G.R. No.

197731 July 6, 2015

HERMIE OLARTE y TARUG and RUBEN OLAV ARIO y MAUNAO, Petitioners,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

RESOLUTION

DEL CASTILLO, J.:

Petitioners Hermie Olarte y Tarug (Olarte) and Ruben Olavario y Maunao (Olavario), together with
Salvador Pasquiny Marco (Pasquin), were charged with the crime of frustrated homicide in an
Information that reads as follows:

That on or about September 15, 2002 in Valenzuela City and within the jurisdiction of this Honorable
Court, the above-named accused, conspiring together and mutually helping one another, without any
justifiable cause and with deliberate intent to kill, did then and there willfully, unlawfully and
feloniously stab one EUGENE VILLOSTAS y MARTINEZ, thus performing all the acts of execution
which would constitute the crime of Homicide as a consequence but which nevertheless, did not
produce it by reason or causes independent of the will of the herein accused, that is, due to the
timely, able and efficient medical attendance rendered to the victim. CONIRARYTO LAW.1

All the three accused posted2 bail. But since Pasquin jumped bail, only petitioners were arraigned on
June 25, 2003 where they pleaded not guilty to the crime charged.3 Trial thereafter ensued.

The prosecution averred that in the early morning of September 15, 2002, the victim Eugene M.
Villostas (Villostas) was fetched by his half-brother, Charlie Penilla (Penilla), from a drinking session.
On their way home, Villostas decided to buy cigarettes from a nearby videoke bar at Gen. T. de
Leon, Valenzuela City. Inside the bar, however, three men who belonged to a group then singing
and drinking suddenly stabbed him on different parts of his body. They only stopped when
bystanders started throwing stones at them. This whole incident was witnessed by Penilla who was
then only seven to eight arms length away from the crime scene.

Barangay tanods immediately responded and brought the malefactors to the Barangay Hall where
they were later identified as petitioners and their co-accused Pasquin. Meanwhile, Villostas was
rushed to the Valenzuela General Hospital where he was treated by Dr. Jolou A. Pascual (Dr.
Pascual).

During trial, Dr. Pascual testified that Villostas sustained multiple stab wounds described as follows:

Multiple Stab Wound

5cm 4th ICS anterior axillary, left 3.5 cm 5th ICS

5cm curvilinear subcostal mid axillary, right

2cm anterior shoulder, left

4cm anterior shoulder, left4

According to him, all these wounds could have caused Villostas’ death were it not for the timely
medical attention given him.5

The defense, on the other hand, alleged that at around 2:00 o’ clock in the morning of September
15, 2002, while petitioners, Pasquin and some other companions were having a drinking spree
inside a videoke bar on Gen. T. De Leon, Valenzuela City, several persons threw stones at them
hitting Olarte and another companion. Their group thus disbanded. While most of them headed
straight home, Olarte, together with a certain Joni, went to the Barangay Hall to have the stoning
incident entered in its blotter. Upon arrival thereat, however, they were surprised that Olarte,
Olavario and Pasquin were being implicated in a stabbing incident. The three were then brought to
the Valenzuela General Hospital where Villostas identified them as his assailants. Thereafter, they
were arrested and detained at the city jail.

On April 27, 2009, the Regional Trial Court (RTC) of Valenzuela City, Branch 172, rendered its
Decision6 finding petitioners guilty as charged, viz.:

WHEREFORE, judgment is hereby rendered finding Hermie Olarte y Tarug and Ruben Olavario y
Maunao guilty beyond reasonable doubt as PRINCIPALS [in] the crime of FRUSTRATED
HOMICIDE and [are] hereby sentenced x x x to suffer an imprisonment of two (2) years, 4 (four)
months and one (1) day of prision correccional as minimum to eight (8) years and one (1) day of
prision mayor medium as maximum. They are also ordered to pay jointly and solidarily the victim
Eugene Villostas y Martinez the amount of Php22,462.05 for medical expenses as actual damages,
Php20,000.00 as moral damages and costs of suit.

Since x x x accused Salvador Pasquin y Marco has not yet been arrested and arraigned despite the
issuance of order of arrest on November 8, 2002, let an alias warrant of arrest be issued against
said accused Salvador Pasquin y Marco. Meantime, let the case against him be archived to be
retrieved as soon as he is arrested.

SO ORDERED.7

Petitioners filed a Notice of Appeal8 which was granted by the RTC in its Order9 of May 13, 2009.

Before the Court of Appeals (CA),10 petitioners questioned the credibility of Villostas and Penilla as
prosecution witnesses. They pointed out inconsistencies in their testimonies respecting the victim’s
1âwphi1

degree of intoxication at the time of the incident, the kind or brand of liquor that he imbibed, and the
length of time that he had been drinking immediately prior thereto. Petitioners argued that such
inconsistencies rendered doubtful their identification as the culprits by said prosecution witnesses.

The CA, in its February 9, 2011 Decision,11debunked petitioners’ arguments as it found the
inconsistencies pointed out by them as relating to mere minor details. On the other hand, it found no
cogent reason to deviate from the findings of the trial court as regards petitioners’ culpability, thus:

WHEREFORE, premises considered, the April 27, 2009 Decision of the Regional Trial Court of
Valenzuela City, Branch 172, in Criminal Case No. 759-V-02, convicting the [petitioners] of the crime
of Frustrated Homicide is AFFIRMED.

SO ORDERED.12

Petitioners’ Motion for Reconsideration13 was likewise denied in a Resolution14 dated July 13, 2011.
Hence, this Petition for Review on Certiorari15under Rule 45 of the Rules of Court where petitioners
raise the following errors:

THE TRIAL COURT ERRED IN NOT ACQUITTING PETITIONERS OF THE CRIME

OF FRUSTRATED HOMICIDE.

THE TRIAL COURT ERRED IN FAILING TO APPRECIATE THE EVIDENCE ON

[RECORD] THAT NEITHER OF THE PETITIONERS WAS THE AUTHOR OF THE
CRIME.16

Petitioners insist that the testimonies of Villostas and Penilla are devoid of credibility as they contain
several inconsistencies. These inconsistencies rendered doubtful the said witnessess’ identification
of petitioners as the assailants. Petitioners also point out that they themselves went to the authorities
to report the incident. This, according to them, negates their involvement in the crime because had
they been the real perpetrators, they would not dare report the matter to the authorities. Moreover,
they contend that the lower courts failed to properly appreciate the testimony of one Rodel Roque
who categorically stated on the witness stand that he saw Villostas being stabbed by only one
person and that person was neither of the petitioners. In view of these, petitioners pray that the
assailed CA Decision be reversed and set aside and that they be acquitted of the crime charged.

Our Ruling

The Petition must be denied.

Suffice it to state that the errors raised by the petitioners are all "appreciation of evidence" errors or
factual errors which are not within the province of a petition for review on certiorari under Rule 45.
The Court had already explained in Batistis v. People17 that:

Pursuant to Section 3, Rule 122, and Section 9, Rule 45, of the Rules of Court, the review on appeal
of a decision in a criminal case, wherein the CA imposes a penalty other than death, reclusion
perpetua, or life imprisonment, is by petition for review on certiorari.

A petition for review on certiorari raises only questions of law. Sec. 1, Rule 45, Rules of Court,
explicitly so provides, viz[.]:

Section 1. Filing of petition with Supreme Court. – A party desiring to appeal by certiorari from a
judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax
Appeals, 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 may include an application for
a writ of preliminary injunction or other provisional remedies and shall raise only questions of law,
which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified
motion filed in the same action or proceeding at any time during its pendency.18 Here, the assigned
errors, requiring as they do a re-appreciation and reexamination of the trial evidence, are evidentiary
and factual in nature.19 The petition must therefore be denied on this basis because "one, the petition
for review thereby violates the limitation of the issues to only legal questions, and, two, the Court, not
being a trier of facts, will not disturb the factual findings of the CA, unless they were mistaken,
absurd, speculative, conflicting, tainted with grave abuse of discretion, or contrary to the findings
reached by the court of origin,"20 which was not shown to be the case here.

At any rate, the Court observes that the CA correctly affirmed the RTC’s conviction of petitioners for
frustrated homicide. The elements of frustrated homicide are: (1) the accused intended to kill his
victim, as manifested by his use of a deadly weapon in his assault; (2) the victim sustained fatal or
mortal wound/s but did not die because of timely medical assistance; and (3) none of the qualifying
circumstances for murder under Article 248 of the Revised Penal Code exist.21These elements were
proved during trial. First, direct and positive testimonies of prosecution witnesses established that
Villostas sustained seven stab wounds on vital parts of his body caused by a pointed sharp object.
Plainly, the nature, location and number of wounds sustained by him demonstrate petitioners’ intent
to kill. Next, the injuries suffered by Villostas were all fatal. Particularly critical were the 5-centimeter
wound below his left armpit, the 3.5-centimeter wound on the mid-part of his left chest which
required inserting a tube thereon to drain blood so as not to impede his breathing, and the 5-
centimeter stab wound on the right side of his abdomen which also injured his liver.22 As testified to
by Dr. Pascual, Villostas would have succumbed to death due to the said injuries if not for the timely
medical attention. Finally, no qualifying circumstance for murder was alleged in the Information to
have attended the commission of the crime.

The Court, however, notes that while the penalty imposed upon petitioners is also proper, there is a
need to modify the awards made in favor of Villostas. The actual damages awarded by the RTC was
only ₱22,642.05. Hence, there is a need to award ₱25,000.00 as temperate damages in lieu of
actual damages in a lesser amount.23Also, pursuant to prevailing jurisprudence, the award of moral
damages must be increased from ₱20,000.00 to ₱25,000.00.24 All these awards shall earn interest at
the legal rate of six percent (6%) per annum to commence from the date of finality of this Resolution
until fully paid.25

WHEREFORE, the petition is DENIED. The Decision dated February 9, 2011 of the Court of
Appeals in CA-G.R. CR No. 32640 which affirmed the April 27, 2009 Decision of the Regional Trial
Court of Valenzuela City, Branch 172 in Criminal Case No. 759-V-02 convicting petitioners Hermie
Olarte y Tarug and Ruben Olavario y Maunao of the crime of frustrated homicide is AFFIRMED with
the MODIFICATIONS that the victim Eugene Villostas y Martinez is awarded (1) temperate damages
of ₱25,000.00 in lieu of actual damages; (2) moral damages in an increased amount of ₱25,000.00;
and that (3) the said awards shall be subject to interest at the legal rate of six percent (6%) per
annum from the date of finality of this Resolution until fully paid. SO ORDERED.

MARIANO C. DEL CASTILLO

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 200773 July 8, 2015

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
ANGELINE L. DAYAOEN, AGUSTINA TAUEL,****and LAWANA T. BATCAGAN, Respondents.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 seeks to set aside the February 23, 2012 Decision2 of the
Court of Appeals (CA) in CA-G.R CV No. 92584 affirming the September 11, 2008 Amended
Decision3 of the Regional Trial Court (RTC) of La Trinidad, Benguet, Branch 63 in LRC Case No. 03-
LRC-0024.
 Factual Antecedents

As determined by the appellate court, the facts are as follows:

Appellees Angeline Dayaoen (Angeline), Agustina Taule (Agustina) and Lawana

Batcagan4 (Lawana) filed an Application for Registration5 of three parcels of land
located in Barangay Tabangaoen, La Trinidad, Benguet, described as Lots 1, 6 and
7, each with an area of 994 square meters, 390 sq. m., and 250 sq. m. respectively,
or, a total of 1,634 sq. m. under Survey Plan Psu-1-002413.6

The subject parcels of land were originally owned and possessed since pre-war time
by Antonio Pablo (Antonio), the grandfather of Dado Pablo (Dado), husband of
appellee Angeline. In 1963, Antonio gave the parcels of land in question to appellee
Angeline and Dado asa wedding gift. From that time on, they continuously occupied
and possessed the properties. In 1976 and 1977, appellee Angeline sold Lots 6 and
7 to co-appellees Agustina and Lawana, pursuant to an Affidavit of Quitclaim and a
Deed of Absolute Sale of a Portion of Unregistered Land, respectively. Since 12 June
1945, appellees and their predecessor-in-interest have been in public, open,
exclusive, uninterrupted and continuous possession thereof in the concept of an
owner. Appellees declared the questioned properties for taxation purposes. There
was no mortgage or encumbrance of any kind whatsoever affecting the said parcels
of land. Neither did any other person have an interest therein, legal or equitable, or
was in possession thereof.

On the scheduled initial hearing, appellees adduced pieces of documentary evidence

to comply with the jurisdictional requirements of notices, posting and publication.
Appellee Angeline testified on the continuous, open, public and exclusive possession
of the lands in dispute.

Trial on the merits ensued. In a Decision7dated 6 November 2007, the court a quo
granted appellees’ application for registration. Unflinching, the Office of the Solicitor
General (OSG) moved for reconsideration but failed to attain favorable relief as its
Motion was denied by the court a quoin its Order dated 11 September 2008. On even
date, the court a quo rendered the assailed Amended Decision finding appellees to
have the registrable title over the subject properties.8

LRC Case No. N-453

Previously, or in 1979, herein respondents Angeline, Agustina and Lawana filed a similar application
for registration of the herein subject property which was docketed as LRC Case No. N-453 before
the RTC La Trinidad, Branch 8. The Republic opposed the application. After trial on the merits, a
Decision9 dated December 26, 1994 was rendered dismissing the application on the ground that
respondents failed to prove that they or their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession of the subject property under a bona fide claim of
ownership since June 12, 1945 or earlier. Respondents did not appeal the said Decision; thus, it
became final and executory.

Ruling of the Regional Trial Court in LRC Case No. 03-LRC-0024

The September 11, 2008 Amended Decision in LRC Case No. 03-LRC-0024 held as follows:
Well settled is the rule that the burden of proof in land registration cases is incumbent
on the applicant who must show that he is the real and absolute owner in fee simple
of the land being applied for. x x x The applicant must present specific acts of
ownership to substantiate the claim and cannot just offer general statements which
are more conclusion of law than factual evidence of possession. Simply put, facts
constituting possession must be duly established by competent evidence. x x x

However, given the foregoing facts, as borne out by competent, reliable, concrete,
and undisputed evidence, the Court cannot conceive of any better proof of
applicants’ adverse, continuous, open, public, peaceful, uninterrupted and exclusive
possession and occupation in concept of owners. The Court finds and concludes that
the applicants have abundantly shown the specific acts that would show such nature
of their possession. In view of the totality of facts obtaining in evidence on record, the
applicants had ably complied with the burden of proof required of them by law. The
Court holds that the established facts are sufficient proof to overcome the
presumption that the lots sought to be registered form part of the public domain.
Hence, they have fully discharged to the satisfaction of the Court their burden in this
proceeding. Moreover, the Court is mindful of what the Supreme Court said in
Director of Lands v. Funtillarx x x that "The attempts of humble people to have
disposable lands they have been tilling for generations titled in their names should
not only be viewed with an understanding attitude but should, as a matter of policy,
be encouraged." For this reason, the Supreme Court limited the strict application of
the rule stated in Heirs of Amunategui v. Director of Forestry, x x x, that "In
confirmation of imperfect title cases, the applicant shoulders the burden of proving
that he meets the requirements of Section 48, Commonwealth Act No. 141, as
amended by Republic Act 1942. He must overcome the presumption that the land he
is applying for is part of the public domain but that he has an interest therein
sufficient to warrant registration in his name because of an imperfect title such as
those derived from old Spanish grants or that he has had continuous, open and
notorious possession and occupation of agricultural lands of the public domain under
a bona fide claim of acquisition of ownership for at least thirty (30) years preceding
the filing of his application." Thus, in Director of Lands v. Funtillar, the Supreme Court
liberalized the aforecited rule and stated:

The Regalian doctrine which forms the basis of our land laws and, in fact, all laws
governing natural resources is a revered and long standing principle. It must,
however, be applied together with the constitutional provisions on social justice and
land reform and must be interpreted in a way as to avoid manifest unfairness and
injustice.

Every application for a concession of public land has to be viewed in the light of its
peculiar circumstances. A strict application of the Heirs of Amunategui vs. Director of
Forestry (126 SCRA 69) ruling is warranted whenever a portion of the public domain
is in danger of ruthless exploitation, fraudulent titling, or other questionable practices.
But when an application appears to enhance the very reasons behind the enactment
of Act 496, as amended, or the Land Registration Act, and Commonwealth Act No.
141, as amended, or the Public Land Act, then their provisions should not be made
to stand in the way of their own implementation.

In the present case, there is no showing that any "portion of the public domain is in
danger of ruthless exploitation, fraudulent titling, or other questionable practices."
Instead, it is very evident from applicants’ mass of undisputed evidence that the
present application will enhance social justice considerations behind the Public Land
Law and the Land Registration Act, in the light of the incontrovertible fact that
applicant Angeline Dayaoen and her three (3) children have long established their
residential houses on the land subject of the application, which is "the policy of the
State to encourage and promote the distribution of alienable public lands as a spur to
economic growth and in line with the social justice ideal enshrined in the
Constitution"(Republic vs. Court of Appeals, G.R. No. L-62680, November 9, 1988).

In the case at bar, the tracing cloth (Diazo Polyester film) of the approved survey
plan of the land embracing the lots subject of the application was adduced in
evidence as Exhibit "H" for the applicants. At its lower left hand corner is a
certification. It states in part: "x x x. This Survey is inside the alienable and
disposable areas per Proc. No. 209, Lot-A. The land herein described is outside any
military or civil reservations. x x x" Aside from this certification, it is further certified by
Geronimo B. Fernandez, in his capacity as Supervising Geodetic Engineer I, "that
this survey is outside the Mountain State Agricultural College and it is within the
Proclamation No. 209, Lot-A." Further scrutiny of the tracing cloth plan also reveals
that the survey plan was approved by Regional Director Sulpicio A. Taeza "For the
Director of Lands."

The Court takes judicial notice of Proclamation No. 20910 issued by then President
Ramon Magsaysay on October 20, 1955. It provides:

"Upon recommendation of the Secretary of Agriculture and Natural Resources and

pursuant to the provisions of Sections 83 and 89 of Commonwealth Act No. 141, as
amended, I, RAMON MAGSAYSAY, President of the Philippines do hereby exclude
from the operation of Proclamation Nos. 99, 64, 39, 102 and 698, series of 1914,
1919, 1920, 1927 and 193[4], respectively, and declare the parcel or parcels of land
embraced therein or portions thereof situated in the Municipality of La Trinidad, Sub-
province of Benguet, Mountain Province, open to disposition under the provisions of
the Public Land Act, to wit: x x x"

Lot A, mentioned in the aforestated certifications in the tracing cloth of the approved
survey plan (Exh. "H"), is one of the three (3) lots described in the aforecited
Presidential Proclamation No. 209 opened to "disposition under the provisions of the
Public Land Act."

The categorical statement of facts in the tracing cloth of the approved survey plan
(Exh. "H"), in conjunction with the aforecited Proclamation No. 209, support the
certification that the land subject of the survey is alienable and disposable. The
certifications therein attesting that the land, which embraced Lots 1, 6 and 7 subject
of the present application, is outside the Mountain State Agricultural College
reservation, that it is within the Proclamation No. 209, LotA; that the land is alienable
and disposable – pursuant to the Proclamation No. 209, Lot-A, and that it is outside
any military or civil reservations. [This] statement of facts in the certifications in the
tracing cloth of the approved survey plan sufficiently contain all the essential factual
and legal bases for any certification that may be issued by the Department of
Environment and Natural Resources that the lots subject of the present application
are indeed alienable and disposable. More importantly, the tracing cloth of the
approved survey plan was approved by Regional Director Sulpicio A. Taeza "For the
Director of Lands." As such, the aforecited certifications in the tracing cloth of the
approved survey plan carry not only his imprimatur but also that of the Director of
Lands for whom he was acting. Thus, the approval of the survey plan was in effect
the act of the Director of Lands. Necessarily, the certifications in the approved survey
plan were [those] of the Director of Lands, not only of the Supervising Geodetic
Engineer I and Regional Director Sulpicio A. Taeza. Under Commonwealth Act No.
141, the Director of Lands is empowered to issue the approved survey plan and to
certify that the land subject thereof is alienable and disposable (Exh. "H") x x x. The
law states the powers of the Director of Lands, as follows:

Sec. 3. The Secretary of Agriculture and Commerce shall be the executive officer
charged with carrying out the provisions of this Act through the Director of Lands,
who shall act under his immediate control.

Sec. 4. Subject to said control, the Director of Lands shall have direct executive
control of the survey, classifications, lease, sale or any other form of concession or
disposition and management of the lands of the public domain, and his decisions as
to questions of fact shall be conclusive when approved by the Secretary of
Agriculture and Commerce.

Sec. 5. The Director of Lands, with the approval of the Secretary of Agriculture and
Commerce shall prepare and issue such forms, instructions, rules, and regulations
consistent with this Act, as may be necessary and proper to carry into effect the
provisions thereof and for the conduct of proceedings arising under such provisions.

Therefore, to require another certification to be issued by the Director of Lands

attesting to same facts already certified in the tracing cloth of the approved survey
plan that the lots subject of the present application for registration of titles are
alienable and disposable is a needless ceremony, a pure act of supererogation.

It is clear, therefore, that the applicants have satisfactorily complied with their burden
of proving "that the land subject of an application for registration is alienable"
considering that they have established "the existence of a positive act of the
government such as a presidential proclamation or an executive order, an
administrative action, investigation reports of Bureau of Lands investigators, and a
legislative act or statute." The certifications categorically cited Proclamation No. 209,
Lot-A, as the basis in attesting that the land, which is the subject of the survey and
present application, is alienable and disposable because it is inside Lot A opened by
the presidential proclamation "to disposition under the provisions of the Public Land
Act."

The Court finds it significant that the State has not adduced any evidence, in spite of
the fact that it has all the records, resources, and power in its command, to show that
the lots subject of the present application are not alienable and disposable part of the
public domain. Having failed to refute the evidence on the very face of the tracing
cloth of the approved survey plan (Exh. "H"), which is a public document and part of
a public record, the presumption that the certifications therein contained, attesting
that the lots subject of the present application for registration are alienable and
disposable, are true and correct have attained the status of concrete facts.

Hence, the Court now turns to resolve the sole issue of whether or not [sic] the
herein applicants are entitled to the confirmation of their titles to the lots subject of
their present application.
It has been well established that since pre-war Antonio Pablo had been in
possession and occupation of the land (TSN, Oct. 19, 2005), which is corroborated
by evidence that when the land was verbally given to applicant Angeline Dayaoen
and Dado Dayaoen as a wedding gift, the old man Antonio Pablo had already an old
hut thereon (TSN, May 29, 1984, p. 14) where the spouses stayed after their
marriage (TSN, Oct. 19, 2005, p. 9), and there were already on the land some fruit
trees, and some other plants, consisting of guavas and avocados already bearing
fruits, which he had planted thereon (TSN, May 29, 1984, pp. 12-14). The anterior
possession and occupation of Antonio Pablo of the land since pre-war should be
tacked to the possession and occupation of applicant Angeline Dayaoen, and the
latter’s possession and occupation, in turn, is tacked to the present possession and
occupation of her co-applicants, who acquired titles from her. Consequently, the
applicants are entitled to the benefits of Sec. 48(b) of C.A. 141, as amended by R.A.
1942, which provides as follows:

"Sec. 48. The following described citizens of the Philippines, occupying lands of the
public domain or claiming to own such lands or an interest therein, but whose titles
have not been perfected or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their claims and the issuance of
a certificate of title therefor under the Land Registration Act, to wit:

xxxx

(b) Those who by themselves or through their predecessors-in-interest have been in

open, continuous, exclusive, and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition of ownership, for
atleast thirty years immediately preceding the filing of the application for confirmation
of title, except when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a government grant and
shall be entitled to a certificate of title under the provisions of this chapter."

This section was amended by Presidential Decree No. 1073, which took effect on
January 25, 1977 (Republic vs. Court of Appeals, G.R. No. 48327, August 21, 1991).
Section 4 thereof provides:

Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII of the Public
Land Act are hereby amended in the sense that these provisions shall apply only to
alienable and disposable lands of the public domain which have been in open,
continuous, exclusive and notorious possession and occupation by the applicant
himself or thru his predecessor-in-interest, under a bona fide claim of acquisition of
ownership, since June 12, 1945

In the present case, it will be recalled that Antonio Pablo commenced possession
and occupation of the land subject of the application for confirmation of title since
before the Second World War. Thus, applicant Angeline Dayaoen was already in
possession and occupation of the land under bona fide claim of acquisition of
ownership for more than thirty (30) years, including the anterior possession and
occupation of Antonio Pablo, when P.D. 1073 amended Sec. 48(b) if C.A. 141, as
amended by R.A. 1942. Applicant Angeline Dayaoen already acquired vested right of
ownership over the land and, therefore, already excluded from the public domain, as
it was already a private property over which applicant Angeline Dayaoen has a
confirmable title. Republic vs. Court of Appeals(G.R. No. 48327, August 21, 1991)
held:

It is important to note that private respondents’ application for judicial confirmation of

their imperfect title was filed in 1970 and that the land registration court rendered its
decision confirming their long-continued possession of the lands here involved in
1974, that is, during the time when Section 48(c) was in legal effect. Private
respondents’ imperfect title was, in other words, perfected or vested by the
completion of the required period of possession prior to the issuance of P.D. No.
1073. Private respondents’ right in respect of the land they had possessed for thirty
(30) years could not be divested by P.D. No. 1073.

Even if Sec. 48(b) of C.A. 141 is applied in the present case in its textual form as
amended by P.D. 1073, still the present applicants are qualified thereunder to have
their titles confirmed. They have already been in possession and occupation of the
lots subject of their application for confirmation of titles under bona fide claim of
acquisition of ownership for more than thirty (30) years since before the Second
World War (or before June 12, 1945) considering that the possession and occupation
of x x x Antonio Pablo, the predecessor-in-interest of the present applicants, should
be tacked to their possession and occupation. Consequently, applicant Angeline
Dayaoen had a vested right over the lots subject of the present application when she
conveyed, transferred and delivered Lots 6 and 7, respectively, to her co-applicants.

Under Article 541 of the New Civil Code, which squarely applies to applicants’
present application, "A possessor in the concept of owner has in his favor the legal
presumption that he possesses with a just title and he cannot be obliged to show or
prove it." Clearly, therefore, since the applicant Angeline Dayaoen and her
predecessor, Antonio Pablo, have been in continuous and uninterrupted possession
of the land since before the Second World War and have been exercising acts of
ownership thereon, it is incumbent upon the State, and not the applicants, to show
that the land still forms part of the public domain. The State has utterly failed to
overcome the presumption with the sole testimony of Irene Leaño Caayas, which the
Court does not even accord any weight and credence.

The tax declaration of applicant Angeline Dayaoen and religious payment of real
property taxes lend strong corroboration to the evidence of the applicants. It is the
established jurisprudence that "While it is true that by themselves tax receipts and
declarations of ownership for taxation purposes are not incontrovertible evidence of
ownership they become strong evidence of ownership acquired by prescription when
accompanied by proof of actual possession of the property"(Republic vs. Court of
Appeals, 131 SCRA 533). In the present application, it has been concretely and
[indisputably] established that applicant Angeline Dayaoen and her predecessor
Antonio Pablo have been in actual and continuous possession of the parcel of land
embracing the lots subject of the present application.

In fine, therefore, the present applicants are entitled to have their titles confirmed
under Section 14(1) of Presidential Decree No. 1529. The Court concludes that the
applicants have indeed confirmable and registrable titles over the lots subject of the
instant application for confirmation of titles pursuant to either Sec. 48(b) of C.A. 141,
as amended by R.A. 1942, or Sec. 48(c) of C.A. 141, as amended by R.A.1942 and
P.D. 1073.
WHEREFORE, in view of the foregoing, judgment is hereby rendered GRANTING
the herein Application for Registration of the parcels of land described as follows:

Lot 1, Psu-1-002413, in the name of ANGELINE L. DAYAOEN,

particularly described as a parcel of land (Lot 1, Psu-1-002413)
situated at Brgy. of Tabangaoen, Mun. of La Trinidad, Prov. of
Benguet, Island of Luzon. Bounded on the NW., along line 1-2 by an
alley (2.00m. wide); on the NE., along line 2-3 by Morris Leaño; on
the SE., along line 3-4 by lot 2 of the plan; on the SW., along line 4-1
by Mt. State Agricultural College, T.C.T. # 7179; Beginning at a point
marked "1" on plan being S. 63 deg. 59’E., 1391.52 m. from Tri. Sta,
"TRINIDAD", La Trinidad, Benguet, thence:

N. 45 deg. 18’E., 27.25m. to point 2;

S. 40 deg. 37’E., 33.18m. to point 3;

S. 54 deg. 05’W., 37.44m. to point 4;

N. 20 deg. 50’W., 29.94m. to point of beginning.

Containing an area of NINE HUNDRED NINETY FOUR (994) SQ.

METERS, more or less.

Lot 6, Psu-1-002413, in the name of AGUSTINA TAULE, particularly

described as a parcel of land (Lot 6, Psu-1-002413) situated at Brgy.
of Tabangaoen, Mun. of La Trinidad, Prov. of Benguet, Island of
Luzon. Bounded on the SW., along line 1-2 by Mt. State Agricultural
College, T.C.T. # 7179; on the NE., along line 2-3 by Morris Leaño;
on the NE., along line 3-4 by Psu-1-000485; on the SE., along line 4-
1 by lot 7 of the plan,. Beginning at a point marked "1" on plan being
S. 64 deg. 20’E. 1382.57m. from Tri. "TRINIDAD", La Trinidad,
Benguet, thence:

N. 20 deg. 50’W., 47.27m. to point 2;

S. 45 deg. 15’E., 16.02m. to point 3;

S. 43 deg. 38’E., 24.91m. to point 4;

S. 38 deg. 20’W., 18.96m. to point of beginning.

Containing an area of THREE HUNDRED NINETY (390) SQ.

METERS, more or less.

Lot 7, Psu-1-002413, in the name of LAWANA T. BATCAGAN,

particularly described as a parcel of land (Lot 7, Psu-1-002413)
situated at Brgy. of Tabangaoen, Mun. of La Trinidad, Prov. of
Benguet, Island of Luzon. Bounded on the NW., along line 1-2 by
Psu-1-000485; on the NE., along line 2-3 by Morris Leaño; on the
SE., along line 3-4 by an alley (2.00 m. wide); on the SW., along line
 4-5 by Mt. State Agricultural College, T.C.T. # 7179; on the NW.,
along line 5-1 by lot 6 of the plan. Beginning ata point marked "1" on
plan being S. 65 deg. 02’E., 1385.03 m. from Tri. "TRINIDAD", La
Trinidad, Benguet, thence:

N. 62 deg. 02’E., 3.11m. to point 2;

S. 47 deg. 13’E., 10.58m. to point 3;

S. 44 deg. 47’W., 26.43m. to point 4;

N. 20 deg. 50’W., 10.29m. to point 5;

N. 38 deg. 20’E., 18.96m. to point of beginning.

Containing an area of TWO HUNDRED FIFTY (250) SQ. METERS,

more or less.

The decree of registration shall be issued upon attainment by this

judgment of its finality.

This Amended Decision supersedes the Decision earlier rendered by

the Court.

SO ORDERED.11

Ruling of the Court of Appeals

Petitioner filed an appeal with the CA, which was docketed as CA-G.R. CV No. 92584. Petitioner
essentially argued that the La Trinidad RTC erred in granting respondents’ application for
registration since they failed to prove that the subject property constitutes alienable and disposable
land; that the annotation on the survey plan that the subject property is alienable and disposable is
not sufficient; and that respondents failed to prove open, continuous, exclusive and notorious
possession and occupation of the subject property.

On February 23, 2012, the CA rendered the assailed Decision affirming the September 11, 2008
Amended Decision of the La Trinidad RTC, pronouncing thus:

The Appeal bears no merit.

Appellant Republic asseverates that appellees12failed to comply with the legal requirement of open,
continuous, exclusive and notorious possession and occupation of the lands applied for since 12
June 1945 or earlier as required under Section 14(1) of Presidential Decree (PD) No. 1529.13

Appellant’s asseveration does not hold sway.

Section 14(1) of PD No. 1529 provides:

"Sec. 14. Who may apply. — The following persons may file in the proper Court of First Instance x x
x an application for registration of title to land, whether personally or through their duly authorized
representatives:

(1) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since June 12, 1945, or earlier." By the
same token, Section 48(b) of Commonwealth Act (CA) No. 14114 which took effect [in] November
1936, amended by Section 4 PD No. 1073, provides:

"Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII of the Public Land Act are
hereby amended in the sense that these provisions shall apply only to alienable and disposable
lands of the public domain which have been in open, continuous, exclusive and notorious
possession and occupation by the applicant himself or thru his predecessor-in-interest, under a bona
fide claim of acquisition of ownership, since June 12, 1945."

The proceedings under the Property Registration Decree (P.D. No. 1529), and Section 48 of the
Public Land Act (C.A. No. 141 as amended by P.D. No. 1073), are the same in that both are against
the whole world, both take the nature of judicial proceedings, and both the decree of registration
issued is conclusive and final. Both proceedings are likewise governed by the same court procedure
and law of evidence.

There are three obvious requisites for the filing of an application for registration of title under Section
14 (1) – that the property in question is alienable and disposable land of the public domain; that the
applicants by themselves or through their predecessors-in-interest have been in continuous, open,
exclusive and notorious possession and occupation, and; that such possession is under a bona fide
claim of ownership since June 12, 1945 or earlier.

Withal, appellees must present specific acts of ownership to substantiate their claim and they cannot
just offer general statements which are mere conclusions of law than factual evidence of possession.
Jurisprudence dictates that a person who seeks confirmation of imperfect or incomplete title to a
piece of land on the basis of possession by himself and his predecessors-in-interest shoulders the
burden of proving by clear and convincing evidence compliance with the requirements of Section
48(b) of C.A. No. 141, as amended.

Parenthetically, case law teaches us that the determination of whether claimants were in open,
continuous, exclusive and notorious possession under a bona fide claim of ownership since 1945 as
required by law, is a question of fact. Here, We find no cogent reason to deviate from the conclusion
of the court a quo that appellees have the registrable rightowing to their and their predecessor-in-
interest continuous possession of the subject parcels of land. The foundation of such conclusion is
primarily factual. Findings of fact of the trial court are conclusive when supported by substantial
evidence on record.

Contrary to appellant’s thesis, appellees were able to prove by convincing evidence that they and
their predecessor-in-interest have been in continuous, open, exclusive and notorious possession
over the subject properties since 12 June 1945 or earlier. Appellee Angeline had personal
knowledge that her predecessor-in-interest, Antonio, owned and possessed them from pre-war time.
She and her husband Dado, tilled and cultivated the lands in question since 1963 when it was given
to them by Antonio as a wedding gift. This was corroborated by co-appellee Lawana who was a co-
employee of Antonio in 1961 at the Mountain State Agricultural College (MSAC), and witness Albert
Dimas (Albert), a resident of the adjoining lot (MSAC cottage), and witness Victor Alejandro, a
neighbor of Antonio in Camp Dangwa.
In the same vein, appellees declared the subject properties for taxation purposes. Although tax
declarations and realty tax payment of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of the possession in the concept of owner for no one in his right
mind would be paying taxes for a property that is not in his actual or at least constructive
possession. They constitute at least proof that the holder has a claim of title over the property. The
voluntary declaration of a piece of property for taxation purposes manifests not only one’s sincere
and honest desire to obtain title to the property and announces his adverse claim against the State
and all other interested parties, but also the intention to contribute needed revenues to the
Government. Such an act strengthens one’s bona fide claim of acquisition of ownership. Next,
appellant’s postulations that the disputed lands were not yet alienable and disposable and that
appellees failed to overcome the presumption that all lands form part of the public domain, carry no
weight.

xxxx

In the case at bench, appellees were able to discharge such bounden duty. The subject properties
are no longer part of public domain. Their private character is declared in the annotation of the
survey plan approved by the Department of Environment and Natural Resources through the Bureau
of Lands, Regional Office No. 1,San Fernando, La Union, viz: "The survey is inside alienable and
disposable areas per Proc. No. 209, Lot-A"; x x x The land herein described is outside any military
and civil reservations. x x x "The Supervising Geodetic Engineer of the same Office likewise certified
"x x x this survey is outside the Mountain State Agricultural College and it is within the Proclamation
No. 209, Lot-A."

We echo with approval the disquisition of the court a quo which thoroughly threshed out the issue on
the alienable and disposable character of the challenged parcels of land –

"In the case at bar, the tracing cloth (Diazo Polyester film) of the approved survey plan of the land
embracing the lots subject of the application x x x.

The Court takes judicial notice of Proclamation No. 209 issued by then President Ramon Magsaysay
on October 20, 1955. x x x

Lot A, mentioned in the aforestated certifications in the tracing cloth of the approved survey plan
(Exh. "H"), is one of the three (3) lots described in the aforecited Presidential Proclamation No. 209
opened to "disposition under the provisions of the Public Land Act."

The categorical statement of facts in the tracing cloth of the approved survey plan (Exh. "H"), in
conjunction with the aforecited Proclamation No. 209, support the certification that the land subject
of the survey is alienable and disposable. The certifications therein attesting that the land, which
embraced Lots 1, 6 and 7 subject of the present application, is outside the Mountain State
Agricultural College reservation, that it is within the Proclamation No. 209, Lot-A; that the land is
alienable and disposable – pursuant to the Proclamation No. 209, Lot-A, and that it is outside any
military or civil reservations. [This] statement of facts in the certifications in the tracing cloth of the
approved survey plan sufficiently contain[s] all the essential factual and legal bases for any
certification that may be issued by the Department of Environment and Natural Resources that the
lots subject of the present application are indeed alienable and disposable. More importantly, the
tracing cloth of the approved survey plan was approved by Regional Director Sulpicio A. Taeza "For
the Director of Lands." As such, the aforecited certifications in the tracing cloth of the approved
survey plan carry not only his imprimatur but also that of the Director of Lands for whom he was
acting. Thus, the approval of the survey plan was in effect the act of the Director of Lands.
Necessarily, the certifications in the approved survey plan were [those] of the Director of Lands, not
only of the Supervising Geodetic Engineer I and Regional Director Sulpicio A. Taeza.

The foregoing discourse is in congruity with the principle enunciated in Republic v. Serrano15wherein
the Supreme Court explicitly pronounced, viz:

"While Cayetano failed to submit any certification which would formally attest to the alienable and
disposable character of the land applied for, the Certification by DENR Regional Technical Director
Celso V. Loriega, Jr., as annotated on the subdivision plan submitted in evidence by Paulita,
constitutes substantial compliance with the legal requirement. It clearly indicates that Lot 249 had
been verified as belonging to the alienable and disposable area as early as July 18, 1925.

The DENR certification enjoys the presumption of regularity absent any evidence to the contrary. It
bears noting that no opposition was filed or registered by the Land Registration Authority or the
DENR to contest respondents’ applications on the ground that their respective shares of the lot are
inalienable. There being no substantive rights which stand to be prejudiced, the benefit of the
Certification may be equitably extended in favor of respondents.

In précis, We discern no reversible error committed by the court a quo.

WHEREFORE, the Appeal is hereby DENIED. The Amended Decision dated 11 September 2008 of
the Regional Trial Court, First Judicial Region, La Trinidad, Benguet, Branch 63, in LRC No. 03-
LRC-0024, is AFFIRMED.

SO ORDERED.16

Hence, the present Petition.

Issues

In a November 25, 2013 Resolution,17 this Court resolved to give due course to the Petition, which
contains the following assignment of errors:

THE COURT OF APPEALS SERIOUSLY MISAPPRECIATED THE FACTS AS WELL AS MADE

FINDINGS WHICH ARE INCONSISTENT WITH, OR NOT SUPPORTED BY, THE EVIDENCE ON
RECORD. LIKEWISE, IT GRAVELY MISAPPLIEDTHE LAWS AND JURISPRUDENCE, AS
FOLLOWS:

(a) The land registration court gravely erred in granting the application for registration of the
three (3) subject lots despite respondents’ utter failure to prove that the said lots are
alienable and disposable, a mere annotation on the survey plan that the said lots are
alienable and disposable being insufficient to prove alienability;

(b) Respondents’ evidence is utterly insufficient to prove open, continuous, exclusive and
notorious occupation and possession by themselves and their predecessors-in-interest since
June 12, 1945, or earlier.18

Petitioner’s Arguments

In its Petition and Reply19 seeking reversal of the assailed CA decision and the dismissal of
respondents’ application for registration in LRC Case No. 03-LRC-0024, petitioner argues that
respondents failed to satisfy the legal requirements relative to proof of the alienability of the subject
land and continuous, open, exclusive and notorious possession thereof. Particularly, petitioner
claims that it was erroneous for the trial and appellate courts to consider as substantial compliance
the certification or annotation in the survey plan that the subject land is alienable and disposable;
that respondents did not present in court the public officials who issued the said
certification/annotation in order that they may authenticate the same; that respondents failed to
establish the existence of a positive act of government declaring that the subject land is alienable
and disposable; that respondents failed to secure a government certification that the subject land
constitutes alienable and disposable land of the public domain; that the trial court erred in taking
judicial notice of Proclamation 209, as the exact boundaries of the lots covered by said law, as well
as that of the subject land, are not a matter of judicial knowledge; that respondents have not shown
that their predecessors-in-interest were in continuous, open, exclusive and notorious possession of
the land for 30 years or since June 12, 1945 or earlier; that respondents’ possession is not genuine;
that the trial court erred in relying on the testimonial evidence taken in LRC Case No. N-453 since
the transcripts of stenographic notes in said case were not submitted to the court; and that
respondents’ tax declarations and receipts do not constitute proof of adverse possession or
ownership of the subject land.

Respondents’ Arguments

In their Comment,20 respondents contend that, as correctly found by the trial and appellate courts, the
annotations and certifications in the approved survey plan substantially comply with the legal
requirement for a certification as to the alienability of the subject land. They cite as follows:

Third. The approved survey plan (Exh. "H") of the respondents contain certifications
attesting to the fact that the three (3) lots, among others, which are the subject of
their application for title, are within the parcel of land described as Lot A in
Presidential Proclamation 209 of the late President Ramon Magsaysay excluded
from the Mountain State Agricultural College (now Benguet State University) and
released for disposition; x x x The certifications are found at the foot of the approved
survey plan (Exh. "H"), which, for ready reference, are here quoted:

Note:

All corners not otherwise described are P.S. cyl. Conc. Mons. 15x60
cm. This survey is for registration purposes and should not be subject
of a public land application unless declared public land by a
competent court. This survey is claimed by Irene L. Ca-aya –
representing the Hrs. of M. Leaño. This survey is inside the alienable
& disposable area as per Proc. No. 209, Lot A. The land herein
described is outside any military or civil registrations. Tax declaration
no. 4317 of real property has been submitted as part of the survey-
returns.

- CERTIFICATION -

I hereby certify that this survey is outside the Mountain State

Agricultural College and it is within the Proclamation No. 209, Lot A.

(Signed)
GERONIMO B. FERNANDEZ
Superv. Geodetic Engineer - I
 In recommending approval of the survey plan, Laurentino P. Baltazar, Regional
Chief, Surveys Division, of the Regional Lands Office No. 1, Bureau of Lands, then
Department of Natural Resources (now Department of Environment and Natural
Resources), at San Fernando, La Union, certified:

I certify that the complete survey returns of the herein described

survey, which are on file in this Office, were verified and found to
conform with pertinent laws of the Philippines and with applicable
regulations of the Bureau of Lands. In view thereof, approval of the
plan is hereby recommended.

(Signed)
LAURENTINO P. BALTAZAR
Regional Chief, Survey Division

Sulpicio A. Taeza, Regional Director, Regional Lands Office No. 1, Bureau of Lands,
then Department of Natural Resources (now Department of Environment and Natural
Resources), at San Fernando, La Union, approved the survey and plan (Exh. "H")
"For the Director of Lands." The survey plan (Exh. "H") was approved on April 10,
1976. Subsequent thereto, or on August 18, 1977, the sketch plan of Mr. Edilberto
Quiaoit (Exh. "P" and Exh. "Z" and series) was prepared. It contains this certification
of District Land Officer Amador Roxas of the Bureau of Lands at the foot thereof, to
wit:

CERTIFICATION

I hereby certify that this sketch plan is true and correct as plotted from
the technical descriptions of Lot 954, GSS-157, & Lots 1-7, PSU-1-
002413 which are on file in this Office.

Issued upon request of Mr. Lawana Batcagan in connection with

Administrative Case No. (N) Angeline Dayaoen et al. vs. Morris
Leaño et al.

… Bu. Of Lands, Baguio City August 18, 1977

(Signed)
AMADOR P. ROXAS
District Land Officer21

Respondents add that, as correctly held by the trial and appellate courts, they have satisfactorily
proved their continuous, open, exclusive and notorious possession of the subject land; that their
predecessors-in-interest occupied the land as early as during the Japanese occupation, or clearly
prior to June 12, 1945; and that petitioner’s evidence should not be believed for being biased.

Our Ruling

The Court grants the Petition.

The trial and appellate courts seriously erred in declaring that the annotation in the tracing cloth of
the approved survey plan (Exh. "H") and the certifications therein constitute substantial compliance
with the legal requirement on presentation of a certificate of land classification status or any other
proof that the subject land is alienable and disposable. We cannot subscribe to such notion.

Under the Regalian doctrine, all lands of the public domain belong to the State. The classification
and reclassification of such lands are the prerogative of the Executive Department. The President
may at any time transfer these public lands from one class to another.22

While in 1955 the President – through Presidential Proclamation No. 209 – declared particular lands
in Baguio City as alienable and disposable, they may have been re-classified by the President
thereafter. This is precisely the reason why an applicant for registration of title based on an
executive proclamation is required to present evidence on the alienable and disposable character of
the land applied for, such as a certificate of land classification status from the Department of
Environment and Natural Resources (DENR), which only the Community Environment and Natural
Resources Officer23 (CENRO) and the Provincial Environment and Natural Resources
Officer24(PENRO) are authorized to issue under DENR Administrative Order No. 38,25 series of 1990
(DAO 38).

In Republic v. Cortez,26 the Court made the following pronouncement:

It must be stressed that incontrovertible evidence must be presented to establish that the land
subject of the application is alienable or disposable.
1âwphi 1

In the present case, the only evidence to prove the character of the subject lands as required by law
is the notation appearing in the Advance Plan stating in effect that the said properties are alienable
and disposable. However, this is hardly the kind of proof required by law. To prove that the land
subject of an application for registration is alienable, an applicant must establish the existence of a
positive act of the government such as a presidential proclamation or an executive order, an
administrative action, investigation reports of Bureau of Lands investigators, and a legislative actor
statute. The applicant may also secure a certification from the Government that the lands applied for
are alienable and disposable. In the case at bar, while the Advance Plan bearing the notation was
certified by the Lands Management Services of the DENR, the certification refers only to the
technical correctness of the survey plotted in the said plan and has nothing to do whatsoever with
the nature and character of the property surveyed. Respondents failed to submit a certification from
the proper government agency to prove that the lands subject for registration are indeed alienable
and disposable. (Emphasis in the original)

Similarly, in Republic v. Roche, the Court declared that:

Respecting the third requirement, the applicant bears the burden of proving the status of the land. In
this connection, the Court has held that he must present a certificate of land classification status
issued by the Community Environment and Natural Resources Office (CENRO) or the Provincial
Environment and Natural Resources Office (PENRO) of the DENR. He must also prove that the
DENR Secretary had approved the land classification and released the land as alienable and
disposable, and that it is within the approved area per verification through survey by the CENRO or
PENRO. Further, the applicant must present a copy of the original classification approved by the
DENR Secretary and certified as true copy by the legal custodian of the official records. These facts
must be established by the applicant to prove that the land is alienable and disposable. (Emphasis in
the original)

Here, Roche did not present evidence that the land she applied for has been classified as alienable
or disposable land of the public domain. She submitted only the survey map and technical
description of the land which bears no information regarding the land’s classification. She did not
bother to establish the status of the land by any certification from the appropriate government
agency. Thus, it cannot be said that she complied with all requisites for registration of title under
Section 14(1) of P.D. 1529.

The annotation in the survey plan presented by Cortez is not the kind of evidence required bylaw as
proof that the subject property forms part of the alienable and disposable land of the public domain.
Cortez failed to present a certification from the proper government agency as to the classification of
the subject property. Cortez likewise failed to present any evidence showing that the DENR
Secretary had indeed classified the subject property as alienable and disposable. Having failed to
present any incontrovertible evidence, Cortez’ claim that the subject property forms part of the
alienable and disposable lands of the public domain must fail. (Emphasis supplied)

Later, another pronouncement was made in Fortuna v. Republic,27 stating thus:

Under Section 6 of the PLA,28 the classification and the reclassification of public lands are the
prerogative of the Executive Department. The President, through a presidential proclamation or
executive order, can classify or reclassify a land to be included or excluded from the public domain.
The Department of Environment and Natural Resources (DENR) Secretary is likewise empowered
by law to approve a land classification and declare such land as alienable and disposable.
Accordingly, jurisprudence has required that an applicant for registration of title acquired through a
public land grant must present incontrovertible evidence that the land subject of the application is
alienable or disposable by establishing the existence of a positive act of the government, such as a
presidential proclamation or an executive order; an administrative action; investigation reports of
Bureau of Lands investigators; and a legislative act or a statute.

In this case, the CA declared that the alienable nature of the land was established by the notation in
the survey plan, which states:

This survey is inside alienable and disposable area as per Project No. 13 L.C. Map No. 1395
certified August 7, 1940. It is outside any civil or military reservation.

It also relied on the Certification dated July 19, 1999 from the DENR Community Environment and
Natural Resources Office (CENRO) that "there is, per record, neither any public land application filed
nor title previously issued for the subject parcel[.]" However, we find that neither of the above
documents is evidence of a positive act from the government reclassifying the lot as alienable and
disposable agricultural land of the public domain.

Mere notations appearing in survey plans are inadequate proof of the covered properties’ alienable
and disposable character. These notations, at the very least, only establish that the land subject of
the application for registration falls within the approved alienable and disposable area per verification
through survey by the proper government office. The applicant, however, must also present a copy
of the original classification of the land into alienable and disposable land, as declared by the DENR
Secretary or as proclaimed by the President. In Republic v. Heirs of Juan Fabio, the Court ruled that

[t]he applicant for land registration must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as alienable and disposable, and that the
land subject of the application for registration falls within the approved area per verification through
survey by the PENRO or CENRO. In addition, the applicant must present a copy of the original
classification of the land into alienable and disposable, as declared by the DENR Secretary, or as
proclaimed by the President.
The survey plan and the DENR-CENRO certification are not proof that the President or the DENR
Secretary has reclassified and released the public land as alienable and disposable. The offices that
prepared these documents are not the official repositories or legal custodian of the issuances of the
President or the DENR Secretary declaring the public land as alienable and disposable.

For failure to present incontrovertible evidence that Lot No. 4457 has been reclassified as alienable
and disposable land of the public domain though a positive act of the Executive Department, the
spouses Fortuna’s claim of title through a public land grant under the PLA should be denied.
(Emphasis supplied and/or in the original)

Yet again, in another subsequent decision of this Court in Remman Enterprises, Inc. v. Republic,29it
was held that –

The burden of proof in overcoming the presumption of State ownership of the lands of the public
domain is on the person applying for registration, who must prove that the properties subject of the
application are alienable and disposable. Even the notations on the survey plans submitted by the
petitioner cannot be admitted as evidence of the subject properties' alienability and disposability.
Such notations do not constitute incontrovertible evidence to overcome the presumption that the
subject properties remain part of the inalienable public domain. (Emphasis supplied)

Thus, while judicial notice of Presidential Proclamation No. 209 may be taken, the DENR certificate
of land classification status or any other proof of the alienable and disposable character of the land
may not be dispensed with, because it provides a more recent appraisal of the classification of the
land as alienable and disposable, or that the land has not been re-classified in the meantime. The
applicable law – Section 14(1) of Presidential Decree No. 1529 – requires that the property sought to
be registered is alienable and disposable at the time the application for registration of title is
filed;30 one way of establishing this material fact is through the DENR certificate of land classification
status which is presumed to be the most recent appraisal of the status and character of the property.

The ruling in Republic v. Serrano31 cannot be controlling. Instead, We must apply the
pronouncements in Republic v. Cortez, Fortuna v. Republic, and Remman Enterprises, Inc. v.
Republic, as they are more recent and in point. Besides, these cases accurately ratiocinate that such
notations or certifications in approved survey plans refer only to the technical correctness of the
surveys plotted in these plans and have nothing to do whatsoever with the nature and character of
the properties surveyed, and that they only establish that the land subject of the application for
registration falls within the approved alienable and disposable area per verification through survey by
the proper government office; they do not indicate at all that the property sought to be registered is
alienable and disposable at the time the application for registration of title is filed.

On the issue of continuous, open, exclusive and notorious possession, however, there appears to be
no reason to deviate from the identical findings of fact of the trial court and the CA, which are rooted
in the testimonies of the respondents and their witnesses - categorical declarations which petitioner
has failed to refute. We adopt the findings of the trial court, to wit:

It has been well established that since pre-war Antonio Pablo had been in possession and
occupation of the land (TSN, Oct. 19, 2005), which is corroborated by evidence that when the land
was verbally given to applicant Angeline Dayaoen and Dado Dayaoen as a wedding gift, the old man
Antonio Pablo had already an old hut thereon (TSN, May 29, 1984, p. 14) where the spouses stayed
after their marriage (TSN, Oct. 19, 2005, p. 9), and there were already on the land some fruit trees,
and some other plants, consisting of guavas and avocados already bearing fruits, which he had
planted thereon (TSN, May 29, 1984, pp. 12-14). The anterior possession and occupation of Antonio
Pablo of the land since pre-war should be tacked to the possession and occupation of applicant
Angeline Dayaoen, and the latter's possession and occupation, in turn, is tacked to the present
possession and occupation of her co-applicants, who acquired titles from her.32

Thus, while respondents have complied with most of the requirements in connection with their
application for registration, they have not sufficiently shown that the property applied for is alienable
and disposable at the time their application for registration was filed. The Court is left with no
alternative but to deny their application for registration. To be sure, the nation's interests will be best
served by a strict adherence to the provisions of the land registration laws.33 WHEREFORE, the
Petition is GRANTED. The February 23, 2012 Decision of the Court of Appeals in CA-G.R. CV No.
92584 and the September 11, 2008 Amended Decision of the Regional Trial Court of La Trinidad,
Benguet, Branch 63 in LRC Case No. 03-LRC-0024 are REVERSED and SET ASIDE. Respondents'
application for registration in LRC Case No. 03-LRC-0024 is ordered DISMISSED.

SO ORDERED.

MARIANO C. DEL CASTILLO

G.R. No. 175188 July 15, 2015

COMMISSIONER OF INTERNAL REVENUE,Petitioner,

vs.
LA TONDENA DISTILLERS, INC. (LTDI [now GINEBRA SAN MIGUEL], Respondent.

DECISION

DEL CASTILLO, J.:

The transfer of real property to a surviving corporation pursuant to a merger is not subject to
Documentary Stamp Tax (DST).1

This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the September 26,
2006 Decision3 and the October 31, 2006 Resolution4 of the Court of Tax Appeals (CTA) in C.T.A.
EB No. 178.

Factual Antecedents

On September 17, 2001, respondent La Tondeña Distillers, Inc. entered into a Plan of Merger5 with
Sugarland Beverage Corporation (SBC), SMC Juice, Inc. (SMCJI), and Metro Bottled Water
Corporation (MBWC).6 As a result of the merger, the assets and liabilities of the absorbed
corporations were transferred to respondent, the surviving corporation.7 Respondent later changed
its corporate name to Ginebra San Miguel, Inc. (GSMI).8

On September 26, 2001, respondent requested for a confirmation of the tax-free nature of the said
merger from the Bureau of Internal Revenue (BIR).9

On November 5, 2001, the BIR issued a ruling stating that pursuant to Section 40(C)(2)10 and
(6)(b)11 of the 1997 National Internal Revenue Code (NIRC), no gain or loss shall be recognized by
the absorbed corporations as transferors of all assets and liabilities.12 However, the transfer of
assets, such as real properties, shall be subject to DST imposed under Section 19613 of the NIRC.14
Consequently, on various dates from October 31, 2001 to November 15, 2001, respondent paid to
the BIR the following DST, to wit:

DST
Property Locations Total Assets
Payments

A. Metro Bottled Water Corp.

General Trias, Cavite 326,508,953.0015 4,897,635.00

Mandaue City, Cebu 14,078,381.00 211,185.00

Pavia, Iloilo 10,644,861.00 159,675.00

B. Sugarland Beverage Corp.

Navotas, Metro Manila 171,790,790.00 2,576,865.00

Imus, Cavite 218,114,261.00 3,272,175.00

Pine Street, Mandaluyong 201,562,148.00 3,023,445.00

Totals 942,729,393.00 14,140,980.00 16

On October 14, 2003, claiming that it is exempt from paying DST, respondent filed with petitioner
Commissioner of Internal Revenue (CIR) an administrative claim for tax refund or tax credit in the
amount of 14,140,980.00, representing the DST it allegedly erroneously paid on the occasion of the
merger.17

On the same day, respondent filed with the CTA a Petition for Review, docketed as C.T.A. Case No.
6796 and raffled to the Second (2nd) Division of the CTA.18

Ruling of the Court of Tax Appeals Division

On January 6, 2006, the 2nd Division of the CTA rendered a Decision19 finding respondent entitled to
its claim for tax refund or tax credit in the amount of 14,140,980.00, representing its erroneously paid
DST for the taxable year 2001.20 The 2nd Division of the CTA ruled that Section 196 of the NIRC
does not apply because there is no purchaser or buyer in the case of a merger.21 Citing Section
8022 of the Corporation Code of the Philippines, the 2nd Division of the CTA explained that the assets
of the absorbed corporations were not bought or purchased by respondent but were transferred to
and vested in respondent as an inherent legal consequence of the merger, without any further act or
deed.23 It also noted that any doubts as to the tax-free nature of the merger had been already
removed by the subsequent enactment of Republic Act No. (RA) 9243,24 which amended Section
19925of the NIRC by specifically exempting from the payment of DST the transfer of property
pursuant to a merger.26 Aggrieved, petitioner moved for reconsideration but the 2nd Division of the
CTA denied the same in a Resolution dated April 4, 2006.27

Unfazed, petitioner elevated the matter to the CTA En Banc via a Petition for Review, docketed as
C.T.A.EB No. 178.

Ruling of the Court of Tax Appeals En Banc

On September 26, 2006, the CTA En Banc rendered the assailed Decision, finding no reversible
error on the part of the 2nd Division of the CTA in granting respondent’s claim for tax refund or tax
credit.28 The CTA En Banc opined that Section 196 of the NIRC does not apply to a merger as the
properties subject of a merger are not sold, but are merely absorbed by the surviving corporation.29 In
other words, the properties are transferred by operation of law, without any further act or deed.30

Petitioner sought reconsideration of the assailed Decision.

On October 31, 2006, the CTA En Banc issued the assailed Resolution, denying petitioner’s motion
for reconsideration.31

Issue

Hence, petitioner filed the instant Petition for Review on Certiorari raising the sole issue of whether
the CTA En Banc erred in ruling that respondent is exempt from payment of DST.32Petitioner’s
Arguments

Petitioner posits that DST is levied on the exercise of the privilege to convey real property regardless
of the manner of conveyance.33 Thus, it is imposed on all conveyances of realty, including realty
transfer during a corporate merger.34 As to the subsequent enactment of RA 9243, petitioner claims
that respondent cannot benefit from it as laws apply prospectively.35Respondent’s Arguments

Respondent, on the other hand, contends that DST is imposed only on conveyances, deeds,
instruments, or writing, where realty sold shall be conveyed to a purchaser or buyer.36 In this case,
there is no purchaser or buyer as a merger is neither a sale nor a liquidation of corporate property
but a consolidation of properties, powers, and facilities of the constituent companies.37

Our Ruling

The Petition must fail.

In Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation,38 the Supreme Court
already ruled that Section 196of the NIRC does not include the transfer of real property from one
corporation to another pursuant to a merger. It explained that:

[W]e do not find merit in petitioner’s contention that Section 196 covers all transfers and
conveyances of real property for a valuable consideration. A perusal of the subject provision would
clearly show it pertains only to sale transactions where real property is conveyed to a purchaser for a
consideration. The phrase "granted, assigned, transferred or otherwise conveyed" is qualified by the
word "sold" which means that documentary stamp tax under Section 196 is imposed on the transfer
of realty by way of sale and does not apply to all conveyances of real property. Indeed, as correctly
noted by the respondent, the fact that Section 196 refers to words "sold", "purchaser" and
"consideration" undoubtedly leads to the conclusion that only sales of real property are contemplated
therein.

Thus, petitioner obviously erred when it relied on the phrase "granted, assigned, transferred or
otherwise conveyed" in claiming that all conveyances of real property regardless of the manner of
transfer are subject to documentary stamp tax under Section 196. It is not proper to construe the
meaning of a statute on the basis of one part. x x x

xxxx
It should be emphasized that in the instant case, the transfer of SPPC’s real property to respondent
was pursuant to their approved plan of merger. In a merger of two existing corporations, oneof the
1âw phi 1

corporations survives and continues the business, while the other is dissolved, and all its rights,
properties, and liabilities are acquired by the surviving corporation. Although there is a dissolution of
the absorbed or merged corporations, there is no winding up of their affairs or liquidation of their
assets because the surviving corporation automatically acquires all their rights, privileges, and
powers, as well as their liabilities. Here, SPPC ceased to have any legal personality and respondent
PSPC stepped into everything that was SPPC’s, pursuant to the law and the terms of their Plan of
Merger.

Pertinently, a merger of two corporations produces the following effects, among others:

Sec. 80. Effects of merger or consolidation. – x x x

xxxx

4. The surviving or the consolidated corporation shall thereupon and thereafter possess all the
rights, privileges, immunities and franchises of each of the constituent corporations; and all property,
real or personal, and all receivables due on whatever account, including subscriptions to shares and
other choses in action, and all and every other interest of, or belonging to, or due to each constituent
corporations, shall be taken and deemed to be transferred to and vested in such surviving or
consolidated corporation without further act or deed;

In a merger, the real properties are not deemed "sold" to the surviving corporation and the latter
could not be considered as "purchaser" of realty since the real properties subject of the merger were
merely absorbed by the surviving corporation by operation of law and these properties are deemed
automatically transferred to and vested in the surviving corporation without further act or deed.
Therefore, the transfer of real properties to the surviving corporation in pursuance of a merger is not
subject to documentary stamp tax. As stated at the outset, documentary stamp tax is imposed only
on all conveyances, deeds, instruments or writing where realty sold shall be conveyed to a
purchaser or purchasers. The transfer of SPPC’s real property to respondent was neither a sale nor
was it a conveyance of real property for a consideration contracted to be paid as contemplated
under Section 196 of the Tax Code. Hence, Section 196 of the Tax Code is inapplicable and
respondent is not liable for documentary stamp tax.39 (Emphasis in the original)

Following the doctrine of stare decisis, which dictates that when a court has reached a conclusion in
one case, it should be applied to those that follow if the facts are substantially the same, even
though the parties may be different,40 we find that respondent is not liable for DST as the transfer of
real properties from the absorbed corporations to respondent was pursuant to a merger. And having
complied with the provisions of Sections 204(C)41 and 22942 of the NIRC, we agree with the CTA that
respondent is entitled to a refund of the DST it erroneously paid on various dates between October
31, 2001 to November 15, 2001 in the total amount of 14,140,980.00.

Likewise without merit is petitioner’s contention that respondent cannot claim exemption under RA
9243 as this was enacted only in 2004 or after respondent’s tax liability accrued. To be clear,
respondent did not file its claim for tax refund or tax credit based on the exemption found in RA
9243. Rather, it filed a claim for tax refund or tax credit on the ground that Section 196 of the NIRC
does not include the transfer of real property pursuant to a merger. In fact, the ratio decidendi (or
reason for the decision) in Pilipinas Shell Petroleum Corporation43 was based on Section 196 of the
NIRC, in relation to Section 80 of the Corporation Code, not RA 9243. In that case, RA 9243 was
mentioned only to emphasize that "the enactment of the said law now removes any doubt and had
made clear that the transfer of real properties as a consequence of merger or consolidation is not
subject to [DST]."44

All told, we find no error on the part of the CTA in granting respondent's claim for tax refund or tax
credit in the amount of ₱14,140,980.00, representing its erroneously paid DST for the taxable year
2001.

In closing, we must stress that taxes must not be imposed beyond what the law expressly and
clearly declares as tax laws must be construed strictly against the State and liberally in favor of the
taxpayer.45

WHEREFORE, the Petition is hereby DENIED. The assailed September 26, 2006 Decision and the
October 31, 2006 Resolution of the Court of Tax Appeals in C.T.A. EB No. 178 are hereby
AFFIRMED.

SO ORDERED

A.M. No. P-07-2293 July 15, 2015

(Formerly A.M No. 06-12-411-MTC)

OFFICE OF THE COURT ADMINISTRATOR,Complainant,

vs.
JOEBERT C. GUIAN, former Clerk of Court, Bulan, Sorsogon, Respondent.

RESOLUTION

DEL CASTILLO, J.:

Clerks of courts are custodians of the court's funds and revenues. Any delay in its remittance, or any
shortages in the amounts, shall make the clerk of court administratively liable. Respondent Joebert
C. Guan (Guan), former Clerk of Court of Municipal Trial Court (MTC), Bulan, Sorsogon, was found
remiss in his duties and is accordingly penalized.

Factual Background

A financial audit of the books of accounts of MTC, Bulan, Sorsogon covering the period July 28,
1993 to August 31, 2004 disclosed that: (1) some collections were not properly and accurately
recorded in the cashbooks; (2) there were shortages in the Judiciary Development Fund (JDF) and
Special Allowance for the Judiciary Fund in the amounts of ₱48,207.10 and ₱5,l 16.00, respectively;
p~ (3) the financial reports on the JDF, General/Special Allowance for the Judiciary Fund (SAJF) and
Fiduciary Fund (FF) were not regularly submitted to the Accounting Division of the Office of the
Court Administrator (OCA); (4) the records control is not systematic; (5) no legal fees forms were
attached to the case records; (6) daily transactions in the FF account were not duly recorded in the
cashbooks; and, (7) documents needed to validate withdrawals of cash bonds from the Municipal
Treasurer’s Office (MTO) of Bulan were missing. The audit team thus made the following
recommendation in its Partial Report1 on the financial audit:

PREMISES CONSIDERED, it is most respectfully recommended that:

I. This report be docketed as a complaint against Mr. Joebert C. Guan, former Clerk of Court of
MTC, Bulan, Sorsogon and DIRECT Mr. Guan to:
 1. IMMEDIATELY RESTITUTE his incurred shortages [in the] Judiciary Development Fund
and Special Allowance for the Judiciary Fund amounting to Forty Eight Thousand Two
Hundred Seven Pesos and 10/100 (48,207.10) and Five Thousand [One] Hundred Sixteen
Pesos and 00/100 (5,116.00) respectively by depositing the same to [their] respective bank
account[s] through Mr. Joseph G. Guim,2 the incumbent Officer-in-Charge, copy furnished
the Fiscal Monitoring Division, Court Management Office with the machine validated deposit
slip/s as proof of compliance.

2. EXPLAIN within ten (10) days from notice why he incurred such shortages and why he
should not be administratively dealt with for failure to comply with the court circulars and
issuances regarding proper handling of court collections;

3. SECURE from the Municipal Treasurer’s Office of Bulan[,] Sorsogon an itemized list of
Unwithdrawn Fiduciary Fund or cashbonds he deposited thereat, certified correct by the
Municipal Accountant and the Municipal Treasurer; and

4. TRANSMIT to [the Office of the Court Administrator] through the Fiscal Monitoring
Division, Court Management Office all the documents regarding the deposits and
withdrawals of cashbonds from the Municipal Treasurer’s Office for the period covering May
1998 to July 31, 2005, i.e., triplicate copies of Official Receipts issued, Fiduciary Fund official
cashbooks, and file copies of monthly Reports of Collections, Deposits and Withdrawals
together with the corresponding supporting documents like the court order, original copy of
surrendered official receipts, vouchers and acknowledgment receipts as proof that all
withdrawn cashbonds were properly received by the bondsmen or their authorized
representatives.

x x x x3

Then Court Administrator Christopher O. Lock approved4 the recommendation and submitted the
same to the Court.5 On January 29, 2007, the Court issued a Resolution6 adopting the
recommendation of the OCA. In addition, this Court held in abeyance any claim of Guan for
separation benefits pending resolution of the administrative matter against him.

Subsequently, Guan wrote the Court a letter7dated March 12, 2007 requesting that the monetary
value of his leave credits be applied as payment for his accountability amounting to 53,323.10.He
explained that he could no longer account for the shortages because some of the records pertaining
thereto, as well as his Judiciary and General Fund reports, could no longer be found.

In a Resolution8 dated August 13, 2007, the Court deferred action on Guan’s request pending
submission of the documents required of him, specifically (1) an itemized list from the MTO of the
unwithdrawn fiduciary fund or cash bonds, certified correct by the Municipal Accountant and
Municipal Treasurer; and (2) all documents regarding the deposits to and withdrawals of cash bonds
from the MTO for the period covering May 1998 to July 31, 2005. But since Guan still failed to submit
all the required documents, he was directed, through a Resolution9 dated October 17, 2011, (1) to
show cause why he should not be held in contempt for such failure and (2) to comply by submitting
the said documents.

In a letter10 dated August 26, 2011, Guan explained that while he was able to secure from the MTO a
list of cashbond deposits made by him, the Fiscal Monitoring Division (FMD) of the OCA did not
accept the same for being incomplete. He thus exerted all efforts to secure a complete list but what
was issued him was the same incomplete list, which when submitted was again rejected by the
FMD. And while he was also able to present to the FMD a certification from the MTO that its records
were damaged by typhoon "Melenyo" in July 2007 (which thereby hindered the MTO from providing
a complete list), the same still proved futile as the FMD did not accept the certificate. Therefore,
Guan requested that an audit be conducted in the MTC of Bulan, Sorsogon. Granting Guan’s
request, the Court, via a Resolution11 dated August 13, 2012, directed Executive Judge Adolfo G.
Fajardo of the Regional Trial Court, Branch 65 of Bulan, Sorsogon, to conduct a financial audit on
the itemized list of unwithdrawn fiduciary fund or cashbonds deposited by Guan and to thereafter
submit a report thereon. Unfortunately, Judge Fajardo, in his Compliance12 dated January 24, 2013,
informed the Court that he cannot make an intelligible and comprehensive financial audit as several
pertinent records were nowhere to be found. In view of this, the Court issued its July 24, 2013
Resolution13 directing the OCA to constitute a financial audit team to conduct the audit. Accordingly,
an audit team was again sent to the MTC of Bulan, Sorsogon.

Upon the conclusion of the audit, it was revealed that both the former Officer-In-Charge, Joseph C.
Guim (Guim) and the incumbent Clerk of Court, Emerose F. Denso, have no accountability insofar
as their periods of accountability are concerned as their books of account were in order. With
respect to Guan, however, the audit team found him accountable for the following:

I. FIDUCIARY FUND (FF)

FOR THE PERIOD COVERED: June 17, 1998 to September 23, 2004

Guan’s final accountability/shortage is 238,000.00. The audit team noted that Guan’s FF
accountability was not due to undeposited collections but to lacking documentations,
specifically the deficient supporting documents on cashbonds withdrawal transactions.

II. JUDICIAL DEVELOPMENT FUND (JDF)

FOR THE PERIOD COVERED: September 1 to 23, 2004

Guan’s accountability/shortage is 1,402.00. This comprised the unreported and undeposited

collections for the period covered.

III. SPECIAL ALLOWANCE FOR THE JUDICIARY FUND (SAJF)

FOR THE PERIOD COVERED: September 1 to 23, 2004

Guan’s SAJF accountability/shortage is 708.00. This comprised the unreported and

undeposited collections for the covered period.14

Thus, including his previous accountabilities for JDF and SAJF as found during the earlier audit in
2006, Guan’s balance of accountabilities are as follows:

BALANCE
FUND/ PERIOD/S ACCOUNTABILITY
ACCOUNT NAME AUDITED (SHORTAGE/
(OVERAGE)

Fiduciary Fund 17 June 1998 to

23 Sept. 2004 [P]238,000.00
 Judiciary Development
Fund (Unrestituted
Shortages from previous 28 July 1993 to
audit) 31 Aug. 2004 [P]48,207.10

Judiciary Development
Fund 1 to 23 Sept. 2004 [P] 1,402.00

Special Allowance for the

Judiciary Fund
(Unrestituted Shortages
from previous audit) 11 Nov. 2003 to
31 Aug. 2004 [P] 5,116.00

Special Allowance for the Judiciary Fund

1 to 23 Sept. 2004 [P] 708.0015

In its report16 dated November 7, 2014, the OCA concluded that Guan was remiss in the performance
of his duties and is administratively liable for:

1) failing to properly remit his cash collections in contrast with the requirements set forth in
the Commission on Audit (COA) and Department of Finance (DOF) Joint Circular 1-81 and in
Administrative Circular No. 13-92 dated March 1, 1992 as amended by Administrative
Circular(A.C.) No. 3-2000 dated June 15, 2000;17 and,

2) failing to remit FF collections, in complete derogation of Administrative Circular No. 50-95

dated October 11, 1995.18

Thus, it recommended that:

1. Mr. Joebert C. Guan, former Clerk of Court II, Municipal Trial Court, Bulan, Sorsogon, be
found GUILTY of Violation of Office Rules and Regulations and Simple Neglect of Duty and
that he be ordered to PAY A FINE of 10,000.00 to be deducted from the monetary value of
his earned leave credits and/or other retirement benefits;

2. the Office of the Administrative Services, OCA be DIRECTED to provide the Financial
Management Office (FMO), OCA with the following documents pertaining to Mr. Joebert C.
Guan:

2.1) Official Service Record;

2.2) Certification of Leave Credits; and

2.3) Notice of Salary Adjustment (NOSA) if any.

3. The FMO, OCA be further DIRECTED to:

3.1) PROCESS the money value of the terminal leave benefits of Mr. Joebert C.
Guan, dispensing with the usual documentary requirements, and apply the same to
the following shortages:
 Name of Fund Period Covered Amount

Fiduciary Fund 17 June 1998 to [P]238,000.00

23 September 2004

Judiciary Development 28 July 1993 to [P] 49,609.10

Fund 23 September 2004

Special Allowance for the 28 July 1993 to [P] 5,824.00

Judiciary Fund 23 September 2004

Total [P]293433.10

3.2) COORDINATE with the Fiscal Monitoring Division, Court Management Office,
OCA, before the processing of the checks to be issued in favour of the Fiduciary
Fund account of the

MTC, Bulan, Sorsogon, and for the preparation of the necessary communication with the
incumbent Clerk of Court/Officer-in-Charge thereat;

4. ORDER Mr. Guan to restitute the remaining shortages in case the monetary value of his
earned leave credits and/or other benefits would not be sufficient to cover the
aforementioned shortages; and

5. CLEAR MR. JOSEPH G. GUIM AND MS. EMEROSE F. DENSO, former Officer-in-
Charge and incumbent Clerk of Court, respectively, MTC, Bulan, Sorsogon, of any
accountability insofar as their corresponding periods of accountability are concerned, after
having been audited of their books of accounts which were found to be in order.19

Our Ruling

The Court modifies the findings and recommendations of the OCA.

As found by the audit team, Guan’s accountabilities were either due to unreported or undeposited
collections or to deposited collection but with lacking documentation. This only demonstrates Guan’s
disorganized way of managing and documenting his collections which, as aptly observed by the
OCA, is in violation of Administrative Circular No. 5-93 that provides, viz.: 3. Duty of the Clerks of
Court, Officers-in-Charge or accountable officers. – The Clerk of Court, Officers-in-Charge ofthe
Office of the Clerk of Court, or their accountable duly authorized representative designated by them
in writing, who must be accountable officers, shall receive the Judiciary Development Fund
collections, issue the proper receipt therefor, maintain a separate cash book properly marked CASH
BOOK FOR JUDICIARY DEVELOPMENT FUND, deposit such collections in the manner herein
prescribed and render the proper Monthly Report of Collections for said Fund.

However, the Court disagrees with the OCA’s finding that Guan’s transgressions constitute simple
neglect of duty only.

In the Office of the Court Administrator v. Acampado,20 the Court declared that any shortages in the
amounts to be remitted and the delay in the actual remittance thereof constitute gross neglect of
duty for which the clerk of court shall be held administratively liable. Moreover, in the Office of the
Court Administrator v. Melchor, Jr.,21 it was held that delayed remittance of cash collections
constitutes gross neglect of duty because this omission deprives the court of interest that could have
been earned if the amounts were deposited in the authorized depository bank. This was also
reiterated in the fairly recent case of Office of the Court Administrator v. Mrs. Aurora T. Zuniga.22

Here, Guan’s shortages with respect to the JDF in the total amount of 49,609.10 and to the SAJF
totaling to 5,824.00 were both due to unreported and undeposited collections. In other words,
1âwphi 1

Guan’s transgressions did not merely consist of delay in the remittance of his collections but to his
total failure to deposit the same as well. This is a clear case of gross neglect of duty. As held,
"[g]ross neglect is such neglect which, from the gravity of the case or the frequency of instances,
becomes so serious in its character as to endanger or threaten the public welfare."23 In this case, the
frequency of the instances alone, i.e., for two separate periods of accountability, Guan was both
found to have incurred shortages with respect to the JDF and SAJF due to unreported and
undeposited collections, makes respondent’s neglect of duty so serious in its character as to
threaten the public welfare.

Anent Guan’s accountability of 238,000.00 in FF, the audit team noted that the same was not due to
unreported or undeposited collections but to incomplete documentation to support cash bond
withdrawals therefrom. Still, it is well to state that documentation of cash collections is essential to
the orderly administration of justice.24 It is for this reason that court circulars and other relevant rules
for proper documentation such as by submission to the court of reports of collections of all funds and
proper issuance of receipts, among others, were designed. Evidently, respondent failed to comply
with the same and this likewise constitutes gross neglect of duty.25

"Gross neglect of duty is classified as a grave offense and punishable by dismissal even if for the
first offense pursuant to Section 52(A)(2) of Rule IV of the Uniform Rules on Administrative Cases in
the Civil Service."26 While Guan had already been dropped from the rolls for being absent without
official leave (AWOL) in A.M. No. 06-5-171-MTC, he still remains administratively liable, although the
penalty of dismissal cannot be imposed upon him. Nevertheless, "[a] fine can be imposed, instead,
and its amount is subject to the sound discretion of the Court. Section 56 (e) of Rule IV of the
Revised Uniform Rules provides that fine as a penalty shall be in an amount not exceeding the
salary for six months had the respondent not resigned [or been dropped from the rolls] the rate for
which is that obtaining at the time of his resignation. The fine shall be deducted from any accrued
leave credits, with the respondent being personally liable for any deficiency that should be directly
payable to this Court. He is [also] further declared disqualified from any future government service."27

As a final note, "Clerks of Court are the custodians of the courts’ ‘funds and revenues, records,
properties, and premises.’ They are ‘liable for any loss, shortage, destruction or impairment’ of those
entrusted to them. Any shortages in the amounts to be remitted and the delay in the actual
remittance ‘constitute gross neglect of duty for which the clerk of court shall beheld administratively
liable.’"28

WHEREFORE, the Court finds respondent Joebert C. Guan GUILTY of gross neglect of duty and
resolves to:

1. ORDER respondent TO PAY A FINE equivalent to his salary for six months computed at
the salary rate of his former position at the time he was dropped from the rolls to be
deducted from the monetary value of his earned leave credits and/or other retirement
benefits, and, DECLARE him DISQUALIFIED from re-employment in any branch or
instrumentality of the government, including government-owned or controlled corporations;
 2. DIRECT the Office of the Administrative Services of Office of the Court Administrator to
provide the Financial Management Office, Office of the Court Administrator, with the
following documents pertaining to respondent Joebert C. Guan:

a. Official Service Record;

b. Certification of Leave Credits; and

c. Notice of Salary Adjustment, if any.

3. FURTHER DIRECT the Financial Management Office of the Office of the Court
Administrator to:

3.1 PROCESS the monetary value of the terminal leave benefits of respondent
Joebert C. Guan, dispensing with the usual documentary requirements, and
whatever remains therefrom after deducting the fine imposed upon him, APPLY the
same to the following shortages:

Name of Fund Period Covered Amount

17 June 1998 to
Fiduciary Fund ₱238,000.00
23 September 2004

Judiciary 28 July 1993 to

₱49,609.10
Development Fund 23 September 2004

Special Allowance for 28 July 1993 to

₱5,824.00
the Judiciary Fund 23 September 2004

Total ₱293,433.10

3.2 COORDINATE with the Fiscal Monitoring Division, Court Management Office of
the Office of the Court Administrator, before the processing of the checks to be
issued in favor of the Fiduciary Fund account of the MTC, Bulan, Sorsogon, and for
the preparation of the necessary communication with the incumbent Clerk of
Court/Officer-in-Charge thereat;

4. ORDER respondent Guan to pay any remainder of the fine and/or restitute any remaining
shortages incase the monetary value of his earned leave credits and/or other benefits would
not be sufficient to cover the same; and,

5. CLEAR MR. JOSEPH G. GUIM AND MS. EMEROSE F. DENSO, former Officer-in-
Charge and incumbent Clerk of Court, respectively, MTC, Bulan, Sorsogon, of any
accountability insofar as their corresponding periods of accountability are concerned, after
having been audited of their books of accounts which were found to be in order.

SO ORDERED.

MARIANO C. DEL CASTILLO

 SECOND DIVISION

July 13, 2015

G.R. No. 196853

ROBERT CHUA, Petitioner,

vs.
PEOPLE OF THE PIIlLIPPINES, Respondent.

DECISION

DEL CASTILLO, J.:

Petitioner Robert Chua (Chua) was charged with 54 counts of violation of Batas Pambansa Big. 22
(BP 22) for issuing checks which were dishonored for either being drawn against insufficient funds or
closed account.

Factual Antecedents

Chua and private complainant Philip See (See) were long-time friends and neighbors. On different
dates from 1992 until 1993, Chua issued several postdated PSBank checks of varying amounts to
See pursuant to their rediscounting arrangement at a 3% rate, to wit:

PSBANK CHECK NO. DATED AMOUNT

1 018062 December 25, 1993 Php300,000.00

2 018061 December 23, 1993 Php350,000.00

3 017996 December 16, 1993 Php100,000.00

4 017992 December 14, 1993 Php200,000.00

5 017993 December 14, 1993 Php200,000.00

6 018138 November 22, 1993 Php 6,000.00

7 018122 November 19, 1993 Php 13,000.00

8 018120 November 18, 1993 Php 6,000.00

9 018162 November 22, 1993 Php 10,800.00

10 018069 November 17, 1993 Php 9,744.25

11 018117 November 17, 1993 Php 8,000.00

12 018149 November 28, 1993 Php 6,000.00

13 018146 November 27, 1993 Php 7,000.00

14 006478 November 26, 1993 Php200,000.00

15 018148 November 26, 1993 Php300,000.00

16 018145 November 26, 1993 Php 7,000.00

17 018137 December 10, 1993 Php150,000.00

18 017991 December 10, 1993 Php150,000.00

19 018151 December 10, 1993 Php150,000.00

20 017962 December 08, 1993 Php150,000.00

21 018165 December 08, 1993 Php 14,000.00

22 018154 December 07, 1993 Php100,000.00

23 018164 December 07, 1993 Php 14,000.00

24 018157 December 07, 1993 Php600,000.00

25 018161 December 06, 1993 Php 12,000.00

26 018160 December 05, 1993 Php 12,000.00

27 018033 November 09, 1993 Php 3,096.00

28 018032 November 08, 1993 Php 12,000.00

29 018071 November 06, 1993 Php150,000.00

30 018070 November 06, 1993 Php150,000.00

31 006210 October 21, 1993 Php100,000.00

32 006251 October 18, 1993 Php200,000.00

33 006250 October 18, 1993 Php200,000.00

34 017971 October 13, 1993 Php400,000.00

35 017972 October 12, 1993 Php335,450.00

36 017973 October 11, 1993 Php464,550.00

37 006433 September 24, 1993 Php520,000.00

38 006213 August 30, 1993 Php100,000.00

39 017976 December 13, 1993 Php100,000.00

40 018139 December 13, 1993 Php125,000.00

41 018141 December 13, 1993 Php175,000.00

42 018143 December 13, 1993 Php300,000.00

 43 018121 December 10, 1993 Php166,934.00

44 018063 November 12, 1993 Php 12,000.00

45 018035 November 11, 1993 Php 7,789.00

46 017970 November 11, 1993 Php600,000.00

47 018068 November 18, 1993 Php 7,800.00

48 017956 November 10, 1993 Php800,000.00

49 018034 November 10, 1993 Php 7,116.00

50 017907 December 1, 1993 Php200,000.00

51 018152 November 30, 1993 Php 6,000.00

52 018067 November 30, 1993 Php 7,800.00

53 006490 November 29, 1993 Php100,000.00

54 018150 November 29, 1993 Php 6,000.001

However, See claimed that when he deposited the checks, they were dishonored either due to
insufficient funds or closed account. Despite demands, Chua failed to make good the checks.
Hence, See filed on December 23, 1993 a Complaint2 for violations of BP 22 before the Office of the
City Prosecutor of Quezon City. He attached thereto a demand letter3 dated December 10, 1993.

In a Resolution4 dated April 25, 1994, the prosecutor found probable cause and recommended the
filing of charges against Chua. Accordingly, 54 counts of violation of BP 22 were filed against him
before the Metropolitan Trial Court (MeTC) of Quezon City.

Proceedings before the Metropolitan Trial Court

During the course of the trial, the prosecution formally offered as its evidence5 the demand letter
dated December 10, 1993 marked as Exhibit "B."6 Chua, however, objected7 to its admissibility on
the grounds that it is a mere photocopy and that it does not bear any proof that he actually received
it. In view of these, Chua filed on April 14, 1999 a Motion to Submit Demurrer to Evidence.8 Per
Chua’s allegation, however, the MeTC failed to act on his motion since the judge of said court
vacated his post.

Several years later, the prosecution filed a Motion to Re-Open Presentation of Prosecution’s
Evidence and Motion to Allow Prosecution to Submit Additional Formal Offer of Evidence9dated
March 28, 2003. It averred that while See was still trying to locate a demand letter dated November
30, 1993 (which it alleged to have been personally served upon Chua), the prosecution nevertheless
decided to rest its case on February 24, 1999 so as not to further delay the proceedings. However,
sometime in February 2002, See decided to have his house rented out such that he emptied it with
all his belongings and had it cleaned. It was during this time that he found the demand letter dated
November 30, 1993.10 The prosecution thus prayed that it be allowed to submit a supplemental offer
of evidence to include said demand letter dated November 30, 1993 as part of its evidence. Again,
the records of the case bear no copy of an MeTC Order or Resolution granting the aforesaid motion
of the prosecution. Nevertheless, extant on records is a Formal Offer of Evidence11 filed by the
private prosecutor submitting the demand letter dated November 30, 1993 as additional evidence. In
his objection thereto,12 Chua averred that the papers on which the demand letter dated November
30, 1993 are written were given to him as blank papers. He affixed his signature thereon purportedly
to give See the authority to retrieve a car which was supposed to serve as payment for Chua’s
obligation to See. In an Order13 dated November 18, 2005, the MeTC refused to take cognizance of
the supplemental formal offer on the ground that the same was filed by the private prosecutor
without the conformity of the public prosecutor. Be that as it may, the demand letter dated November
30, 1993 eventually found its way into the records of this case as Exhibit "SSS."14

Later, the defense, with leave of court, filed a Demurrer to Evidence.15 It again pointed out that the
demand letter dated December 10, 1993 attached to See’s affidavit-complaint is a mere photocopy
and not accompanied with a Post Office Registry Receipt and Registry Return Receipt. Most
importantly, it does not contain Chua’s signature that would serve as proof of his actual receipt
thereof. In view of these, the defense surmised that the prosecution fabricated the demand letter
dated November 30, 1993 to remedy the lack of a proper notice of dishonor upon Chua. At any rate,
it argued that while the November 30, 1993 demand letter contains Chua’s signature, the same
should not be given any probative value since it does not contain the date when he allegedly
received the same. Hence, there is simply no way of reckoning the crucial five-day period that the
law affords an issuer to make good the check from the date of his notice of its dishonor.

In an Order16 dated January 12, 2007, the MeTC denied the defense’s Demurrer to Evidence. The
Motion for Reconsideration thereto was likewise denied in an Order17 dated May 23, 2007. Hence,
the trial of the case proceeded.

In a Consolidated Decision18 dated May 12, 2008, the MeTC convicted Chua of 54 counts of violation
of BP 22 after it found all the elements of the offense obtaining in the case. Anent Chua’s receipt of
the notice of dishonor, it ratiocinated, viz.:

xxxx

The prosecution had proved also that private complainant personally sen[t] a written notice of
dishonor of the subject check to the accused and that the latter personally received the same. In
fact, the defense stipulated in open court the existence of the said demand letter and the signature
of the accused as reflected in the face of the demand letter. x x x In view of that stipulation, the
defense is now estopped [from] denying its receipt thereof. Although there was no date when
accused received the demand letter x x x the demand letter was dated, thus it is presumed that the
accused received the said demand letter on the date reflected on it. It has been said that "admission
verbal or written made by the party in the course of the proceedings in the same case does not
require proof."x x x

[In spite of] receipt thereof, the accused failed to pay the amount of the checks or make arrangement
for its payment "[w]ithin five (5) banking days after receiving notice that the said checks have not
been paid by the drawee bank. As a result, the presumption of knowledge as provided for in Section
2 of Batas Pambansa Bilang 22 which was the basis of reckoning the crucial five (5) day period was
established.19

Hence, the dispositive portion of the MeTC Decision:

WHEREFORE, premises considered, this court finds accused Robert Chua GUILTY, beyond
reasonable doubt, of fifty four (54) counts of Violation of Batas Pambansa Bilang 22 and hereby
sentence[s] him to suffer the penalty of six (6) months imprisonment for each case and to restitute to
the private complainant the total amount of the face value of all the subject checks in these cases
with legal interest of 12% per annum reckoned from the filing of the informations until the full amount
is fully paid and to pay the costs of suit.

SO ORDERED.20

Ruling of the Regional Trial Court (RTC)

Aggrieved, Chua appealed to the RTC where he argued that: (1) the complaint was prematurely filed
since the demand letter dated December 10, 1993 had not yet been sent to him at the time of filing
of the Complaint; (2) the demand letter dated November 30, 1993 has no probative value since it
lacked proof of the date when Chua received the same; and, (3) since Chua was acquitted in two
other BP 22 cases involving the same parties, facts and issues, he should likewise be acquitted in
the present case based on the principle of stare decisis.

In a Decision21 dated July 1, 2009, the RTC likewise found all the elements of BP 22 to have been
sufficiently established by the prosecution, to wit:

(1) the making, drawing, and issuance of any check to apply for account or for value;

(2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have
sufficient funds in or credit with the drawee bank for the payment of the check in full upon its
presentment;

(3) the subsequent dishonor of the check by the drawee bank for insufficient funds or credit
or dishonor for the same reason had not the drawer, without any valid cause ordered the
bank to stop payment.

As to first element, the RTC held that the evidence shows that Chua issued the checks in question.
Next, on the basis of the demand letter dated November 30, 1993 bearing Chua’s signature as proof
of receipt thereof, it was likewise established that he had knowledge of the insufficiency of his funds
with the drawee bank at the time he issued the checks, thus, satisfying the second element. It
expounded:

Thus, in order to create the prima facie presumption that the issuer knew of the insufficiency of
funds, it must be shown that he or she received a notice of dishonor and, within five banking days
thereafter, failed to satisfy the amount of the check or make arrangement for its payment. x x x

In the present case, a demand letter (Exh. "SSS") was sent to accused-appellant informing him of
the dishonor of the check and demanding he make good of the checks. The prosecution offered this
in evidence, and the accused’s signature thereon evidences his receipt of the said demand letter.
Accused-appellant argues that there is no proof that he received the same considering that there is
no date on his signature appearing on the document. But as borne out by the records of the
proceedings, the defense even stipulated in open court the existence of the demand letter. x x x

Thus, considering that the demand letter was dated November 30, 1993, the reckoning of the crucial
five day period was established. Accused failed to make arrangement for the payment of the amount
of check within five-day period from notice of the checks’ dishonor.22

Finally, the RTC ruled that the prosecution was able to prove the existence of the third element when
it presented a bank employee who testified that the subject checks were dishonored due to
insufficiency of funds or closed account.
Anent the defense’s invocation of the principle of stare decisis, the RTC found the same inapplicable
since there is a distinction between the present case and the other cases where Chua was
acquitted. In the instant case, the prosecution, as mentioned, was able to establish the second
element of the offense by way of the demand letter dated November 30, 1993 duly received by
Chua. Whereas in the other cases where Chua was acquitted, there was no proof that he received a
demand letter.

Hence, the dispositive portion of the RTC Decision:

WHEREFORE, the appealed decision dated May 12, 2008 is hereby AFFIRMED.

SO ORDERED.23

Ruling of the Court of Appeals (CA)

Before the CA, Chua argued against the probative value of the demand letter dated November 30,
1993 by pointing out that: (1) for more than 10 years from the time the case was filed, the
prosecution never adverted to its existence. He thus surmised that this was because the document
was not really missing but in fact inexistent – a mere afterthought as to make it appear that the
second element of the offense is obtaining in the case; (2) the subject demand letter is not a newly
discovered evidence as it could have been discovered earlier through the exercise of due diligence;
and, (3) his counsel’s admission of the physical existence of the subject demand letter and Chua’s
signature thereon does not carry with it the admission of its contents and his receipt of the same.

Unpersuaded, the CA, in its November 11, 2010 Decision24 brushed aside Chua’s arguments in this
wise:

x x x [A]s aptly pointed out by the Solicitor General, See could not have waited for a decade just to
fabricate an evidence against petitioner. The contention that petitioner’s counsel was tricked by the
prosecution into stipulating on the admissibility of the demand letter is without basis. Once validly
entered into, stipulations will not be set aside unless for good cause. They should be enforced
especially when they are not false, unreasonable or against good morals and sound public policy.
When made before the court, they are conclusive. And the party who validly made them can be
relieved therefrom only upon a showing of collusion, duress, fraud, misrepresentation as to facts,
and undue influence; or upon a showing of sufficient cause on such terms as will serve justice in a
particular case. Moreover, the power to relieve a party from a stipulation validly made lies in the
court’s sound discretion which, unless exercised with grave abuse, will not be disturbed on appeal.25

And just like the MeTC and the RTC, the CA concluded that the prosecution clearly established all
the elements of the offense of violation of BP 22. Ultimately, it ruled as follows:

WHEREFORE, the instant petition is hereby DENIED for lack of merit. The assailed decision dated
July 1, 2009 and order dated October 30, 2009 of the RTC of Quezon City, Branch 219, are hereby
AFFIRMED.

SO ORDERED.26

Chua filed a Motion for Reconsideration,27 but the same was denied in a Resolution28 dated May 4,
2011.

Hence, this Petition for Review on Certiorari.

 Issues

THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT UPHELD THE

RULINGS OF THE TRIAL COURTS THAT THE ACCUSED AT THE TIME OF THE
ISSUANCE OF THE DISHONORED CHECKS HAD KNOWLEDGE OF THE
INSUFFICIENCY OF FUNDS FOR THE PAYMENT OF THE CHECKS UPON THEIR
PRESENTMENT, BASED MERELY ON THE PRESUMPTION THAT THE DATE OF
THE PREPARATION OF THE LETTER IS THE DATE OF RECEIPT BY THE
ADDRESSEE.

II

THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT CONSIDERED THE

DEMAND LETTER DATED 30 NOVEMBER 1993 AS A NEWLYDISCOVERED
EVIDENCE.29

The Parties’ Arguments

Chua asserts that the second element of the offense charged, i.e, knowledge of the maker, drawer,
or issuer that at the time of issue there are no sufficient funds in or credit with the drawee bank for
the payment of such check in full upon its presentment, was not proved by the prosecution. He
argues that the presumption that the issuer had knowledge of the insufficiency of funds only arises
after it is proved that the issuer actually received a notice of dishonor and within five days from
receipt thereof failed to pay the amount of the check or make arrangement for its payment. Here, the
date when Chua allegedly received the demand letter dated November 30, 1993 was not established
by the prosecution. Citing Danao v. Court of Appeals,30 he thus contends that since there is no date
of receipt from which to reckon the aforementioned five-day period, the presumption that he has
knowledge of the insufficiency of funds at the time of the issuance of the checks did not arise.

In any case, Chua argues that the demand letter dated November 30, 1993 is not a newly
discovered evidence. He points out that a newly discovered evidence is one which could not have
been discovered even in the exercise of due diligence in locating the same. In this case, See claims
that he only found the letter after having his house cleaned. This means that he could have found it
early on had he exercised due diligence, which, however, was neither shown by the prosecution.

On the other hand, respondent People of the Philippines, through the Office of the Solicitor General
(OSG), avers that Chua’s contention that there is no proof of the date when he actually received the
demand letter dated November 30, 1993 involves a factual issue which is not within the province of
a certiorari petition. As to the matter of whether the subject demand letter is a newly discovered
evidence, the OSG calls attention to the fact that the MeTC, RTC and the CA all considered the said
document as a newly discovered evidence. Hence, such finding deserves full faith and credence.
Besides, Chua was correctly convicted for violation of BP 22 since all the elements of the offense
were sufficiently proven by the prosecution.

Our Ruling

The Petition is impressed with merit.

The issues raised by Chua involve
questions of law.

The OSG argues that the issues raised by Chua involve questions of fact which are not within the
province of the present petition for review on certiorari. The Court, however upon perusal of the
petition, finds that the issues raised and the arguments advanced by Chua in support thereof,
concern questions of law. "Jurisprudence dictates that there is a ‘question of law’ when the doubt or
difference arises as to what the law is on a certain set of facts or circumstances; on the other hand,
there is a ‘question of fact’ when the issue raised on appeal pertains to the truth or falsity of the
alleged facts. The test for determining whether the supposed error was one of ‘law’ or ‘fact’ is not the
appellation given by the parties raising the same; rather, it is whether the reviewing court can resolve
the issues raised without evaluating the evidence, in which case, it is a question of law; otherwise, it
is one of fact. In other words, where there is no dispute as to the facts, the question of whether or
not the conclusions drawn from these facts are correct is a question of law. However, if the question
posed requires a re-evaluation of the credibility of witnesses, or the existence or relevance of
surrounding circumstances and their relationship to each other, the issue is factual."31

Chua raises two issues in this petition, to wit: (1) whether the MeTC, RTC and the CA correctly
applied the legal presumption that Chua has knowledge of the insufficiency of funds at the time he
issued the check based on his alleged receipt of the demand letter dated November 30, 1993 and
his failure to make good the checks five days from such receipt; and (2) whether the said courts
correctly considered the demand letter dated November 30, 1993 as newly discovered evidence. As
to the first issue, it is not disputed that the subject demand letter, while bearing the signature of
Chua, does not indicate any date as to his receipt thereof. There being no disagreement as to this
fact, the propriety of the conclusion drawn from the same by the courts below, that is, the date of the
said letter is considered as the date when Chua received the same for the purpose of reckoning the
five-day period to make good the checks, clearly refers to a question of law. Similarly, the second
issue is one concerning a question of law because it requires the application of the provision of the
Rules of Court concerning a newly discovered evidence.32

Nevertheless, assuming that the questions posed before this Court are indeed factual, the rule that
factual findings of the lower courts are not proper subject of certiorari petition admits of exceptions.
One of these exceptions is when the lower courts failed to appreciate certain facts and
circumstances which, if taken into account, would materially affect the result of the case. The Court
finds the said exception applicable in the instant case. Clearly, the petition deserves the
consideration of this Court.

The prosecution failed to prove all the

elements of the offenses charged.

In order to successfully hold an accused liable for violation of BP 22, the following essential
elements must be present: "(1) the making, drawing, and issuance of any check to apply for account
or for value; (2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not
have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its
presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of
funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered
the bank to stop payment."33 "Of the three (3) elements, the second element is the hardest to prove
as it involves a state of mind. Thus, Section 2 of BP 22 creates a presumption of knowledge of
insufficiency of funds, which, however, arises only after it is proved that the issuer had received a
written notice of dishonor and that within five days from receipt thereof, he failed to pay the amount
of the check or to make arrangements for its payment.34
In the instant case, what is in dispute is the existence of the second element. Chua asserts that the
absence of the date of his actual receipt on the face of the demand letter dated November 30, 1993
prevented the legal presumption of knowledge of insufficiency of funds from arising. On the other
hand, the MeTC opined that while the date of Chua’s actual receipt of the subject demand letter is
not affixed thereon, it is presumed that he received the same on the date of the demand letter
(November 30, 1993). Moreover, the lower courts banked on the stipulation entered into by Chua’s
counsel as to the existence of the demand letter and of Chua’s signature thereon. By reason of such
stipulation, they all held that Chua could no longer impugn the said demand letter.

In Danao v. Court of Appeals,35 the Court discussed the importance of proving the date of actual
receipt of the notice of dishonor, viz.:

In King vs. People, this Court, through Justice Artemio V. Panganiban, held: "To hold a person liable
under B.P. Blg. 22, it is not enough to establish that a check issued was subsequently dishonored. It
must be shown further that the person who issued the check knew ‘at the time of issue that he does
not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon
its presentment.’ Because this element involves a state of mind which is difficult to establish, Section
2 of the law creates a prima facie presumption of such knowledge, as follows:

‘SEC 2. Evidence of knowledge of insufficient funds – The making, drawing and issuance of a check
payment of which is refused by the drawee because of insufficient funds in or credit with such bank,
when presented within ninety (90) days from the date of the check, shall be prima facie evidence of
knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder
thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such
check within five (5) banking days after receiving notice that such check has not been paid by the
drawee.

Thus, this Court further ruled in King, "in order to create the prima facie presumption that the issuer
knew of the insufficiency of funds, it must be shown that he or she received a notice of dishonor and,
within five banking days thereafter, failed to satisfy the amount of the check or make arrangement for
its payment."

Indeed, the prima facie presumption in Section 2 of B.P. Blg. 22 "gives the accused an opportunity to
satisfy the amount indicated in the check and thus avert prosecution. This opportunity, as this Court
stated in Lozano vs. Martinez, serves to mitigate the harshness of the law in its application.

In other words, if such notice of non-payment by the drawee bank is not sent to the maker or drawer
of the bum check, or if there is no proof as to when such notice was received by the drawer,
then the presumption or prima facie evidence as provided in Section 2 of B.P. Blg. 22 cannot
arise, since there would simply be no way of reckoning the crucial 5-day period."36(Italics in the
original, emphasis supplied)

Similarly in the present case, there is no way to ascertain when the five-day period under Section 22
of BP 22 would start and end since there is no showing when Chua actually received the demand
letter dated November 30, 1993. The MeTC cannot simply presume that the date of the demand
letter was likewise the date of Chua’s receipt thereof. There is simply no such presumption provided
in our rules on evidence. In addition, from the inception of this case Chua has consistently denied
having received subject demand letter. He maintains that the paper used for the purported demand
letter was still blank when presented to him for signature and that he signed the same for another
purpose. Given Chua’s denial, it behooved upon the prosecution to present proof of his actual
receipt of the November 30, 1993 demand letter. However, all that the prosecution did was to
present it without, however, adducing any evidence as to the date of Chua’s actual receipt thereof. It
must be stressed that ‘[t]he prosecution must also prove actual receipt of [the notice of dishonor]
because the fact of service provided for in the law is reckoned from receipt of such notice of
dishonor by the accused."37 "The burden of proving notice rests upon the party asserting its
existence. Ordinarily, preponderance of evidence is sufficient to prove notice. In criminal cases,
however, the quantum of proof required is proof beyond reasonable doubt. Hence, for B.P. Blg. 22
cases, there should be clear proof of notice"38which the Court finds wanting in this case.

Anent the stipulation entered into by Chua’s counsel, the MeTC stated:

In the course of the said proceedings, the defense counsel manifested that he is willing to stipulate
as to the existence of the demand letter and the signature of the accused as reflected on the face of
the demand letter. x x x

xxxx

The prosecution had proved also that private complainant personally sent a written notice of
dishonor of the subject checks to the accused and that the latter personally received the same. In
fact, the defense stipulated in open court the existence of the said demand letter and the signature
of the accused as reflected in the face of the demand letter. x x x In view of that stipulation, the
defense is now estopped in denying its receipt thereof.39

As earlier mentioned, this ruling of the MeTC was affirmed by both the RTC and the CA.

The Court, however, disagrees with the lower courts. It is plain that the stipulation only refers to the
existence of the demand letter and of Chua’s signature thereon. In no way can an admission of
Chua’s receipt of the demand letter be inferred therefrom. Hence, Chua cannot be considered
estopped from claiming non-receipt. Also, the Court observes that Chua’s admission with respect to
his signature on the demand letter is consistent with his claim that See made him sign blank papers
where the contents of the demand letter dated November 30, 1993 were later intercalated.

In view of the above discussion, the Court rules that the prosecution was not able to sufficiently
prove the existence of the second element of BP 22.

At any rate, the demand letter dated

November 30, 1993 deserves no weight
and credence not only because it does
not qualify as a newly discovered
evidence within the purview of the law
but also because of its doubtful
character.

As may be recalled, the prosecution had already long rested its case when it filed a Motion to Re-
Open Presentation of Prosecution’s Evidence and Motion To Allow Prosecution To Submit Additional
Formal Offer of Evidence dated March 28, 2003. Intending to introduce the demand letter dated
November 30, 1993 as a newly discovered evidence, See attached to the said motion an affidavit40 of
even date where he stated the circumstances surrounding the fact of his location of the same, viz.:

2. When we initially presented our evidence in support of these criminal complaints, I was
already looking for a copy of the demand letter personally served by the affiant (See) and
duly received by [Chua];
 3. That despite diligent efforts to locate the demand letter x x x dated November 30, 1993,
the same was not located until sometime in February 2002 when I was having our old
house/office located at C-5 Christian Street, Grace Village, Quezon City, cleaned and ready
to be rented out;

4. x x x [upon] showing the same to the new handling public prosecutor, he advised the
affiant to have it presented in Court.41

In Ybiernas v. Tanco-Gabaldon,42 the Court held that:

x x x The question of whether evidence is newly discovered has two aspects: a temporal one, i.e.,
when was the evidence discovered, and a predictive one, i.e., when should or could it have been
discovered. It is to the latter that the requirement of due diligence has relevance. We have held that
in order that a particular piece of evidence may be properly regarded as newly discovered to justify
new trial, what is essential is not so much the time when the evidence offered first sprang into
existence nor the time when it first came to the knowledge of the party now submitting it; what is
essential is that the offering party had exercised reasonable diligence in seeking to locate such
evidence before or during trial but had nonetheless failed to secure it.

The Rules do not give an exact definition of due diligence, and whether the movant has exercised
due diligence depends upon the particular circumstances of each case. Nonetheless, it has been
observed that the phrase is often equated with "reasonable promptness to avoid prejudice to the
defendant." In other words, the concept of due diligence has both a time component and a good faith
component. The movant for a new trial must not only act in a timely fashion in gathering evidence in
support of the motion; he must act reasonably and in good faith as well. Due diligence contemplates
that the defendant acts reasonably and in good faith to obtain the evidence, in light of the totality of
the circumstances and the facts known to him.43

"Under the Rules of Court, the requisites for newly discovered evidence are: (a) the evidence was
discovered after trial; (b) such evidence could not have been discovered and produced at the trial
with reasonable diligence; and (c) it is material, not merely cumulative, corroborative or impeaching,
and is of such weight that, if admitted, will probably change the judgment."44

In this case, the Court holds that the demand letter dated November 30, 1993 does not qualify as a
newly discovered evidence within the purview of the law. Per See’s statements in his affidavit, the
said evidence was already known to him at the time he filed his complaint against Chua. It was also
apparently available considering that it was just kept in his house. Undeniably, had See exercised
reasonable diligence, he could have promptly located the said demand letter and presented it during
trial. However, the circumstances suggest otherwise.

Curiously, while See claims that the demand letter dated November 30, 1993 was already existing at
the time he filed the complaint, the same was not mentioned therein. Only the demand letter dated
December 10, 1993 was referred to in the complaint, which per See’s own allegations, was also not
actually received by Chua. In addition, the prosecution failed to present the original copy of the
demand letter dated December 10, 1993 during trial. Clearly on the basis of the demand letter dated
December 10, 1993 alone, the prosecution cannot possibly establish the existence of the second
element of the offense. Indeed, the surrounding circumstances and the doubtful character of the
demand letter dated November 30, 1993 make it susceptible to the conclusion that its introduction
was a mere afterthought – a belated attempt to fill in a missing component necessary for the
existence of the second element of BP 22.
It may not be amiss to add at this point that out of the 54 cases for violation of BP 22 filed against
Chua, 22 involve checks issued on November 30, 1993 or thereafter. Hence, the lower courts
grievously erred in convicting Chua for those 22 cases on the basis of a purported demand letter
written and sent to Chua prior to the issuance of said 22 checks. Checks can only be dishonored
after they have been issued and presented for payment. Before that, dishonor cannot take place.
Thus, a demand letter that precedes the issuance of checks cannot constitute as sufficient notice of
dishonor within the contemplation of BP 22. It is likewise significant to note that aside from the
absence of a date, the signature of Chua appearing on the questioned November 30, 1993 demand
letter is not accompanied by any word or phrase indicating that he affixed his signature thereon to
signify his receipt thereof. Indeed, "conviction must rest upon the strength of the evidence of the
prosecution and not on the weakness of the evidence for the defense."45 In view of the foregoing, the
Court cannot accord the demand letter dated November 30, 1993 any weight and credence.
Consequently, it cannot be used to support Chua’s guilt of the offenses charged.

All told, the Court cannot convict Chua for violation of BP 22 with moral certainty.

Chua’s acquittal, however, does not entail the extinguishment of his civil liability for the dishonored
checks.46 "An acquittal based on lack of proof beyond reasonable doubt does not preclude the award
of civil damages."47 For this reason, Chua must be directed to testitute See the total amount of the
face value of all the checks subject of the case with legal interest at the rate of 12% per
annum reckoned from the time the said checks became due and demandable up to June 30, 2013
and 6% per annum from July 1, 2013 until fully paid.48

WHEREFORE, the Court GRANTS the Petition. The assailed Decision dated November 11, 2010 of
the Court of Appeals in CA-GR. CR No. 33079 which affirmed the Decisions of the Metropolitan Trial
Court of Quezon City, Branch 36 and the Regional Trial Court of Quezon City, Branch 219 finding
petitioner Robert Chua guilty beyond reasonable doubt of 54 counts of Violation of Batas Pambansa
Big. 22 is REVERSED and SET ASIDE. Petitioner Robert Chua is hereby ACQUITTED on the
ground that his guilt has not been established beyond reasonable doubt and
ordered RELEASED immediately / unless he is detained for some other legal cause. He is ordered,
however, to indemnify the private complainant Philip See the total value of the 54 checks subject of
this case plus legal interest of 12% per annum from the time the said sum became due and
demandable until June 30, 2013 and 6% per annum from July 1, 2013 until fully paid.

SO ORDERED.

MARIANO C. DEL CASTILLO