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FIRST DIVISION

REPUBLIC OF THE G.R. No. 175021


PHILIPPINES, represented by
the CHIEF OF THE PHILIPPINE Present:
NATIONAL POLICE,
Petitioner, VELASCO, JR .,*
Acting Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,**
DEL CASTILLO, and
- versus - PEREZ, JJ.
Promulgated:

June 15, 2011


THI THU THUY T. DE GUZMAN,
Respondent.
x----------------------------------------------------x

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari[1] filed by Republic of the


Philippines, as represented by the Chief of the Philippine National Police (PNP),
of the September 27, 2006 Decision[2] of the Court of Appeals in CA-G.R. CV
No. 80623, which affirmed with modification the September 8, 2003
Decision[3] of the Regional Trial Court (RTC), Branch 222, of Quezon City in
Civil Case No. Q99-37717.

Respondent is the proprietress of Montaguz General Merchandise


(MGM),[4] a contractor accredited by the PNP for the supply of office and
construction materials and equipment, and for the delivery of various services
such as printing and rental, repair of various equipment, and renovation of
buildings, facilities, vehicles, tires, and spare parts.[5]

On December 8, 1995, the PNP Engineering Services (PNPES), released a


Requisition and Issue Voucher[6] for the acquisition of various building materials
amounting to Two Million Two Hundred Eighty-Eight Thousand Five Hundred
Sixty-Two Pesos and Sixty Centavos (P2,288,562.60) for the construction of a
four-storey condominium building with roof deck at Camp Crame, Quezon City.
[7]

Respondent averred that on December 11, 1995, MGM and petitioner,


represented by the PNP, through its chief, executed a Contract of
Agreement[8] (the Contract) wherein MGM, for the price of P2,288,562.60,
undertook to procure and deliver to the PNP the construction materials itemized
in the purchase order[9]attached to the Contract. Respondent claimed that after
the PNP Chief approved the Contract and purchase order,[10] MGM, on March 1,
1996, proceeded with the delivery of the construction materials, as evidenced by
Delivery Receipt Nos. 151-153,[11] Sales Invoice Nos. 038 and 041,[12] and the
Report of Public Property Purchase[13] issued by the PNPs Receiving and
Accounting Officers to their Internal Auditor Chief. Respondent asseverated that
following the PNPs inspection of the delivered materials on March 4, 1996,
[14]
the PNP issued two Disbursement Vouchers; one in the amount
of P2,226,147.26 in favor of MGM,[15] and the other, [16]in the amount
of P62,415.34, representing the three percent (3%) withholding tax, in favor of
the Bureau of Internal Revenue (BIR).[17]

On November 5, 1997, the respondent, through counsel, sent a letter dated


October 20, 1997[18] to the PNP, demanding the payment of P2,288,562.60 for
the construction materials MGM procured for the PNP under their December
1995 Contract.

On November 17, 1997, the PNP, through its Officer-in-Charge,


replied[19] to respondents counsel, informing her of the payment made to
MGM via Land Bank of the Philippines (LBP) Check No. 0000530631, [20] as
evidenced by Receipt No. 001, [21] issued by the respondent to the PNP on April
23, 1996.[22]

On November 26, 1997, respondent, through counsel, responded by


reiterating her demand[23] and denying having ever received the LBP check,
personally or through an authorized person. She also claimed that Receipt No.
001, a copy of which was attached to the PNPs November 17, 1997 letter, could
not support the PNPs claim of payment as the aforesaid receipt belonged to
Montaguz Builders, her other company, which was also doing business with the
PNP, and not to MGM, with which the contract was made.

On May 5, 1999, respondent filed a Complaint for Sum of Money against


the petitioner, represented by the Chief of the PNP, before the RTC, Branch 222
of Quezon City.[24] This was docketed as Civil Case No. Q99-37717.
The petitioner filed a Motion to Dismiss[25] on July 5, 1999, on the ground
that the claim or demand set forth in respondents complaint had already been
paid or extinguished,[26] as evidenced by LBP Check No. 0000530631 dated
April 18, 1996, issued by the PNP to MGM, and Receipt No. 001, which the
respondent correspondingly issued to the PNP. The petitioner also argued that
aside from the fact that the respondent, in her October 20, 1997 letter, demanded
the incorrect amount since it included the withholding tax paid to the BIR, her
delay in making such demand [did] not speak well of the worthiness of the cause
she espouse[d].[27]

Respondent opposed petitioners motion to dismiss in her July 12, 1999


Opposition[28]and September 10, 1999 Supplemental Opposition to Motion to
Dismiss.[29] Respondent posited that Receipt No. 001, which the petitioner
claimed was issued by MGM upon respondents receipt of the LBP check, was,
first, under the business name Montaguz Builders, an entity separate from
MGM. Next, petitioners allegation that she received the LBP check on April 19,
1996 was belied by the fact that Receipt No. 001, which was supposedly issued
for the check, was dated four days later, or April 23, 1996. Moreover, respondent
averred, the PNPs own Checking Account Section Logbook or the Warrant
Register, showed that it was one Edgardo Cruz (Cruz) who signed for the check
due to MGM, [30] contrary to her usual practice of personally receiving and
signing for checks payable to her companies.

After conducting hearings on the Motion to Dismiss, the RTC issued an


[31]
Order on May 4, 2001, denying the petitioners motion for lack of merit. The
petitioner thereafter filed its Answer,[32] wherein it restated the same allegations
in its Motion to Dismiss.

Trial on the merits followed the pre-trial conference, which was


terminated on June 25, 2002 when the parties failed to arrive at an amicable
settlement.[33]

On September 3, 2002, shortly after respondent was sworn in as a witness,


and after her counsel formally offered her testimony in evidence, Atty. Norman
Bueno, petitioners counsel at that time, made the following stipulations in open
court:

Atty. Bueno (To Court)


Your Honor, in order to expedite the trial, we will admit that this witness was
contracted to deliver the construction supplies or materials. We
will admit that she complied, that she actually delivered the
materials. We will admit that Land Bank Corporation check
was issued although we will not admit that the check was not
released to her, as [a] matter of fact, we have the copy of the
check. We will admit that Warrant Register indicated that the
check was released although we will not admit that the check
was not received by the [respondent].

Court (To Atty. Albano)

So, the issues here are whether or not the [respondent] received the check for
the payment of the construction materials or supplies and who
received the same. That is all.

Atty. Albano (To Court)

Yes, your Honor.

Court (To Atty. Albano)

I think we have an abbreviated testimony here. Proceed.[34] (Emphasis ours.)

The stipulations made by the petitioner through Atty. Bueno were in


consonance with the admissions it had previously made, also through Atty.
Bueno, in its Answer,[35] and pre-trial brief[36]:

Answer:
IX
It ADMITS the allegation in paragraph 9 of the Complaint that
[respondent] delivered to the PNP Engineering Service the construction
materials. It also ADMITS the existence of Receipt Nos. 151, 152 and 153
alleged in the same paragraph, copies of which are attached to the Complaint
as Annexes G, G-1 and G-2.[37] (Emphasis ours.)

Pre-trial Brief:

III

ADMISSIONS

3.1. Facts and/or documents admitted


For brevity, [petitioner] admit[s] only the allegations in [respondents]
Complaint and the annexes thereto that were admitted in the Answer.
[38]
(Emphases ours.)

With the issue then confined to whether respondent was paid or not, the
RTC proceeded with the trial.

Respondent, in her testimony, narrated that on April 18, 1996, she went to
the PNP Finance Center to claim a check due to one of her companies,
Montaguz Builders. As the PNP required the issuance of an official receipt upon
claiming its checks, respondent, in preparation for the PNP check she expected,
already signed Montaguz Builders Official Receipt No. 001, albeit the details
were still blank. However, upon arriving at the PNP Finance Center, respondent
was told that the check was still with the LBP, which could not yet release
it. Respondent then left for the Engineering Services Office to see Captain
Rama, along with Receipt No. 001, which she had not yet issued.[39] Respondent
claimed that after some time, she left her belongings, including her receipt
booklet, at a bench in Captain Ramas office when she went around the
Engineering Office to talk to some other people.[40] She reasoned that since she
was already familiar and comfortable with the people in the PNPES Office, she
felt no need to ask anyone to look after her belongings, as it was her normal
practice[41] to leave her belongings in one of the offices there.The next day,
respondent alleged that when she returned for the check due to Montaguz
Builders that she was not able to claim the day before, she discovered for the
first time that Receipt No. 001, which was meant for that check, was
missing. Since she would not be able to claim her check without issuing a
receipt, she just informed the releaser of the missing receipt and issued Receipt
No. 002 in its place.[42] After a few months, respondent inquired with the PNP
Finance Center about the payment due to MGM under the Contract of December
1995 and was surprised to find out that the check payable to MGM had already
been released. Upon making some inquiries, respondent learned that the check,
payable to MGM, in the amount of P2,226,147.26, was received by Cruz, who
signed the PNPs Warrant Register. Respondent admitted to knowing Cruz, as he
was connected with Highland Enterprises, a fellow PNP-accredited
contractor. However, she denied ever having authorized Cruz or Highland
Enterprises to receive or claim any of the checks due to MGM or Montaguz
Builders.[43] When asked why she had not filed a case against Cruz or Herminio
Reyes, the owner of Highland Enterprises, considering the admitted fact that
Cruz claimed the check due to her, respondent declared that there was no reason
for her to confront them as it was the PNPs fault that the check was released to
the wrong person. Thus, it was the PNPs problem to find out where the money
had gone, while her course of action was to go after the PNP, as the party
involved in the Contract.[44]

On April 29, 2003, petitioner presented Ms. Jesusa Magtira, who was then
the check releaser[45] of the PNP, to prove that the respondent received the LBP
check due to MGM, and that respondent herself gave the check to Cruz.[46] Ms.
Magtira testified that on April 23, 1996, she released the LBP check payable to
the order of MGM, in the amount of P2,226,147.26, to the respondent herein,
whom she identified in open court. She claimed that when she released the
check to respondent, she also handed her a voucher, and a logbook also known
as the Warrant Register, for signing.[47] When asked why Cruz was allowed to
sign for the check, Ms. Magtira explained that this was allowed since the
respondent already gave her the official receipt for the check, and it was
respondent herself who gave the logbook to Cruz for signing.[48]

The petitioner next presented Edgardo Cruz for the purpose of proving
that the payment respondent was claiming rightfully belonged to Highland
Enterprises.Cruz testified that Highland Enterprises had been an accredited
contractor of the PNP since 1975. In 1995, Cruz claimed that the PNPES was
tasked to construct by administration a condominium building. This meant that
the PNPES had to do all the work, from the canvassing of the materials to the
construction of the building.The PNPES allegedly lacked the funds to do this
and so asked for Highland Enterprisess help.[49] In a meeting with its accredited
contractors, the PNPES asked if the other contractors would agree to the use of
their business name[50] for a two percent (2%) commission of the purchase order
price to avoid the impression that Highland Enterprises was monopolizing the
supply of labor and materials to the PNP.[51] Cruz alleged that on April 23, 1996,
he and the respondent went to the PNP Finance Center to claim the LBP check
due to MGM. Cruz said that the respondent handed him the already signed
Receipt No. 001, which he filled up. He claimed that the respondent knew that
the LBP check was really meant for Highland Enterprises as she had already
been paid her 2% commission for the use of her business name in the concerned
transaction.[52]

On September 8, 2003, the RTC rendered its Decision, the dispositive of


which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of


[respondent] and against [petitioner] ordering the latter to pay [respondent] the
following sums:

(1) P2,226,147.26 representing the principal sum plus interest at 14%


per annum from April 18, 1996 until the same shall have been fully
paid;

(2) 20% of the sum to be collected as attorneys fees; and,

(3) Costs of suit.[53]

The RTC declared that while Cruzs testimony seemed to offer a plausible
explanation on how and why the LBP check ended up with him, the petitioner,
already admitted in its Answer, and Pre-trial Brief, that MGM, did in fact deliver
the construction materials worth P2,288,562.60 to the PNP. The RTC also
pointed out the fact that the petitioner made the same admissions in open court
to expedite the trial, leaving only one issue to be resolved: whether the
respondent had been paid or not. Since this was the only issue, the RTC said that
it had no choice but to go back to the documents and the documentary evidence
clearly indicates that the check subject of this case was never received by
[respondent].[54] In addition, the PNPs own Warrant Register showed that it was
Edgardo Cruz who received the LBP check, and Receipt No. 001 submitted by
the petitioner to support its claim was not issued by MGM, but by Montaguz
Builders, a different entity. Finally, the RTC held that Cruzs testimony, which
appeared to be an afterthought to cover up the PNPs blunder, were irreconcilable
with the petitioners earlier declarations and admissions, hence, not credit-
worthy.

The petitioner appealed this decision to the Court of Appeals, which


affirmed with modification the RTCs ruling on September 27, 2006:

WHEREFORE, the decision appealed from is AFFIRMED with


the MODIFICATION that the 14% interest per annum imposed on the
principal amount is ordered reduced to 12%, computed from November 16,
1997 until fully paid. The order for the payment of attorneys fees and costs of
the suit is DELETED.[55]

The Court of Appeals, in deciding against the petitioner, held that the
petitioners admissions and declarations, made in various stages of the
proceedings are express admissions, which cannot be overcome by allegations
of respondents implied admissions. Moreover, petitioner cannot controvert its
own admissions and it is estopped from denying that it had a contract with
MGM, which MGM duly complied with. The Court of Appeals agreed with the
RTC that the real issue for determination was whether the petitioner was able to
discharge its contractual obligation with the respondent. The Court of Appeals
held that while the PNPs own Warrant Register disclosed that the payment due
to MGM was received by Cruz, on behalf of Highland Enterprises, the PNPs
contract was clearly with MGM, and not with Highland Enterprises. Thus, in
order to extinguish its obligation, the petitioner should have directed its payment
to MGM unless MGM authorized a third person to accept payment on its behalf.

The petitioner is now before this Court, praying for the reversal of the
lower courts decisions on the ground that the Court of Appeals committed a
serious error in law by affirming the decision of the trial court.[56]

THE COURTS RULING:

This case stemmed from a contract executed between the respondent and
the petitioner. While the petitioner, in proclaiming that the respondents claim
had already been extinguished, initially insisted on having fulfilled its
contractual obligation, it now contends that the contract it executed with the
respondent is actually a fictitious contract to conceal the fact that only one
contractor will be supplying all the materials and labor for the PNP
condominium project.

Both the RTC and the Court of Appeals upheld the validity of the contract
between the petitioner and the respondent on the strength of the documentary
evidence presented and offered in Court and on petitioners own stipulations and
admissions during various stages of the proceedings.

It is worthy to note that while this petition was filed under Rule 45 of the
Rules of Court, the assertions and arguments advanced herein are those that will
necessarily require this Court to re-evaluate the evidence on record.

It is a well-settled rule that in a petition for review under Rule 45, only
questions of law may be raised by the parties and passed upon by this Court.[57]

This Court has, on many occasions, distinguished between a question of


law and a question of fact. We held that when there is doubt as to what the law is
on a certain state of facts, then it is a question of law; but when the doubt arises
as to the truth or falsity of the alleged facts, then it is a question of fact.
[58]
Simply put, when there is no dispute as to fact, the question of whether or not
the conclusion drawn therefrom is correct, is a question of law.[59] To elucidate
further, this Court, in Hko Ah Pao v. Ting[60] said:
One test to determine if there exists a question of fact or law in a given case is
whether the Court can resolve the issue that was raised without having to
review or evaluate the evidence, in which case, it is a question of law;
otherwise, it will be a question of fact. Thus, the petition must not involve
the calibration of the probative value of the evidence presented. In
addition, the facts of the case must be undisputed, and the only issue that
should be left for the Court to decide is whether or not the conclusion drawn by
the CA from a certain set of facts was appropriate.[61] (Emphases ours.)

In this case, the circumstances surrounding the controversial LBP check


are central to the issue before us, the resolution of which, will require a perusal
of the entire records of the case including the transcribed testimonies of the
witnesses. Since this is an appeal via certiorari, questions of fact are not
reviewable. As a rule, the findings of fact of the Court of Appeals are final and
conclusive[62] and this Court will only review them under the following
recognized exceptions: (1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is a grave abuse of discretion; (3) when the
finding is grounded entirely on speculations, surmises or conjectures; (4) when
the judgment of the Court of Appeals is based on misapprehension of facts; (5)
when the findings of fact are conflicting; (6) when the Court of Appeals, in
making its findings, went beyond the issues of the case and the same is contrary
to the admissions of both appellant and appellee; (7) when the findings of the
Court of Appeals are contrary to those of the trial court; (8) when the findings of
fact are conclusions without citation of specific evidence on which they are
based; (9) when the Court of Appeals manifestly overlooked certain relevant
facts not disputed by the parties and which, if properly considered, would justify
a different conclusion; and (10) when the findings of fact of the Court of
Appeals are premised on the absence of evidence and are contradicted by the
evidence on record.[63]

Although petitioners sole ground to support this petition was stated in


such a manner as to impress upon this Court that the Court of Appeals
committed an error in law, what the petitioner actually wants us to do is to
review and re-examine the factual findings of both the RTC and the Court of
Appeals.

Since the petitioner has not shown this Court that this case falls under any
of the enumerated exceptions to the rule, we are constrained to uphold the facts
as established by both the RTC and the Court of Appeals, and, consequently, the
conclusions reached in the appealed decision.

Nonetheless, even if we were to exercise utmost liberality and veer away


from the rule, the records will show that the petitioner had failed to establish its
case by a preponderance of evidence.[64] Section 1, Rule 133 of the Revised
Rules of Court provides the guidelines in determining preponderance of
evidence:

SECTION 1. Preponderance of evidence, how determined. In civil


cases, the party having the burden of proof must establish his case by a
preponderance of evidence. In determining where the preponderance or
superior weight of evidence on the issues involved lies, the court may consider
all the facts and circumstances of the case, the witnesses manner of testifying,
their intelligence, their means and opportunity of knowing the facts to which
they are testifying, the nature of the facts to which they testify, the probability
or improbability of their testimony, their interest or want of interest, and also
their personal credibility so far as the same may legitimately appear upon the
trial. The court may also consider the number of witnesses, though the
preponderance is not necessarily with the greater number.

Expounding on the concept of preponderance of evidence, this Court


in Encinas v. National Bookstore, Inc.,[65] held:

Preponderance of evidence is the weight, credit, and value of the aggregate


evidence on either side and is usually considered to be synonymous with the
term greater weight of the evidence or greater weight of the credible evidence.
Preponderance of evidence is a phrase which, in the last analysis, means
probability of the truth. It is evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.[66]

The petitioner avers that the Court of Appeals should not have relied
heavily, if not solely[67] on the admissions made by petitioners former counsel,
thereby losing sight of the secret agreement between the respondent and
Highland Enterprises, which explains why all the documentary evidence were in
respondents name.[68]

The petitioner relies mainly on Cruzs testimony to support its


allegations. Not only did it not present any other witness to corroborate Cruz,
but it also failed to present any documentation to confirm its story. It is doubtful
that the petitioner or the contractors would enter into any secret agreement
involving millions of pesos based purely on verbal affirmations. Meanwhile, the
respondent not only presented all the documentary evidence to prove her claims,
even the petitioner repeatedly admitted that respondent had fully complied with
her contractual obligations.

The petitioner argued that the Court of Appeals should have appreciated
the clear and adequate testimony of Cruz, and should have given it utmost
weight and credit especially since his testimony was a judicial admission against
interest a primary evidence which should have been accorded full evidentiary
value.[69]

The trial courts appreciation of the witnesses testimonies is entitled to the


highest respect since it was in a better position to assess their credibility.[70] The
RTC held Cruzs testimony to be not credit worthy[71] for being irreconcilable
with petitioners earlier admissions. Contrary to petitioners contentions, Cruzs
testimony cannot be considered as a judicial admission against his interest as he
is neither a party to the case nor was his admission against his own interest, but
actually against either the petitioners or the respondents interest. Petitioners
statements on the other hand, were deliberate, clear, and unequivocal and were
made in the course of judicial proceedings; thus, they qualify as judicial
admissions.[72] In Alfelor v. Halasan,[73] this Court held that:

A party who judicially admits a fact cannot later challenge that fact as judicial
admissions are a waiver of proof; production of evidence is dispensed with. A
judicial admission also removes an admitted fact from the field of
controversy. Consequently, an admission made in the pleadings cannot be
controverted by the party making such admission and are conclusive as to such
party, and all proofs to the contrary or inconsistent therewith should be
ignored, whether objection is interposed by the party or not. The allegations,
statements or admissions contained in a pleading are conclusive as against the
pleader. A party cannot subsequently take a position contrary of or inconsistent
with what was pleaded.[74]
The petitioner admitted to the existence and validity of the Contract of
Agreement executed between the PNP and MGM, as represented by the
respondent, on December 11, 1995. It likewise admitted that respondent
delivered the construction materials subject of the Contract, not once, but
several times during the course of the proceedings. The only matter petitioner
assailed was respondents allegation that she had not yet been paid. If Cruzs
testimony were true, the petitioner should have put respondent in her place the
moment she sent a letter to the PNP, demanding payment for the construction
materials she had allegedly delivered. Instead, the petitioner replied that it had
already paid respondent as evidenced by the LBP check and the receipt she
supposedly issued. This line of defense continued on, with the petitioner
assailing only the respondents claim of nonpayment, and not the rest of
respondents claims, in its motion to dismiss, its answer, its pre-trial brief, and
even in open court during the respondents testimony. Section 4, Rule 129 of the
Rules of Court states:

SECTION 4. Judicial Admissions.An admission, verbal or written,


made by a party in the course of the proceedings in the same case, does not
require proof. The admission may be contradicted only by showing that it was
made through palpable mistake or that no such admission was made.

Petitioners admissions were proven to have been made in various stages


of the proceedings, and since the petitioner has not shown us that they were
made through palpable mistake, they are conclusive as to the petitioner. Hence,
the only question to be resolved is whether the respondent was paid under the
December 1995 Contract of Agreement.

The RTC and the Court of Appeals correctly ruled that the petitioners
obligation has not been extinguished. The petitioners obligation consists of
payment of a sum of money. In order for petitioners payment to be effective in
extinguishing its obligation, it must be made to the proper person. Article 1240
of the Civil Code states:

Art. 1240. Payment shall be made to the person in whose favor the
obligation has been constituted, or his successor in interest, or any person
authorized to receive it.

In Cembrano v. City of Butuan,[75] this Court elucidated on how payment


will effectively extinguish an obligation, to wit:

Payment made by the debtor to the person of the creditor or to one


authorized by him or by the law to receive it extinguishes the obligation. When
payment is made to the wrong party, however, the obligation is not
extinguished as to the creditor who is without fault or negligence even if the
debtor acted in utmost good faith and by mistake as to the person of the
creditor or through error induced by fraud of a third person.

In general, a payment in order to be effective to discharge an


obligation, must be made to the proper person. Thus, payment must be made to
the obligee himself or to an agent having authority, express or implied, to
receive the particular payment. Payment made to one having apparent authority
to receive the money will, as a rule, be treated as though actual authority had
been given for its receipt. Likewise, if payment is made to one who by law is
authorized to act for the creditor, it will work a discharge. The receipt of
money due on a judgment by an officer authorized by law to accept it will,
therefore, satisfy the debt.[76]

The respondent was able to establish that the LBP check was not received
by her or by her authorized personnel. The PNPs own records show that it was
claimed and signed for by Cruz, who is openly known as being connected to
Highland Enterprises, another contractor. Hence, absent any showing that the
respondent agreed to the payment of the contract price to another person, or that
she authorized Cruz to claim the check on her behalf, the payment, to be
effective must be made to her.[77]

The petitioner also challenged the RTCs findings, on the ground that it
overlooked material fact and circumstance of significant weight and substance.
[78]
Invoking the doctrine of adoptive admission, the petitioner pointed out that
the respondents inaction towards Cruz, whom she has known to have claimed
her check as early as 1996, should be taken against her. Finally, the petitioner
contends that Cruzs testimony should be taken against respondent as well, under
Rule 130, Sec. 32 of the Revised Rules on Evidence, since she has not presented
any controverting evidence x x x notwithstanding that she personally heard it.[79]

The respondent has explained her inaction towards Cruz and Highland
Enterprises. Both the RTC and the Court of Appeals have found her explanation
sufficient and this Court finds no cogent reason to overturn the assessment by
the trial court and the Court of Appeals of the respondents testimony. It may be
recalled that the respondent argued that since it was the PNP who owed her
money, her actions should be directed towards the PNP and not Cruz or
Highland Enterprises, against whom she has no adequate proof.[80] Respondent
has also adequately explained her delay in filing an action against the petitioner,
particularly that she did not want to prejudice her other pending transactions
with the PNP.[81]

The petitioner claims that the RTC overlooked material fact and
circumstance of significant weight and substance,[82] but it ignores all the
documentary evidence, and even its own admissions, which are evidence of the
greater weight and substance, that support the conclusions reached by both the
RTC and the Court of Appeals.

We agree with the Court of Appeals that the RTC erred in the interest rate
and other monetary sums awarded to respondent as baseless. However, we must
further modify the interest rate imposed by the Court of Appeals pursuant to the
rule laid down in Eastern Shipping Lines, Inc. v. Court of Appeals[83]:

I. When an obligation, regardless of its source, i.e., law, contracts,


quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held
liable for damages. The provisions under Title XVIII on "Damages" of the
Civil Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of
actual and compensatory damages, the rate of interest, as well as the accrual
thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a


sum of money, i.e., a loan or forbearance of money, the interest due should be
that which may have been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money,


is breached, an interest on the amount of damages awarded may be imposed at
the discretion of the court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall begin to run
from the time the claim is made judicially or extrajudicially (Art. 1169, Civil
Code) but when such certainty cannot be so reasonably established at the time
the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages
may be deemed to have been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the amount finally
adjudged.

3. When the judgment of the court awarding a sum of money becomes


final and executory, the rate of legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality
until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.[84]

Since the obligation herein is for the payment of a sum of money, the
legal interest rate to be imposed, under Article 2209 of the Civil Code is six
percent (6%) per annum:

Art. 2209. If the obligation consists in the payment of a sum of money,


and the debtor incurs in delay, the indemnity for damages, there being no
stipulation to the contrary, shall be the payment of the interest agreed upon,
and in the absence of stipulation, the legal interest, which is six per cent per
annum.

Following the guidelines above, the legal interest of 6% per annum is to


be imposed from November 16, 1997, the date of the last demand, and 12% in
lieu of 6% from the date this decision becomes final until fully paid.

Petitioners allegations of sham dealings involving our own government


agencies are potentially disturbing and alarming. If Cruzs testimony were true,
this should be a lesson to the PNP not to dabble in spurious
transactions. Obviously, if it can afford to give a 2% commission to other
contractors for the mere use of their business names, then the petitioner is
disbursing more money than it normally would in a legitimate transaction. It is
recommended that the proper agency investigate this matter and hold the
involved personnel accountable to avoid any similar occurrence in the future.

WHEREFORE, the Petition is hereby DENIED and the Decision of the


Court of Appeals in C.A. G.R. CV No. 80623 dated September 27, 2006
is AFFIRMED with the MODIFICATION that the legal interest to be paid is
SIX PERCENT (6%) per annum on the amount of P2,226,147.26, computed
from the date of the last demand or on November 16, 1997. A TWELVE
PERCENT (12%) per annum interest in lieu of SIX PERCENT (6%) shall be
imposed on such amount upon finality of this decision until the payment thereof.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO


Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.


Associate Justice
Acting Chairperson
LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO
Associate Justice Associate Justice

JOSE PORTUGAL PEREZ


Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

PRESBITERO J. VELASCO, JR.


Associate Justice
Acting Chairperson, First Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

*
Per Special Order No. 1003 dated June 8, 2011.
**
Additional member per Special Order No. 1000 dated June 8, 2011.
[1]
Under Rule 45 of the 1997 Rules of Civil Procedure.
[2]
Rollo, pp. 9-21; penned by Associate Justice Amelita G. Tolentino with Associate Justices Portia Alio-
Hormachuelos and Arcangelita Romilla-Lontok, concurring.
[3]
CA rollo, pp. 34-37.
[4]
Id. at 43.
[5]
Records, p. 10.
[6]
Id. at 11-13.
[7]
Id. at 14.
[8]
Id. at 14-15.
[9]
Id. at 16-17.
[10]
Id. at 18.
[11]
Id. at 19-21.
[12]
Id. at 22-23.
[13]
Id. at 23A-24.
[14]
Id. at 25.
[15]
Id. at 26
[16]
Id. at 27.
[17]
Id.
[18]
Id. at 29.
[19]
Id. at 263.
[20]
Id. at 28.
[21]
Id. at 44.
[22]
Id.
[23]
Id. at 266-267.
[24]
Id. at 2-7.
[25]
Id. at 40-43.
[26]
Id. at 40.
[27]
Id. at 42.
[28]
Id. at 46-48.
[29]
Id. at 51-53.
[30]
Id. at 54.
[31]
Id. at 159-160.
[32]
Id. at 167-175.
[33]
Id. at 201-202.
[34]
TSN, September 3, 2002, pp. 8-9.
[35]
Records, pp. 167-176.
[36]
Id. at 184-190.
[37]
Id. at 170.
[38]
Id. at 186.
[39]
TSN, September 3, 2002, pp. 25-27.
[40]
TSN, December 3, 2002, pp. 15-18.
[41]
Id. at 18.
[42]
TSN, September 3, 2002, p. 31.
[43]
Id. at 10-16.
[44]
TSN, December 3, 2002, pp. 37-40.
[45]
TSN, April 29, 2003, p. 6.
[46]
Id. at 14.
[47]
Id. at 8-11.
[48]
Id. at 24-26.
[49]
Id. at 42-45.
[50]
Id. at 84.
[51]
Id. at 74-78.
[52]
Id. at 50-54.
[53]
CA rollo, p. 37.
[54]
Id. at 36.
[55]
Rollo, p. 20.
[56]
Id. at 30.
[57]
Jarantilla, Jr. v. Jarantilla, G.R. No. 154486, December 1, 2010.
[58]
Suarez v. Judge Villarama, Jr., G.R. No. 124512, June 27, 2006, 493 SCRA 74, 80.
[59]
Cucueco v. Court of Appeals, 484 Phil. 254, 264 (2004).
[60]
G.R. No. 153476, September 27, 2006, 503 SCRA 551.
[61]
Id. at 559.
[62]
Microsoft Corporation v. Maxicorp, Inc., G.R. No. 140946, September 13, 2004, 438 SCRA 224, 230.
[63]
Go v. Court of Appeals, 403 Phil. 883, 890 (2001).
[64]
Hko Ah Pao v. Ting, supra note 60 at 560.
[65]
G.R. No. 162704, November 19, 2004, 443 SCRA 293.
[66]
Id. at 302.
[67]
Rollo, p. 33.
[68]
Id.
[69]
Id.
[70]
People v. Gasacao, 511 Phil. 435, 445 (2005).
[71]
CA rollo, p. 37.
[72]
Alfelor v. Halasan, G.R. No. 165987, March 31, 2006, 486 SCRA 451, 459.
[73]
Id.
[74]
Id. at 459-460.
[75]
G.R. No. 163605, September 20, 2006, 502 SCRA 494.
[76]
Id. at 511-512.
[77]
Montecillo v. Reynes, 434 Phil. 456, 464-465 (2002).
[78]
Rollo, p. 34.
[79]
Id.
[80]
TSN, December 3, 2002, pp. 35-40.
[81]
TSN, September 3, 2002, pp. 45-47.
[82]
Rollo, p. 34.
[83]
G.R. No. 97412, July 12, 1994, 234 SCRA 78.
[84]
Id. at 95-97.
Today is Monday, February 19, 2018

Republic of the Philippines


SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 193089 July 9, 2012

ROSENA FONTELAR OGAWA, Petitioner,


vs.
ELIZABETH GACHE MENIGISHI, Respondent.

DECISION

PERLAS-BERNABE, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the March 8, 2010 Decision and June 21,
1

2010 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 86362 which affirmed with modification the September 1, 2005
2

Decision of the Regional Trial Court (RTC) of Sorsogon City, Branch 52, granting respondent’s counterclaim in the amount of
3

1,000,000.00 Yen and deleting the award of damages as well as attorney’s fees in favor of the petitioner.

The Facts

Petitioner Roseña Fontelar Ogawa and respondent Elizabeth Gache Menigishi were childhood friends and former residents of
Sorsogon City. Respondent married a Japanese national, Tomohito Menigishi (Tomohito), and lived in Japan. Sometime in June
1992, the Menigishis visited the Philippines and introduced Yashoyuki Ogawa (Yashoyuki), Tomohito’s friend, to petitioner.
Yashoyuki and petitioner eventually got married in the Philippines and thereafter, also lived in Japan.

On January 26, 2004, petitioner filed a complaint for sum of money, damages, breach of good human relation and unjust
4

enrichment before the RTC against respondent, docketed as Civil Case No. 2004-7299, alleging that the latter borrowed from her
the amounts of P15,000.00, P100,000.00 and P8,000.00, in September 2000, August 2001, and March 2003, respectively.
Unable to pay, respondent offered to sell her building and its improvements in Sorsogon City to petitioner for a consideration of
P1,500,000.00 with the agreement that her outstanding loans with petitioner be deducted from the purchase price and the
balance payable in installments.

As partial payment for the properties, petitioner remitted the following amounts to respondent: (a) P150,000.00 through the
account of her friend Emma Fulleros on October 23, 2003; and (b) P250,772.90 by way of bank remittance to respondent's
Equitable-PCI Bank Account on December 8, 2003. Having paid huge amounts and in order to protect her proprietary rights,
petitioner then demanded for the execution of the corresponding deed of sale, but respondent backed out from the deal and
reneged on her obligations.

In her Answer with Counterclaim, respondent specifically denied her indebtedness to petitioner and claimed that it was the latter
5

who owed her 1,000,000.00 Yen, equivalent to about P500,000.00, as evidenced by a receipt. In partial payment of her
indebtedness, petitioner, thus, remitted the amounts of P150,000.00 and P250,000.00 to respondent, leaving a balance of
P100,000.00. Respondent also sought reimbursement of the advances she allegedly made for the wedding expenses of
petitioner and Yashoyuki in the amount of 4,000,000.00 Yen. While she admitted offering her property for sale to petitioner,
respondent explained that the sale did not materialize as petitioner failed to produce the stipulated downpayment. By way of
counterclaim, respondent prayed for the award of 4,000,000.00 Yen, the balance of petitioner's purported loan in the amount of
P100,000.00; moral and exemplary damages; and attorney’s fees.
The RTC Ruling

Finding that respondent was indeed indebted to petitioner in the amounts of P150,000.00 and P250,772.90 or the total amount of
P400,772.90, the RTC rendered a Decision dated September 1, 2005, thus:
6

1. Ordering the defendant to pay the plaintiff the amount of P400,772.90 plus interest of 12% from the date of
filing of this case until the same shall have been paid in full.

2. Ordering the defendant to reimburse the plaintiff for the actual expenses she incurred in filing the instant case,
to wit:

a. P54,000.00 for her fare of plane tickets

b. P7,355.00 for docket fees

3. Ordering the defendant to pay the plaintiff the following amounts:

a. P25,000.00 – moral damages

b. P25,000.00 – exemplary damages

c. P50,000.00 – attorney’s fees

d. P1,000.00 – per appearance of her lawyer

SO ORDERED.

The RTC refused to give credence to respondent's testimony on her counterclaims for being incredible, inconsistent, and
contrary to human experience. It likewise disregarded the receipt presented by respondent as proof of petitioner's purported
indebtedness of 1,000,000.00 Yen.

The CA Ruling

On appeal, the CA affirmed the RTC’s awards of the sums of P150,000.00 and P250,772.90 in favor of petitioner and sustained
the denial of respondent's counterclaim of 4,000,000.00 Yen for lack of evidence. However, it gave probative value to the receipt
for 1,000,000.00 Yen and held it sufficient to establish petitioner's indebtedness to respondent, considering the purported
admission of the former's counsel as well as petitioner's own failure to specifically deny the same under oath as provided for
under Section 8, Rule 8 of the Rules of Court. Consequently, it granted respondent's counterclaim of 1,000,000.00 Yen. Finally,
having found both parties at fault, the CA deleted the awards of damages and attorney’s fees.

Issue Before The Court

In this petition, petitioner advances the question of whether the disputed receipt sufficiently established respondent's
counterclaim that petitioner owed her 1,000,000.00 Yen.

Petitioner’s Arguments

Petitioner argues that the receipt for 1,000,000 Yen is not a promissory note and as such, its due execution and genuineness
need not be denied under oath. Moreover, she denied any admission of liability that can be deduced from her counsel’s
manifestation during the trial that "the one who usually prepares the receipt is the obligor or the creditor."

Respondent’s Arguments

Respondent, in her Comment, prays for the dismissal of the petition insisting that the CA did not err in sustaining the obligation of
petitioner in her favor on the basis of the disputed receipt which the latter never denied and her counsel even admitted.

The Court’s Ruling


The Court finds merit in the petition.

At the outset, it should be emphasized that the factual findings of the trial court, when adopted and confirmed by the CA, are
binding and conclusive upon the Court and may not be reviewed on appeal. However, when the RTC and the CA differ in their
findings of fact and conclusions, as in this case, it becomes imperative to digress from this general rule and revisit the factual
circumstances surrounding the controversy. 7

In this case, the RTC and the CA gave different interpretations on the context of the receipt (Exhibit 1) executed by the parties
and arrived at incongruent findings. On one hand, the RTC considered it as having failed to establish any right on the part of
respondent to collect from petitioner the purported indebtedness of 1,000,000.00 Yen, while on the other, the CA found it
sufficient to confer liability.

A receipt is defined as a written and signed acknowledgment that money or good was delivered or received. Exhibit 1, upon
8

which respondent relies to support her counterclaim, sufficiently satisfies this definition. It reads in full:

June 13, 2003

I receive the total amount of 1,000,000 Yen (x x x)

Signed

Elizabeth Menigishi Roseña Ogawa

However, while indubitably containing the signatures of both parties, a plain reading of the contents of Exhibit 1 negates any
inference as to the nature of the transaction for which the 1,000,000 Yen was received and who between the parties is the obligor
and the obligee. What is apparent is a mere written and signed acknowledgment that money was received. There are no terms
and conditions found therein from which a right or obligation may be established. Hence, it cannot be considered an actionable
document upon which an action or defense may be founded.
9

Consequently, there was no need to deny its genuineness and due execution under oath in accordance with Section 8, Rule 8 of
the Rules of Civil Procedure which provides:

Section 8. How to contest such documents. – When an action or defense is founded upon a written instrument, copied in, or
attached to the corresponding pleading as provided in the preceding Section, the genuineness and due execution of the
instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth what he
claims to be the facts; but the requirement of an oath does not apply when the adverse party does not appear to be party to the
instrument or when compliance with an order for an inspection of the original is refused.

Corollary thereto, the manifestation made in open court by Atty. Gerona, petitioner's counsel, cannot be construed as an
admission of her liability. The pertinent testimony of respondent and the manifestation of Atty. Gerona on May 18, 2005 read:

Q: Ms. Witness, on the cross-examination, the counsel asked you how come that the signature of Rosena which was marked as
EXHIBIT "1-a" and your signature marked as EXHIBIT "1-b" are parallel to each other?

A: Because it was Rosena who made this. I was just made to confirm that she borrowed money from me.

Q: Whose handwriting are these, the wording I received One Million Yen… (interrupted)

ATTY. GERONA: (TO THE COURT)

That is admitted, Your Honor, because the one who usually prepares the receipt is the obligor or the creditor. 10

From the foregoing exchange, it cannot be clearly ascertained who between the two signatories is the obligor and obligee. Atty.
Gerona's statement that the one who usually prepares the receipt is the obligor or the creditor did not conclusively imply that
petitioner owed respondent 1,000,000.00 Yen, or vice versa. Hence, absent any other evidence to prove the transaction for which
the receipt was issued, the Court cannot consider Exhibit 1 as evidence of a purported loan between petitioner and respondent
which the former categorically denied. It is settled that the burden of proof lies with the party who asserts his/her right. In a
counterclaim, the burden of proving the existence of the claim lies with the defendant, by the quantum of evidence required by
law, which in this case is preponderance of evidence. On this score, Section 1, Rule 133 of the Revised Rules on Evidence
provides:

Section 1. Preponderance of evidence, how determined. – In civil cases, the party having the burden of proof must establish his
case by a preponderance of evidence. In determining where the preponderance of evidence or superior weight of evidence on
the issues involved lies, the court may consider all the facts and circumstance of the case, the witness’ manner of testifying, their
intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they
testify, the probability of their testimony, their interest or want of interest, and also their personal credibility so far as the same
may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not
necessarily with the greater number.

"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either side and is usually considered
to be synonymous with the term "greater weight of evidence" or "greater weight of credible evidence." 11

From the evidence on record, it is clear that respondent failed to prove her counterclaim by preponderance of evidence. 1âwphi1

In view of the foregoing, the Court cannot sustain the findings of the CA that both parties are at fault. Accordingly, the award of
12

damages granted by the RTC in favor of petitioner must be reinstated with the modification that the award of actual damages in
the amount of

P400,772.00, in the nature of a loan or forbearance of money, shall earn 12% interest per annum reckoned from the date of filing
13

of the instant complaint until the finality of this Decision. Thereafter, the judgment award inclusive of interest shall bear 12%
annual interest until fully paid.
14

WHEREFORE, the instant petition is GRANTED. The March 8, 201 0 Decision and June 21, 2010 Resolution of the Court of
Appeals are REVERSED and SET ASIDE and the September 1, 2005 Decision of the Regional Trial Court of Sorsogon City,
Branch 52 is REINSTATED with MODIFICATION ordering respondent Elizabeth Gache Menigishi to pay

petitioner Rosefia Fontelar Ogawa the amount of P400,772.00 plus 12% interest per annum reckoned from the date of filing of
the instant complaint until the finality of this Decision. Thereafter, the judgment award inclusive of interest shall bear 12% annual
interest until fully paid.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.


Associate Justice
Chairperson

DIOSDADO M. PERALTA JOSE CATRAL MENDOZA


Associate Justice Associate Justice

BIENVENIDO L. REYES*
Associate Justice

ATT E STATI O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court's Division.

PRESBITERO J. VELASCO, JR.


Associate Justice
Chairperson, Third Division

C E RTI F I CATI O N
I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Court's Division.

ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)

Footnotes

* Acting Member in lieu of Justice Roberto A. A bad, per Special Order No. 1244 dated June 26, 2012.

Penned by Associate Justice Romeo F. Barza, with Associate Justices Magdangal M. de Leon and Ruben C.
1

Ayson, concurring; rolla, pp. 35-50.

2
Id. at 51-52.

3
ld. at 64-83.

4
Id. at 53-57.

5
Id. at 58-62.

6
Id. at 121-140.

7
Microsoft Corporation v. Maxicorp, Inc., G.R. No. 140946, September 13, 2004, 438 SCRA 224-243.

8
Towne & City Development Corporation v. Court of Appeals, G.R. No. 135043, July 14, 2004, 434 SCRA 356,
363.

9
Duarte v. Duran, G.R. No. 173038, September 14, 2011.

10
TSN, May 18, 2005, pp. 33-34.

11
Amoroso v. Alegre, G.R. No. 142766, June 15, 2007, 524 SCRA 641, 652.

12
Rollo, p. 48.

13
Id. at 139.

14
Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95 and 96.

The Lawphil Project - Arellano Law Foundation


Today is Monday, February 19, 2018

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 185945 December 05, 2012
FIDELIZA J. AGLIBOT, Petitioner,
vs.
INGERSOL L. SANTIA, Respondent.
DECISION
REYES, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure seeking to annul and
set aside the Decision1 dated March I 8, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 100021, which reversed the
Decision2 dated April 3, 2007 of the Regional Trial Court (RTC) of Dagupan City, Branch 40, in Criminal Case Nos. 2006-0559-D to 2006-
0569-D and entered a new judgment. The fallo reads as follows:
WHEREFORE, the instant petition is GRANTED and the assailed Joint Decision dated April 3, 2007 of the RTC of Dagupan City,
Branch 40, and its Order dated June 12, 2007 are REVERSED AND SET ASIDE and a new one is entered ordering private respondent
Fideliza J. Aglibot to pay petitioner the total amount of ₱3,000,000.00 with 12% interest per annum from the filing of the Informations
until the finality of this Decision, the sum of which, inclusive of interest, shall be subject thereafter to 12% annual interest until fully
paid.
SO ORDERED.3
On December 23, 2008, the appellate court denied herein petitioner’s motion for reconsideration.
Antecedent Facts
Private respondent-complainant Engr. Ingersol L. Santia (Santia) loaned the amount of ₱2,500,000.00 to Pacific Lending &
Capital Corporation (PLCC), through its Manager, petitioner Fideliza J. Aglibot (Aglibot). The loan was evidenced by a Promissory Note
dated July 1, 2003, issued by Aglibot in behalf of PLCC, payable in one year subject to interest at 24% per annum. Allegedly as a
guaranty or security for the payment of the note, Aglibot also issued and delivered to Santia eleven (11) post-dated personal checks
drawn from her own demand account maintained at Metrobank, Camiling Branch. Aglibot is a major stockholder of PLCC, with
headquarters at 27 Casimiro Townhouse, Casimiro Avenue, Zapote, Las Piñas, Metro Manila, where most of the stockholders also
reside.4
Upon presentment of the aforesaid checks for payment, they were dishonored by the bank for having been drawn against
insufficient funds or closed account. Santia thus demanded payment from PLCC and Aglibot of the face value of the checks, but
neither of them heeded his demand. Consequently, eleven (11) Informations for violation of Batas Pambansa Bilang 22 (B.P. 22),
corresponding to the number of dishonored checks, were filed against Aglibot before the Municipal Trial Court in Cities (MTCC),
Dagupan City, Branch 3, docketed as Criminal Case Nos. 47664 to 47674. Each Information, except as to the amount, number and date
of the checks, and the reason for the dishonor, uniformly alleged, as follows:
That sometime in the month of September, 2003 in the City of Dagupan, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, FIDELIZA J. AGLIBOT, did then and there, willfully, unlawfully and criminally, draw, issue
and deliver to one Engr. Ingersol L. Santia, a METROBANK Check No. 0006766, Camiling Tarlac Branch, postdated November 1, 2003, in
the amount of ₱50,000.00, Philippine Currency, payable to and in payment of an obligation with the complainant, although the said
accused knew fully well that she did not have sufficient funds in or credit with the said bank for the payment of such check in full upon
its presentment, such that when the said check was presented to the drawee bank for payment within ninety (90) days from the date
thereof, the same was dishonored for reason "DAIF", and returned to the complainant, and despite notice of dishonor, accused failed
and/or refused to pay and/or make good the amount of said check within five (5) days banking days [sic], to the damage and prejudice
of one Engr. Ingersol L. Santia in the aforesaid amount of ₱50,000.00 and other consequential damages. 5
Aglibot, in her counter-affidavit, admitted that she did obtain a loan from Santia, but claimed that she did so in behalf of PLCC;
that before granting the loan, Santia demanded and obtained from her a security for the repayment thereof in the form of the
aforesaid checks, but with the understanding that upon remittance in cash of the face amount of the checks, Santia would
correspondingly return to her each check so paid; but despite having already paid the said checks, Santia refused to return them to
her, although he gave her assurance that he would not deposit them; that in breach of his promise, Santia deposited her checks,
resulting in their dishonor; that she did not receive any notice of dishonor of the checks; that for want of notice, she could not be held
criminally liable under B.P. 22 over the said checks; and that the reason Santia filed the criminal cases against her was because she
refused to agree to his demand for higher interest.
On August 18, 2006, the MTCC in its Joint Decision decreed as follows:
WHEREFORE, in view of the foregoing, the accused, FIDELIZA J. AGLIBOT, is hereby ACQUITTED of all counts of the crime of
violation of the bouncing checks law on reasonable doubt. However, the said accused is ordered to pay the private complainant the
sum of ₱3,000,000.00 representing the total face value of the eleven checks plus interest of 12% per annum from the filing of the
cases on November 2, 2004 until fully paid, attorney’s fees of ₱30,000.00 as well as the cost of suit.
SO ORDERED.6
On appeal, the RTC rendered a Decision dated April 3, 2007 in Criminal Case Nos. 2006-0559-D to 2006-0569-D, which further
absolved Aglibot of any civil liability towards Santia, to wit:
WHEREFORE, premises considered, the Joint Decision of the court a quo regarding the civil aspect of these cases is reversed
and set aside and a new one is entered dismissing the said civil aspect on the ground of failure to fulfill, a condition precedent of
exhausting all means to collect from the principal debtor.
SO ORDERED.7
Santia’s motion for reconsideration was denied in the RTC’s Order dated June 12, 2007. 8 On petition for review to the CA
docketed as CA-G.R. SP No. 100021, Santia interposed the following assignment of errors, to wit:
"In brushing aside the law and jurisprudence on the matter, the Regional Trial Court seriously erred:
1. In reversing the joint decision of the trial court by dismissing the civil aspect of these cases;
2. In concluding that it is the Pacific Lending and Capital Corporation and not the private respondent which is principally
responsible for the amount of the checks being claimed by the petitioner;
3. In finding that the petitioner failed to exhaust all available legal remedies against the principal debtor Pacific Lending and
Capital Corporation;
4. In finding that the private respondent is a mere guarantor and not an accommodation party, and thus, cannot be compelled
to pay the petitioner unless all legal remedies against the Pacific Lending and Capital Corporation have been exhausted by the
petitioner;
5. In denying the motion for reconsideration filed by the petitioner." 9
In its now assailed decision, the appellate court rejected the RTC’s dismissal of the civil aspect of the aforesaid B.P. 22 cases
based on the ground it cited, which is that the "failure to fulfill a condition precedent of exhausting all means to collect from the
principal debtor." The appellate court held that since Aglibot’s acquittal by the MTCC in Criminal Case Nos. 47664 to 47674 was upon a
reasonable doubt10 on whether the prosecution was able to satisfactorily establish that she did receive a notice of dishonor, a requisite
to hold her criminally liable under B.P. 22, her acquittal did not operate to bar Santia’s recovery of civil indemnity.
It is axiomatic that the "extinction of penal action does not carry with it the eradication of civil liability, unless the extinction
proceeds from a declaration in the final judgment that the fact from which the civil liability might arise did not exist. Acquittal will not
bar a civil action in the following cases: (1) where the acquittal is based on reasonable doubt as only preponderance of evidence is
required in civil cases; (2) where the court declared the accused’s liability is not criminal but only civil in nature[;] and (3) where the
civil liability does not arise from or is not based upon the criminal act of which the accused was acquitted." 11 (Citation omitted)
The CA therefore ordered Aglibot to personally pay Santia ₱3,000,000.00 with interest at 12% per annum, from the filing of
the Informations until the finality of its decision. Thereafter, the sum due, to be compounded with the accrued interest, will in turn be
subject to annual interest of 12% from the finality of its judgment until full payment. It thus modified the MTCC judgment, which
simply imposed a straight interest of 12% per annum from the filing of the cases on November 2, 2004 until the ₱3,000,000.00 due is
fully paid, plus attorney’s fees of ₱30,000.00 and the costs of the suit.
Issue
Now before the Court, Aglibot maintains that it was error for the appellate court to adjudge her personally liable for issuing
her own eleven (11) post-dated checks to Santia, since she did so in behalf of her employer, PLCC, the true borrower and beneficiary of
the loan. Still maintaining that she was a mere guarantor of the said debt of PLCC when she agreed to issue her own checks, Aglibot
insists that Santia failed to exhaust all means to collect the debt from PLCC, the principal debtor, and therefore he cannot now be
permitted to go after her subsidiary liability.
Ruling of the Court
The petition is bereft of merit.
Aglibot cannot invoke the benefit of excussion
The RTC in its decision held that, "It is obvious, from the face of the Promissory Note x x x that the accused-appellant signed
the same on behalf of PLCC as Manager thereof and nowhere does it appear therein that she signed as an accommodation
party."12 The RTC further ruled that what Aglibot agreed to do by issuing her personal checks was merely to guarantee the
indebtedness of PLCC. So now petitioner Aglibot reasserts that as a guarantor she must be accorded the benefit of excussion – prior
exhaustion of the property of the debtor – as provided under Article 2058 of the Civil Code, to wit:
Art. 2058. The guarantor cannot be compelled to pay the creditor unless the latter has exhausted all the property of the