the Court. Exhibit S is
a letter which is clearly a private document. Not only does it not fall within the
exceptions of Section 3, it is also a mere photocopy. As We previously
emphasized, even if originals of these affidavits were presented, they would still
be considered hearsay evidence if the affiants do not testify and identify them.[38]

Thus, absent any convincing evidence to hold otherwise, it follows that


petitioner failed to prove that the Marcos siblings and Gregorio Araneta III
collaborated with former President Marcos and Imelda R. Marcos and participated
in the first couples alleged accumulation of ill-gotten wealth insofar as the specific
allegations herein were concerned.

The Marcos siblings are compulsory heirs.


To reiterate, in its third Amended Complaint, petitioner prays that the
Marcos respondents be made to (1) pay for the value of the alleged ill-gotten
wealth with interest from the date of acquisition; (2) render a complete accounting
and inventory of all funds and other pieces of property legally or beneficially held
and/or controlled by them, as well as their legal and beneficial interest therein; (3)
pay actual damages estimated at P200 billion and additional actual damages to
reimburse expenses for the recovery of the alleged ill-gotten wealth estimated
at P250 million or in such amount as may be proven during trial; (4) pay moral
damages amounting to P50 billion; (5) pay temperate and nominal damages, as
well as attorneys fees and litigation expenses in an amount to be proven during the
trial; (6) pay exemplary damages in the amount of P1 billion; and (7) pay treble
judicial costs.[39]

It must be stressed that we are faced with exceptional circumstances, given


the nature and the extent of the properties involved in the case pending with the
Sandiganbayan. It bears emphasis that the Complaint is one for the reversion, the
reconveyance, the restitution and the accounting of alleged ill-gotten wealth and
the payment of damages. Based on the allegations of the Complaint, the court is
charged with the task of (1) determining the properties in the Marcos estate that
constitute the alleged ill-gotten wealth; (2) tracing where these properties are; (3)
issuing the appropriate orders for the accounting, the recovery, and the payment of
these properties; and, finally, (4) determining if the award of damages is proper.

Since the pending case before the Sandiganbayan survives the death of
Ferdinand E. Marcos, it is imperative therefore that the estate be duly represented.
The purpose behind this rule is the protection of the right to due process of every
party to a litigation who may be affected by the intervening death. The deceased
litigant is himself protected, as he continues to be properly represented in the suit
through the duly appointed legal representative of his estate.[40] On that note, we
take judicial notice of the probate proceedings regarding the will of Ferdinand E.
Marcos. In Republic of the Philippines v. Marcos II,[41] we upheld the grant by the
Regional Trial Court (RTC) of letters testamentary in solidum to Ferdinand R.
Marcos, Jr. and Imelda Romualdez-Marcos as executors of the last will and
testament of the late Ferdinand E. Marcos.
Unless the executors of the Marcos estate or the heirs are ready to waive in
favor of the state their right to defend or protect the estate or those properties found
to be ill-gotten in their possession, control or ownership, then they may not be
dropped as defendants in the civil case pending before the Sandiganbayan.

Rule 3, Sec. 7 of the Rules of Court defines indispensable parties as those


parties-in-interest without whom there can be no final determination of an action.
They are those parties who possess such an interest in the controversy that a final
decree would necessarily affect their rights, so that the courts cannot proceed
without their presence. Parties are indispensable if their interest in the subject
matter of the suit and in the relief sought is inextricably intertwined with that of the
other parties.[42]

In order to reach a final determination of the matters concerning the estate of


Ferdinand E. Marcos that is, the accounting and the recovery of ill-gotten wealth
the present case must be maintained against Imelda Marcos and herein respondent
Ferdinand Bongbong R. Marcos, Jr., as executors of the Marcos estate pursuant to
Sec. 1 of Rule 87 of the Rules of Court. According to this provision, actions may
be commenced to recover from the estate, real or personal property, or an interest
therein, or to enforce a lien thereon; and actions to recover damages for an injury
to person or property, real or personal, may be commenced against the executors.

We also hold that the action must likewise be maintained against Imee
Marcos-Manotoc and Irene Marcos-Araneta on the basis of the non-exhaustive list
attached as Annex A to the Third Amended Complaint, which states that the listed
properties therein were owned by Ferdinand and Imelda Marcos and their
immediate family.[43] It is only during the trial of Civil Case No. 0002 before the
Sandiganbayan that there could be a determination of whether these properties are
indeed ill-gotten or were legitimately acquired by respondents and their
predecessors. Thus, while it was not proven that respondents conspired in
accumulating ill-gotten wealth, they may be in possession, ownership or control of
such ill-gotten properties or the proceeds thereof as heirs of the Marcos couple.
Thus, their lack of participation in any illegal act does not remove the character of
the property as ill-gotten and, therefore, as rightfully belonging to the State.
Secondly, under the rules of succession, the heirs instantaneously became
co-owners of the Marcos properties upon the death of the President. The property
rights and obligations to the extent of the value of the inheritance of a person are
transmitted to another through the decedents death.[44] In this concept, nothing
prevents the heirs from exercising their right to transfer or dispose of the properties
that constitute their legitimes, even absent their declaration or absent the partition
or the distribution of the estate. In Jakosalem v. Rafols,[45] we said:
Article 440 of the Civil Code provides that the possession of hereditary
property is deemed to be transmitted to the heir without interruption from
the instant of the death of the decedent, in case the inheritance be
accepted. And Manresa with reason states that upon the death of a person, each
of his heirs becomes the undivided owner of the whole estate left with respect
to the part or portion which might be adjudicated to him, a community of
ownership being thus formed among the coowners of the estate while it
remains undivided. (3 Manresa, 357; Alcala vs. Alcala, 35 Phil. 679.) And
according to article 399 of the Civil Code, every part owner may assign or
mortgage his part in the common property, and the effect of such assignment
or mortgage shall be limited to the portion which may be allotted him in the
partition upon the dissolution of the community. Hence, in the case of Ramirez
vs. Bautista, 14 Phil. 528, where some of the heirs, without the concurrence of
the others, sold a property left by their deceased father, this Court, speaking
thru its then Chief Justice Cayetano Arellano, said that the sale was valid,
but that the effect thereof was limited to the share which may be allotted to
the vendors upon the partition of the estate. (Emphasis supplied)

Lastly, petitioners prayer in its Third Amended Complaint directly refers to


herein respondents, to wit:
1. AS TO THE FIRST SECOND AND THIRD CAUSES OF
ACTION To return and reconvey to Plaintiff all funds and other property
acquired by Defendants during their incumbency as public officers, which funds
and other property are manifestly out of proportion to their salaries, other lawful
income and income from legitimately acquired property which Defendants have
failed to establish as having been, in fact, lawfully acquired by them,
alternatively, to solidarily pay Plaintiff the value thereof with interest thereon
from the date of acquisition until full payment.
2. AS TO THE FOURTH CAUSE OF ACTION to individually render
to this Honorable Court a complete accounting and inventory, subject to
evaluation of Court-appointed assessors, of all funds and other property legally or
beneficially held and/or controlled by them, as well as their legal and beneficial
interest in such funds and other property. (Emphasis supplied)

In sum, the Marcos siblings are maintained as respondents, because (1) the
action pending before the Sandiganbayan is one that survives death, and, therefore,
the rights to the estate must be duly protected; (2) they allegedly control, possess or
own ill-gotten wealth, though their direct involvement in accumulating or
acquiring such wealth may not have been proven.

Yeung Chun Kam, Yeung Chun


Ho And Yeung Chun Fan

It is worthy to note that respondents draw our attention to American Inter-


Fashion Corporation v. Office of the President[46] in which they contend that this
Court considered the allegation of dollar salting as baseless. The cited case,
however, finds no application herein as the former merely ruled that Glorious Sun
was denied due process when it was not furnished by the Garments and Textile
Export Board (GTEB) any basis for the cancellation of the export quota because of
allegations of dollar salting. That Decision did not prevent petitioner from
adducing evidence to support its allegation in Civil Case No. 0002 before the
Sandiganbayan under a different cause of action.

Nevertheless, the allegations against Yeung Chun Kam, Yeung Chun Ho and
Yeung Chun Fan in the case at bar were also proved to be baseless. Again,
petitioner failed to illustrate how respondents herein acted as dummies of the
Marcoses in acquiring ill-gotten wealth. This Court notes that the Complaint
against the Yeungs alleges that the Marcoses used Glorious Sun the garment
company in which the Yeungs are controlling stockholders for illegal dollar salting
through the companys importation of denim fabrics from only one supplier at
prices much higher than those being paid by other users of similar materials.
Notably, no mention of De Soleil Apparel was made.

To prove its allegations, petitioner submitted the controverted Exhibits P, Q,


R, S, and T. As earlier discussed in detail, these pieces of evidence were mere
photocopies of the originals and were unauthenticated by the persons who executed
them; thus, they have no probative value. Even the allegations of petitioner itself in
its Petition for Review are bereft of any factual basis for holding that these
documents undoubtedly show respondents participation in the alleged dollar
salting. The pertinent portion of the Petition reads:
To illustrate, the Affidavit dated May 29, 1987 executed by Mr. Ramon
Monzon which was submitted as Exhibit P, showed that respondent Imee
Marcos-Manotoc owns and controls IBC-13, BBC-2 and (R)PN-9, and has
interest in the De Soleil Apparel. The testimony of Mr. Ramon Monzon during
the hearing on June 8, 1987 before the Presidential Commission on Good
Government as shown in the Transcript of Stenographic Notes also affirmed his
declarations in the Affidavit dated May 29, 1987. The Transcript of Stenographic
Notes dated June 8, 1987 was presented as Exhibit Q. Moreover, the Affidavit
dated March 21, 1986 of Yeung Kwok Ying which was presented as Exhibit
R disclosed that Imee Marcos-Manotoc is the owner of 67% equity of De Soleil
Apparel. The letter dated July 17, 1984 signed by seven (7) incorporators of De
Soleil Apparel, addressed to Hongkong investors which was presented as Exhibit
Sconfirmed that the signatories hold or own 67% equity of the corporation in
behalf of the beneficial owners previously disclosed to the addressees. In addition
to the foregoing documents, petitioner presented the Affidavit of Rodolfo V.
Puno, Chairman of the Garments and Textile Export Group (GTEB) as Exhibit
T wherein he categorically declared that the majority of De Soleil Apparel was
actually owned by respondent Imee Marcos-Manotoc.[47]

The foregoing quotation from the Petition is bereft of any factual matter that
warrants a consideration by the Court. Straight from the horses mouth, these
documents are only meant to show the ownership and interest of Imee Marcos
Manotoc in De Soleil and not how respondent supposedly participated in dollar
salting or in the accumulation of ill-gotten wealth.

PEA-PTGWO
The PEA-PTGWO Demurrer to Evidence was granted primarily as a
consequence of the prosecutions failure to establish that the assets of Pantranco
were ill-gotten, as discussed earlier. Thus, we find no error in the assailed Order of
the Sandiganbayan.

A Final Note
As earlier adverted to, the best evidence rule has been recognized as an
evidentiary standard since the 18th century. For three centuries, it has been
practiced as one of the most basic rules in law. It is difficult to conceive that one
could have finished law school and passed the bar examinations without knowing
such elementary rule. Thus, it is deeply disturbing that the PCGG and the Office of
the Solicitor General (OSG) the very agencies sworn to protect the interest of the
state and its people could conduct their prosecution in the manner that they did. To
emphasize, the PCGG is a highly specialized office focused on the recovery of ill-
gotten wealth, while the OSG is the principal legal defender of the government.
The lawyers of these government agencies are expected to be the best in the legal
profession.

However, despite having the expansive resources of government, the


members of the prosecution did not even bother to provide any reason whatsoever
for their failure to present the original documents or the witnesses to support the
governments claims. Even worse was presenting in evidence a photocopy of the
TSN of the PCGG proceedings instead of the original, or a certified true copy of
the original, which the prosecutors themselves should have had in their custody.
Such manner of legal practice deserves the reproof of this Court. We are
constrained to call attention to this apparently serious failure to follow a most basic
rule in law, given the special circumstances surrounding this case.

The public prosecutors should employ and use all government resources and
powers efficiently, effectively, honestly and economically, particularly to avoid
wastage of public funds and revenues. They should perform and discharge their
duties with the highest degree of excellence, professionalism, intelligence and
skill.[48]
The basic ideal of the legal profession is to render service and secure justice
for those seeking its aid.[49] In order to do this, lawyers are required to observe and
adhere to the highest ethical and professional standards. The legal profession is so
imbued with public interest that its practitioners are accountable not only to their
clients, but to the public as well.

The public prosecutors, aside from being representatives of the government


and the state, are, first and foremost, officers of the court. They took the oath to
exert every effort and to consider it their duty to assist in the speedy and efficient
administration of justice.[50] Lawyers owe fidelity to the cause of the client and
should be mindful of the trust and confidence reposed in them.[51] Hence, should
serve with competence and diligence.[52]

We note that there are instances when this Court may overturn the dismissal
of the lower courts in instances when it is shown that the prosecution has deprived
the parties their due process of law. In Merciales v. Court of Appeals,[53] we
reversed the Decision of the RTC in dismissing the criminal case for rape with
homicide. In that case, it was very apparent that the public prosecutor violated the
due process rights of the private complainant owing to its blatant disregard of
procedural rules and the failure to present available crucial evidence, which would
tend to prove the guilt or innocence of the accused therein. Moreover, we likewise
found that the trial court was gravely remiss in its duty to ferret out the truth and,
instead, just passively watched as the public prosecutor bungled the case.
However, it must be emphasized that Merciales was filed exactly to
determine whether the prosecution and the trial court gravely abused their
discretion in the proceedings of the case, thus resulting in the denial of the
offended partys due process. Meanwhile, the present case merely alleges that there
was an error in the Sandiganbayans consideration of the probative value of
evidence. We also note that in Merciales, both the prosecution and the trial court
were found to be equally guilty of serious nonfeasance, which prompted us to
remand the case to the trial court for further proceedings and reception of
evidence. Merciales is thus inapplicable to the case at bar.

Nevertheless, given the particular context of this case, the failure of the
prosecution to adhere to something as basic as the best evidence rule raises serious
doubts on the level and quality of effort given to the governments cause. Thus, we
highly encourage the Office of the President, the OSG, and the PCGG to conduct
the appropriate investigation and consequent action on this matter.

WHEREFORE, in view of the foregoing, the Petition


is PARTIALLY GRANTED. The assailed Sandiganbayan Resolution dated 6
December 2005 is AFFIRMED with MODIFICATION. For the reasons stated
herein, respondents Imelda Marcos-Manotoc, Irene Marcos-Araneta, and
Ferdinand R. Marcos, Jr. shall be maintained as defendants in Civil Case No. 0002
pending before the Sandiganbayan.
Let a copy of this Decision be furnished to the Office of the President so
that it may look into the circumstances of this case and determine the liability, if
any, of the lawyers of the Office of the Solicitor General and the Presidential
Commission on Good Government in the manner by which this case was handled
in the Sandiganbayan.

SO ORDERED.

FIRST DIVISION

PHILIPPINE TRUST COMPANY G.R. No. 150318


(also known as Philtrust Bank),
Petitioner,
Present:

CORONA, C.J.,

Chairperson,
- versus -
VELASCO, JR.,

LEONARDO-DE CASTRO,

PERALTA,* and

PEREZ, JJ.
HON. COURT OF APPEALS and
FORFOM DEVELOPMENT
CORPORATION, Promulgated:
Respondents.

November 22, 2010

x--------------------------------------------------x

DECISION

LEONARDO-DE CASTRO, J.:


This is a Petition for Certiorari assailing the Decision[1] of the Court of
Appeals dated June 15, 2001 and the subsequent Resolution[2] denying
reconsideration dated August 21, 2001.

The facts of the case, as determined by the Court of Appeals, are as follows:

Plaintiff Forfom Development Corporation is engaged in


agricultural business and real estate development and owns several
parcels of land in Pampanga. It is the registered owner of two (2)
parcels of land subject of the present controversy, situated in Angeles
City, Pampanga, under Transfer Certificate of Title Nos. 10896 and
64884 consisting of 1,126,530 and 571,014 square meters,
respectively. Sometime in 1989, plaintiff received a letter from the
Department of Agrarian Reform with the names Ma. Teresa Limcauco
and Ellenora Limcauco as addressees.Upon verification with the DAR
and the Register of Deeds made by plaintiffs Vice-President at that
time, Mr. Jose Marie L. Ramos, plaintiff discovered that the subject
properties had already been transferred in the names of said Ma.
Teresa Limcauco and Ellenora Limcauco who were never known to
plaintiff or its employees. Plaintiffs Board of Directors decided to seek
the assistance of the National Bureau of Investigation (NBI) to conduct
an investigation on the matter. On November 23, 1989, plaintiff caused
the annotation of its adverse claim on TCT No. 75533 of the Registry of
Deeds of Angeles City.

The results of the NBI Investigation and plaintiffs own inquiry


revealed the following acts through which the subject parcels of land
were transferred in the names of Ma. Teresa Limcauco and Ellenora
Vda. De Limcauco, fictitious names which were used by defendant
Honorata Dizon in the questioned transactions:

(1) A Deed of Absolute Sale dated March 6, 1987 was executed


over the lot covered by TCT No. 64884 in favor of Ellenora Vda. De
Limcauco for the price of P500,000.00. A separate Deed of Absolute
Sale dated October 5, 1987 was likewise executed over the property
covered by TCT No. 10896 in favor of Ma. Teresa Limcauco in
consideration of P500,000.00. In both instruments, the signature of the
plaintiffs President, Felix H. Limcauco was forged. Likewise, a
certification to the effect that plaintiffs Board of Directors had duly
approved the sale contained the forged signature of plaintffs President,
Felix H. Limcauco.
(2) On July 7, 1987, a petition for issuance of owners duplicate
copy was filed with the Regional Trial Court of Angeles City, Branch 57
by Ellenora Limcauco who allegedly lost said owners duplicate copy of
TCT No. 64884, which was docketed as Cad. Case No. A-124-160. On
January 10, 1989, a separate petition for the issuance of a new owners
duplicate copy was filed with the same court by counsel for Ma. Teresa
Limcauco who allegedly lost the owners duplicate copy of TCT No.
10896, which was docketed as Cad. Case No. A-124-280. After due
hearing, the court in Cad. Case No. A-124-280 granted the petition in an
Order dated February 1, 1989 which directed the Register of Deeds to
issue another owners duplicate copy of TCT No. 10896 in place of the
lost one.

(3) As a consequence of the courts order in Cad. Case No. A-124-


280, TCT No. 10896 was cancelled and TCT No. 82760/T-414 was issued
in the name of Ma. Teresa Limcauco who had the property covered
thereby subdivided into different lots for which TCT Nos. 85585, 85587,
85589 and 85591 were issued in the name of said Ma. Teresa
Limcauco. As to TCT No. 64884, this was also cancelled by the Register
of Deeds of Angeles City, Honesto G. Guarin, by virtue of a purported
court order issued by Judge Eliodoro B. Guinto of RTC-Branch 57. Also
appearing as Entry No. 1127 in TCT No. 64884 is the Secretarys
Certificate in favor of Felix H. Limcauco and Entry No. 1128 which is the
sale in favor of Ellenora Limcauco. However, the copy of the court order
in Cad. Case No. A-124-160 presented to said Register of Deeds was not
signed by Judge Guinto who had denied before the NBI authorities
having signed such order or having conducted hearing on said case. The
copy submitted to the Register of Deeds was merely stamped Original
Signed. Another document certifying that the Order granting the
petition in Cad. Case No. A-124-160 had become final and executory
was also submitted to the Register of Deeds in connection with the
cancellation of TCT No. 64884. However, then Branch Clerk of Court
Benedicto A. Pineda testified that he did not sign said certification and
neither had he been aware of the proceedings in Cad. Case No. A-124-
160. Atty. Pinedas signature on said certification appears to have been
falsified by one Lorenzo San Andres.

(4) Although the property covered by TCT No. 10896 has already
been subdivided into different lots and covered by separate titles in the
name of Ma. Teresa Limcauco, said lots were not yet transferred or
conveyed to third parties. But as to the property covered by TCT No.
64884, said certificate of title was cancelled and a new certificate of
title, TCT No. 75436/T-378 was issued in the name of Ellenora Vda. De
Limcauco. On September 23, 1987, a Deed of Absolute Sale was
executed by Ellenora Vda. De Limcauco in favor of defendant Raul P.
Claveria whereby the property covered by TCT No. 64884 was
supposedly sold to said defendant for the sum of P5,139,126.00. On
September 24, 1987, TCT No. 75436/T-378 was cancelled and a new
certificate of title, TCT No. 75533 was issued in the name of defendant
Raul P. Claveria. On October 21, 1987, defendant spouses Raul and Elea
Claveria mortgaged the property with the defendant Philippine Trust
Company to guarantee a loan in the amount of P8,000,000.00, which
mortgage was duly registered and annotated as Entry No. 2858 in TCT
No. 75533.

On December 26, 1989, plaintiff instituted the present action


against the defendants Ma. Teresa Limcauco, Ellenora D. Limcauco,
spouses Raul P. Claveria and Elea R. Claveria, Philippine Trust Company
and the Register of Deeds of Angeles City. The Complaint alleged
conspiratorial acts committed by said defendants who succeeded in
causing the fraudulent transfer of registration of plaintiffs properties in
the names of Ma. Teresa Limcauco and Ellenora D. Limcauco and the
subdivision of the land covered by TCT No. 10896 over which separate
titles have been issued. Plaintiff prayed that the trial court render
judgment (a) declaring the deeds of sale of March 9, 1987, October 5,
1987 and September 23, 1987 as well as TCT Nos. 75436, 75533, 87269,
85585, 85587, 85589 and 85591, all of the Registry of Deeds of Angeles
City as void ab initio, (b) directing the reconveyance of the aforesaid
real property in the name of plaintiff corporation, and (c) sentencing
defendants to pay plaintiff sums of P1,000,000.00 as moral
damages, P100,000.00 plus daily appearance fee of P1,000.00 as
attorneys fees, and costs of suit. Defendant Philippine Trust Bank filed a
motion for bill of particulars which was granted by the trial court, and
accordingly plaintiff amended its Complaint to specifically allege the
fraudulent acts and irregularities in the transfer of registration of its
properties, in addition to those already specified in the Complaint. Thus
plaintiff alleged in addition that (1) the supposed court Order directing
the issuance of another owners duplicate copy actually did not exist,
copy of said Order not bearing either the signature of the judge or his
branch clerk of court as well as the court seal, and yet accepted at face
value in conspiracy or at least negligently, by defendant Register of
Deeds of Angeles City, not to mention the haste, among other signs of
conspiracy, with which said new owners duplicate copy of the title was
issued; (2) the mortgage executed by defendant-spouses Claveria in
favor of defendant bank was characterized by irregularities, the bank
having extended a loan in the amount of P8 million, far in excess of the
propertys market value of P2,855,070.00, as well as the haste in which
said loan was granted.

In its Answer, defendant Philippine Trust Company denied the


allegations of the Complaint as to the irregularities in the granting of
the P8 million loan to defendant-spouses Raul and Elea
Claveria. According to said defendant, the Claveria spouses have been
their clients since 1986 and on October 2, 1987, all their outstanding
obligations in the amount of P7,300,000.00 were consolidated into one
(1) account on clean basis. Defendant bank had required the Claveria
spouses to secure their clean loan of P7,300,000.00 with a real estate
mortgage, and hence on October 21, 1987, said spouses executed
mortgage on real property covered by TCT No. 75533 for an obligation
of P8 million after securing an advance from the defendant bank in the
amount of P700,000.00. It had subjected the land offered as security to
the usual bank appraisals and examined the genuineness and
authenticity of TCT No. 75533 with the Register of Deeds of Angeles City
and found the same to be in existence and in order. Thereupon, the
deed of mortgage executed by the Claveria spouses was registered by
the defendant bank with the Register of Deeds and had it annotated in
the original copy of the title. Defendant bank thus prayed that after due
hearing, the complaint against it be dismissed and a decision be
rendered (a) holding as valid and legal the mortgage on the real
property covered by TCT No. 75533 of the Registry of Deeds of Angeles
City, and (b) on its counterclaim, ordering the plaintiff to pay to
defendant bank the amounts of P50,000.00 as actual
damages, P1,000,000.00 as moral damages, P100,000.00 as attorneys
fees, and the costs of suit.

On motion of plaintiff, the trial court ordered the service of


summons by publication with respect to defendants Ma. Teresa
Limcauco, Ellenora Limcauco, Raul P. Claveria and Elea Claveria, whose
addresses could not be located by the Sheriff and even by the parties.

Defendant Register of Deeds of Angeles City filed his Answer


denying that he conspired with the other defendants in effecting the
transfer of registration of the subject properties and averring that it had
issued the questioned transfer certificates of title to defendants Ma.
Teresa Limcauco, Ellenora Vda. de Limcauco and the spouses Raul and
Elea Claveria on the basis of documents filed with it and existing in the
Office of the Register of Deeds of Angeles City. In his defense,
defendant Register of Deeds maintained that he had no reason or basis
to question the validity and legality of the documents presented before
him for registration nor to question the genuineness of the signatures
appearing therein, as well as the Orders of RTC-Angeles City, Branch 57,
which contained a signature over and above the typewritten name of
Judge Eliodoro B. Guinto. He had the right to assume that official
functions were regularly performed. Plaintiff therefore has no cause of
action against the defendant Register of Deeds as the latter merely
performed his duties and functions embodied under Sec. 10 of P.D. No.
1529. By way of counterclaim, defendant Register of Deeds alleged bad
faith and malice in plaintiffs filing of the complaint against him, stating
that (1) despite plaintiffs knowledge that defendant Register of Deeds
has not committed any act of malfeasance or misfeasance in the
registration of the subject certificates of title, he was subjected to an
investigation by NBI authorities at the instance of plaintiff and was
compelled to give a sworn statement before said government
authorities in order to clear his name; and (2) plaintiffs former counsel
had earlier manifested that the Register of Deeds was being impleaded
merely as a nominal party; however, in a sudden and unexplained
turnabout, plaintiff impleaded defendant Register of Deeds as a
principal party in its Amended Complaint. Defendant Register of Deeds
thus prayed for the dismissal of the complaint against him for utter lack
of merit and on his counterclaim, that a decision be rendered ordering
the plaintiff to pay the defendant Register of Deeds the following
sums: P200,000.00 by way of moral damages, P100,000.00 by way of
exemplary damages, P20,000.00 by way of attorneys fees plus P500.00
per appearance, and costs of suit.

In an Order dated October 30, 1991, the trial court declared the
defendants Ma. Teresa Limcauco, Ellenora Limcauco, Raul P. Claveria
and Elea R. Claveria in default for their failure to file the necessary
responsive pleadings despite the lapse of sixty (60) days from the last
day of publication of summons, and accordingly allowed the plaintiff to
present its evidence ex parte against the said defendants. During the
pre-trial conference held on November 25, 1991, plaintiffs counsel
manifested that it was joining the defendant Register of Deeds only as a
nominal party as the latter also waived his counterclaim against the
plaintiff.

On February 4, 1992, the trial court granted plaintiffs motion to


authenticate the signatures appearing in the Deeds of Sale of October
5, 1987 and March 6, 1987, and that of Josefina K. Limcauco appearing
in the Secretarys Certificate containing the supposed Board resolution
of plaintiff approving the sale of the parcels of land covered by TCT Nos.
10896 and 64884. The said documents were ordered forwarded to the
NBI for authentication. During the pre-trial conference conducted on
August 25, 1992, the parties agreed on two (2) issues for resolution
during the trial: (1) whether or not the Deeds of Absolute Sale
purportedly executed by the plaintiff covering the subject real
properties, as well as the titles issued thereat, TCT Nos. 75436, 75533,
87269, 85585, 85587, 85589 and 85591, all of the Registry of Deeds of
Angeles City are genuine and valid; and (2) whether or not the
mortgage on the real property covered by TCT No. 75533 of the
Registry of Deeds of Angeles City is valid and legal. At the trial proper,
plaintiff presented as its witnesses Jose Marie L. Ramos (Vice-President
of plaintiff corporation), Alberto Ramos (NBI officer), Eliodoro
Constantino (NBI handwriting expert), Felix H. Limcauco, Jr. (former
President of plaintiff corporation) and Atty. Benedicto Pineda (former
Branch Clerk of Court of RTC- Angeles City, Branch 57). Defendant
Philippine Trust Company, on the other hand, presented the testimony
of defendant Atty. Honesto Guarin (Register of Deeds of Angeles
City). After the formal offer of the respective documentary evidence of
the parties and submission of their memoranda, the case was
submitted for decision. x x x.[3]

On December 29, 1993, the RTC rendered its Decision in favor of private
respondent Forfom Development Corporation (Forfom):

WHEREFORE, all the [foregoing] considered, judgment is hereby


rendered in favor of the plaintiff and against the defendants Philippine
Trust Co., spouses Raul P. Claveria and Elea R. Claveria, Ma. Teresa
Limcauco @ Honorata Dizon and Ellenora Vda. de Limcauco @
Honorata Dizon:

1. Declaring the Deeds of Sale of 9 March 1987, 23 September


1987 and 5 October 1987 as well as Transfer Certificates of Title Nos.
75436, 75533, 82760, 85585, 85587, 85589 and 85591 all of the
Register of Deeds of Angeles City as void ab initio;

2. Ordering the Register of Deeds of Angeles City to reinstate


Transfer Certificates of Title Nos. 10896 and 64884 in the name of the
plaintiff or to issue new transfer certificate of title for the same parcels
of land in the name of the plaintiff-corporation free from liens and
encumbrances made subsequent to the cancellation of the said two (2)
titles;

3. Ordering the defendants Philippine Trust Co., spouses Raul P.


Claveria and Elea R. Claveria, Ma. Teresa Limcauco @ Honorata Dizon
and Ellenora Vda. de Limcauco @ Honorata Dizon to pay jointly and
severally the plaintiff the sum of P50,000.00 as actual damages in the
form of attorneys fees; and

4. To pay the costs of this suit.[4]

On January 21, 1994, petitioner Philippine Trust Company (Philtrust) filed a


Notice of Appeal, alleging that the lower court erred in declaring Transfer
Certificate of Title No. 75533-Angeles City void and in concluding that it was a
mortgagee in bad faith. Philtrust further claims that Forfom was negligent with its
property.

On June 15, 2001, the Court of Appeals rendered the assailed Decision
affirming the Decision of the RTC:

WHEREFORE, premises considered, the present appeal is hereby


DISMISSED and the appealed Decision of the trial court in Civil Case No.
6087 is hereby AFFIRMED and REITERATED.[5]

According to the Court of Appeals, Philtrust was negligent in its credit


investigation procedures and its standards for granting of loans, as shown by (a)
its previously extending unsecured and uncollateralized loans to the spouses Raul
and Elea Claveria, and (b) its failure to discover the latters statement of a fictitious
address in the mortgage contract and being the subject of estafa cases. The Court
of Appeals agreed with the trial courts finding that Philtrust acted in haste in the
execution of the mortgage and loan contracts, as the property, assessed only at
more than P2 million and allegedly purchased at more than P5 million, was made
to secure the principal loan obligation of P8 million.
The appellate court further took note of Philtrusts refusal to present the
records and details of its transactions with the spouses Claveria despite being
pressed to do so by Forfom. The Court of Appeals found this circumstance cast
serious doubt on Philtrusts allegation that it was a mortgagee in good faith.

On August 21, 2001, the Court of Appeals denied Philtrusts Motion for
Reconsideration. Hence, this Petition for Certiorari, where Philtrust raises the
following arguments:

1. The Court of Appeals committed grave abuse of discretion amounting to


lack or excess of jurisdiction in finding there was lack of evidence that Philtrust
was a mortgagee in good faith; hence, capriciously and wantonly ascribed bad
faith to the latter;[6]

2. The Court of Appeals committed grave abuse of discretion amounting to


lack or excess of jurisdiction in finding that Philtrust had actual knowledge of facts
and circumstances pertaining to the fraudulent transfer of the registration of the
subject property from the name of Forfom to the name of Ellenora Limcauco,
when there was no iota of evidence to support such factual finding; hence,
capriciously and wantonly ascribed bad faith to Philtrust as the mortgagee of the
said property;[7] and

3. The Court of Appeals committed grave abuse of discretion amounting to


lack or excess of jurisdiction in completely disregarding the well-settled rule that a
forged deed may be the root of a valid title; hence, capriciously and wantonly
nullified the real estate mortgage executed by the spouses Claveria in favor of
Philtrust.[8]

Contrary to the allegation in the third argument presented by Philtrust, the


Court of Appeals did not seem to have disregarded the rule that a forged deed
may be the root of a valid title. The appellate court clearly specified the
circumstances allowing the application of such rule:

A forged deed may be the root of a valid title when an innocent


purchaser for value intervenes. A purchaser in good faith and for value
is one who buys the property of another without notice that some
other person has a right to or interest in such property and pays a full
and fair price for the same, at the time of such purchase, or before he
has notice of the claims or interest of some other person in the
property. It has been held that where a mortgagee bank accepted the
mortgage in good faith, the land involved being registered land, it is not
bound to go [beyond] the certificate of title to look for flaws in the
mortgagors title, the doctrine of innocent purchaser for value being
applicable to an innocent mortgagee for value. A mortgagee in good
faith and for value is entitled to protection. A bank is not required,
before accepting a mortgage, to make an investigation of the title of the
property being given as security. This is a consequence of the rule that a
person dealing with registered land has a right to rely upon the face of
the Torrens certificate of title and to dispense with the need of
inquiring further, except when the party concerned has actual
knowledge of facts and circumstances that would impel a reasonably
cautious man to make such inquiry.[9]

Indeed, the presence of anything which excites or arouses suspicion should


prompt the vendee or mortgagee to look beyond the certificate and investigate
the title of the vendor appearing on the face of said certificate.[10] If the vendee or
mortgagee failed to do so before the execution of the contract, the vendee or
mortgagee is deemed to be in bad faith and therefore cannot acquire any title
under the forged instrument.

The determination of the case at bar, therefore, hinges on the resolution of


the first two issues, which deal with whether Philtrust is a mortgagee in good or
bad faith.However, since what Philtrust filed with us is a Petition
for Certiorari rather than a Petition for Review, a finding that Philtrust is in good
faith is not enough for us to grant the Petition. A mere error in the judgment of
the Court of Appeals in affirming the RTC Decision would not be enough; nothing
less than grave abuse of discretion on the part of the Court of Appeals is required
for the issuance of the Writ of Certiorari.

Philtrust claims that the loans secured by the mortgage on the subject
property were granted to the spouses Claveria after Philtrust was satisfied
regarding the spouses credit worthiness and capacity to pay.[11] In fact, according
to Philtrust, the spouses Claveria were able to maintain a satisfactory record of
payment during the early period of their transactions with the bank.[12] Philtrust
insists that prior to the constitution of the mortgage, it followed the standard
operating procedures in accepting property as security, including having
investigators visit the subject property and appraise its value.[13]

When the Court of Appeals ruled that these claims by Philtrust were not
supported by evidence, the latter countered before us that its allegations were
supported by the following documents: (a) the Promissory Note;[14] (b) the Deed
of Mortgage;[15] and (c) TCT No. 75533.[16] Philtrust adds that it stated in the
Answer to Interrogatories that it followed the standard operating procedures in
accepting the property as security. Since said Answer to Interrogatories is a
notarized document, Philtrust claims that it is a public document which is
conclusive as to the truthfulness of its contents.[17]

It is settled that banks, their business being impressed with public interest,
are expected to exercise more care and prudence than private individuals in their
dealings, even those involving registered lands.[18] The rule that persons dealing
with registered lands can rely solely on the certificate of title does not apply to
banks.[19] Consequently, Philtrust should prove that it exercised extraordinary
diligence required of it in approving the mortgage contract in favor of the spouses
Claveria.

It baffles us how Philtrust can argue that the promissory note and Deed of
Mortgage executed by the spouses Claveria, and the TCT of the subject property,
can prove its allegations that (a) the mortgage was granted after it was satisfied of
the spouses credit worthiness; (b) the latter was able to maintain a satisfactory
record of payment early on; or (c) it followed the standard operating procedures
in accepting property as security, including having investigators visit the subject
property and appraise its value. The mere fact that Philtrust accepted the subject
property as security most certainly does not prove that it followed the standard
operating procedure in doing so. As regards Philtrusts claim that the Answer to
Interrogatories, being a notarized document, is conclusive as to the truthfulness of
its contents, we deem it necessary to clarify the doctrines cited by Philtrust on this
matter.

Section 19, Rule 132 of the Rules of Court enumerates three kinds of public
documents, to wit:

Sec. 19. Classes of Documents. For the purpose of their


presentation in evidence, documents are either public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the
sovereign authority, official bodies and tribunals, and public officers,
whether of the Philippines, or of a foreign country;

(b) Documents acknowledged before a notary public except last


wills and testaments; and
(c) Public records, kept in the Philippines, of private documents
required by law to be entered therein.

All other writings are private.

Notarized documents fall under the second classification of public


documents. However, not all types of public documents are deemed prima
facie evidence of the facts therein stated:

Sec. 23. Public documents as evidence. Documents consisting of


entries in public records made in the performance of a duty by a public
officer are prima facie evidence of the facts therein stated. All other
public documents are evidence, even against a third person, of the fact
which gave rise to their execution and of the date of the latter.[20]

Public records made in the performance of a duty by a public officer include


those specified as public documents under Section 19(a), Rule 132 of the Rules of
Court and the acknowledgement,[21] affirmation or oath,[22] or jurat[23] portion of
public documents under Section 19(c). Hence, under Section 23, notarized
documents are merely proof of the fact which gave rise to their execution (e.g.,
the notarized Answer to Interrogatories in the case at bar is proof that Philtrust
had been served with Written Interrogatories), and of the date of the latter (e.g.,
the notarized Answer to Interrogatories is proof that the same was executed on
October 12, 1992, the date stated thereon),[24] but is not prima facie evidence of
the facts therein stated. Additionally, under Section 30 of the same Rule, the
acknowledgement in notarized documents is prima facie evidence of the
execution of the instrument or document involved (e.g., the notarized Answer to
Interrogatories is prima facie proof that petitioner executed the same).[25]

The reason for the distinction lies with the respective official duties
attending the execution of the different kinds of public instruments. Official duties
are disputably presumed to have been regularly performed.[26] As regards
affidavits, including Answers to Interrogatories which are required to be sworn to
by the person making them,[27] the only portion thereof executed by the person
authorized to take oaths is the jurat. The presumption that official duty has been
regularly performed therefore applies only to the latter portion, wherein the
notary public merely attests that the affidavit was subscribed and sworn to before
him or her, on the date mentioned thereon. Thus, even though affidavits are
notarized documents, we have ruled that affidavits, being self-serving, must be
received with caution.[28]
Philtrust, therefore, presented no evidence rebutting the following badges
of bad faith shown in the records of the case. Even though circumstantial, the
following adequately prove by preponderance of evidence that Philtrust was
aware of the fraudulent scheme perpetrated upon Forfom:

1. Within a period of less than one year, Philtrust extended unsecured loans
amounting to P7,300,000.00 to the spouses Claveria as shown in its Answer
wherein it declared:

Spouses Raul and Elea Claveria has been clients of the bank since 1986
and on October 2, 1987, all their outstanding obligations in the amount
of P7,300,000.00 were consolidated into one account on a clean
basis.[29]

All Philtrust can give is a very general explanation for these unsecured loans:

5. Why were the Claveria spouses granted loans without


collaterals at the onset?[30]

[ANSWER:]

5. The Claveria spouses passed the standards set by the bank.[31]

2. Although the spouses Claveria had declared their residence to be in the


plush subdivision in Ayala Alabang, Philtrust was content to receive as security a
land outside Metro Manila, which was only recently acquired by the said
spouses. When asked about this in the Request for Interrogatories, Philtrust
merely responded evasively:

7. Did the bank not request from the Claveria spouses collateral
within the Metro Manila area and if so what was the reply of the
Claveria spouses?[32]
[ANSWER:]

7. The bank requested for collateral on the P8,300,000.00 loan


preferably located in Metro Manila.[33]

3. It is presumed that evidence willfully suppressed would be adverse if


produced.[34] When pressed in the Request for Interrogatories for details of the
investigation of the bank, and for the names of the persons who allegedly visited
the subject property and the alleged home of the spouses Claveria, and the names
of the bank officers who dealt with said spouses, Philtrust refused to do so:

10. Prior to the execution of the real estate mortgage by the


Claveria spouses on the Angeles City property subject of the above-
captioned case, what investigation, if any did the bank undertake for
the physical examination of said property, what were the results, if any,
of such physical examination of the property, and the name or names of
the persons who visited the property?[35]

[ANSWER:]

10. The Angeles property was appraised in accordance with the


usual procedure in the appraisal of property offered as collateral. The
property was visited by the investigators of the Credit Department of
the bank.[36]

15. Did an officer or employee of the bank actually visit the given
residences of the Claveria spouses in Angeles City and Bacolod City, the
result of such visit, and the name or names of the persons representing
the bank who visited such places? [37]

[ANSWER:]

15. As stated above, the last known address of spouses was 406
Caliraya Street, New Alabang, Muntinlupa, M.M.[38]
17. Who was the particular bank officer who dealt directly with
the Claveria spouses and handled their accounts?[39]

[ANSWER:]

17. The Loans and Discounts Department of the bank handled


the accounts of the spouses.[40]

The RTC and the Court of Appeals considered these circumstances as


circumstantial evidence of Philtrusts awareness of the fraudulent scheme against
Forfom.Nevertheless, Philtrust up to this date persists with suppressing these
details:

Petitioner humbly believes and strongly maintains its position


that the presentation of all documents pertaining to the loan
transactions of Spouses Claveria is unnecessary, irrelevant, and
immaterial in its defense of good faith before the court a
quo. Nevertheless, as discussed above, Petitioner had sufficiently
proved through its Answer to Interrogatories and loan documents
extant in the records of the case that it prudently complied with the
standard practice of banks in accepting mortgage.[41]

4. Philtrust persistently refused to cooperate with the National Bureau of


Investigation (NBI) in its investigation of the fraudulent scheme perpetrated
against Forfom, as testified by NBI agents Alberto V. Ramos and Pastor T.
Pangan,[42] and as shown in NBI Investigation Report NBI-NCR 10-11-90 90-2-
5507.[43]

5. Had Philtrust properly conducted a credit investigation of the spouses


Claveria, it would have easily discovered that they did not reside and never
resided in the address declared by them, as revealed in the investigation by the
NBI[44] and declared by the association of homeowners in the New Alabang
subdivision.[45]
All the foregoing considered, we find that the Court of Appeals did not even
err in finding that Philtrust was in bad faith in the execution of the mortgage
contract with the spouses Claveria. Consequently, Philtrust miserably failed to
prove that the Court of Appeals committed grave abuse of discretion amounting
to lack or excess of jurisdiction in rendering the assailed Decision and Resolution.

WHEREFORE, the instant Petition for Certiorari is DISMISSED. The Decision


of the Court of Appeals dated June 15, 2001 and the subsequent Resolution
denying reconsideration dated August 21, 2001 are AFFIRMED.

Costs against petitioner Philippine Trust Company.

SO ORDERED.

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

MARINA LLEMOS, PEDRO G.R. No. 150162

LLEMOS, FELISA LLEMOS

and VIRGINIA M. JIMENEZ,

Petitioners,

Present:

YNARES-SANTIAGO, J., (Chairperson),

AUSTRIA-MARTINEZ,

- versus - CALLEJO, SR., and


CHICO-NAZARIO, JJ.

ROMEO LLEMOS, ROMY LLEMOS,

MERCEDES LLEMOS, EUSEBIA

LL. FERNANDEZ, JULIANA LL.

CARAMAT, FORTUNATA LLEMOS,

ALIPIO LLEMOS, AMELIA LL.

ABRIGO, PERFECTO LLEMOS,

ALIPIA LL. CARAMAT, JOVITA

LL. LACA, GENEROSA LLEMOS

ABRIGO, ROSALINA LL. CRUZ,

ARTURO LLEMOS, TEODORA

LLEMOS, RODOLFO LLEMOS,

PET LLEMOS and ROSARIO

LLEMOS, Promulgated:

Respondents. January 26, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under


Rule 45 of the Rules of Court questioning the
[1]
Decision dated September 19, 2001 promulgated by the Court of
Appeals (CA) in CA-G.R. CV No. 53112, which reversed the Decision
dated February 29, 1996 of the Regional Trial Court, Branch 41, of
Dagupan City (RTC).
The case originated from a Complaint filed by the respondents,
the compulsory heirs of the late Saturnina Salvatin (Saturni na). The
Complaint sought to declare the nullity of the transfer certificate of
title of the petitioners on the ground that their predecessor -in-
interest, the late Felipe Llemos (Felipe), acquired the property
described therein through a forged deed of sal e.

The facts of the case, as summarized by the CA, are as follows:

[Respondents] and [petitioners] are the heirs of the late Saturnina


Salvatin Llemos, being their grandmother. The late Saturnina Salvatin
Llemos had four (4) children, namely: Adriano Llemos, Santiago Llemos,
Domingo Llemos, who were the predecessors-in-interest of
[respondents], and Felipe Llemos, who was the predecessor-in-interest
of herein [petitioners].

During her lifetime, the late Saturnina Salvatin Llemos acquired a parcel
of land described as Lot No. 2059, covered by Original Certificate of
Title No. 38564, which all the parties presently occupy.

xxxx

On November 5, 1964, the Register of Deeds of Dagupan, Pangasinan,


cancelled Original Certificate of Title No. 38564 (Exhibit B) and issued a
new one, Transfer Certificate of Title No. 15632 (Exhibit D) in the name
of Felipe Llemos, by virtue of a Deed of Absolute Sale thumb marked by
Saturnina Salvatin Llemos conveying said property to Felipe Llemos,
herein [petitioners] predecessor-in-interest, for a consideration
of P200.00 (Exhibit C).

Sometime in 1991, Jovita Llemos Laca, one of the [respondents],


decided to improve her residential house on said parcel of land. Hence,
she borrowed the title of the property from one of the [petitioners],
Felisa Llemos, for purposes of securing a building permit. It was on such
instance that [respondents] discovered that the title of the property
was already in the name of herein [petitioners].
On August 10, 1992, [respondents] filed the instant action for
Declaration of Nullity of said Transfer Certificate [of] Title No. 15632
and for damages. The complaint, was amended on October 24, 1995 to
include additional plaintiffs who are likewise heirs of Saturnina Salvatin
Llemos.

In their Answer, [petitioners] alleged that the late Saturnina Salvatin


Llemos conveyed to their father, the late Felipe Llemos, the subject
parcel of land, thus, said property is their inheritance from their father.

During the pre-trial conference, the parties failed to settle their


differences. Hence, trial proceeded.

x x x x[2]

On February 29, 1996, the RTC ruled in favor of the petitioners, then
the defendants. The dispositive portion of the Decision states:

WHEREFORE, judgment is hereby rendered dismissing the


complaint with costs against plaintiffs.

There is no pronouncement as to damages and attorneys


fees.

SO ORDERED. [ 3 ]

The RTC held that although respondent Eusebia Ll. Fernandez


(Eusebia) testified that Saturnina was her grandmother and that she
died in 1938, Eusebia did not testify on the fact of death of Saturnina
from personal knowledge; that the respondents cause of action
heavily rests on the Certificate of Death [ 4 ] only and no other
evidence; that since at the time Saturnina died, there was already an
existing public registry by virtue of Act 3753, hence, no other entity,
not even the Catholic Church, had the authority to issue a certificate
regarding the fact of death which can qualify as a public docum ent;
that, for these reasons, the Certificate of Death is a private document
and must be authenticated to be admissible as evidence; that
respondents failed to notarize or otherwise authenticate the same
and, hence, the facts stated therein are hearsay; an d finally, since the
deed in question was registered as early as 1964, more than 20 years
had already lapsed, hence, the respondents cause of action had
already prescribed at the time of the filing of their Complaint on
August 10, 1992.
On appeal, the CA reversed the RTC in its Decision dated September
19, 2001, the dispositive portion of which reads:

WHEREFORE, premises considered, the Decision dated


February 29, 1996 rendered by the Regional Trial Court of
Dagupan City, Branch 41, is hereby REVERSED and SET ASIDE, and
a new one is entered as follows:

1. The Deed of Absolute Sale (Exhibit 3) is


hereby declared NULL and VOID;

2. The parties are declared co -owners of the


subject parcel of land owned by the late
Saturnina Salvatin Llemos, as previo usly
covered by Original Certificate of Title No.
38564;

3. Transfer Certificate of Title No. 15632 is


ordered cancelled;

No pronouncement as to costs.

SO ORDERED. [ 5 ]

The CA held that the entries in the Registry Book of St. John
Metropolitan Cathedral in Dagupan City may be considered as entries
made in the course of business under then Section 37 of Rule
130, [ 6 ] which is an exception to the hearsay rule; that Saturnina
passed away on March 12, 1938 as stated by the Book of t he Dead of
the Catholic Church; that, for this reason, the Deed of Absolute Sale
purportedly executed on November 5, 1964 is invalid, as there could
not possibly be a meeting of the minds between a dead person and a
living one; that all the parties in the instant suit are presently
occupying the property in question; and finally, that the petitioners
cannot invoke the indefeasibility of title since it may still be attacked
even beyond the one year period reckoned from the date of its
issuance on the ground of fraud.

On appeal to this Court, the petitioners raise the following issues:

WHETHER THE CAUSE OF ACTION HAD PRESCRIBED OR THAT

THE RESPONDENTS ARE GUILTY OF LACHES. [ 7 ]

THE HONORABLE COURT OF APPEALS ERRED IN


GIVING UNDUE WEIGHT TO THE CERTIFICATE OF
DEATH ISSUED BY THE CHURCH WHEN THE REGISTER
WAS NEVER PRESENTED NOR THE CLERK WHO
PREPARED THE SAME WAS PRESENTED FOR ITS
AUTHENTICATION. [ 8 ]

The issue on prescription deserves scant consideration. The Court has


recently affirmed the rule that an action for annulment of title or
reconveyance based on fraud is imprescrip tible where the plaintiff is
in possession of the property subject of the acts. [ 9 ] It is not disputed
that respondents (plaintiffs), including petitioners (defendan ts),
presently occupy the property in question.
Nor can laches be invoked against respondents. In Agra v. Philippine
National Bank, [ 1 0 ] the Court held that prescription is different from
laches, as the latter is principally a question of equity and each case
is to be determined according to its particular circumstances.

In the present case, evidence shows that the Deed of Absolute Sale
(Exhibit C) dated November 5, 1964, conveying the subject property
to Felipe, petitioners predecessor -in-interest, was thumbmarked by
Saturnina, by virtue of which, the Register of Deeds of Dagupan,
Pangasinan cancelled Original Certificate of Title No. 38564 (Exhibit
B) and issued Transfer Certificate of Title (TCT) No. 15632 (Exhibit D)
on November 5, 1964 in the name of Felipe.
Petitioners insist that respondents are guilty of laches considering
that the latter filed the complaint for declaration of nullity of the TCT
only on August 10, 1992 or almost 28 years after the TCT was issued
to the former on November 5, 1964. On the other hand, respondents
claim that when the Deed of Absolute Sale, on which basis the TCT
was issued, was purportedly thumbmarked by Saturnina on N ovember
5, 1964, the latter had been dead since 1938; that therefore fraud
attended the execution of the Deed of Absolute Sale; that the TCTs in
the names of petitioners are null and void; and that they discovered
the fact of fraud only in 1991.

It is a well-settled doctrine that laches cannot be used to defeat


justice or perpetuate fraud and injustice. Neither should its
application be used to prevent the rightful owners of a property from
recovering what has been fraudulently registered in the name of
another. [ 1 1 ]

However, in order that respondents complaint may prosper, the


burden of proof is on them to show by preponderance of evidence
that the execution of the Deed of Absolute Sale was fraudulent and,
consequently, the issuance of the TCT, a nullity.

Respondents rely principally on the Certificate of Death [ 1 2 ] issued by


Rev. Fr. Camilo V. Natividad on January 29, 1991, attesting that
Salvatin Salvatin, widow of Andres Llemos died on the 12 t h day of
March 1938 and was buried in the Roman Catholic Cemetery of the
parish of St. John Metropolitan Cathedral, Dagupan City. The
Certificate further attests that it is a true copy of the original records
as it appears in the Register of Dead of said Parish, Book No. 20, Folio
No. 91.

It is well-settled that Church registries of births, marriages, and


deaths made subsequent to the promulgation of General Orders No.
68 [ 1 3 ] and the passage of Act No. 190 [ 1 4 ] are no longer public writings,
nor are they kept by duly authorized public officials. [ 1 5 ] They are
private writings and their authenticity must therefo re be proved as
are all other private writings in accordance with the rules of
evidence. [ 1 6 ]

Respondents failed to establish the due execution and


authenticity of the Certificate of Death in accordance with Section 20, Rule
132 of the Rules of Court which provides:
SEC. 20. Proof of private document. Before any private

document offered as authentic is received in evidence, its

due execution and authenticity must be proved either:

a) By anyone who saw the document executed or

written; or

b) By evidence of the genuineness of the signature

or handwriting of the maker.

Any other private document need only be identified as

that which it is claimed to be.

As aptly pointed out by the RTC, respondents failed to present a


witness to prove the due execution and authenticity of the Certificate
of Death.

Nonetheless, the CA considered the entry in the Registry Book of St.


John Metropolitan Cathedral as to the date of death as admissible in
evidence on the ground that it is an entry in the course of official
business which is an exception to the hearsay rule, citing Section 37,
Rule 130 of the Rules of Court, viz:

SEC. 37. Entries in the course of busi ness. - Entries


made at, or near the time of the transactions to which they
refer, by a person deceased, outside of the Philippines or
unable to testify, who was in a position to know the facts
therein stated, may be received as prima facie evidence, if
such person made the entries in his professional capacity or
in the performance of duty and in the ordinary or regular
course of business or duty. [ 1 7 ]

The CA committed a reversible error in considering said


evidence.
Unfortunately, respondents did not submit as evidence the
Register of Dead, Book No. 20 of St. John Metropolitan Cathedral and
they failed to comply with the provisions of Section 5, Rule 130, to
wit:

SEC. 5. When original document is unavailable. When


the original document has been lost or destroyed, or cannot
be produced in court, the offeror, upon proof of its
execution or existence and the cause of its unavailability
without bad faith on his part, may prove its contents by a
copy, or by a recital of its contents in some authentic
document, or by the testimony of witnesses in the order
stated. [ 1 8 ]

Under Section 3, Rule 130, Rules of Court, the original document


must be produced and no evidence shall be admissible other than the
original document itself, except in the following cases:

xxxx

a) When the original has been lost or destroyed, or


cannot be produced in court, without bad faith on the part
of the offeror;

b) When the original is in the custody or under the


control of the party against whom the evidence is offered,
and the latter fails to produce it after reasonable notice;

c) When the original consists of numerous accounts or


other documents which cannot be examined in court without
great loss of time and the fact sought to be established from
them is only the general result of the whole; and

d) When the original is a public rec ord in the custody


of a public officer or is recorded in a public office.
None of the exceptions are attendant in the present case. The
Register of Dead is in the custody of St. John Metropolitan Cathedral
but respondents failed to show that it present ed the Certificate of
Death because the Register of Dead cannot be produced in court.
There is no showing that the Register of Dead consists of numerous
documents which cannot be examined in court without great loss of
time and the fact sought to be establ ished from it is only the general
result of the whole. Further, respondents failed to present an
authentic document that recites the contents of the Register of
Dead. As earlier held, the Certificate of Death is a private document
and not a public document; and respondents failed to prove its
authenticity by their failure to present any witness to testify on the
due execution and genuineness of the signature of Fr. Natividad,
pursuant to Section 20, Rule 132.
Moreover, the Court notes the absence of evidenc e showing
that Salvatin Salvatin mentioned in the Certificate of Death is the
same Saturnina Salvatin referred to by them as their predecessor -in-
interest; and that Father Natividad has personal knowledge of the
date of death of Salvatin Salvatin. The CA merely relied on the
Register of Dead of the parish which, as earlier pointed out, was not
presented in court.

On the other hand, petitioners presented the questioned Deed of


Absolute Sale dated November 5, 1964, marked as Exhibit 3. It is a
notarized document which, as correctly found by the RTC, had been

[E]xecuted with all the formalities of law and ratified by a


notary public who attested that the vendor Saturnina
Salvatin appeared before him and acknowledged her deed to
be her free act and deed. It was executed in the presence of
two witnesses. Maria Llemos Jimenez likewise testified that
the deed was properly executed for valuable consideration
at the time. [ 1 9 ]

A notarized document is executed to lend truth to the


statements contained therein and to the authenticity of the
signatures. Notarized documents enjoy the presumption of regularity
which can be overturned only by clear and convincing evidence. [ 2 0 ]

As found earlier, respondents failed to establish the date of


death of their predecessor-in-interest which could have proven that
the thumbmark of Saturnina in the Deed of Absolute Sale was
fraudulently affixed because she had died before the deed of sale was
purportedly executed by her.

In fine, respondents failed to establish by preponderance of


evidence their claim that petitioners predecessor -in-interest obtained
his title through fraud.

WHEREFORE, the petition is GRANTED. The challenged Decision


of the Court of Appeals is hereby REVERSED and SET ASIDE. The
complaint of respondents is DISMISSED.

No pronouncement as to costs.
SO ORDERED.
THIRD DIVISION

[G.R. Nos. 106314-15. October 8, 1999]

HEIRS OF PEDRO CABAIS, NAMELY: MAGDALENA BONTO CABAIS,


ANTONIO CABAIS, PABLO CABAIS, ANDREA CABAIS, EFREN
CABAIS, AGAPITA CABAIS, and ANDRES CABAIS, represented by
AVELINA CABAIS, petitioners, vs. THE HONORABLE COURT OF
APPEALS, CONSTANCIA PAGLINAWAN, PAULINO LORIA,
AUREA NICOLAS, ANTONIO LO, SANTOS WANTON, ZENAIDA
BATALLER, ISABEL LORIA, ADELAIDA DAUSAND EMMA
CARALI, respondents.
HEIRS OF PEDRO CABAIS, NAMELY: MAGDALENA BONTO CABAIS,
CHILDREN: ANTONIO, ANDREA, PABLO, AVELINA, EFREN,
AGAPITA and ANDRES all surnamed CABAIS, petitioners vs. THE
HONORABLE COURT OF APPEALS, HEIRS OF VICTORIA CAETA,
NAMELY: CELSO represented by his HEIRS, ISABEL, ARMANDO,
ROGER, SURNAMED LORIA, HEIRS OF MELECIO LORIA,
NAMELY: NIMFA and JOEL, PAULINA LORIA VDA. DE
PAGLINAWAN, EMERITA LORIA and SPS. RUFINO NICOLAS and
AUREA GOYAL, respondents.

DECISION
PURISIMA, J:

At bar are Petitions for Review on Certiorari under Rule 45 of the Revised Rules of Court,
seeking a review of the Decision[1] of the Court of Appeals, dated November 13, 1991, and its
Resolution[2] of July 9, 1992, denying the motion for reconsideration in CA- G.R. SP Nos. 28109
and 28110.
The two cases were tried jointly and decided by Branch 17 of the Regional Trial Court in
Tabaco, Albay.
Petitioners are legal heirs of Pedro Cabais, who died on April 16, 1982, leaving a parcel of
land situated[3] in Basud, Tabaco, Albay, with an area of 1,638 square meters, and covered by
Transfer Certificate of Title No. T-55640 in the name of Pedro Cabais. The said property was
inherited by Pedro Cabais from his grandmother Eustaquia Caeta by right of representation. His
mother, Felipa Caeta Buesa, who was the only daughter of Eustaquia Caeta,[4] predeceased the
latter, leaving him as the only legal heir of Eustaquia. Thus, Pedro Cabais executed a Deed of
Self-Adjudication,[5] adjudicating in his favor subject property. By virtue thereof, Original
Certificate of Title No. RO-3433 (23899) was cancelled and in lieu thereof, the aforementioned
transfer certificate of title issued in his name.
On October 15, 1979, shortly after Pedro Cabais had adjudicated to himself the property in
question, a complaint for partition and accounting was brought by Simon Bonaobra, Heirs of
Victoria Caeta and Heirs of Anastacio Caeta against Pedro Cabais, docketed as Civil Case No. T-
567 before the Regional Trial Court but the plaintiffs were declared non-suited, resulting to the
dismissal of the case.
During the pendency of Civil Case No. T-567, Pedro Cabais died. Whereupon, the
respondents herein entered the property in dispute and constructed houses thereon, depriving
petitioners of possession thereof.
On April 15, 1987, petitioners filed with the lower court,[6] Civil Case No. T-1283, for
quieting of title, recovery of possession and ownership with a prayer for preliminary injunction,
against the herein respondents, alleging that the acts of the latter with regard to the disputed
property cast a cloud on their title thereto. In their Answer, respondents theorized that the
petitioners have no cause of action and were in estoppel, and that the issuance of Transfer
Certificate of Title No. 55640 was in derogation of respondents successional rights.
On April 21, 1987, the respondents, Heirs of Victoria Caeta, Paulino Loria, Jose Loria,
Constancia Loria Vda. de Paglinawan, Emeterio Loria, and spouses Rufino Nicolas and Aurea
Goyal, instituted before the same lower court Civil Case No. T-1284, for annulment of title and
damages, claiming to be co-owners of subject property. The respondent spouses, Rufino Nicolas
and Aurea Goyal, asserted that they bought 806.5 square meters of Lot No. 2119 from Simplicia
Casaul. The latter was said to have acquired the said portion of the lot from Benigno Bonaobra,
who, in turn, acquired the same from Victoria Caeta and Ciriaca Vda. de Gawan.
The respondent heirs of Victoria Caeta averred that they purchased the remaining portion of
Lot No. 2119 from their deceased grandmother, Ciriaca Vda. de Gawan, the first wife of Antonio
Buesa.According to them, the cancellation of Original Certificate of Title No. RO-3433 (23899)
and issuance of Transfer Certificate of Title No. 55640 were tainted by fraud.
Petitioners denied the allegations of respondents Answer in Civil Case No. T-1284. It was
their submission that the truth of the matter were those alleged in their Complaint in Civil Case
No. T-1283, and that Civil Case No. T-1284 is barred by Civil Case No. 567, which had been
previously dismissed.
In due time, the two cases were jointly tried and on September 28, 1989, the lower court
came out with a Joint Decision upholding the view of petitioners, quieting their title over the
contested lot; ordering the respondents to vacate the same, to pay the rents thereon to petitioners
until they leave the place, apart from litigation expenses. The trial court ruled that res
judicata barred the institution of Civil Case No. T-1284 by reason of the prior dismissal of Civil
Case No. T-567.
Respondents seasonably presented a motion for reconsideration of the said disposition,
which the trial court granted[7] on November 26, 1989, upon the reasoning that res judicata as
alluded to in the decision did not apply and that the baptismal certificate of Felipa C. Buesa does
not show her to be the daughter of Eustaquia Caeta. From such adverse action against them,
petitioners went to the Court of Appeals which rendered the assailed decision on November 13,
1991, affirming the decision of the lower court. Petitioners filed a motion for reconsideration but
the same was denied in the Resolution dated July 9, 1992.
Undaunted, petitioners have come to this Court for relief.
The main issue for resolution here is whether or not the Order of the lower court
reconsidering its Joint Decision was proper. Firstly, petitioners maintain that the lower court
erred in relying on the Baptismal Certificate[8] of Felipa C. Buesa to establish the parentage and
filiation of Pedro Cabais. They contend that the grant of the motion for reconsideration and
reversal of its own decision were without legal basis. It is also petitioners submission that the
dismissal of Civil Case No. 567 constituted a bar to Civil Case No. T-1284 on the ground of res
judicata.
The petition is impressed with merit.
The Order under attack disregarded the limited evidentiary value of a baptismal certificate in
this jurisdiction vis--vis a birth certificate.
A birth certificate, being a public document, offers prima facie evidence of filiation[9]and a
high degree of proof is needed to overthrow the presumption of truth contained in such public
document.[10]This is pursuant to the rule that entries in official records made in the performance
of his duty by a public officer are prima facie evidence of the facts therein stated.[11] The
evidentiary nature of such document must, therefore, be sustained in the absence of strong,
complete and conclusive proof of its falsity or nullity.[12]
On the contrary, a baptismal certificate, a private document, which, being hearsay, is not a
conclusive proof of filiation.[13] It does not have the same probative value as a record of birth, an
official or public document.[14] In US vs. Evangelista, this Court held that church registers of
births, marriages, and deaths made subsequent to the promulgation of General Orders No.
68[15] and the passage of Act No. 190,[16] are no longer public writings, nor are they kept by duly
authorized public officials.[17] Thus, in this jurisdiction, a certificate of baptism such as the one
herein under controversy is no longer regarded with the same evidentiary value as official
records of birth. Moreover, on this score, jurisprudence is consistent and uniform in ruling that
the canonical certificate of baptism is not sufficient to prove recognition.[18]
The unjustified failure to present the birth certificate instead of the baptismal certificate now
under consideration or to otherwise prove filiation by any of the means recognized by law weigh
heavily against respondents. In Macadangdang vs. Court of Appeals, et al.,[19] this Court declared
that a baptismal certificate is evidence only to prove the administration of the sacrament on the
dates therein specified, but not the veracity of the declarations therein stated with respect to his
kinsfolk. The same is conclusive only of the baptism administered, according to the rites of the
Catholic Church, by the priest who baptized subject child, but it does not prove the veracity of
the declarations and statements contained in the certificate concerning the relationship of the
person baptized.[20] It is indispensable that such declarations and statements are shown by proof
recognized by law.[21]
There is thus no reason to further sustain respondents stance in the face of the aforecited
rulings explaining the significance of baptismal certificates. The lower court erred in giving too
much credence on the baptismal certificate of Felipa Caeta Buesa to prove that Felipa was the
daughter of one Gregoria Caeta and not of Eustaquia Caeta, the original registered owner of the
property under controversy.
The grant by the lower court of the motion for reconsideration from its own decision,
quieting the title of Pedro Cabais (and consequently of herein petitioners-successors in interest)
to the said property, on the basis mainly of such proof was unwarranted. To repeat, a baptismal
certificate, like all documents in general, attests the fact leading to its execution and the date
thereof, the administration of the sacrament on the day therein specified, but not to the veracity
of the statements therein contained regarding the kinsfolk of the person baptized.[22]
Furthermore, the above findings of the courts below relying on the baptismal certificate in
question to establish the filiation of Pedro Cabais mother must of necessity yield to the inherent
inconsistency and unbelievable nature of the baptismal certificate in question. It appears that said
baptismal certificate of Felipa C. Buesa states that she was born on September 13, 1899, while
the baptismal certificate of Gregoria Caeta, the supposed mother of Felipa, indicated that
Gregoria was born on May 9, 1898, or only a little more than one year ahead of her alleged
daughter.
This Court need not overstress the point that it is simply improbable under the above
circumstances for Gregoria to have been the mother of Felipa, and thus, to have been the real
grandmother of Pedro.The lower court should have readily taken judicial notice of this fact,
being one of those matters which come to the ordinary experiences of life and which is generally
accepted as true and is capable of ready and unquestioned demonstration.[23]
However, as regards the contention that Civil Case No. 567 barred the filing of Civil Case
No. T-1284, the Court holds that the Court of Appeals erred not. Thus, in ruling on the
inapplicability of res judicata, it ratiocinated:
Nor would the defense of res judicata prosper. For the doctrine of res Judicata to
apply, (1) the judgment or order must be final; (2) the court rendering it must have
jurisdiction over the subject matter and of the parties; (3) it must be a judgment on the
merits; and (4) there must be identity of parties, subject matter and cause of action.

While We agree with appellants that the dismissal of Civil Case No. T-567 for non-
suit is an adjudication on the merits, the fourth element, particularly the identity of
causes of action, is absent in the case at bar. Civil Case No. T-567 was an action for
partition and accounting, while the instant case is an action for the annulment of
T.C.T. No. 55640. The evidence needed to sustain both the former and the present
causes of action are not the same.[24]

Be that as it may, the said pronouncement by the Court of Appeals is rendered moot and
academic by the finding here that there was no basis for the grant by the trial court of the motion
for reconsideration of its Joint Decision of September 20, 1989.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV Nos. 28109 and
28110 is SET ASIDE, and the Joint Decision of the Regional Trial Court of origin in Civil Case
Nos. T-1283 and T-1284, dated September 20, 1989, REINSTATED. No pronouncement as to
costs.
SO ORDERED.
Melo, (Acting Chief Justice), and Gonzaga-Reyes, JJ., concur.
Vitug, and Panganiban, JJ., concur in the result.

Republic of the Philippines

Supreme Court

Baguio City

THIRD DIVISION

G.R. No. 152364

ALEJANDRA S. LAZARO, assisted by her


husband, ISAURO M. LAZARO; LEONCIO
D. SANTOS; ADOLFO SANTOS; NENITA S.
LACAR; ANGELINA S. SAGLES, assisted by Present:
her husband, ALBERTO SANTOS, JR.;
REGINA SANTOS and FABIAN SANTOS,

Petitioners,
CORONA, J., Chairperson,

VELASCO, JR.,
- versus -
NACHURA,

PERALTA, and

MODESTA AGUSTIN, FILEMON AGUSTIN,


VENANCIA AGUSTIN, MARCELINA MENDOZA, JJ.
AGUSTIN, PAUL A. DALALO, NOEL A.
DALALO, GREGORIO AGUSTIN and
BIENVENIDO AGUSTIN,

Respondents. Promulgated:

April 15, 2010

x-----------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

Assailed in the present petition for review on certiorari is the


Decision[1] dated February 21, 2002 of the Court of Appeals (CA) in CA-G.R. SP
No. 63321. The CA had affirmed, with modification, the
[2]
Decision dated February 6, 2001 of the Regional Trial Court (RTC)
of Laoag City, Branch 13, in Civil Case No. 11951-13, which also affirmed, with
modification, the Decision[3] dated January 6, 2000 of the Municipal Trial Court in
Cities (MTCC) of Laoag City, Branch 1, in Civil Case No. 2834.

The factual and procedural antecedents of the case are as follows:

On November 4, 1998, herein petitioners filed against herein respondents a


Complaint[4] for partition with the MTCC of Laoag City, alleging as follows:

xxxx

II
That the plaintiffs and the defendants are the descendants of the late
Simeon C. Santos, married to Trinidad Duldulao, who died intestate
leaving a parcel of land situated in the Barrio of Natividad Nstra.
Sra., Municipality of Laoag, designated as Lot No. 10675 of the
Cadastral Survey of Laoag;

III
That Simeon C. Santos during his lifetime, married to Trinidad
Duldulao, begot four (4) legitimate children, namely: Basilisa D. Santos,
Alberto D. Santos, Leoncio D. Santos and Alejandra D. Santos. Basilisa
D. Santos, [who] was married to Petronilo Agustin, is now deceased;
Alberto Santos, married to Rizalina Guerrero, is now deceased, while
Leoncio D. Santos, married to Dictinia Tabeta, and Alejandra D. Santos
married to Isauro M. Lazaro, are still living;

IV
That in the desire of the children of Simeon C. Santos from whom the
parcel of land originated as owner, his children, namely[:] Alberto,
Leoncio and Alejandra, all surnamed Santos, consented that the parcel of
land mentioned in paragraph II of this complaint be titled in the name of
Basilisa, the latter being the eldest and so Original Certificate of Title
No. 20742 in the name of Basilisa Santos was obtained although it was
agreed among them that it did not and does not necessarily mean that
Basilisa Santos is the sole and exclusive owner of this parcel of land, and
as embodied in the Title obtained in the name of Basilisa Santos, the
parcel of land is particularly described as follows:

A parcel of land (Lot No. 10676 of the Cadastral survey of


Laoag), with the improvements thereon, situated in the
Barrio of Natividad Nstra. Sra., Municipality of Laoag.
Bounded on the NE. by Lot No. 10677; on the SE. by
Panganiban Street; on the SW. by Lot No. 10672; and on
NW. by Lot No. 1065, containing an area of three hundred
and one (301) square meters, more or less, covered by Tax
Declaration No. 010-00224 for the year 1994 in the names
of Modesta Agustin, et al. with a market value
of P96,320.00 and an assessed value of P14,450.00.

V
That there is a residential house constructed on the lot described in
paragraph IV of this complaint and in the construction of which plaintiff
Alejandra Santos, then still single, spent the amount of P68,308.60,
while Basilisa Santos and her children spent the amount of P3,495.00.
Afterwards, Alejandra Santos got married to Isauro M. Lazaro who was
employed in a private company and when he retired from the service,
some additional constructions were made on the residential house and lot
such as a bedroom, azotea, two (2) toilets, two (2) kitchens, a car garage,
the money spent for these additional constructions came from the
earnings of the spouses Alejandra Santos-Lazaro and Isauro M. Lazaro.
The said residential house is now covered by Tax Declaration No. 010-
00225 in the names of Basilio Agustin (should be Basilisa Agustin) and
Alejandra Santos for the year 1994 with a market value of P93,920.00
and an assessed value of zero;

VI
That without the knowledge and consent of the plaintiffs, the title of the
lot described in paragraph IV of the complaint was transferred into
another title which is now Transfer Certificate of Title No. T-20695 in
the names of Modesta Agustin, Filemon Agustin, Venancia Agustin,
Marcelina Agustin, Monica Agustin, Gregorio Agustin and Bienvenido
Agustin who are the children of the late Basilisa Santos-Agustin who are
herein named as defendants with Monica Agustin now deceased
represented by her children Paul A. Dalalo and Noel A. Dalalo as
defendants;

VII
That during the lifetime of Basilisa Santos-Agustin, plaintiff Alejandra
Santos-Lazaro informed the former, who are sisters, that the transfer of
the title covering the lot described in paragraph IV of this complaint in
the name of Basilisa Santos into the names of her children would
erroneously imply that the lot is solely and exclusively owned by
Basilisa Santos-Agustin's children, but Basilisa Santos-Agustin replied
[to] plaintiff Alejandra Santos-Lazaro not to worry because an affidavit
was already executed by her recognizing and specifying that her brothers
Alberto Santos and Leoncio Santos, and her sister Alejandra Santos-
Lazaro would each get one fourth () share of the lot;

VIII

That in a move to determine if the children and the heirs of Basilisa


Santos-Agustin, namely: Modesta Agustin, Filemon Agustin, Venancia
Agustin, Marcelina Agustin, Paul Dalalo and Noel Dalalo who are the
successors of their mother the late Monica Agustin, Gregorio Agustin
and Bienvenido Agustin would follow the line of thinking of their
mother and grandmother of Paul A. Dalalo and Noel A. Dalalo on the
shares of the lot and residential house erected on it, the plaintiffs
initiated a partition in the barangay court where the lot is situated
described in paragraph IV of this complaint, but that the children of
Basilisa Santos-Agustin and her grandchildren Paul A. Dalalo and Noel
A. Dalalo refused and opposed the partition claiming that they are the
sole and exclusive owners of the lot being that the lot is now titled in
their names, and hence there was no settlement as shown by the
certification of the barangay court hereto attached as annex A;

IX

That plaintiffs now invoke the intervention of the court to partition the
lot in accordance with the law on intestate succession and to partition the
residential house as specified below. x x x

x x x x[5]
Petitioners also prayed for the grant of attorney's fees, moral and exemplary
damages, and costs of suit.

Herein respondents filed their Answer with Counterclaim,[6] raising the following
as their Special/Affirmative Defenses:

1. The subject parcel of land is owned exclusively by the defendants as


heirs of the late Basilisa Santos, wife of Petronilo Agustin, who was the
original registered owner of the property evidenced by OCT No. 20742;
the plaintiffs never became owners of said land. There was never any
agreement between the ascendants of the plaintiffs and defendants,
neither is there any agreement between the plaintiffs and defendants
themselves that in the ownership, the plaintiffs have a share over the lot;
2. The defendants are the ones paying for the real estate taxes of said
land;
3. Some of the plaintiffs were able to stay on the subject house because
defendants' mother Basilisa Santos was the eldest sibling and she had to
take care of her brother Leoncio and sister Alejandra when these siblings
were not yet employed and Basilisa allowed them to reside in the house
constructed within the lot; Alejandra Santos stayed in the house up to the
present with the agreement that she will spend for the renovation of the
house in lieu of monthly rentals that she has to pay when she already
became financially able;

4. Prior to 1962, subject property was mortgaged by Basilisa Santos


Agustin to the Philippine National Bank and the property was foreclosed
by PNB when the loan was not paid, hence, TCT No. (T-9522)-4495,
under the name of the Philippine National Bank was issued (Annex
A). Thereafter, Basilisa Santos-Agustin, purchased it from the PNB and
TCT No. T-5662 was issued under her name (Annex B); the property
was later on transferred to her direct descendants, the defendants herein
as evidenced by TCT No. T-20695 (Annex C);

x x x x[7]

Respondents then prayed that petitioners' complaint be dismissed. In their


Counterclaim, respondents asked the court to direct petitioners to pay reasonable
compensation for the latter's use of the disputed property, exemplary and moral
damages, attorney's fees, and costs of suit.

After the issues were joined and the pre-trial was terminated, trial on the merits
ensued.

On January 6, 2000, the MTCC rendered its Decision[8] dismissing the complaint
and denying petitioners' prayer for partition.

The MTCC ruled, among others, that no evidentiary value could be given to the
affidavit allegedly executed by Basilisa, wherein she purportedly acknowledged
her co-ownership of the subject property with her siblings Alberto, Leoncio and
Alejandra, because the affiant was not presented on the witness stand, such that all
the statements made in her affidavit were hearsay. Moreover, the MTCC held that
two credible witnesses testified in plain, simple and straightforward manner that at
the time the affidavit was supposed to have been signed and sworn to before the
notary public, Basilisa was already bedridden and an invalid who could not even
raise her hand to feed herself. In addition, the MTCC also gave credence to the
testimony of the notary public, before whom the document was supposedly signed
and sworn to, that the said affidavit was already complete and thumbmarked when
the same was presented to him by a person who claimed to be Basilisa.

Petitioners filed an appeal with the RTC of Laoag City.

On February 6, 2001 the RTC issued a Decision[9] affirming, with modification, the
judgment of the MTCC. The RTC found that the house erected on the disputed lot
was built and renovated by petitioners in good faith. As a consequence, the RTC
held that petitioners were entitled to indemnity representing the costs of the
construction and renovation of the said house. The dispositive portion of the RTC
Decision, thus, reads:

WHEREFORE, the decision of the lower court is hereby affirmed with


the modification directing the appellees [herein respondents] to
indemnify the appellants [herein petitioners] in the amount
of P68,308.60 as proved by them.

Considering the apparent error of the lower court in quoting the


questioned lot as Lot No. 10675, the same is hereby corrected so as to
reflect the correct lot number as Lot No. 10676 to conform to the
evidence presented.

SO ORDERED.[10]

Aggrieved by the RTC Decision, petitioners filed a petition for review with the
CA.

On February 21, 2002, the CA issued its presently assailed Decision disposing as
follows:

WHEREFORE, the decision dated February 6, 2001 rendered in


Civil Case No. 11951-13 is hereby AFFIRMED subject to the
MODIFICATION that appellees [herein respondents] pay the amount
of P68,308.60 in indemnity solely to appellant Alejandra Santos-Lazaro.

SO ORDERED.[11]

Hence, the instant petition based on the following grounds:

I. THE SWORN STATEMENT OF BASILISA S. AGUSTIN IS


A DECLARATION AGAINST INTEREST WHICH
ESTABLISHES THE CO-OWNERSHIP OF LOT NO. 10676 BY AND
AMONG THE PETITIONERS AND RESPONDENTS AS HEIRS OF
THE LATE SIMEON C. SANTOS.[12]

II. THE CO-OWNERSHIP OF LOT NO. 10676 BY AND


AMONG BASILISA S. AGUSTIN, ALBERTO D. SANTOS,
ALEJANDRA S. LAZARO AND LEONCIO D. SANTOS DID
NOT TERMINATE AS A RESULT OF THE TRANSFER OF
THE LOT'S OWNERSHIP PRECIPITATED BY ACTS OF
BASILISA S. AGUSTIN WITH RESPECT TO THE SUBJECT
PROPERTY.[13]

III. PETITIONER ALEJANDRA S. LAZARO IS A CO-OWNER


OF THE RESIDENTIAL HOUSE ON LOT NO. 10676 NOT MERELY
A BUILDER IN GOOD FAITH WITH RESPECT THERETO AND AS
SUCH, IS ENTITLED TO A PARTITION OF THE SUBJECT
HOUSE.[14]

In their first assigned error, petitioners contend that Basilisa's sworn statement
which recognizes her siblings' share in the disputed property is a declaration
against interest which is one of the recognized exceptions to the hearsay rule.
Petitioners argue that since the sworn statement was duly notarized, it should be
admitted in court without further proof of its due execution and authenticity; that
the testimonies of Basilisa's nurse and physician cannot qualify as clear and
convincing evidence which could overthrow such notarized document; that the
notary public cannot impugn the same document which he notarized for to do so
would render notarized documents worthless and unreliable resulting in prejudice
to the public.
As to the second assigned error, petitioners aver that their co-ownership of the
questioned property with Basilisa did not cease to exist when the Philippine
National Bank (PNB) consolidated its ownership over the said parcel of land.
Petitioners assert that they did not lose their share in the property co-owned when
their share was mortgaged by Basilisa without their knowledge and consent; that
the mortgage was limited only to the portion that may be allotted to Basilisa upon
termination of their co-ownership; that PNB acquired ownership only of the share
pertaining to Basilisa; that when Basilisa bought back the property from PNB, she
simply re-acquired the portion pertaining to her and simply resumed co-ownership
of the property with her siblings. Petitioners also contend that Basilisa's children
did not acquire ownership of the subject lot by prescription, and that neither
Basilisa nor respondents repudiated their co-ownership.

Anent the third assignment of error, petitioners argue that Alejandra Lazaro, being
a co-owner of the disputed parcel of land and not simply a builder in good faith, is
entitled to a partition of the subject residential house.

At the outset, it bears to point out that it is wrong for petitioners to argue that
Basilisa's alleged sworn statement is a declaration against interest. It is not a
declaration against interest. Instead, it is an admission against interest.

Indeed, there is a vital distinction between admissions against interest and


declarations against interest. Admissions against interest are those made by a party
to a litigation or by one in privity with or identified in legal interest with such party,
and are admissible whether or not the declarant is available as a
witness.[15] Declarations against interest are those made by a person who is neither a
party nor in privity with a party to the suit, are secondary evidence, and constitute an
exception to the hearsay rule. They are admissible only when the declarant is
unavailable as a witness.[16] In the present case, since Basilisa is respondents'
predecessor-in-interest and is, thus, in privity with the latter's legal interest, the
former's sworn statement, if proven genuine and duly executed, should be
considered as an admission against interest.

A cursory reading of the subject sworn statement also reveals that it refers to a
parcel of land denominated as Lot No. 10678 while the property being disputed is
Lot No. 10676.[17] On this basis, it cannot be concluded with certainty that the
property being referred to in the sworn statement is the same property claimed by
petitioners.

Having made the foregoing observations and discussions, the question that arises is
whether the subject sworn statement, granting that it refers to the property being
disputed in the present case, can be given full faith and credence in view of the
issues raised regarding its genuineness and due execution.
The Court rules in the negative.

Settled is the rule that generally, a notarized document carries the evidentiary
weight conferred upon it with respect to its due execution, and documents
acknowledged before a notary public have in their favor the presumption of
regularity.[18] However, this presumption is not absolute and may be rebutted by
clear and convincing evidence to the contrary.[19]

Moreover, not all notarized documents are exempted from the rule on
authentication.[20] Thus, an affidavit does not automatically become a public
document just because it contains a notarial jurat.[21] The presumptions that attach
to notarized documents can be affirmed only so long as it is beyond dispute that the
notarization was regular.[22]

However, a question involving the regularity of notarization as well as the due


execution of the subject sworn statement of Basilisa would require an inquiry into
the appreciation of evidence by the trial court. It is not the function of this Court to
review, examine and evaluate or weigh the probative value of the evidence
presented. A question of fact would arise in such event. Settled is the rule that
questions of fact cannot be raised in an appeal via certiorari before the Supreme
Court and are not proper for its consideration.[23] The rationale behind this doctrine
is that a review of the findings of fact of the trial courts and the appellate tribunal is
not a function this Court normally undertakes.[24] The Court will not weigh the
evidence all over again unless there is a showing that the findings of the lower
courts are totally devoid of support or are clearly erroneous so as to constitute
serious abuse of discretion.[25] Although there are recognized exceptions[26] to this
rule, none exists in the present case to justify a departure therefrom.

Petitioners rely heavily on the presumption of regularity accorded by law to


notarized documents. While indeed, a notarized document enjoys this presumption,
the fact that a deed is notarized is not a guarantee of the validity of its
contents.[27] As earlier discussed, the presumption is not absolute and may be
rebutted by clear and convincing evidence to the contrary.[28] The presumption
cannot be made to apply to the present case because the regularity in the execution
of the sworn statement was challenged in the proceedings below where its prima
facie validity was overthrown by the highly questionable circumstances under
which it was supposedly executed, as well as the testimonies of witnesses who
testified on the improbability of execution of the sworn statement, as well as on the
physical condition of the signatory, at the time the questioned document was
supposedly executed. The trial and appellate courts were unanimous in giving
credence to the testimonies of these witnesses. The Court has repeatedly held that
it will not interfere with the trial court's determination of the credibility of
witnesses, unless there appears on record some fact or circumstance of weight and
influence which has been overlooked or the significance of which has been
misinterpreted.[29] The reason for this is that the trial court was in a better position
to do so, because it heard the witnesses testify before it and had every opportunity
to observe their demeanor and deportment on the witness stand.[30]

Considering the foregoing, the Court finds no reason to reverse the rulings of the
MTCC, the RTC and the CA. Although the questioned sworn statement is a public
document having in its favor the presumption of regularity, such presumption was
adequately refuted by competent witnesses.

The Court further agrees with the ruling of the RTC that:

The testimony of [the notary public] Atty. Angel Respicio did not suffice
to rebut the evidence of the appellees considering his admission that the
affidavit was already thumbmarked when presented to him by one who
claimed to be Basilisa Santos and whom, the witness said he did not
know personally. Further, what makes the documents suspect is the fact
that it was subscribed on the same date as the financial statement of
Alejandra Santos.

It may not be amiss to point out, at this juncture, that the principal function of a
notary public is to authenticate documents.[31] When a notary public certifies to the
due execution and delivery of a document under his hand and seal, he gives the
document the force of evidence.[32] Indeed, one of the purposes of requiring
documents to be acknowledged before a notary public, in addition to the solemnity
which should surround the execution and delivery of documents, is to authorize
such documents to be given without further proof of their execution and
delivery.[33] A notarial document is by law entitled to full faith and credit upon its
face. Courts, administrative agencies and the public at large must be able to rely
upon the acknowledgment executed before a notary public and appended to a
private instrument.[34] Hence, a notary public must discharge his powers and duties,
which are impressed with public interest, with accuracy and fidelity. [35] A notary
public should not notarize a document unless the persons who signed the same are
the very same persons who executed and personally appeared before him to attest
to the contents and truth of what are stated therein.[36]

In the instant case, the notary public should have exercised utmost diligence in
ascertaining the true identity of the person executing the said sworn statement.
However, the notary public did not comply with this requirement. He simply relied
on the affirmative answers of the person appearing before him attesting that she
was Basilisa Santos; that the contents of the sworn statement are true; and that the
thumbmark appearing on the said document was hers. However, this would not
suffice. He could have further asked the person who appeared before him to
produce any identification to prove that she was indeed Basilisa Santos,
considering that the said person was not personally known to him, and that the
thumbmark appearing on the document sought to be notarized was not affixed in
his presence. But he did not. Thus, the lower courts did not commit any error in not
giving evidentiary weight to the subject sworn statement.

The second and third assigned errors proceed on the presumption that petitioners
are co-owners of the disputed property. Since the Court has already ruled that the
lower courts did not err in finding that petitioners failed to prove their claim that
they were co-owners of the said property, there is no longer any need to discuss the
other assigned errors.

WHEREFORE, the petition is DENIED. The February 21, 2002 Decision of the
Court of Appeals in CA-G.R. SP No. 63321 is AFFIRMED.

SO ORDERED.
Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION

ADELAIDA MENESES G.R. No. 172196


(deceased), substituted by her
heir MARILYN M. Present:
CARBONEL-GARCIA,
Petitioner, VELASCO, JR., J., Chairperson,
PERALTA,
ABAD,
- versus - MENDOZA, and
PERLAS-BERNABE, JJ.

Promulgated:
ROSARIO G.
VENTUROZO, October 19, 2011
Respondent.
x------------------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

This is a petition for review on certiorari[1] of the Court of Appeals Decision


dated October 27, 2005 in CA-G.R. CV No. 78217 and its Resolution dated April
5, 2006, denying petitioners motion for reconsideration.

The Court of Appeals Decision reversed and set aside the Decision of the
Regional Trial Court (RTC) of Dagupan City, Branch 40 in Civil Case No. D-
9040, as the appellate court declared respondent Rosario G. Venturozo the owner
of the land in dispute, and ordered petitioner Adelaida Meneses to vacate and
surrender her possession thereof to respondent.

The facts are as follows:

On June 8, 1988, plaintiff Rosario G. Venturozo, respondent herein, filed a


Complaint[2] for ownership, possession x x x and damages in the Regional Trial
Court (RTC) of Dagupan City against defendant Adelaida Meneses, petitioner
herein, alleging that she (plaintiff) is the absolute owner of an untitled coconut
land, containing an area of 2,109 square meters, situated at Embarcadero,
Mangaldan, Pangasinan, and declared under Tax Declaration No.
239. Plaintiff alleged that she purchased the property from the spouses Basilio de
Guzman and Crescencia Abad on January 31, 1973 as evidenced by a Deed of
Absolute Sale,[3] and that the vendors, in turn, purchased the property from
defendant as evidenced by a Deed of Absolute Sale[4] dated June 20, 1966. Plaintiff
alleged that she has been in possession of the land until May 1983 when defendant
with some armed men grabbed possession of the land and refused to vacate despite
repeated demands prompting her to engage the services of counsel. Plaintiff prayed
that after preliminary hearing, a writ of preliminary mandatory injunction be
issued; and that after hearing, a decision be rendered declaring her as the owner of
the property in dispute, ordering defendant to vacate the property in question and
to pay her P5,000.00 as attorneys fees; P1,000.00 as litigation
expenses; P10,000.00 as damages and to pay the costs of suit.

In her Answer,[5] defendant Adelaida Meneses stated that plaintiff is the


daughter of Basilio de Guzman, the vendee in the Deed of Absolute Sale dated
June 20, 1966 that was purportedly executed by her (defendant) covering the
subject property. Defendant alleged that she never signed any Deed of Absolute
Sale dated June 20, 1966, and that the said deed is a forgery. Defendant also
alleged that she never appeared before any notary public, and she did not obtain a
residence certificate; hence, her alleged sale of the subject property to Basilio de
Guzman is null and void ab initio. Consequently, the Deed of Absolute Sale
dated January 31, 1973, executed by Basilio de Guzman in favor of plaintiff,
covering the subject property, is likewise null and void. Defendant stated that she
acquired the subject property from her deceased father and she has been in
possession of the land for more than 30 years in the concept of owner. Plaintiffs
allegation that she (defendant) forcibly took possession of the land is a falsehood.
Defendant stated that this is the fourth case the plaintiff filed against her
concerning the land in question.

In her Counterclaim, defendant stated that in view of the nullity of the


falsified Deed of Absolute Sale of the subject property, and the fact that plaintiff
and her father Basilio de Guzman had never been in actual possession of the
property, plaintiff is under legal obligation to execute a deed of reconveyance over
the said property in her favor.

The issue before the trial court was whether the sale made by defendant
Adelaida Meneses in favor of plaintiffs father, Basilio de Guzman, was valid.[6]

On July 18, 1991, the RTC of Dagupan City, Branch 40 (trial court)
rendered a Decision in favor of defendant Adelaida Meneses. The dispositive
portion of the Decision reads:

WHEREFORE, judgment is hereby rendered:

1) Declaring the Deed of Absolute and Definite Sale dated June 20, 1966
(Exhibit B) and the Deed of Absolute and Definite Sale dated January 31,
1973 (Exhibit A) null and void ab initio;

2) Declaring the defendant Adelaida Meneses as the owner of the property in


question;

3) Ordering the plaintiff Rosario G. Venturozo to execute a Deed of


Reconveyance in favor of the defendant Adelaida Meneses over the
property in question described in paragraph 2 of the complaint;

4) Ordering the plaintiff to pay to the defendant P10,000.00 as damages;


and P1,000.00, as litigation expenses.

SO ORDERED.[7]
The trial court found that defendant Adelaida Meneses inherited the land in
dispute from her father, Domingo Meneses; that she did not sell her property to
Basilio de Guzman in 1966; and that the signature of Adelaida Meneses on the
Deed of Absolute Sale dated June 20, 1966 is a forgery. The trial court stated that
the signature of Adelaida Meneses, as appearing on the Deed of Absolute Sale
dated June 20, 1966, is very much different from her specimen signatures and
those appearing in the records of Civil Case No. 1096 in the Municipal Trial Court
of Mangaldan. It held that since there was no valid transfer of the property by
Adelaida Meneses to Basilio de Guzman, the conveyance of the same property in
1973 by Basilio de Guzman to his daughter, plaintiff Rosario G. Venturozo, was
also invalid. The trial court stated that the claim of plaintiff Rosario G. Venturozo,
that her parents, Spouses Basilio and Crescencia de Guzman, purchased from
defendant Adelaida Meneses the subject property in 1966, is negated by
defendants continued possession of the land and she gathered the products
therefrom.

Plaintiff appealed the decision of the trial court to the Court of Appeals.

On October 27, 2005, the Court of Appeals rendered a Decision reversing


the decision of the trial court. The dispositive portion of the appellate courts
decision reads:
WHEREFORE, the appealed decision of the Regional Trial Court
of Dagupan City (Branch 40) is REVERSED and SET ASIDE and a new one
rendered declaring plaintiff-appellant the owner of the subject land and ordering
defendant-appellee to vacate and surrender possession thereof to the former.[8]

The Court of Appeals stated that appellee Adelaida Meneses failed to prove
by clear and convincing evidence that her signature on the Deed of Absolute Sale
dated June 20, 1966 was a forgery. Instead, she admitted on direct examination that
her signature on the Deed of Absolute Sale was genuine, thus:

Q. I am showing to you Exhibit 6 and Exhibit A for the plaintiff a Deed of


Absolute Sale o[f] Real Property of one (1) Adelaida Meneses in favor of
Basilio de Guzman. Will you examine this if you know this Deed of Absolute
Sale?
A. I do not know this document, sir.

Q. There is a signature over the name of the vendor Adelaida Meneses which was
previously marked as Exhibit 6-a and Exhibit A-1 for the plaintiff, will you
examine this signature, if do you (sic) know this signature?
A. This is my signature, sir.[9]

According to the Court of Appeals, such admission is binding on her, there


being no showing that it was made through palpable mistake or that no such
admission was made.[10]

The Court of Appeals also stated that mere variance of signatures cannot be
considered as conclusive proof that the same were forged, as forgery cannot be
presumed.[11]Appellee Adelaida Meneses should have produced specimen
signatures appearing on documents executed in or about the year 1966 for a better
comparison and analysis.[12]
The Court of Appeals held that a notarized document, like the questioned
Deed of Absolute Sale dated June 20, 1966, has in its favor the presumption of
regularity, and to overcome the same, there must be evidence that is clear,
convincing and more than merely preponderant; otherwise, the document should be
upheld.[13] Moreover, Atty. Abelardo G. Biala − the notary public before whom the
questioned Deed of Sale was acknowledged − testified and confirmed its
genuineness and due execution, particularly the signature in question. The
appellate court stated that as against appellee Adelaida Meneses version, Atty.
Bialas testimony, that appellee appeared before him and acknowledged that the
questioned deed was her free and voluntary act, is more credible. The testimony of
a notary public enjoys greater credence than that of an ordinary witness.[14]

The Court of Appeals held that appellee Adelaida Meneses failed to present
clear and convincing evidence to overcome the evidentiary force of the questioned
Deed of Absolute Sale dated June 1966, which appears on its face to have been
executed with all the formalities required by law.

Adelaida Meneses motion for reconsideration was denied for lack of merit
by the Court of Appeals in a Resolution[15] dated April 5, 2006.

Hence, Adelaida Meneses, substituted by her heir, filed this petition raising
this lone issue:

I
WHETHER THE DECISION OF THE COURT OF APPEALS, WHICH
REVERSED THE DECISION OF THE REGIONAL TRIAL COURT, IS IN
KEEPING WITH BOTH LAW AND JURISPRUDENCE.[16]

Petitioner contends that her statement, made during the course of her
testimony in the trial court, was taken out of context by respondent to be used
merely as an argumentative point. The examining lawyer used the words, Do you
know this signature? viz.:

Q. I am showing to you Exhibit 6 and Exhibit A for the plaintiff a Deed of


Absolute Sale o[f] Real Property of one (1) Adelaida Meneses in favor of
Basilio de Guzman. Will you examine this if you know this Deed of Absolute
Sale?
A. I do not know this document, sir.

Q. There is a signature over the name of the vendor Adelaida Meneses which was
previously marked as Exhibit 6-a and Exhibit A-1 for the plaintiff, will you
examine this signature, if do you (sic) know this signature?
A. This is my signature, sir.[17]

Petitioner contends that in the above-quoted transcript of stenographic notes,


she was merely asked if she was cognizant of such a signature as hers or whether
the signature appearing on the questioned document was similar to that of her
signature, and not if she was the one who indeed affixed such signature on the said
deed of sale.

She avers that the general rule that a judicial admission is conclusive upon
the party invoking it and does not require proof admits of two exceptions: (1) when
it is shown that the admission was made through palpable mistake; and (2) when it
is shown that no such admission was in fact made. The latter exception allows one
to contradict an admission by denying that he made such an admission. For
instance, if a party invokes an admission by an adverse party, but cites the
admission out of context, then the one making the admission may show that he
made no such admission, or that his admission was taken out of context. [18] This
may be interpreted as to mean not in the sense in which the admission is made to
appear.[19]
Petitioner also contends that a comparison of the signature on the Deed of
Absolute Sale dated June 20, 1966 and her specimen signatures, as well as her
genuine signature on pleadings, were made by the trial court, and it ruled that her
signature on the Deed of Absolute Sale dated June 20, 1966 was a forgery. She
submits that the trial courts evaluation of the credibility of witnesses and their
testimonies is entitled to great respect,[20] and the appellate court should have given
weight to the trial courts findings that her signature on the said Deed of Absolute
Sale was a forgery.

The petition is meritorious.

The rule is that the jurisdiction of the Court over appealed cases from the
Court of Appeals is limited to the review and revision of errors of law allegedly
committed by the appellate court, as its findings of fact are deemed
conclusive.[21] Thus, this Court is not duty-bound to analyze and weigh all over
again the evidence already considered in the proceedings below.[22] However, this
rule admits exceptions,[23] such as when the findings of fact of the Court of Appeals
are contrary to the findings and conclusions of the trial court[24] like in this case.

The necessity of a public document for contracts which transmit or


extinguish real rights over immovable property, as mandated by Article 1358 of the
Civil Code,[25] is only for convenience; it is not essential for validity or
enforceability.[26] As notarized documents, Deeds of Absolute Sale carry
evidentiary weight conferred upon them with respect to their due execution [27] and
enjoy the presumption of regularity which may only be rebutted by evidence so
clear, strong and convincing as to exclude all controversy as to falsity. [28] The
presumptions that attach to notarized documents can be affirmed only so long as it
is beyond dispute that the notarization was regular.[29] A defective notarization will
strip the document of its public character and reduce it to a private
instrument.[30] Consequently, when there is a defect in the notarization of a
document, the clear and convincing evidentiary standard normally attached to a
duly-notarized document is dispensed with, and the measure to test the validity of
such document is preponderance of evidence.[31]

In this case, it should be pointed out that contrary to the finding of the Court
of Appeals, the Deed of Sale dated June 20, 1966 did not comply with the
formalities required by law, specifically Act No. 496,[32] otherwise known as The
Land Registration Act, which took effect on January 1, 1903, as Section 127 of the
Act provides:

FORMS
Section 127. Deeds, conveyances, mortgages, leases, releases,
and discharges affecting lands, whether registered under this Act or
unregistered, shall be sufficient in law when made substantially in
accordance with the following forms, and shall be as effective to
convey, encumber, lease, release, discharge, or bind the lands as
though made in accordance with the more prolix form heretofore in
use: Provided, That every such instrument shall be signed by the
person or persons executing the same, in the presence of two
witnesses, who shall sign the instrument as witnesses to the execution
thereof, and shall be acknowledged to be his or their free act and deed
by the person or persons executing the same, before the judge of a
court of record or clerk of a court of record, or a notary public, or a
justice of the peace, who shall certify to such acknowledgment x x
x.[33]

In the Deed of Absolute Sale dated June 20, 1966, the Notary Public signed
his name as one of the two witnesses to the execution of the said deed; hence, there
was actually only one witness thereto. Moreover, the residence certificate of
petitioner was issued to petitioner and then it was given to the Notary Public the
day after the execution of the deed of sale and notarization; hence, the number of
petitioners residence certificate and the date of issuance (June 21, 1966) thereof
was written on the Deed of Absolute Sale by the Notary Public on June 21, 1966,
after the execution and notarization of the said deed on June 20,
1966.[34] Considering the defect in the notarization, the Deed of Absolute Sale
dated June 20, 1966 cannot be considered a public document, but only a private
document,[35] and the evidentiary standard of its validity shall be based on
preponderance of evidence.
Section 20, Rule 132 of the Rules of Court provides that before any private
document offered as authentic is received in evidence, its due execution and
authenticity must be proved either: (a) by anyone who saw the document executed
or written; or (b) by evidence of the genuineness of the signature or handwriting of
the maker.

In regard to the genuineness of petitioners signature appearing on the Deed


of Absolute Sale dated June 20, 1966,[36] the Court agrees with the trial court that
her signature therein is very much different from her specimen signatures [37] and
those appearing in the pleadings[38] of other cases filed against her, even
considering the difference of 17 years when the specimen signatures were
made. Hence, the Court rules that petitioners signature on the Deed of Absolute
Sale dated June 20, 1966 is a forgery.

The Court agrees with petitioner that her admission was taken out of context,
considering that in her Answer[39] to the Complaint, she stated that the alleged
Deed of Sale purportedly executed by her in favor of Basilio de Guzman is a
forgery; that she never signed the said Deed of Sale; that she did not appear
personally before the Notary Public; and that she did not secure the residence
certificate mentioned in the said Deed of Sale. She also testified that she never sold
her land to Basilio de Guzman;[40] that she never met the Notary Public, Attorney
Abelardo Biala,[41] and that she did not meet Basilio de Guzman on June 20,
1966.[42] The trial court found petitioner and her testimony to be credible, and
declared the Deed of Sale dated June 20, 1966 null and void ab initio. These
circumstances negate the said admission.

The Court finds the Notary Publics testimony self-serving and unreliable,
because although he testified that petitioner was the one who submitted her
residence certificate to him on June 21, 1966,[43] the next day after the Deed of
Absolute Sale was executed on June 20, 1966, Crescencia de Guzman, respondents
mother, testified that she and her husband got the residence certificate from
petitioner and gave it to the Notary Public on June 21, 1966.[44] Thus, it is doubtful
whether the Notary Public really knew the identity of the vendor who signed the
Deed of Absolute Sale[45] dated June 20, 1966.
The Court notes that the trial court found petitioner and her testimony to be
credible. It is a well-settled doctrine that findings of trial courts on the credibility
of witnesses deserve a high degree of respect.[46] Having observed the deportment
of witnesses during the trial, the trial judge is in a better position to determine the
issue of credibility.[47]

In fine, the preponderance of evidence is with petitioner.

WHEREFORE, the petition is GRANTED. The Court of Appeals


Decision dated October 27, 2005 and its Resolution dated April 5, 2006 in CA-
G.R. CV No. 78217 are REVERSED and SET ASIDE, and the Decision of the
Regional Trial Court of Dagupan City, Branch 40 in Civil Case No. D-9040 is
hereby REINSTATED.

No costs.

SO ORDERED.

SECOND DIVISION

January 11, 2016

G.R. No. 174673

REPUBLIC OF THE PHILIPPINES, Petitioner,


vs.
FE ROA GIMENEZ AND IGNACIO B. GIMENEZ, Respondents.

DECISION

LEONEN, J.:

Rules of procedure are not ends in themselves. The object of these rules is to assist and facilitate a trial court's
function to be able to receive all the evidence of the parties, and evaluate their admissibility and probative value
in the context of the issues presented by the parties' pleadings in order to arrive at a conclusion as to the facts
that transpired. Having been able to establish the facts, the trial court will then be able to apply the law and
determine whether a complainant is deserving of the reliefs prayed for in the pleading.

Dismissal on the basis of a very strict interpretation of procedural rules without a clear demonstration of the
injury to a substantive right of the defendant weighed against 19 years of litigation actively participated in by
both parties should not be encouraged.

There is likewise serious reversible error, even grave abuse of discretion, when the Sandiganbayan dismisses
a case on demurrer to evidence without a full statement of its evaluation of the evidence presented and offered
and the interpretation of the relevant law. After all, dismissal on the basis of demurrer to evidence is similar to a
judgment. It is a final order ruling on the merits of a case.

This is a Petition1 for Review on Certiorari assailing the Sandiganbayan Resolutions dated May 25, 2006 2 and
September 13, 2006.3 The Sandiganbayan deemed petitioner Republic of the Philippines (Republic) to have
waived the filing of its Formal Offer of Evidence4 and granted the Motion to Dismiss of respondents Spouses
Ignacio Gimenez and Fe Roa Gimenez (Gimenez Spouses) based on demurrer to evidence.5

The Republic, through the Presidential Commission on Good Government (PCGG), instituted a Complaint 6 for
Reconveyance, Reversion, Accounting, Restitution and Damages against the Gimenez Spouses before the
Sandiganbayan.7 "The Complaint seeks to recover . . . ill-gotten wealth . . . acquired by [the Gimenez Spouses]
as dummies, agents[,] or nominees of former President Ferdinand E. Marcos and Imelda Marcos[.]" 8

During trial, the Republic presented documentary evidence attesting to the positions held, business interests,
income, and pertinent transactions of the Gimenez Spouses.9 The Republic presented the testimonies of Atty.
Tereso Javier, Head of the Sequestered Assets Department of PCGG, and of Danilo R.V. Daniel, Director of
the Research and Development Department of PCGG.10 Witnesses testified on the bank accounts and
businesses owned or controlled by the Gimenez Spouses.11
On February 27, 2006, the Sandiganbayan denied a motion to recall Danilo R.V. Daniel’s testimony. 12 The
Republic then manifested that it was "no longer presenting further evidence."13 Accordingly, the Sandiganbayan
gave the Republic 30 days or until March 29, 2006 "to file its formal offer of evidence."14

On March 29, 2006, the Republic moved "for an extension of thirty (30) days or until April 28, 2006, within
which to file [its] formal offer of evidence."15 This Motion was granted by the Sandiganbayan in a Resolution of
the same date.16

On April 27, 2006, the Republic moved for an additional 15 days or until May 13, 2006 within which to file its
Formal Offer of Evidence.17 This Motion was granted by the Sandiganbayan in a Resolution dated May 8,
2006.18 Following this, no additional Motion for extension was filed by the Republic.

In the first assailed Resolution dated May 25, 2006, the Sandiganbayan noted that the Republic failed to file
its Formal Offer of Evidence notwithstanding repeated extensions and the lapse of 75 days from the date it
terminated its presentation of evidence.19 Thus, it declared that the Republic waived the filing of its Formal Offer
of Evidence.20

The first assailed Resolution provides:

It appearing that the plaintiff has long terminated the presentation of its evidence on February 27, 2006, and it
appearing further that it failed or otherwise neglected to file its written formal offer of evidence for an
unreasonable period of time consisting of 75 days (i.e., 30 days original period plus two extension periods
totaling 45 days), the filing of said written formal offer of evidence is hereby deemed WAIVED.

WHEREFORE, the reception of the defendants’ evidence shall proceed on June 22 and 23, 2006, both at 8:30
o’clock [sic] in the morning as previously scheduled.21

Ignacio Gimenez filed a Motion to Dismiss on Demurrer to Evidence dated May 30, 2006.22 He argued that the
Republic showed no right to relief as there was no evidence to support its cause of action.23 Fe Roa Gimenez
filed a Motion to Dismiss dated June 13, 2006 on the ground of failure to prosecute. 24 Through her own Motion
to Dismiss, she joined Ignacio Gimenez’s demurrer to evidence.25

Two days after Fe Roa Gimenez’s filing of the Motion to Dismiss or on June 15, 2006, the Republic filed a
Motion for Reconsideration [of the first assailed Resolution] and to Admit Attached Formal Offer of
Evidence.26 The pertinent portions of the Republic’s offer of documentary exhibits attached to the Motion are
summarized as follows:

Exhibits A to G and series consist of the Income Tax Returns, Certificate of Income Tax Withheld On
Compensation, Statement of Tax Withheld At Source, Schedule of Interest Income, Royalties and Withholding
Tax, Statement of Assets, Liabilities & Net Worth of Ignacio B. Gimenez from 1980-1986 proving his legitimate
income during said period. Exhibits H -J and series refer to the Deeds of Sale and Transfer Certificates of Title
proving that spouses Gimenezes acquired several real properties.

Exhibits K and series (K-1-K-4) pertain to Checking Statements Summary issued by the Bankers Trust
Company (BTC) proving that Fe Roa Gimenez maintained a current account under Account Number 34-714-
415 with BTC. Exhibits L and series (L1-L-114) are several BTC checks, proving that from June 1982 to April
1984, Fe Roa Gimenez issued several checks against her BTC Current Account No. 34-714-415 payable to
some individuals and entities such as Erlinda Oledan, Vilma Bautista, The Waldorf Towers, Cartier, Gliceria
Tantoco, Bulgari, Hammer Galleries and Renato Balestra, involving substantial amount of money in US
Dollars. Exhibits M and series (M1-M-25) are several The Chase Manhattan Bank (TCMB) checks drawn
against the account of Fe Roa Gimenez under Account Number 021000021, proving that she issued several
checks drawn against her TCMB account, payable to individuals and entities such as Gliceria Tantoco, Vilma
Bautista and The Waldorf Towers, involving substantial sums in US Dollars. Exhibit N is the Philippine National
Bank (PNB), New York Branch Office Charge Ticket No. FT 56880 dated December 9, 1982 in the amount of
US$30,000.00 for Fe Roa Gimenez proving that she received said enormous amount from the PNB, New York
Branch Office, with clearance from the Central Bank, which amount was charged against PNB Manila. Exhibit
N-1 is the PNB New York Branch Advice to Payee No. FT 56535 dated November 12, 1982 in the amount of
US$10,990.00 for Fe Roa Gimenez proving her receipt of such amount as remitted from California Overseas
Bank, Los Angeles. Exhibits O and series (O1-O-8) refer to several Advices made by Bankers Trust AG
Zurich-Geneve Bank in Switzerland to respondent Fe Roa Gimenez proving that she maintained a current
account with said bank under Account Number 107094.50 and that from July 30, 1984 to August 30, 1984, she
placed a substantial amount on time deposit in several banks, namely, Hypobank, Luzemburg, Luxemburg,
Societe Generale, Paris and Bank of Nova Scotia, London.

Exhibit P is the Certification dated March 19, 2002 issued by Director Florino O. Ibanez of the Office of the
President proving that Fe Roa Gimenez, from January 1, 1966 to April 1, 1986, worked with the Office of the
President under different positions, the last of which as Presidential Staff Director with a salary of P87,072.00
per annum.

Exhibit Q and series (Q-1-Q-18) is the Affirmation of Ralph Shapiro filed with the United States Court of
Appeals in the case entitled, "The Republic of the Philippines vs. Ferdinand E. Marcos, et al." which discussed
certain acts of Fe Roa Gimenez and Vilma Bautista, among others, in relation to the funds of the Marcoses.

Exhibits R and S and series (R-1, R-9; S-1-S-10) refer to the Certificate of Filing of Amended Articles of
Incorporation of GEI Guaranteed Education, Inc., the Amended Articles of Incorporation of GEI Guaranteed
Education, Inc., the Treasurer’s Affidavit executed by Ignacio Gimenez and the Director’s Certificate executed
by Roberto B. Olanday, Ignacio Gimenez and Roberto Coyuto, Jr. proving Ignacio Gimenez and Roberto
Olanday’s interests in GEl Guaranteed Education, Inc.

Exhibits T and series (T-1-T-8) are the Advices made by the Bankers Trust AG Zurich-Geneve Bank in
Switzerland to Ignacio Gimenez proving that he maintained a current account with said bank under Account
Number 101045.50 and that from March to June, 1984, he placed a substantial amount on time deposit in
several banks, namely, Credit Lyonnais, Brussels, Societe Generale, Paris, Credit Commercial De France,
Paris and Bank of Nova Scotia, London.

Exhibits U and V and series (U-1-U-5; V1-V-18) consist of the Affidavit dated April 25, 1986 and the
Declaration dated June 23, 1987 including the attachments, of Oscar Carino, Vice-President and Manager of
the PNB New York Branch, narrating in detail how the funds of the PNB New York Branch were disbursed
outside regular banking business upon the instructions of former President Ferdinand E. Marcos and Imelda
Marcos using Fe Roa Gimenez and others as conduit.

Exhibits W and series (W-1-W-4) are the Debit memos from the PNB to Fe Roa Gimenez while Exhibits X
and X-1 are the Acknowledgments of said respondent, proving that she received substantial amounts of money
which were coursed through the PNB to be used by the Marcos spouses for state visits and foreign trips.

Exhibit Y and series (Y-1-Y-2) is the Letter dated August 25, 1986 of Juan C. Gatmaitan, Assistant Chief
Legal Counsel of PNB to Charles G. LaBella, Assistant United States Attorney regarding the ongoing
investigation of irregular transactions at the PNB, New York Branch proving that PNB cooperated with the
United States government in connection with the investigation on the irregular transactions of Oscar Carino at
PNB New York Branch.

Exhibit Z is the service record of Fe Roa Gimenez issued by Florino O. Ibanez of the Office of the President
which proves that she worked with the Office of the President from 1966-1986 holding different positions, the
last of which was Presidential Staff Director.
1âwphi 1

Exhibits AA and series (AA-1 –AA-2) are the several Traders Royal Bank checks drawn against Account No.
74-702836-9 under the account name of Fe Roa Gimenez which prove that she issued said checks payable to
individuals and entities involving substantial amount of money.

Exhibits BB and CC and series (BB-1–BB-17; CC-1-CC-3) are the several Transfer of Funds Advice from
Traders Royal Bank Statements of Account of Fe Roa Gimenez, proving that she maintained a current account
under Account No. 74-7028369 at Traders Royal Bank.

Exhibits HH and series (HH-1-HH-3) are the Certification dated October 3, 2002 of Lamberto R. Barbin,
Officer-in-Charge, Malacanang Records Office, that the Statement of Assets and Liabilities of spouses
Marcoses for the years 1965 up to 1986 are not among the records on file in said Office except 1965, 1967 and
1969; the Statement of Assets and Liabilities as of December 31, 1969 and December 31, 1967 of former
President Ferdinand Marcos; and the Sworn Statement of Financial Condition, Assets, Income and Liabilities
as of December 31, 1965 of former President Ferdinand Marcos. These documentary exhibits prove the assets
and liabilities of former President Marcos for the years 1965,1967 and 1969.

Exhibit II and series is [sic] the Statement of Assets and Liabilities as of December 31,1969 submitted by Fe
Roa Gimenez which prove that her assets on that period amounted only to P39,500.00.

Exhibit KK is the Table of Contents of Civil Case No. [0]007 before the Sandiganbayan entitled "Republic of
the Philippines vs. Ignacio B. Gimenez and Fe Roa Gimenez, et. al.", including its Annexes which prove the
assets and liabilities of spouses Gimenezes.

Exhibits KK-1 up to KK-12 are several transfer certificates of title and tax declarations in the names of
spouses Gimenezes, proving their acquisition of several real properties.

Exhibits KK-15, KK-18, KK-20 up to KK-27, KK-30, KK-32 up to KK-38 and KK-40 are the General
Information Sheet, Certificate of Filing of Amended Articles of Incorporation, and Amended Articles of
Incorporation of various corporations. These prove the corporations in which Ignacio B. Gimenez has
substantial interests.

Exhibits KK-41 up to KK-44 are the Writs and Letters of Sequestration issued by the PCGG which prove that
the shares of stocks of Ignacio Gimenez in Ignacio B. Gimenez, Securities, Inc. and the real properties covered
by Transfer Certificates of Title Nos. 137638, 132807, 126693 and 126694 located in San Fabian, Pangasinan,
were sequestered by the PCGG.

Exhibit KK-45 is the Memorandum dated August 1, 1988 of Atty. Ralph S. Lee and Alexander M. Berces,
Team Supervisor and Investiogator, [sic] respectively, of IRD, PCGG, proving that the PCGG conducted an
investigation on New City Builders, Inc., Transnational Construction Corporation, and OTO Construction and
Development Corporation in relation to Ignacio B. Gimenez and Roberto O. Olanday.

Exhibits KK-48, KK-49 and KK-50 are certain Lis Pendens from the PCGG addressed to the concerned
Register of Deeds informing that the real properties mentioned therein had been sequestered and are the
subject of Civil Case No. [0]007 before the Sandiganbayan.
Exhibits KK-51, KK-51-A, KK-52 and KK-52-A are the Letter and Writ of Sequestration issued by the PCGG
on Allied Banking Corporation and Guaranteed Education Inc. pursuant to its mandate to go after ill-gotten
wealth.

Exhibits NN, OO, PP, QQ and QQ-1 refer to the Memorandum To All Commercial Banks dated March 14,
1986 issued by then Central Bank Governor Jose B. Fernandez and the Letter dated March 13, 1986 of Mary
Concepcion Bautista, PCGG Commissioner addressed to then Central Bank Governor Fernandez requesting
that names be added to the earlier request of PCGG Chairman Jovito Salonga to instruct all commercial banks
not to allow any withdrawal or transfer of funds from the market placements under the names of said persons,
to include spouses Gimenezes, without authority from PCGG.

Exhibits KK and series, NN, OO, PP, QQ and QQ-1 which prove the various real properties, business
interests and bank accounts owned by spouses Gimenezes were part of the testimony of Atty. Tereso Javier.

Exhibit RR and series (RR-1-RR-23) are the Affidavit dated July 24, 1987 of Dominador Pangilinan, Acting
President and President of Trader’s Royal Bank, and the attached Recapitulation, Status of Banker’s
Acceptances, Status of Funds and Savings Account Ledger wherein he mentioned that Malacanang
maintained trust accounts at Trader’s Royal Bank, the balance of which is approximately 150-175 million
Pesos, and that he was informed by Mr. Rivera that the funds were given to him (Rivera) by Fe Roa Gimenez
for deposit to said accounts.

Exhibits SS and series (SS-1-SS-29) are the Affidavit dated July 23, 1987 of Apolinario K. Medina, Executive
Vice President of Traders Royal Bank and attachments, which include Recapitulation, Status of Funds, and
Messages from Traders Royal Bank Manila to various foreign banks. In his Affidavit, Medina divulged certain
numbered confidential trust accounts maintained by Malacanang with the Trader’s Royal Bank. He further
stated that the deposits were so substantial that he suspected that they had been made by President Marcos or
his family.

Exhibit TT and series (TT-1-TT-3) is [sic] the Memorandum dated July 19, 2005 of Danilo R.V. Daniel, then
Director of the Research and Development Department of PCGG regarding the investigation conducted on the
ill-gotten wealth of spouses Gimenezes, the subject matter of Civil Case No. [0]007. He revealed that during
the investigation on the ill-gotten wealth of spouses Gimenezes, it was found out that from 1977 to 1982,
several withdrawals, in the total amount of P75,090,306.42 were made from Trust Account No. 128 (A/C 76-
128) in favor of I.B. Gimenez, I.B. Gimenez Securities and Fe Roa Gimenez.

Exhibits RR, SS, TT and their series prove that spouses Gimenez maintained bank accounts of substantial
amounts and gained control of various corporations. These are also being offered as part of the testimony of
1âwphi 1

Danilo R.V. Daniel.27 (Emphasis in the original, citations omitted)

In the second assailed Resolution dated September 13, 2006, the Sandiganbayan denied the Republic’s
Motion for Reconsideration and granted the Gimenez Spouses’ Motion to Dismiss.28 According to the
Sandiganbayan:

While it is true that litigation is not a game of technicalities and that the higher ends of substantial justice
militate against dismissal of cases purely on technical grounds, the circumstances of this case show that the
ends of justice will not be served if this Court allows the wanton disregard of the Rules of Court and of the
Court’s orders. Rules of procedure are designed for the proper and prompt disposition of cases. . . .

The reasons invoked by the plaintiff to justify its failure to timely file the formal offer of evidence fail to persuade
this Court. The missing exhibits mentioned by the plaintiff’s counsel appear to be the same missing documents
since 2004, or almost two (2) years ago. The plaintiff had more than ample time to locate them for its purpose. .
. . Since they remain missing after lapse of the period indicated by the Court, there is no reason why the search
for these documents should delay the filing of the formal offer of evidence.

[Petitioner’s] counsel . . . admits that faced with other pressing matters, he lost track of the time. We cannot just
turn a blind eye on the negligence of the parties and in their failure to observe the orders of this Court. The
carelessness of [petitioner’s] counsel in keeping track of the deadlines is an unacceptable reason for the Court
to set aside its Order and relax the observance of the period set for filing the formal offer of evidence. 29 (Citation
omitted)

The Sandiganbayan also found that the Republic failed to prosecute its case for an unreasonable length of time
and to comply with the court’s rules.30 The court also noted that the documentary evidence presented by the
Republic consisted mostly of certified true copies.31 However, the persons who certified the documents as
copies of the original were not presented.32 Hence, the evidence lacked probative value.33 The dispositive
portion of the assailed Resolution reads:

ACCORDINGLY, there being no valid and cogent justification shown by the plaintiff for the Court to Grant its
Motion for Reconsideration and admit its Formal Offer of Evidence, the plaintiff’s Motion for Reconsideration
and to Admit Attached Formal Offer of Evidence is DENIED. The Motion to Dismiss on Demurrer to Evidence
filed by the defendant Ignacio B. Gimenez and adopted by defendant Fe Roa Gimenez is GRANTED. The case
is then DISMISSED.

SO ORDERED.34 (Emphasis in the original)

The Republic filed its Petition for Review on Certiorari dated November 3, 2006 before this court. 35
The Gimenez Spouses were required to comment on the Petition.36 This court noted the separate
Comments37 filed by the Gimenez Spouses.38 The Republic responded to the Comments through a
Consolidated Reply39 dated June 22, 2007.

In the Resolution40 dated August 29, 2007, this court required the parties to submit their memoranda. 41

On February 18, 2008, this court resolved to require the parties to "move in the premises[.]"42

On March 2, 2012, the Republic filed a Motion for Leave to Re-open Proceedings, to File and Admit Attached
Supplement to the Petition for Certiorari.43 In this Supplement, the Republic argued that the second assailed
Resolution dated September 13, 2006 was void for failing to state the facts and the law on which it was
based.44This Motion was granted, and the Gimenez Spouses were required to file their Comment on the
Supplement to the Petition.45 Thereafter, the Republic filed its Reply.46

Fe Roa Gimenez filed a Rejoinder47 dated December 19, 2012 which was expunged by this court in a
Resolution48dated January 23, 2013. Ignacio Gimenez’s Motion for Leave to File and Admit Attached
Rejoinder49 was denied.50

The Republic raised the following issues:

Whether or not the Sandiganbayan gravely erred in dismissing the case in the light of the allegations in the
Complaint which were substantiated by overwhelming evidence presented vis-a-vis the material admissions of
spouses Gimenezes as their answer failed to specifically deny that they were dummies of former President
Ferdinand E. Marcos and that they acquired illegal wealth grossly disproportionate to their lawful income in a
manner prohibited under the Constitution and Anti-Graft Statutes.

Whether or not the Sandiganbayan gravely erred in denying petitioner’s Motion to Admit Formal Offer of
Evidence on the basis of mere technicalities, depriving petitioner of its right to due process.

Whether or not the Sandiganbayan gravely erred in making a sweeping pronouncement that petitioner’s
evidence do not bear any probative value.51

The issues for consideration of this court are:

First, whether a Petition for Review on Certiorari was the proper remedy to assail the Sandiganbayan
Resolutions; and

Second, whether the Sandiganbayan erred in holding that petitioner Republic of the Philippines waived the
filing of its Formal Offer of Evidence and in granting respondents Ignacio Gimenez and Fe Roa Gimenez’s
Motion to Dismiss on demurrer to evidence.

We grant the Petition.

Respondent Ignacio Gimenez pictures petitioner as being confused as to the proper mode of review of the
Sandiganbayan Resolutions. According to him, petitioner claims that the Sandiganbayan committed grave
abuse of discretion.52 Hence, petitioner should have filed a petition for certiorari under Rule 65 and not a petition
for review under Rule 45 of the Rules of Court.53 Nevertheless, the Sandiganbayan did not commit any error,
and petitioner has to show that the Sandiganbayan committed grave abuse of discretion amounting to lack of or
in excess of jurisdiction.54

Observance of the proper procedure before courts, especially before the Sandiganbayan, cannot be stressed
enough. Due process is enshrined in the Constitution, specifically the Bill of Rights.55 "Due process [in criminal
cases] guarantees the accused a presumption of innocence until the contrary is proved[.]" 56 "Mere suspicion of
guilt should not sway judgment."57

To determine whether a petition for review is the proper remedy to assail the Sandiganbayan Resolutions, we
review the nature of actions for reconveyance, revision, accounting, restitution, and damages.

Actions for reconveyance, revision, accounting, restitution, and damages for ill-gotten wealth are also called
civil forfeiture proceedings.

Republic Act No. 137958 provides for the procedure by which forfeiture proceedings may be instituted against
public officers or employees who "[have] acquired during his [or her] incumbency an amount of property which
is manifestly out of proportion to his [or her] salary as such public officer or employee and to his [or her] other
lawful income and the income from legitimately acquired property, [which] property shall be presumed prima
facie to have been unlawfully acquired."59

This court has already settled the Sandiganbayan’s jurisdiction over civil forfeiture cases:

. . . violations of R.A. No. 1379 are placed under the jurisdiction of the Sandiganbayan, even though the
proceeding is civil in nature, since the forfeiture of the illegally acquired property amounts to a penalty. 60
In Garcia v. Sandiganbayan, et al.,61 this court re-affirmed the doctrine that forfeiture proceedings under
Republic Act No. 1379 are civil in nature.62 Civil forfeiture proceedings were also differentiated from plunder
cases:

. . . a forfeiture case under RA 1379 arises out of a cause of action separate and different from a plunder case.
. . . In a prosecution for plunder, what is sought to be established is the commission of the criminal acts in
furtherance of the acquisition of ill-gotten wealth. . . . On the other hand, all that the court needs to determine,
by preponderance of evidence, under RA 1379 is the disproportion of respondent’s properties to his legitimate
income, it being unnecessary to prove how he acquired said properties. As correctly formulated by the Solicitor
General, the forfeitable nature of the properties under the provisions of RA 1379 does not proceed from a
determination of a specific overt act committed by the respondent public officer leading to the acquisition of the
illegal wealth.63(Citation omitted)

To stress, the quantum of evidence required for forfeiture proceedings under Republic Act No. 1379 is the
same with other civil cases — preponderance of evidence.64

When a criminal case based on demurrer to evidence is dismissed, the dismissal is equivalent to an acquittal. 65

As a rule, once the court grants the demurrer, the grant amounts to an acquittal; any further prosecution of the
accused would violate the constitutional proscription on double jeopardy.66

Hence, the Republic may only assail an acquittal through a petition for certiorari under Rule 65 of the Rules of
Court:

Accordingly, a review of a dismissal order of the Sandiganbayan granting an accused’s demurrer to evidence
may be done via the special civil action of certiorari under Rule 65, based on the narrow ground of grave abuse
of discretion amounting to lack or excess of jurisdiction.67 (Citation omitted)

In this case, a civil forfeiture under Republic Act No. 1379, petitioner correctly filed a Petition for Review on
Certiorari under Rule 45 of the Rules of Court. Section 1 of the Rule provides the mode of appeal from
judgments, final orders, or resolutions of the Sandiganbayan:

SECTION 1. Filing of petition with Supreme Court.— A party desiring to appeal by certiorari from a judgment or
final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts
whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The
petition shall raise only questions of law which must be distinctly set forth.

II

Petitioner argues that substantial justice requires doing away with the procedural technicalities. 68 Loss of vital
documentary proof warranted extensions to file the Formal Offer of Evidence.69 Honest efforts to locate several
missing documents resulted in petitioner’s inability to file the pleading within the period granted by the
Sandiganbayan.70

Respondent Ignacio Gimenez argues that petitioner cannot fault the Sandiganbayan for its incompetence
during trial.71 Even if the evidence were formally offered within the prescribed period, PCGG’s evidence still had
no probative value.72 It is solely petitioner’s fault "that the persons who certified to the photocopies of the
originals were not presented to testify[.]"73 It is also misleading to argue that the pieces of documentary
evidence presented are public documents.74 "The documents are not public in the sense that these are official
issuances of the Philippine government." 75 "The bulk consists mainly of notarized, private documents that have
simply been certified true and faithful."76

According to respondent Fe Roa Gimenez, petitioner tries to excuse its non-filing of the Formal Offer of
Evidence within the prescribed period by raising its efforts to locate the 66 missing documents. 77 However, the
issue of the missing documents was laid to rest during the hearing on November 16, 2004.78 The
Sandiganbayan gave petitioner until March 2005 to produce the documents; otherwise, these would be
excluded.79 The testimonies of the witnesses related to the missing documents would also be expunged from
the case records.80

Moreover, respondent Fe Roa Gimenez claims that "[t]he Sandiganbayan did not err when it ruled that the
great bulk of the documentary evidence offered by the PCGG have no probative value."81 Aside from the 66
missing documents it failed to present, almost all of petitioner’s pieces of documentary evidence were mere
photocopies.82The few that were certified true copies were not testified on by the persons who certified these
documents.83

Our Rules of Court lays down the procedure for the formal offer of evidence. Testimonial evidence is offered "at
the time [a] witness is called to testify."84 Documentary and object evidence, on the other hand, are offered
"after the presentation of a party’s testimonial evidence."85 Offer of documentary or object evidence is generally
done orally unless permission is given by the trial court for a written offer of evidence. 86

More importantly, the Rules specifically provides that evidence must be formally offered to be considered by
the court. Evidence not offered is excluded in the determination of the case.87 "Failure to make a formal offer
within a considerable period of time shall be deemed a waiver to submit it."88
Rule 132, Section 34 provides:

SEC. 34. Offer of evidence.— The court shall consider no evidence which has not been formally offered. The
purpose for which the evidence is offered must be specified.

The rule on formal offer of evidence is intertwined with the constitutional guarantee of due process. Parties
must be given the opportunity to review the evidence submitted against them and take the necessary actions to
secure their case.89 Hence, any document or object that was marked for identification is not evidence unless it
was "formally offered and the opposing counsel [was] given an opportunity to object to it or cross-examine the
witness called upon to prove or identify it."90

This court explained further the reason for the rule:

The Rules of Court provides that "the court shall consider no evidence which has not been formally offered." A
formal offer is necessary because judges are mandated to rest their findings of facts and their judgment only
and strictly upon the evidence offered by the parties at the trial. Its function is to enable the trial judge to know
the purpose or purposes for which the proponent is presenting the evidence. On the other hand, this allows
opposing parties to examine the evidence and object to its admissibility. Moreover, it facilitates review as the
appellate court will not be required to review documents not previously scrutinized by the trial
court.91 (Emphasis supplied, citations omitted)

To consider a party’s evidence which was not formally offered during trial would deprive the other party of due
process. Evidence not formally offered has no probative value and must be excluded by the court. 92

Petitioner’s failure to file its written Formal Offer of Evidence of the numerous documentary evidence presented
within the prescribed period is a non-issue. In its first assailed Resolution dated May 25, 2006, the
Sandiganbayan declared that petitioner waived the filing of its Formal Offer of Evidence when it failed to file the
pleading on May 13, 2006, the deadline based on the extended period granted by the court. Petitioner was
granted several extensions of time by the Sandiganbayan totalling 75 days from the date petitioner terminated
its presentation of evidence. Notably, this 75-day period included the original 30-day period. Subsequently,
petitioner filed a Motion for Reconsideration and to Admit Attached Formal Offer of Evidence, and the Formal
Offer of Evidence.

In resolving petitioner’s Motion for Reconsideration and to Admit Attached Formal Offer of Evidence, the
Sandiganbayan found the carelessness of petitioner’s counsel unacceptable. According to the Sandiganbayan,
it could not countenance the non-observance of the court’s orders.

This court has long acknowledged the policy of the government to recover the assets and properties illegally
acquired or misappropriated by former President Ferdinand E. Marcos, his wife Mrs. Imelda R. Marcos, their
close relatives, subordinates, business associates, dummies, agents or nominees.93 Hence, this court has
adopted a liberal approach regarding technical rules of procedure in cases involving recovery of ill-gotten
wealth:

In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside technicalities
and formalities that merely serve to delay or impede judicious resolution. This Court prefers to have such cases
resolved on the merits at the Sandiganbayan. But substantial justice to the Filipino people and to all parties
concerned, not mere legalisms or perfection of form, should now be relentlessly and firmly pursued. Almost two
decades have passed since the government initiated its search for and reversion of such ill-gotten wealth. The
definitive resolution of such cases on the merits is thus long overdue. If there is proof of illegal acquisition,
accumulation, misappropriation, fraud or illicit conduct, let it be brought out now. Let the ownership of these
funds and other assets be finally determined and resolved with dispatch, free from all the delaying technicalities
and annoying procedural sidetracks.94 (Emphasis supplied, citation omitted)

To be clear, petitioner was able to file its Formal Offer of Evidence, albeit, belatedly. Petitioner hurdled 19 years
of trial before the Sandiganbayan to present its evidence as shown in its extensive Formal Offer of Evidence.
As petitioner argues:

Undeniable from the records of the case is that petitioner was vigorous in prosecuting the case. The most
tedious and crucial stage of the litigation and presentation of evidence has been accomplished. Petitioner
completed its presentation of evidence proving the ill-gotten nature and character of the funds and assets
sought to be recovered in the present case. It presented vital testimonial and documentary evidence consisting
of voluminous record proving the gross disparity of the subject funds to spouses Gimenezes’ combined
declared income which must be reconveyed to the Republic for being acquired in blatant violation of the
Constitution and the Anti-Graft statutes.95

This court is not unmindful of the difficulty in gathering voluminous documentary evidence in cases of forfeiture
of ill-gotten wealth acquired throughout the years. It is never easy to prosecute corruption and take back what
rightfully belongs to the government and the people of the Republic.

This is not the first time that this court relaxed the rule on formal offer of evidence.

Tan v. Lim96 arose from two civil Complaints: one for injunction and another for legal redemption, which were
heard jointly before the trial court.97 The defendant did not file a Formal Offer of Evidence in the injunction
case98 and merely adopted the evidence offered in the legal redemption case.99 The trial court held that the
defendant’s failure to file his Formal Offer of Evidence in the injunction case rendered the plaintiff’s evidence
therein as uncontroverted.100 The Court of Appeals reversed the Decision and was affirmed by this court.101 This
court ruled that while the trial court’s reasoning in its Decision was technically sound, a liberal interpretation
was more appropriate and in line with substantial justice:

It may be true that Section 34, Rule 132 of the rules directs the court to consider no evidence which has not
been formally offered and that under Section 35, documentary evidence is offered after presentation of
testimonial evidence. However, a liberal interpretation of these Rules would have convinced the trial court that
a separate formal offer of evidence in Civil Case No. 6518 was superfluous because not only was an offer of
evidence made in Civil Case No. 6521 that was being jointly heard by the trial court, counsel for Jose Renato
Lim had already declared he was adopting these evidences for Civil Case No. 6518. The trial court itself stated
that it would freely utilize in one case evidence adduced in the other only to later abandon this posture. Jose
Renato Lim testified in Civil Case No. 6518. The trial court should have at least considered his testimony since
at the time it was made, the rules provided that testimonial evidence is deemed offered at the time the witness
is called to testify. Rules of procedure should not be applied in a very rigid, technical case as they are devised
chiefly to secure and not defeat substantial justice.

....

The logic of the Court of Appeals is highly persuasive. Indeed, apparently, the trial court was being overly
technical about the nonsubmission of Jose Renato Lim’s formal offer of evidence. This posture not only goes
against Section 6, Rule 1 of the Rules of Civil Procedure decreeing a liberal construction of the rules to
promote a just, speedy and inexpensive litigation but ignores the consistent rulings of the Court against utilizing
the rules to defeat the ends of substantial justice. Despite the intervening years, the language of the Court in
Manila Railroad Co. vs. Attorney-General, still remains relevant:

"x x x. The purpose of procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to
the rival claims of contending parties. It was created not to hinder and delay but to facilitate and promote the
administration of justice. It does not constitute the thing itself which courts are always striving to secure to
litigants. It is designed as the means best adapted to obtain that thing. In other words, it is a means to an end.
It is the means by which the powers of the court are made effective in just judgments. When it loses the
character of the one and takes on that of the other the administration of justice becomes incomplete and
unsatisfactory and lays itself open to grave criticism."102 (Emphasis supplied, citations omitted)

Furthermore, "subsequent and substantial compliance . . . may call for the relaxation of the rules of
procedure."103

Weighing the amount of time spent in litigating the case against the number of delays petitioner incurred in
submitting its Formal Offer of Evidence and the state’s policy on recovering ill-gotten wealth, this court is of the
belief that it is but only just that the Rules be relaxed and petitioner be allowed to submit its written Formal Offer
of Evidence. The Sandiganbayan’s Resolutions should be reversed.

III

According to petitioner, the Sandiganbayan erred when it granted the demurrer to evidence filed by
respondents and dismissed the case despite a "prima facie foundation [based on the pleadings and documents
on record] that spouses Gimenezes amassed enormous wealth grossly disproportionate to their lawful income
or declared lawful assets."104

Similarly, the Complaint alleged specific acts committed by respondent Ignacio Gimenez:

[T]aking undue advantage of his relationship, influence, and connection, by himself and/or in unlawful concert
and active collaboration with former President Ferdinand E. Marcos and Imelda R. Marcos for the purpose of
mutually enriching themselves and preventing the disclosure and recovery of assets illegally obtained: (a) acted
as the dummy, nominee or agent of former President Ferdinand E. Marcos and Imelda R. Marcos in several
corporations such as, the Allied Banking Corporation, Acoje Mining Corporation, Baguio Gold Mining, Multi
National Resources, Philippine Oversees, Inc. and Pioneer Natural Resources; (b) unlawfully obtained, through
corporations organized by them such as the New City Builders, Inc. (NCBI), multi-million peso contracts with
the government buildings, such as the University of Life Sports Complex and Dining Hall as well as projects of
the National Manpower Corporation, Human Settlements, GSIS, and Maharlika Livelihood, to the gross and
manifest disadvantage of the Government and the Filipino people; and (c) in furtherance of the above stated
illegal purposes, organized several establishments engaged in food, mining and other businesses such as the
Transnational Construction Corporation, Total Systems Technology, Inc., Pyro Control Technology
Corporation, Asian Alliance, Inc., A & T Development Corporation, RBO Agro Forestry Farm Development
Corporation, Bathala Coal Mining Corporation, Coal Basis Mining Corporation, Titan Coal Mining Corporation,
GEI Guaranteed Education, Inc., and I.B. Gimenez Securities, Inc.105

Despite the specific allegations in the Complaint, petitioner contends that respondents merely gave general
denials to the allegations in the Complaint.106 "[N]o specific denial [was] made on the material allegations [in] the
[C]omplaint."107

Respondents, on the other hand, assert that the Sandiganbayan was correct in granting the Motion to Dismiss
on demurrer to evidence.

Respondent Ignacio Gimenez claims that petitioner cannot be excused from filing its Formal Offer of Evidence
considering the numerous extensions given by the Sandiganbayan. Petitioner had all the resources and time to
gather, collate, and secure the necessary evidence to build its case. 108 Petitioner’s presentation of evidence
took 19 years to complete, and yet it failed to submit the necessary documents and pleading.109

Similarly, respondent Fe Roa Gimenez argues that petitioner was negligent in failing to comply with the
Sandiganbayan’s orders considering the inordinate amount of time given to petitioner to present evidence,
which resulted in only five witnesses in 19 years.110

To determine the propriety of granting respondents’ Motion to Dismiss based on Demurrer to Evidence, we
review the nature of demurrer.

Rule 33, Section 1 of the Rules of Court provides:

SECTION 1. Demurrer to evidence.— After the plaintiff has completed the presentation of his evidence, the
defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no
right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on
appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence.

In Oropesa v. Oropesa111 where this court affirmed the dismissal of the case on demurrer to evidence due to
petitioner’s non-submission of the Formal Offer of Evidence,112 demurrer to evidence was defined as:

. . . "an objection by one of the parties in an action, to the effect that the evidence which his adversary
produced is insufficient in point of law, whether true or not, to make out a case or sustain the issue." We have
also held that a demurrer to evidence "authorizes a judgment on the merits of the case without the defendant
having to submit evidence on his part, as he would ordinarily have to do, if plaintiff’s evidence shows that he is
not entitled to the relief sought."113 (Citations omitted)

This court has laid down the guidelines in resolving a demurrer to evidence:

A demurrer to evidence may be issued when, upon the facts and the law, the plaintiff has shown no right to
relief. Where the plaintiff’s evidence together with such inferences and conclusions as may reasonably be
drawn therefrom does not warrant recovery against the defendant, a demurrer to evidence should be
sustained. A demurrer to evidence is likewise sustainable when, admitting every proven fact favorable to the
plaintiff and indulging in his favor all conclusions fairly and reasonably inferable therefrom, the plaintiff has
failed to make out one or more of the material elements of his case, or when there is no evidence to support an
allegation necessary to his claim. It should be sustained where the plaintiff’s evidence is prima facie insufficient
for a recovery.114

Furthermore, this court already clarified what the trial court determines when acting on a motion to dismiss
based on demurrer to evidence:

What should be resolved in a motion to dismiss based on a demurrer to evidence is whether the plaintiff is
entitled to the relief based on the facts and the law. The evidence contemplated by the rule on demurrer is that
which pertains to the merits of the case, excluding technical aspects such as capacity to sue. . . . 115 (Emphasis
supplied, citation omitted)

Petitioner, in its Supplement to the Petition, argued that the testimonial evidence it had presented and offered
during trial warranted consideration and analysis.116 The Sandiganbayan erroneously excluded these
testimonies in determining whether to grant the motion to dismiss or not, hence:

. . . even assuming that the Sandiganbayan denied petitioner’s formal offer of evidence, petitioner still had
testimonial evidence in its favor which should [have] been considered. It behoved then upon the
Sandiganbayan to discuss or include in its discussion, at the very least, an analysis of petitioner’s testimonial
evidence.117

With our ruling reversing the Sandiganbayan’s Resolutions on petitioner’s Formal Offer of Evidence, what
should be determined now by the Sandiganbayan is whether petitioner’s evidence is sufficient to entitle it to the
relief it seeks after the Sandiganbayan rested its case. Petitioner is required to establish preponderance of
evidence.

In the second assailed Resolution, the Sandiganbayan granted respondents’ Motion to Dismiss based on the
lack of Formal Offer of Evidence of petitioner. At the same time, it observed that the pieces of documentary
evidence presented by petitioner were mostly certified true copies of the original. In passing upon the probative
value of petitioner’s evidence, the Sandiganbayan held:

On another note, the evidence presented by the plaintiff consisted mainly of certified true copies of the original.
These certified copies of documentary evidence presented by the plaintiff were not testified on by the person
who certified them to be photocopies of the original. Hence, these evidence do not appear to have significant
substantial probative value.118

Petitioner faults the Sandiganbayan for making "a general and sweeping statement that the evidence
presented by petitioner lacked probative value for the reason that they are mainly certified true copies which
had not been testified on by the person who certified [them]."119 Thus, its right to due process was violated when
the Sandiganbayan rejected petitioner’s documentary evidence in the same Resolution which dismissed the
case.120
Petitioner argues that: a) respondents unqualifiedly admitted the identity and authenticity of the documentary
evidence presented by petitioner;121 and b) the documents it presented were public documents, and there was
no need for the identification and authentication of the original documentary exhibits.122 Petitioner relies on the
Sandiganbayan Order123 dated August 6, 2002. The Order reads:

Considering the manifestation of Atty. Reno Gonzales, counsel for plaintiff/PCGG, that the defendant Fe Roa
Gimenez, through counsel, is willing to stipulate that the documents to be presented and identified by the
witness are in her custody as Records Officer of the PCGG, the parties agreed to dispense with the testimony
of Ma. Lourdes Magno.

WHEREFORE, and as prayed for, the continuation of the presentation of plaintiff’s evidence is set on October 9
and 10, 2002, both at 8:30 o’clock [sic] in the morning.

SO ORDERED.124 (Emphasis supplied)

Petitioner claims that the following exhibits were acquired in relation to the PCGG’s functions prescribed under
Executive Order No. 1, Section 3(b),125 and form part of the official records of the PCGG:126 "Certifications as to
the various positions held in Government by Fe Roa-Gimenez, her salaries and compensation during her stint
as a public officer, the BIR Income Tax Returns and Statement of Assets and Liabilities showing the declared
income of spouses Gimenezes; the Articles of Incorporation of various corporations showing spouses
Gimenezes’ interests on various corporations; and several transactions involving huge amounts of money
which prove that they acted as conduit in the disbursement of government funds."127

On the other hand, respondent Ignacio Gimenez argues that petitioner’s documents are not "official issuances
of the Philippine government."128 They are mostly notarized private documents.129 Petitioner’s evidence has no
probative value; hence, a dismissal on demurrer to evidence is only proper.130 Respondent Fe Roa Gimenez
claims that the Sandiganbayan did not err in holding that the majority of petitioner’s documentary evidence has
no probative value, considering that most of these documents are only photocopies.131

The evidence presented by petitioner before the Sandiganbayan deserves better treatment.

For instance, the nature and classification of the documents should have been ruled upon. Save for certain
cases, the original document must be presented during trial when the subject of the inquiry is the contents of
the document.132 This is the Best Evidence Rule provided under Rule 130, Section 3 of the Rules of Court:

SEC. 3. Original document must be produced; exceptions.— When the subject of inquiry is the contents of a
document, no evidence shall be admissible other than the original document itself, except in the following
cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on
the part of the offeror;

(b) When the original is in the custody or under the control of the party against whom the evidence is
offered, and the latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined in
court without great loss of time and the fact sought to be established from them is only the general
result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public
office.

In case of unavailability of the original document, secondary evidence may be presented133 as provided for
under Sections 5 to 7 of the same Rule:

SEC. 5. When original document is unavailable.— When the original document has been lost or destroyed, or
cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in
some authentic document, or by the testimony of witnesses in the order stated.

SEC. 6. When original document is in adverse party's custody or control. — If the document is in the custody or
under the control of adverse party, he must have reasonable notice to produce it. If after such notice and after
satisfactory proof of its existence, he fails to produce the document, secondary evidence may be presented as
in the case of its loss. (5a)

SEC. 7. Evidence admissible when original document is a public record.— When the original of a document is
in the custody of a public officer or is recorded in a public office, its contents may be proved by a certified copy
issued by the public officer in custody thereof. (Emphasis supplied)

In Citibank, N.A. v. Sabeniano,134 citing Estrada v. Hon. Desierto,135 this court clarified the applicability of the
Best Evidence Rule:

As the afore-quoted provision states, the best evidence rule applies only when the subject of the inquiry is the
contents of the document. The scope of the rule is more extensively explained thus —
But even with respect to documentary evidence, the best evidence rule applies only when the content of such
document is the subject of the inquiry. Where the issue is only as to whether such document was actually
executed, or exists, or on the circumstances relevant to or surrounding its execution, the best evidence rule
does not apply and testimonial evidence is admissible (5 Moran, op. cit., pp. 76-66; 4 Martin, op. cit., p. 78).
Any other substitutionary evidence is likewise admissible without need for accounting for the original.

Thus, when a document is presented to prove its existence or condition it is offered not as documentary, but as
real, evidence. Parol evidence of the fact of execution of the documents is allowed (Hernaez, et al. vs.
McGrath, etc., et al., 91 Phil[.] 565). x x x

In Estrada v. Desierto, this Court had occasion to rule that —

It is true that the Court relied not upon the original but only [a] copy of the Angara Diary as published in the
Philippine Daily Inquirer on February 4-6, 2001. In doing so, the Court, did not, however, violate the best
evidence rule. Wigmore, in his book on evidence, states that:

"Production of the original may be dispensed with, in the trial court’s discretion, whenever in the case in hand
the opponent does not bona fide dispute the contents of the document and no other useful purpose will be
served by requiring production.

"x x x x x x x x x

"In several Canadian provinces, the principle of unavailability has been abandoned, for certain documents in
which ordinarily no real dispute arised [sic]. This measure is a sensible and progressive one and deserves
universal adoption (post, sec. 1233). Its essential feature is that a copy may be used unconditionally, if the
opponent has been given an opportunity to inspect it."

This Court did not violate the best evidence rule when it considered and weighed in evidence the photocopies
and microfilm copies of the PNs, MCs, and letters submitted by the petitioners to establish the existence of
respondent’s loans. The terms or contents of these documents were never the point of contention in the
Petition at bar. It was respondent’s position that the PNs in the first set (with the exception of PN No. 34534)
never existed, while the PNs in the second set (again, excluding PN No. 34534) were merely executed to cover
simulated loan transactions. As for the MCs representing the proceeds of the loans, the respondent either
denied receipt of certain MCs or admitted receipt of the other MCs but for another purpose. Respondent further
admitted the letters she wrote personally or through her representatives to Mr. Tan of petitioner Citibank
acknowledging the loans, except that she claimed that these letters were just meant to keep up the ruse of the
simulated loans. Thus, respondent questioned the documents as to their existence or execution, or when the
former is admitted, as to the purpose for which the documents were executed, matters which are, undoubtedly,
external to the documents, and which had nothing to do with the contents thereof.

Alternatively, even if it is granted that the best evidence rule should apply to the evidence presented by
petitioners regarding the existence of respondent’s loans, it should be borne in mind that the rule admits of the
following exceptions under Rule 130, Section 5 of the revised Rules of Court[.]136 (Emphasis supplied, citation
omitted)

Furthermore, for purposes of presenting these as evidence before courts, documents are classified as either
public or private. Rule 132, Section 19 of the Rules of Court provides:

SEC. 19. Classes of Documents.— For the purpose of their presentation in evidence, documents are either
public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the sovereign authority, official bodies and
tribunals, and public officers, whether of the Philippines, or of a foreign country;

(b) Documents acknowledge before a notary public except last wills and testaments; and

(c) Public records, kept in the Philippines, of private documents required by law to be entered therein.

All other writings are private.

The same Rule provides for the effect of public documents as evidence and the manner of proof for public
documents:

SEC. 23. Public documents as evidence.— Documents consisting of entries in public records made in the
performance of a duty by a public officer are prima facie evidence of the facts therein stated. All other public
documents are evidence, even against a third person, of the fact which gave rise to their execution and of the
date of the latter.

SEC. 24. Proof of official record.— The record of public documents referred to in paragraph (a) of Section 19,
when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by
the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in
the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul,
vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign
country in which the record is kept, and authenticated by the seal of his office.

SEC. 25. What attestation of copy must state.— Whenever a copy of a document or record is attested for the
purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or
a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting
officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court.

....

SEC. 27. Public record of a private document.— An authorized public record of a private document may be
proved by the original record, or by a copy thereof, attested by the legal custodian of the record, with an
appropriate certificate that such officer has the custody.

....

SEC. 30. Proof of notarial documents.— Every instrument duly acknowledged or proved and certified as
provided by law, may be presented in evidence without further proof, the certificate of acknowledgment being
prima facie evidence of the execution of the instrument or document involved. (Emphasis supplied)

Emphasizing the importance of the correct classification of documents, this court pronounced:

The nature of documents as either public or private determines how the documents may be presented as
evidence in court. A public document, by virtue of its official or sovereign character, or because it has been
acknowledged before a notary public (except a notarial will) or a competent public official with the formalities
required by law, or because it is a public record of a private writing authorized by law, is self-authenticating and
requires no further authentication in order to be presented as evidence in court. In contrast, a private document
is any other writing, deed, or instrument executed by a private person without the intervention of a notary or
other person legally authorized by which some disposition or agreement is proved or set forth. Lacking the
official or sovereign character of a public document, or the solemnities prescribed by law, a private document
requires authentication in the manner allowed by law or the Rules of Court before its acceptance as evidence in
court.137 (Emphasis supplied)

The distinction as to the kind of public document under Rule 132, Section 19 of the Rules of Court is material
with regard to the fact the evidence proves. In Philippine Trust Company v. Hon. Court of Appeals, et al.,138 this
court ruled that:

. . . not all types of public documents are deemed prima facie evidence of the facts therein stated:

....

"Public records made in the performance of a duty by a public officer" include those specified as public
documents under Section 19(a), Rule 132 of the Rules of Court and the acknowledgement, affirmation or oath,
or jurat portion of public documents under Section 19(c). Hence, under Section 23, notarized documents are
merely proof of the fact which gave rise to their execution (e.g., the notarized Answer to Interrogatories . . . is
proof that Philtrust had been served with Written Interrogatories), and of the date of the latter (e.g., the
notarized Answer to Interrogatories is proof that the same was executed on October 12, 1992, the date stated
thereon), but is not prima facie evidence of the facts therein stated. Additionally, under Section 30 of the same
Rule, the acknowledgement in notarized documents is prima facie evidence of the execution of the instrument
or document involved (e.g., the notarized Answer to Interrogatories is prima facie proof that petitioner executed
the same).

The reason for the distinction lies with the respective official duties attending the execution of the different kinds
of public instruments. Official duties are disputably presumed to have been regularly performed. As regards
affidavits, including Answers to Interrogatories which are required to be sworn to by the person making them,
the only portion thereof executed by the person authorized to take oaths is the jurat. The presumption that
official duty has been regularly performed therefore applies only to the latter portion, wherein the notary public
merely attests that the affidavit was subscribed and sworn to before him or her, on the date mentioned thereon.
Thus, even though affidavits are notarized documents, we have ruled that affidavits, being self-serving, must be
received with caution.139 (Emphasis supplied, citations omitted)

In Salas v. Sta. Mesa Market Corporation,140 this court discussed the difference between mere copies of audited
financial statements submitted to the Bureau of Internal Revenue (BIR) and Securities and Exchange
Commission (SEC), and certified true copies of audited financial statements obtained or secured from the BIR
or the SEC which are public documents under Rule 132, Section 19(c) of the Revised Rules of Evidence:

The documents in question were supposedly copies of the audited financial statements of SMMC. Financial
statements (which include the balance sheet, income statement and statement of cash flow) show the fiscal
condition of a particular entity within a specified period. The financial statements prepared by external auditors
who are certified public accountants (like those presented by petitioner) are audited financial
statements. Financial statements, whether audited or not, are, as [a] general rule, private documents. However,
once financial statements are filed with a government office pursuant to a provision of law, they become public
documents.
Whether a document is public or private is relevant in determining its admissibility as evidence. Public
documents are admissible in evidence even without further proof of their due execution and genuineness. On
the other hand, private documents are inadmissible in evidence unless they are properly authenticated. Section
20, Rule 132 of the Rules of Court provides:

....

Petitioner and respondents agree that the documents presented as evidence were mere copies of the audited
financial statements submitted to the BIR and SEC. Neither party claimed that copies presented were certified
true copies of audited financial statements obtained or secured from the BIR or the SEC which under Section
19(c), Rule 132 would have been public documents. Thus, the statements presented were private documents.
Consequently, authentication was a precondition to their admissibility in evidence.

During authentication in court, a witness positively testifies that a document presented as evidence is genuine
and has been duly executed or that the document is neither spurious nor counterfeit nor executed by mistake
or under duress. In this case, petitioner merely presented a memorandum attesting to the increase in the
corporation’s monthly market revenue, prepared by a member of his management team. While there is no fixed
criterion as to what constitutes competent evidence to establish the authenticity of a private document, the best
proof available must be presented. The best proof available, in this instance, would have been the testimony of
a representative of SMMC’s external auditor who prepared the audited financial statements. Inasmuch as there
was none, the audited financial statements were never authenticated.141 (Emphasis supplied, citations omitted)

Indeed, in Republic v. Marcos-Manotoc,142 this court held that mere collection of documents by the PCGG does
not make such documents public documents per se under Rule 132 of the Rules of Court:

The fact that these documents were collected by the PCGG in the course of its investigations does not make
them per se public records referred to in the quoted rule.

Petitioner presented as witness its records officer, Maria Lourdes Magno, who testified that these public and
private documents had been gathered by and taken into the custody of the PCGG in the course of the
Commission’s investigation of the alleged ill-gotten wealth of the Marcoses. However, given the purposes for
which these documents were submitted, Magno was not a credible witness who could testify as to their
contents. To reiterate, "[i]f the writings have subscribing witnesses to them, they must be proved by those
witnesses." Witnesses can testify only to those facts which are of their personal knowledge; that is, those
derived from their own perception. Thus, Magno could only testify as to how she obtained custody of these
documents, but not as to the contents of the documents themselves.

Neither did petitioner present as witnesses the affiants of these Affidavits or Memoranda submitted to the court.
Basic is the rule that, while affidavits may be considered as public documents if they are acknowledged before
a notary public, these Affidavits are still classified as hearsay evidence. The reason for this rule is that they are
not generally prepared by the affiant, but by another one who uses his or her own language in writing the
affiant’s statements, parts of which may thus be either omitted or misunderstood by the one writing them.
Moreover, the adverse party is deprived of the opportunity to cross-examine the affiants. For this reason,
affidavits are generally rejected for being hearsay, unless the affiants themselves are placed on the witness
stand to testify thereon.143(Citations omitted)

Notably, the Sandiganbayan’s evaluation of the evidence presented by petitioner was cursory. Its main reason
for granting the Motion to Dismiss on Demurrer to Evidence was that there was no evidence to consider due to
petitioner’s failure to file its Formal Offer of Evidence. It brushed off the totality of evidence on which petitioner
built its case.

Even assuming that no documentary evidence was properly offered, this court finds it clear from the second
assailed Resolution that the Sandiganbayan did not even consider other evidence presented by petitioner
during the 19 years of trial. The Sandiganbayan erred in ignoring petitioner’s testimonial evidence without any
basis or justification. Numerous exhibits were offered as part of the testimonies of petitioner’s witnesses.

Petitioner presented both testimonial and documentary evidence that tended to establish a presumption that
respondents acquired ill-gotten wealth during respondent Fe Roa Gimenez’s incumbency as public officer and
which total amount or value was manifestly out of proportion to her and her husband’s salaries and to their
other lawful income or properties.

Petitioner presented five (5) witnesses, two (2) of which were Atty. Tereso Javier and Director Danilo R.V.
Daniel, both from the PCGG:

Petitioner presented as witnesses Atty. Tereso Javier, then Head of the Sequestered Assets Department of
PCGG, and Danilo R.V. Daniel, then Director of the Research and Development Department of PCGG, who
testified on the bank accounts and businesses owned and/ or under the control of spouses Gimenezes.144

Several exhibits excluded by the Sandiganbayan were offered as part of petitioner’s testimonial evidence:

1) Exhibit "KK"145 was offered "for the purpose of proving the assets or properties of the spouses
Ignacio B. Gimenez and Fe Roa Gimenez, and as part of the testimony of Tereso Javier."146
2) Exhibits "KK-1" to "KK-12"147 inclusive of sub-markings, were offered "for the purpose of proving the
real properties acquired by the spouses Ignacio B. Gimenez and Fe Roa Gimenez, and as part of the
testimony of Tereso Javier."148

3) Exhibits "KK-15," "KK-18," "KK-20," "KK-27," "KK-30," "KK-32" to "KK-38" and "KK-40"149 were
offered "for the purpose of proving the corporations in which Ignacio B. Gimenez has interest, and as
part of the testimony of Tereso Javier."150

4) Exhibit "KK-45"151 was offered "for the purpose of proving that the PCGG conducted an investigation
of New City Builders, Inc., Transnational Construction Corporation, and OTO Construction and
Development Corporation in relation to Ignacio B. Gimenez and Roberto O. Olanday, and as part of
the testimony of Tereso Javier."152

5) Exhibits "KK-48" to "KK-50"153 were offered "for the purpose of proving that the PCGG formally filed
notices of lis pendens with the Registers of Deeds of Taytay, Rizal, Lucena City, Quezon and San
Fabian, Pangasinan over the properties mentioned in said notices in connection with Civil Case No.
[0]007 pending with the Sandiganbayan, and as part of the testimony of Tereso Javier."154

6) Exhibits "KK-51" to "KK-52"155 and their sub-markings were offered "for the purpose of proving that
the PCGG sequestered the shares of stock in Allied Banking Corporation and Guaranteed Education,
Inc. as stated in the said writ/letter of sequestration, and as part of the testimony of Tereso Javier."156

7) Exhibits "NN" to "QQ"157 and their sub-markings were offered "for the purpose of proving that the
PCGG formally requested the Central Bank to freeze the bank accounts of the spouses Igancio [sic] B.
Gimenez and Fe Roa Gimenez and that the Central Bank, acting on said request,