Republic of the Philippines
: 411, 413, 414, 427, 429-454, 457- 471, 474-
SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD,
INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to
the President, HON. JOAQUIN VENUS, in his capacity as Deputy
Executive Assistant to the President , MELQUIADES P. DE LA
CRUZ, in his capacity as Director, Malacañang Records Office,
and FLORENDO S. PABLO, in his capacity as Director, Bureau of
Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters of public concern,
a right recognized in Section 6, Article IV of the 1973 Philippine
Constitution, 1 as well as the principle that laws to be valid and
enforceable must be published in the Official Gazette or otherwise
effectively promulgated, petitioners seek a writ of mandamus to compel
respondent public officials to publish, and/or cause the publication in
the Official Gazette of various presidential decrees, letters of
instructions, general orders, proclamations, executive orders, letter of
implementation and administrative orders.
Specifically, the publication of the following presidential issuances is
sought:
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184,
197, 200, 234, 265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358,
359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447, 473, 486, 491,
503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718,
731, 733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050,
1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279,
1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840,
1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136,
141, 150, 153, 155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204,
205, 209, 211-213, 215-224, 226-228, 231-239, 241-245, 248, 251,
253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-
303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370,
382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498,
501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612,
615, 641, 642, 665, 702, 712-713, 726, 837-839, 878-879, 881, 882,
939-940, 964,997,1149-1178,1180-1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281,
1319-1526, 1529, 1532, 1535, 1538, 1540-1547, 1550-1558, 1561-
1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-1649,
1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744,
1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800,
1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-
1832, 1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-
1858, 1860, 1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923,
1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-2044,
2046-2145, 2147-2161, 2163-2244.
e] Executive Orders Nos.
492, 494-507, 509-510, 522, 524-528, 531-532, 536, 538, 543-544,
549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604, 609,
611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51,
59, 76, 80-81, 92, 94, 95, 107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433,
436-439.
The respondents, through the Solicitor General, would have this case
dismissed outright on the ground that petitioners have no legal
personality or standing to bring the instant petition. The view is
submitted that in the absence of any showing that petitioners are
personally and directly affected or prejudiced by the alleged non-
publication of the presidential issuances in question 2 said petitioners
are without the requisite legal personality to institute this mandamus
proceeding, they are not being "aggrieved parties" within the meaning
of Section 3, Rule 65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.—When any tribunal, corporation,
board or person unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from an office, trust, or
station, or unlawfully excludes another from the use a rd enjoyment of a
right or office to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course of law, the
person aggrieved thereby may file a verified petition in the proper court
alleging the facts with certainty and praying that judgment be rendered
commanding the defendant, immediately or at some other specified
time, to do the act required to be done to Protect the rights of the
petitioner, and to pay the damages sustained by the petitioner by reason
of the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of the
petition concerns a public right and its object is to compel the
performance of a public duty, they need not show any specific interest
for their petition to be given due course.
The issue posed is not one of first impression. As early as the 1910 case
of Severino vs. Governor General, 3 this Court held that while the
general rule is that "a writ of mandamus would be granted to a private
individual only in those cases where he has some private or particular
interest to be subserved, or some particular right to be protected,
independent of that which he holds with the public at large," and "it is
for the public officers exclusively to apply for the writ when public
rights are to be subserved [Mithchell vs. Boardmen, 79 M.e., 469],"
nevertheless, "when the question is one of public right and the object of
the mandamus is to procure the enforcement of a public duty, the
people are regarded as the real party in interest and the relator at whose
instigation the proceedings are instituted need not show that he has any
legal or special interest in the result, it being sufficient to show that he
is a citizen and as such interested in the execution of the laws [High,
Extraordinary Legal Remedies, 3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino, a
private individual, as a proper party to the mandamus proceedings
brought to compel the Governor General to call a special election for
the position of municipal president in the town of Silay, Negros
Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:
We are therefore of the opinion that the weight of authority supports the
proposition that the relator is a proper party to proceedings of this
character when a public right is sought to be enforced. If the general
rule in America were otherwise, we think that it would not be
applicable to the case at bar for the reason 'that it is always dangerous
to apply a general rule to a particular case without keeping in mind the
reason for the rule, because, if under the particular circumstances the
1
reason for the rule does not exist, the rule itself is not applicable and Perhaps at no time since the establishment of the Philippine Republic
reliance upon the rule may well lead to error' has the publication of laws taken so vital significance that at this time
when the people have bestowed upon the President a power heretofore
No reason exists in the case at bar for applying the general rule insisted enjoyed solely by the legislature. While the people are kept abreast by
upon by counsel for the respondent. The circumstances which surround the mass media of the debates and deliberations in the Batasan
this case are different from those in the United States, inasmuch as if Pambansa—and for the diligent ones, ready access to the legislative
the relator is not a proper party to these proceedings no other person records—no such publicity accompanies the law-making process of the
could be, as we have seen that it is not the duty of the law officer of the President. Thus, without publication, the people have no means of
Government to appear and represent the people in cases of this knowing what presidential decrees have actually been promulgated,
character. much less a definite way of informing themselves of the specific
contents and texts of such decrees. As the Supreme Court of Spain
The reasons given by the Court in recognizing a private citizen's legal
ruled: "Bajo la denominacion generica de leyes, se comprenden
personality in the aforementioned case apply squarely to the present
tambien los reglamentos, Reales decretos, Instrucciones, Circulares y
petition. Clearly, the right sought to be enforced by petitioners herein is
Reales ordines dictadas de conformidad con las mismas por el Gobierno
a public right recognized by no less than the fundamental law of the
en uso de su potestad.5
land. If petitioners were not allowed to institute this proceeding, it
would indeed be difficult to conceive of any other person to initiate the The very first clause of Section I of Commonwealth Act 638 reads:
same, considering that the Solicitor General, the government officer "There shall be published in the Official Gazette ... ." The word "shall"
generally empowered to represent the people, has entered his used therein imposes upon respondent officials an imperative duty. That
appearance for respondents in this case. duty must be enforced if the Constitutional right of the people to be
informed on matters of public concern is to be given substance and
Respondents further contend that publication in the Official Gazette is
reality. The law itself makes a list of what should be published in the
not a sine qua non requirement for the effectivity of laws where the
Official Gazette. Such listing, to our mind, leaves respondents with no
laws themselves provide for their own effectivity dates. It is thus
discretion whatsoever as to what must be included or excluded from
submitted that since the presidential issuances in question contain
such publication.
special provisions as to the date they are to take effect, publication in
the Official Gazette is not indispensable for their effectivity. The point The publication of all presidential issuances "of a public nature" or "of
stressed is anchored on Article 2 of the Civil Code: general applicability" is mandated by law. Obviously, presidential
decrees that provide for fines, forfeitures or penalties for their violation
Art. 2. Laws shall take effect after fifteen days following the
or otherwise impose a burden or. the people, such as tax and revenue
completion of their publication in the Official Gazette, unless it is
measures, fall within this category. Other presidential issuances which
otherwise provided, ...
apply only to particular persons or class of persons such as
The interpretation given by respondent is in accord with this Court's administrative and executive orders need not be published on the
construction of said article. In a long line of decisions,4 this Court has assumption that they have been circularized to all concerned. 6
ruled that publication in the Official Gazette is necessary in those cases
It is needless to add that the publication of presidential issuances "of a
where the legislation itself does not provide for its effectivity date-for
public nature" or "of general applicability" is a requirement of due
then the date of publication is material for determining its date of
process. It is a rule of law that before a person may be bound by law, he
effectivity, which is the fifteenth day following its publication-but not
must first be officially and specifically informed of its contents. As
when the law itself provides for the date when it goes into effect.
Justice Claudio Teehankee said in Peralta vs. COMELEC 7:
Respondents' argument, however, is logically correct only insofar as it
In a time of proliferating decrees, orders and letters of instructions
equates the effectivity of laws with the fact of publication. Considered
which all form part of the law of the land, the requirement of due
in the light of other statutes applicable to the issue at hand, the
process and the Rule of Law demand that the Official Gazette as the
conclusion is easily reached that said Article 2 does not preclude the
official government repository promulgate and publish the texts of all
requirement of publication in the Official Gazette, even if the law itself
such decrees, orders and instructions so that the people may know
provides for the date of its effectivity. Thus, Section 1 of
where to obtain their official and specific contents.
Commonwealth Act 638 provides as follows:
The Court therefore declares that presidential issuances of general
Section 1. There shall be published in the Official Gazette [1] all
application, which have not been published, shall have no force and
important legisiative acts and resolutions of a public nature of the,
effect. Some members of the Court, quite apprehensive about the
Congress of the Philippines; [2] all executive and administrative orders
possible unsettling effect this decision might have on acts done in
and proclamations, except such as have no general applicability; [3]
reliance of the validity of those presidential decrees which were
decisions or abstracts of decisions of the Supreme Court and the Court
published only during the pendency of this petition, have put the
of Appeals as may be deemed by said courts of sufficient importance to
question as to whether the Court's declaration of invalidity apply to
be so published; [4] such documents or classes of documents as may be
P.D.s which had been enforced or implemented prior to their
required so to be published by law; and [5] such documents or classes
publication. The answer is all too familiar. In similar situations in the
of documents as the President of the Philippines shall determine from
past this Court had taken the pragmatic and realistic course set forth
time to time to have general applicability and legal effect, or which he
in Chicot County Drainage District vs. Baxter Bank 8 to wit:
may authorize so to be published. ...
The courts below have proceeded on the theory that the Act of
The clear object of the above-quoted provision is to give the general
Congress, having been found to be unconstitutional, was not a law; that
public adequate notice of the various laws which are to regulate their
it was inoperative, conferring no rights and imposing no duties, and
actions and conduct as citizens. Without such notice and publication,
hence affording no basis for the challenged decree. Norton v. Shelby
there would be no basis for the application of the maxim "ignorantia
County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228
legis non excusat." It would be the height of injustice to punish or
U.S. 559, 566. It is quite clear, however, that such broad statements as
otherwise burden a citizen for the transgression of a law of which he
to the effect of a determination of unconstitutionality must be taken
had no notice whatsoever, not even a constructive one.
2
with qualifications. The actual existence of a statute, prior to such a
determination, is an operative fact and may have consequences which
cannot justly be ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent ruling as to invalidity
may have to be considered in various aspects-with respect to particular
conduct, private and official. Questions of rights claimed to have
become vested, of status, of prior determinations deemed to have
finality and acted upon accordingly, of public policy in the light of the
nature both of the statute and of its previous application, demand
examination. These questions are among the most difficult of those
which have engaged the attention of courts, state and federal and it is
manifest from numerous decisions that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified.

Consistently with the above principle, this Court in Rutter vs.

Esteban 9 sustained the right of a party under the Moratorium Law,
albeit said right had accrued in his favor before said law was declared
unconstitutional by this Court.

Similarly, the implementation/enforcement of presidential decrees prior

to their publication in the Official Gazette is "an operative fact which
may have consequences which cannot be justly ignored. The past
cannot always be erased by a new judicial declaration ... that an all-
inclusive statement of a principle of absolute retroactive invalidity
cannot be justified."

From the report submitted to the Court by the Clerk of Court, it appears
that of the presidential decrees sought by petitioners to be published in
the Official Gazette, only Presidential Decrees Nos. 1019 to 1030,
inclusive, 1278, and 1937 to 1939, inclusive, have not been so
published. 10 Neither the subject matters nor the texts of these PDs can
be ascertained since no copies thereof are available. But whatever their
subject matter may be, it is undisputed that none of these unpublished
PDs has ever been implemented or enforced by the government.
In Pesigan vs. Angeles, 11 the Court, through Justice Ramon Aquino,
ruled that "publication is necessary to apprise the public of the contents
of [penal] regulations and make the said penalties binding on the
persons affected thereby. " The cogency of this holding is apparently
recognized by respondent officials considering the manifestation in
their comment that "the government, as a matter of policy, refrains from
prosecuting violations of criminal laws until the same shall have been
published in the Official Gazette or in some other publication, even
though some criminal laws provide that they shall take effect
immediately.

WHEREFORE, the Court hereby orders respondents to publish in the

Official Gazette all unpublished presidential issuances which are of
general application, and unless so published, they shall have no binding
force and effect.

SO ORDERED.

3
G.R. No. 80718 January 29, 1988
FELIZA P. DE ROY and VIRGILIO RAMOS, petitioners,
vs.
COURT OF APPEALS and LUIS BERNAL, SR., GLENIA
BERNAL, LUIS BERNAL, JR., HEIRS OF MARISSA BERNAL,
namely, GLICERIA DELA CRUZ BERNAL and LUIS BERNAL,
SR., respondents.
RESOLUTION
CORTES, J.:
This special civil action for certiorari seeks to declare null and void two
(2) resolutions of the Special First Division of the Court of Appeals in
the case of Luis Bernal, Sr., et al. v. Felisa Perdosa De Roy, et al., CA-
G.R. CV No. 07286. The first resolution promulgated on 30 September
1987 denied petitioners' motion for extension of time to file a motion
for reconsideration and directed entry of judgment since the decision in
said case had become final; and the second Resolution dated 27
October 1987 denied petitioners' motion for reconsideration for having
been filed out of time.
At the outset, this Court could have denied the petition outright for not
being verified as required by Rule 65 section 1 of the Rules of Court.
However, even if the instant petition did not suffer from this defect, this
Court, on procedural and substantive grounds, would still resolve to
deny it.
The facts of the case are undisputed. The firewall of a burned-out
building owned by petitioners collapsed and destroyed the tailoring
shop occupied by the family of private respondents, resulting in injuries
to private respondents and the death of Marissa Bernal, a daughter.
Private respondents had been warned by petitioners to vacate their shop
in view of its proximity to the weakened wall but the former failed to
do so. On the basis of the foregoing facts, the Regional Trial Court.
First Judicial Region, Branch XXXVIII, presided by the Hon. Antonio
M. Belen, rendered judgment finding petitioners guilty of gross
negligence and awarding damages to private respondents. On appeal,
the decision of the trial court was affirmed in toto by the Court of
Appeals in a decision promulgated on August 17, 1987, a copy of
which was received by petitioners on August 25, 1987. On September
9, 1987, the last day of the fifteen-day period to file an appeal,
petitioners filed a motion for extension of time to file a motion for
reconsideration, which was eventually denied by the appellate court in
the Resolution of September 30, 1987. Petitioners filed their motion for
reconsideration on September 24, 1987 but this was denied in the
Resolution of October 27, 1987.
This Court finds that the Court of Appeals did not commit a grave
abuse of discretion when it denied petitioners' motion for extension of
time to file a motion for reconsideration, directed entry of judgment and
denied their motion for reconsideration. It correctly applied the rule laid
down in Habaluyas Enterprises, Inc. v. Japzon, [G.R. No. 70895,
August 5, 1985,138 SCRA 461, that the fifteen-day period for
appealing or for filing a motion for reconsideration cannot be extended.
In its Resolution denying the motion for reconsideration, promulgated
on July 30, 1986 (142 SCRA 208), this Court en banc restated and
clarified the rule, to wit:
Beginning one month after the promulgation of this Resolution, the rule
shall be strictly enforced that no motion for extension of time to file a
motion for reconsideration may be filed with the Metropolitan or
Municipal Trial Courts, the Regional Trial Courts, and the Intermediate
Appellate Court. Such a motion may be filed only in cases pending with
the Supreme Court as the court of last resort, which may in its sound
discretion either grant or deny the extension requested. (at p. 212)
Lacsamana v. Second Special Cases Division of the intermediate
Appellate Court, [G.R. No. 73146-53, August 26, 1986, 143 SCRA
643], reiterated the rule and went further to restate and clarify the
modes and periods of appeal.
Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept. 15,
1986,144 SCRA 161],stressed the prospective application of said rule,
and explained the operation of the grace period, to wit:
In other words, there is a one-month grace period from the
promulgation on May 30, 1986 of the Court's Resolution in the
clarificatory Habaluyas case, or up to June 30, 1986, within which the
rule barring extensions of time to file motions for new trial or
reconsideration is, as yet, not strictly enforceable.
Since petitioners herein filed their motion for extension on February 27,
1986, it is still within the grace period, which expired on June 30, 1986,
and may still be allowed.
This grace period was also applied in Mission v. Intermediate Appellate
Court [G.R. No. 73669, October 28, 1986, 145 SCRA 306].]
In the instant case, however, petitioners' motion for extension of time
was filed on September 9, 1987, more than a year after the expiration of
the grace period on June 30, 1986. Hence, it is no longer within the
coverage of the grace period. Considering the length of time from the
expiration of the grace period to the promulgation of the decision of the
Court of Appeals on August 25, 1987, petitioners cannot seek refuge in
the ignorance of their counsel regarding said rule for their failure to file
a motion for reconsideration within the reglementary period.
Petitioners contend that the rule enunciated in the Habaluyas case
should not be made to apply to the case at bar owing to the non-
publication of the Habaluyas decision in the Official Gazette as of the
time the subject decision of the Court of Appeals was promulgated.
Contrary to petitioners' view, there is no law requiring the publication
of Supreme Court decisions in the Official Gazette before they can be
binding and as a condition to their becoming effective. It is the bounden
duty of counsel as lawyer in active law practice to keep abreast of
decisions of the Supreme Court particularly where issues have been
clarified, consistently reiterated, and published in the advance reports of
Supreme Court decisions (G. R. s) and in such publications as the
Supreme Court Reports Annotated (SCRA) and law journals.
This Court likewise finds that the Court of Appeals committed no grave
abuse of discretion in affirming the trial court's decision holding
petitioner liable under Article 2190 of the Civil Code, which provides
that "the proprietor of a building or structure is responsible for the
damage resulting from its total or partial collapse, if it should be due to
the lack of necessary repairs.
Nor was there error in rejecting petitioners argument that private
respondents had the "last clear chance" to avoid the accident if only
they heeded the. warning to vacate the tailoring shop and , therefore,
petitioners prior negligence should be disregarded, since the doctrine of
"last clear chance," which has been applied to vehicular accidents, is
inapplicable to this case.
WHEREFORE, in view of the foregoing, the Court Resolved to DENY
the instant petition for lack of merit.
4
A.M. No. MTJ-92-706 March 29, 1995
LUPO ALMODIEL ATIENZA, complainant,
vs.
JUDGE FRANCISCO F. BRILLANTES, JR., Metropolitan Trial
Court, Branch 28, Manila, respondent.
QUIASON, J.:
This is a complaint by Lupo A. Atienza for Gross Immorality and
Appearance of Impropriety against Judge Francisco Brillantes, Jr.,
Presiding Judge of the Metropolitan Trial Court, Branch 20, Manila.
Complainant alleges that he has two children with Yolanda De Castro,
who are living together at No. 34 Galaxy Street, Bel-Air Subdivision,
Makati, Metro Manila. He stays in said house, which he purchased in
1987, whenever he is in Manila.
In December 1991, upon opening the door to his bedroom, he saw
respondent sleeping on his (complainant's) bed. Upon inquiry, he was
told by the houseboy that respondent had been cohabiting with De
Castro. Complainant did not bother to wake up respondent and instead
left the house after giving instructions to his houseboy to take care of
his children.
Thereafter, respondent prevented him from visiting his children and
even alienated the affection of his children for him.
Complainant claims that respondent is married to one Zenaida Ongkiko
with whom he has five children, as appearing in his 1986 and 1991
sworn statements of assets and liabilities. Furthermore, he alleges that
respondent caused his arrest on January 13, 1992, after he had a heated
argument with De Castro inside the latter's office.
For his part, respondent alleges that complainant was not married to De
Castro and that the filing of the administrative action was related to
complainant's claim on the Bel-Air residence, which was disputed by
De Castro.
Respondent denies that he caused complainant's arrest and claims that
he was even a witness to the withdrawal of the complaint for Grave
Slander filed by De Castro against complainant. According to him, it
was the sister of De Castro who called the police to arrest complainant.
Respondent also denies having been married to Ongkiko, although he
admits having five children with her. He alleges that while he and
Ongkiko went through a marriage ceremony before a Nueva Ecija town
mayor on April 25, 1965, the same was not a valid marriage for lack of
a marriage license. Upon the request of the parents of Ongkiko,
respondent went through another marriage ceremony with her in Manila
on June 5, 1965. Again, neither party applied for a marriage license.
Ongkiko abandoned respondent 17 years ago, leaving their children to
his care and custody as a single parent.
Respondent claims that when he married De Castro in civil rites in Los
Angeles, California on December 4, 1991, he believed, in all good faith
and for all legal intents and purposes, that he was single because his
first marriage was solemnized without a license.
Under the Family Code, there must be a judicial declaration of the
nullity of a previous marriage before a party thereto can enter into a
second marriage. Article 40 of said Code provides:
The absolute nullity of a previous marriage may be invoked for the
purposes of remarriage on the basis solely of a final judgment declaring
such previous marriage void.
Respondent argues that the provision of Article 40 of the Family Code
does not apply to him considering that his first marriage took place in
1965 and was governed by the Civil Code of the Philippines; while the
second marriage took place in 1991 and governed by the Family Code.
Article 40 is applicable to remarriages entered into after the effectivity
of the Family Code on August 3, 1988 regardless of the date of the first
marriage. Besides, under Article 256 of the Family Code, said Article is
given "retroactive effect insofar as it does not prejudice or impair
vested or acquired rights in accordance with the Civil Code or other
laws." This is particularly true with Article 40, which is a rule of
procedure. Respondent has not shown any vested right that was
impaired by the application of Article 40 to his case.
The fact that procedural statutes may somehow affect the litigants'
rights may not preclude their retroactive application to pending actions.
The retroactive application of procedural laws is not violative of any
right of a person who may feel that he is adversely affected (Gregorio v.
Court of Appeals, 26 SCRA 229 [1968]). The reason is that as a general
rule no vested right may attach to, nor arise from, procedural laws
(Billones v. Court of Industrial Relations, 14 SCRA 674 [1965]).
Respondent is the last person allowed to invoke good faith. He made a
mockery of the institution of marriage and employed deceit to be able
to cohabit with a woman, who beget him five children.
Respondent passed the Bar examinations in 1962 and was admitted to
the practice of law in 1963. At the time he went through the two
marriage ceremonies with Ongkiko, he was already a lawyer. Yet, he
never secured any marriage license. Any law student would know that a
marriage license is necessary before one can get married. Respondent
was given an opportunity to correct the flaw in his first marriage when
he and Ongkiko were married for the second time. His failure to secure
a marriage license on these two occasions betrays his sinister motives
and bad faith.
It is evident that respondent failed to meet the standard of moral fitness
for membership in the legal profession.
While the deceit employed by respondent existed prior to his
appointment as a Metropolitan Trial Judge, his immoral and illegal act
of cohabiting with De Castro began and continued when he was already
in the judiciary.
The Code of Judicial Ethics mandates that the conduct of a judge must
be free of a whiff of impropriety, not only with respect to his
performance of his judicial duties but also as to his behavior as a
private individual. There is no duality of morality. A public figure is
also judged by his private life. A judge, in order to promote public
confidence in the integrity and impartiality of the judiciary, must
behave with propriety at all times, in the performance of his judicial
duties and in his everyday life. These are judicial guideposts too self-
evident to be overlooked. No position exacts a greater demand on moral
righteousness and uprightness of an individual than a seat in the
judiciary (Imbing v. Tiongzon, 229 SCRA 690 [1994]).
WHEREFORE, respondent is DISMISSED from the service with
forfeiture of all leave and retirement benefits and with prejudice to
reappointment in any branch, instrumentality, or agency of the
government, including government-owned and controlled corporations.
This decision is immediately executory.
SO ORDERED.
5
G.R. No. 179922 December 16, 2008
JUAN DE DIOS CARLOS, petitioner,
vs.
FELICIDAD SANDOVAL, also known as FELICIDAD S. VDA.
DE CARLOS or FELICIDAD SANDOVAL CARLOS or
FELICIDAD SANDOVAL VDA. DE CARLOS, and TEOFILO
CARLOS II, respondents.
DECISION
REYES, R.T., J.:
ONLY a spouse can initiate an action to sever the marital bond for
marriages solemnized during the effectivity of the Family Code, except
cases commenced prior to March 15, 2003. The nullity and annulment
of a marriage cannot be declared in a judgment on the pleadings,
summary judgment, or confession of judgment.
We pronounce these principles as We review on certiorari the
Decision1 of the Court of Appeals (CA) which reversed and set aside
the summary judgment2 of the Regional Trial Court (RTC) in an action
for declaration of nullity of marriage, status of a child, recovery of
property, reconveyance, sum of money, and damages.
The Facts
The events that led to the institution of the instant suitare unveiled as
follows:
Spouses Felix B. Carlos and Felipa Elemia died intestate. They left six
parcels of land to their compulsory heirs, Teofilo Carlos and petitioner
Juan De Dios Carlos. The lots are particularly described as follows:
Parcel No. 1
Lot No. 162 of the MUNTINLUPA ESTATE SUBDIVISION, Case
No. 6137 of the Court of Land Registration.
Exemption from the provisions of Article 567 of the Civil Code is
specifically reserved.
Area: 1 hectare, 06 ares, 07 centares.
Parcel No. 2
A parcel of land (Lot No. 159-B), being a portion of Lot 159, situated
in the Bo. of Alabang, Municipality of Muntinlupa, Province of Rizal, x
x x containing an area of Thirteen Thousand Four Hundred Forty One
(13,441) square meters.
Parcel No. 3
A parcel of land (Lot 159-B-2 of the subd. plan [LRC] Psd-325903,
approved as a non-subd. project), being a portion of Lot 159-B [LRC]
Psd- Alabang, Mun. of Muntinlupa, Metro Manila, Island of Luzon.
Bounded on the NE, points 2 to 4 by Lot 155, Muntinlupa Estate; on
the SE, point 4 to 5 by Lot 159-B-5; on the S, points 5 to 1 by Lot 159-
B-3; on the W, points 1 to 2 by Lot 159-B-1 (Road widening) all of the
subd. plan, containing an area of ONE HUNDRED THIRTY (130) SQ.
METERS, more or less.
PARCEL No. 4
A parcel of land (Lot 28-C of the subd. plan Psd-13-007090, being a
portion of Lot 28, Muntinlupa Estate, L.R.C. Rec. No. 6137), situated
in the Bo. of Alabang, Mun. of Muntinlupa, Metro Manila. Bounded on
the NE, along lines 1-2 by Lot 27, Muntinlupa Estate; on the East &
SE, along lines 2 to 6 by Mangangata River; and on the West., along
line 6-1, by Lot 28-B of the subd. plan x x x containing an area of ONE
THUSAND AND SEVENTY-SIX (1,076) SQUARE METERS.
PARCEL No. 5
PARCELA DE TERRENO No. 50, Manzana No. 18, de la subd. de
Solocan. Linda por el NW, con la parcela 49; por el NE, con la parcela
36; por el SE, con la parcela 51; y por el SW, con la calle Dos Castillas.
Partiendo de un punto marcado 1 en el plano, el cual se halla a S. gds.
01'W, 72.50 mts. Desde el punto 1 de esta manzana, que es un mojon
de concreto de la Ciudad de Manila, situado on el esquina E. que
forman las Calles Laong Laan y Dos. Castillas, continiendo un
extension superficial de CIENTO CINCUENTA (150) METROS
CUADRADOS.
PARCEL No. 6
PARCELA DE TERRENO No. 51, Manzana No. 18, de la subd. De
Solocon. Linda por el NW, con la parcela 50; por el NE, con la parcela
37; por el SE, con la parcela 52; por el SW, con la Calle Dos Castillas.
Partiendo de un punto Marcado 1 en el plano, el cual se halla at S. 43
gds. 01'E, 82.50 mts. Desde el punto 1 de esta manzana, que es un
mojon de concreto de la Ciudad de Manila, situado on el esquina E. que
forman las Calles Laong Laan y Dos. Castillas, continiendo una
extension superficial de CIENTO CINCUENTA (150) METROS
CUADRADOS.3
During the lifetime of Felix Carlos, he agreed to transfer his estate to
Teofilo. The agreement was made in order to avoid the payment of
inheritance taxes. Teofilo, in turn, undertook to deliver and turn over
the share of the other legal heir, petitioner Juan De Dios Carlos.
Eventually, the first three (3) parcels of land were transferred and
registered in the name of Teofilo. These three (3) lots are now covered
by Transfer Certificate of Title (TCT) No. 234824 issued by the
Registry of Deeds of Makati City; TCT No. 139061 issued by the
Registry of Deeds of Makati City; and TCT No. 139058 issued by the
Registry of Deeds of Makati City.
Parcel No. 4 was registered in the name of petitioner. The lot is now
covered by TCT No. 160401 issued by the Registry of Deeds of Makati
City.
On May 13, 1992, Teofilo died intestate. He was survived by
respondents Felicidad and their son, Teofilo Carlos II (Teofilo II). Upon
Teofilo's death, Parcel Nos. 5 & 6 were registered in the name of
respondent Felicidad and co-respondent, Teofilo II. The said two (2)
parcels of land are covered by TCT Nos. 219877 and 210878,
respectively, issued by the Registry of Deeds of Manila.
In 1994, petitioner instituted a suit against respondents before the RTC
in Muntinlupa City, docketed as Civil Case No. 94-1964. In the said
case, the parties submitted and caused the approval of a partial
compromise agreement. Under the compromise, the parties
acknowledged their respective shares in the proceeds from the sale of a
portion of the first parcel of land. This includes the remaining 6,691-
square-meter portion of said land.
On September 17, 1994, the parties executed a deed of extrajudicial
partition, dividing the remaining land of the first parcel between them.
Meanwhile, in a separate case entitled Rillo v. Carlos,4 2,331 square
meters of the second parcel of land were adjudicated in favor of
plaintiffs Rillo. The remaining 10,000-square meter portion was later
divided between petitioner and respondents.
The division was incorporated in a supplemental compromise
agreement executed on August 17, 1994, with respect to Civil Case No.
94-1964. The parties submitted the supplemental compromise
agreement, which was approved accordingly.
6
Petitioner and respondents entered into two more contracts in August
1994. Under the contracts, the parties equally divided between them the
third and fourth parcels of land.
In August 1995, petitioner commenced an action, docketed as Civil
Case No. 95-135, against respondents before the court a quo with the
following causes of action: (a) declaration of nullity of marriage; (b)
status of a child; (c) recovery of property; (d) reconveyance; and (e)
sum of money and damages. The complaint was raffled to Branch 256
of the RTC in Muntinlupa.
In his complaint, petitioner asserted that the marriage between his late
brother Teofilo and respondent Felicidad was a nullity in view of the
absence of the required marriage license. He likewise maintained that
his deceased brother was neither the natural nor the adoptive father of
respondent Teofilo Carlos II.
Petitioner likewise sought the avoidance of the contracts he entered into
with respondent Felicidad with respect to the subject real properties. He
also prayed for the cancellation of the certificates of title issued in the
name of respondents. He argued that the properties covered by such
certificates of title, including the sums received by respondents as
proceeds, should be reconveyed to him.
Finally, petitioner claimed indemnification as and by way of moral and
exemplary damages, attorney's fees, litigation expenses, and costs of
suit.
On October 16, 1995, respondents submitted their answer. They denied
the material averments of petitioner's complaint. Respondents
contended that the dearth of details regarding the requisite marriage
license did not invalidate Felicidad's marriage to Teofilo. Respondents
declared that Teofilo II was the illegitimate child of the deceased
Teofilo Carlos with another woman.
On the grounds of lack of cause of action and lack of jurisdiction over
the subject matter, respondents prayed for the dismissal of the case
before the trial court. They also asked that their counterclaims for moral
and exemplary damages, as well as attorney's fees, be granted.
But before the parties could even proceed to pre-trial, respondents
moved for summary judgment. Attached to the motion was the affidavit
of the justice of the peace who solemnized the marriage. Respondents
also submitted the Certificate of Live Birth of respondent Teofilo II. In
the certificate, the late Teofilo Carlos and respondent Felicidad were
designated as parents.
On January 5, 1996, petitioner opposed the motion for summary
judgment on the ground of irregularity of the contract evidencing the
marriage. In the same breath, petitioner lodged his own motion for
summary judgment. Petitioner presented a certification from the Local
Civil Registrar of Calumpit, Bulacan, certifying that there is no record
of birth of respondent Teofilo II.
Petitioner also incorporated in the counter-motion for summary
judgment the testimony of respondent Felicidad in another case. Said
testimony was made in Civil Case No. 89-2384, entitled Carlos v.
Gorospe, before the RTC Branch 255, Las Piñas. In her testimony,
respondent Felicidad narrated that co-respondent Teofilo II is her child
with Teofilo.5
Subsequently, the Office of the City Prosecutor of Muntinlupa
submitted to the trial court its report and manifestation, discounting the
possibility of collusion between the parties.
RTC and CA Dispositions
On April 8, 1996, the RTC rendered judgment, disposing as follows:
WHEREFORE, premises considered, defendant's (respondent's)
Motion for Summary Judgment is hereby denied. Plaintiff's
(petitioner's) Counter-Motion for Summary Judgment is hereby granted
and summary judgment is hereby rendered in favor of plaintiff as
follows:
1. Declaring the marriage between defendant Felicidad Sandoval and
Teofilo Carlos solemnized at Silang, Cavite on May 14, 1962,
evidenced by the Marriage Certificate submitted in this case, null and
void ab initio for lack of the requisite marriage license;
2. Declaring that the defendant minor, Teofilo S. Carlos II, is not the
natural, illegitimate, or legally adopted child of the late Teofilo E.
Carlos;
3. Ordering defendant Sandoval to pay and restitute to plaintiff the sum
of P18,924,800.00 together with the interest thereon at the legal rate
from date of filing of the instant complaint until fully paid;
4. Declaring plaintiff as the sole and exclusive owner of the parcel of
land, less the portion adjudicated to plaintiffs in Civil Case No. 11975,
covered by TCT No. 139061 of the Register of Deeds of Makati City,
and ordering said Register of Deeds to cancel said title and to issue
another title in the sole name of plaintiff herein;
5. Declaring the Contract, Annex "K" of complaint, between plaintiff
and defendant Sandoval null and void, and ordering the Register of
Deeds of Makati City to cancel TCT No. 139058 in the name of Teofilo
Carlos, and to issue another title in the sole name of plaintiff herein;
6. Declaring the Contract, Annex M of the complaint, between plaintiff
and defendant Sandoval null and void;
7. Ordering the cancellation of TCT No. 210877 in the names of
defendant Sandoval and defendant minor Teofilo S. Carlos II and
ordering the Register of Deeds of Manila to issue another title in the
exclusive name of plaintiff herein;
8. Ordering the cancellation of TCT No. 210878 in the name of
defendant Sandoval and defendant Minor Teofilo S. Carlos II and
ordering the Register of Deeds of Manila to issue another title in the
sole name of plaintiff herein.
Let this case be set for hearing for the reception of plaintiff's evidence
on his claim for moral damages, exemplary damages, attorney's fees,
appearance fees, and litigation expenses on June 7, 1996 at 1:30 o'clock
in the afternoon.
SO ORDERED.6
Dissatisfied, respondents appealed to the CA. In the appeal, respondents
argued, inter alia, that the trial court acted without or in excess of
jurisdiction in rendering summary judgment annulling the marriage of
Teofilo, Sr. and Felicidad and in declaring Teofilo II as not an
illegitimate child of Teofilo, Sr.
On October 15, 2002, the CA reversed and set aside the RTC ruling,
disposing as follows:
WHEREFORE, the summary judgment appealed from is REVERSED
and SET ASIDE and in lieu thereof, a new one is entered
REMANDING the case to the court of origin for further proceedings.
SO ORDERED.7
The CA opined:
We find the rendition of the herein appealed summary judgment by the
court a quo contrary to law and public policy as ensconced in the
aforesaid safeguards. The fact that it was appellants who first sought
7
summary judgment from the trial court, did not justify the grant thereof
in favor of appellee. Not being an action "to recover upon a claim" or
"to obtain a declaratory relief," the rule on summary judgment apply
(sic) to an action to annul a marriage. The mere fact that no genuine
issue was presented and the desire to expedite the disposition of the
case cannot justify a misinterpretation of the rule. The first paragraph of
Article 88 and 101 of the Civil Code expressly prohibit the rendition of
decree of annulment of a marriage upon a stipulation of facts or a
confession of judgment. Yet, the affidavits annexed to the petition for
summary judgment practically amount to these methods explicitly
proscribed by the law.
We are not unmindful of appellee's argument that the foregoing
safeguards have traditionally been applied to prevent collusion of
spouses in the matter of dissolution of marriages and that the death of
Teofilo Carlos on May 13, 1992 had effectively dissolved the marriage
herein impugned. The fact, however, that appellee's own brother and
appellant Felicidad Sandoval lived together as husband and wife for
thirty years and that the annulment of their marriage is the very means
by which the latter is sought to be deprived of her participation in the
estate left by the former call for a closer and more thorough inquiry into
the circumstances surrounding the case. Rather that the summary nature
by which the court a quo resolved the issues in the case, the rule is to
the effect that the material facts alleged in the complaint for annulment
of marriage should always be proved. Section 1, Rule 19 of the Revised
Rules of Court provides:
"Section 1. Judgment on the pleadings. - Where an answer fails to
tender an issue, or otherwise admits the material allegations of the
adverse party's pleading, the court may, on motion of that party, direct
judgment on such pleading. But in actions for annulment of marriage or
for legal separation, the material facts alleged in the complaint shall
always be proved." (Underscoring supplied)
Moreover, even if We were to sustain the applicability of the rules on
summary judgment to the case at bench, Our perusal of the record
shows that the finding of the court a quo for appellee would still not be
warranted. While it may be readily conceded that a valid marriage
license is among the formal requisites of marriage, the absence of
which renders the marriage void ab initio pursuant to Article 80(3) in
relation to Article 58 of the Civil Code the failure to reflect the serial
number of the marriage license on the marriage contract evidencing the
marriage between Teofilo Carlos and appellant Felicidad Sandoval,
although irregular, is not as fatal as appellee represents it to be. Aside
from the dearth of evidence to the contrary, appellant Felicidad
Sandoval's affirmation of the existence of said marriage license is
corroborated by the following statement in the affidavit executed by
Godofredo Fojas, then Justice of the Peace who officiated the impugned
marriage, to wit:
"That as far as I could remember, there was a marriage license issued at
Silang, Cavite on May 14, 1962 as basis of the said marriage contract
executed by Teofilo Carlos and Felicidad Sandoval, but the number of
said marriage license was inadvertently not placed in the marriage
contract for the reason that it was the Office Clerk who filled up the
blanks in the Marriage Contract who in turn, may have overlooked the
same."
Rather than the inferences merely drawn by the trial court, We are of
the considered view that the veracity and credibility of the foregoing
statement as well as the motivations underlying the same should be
properly threshed out in a trial of the case on the merits.
If the non-presentation of the marriage contract - the primary evidence
of marriage - is not proof that a marriage did not take place, neither
should appellants' non-presentation of the subject marriage license be
taken as proof that the same was not procured. The burden of proof to
show the nullity of the marriage, it must be emphasized, rests upon the
plaintiff and any doubt should be resolved in favor of the validity of the
marriage.
Considering that the burden of proof also rests on the party who
disputes the legitimacy of a particular party, the same may be said of
the trial court's rejection of the relationship between appellant Teofilo
Carlos II and his putative father on the basis of the inconsistencies in
appellant Felicidad Sandoval's statements. Although it had effectively
disavowed appellant's prior claims regarding the legitimacy of appellant
Teofilo Carlos II, the averment in the answer that he is the illegitimate
son of appellee's brother, to Our mind, did not altogether foreclose the
possibility of the said appellant's illegitimate filiation, his right to prove
the same or, for that matter, his entitlement to inheritance rights as
such.
Without trial on the merits having been conducted in the case, We find
appellee's bare allegation that appellant Teofilo Carlos II was merely
purchased from an indigent couple by appellant Felicidad Sandoval, on
the whole, insufficient to support what could well be a minor's total
forfeiture of the rights arising from his putative filiation. Inconsistent
though it may be to her previous statements, appellant Felicidad
Sandoval's declaration regarding the illegitimate filiation of Teofilo
Carlos II is more credible when considered in the light of the fact that,
during the last eight years of his life, Teofilo Carlos allowed said
appellant the use of his name and the shelter of his household. The least
that the trial court could have done in the premises was to conduct a
trial on the merits in order to be able to thoroughly resolve the issues
pertaining to the filiation of appellant Teofilo Carlos II.8
On November 22, 2006, petitioner moved for reconsideration and for
the inhibition of the ponente, Justice Rebecca De Guia-Salvador. The
CA denied the twin motions.
Issues
In this petition under Rule 45, petitioner hoists the following issues:
1. That, in reversing and setting aside the Summary Judgment under the
Decision, Annex A hereof, and in denying petitioner's Motion for
reconsideration under the Resolution, Annex F hereof, with respect to
the nullity of the impugned marriage, petitioner respectfully submits
that the Court of Appeals committed a grave reversible error in
applying Articles 88 and 101 of the Civil Code, despite the fact that the
circumstances of this case are different from that contemplated and
intended by law, or has otherwise decided a question of substance not
theretofore decided by the Supreme Court, or has decided it in a manner
probably not in accord with law or with the applicable decisions of this
Honorable Court;
2. That in setting aside and reversing the Summary Judgment and, in
lieu thereof, entering another remanding the case to the court of origin
for further proceedings, petitioner most respectfully submits that the
Court of Appeals committed a serious reversible error in applying
Section 1, Rule 19 (now Section 1, Rule 34) of the Rules of Court
providing for judgment on the pleadings, instead of Rule 35 governing
Summary Judgments;
3. That in reversing and setting aside the Summary Judgment and, in
lieu thereof, entering another remanding the case to the court of origin
for further proceedings, petitioner most respectfully submits that the
Court of Appeals committed grave abuse of discretion, disregarded
judicial admissions, made findings on ground of speculations, surmises,
and conjectures, or otherwise committed misapplications of the laws
and misapprehension of the facts.9 (Underscoring supplied)
Essentially, the Court is tasked to resolve whether a marriage may be
declared void ab initio through a judgment on the pleadings or a
8
summary judgment and without the benefit of a trial. But there are other
procedural issues, including the capacity of one who is not a spouse in
bringing the action for nullity of marriage.
Our Ruling
I. The grounds for declaration of absolute nullity of marriage must
be proved. Neither judgment on the pleadings nor summary
judgment is allowed. So is confession of judgment disallowed.
Petitioner faults the CA in applying Section 1, Rule 1910 of the Revised
Rules of Court, which provides:
SECTION 1. Judgment on the pleadings. - Where an answer fails to
tender an issue, or otherwise admits the material allegations of the
adverse party's pleading, the court may, on motion of that party, direct
judgment on such pleading. But in actions for annulment of marriage or
for legal separation, the material facts alleged in the complaint shall
always be proved.
He argues that the CA should have applied Rule 35 of the Rules of
Court governing summary judgment, instead of the rule on judgment on
the pleadings.
Petitioner is misguided. The CA did not limit its finding solely within
the provisions of the Rule on judgment on the pleadings. In disagreeing
with the trial court, the CA likewise considered the provisions on
summary judgments, to wit:
Moreover, even if We are to sustain the applicability of the rules on
summary judgment to the case at bench, Our perusal of the record
shows that the finding of the court a quo for appellee would still not be
warranted. x x x11
But whether it is based on judgment on the pleadings or summary
judgment, the CA was correct in reversing the summary judgment
rendered by the trial court. Both the rules on judgment on the pleadings
and summary judgments have no place in cases of declaration of
absolute nullity of marriage and even in annulment of marriage.
With the advent of A.M. No. 02-11-10-SC, known as "Rule on
Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages," the question on the application of summary
judgments or even judgment on the pleadings in cases of nullity or
annulment of marriage has been stamped with clarity. The significant
principle laid down by the said Rule, which took effect on March 15,
200312 is found in Section 17, viz.:
SEC. 17. Trial. - (1) The presiding judge shall personally conduct the
trial of the case. No delegation of evidence to a commissioner shall be
allowed except as to matters involving property relations of the
spouses.
(2) The grounds for declaration of absolute nullity or annulment of
marriage must be proved. No judgment on the pleadings, summary
judgment, or confession of judgment shall be allowed. (Underscoring
supplied)
Likewise instructive is the Court's pronouncement in Republic v.
Sandiganbayan.13 In that case, We excluded actions for nullity or
annulment of marriage from the application of summary judgments.
Prescinding from the foregoing discussion, save for annulment of
marriage or declaration of its nullity or for legal separation, summary
judgment is applicable to all kinds of actions.14 (Underscoring supplied)
By issuing said summary judgment, the trial court has divested the
State of its lawful right and duty to intervene in the case. The
participation of the State is not terminated by the declaration of the
public prosecutor that no collusion exists between the parties. The State
should have been given the opportunity to present controverting
evidence before the judgment was rendered.15
Both the Civil Code and the Family Code ordain that the court should
order the prosecuting attorney to appear and intervene for the State. It is
at this stage when the public prosecutor sees to it that there is no
suppression of evidence. Concomitantly, even if there is no suppression
of evidence, the public prosecutor has to make sure that the evidence to
be presented or laid down before the court is not fabricated.
To further bolster its role towards the preservation of marriage, the Rule
on Declaration of Absolute Nullity of Void Marriages reiterates the
duty of the public prosecutor, viz.:
SEC. 13. Effect of failure to appear at the pre-trial. - (a) x x x
(b) x x x If there is no collusion, the court shall require the public
prosecutor to intervene for the State during the trial on the merits to
prevent suppression or fabrication of evidence. (Underscoring supplied)
Truly, only the active participation of the public prosecutor or the
Solicitor General will ensure that the interest of the State is represented
and protected in proceedings for declaration of nullity of marriages by
preventing the fabrication or suppression of evidence.16
II. A petition for declaration of absolute nullity of void marriage
may be filed solely by the husband or wife. Exceptions: (1) Nullity
of marriage cases commenced before the effectivity of A.M. No. 02-
11-10-SC; and (2) Marriages celebrated during the effectivity of the
Civil Code.
Under the Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages, the petition for
declaration of absolute nullity of marriage may not be filed by any party
outside of the marriage. The Rule made it exclusively a right of the
spouses by stating:
SEC. 2. Petition for declaration of absolute nullity of void marriages. -
(a) Who may file. - A petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or the wife. (Underscoring
supplied)
Section 2(a) of the Rule makes it the sole right of the husband or the
wife to file a petition for declaration of absolute nullity of void
marriage. The rationale of the Rule is enlightening, viz.:
Only an aggrieved or injured spouse may file a petition for annulment
of voidable marriages or declaration of absolute nullity of void
marriages. Such petition cannot be filed by compulsory or intestate
heirs of the spouses or by the State. The Committee is of the belief that
they do not have a legal right to file the petition. Compulsory or
intestate heirs have only inchoate rights prior to the death of their
predecessor, and, hence, can only question the validity of the marriage
of the spouses upon the death of a spouse in a proceeding for the
settlement of the estate of the deceased spouse filed in the regular
courts. On the other hand, the concern of the State is to preserve
marriage and not to seek its dissolution.17 (Underscoring supplied)
The new Rule recognizes that the husband and the wife are the sole
architects of a healthy, loving, peaceful marriage. They are the only
ones who can decide when and how to build the foundations of
marriage. The spouses alone are the engineers of their marital life. They
are simultaneously the directors and actors of their matrimonial true-to-
life play. Hence, they alone can and should decide when to take a cut,
but only in accordance with the grounds allowed by law.
9
The innovation incorporated in A.M. No. 02-11-10-SC sets forth a
demarcation line between marriages covered by the Family Code and
those solemnized under the Civil Code. The Rule extends only to
marriages entered into during the effectivity of the Family Code which
took effect on August 3, 1988.18
The advent of the Rule on Declaration of Absolute Nullity of Void
Marriages marks the beginning of the end of the right of the heirs of the
deceased spouse to bring a nullity of marriage case against the
surviving spouse. But the Rule never intended to deprive the
compulsory or intestate heirs of their successional rights.
While A.M. No. 02-11-10-SC declares that a petition for declaration of
absolute nullity of marriage may be filed solely by the husband or the
wife, it does not mean that the compulsory or intestate heirs are without
any recourse under the law. They can still protect their successional
right, for, as stated in the Rationale of the Rules on Annulment of
Voidable Marriages and Declaration of Absolute Nullity of Void
Marriages, compulsory or intestate heirs can still question the validity
of the marriage of the spouses, not in a proceeding for declaration of
nullity but upon the death of a spouse in a proceeding for the settlement
of the estate of the deceased spouse filed in the regular courts. 19
It is emphasized, however, that the Rule does not apply to cases already
commenced before March 15, 2003 although the marriage involved is
within the coverage of the Family Code. This is so, as the new Rule
which became effective on March 15, 200320 is prospective in its
application. Thus, the Court held in Enrico v. Heirs of Sps.
Medinaceli,21 viz.:
As has been emphasized, A.M. No. 02-11-10-SC covers marriages
under the Family Code of the Philippines, and is prospective in its
application.22 (Underscoring supplied)
Petitioner commenced the nullity of marriage case against respondent
Felicidad in 1995. The marriage in controversy was celebrated on May
14, 1962. Which law would govern depends upon when the marriage
took place.23
The marriage having been solemnized prior to the effectivity of the
Family Code, the applicable law is the Civil Code which was the law in
effect at the time of its celebration.24 But the Civil Code is silent as to
who may bring an action to declare the marriage void. Does this mean
that any person can bring an action for the declaration of nullity of
marriage?
We respond in the negative. The absence of a provision in the Civil
Code cannot be construed as a license for any person to institute a
nullity of marriage case. Such person must appear to be the party who
stands to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit.25 Elsewise stated, plaintiff must
be the real party-in-interest. For it is basic in procedural law that every
action must be prosecuted and defended in the name of the real party-
in-interest.26
Interest within the meaning of the rule means material interest or an
interest in issue to be affected by the decree or judgment of the case, as
distinguished from mere curiosity about the question involved or a mere
incidental interest. One having no material interest to protect cannot
invoke the jurisdiction of the court as plaintiff in an action. When
plaintiff is not the real party-in-interest, the case is dismissible on the
ground of lack of cause of action.27
Illuminating on this point is Amor-Catalan v. Court of Appeals,28 where
the Court held:
True, under the New Civil Code which is the law in force at the time
the respondents were married, or even in the Family Code, there is no
specific provision as to who can file a petition to declare the nullity of
marriage; however, only a party who can demonstrate "proper
interest" can file the same. A petition to declare the nullity of marriage,
like any other actions, must be prosecuted or defended in the name of
the real party-in-interest and must be based on a cause of action. Thus,
in Niñal v. Badayog, the Court held that the children have the
personality to file the petition to declare the nullity of marriage of their
deceased father to their stepmother as it affects their successional
rights.
xxxx
In fine, petitioner's personality to file the petition to declare the nullity
of marriage cannot be ascertained because of the absence of the divorce
decree and the foreign law allowing it. Hence, a remand of the case to
the trial court for reception of additional evidence is necessary to
determine whether respondent Orlando was granted a divorce decree
and whether the foreign law which granted the same allows or restricts
remarriage. If it is proved that a valid divorce decree was obtained and
the same did not allow respondent Orlando's remarriage, then the trial
court should declare respondent's marriage as bigamous and void ab
initio but reduced the amount of moral damages from P300,000.00
to P50,000.00 and exemplary damages from P200,000.00
to P25,000.00. On the contrary, if it is proved that a valid divorce
decree was obtained which allowed Orlando to remarry, then the trial
court must dismiss the instant petition to declare nullity of marriage on
the ground that petitioner Felicitas Amor-Catalan lacks legal
personality to file the same.29 (Underscoring supplied)
III. The case must be remanded to determine whether or not
petitioner is a real-party-in-interest to seek the declaration of
nullity of the marriage in controversy.
In the case at bench, the records reveal that when Teofilo died intestate
in 1992, his only surviving compulsory heirs are respondent Felicidad
and their son, Teofilo II. Under the law on succession, successional
rights are transmitted from the moment of death of the decedent and the
compulsory heirs are called to succeed by operation of law. 30
Upon Teofilo's death in 1992, all his property, rights and obligations to
the extent of the value of the inheritance are transmitted to his
compulsory heirs. These heirs were respondents Felicidad and Teofilo
II, as the surviving spouse and child, respectively.
Article 887 of the Civil Code outlined who are compulsory heirs, to
wit:
(1) Legitimate children and descendants, with respect to their legitimate
parents and ascendants;
(2) In default of the foregoing, legitimate parents and ascendants, with
respect to their legitimate children and descendants;
(3) The widow or widower;
(4) Acknowledged natural children, and natural children by legal
fiction;
(5) Other illegitimate children referred to in Article 287 of the Civil
Code.31
Clearly, a brother is not among those considered as compulsory heirs.
But although a collateral relative, such as a brother, does not fall within
the ambit of a compulsory heir, he still has a right to succeed to the
estate. Articles 1001 and 1003 of the New Civil Code provide:
ART. 1001. Should brothers and sisters or their children survive with
the widow or widower, the latter shall be entitled to one-half of the
10
inheritance and the brothers and sisters or their children to the other
half.
ART. 1003. If there are no descendants, ascendants, illegitimate
children, or a surviving spouse, the collateral relatives shall succeed to
the entire estate of the deceased in accordance with the following
articles. (Underscoring supplied)
Indeed, only the presence of descendants, ascendants or illegitimate
children excludes collateral relatives from succeeding to the estate of
the decedent. The presence of legitimate, illegitimate, or adopted child
or children of the deceased precludes succession by collateral
relatives.32 Conversely, if there are no descendants, ascendants,
illegitimate children, or a surviving spouse, the collateral relatives shall
succeed to the entire estate of the decedent.33
If respondent Teofilo II is declared and finally proven not to be the
legitimate, illegitimate, or adopted son of Teofilo, petitioner would then
have a personality to seek the nullity of marriage of his deceased
brother with respondent Felicidad. This is so, considering that collateral
relatives, like a brother and sister, acquire successional right over the
estate if the decedent dies without issue and without ascendants in the
direct line.
The records reveal that Teofilo was predeceased by his parents. He had
no other siblings but petitioner. Thus, if Teofilo II is finally found and
proven to be not a legitimate, illegitimate, or adopted son of Teofilo,
petitioner succeeds to the other half of the estate of his brother, the first
half being allotted to the widow pursuant to Article 1001 of the New
Civil Code. This makes petitioner a real-party-interest to seek the
declaration of absolute nullity of marriage of his deceased brother with
respondent Felicidad. If the subject marriage is found to be void ab
initio, petitioner succeeds to the entire estate.
It bears stressing, however, that the legal personality of petitioner to
bring the nullity of marriage case is contingent upon the final
declaration that Teofilo II is not a legitimate, adopted, or illegitimate
son of Teofilo.
If Teofilo II is proven to be a legitimate, illegitimate, or legally adopted
son of Teofilo, then petitioner has no legal personality to ask for the
nullity of marriage of his deceased brother and respondent Felicidad.
This is based on the ground that he has no successional right to be
protected, hence, does not have proper interest. For although the
marriage in controversy may be found to be void from the beginning,
still, petitioner would not inherit. This is because the presence of
descendant, illegitimate,34 or even an adopted child35 excludes the
collateral relatives from inheriting from the decedent.
Thus, the Court finds that a remand of the case for trial on the merits to
determine the validity or nullity of the subject marriage is called
for. But the RTC is strictly instructed to dismiss the nullity of
marriage case for lack of cause of action if it is proven by evidence
that Teofilo II is a legitimate, illegitimate, or legally adopted son of
Teofilo Carlos, the deceased brother of petitioner.
IV. Remand of the case regarding the question of filiation of
respondent Teofilo II is proper and in order. There is a need to
vacate the disposition of the trial court as to the other causes of action
before it.
Petitioner did not assign as error or interpose as issue the ruling of the
CA on the remand of the case concerning the filiation of respondent
Teofilo II. This notwithstanding, We should not leave the matter
hanging in limbo.
This Court has the authority to review matters not specifically raised or
assigned as error by the parties, if their consideration is necessary in
arriving at a just resolution of the case.36
We agree with the CA that without trial on the merits having been
conducted in the case, petitioner's bare allegation that respondent
Teofilo II was adopted from an indigent couple is insufficient to
support a total forfeiture of rights arising from his putative filiation.
However, We are not inclined to support its pronouncement that the
declaration of respondent Felicidad as to the illegitimate filiation of
respondent Teofilo II is more credible. For the guidance of the appellate
court, such declaration of respondent Felicidad should not be afforded
credence. We remind the CA of the guaranty provided by Article 167 of
the Family Code to protect the status of legitimacy of a child, to wit:
ARTICLE 167. The child shall be considered legitimate although the
mother may have declared against its legitimacy or may have been
sentenced as an adulteress. (Underscoring supplied)
It is stressed that Felicidad's declaration against the legitimate status of
Teofilo II is the very act that is proscribed by Article 167 of the Family
Code. The language of the law is unmistakable. An assertion by the
mother against the legitimacy of her child cannot affect the legitimacy
of a child born or conceived within a valid marriage. 37
Finally, the disposition of the trial court in favor of petitioner for causes
of action concerning reconveyance, recovery of property, and sum of
money must be vacated. This has to be so, as said disposition was made
on the basis of its finding that the marriage in controversy was null and
void ab initio.
WHEREFORE, the appealed Decision is MODIFIED as follows:
1. The case is REMANDED to the Regional Trial Court in regard to
the action on the status and filiation of respondent Teofilo Carlos II and
the validity or nullity of marriage between respondent Felicidad
Sandoval and the late Teofilo Carlos;
2. If Teofilo Carlos II is proven to be the legitimate, or illegitimate, or
legally adopted son of the late Teofilo Carlos, the RTC is
strictly INSTRUCTED to DISMISS the action for nullity of marriage
for lack of cause of action;
3. The disposition of the RTC in Nos. 1 to 8 of the fallo of its decision
is VACATED AND SET ASIDE.
The Regional Trial Court is ORDERED to conduct trial on the merits
with dispatch and to give this case priority in its calendar.
No costs.
11
G.R. No. 174238 July 7, 2009
ANITA CHENG, Petitioner,
vs.
SPOUSES WILLIAM SY and TESSIE SY, Respondents.
DECISION
NACHURA, J.:
This is apetition1for review on certiorari under Rule 45 of the Rules of
Court of the Order dated January 2, 20062 of the Regional Trial Court
(RTC), Branch 18, Manila in Civil Case No. 05-112452 entitled Anita
Cheng v. Spouses William Sy and Tessie Sy.
The antecedents are as follows—
Petitioner Anita Cheng filed two (2) estafa cases before the RTC,
Branch 7, Manila against respondent spouses William and Tessie Sy
(Criminal Case No. 98-969952 against Tessie Sy and Criminal Case
No. 98-969953 against William Sy) for issuing to her Philippine Bank
of Commerce (PBC) Check Nos. 171762 and 71860 for ₱300,000.00
each, in payment of their loan, both of which were dishonored upon
presentment for having been drawn against a closed account.
Meanwhile, based on the same facts, petitioner, on January 20, 1999,
filed against respondents two (2) cases for violation of Batas Pambansa
Bilang (BP Blg.) 22 before the Metropolitan Trial Court (MeTC),
Branch 25, Manila (Criminal Case Nos. 341458-59).
On March 16, 2004, the RTC, Branch 7, Manila dismissed the estafa
cases for failure of the prosecution to prove the elements of the crime.
The Order dismissing Criminal Case No. 98-969952 contained no
declaration as to the civil liability of Tessie Sy.3 On the other hand, the
Order in Criminal Case No. 98-969953 contained a statement, "Hence,
if there is any liability of the accused, the same is purely ‘civil,’ not
criminal in nature."4
Later, the MeTC, Branch 25, Manila, dismissed, on demurrer, the BP
Blg. 22 cases in its Order5 dated February 7, 2005 on account of the
failure of petitioner to identify the accused respondents in open court.
The Order also did not make any pronouncement as to the civil liability
of accused respondents.1avvphi1
On April 26, 2005, petitioner lodged against respondents before the
RTC, Branch 18, Manila, a complaint6 for collection of a sum of money
with damages (Civil Case No. 05-112452) based on the same loaned
amount of ₱600,000.00 covered by the two PBC checks previously
subject of the estafa and BP Blg. 22 cases.
In the assailed Order7 dated January 2, 2006, the RTC, Branch 18,
Manila, dismissed the complaint for lack of jurisdiction, ratiocinating
that the civil action to collect the amount of ₱600,000.00 with damages
was already impliedly instituted in the BP Blg. 22 cases in light of
Section 1, paragraph (b) of Rule 111 of the Revised Rules of Court.
Petitioner filed a motion for reconsideration8 which the court denied in
its Order9 dated June 5, 2006. Hence, this petition, raising the sole legal
issue –
Whether or not Section 1 of Rule 111 of the 2000 Rules of Criminal
Procedure and Supreme Court Circular No. 57-97 on the Rules and
Guidelines in the filing and prosecution of criminal cases under BP Blg.
22 are applicable to the present case where the nature of the order
dismissing the cases for bouncing checks against the respondents was
[based] on the failure of the prosecution to identify both the accused
(respondents herein)?10
Essentially, petitioner argues that since the BP Blg. 22 cases were filed
on January 20, 1999, the 2000 Revised Rules on Criminal Procedure
promulgated on December 1, 2000 should not apply, as it must be given
only prospective application. She further contends that that her case
falls within the following exceptions to the rule that the civil action
correspondent to the criminal action is deemed instituted with the
latter—
(1) additional evidence as to the identities of the accused is necessary
for the resolution of the civil aspect of the case;
(2) a separate complaint would be just as efficacious as or even more
expedient than a timely remand to the trial court where the criminal
action was decided for further hearings on the civil aspect of the case;
(3) the trial court failed to make any pronouncement as to the civil
liability of the accused amounting to a reservation of the right to have
the civil liability litigated in a separate action;
(4) the trial court did not declare that the facts from which the civil
liability might arise did not exist;
(5) the civil complaint is based on an obligation ex-contractu and not
ex-delicto pursuant to Article 3111 of the Civil Code; and
(6) the claim for civil liability for damages may be had under Article
2912 of the Civil Code.
Petitioner also points out that she was not assisted by any private
prosecutor in the BP Blg. 22 proceedings.
The rule is that upon the filing of the estafa and BP Blg. 22 cases
against respondents, where the petitioner has not made any waiver,
express reservation to litigate separately, or has not instituted the
corresponding civil action to collect the amount of ₱600,000.00 and
damages prior to the criminal action, the civil action is deemed
instituted with the criminal cases.13
This rule applies especially with the advent of the 2000 Revised Rules
on Criminal Procedure. Thus, during the pendency of both the estafa
and the BP Blg. 22 cases, the action to recover the civil liability was
impliedly instituted and remained pending before the respective trial
courts. This is consonant with our ruling in Rodriguez v.
Ponferrada14 that the possible single civil liability arising from the act
of issuing a bouncing check can be the subject of both civil actions
deemed instituted with the estafa case and the prosecution for violation
of BP Blg. 22, simultaneously available to the complaining party,
without traversing the prohibition against forum shopping.15 Prior to the
judgment in either the estafa case or the BP Blg. 22 case, petitioner, as
the complainant, cannot be deemed to have elected either of the civil
actions both impliedly instituted in the said criminal proceedings to the
exclusion of the other.16
The dismissal of the estafa cases for failure of the prosecution to prove
the elements of the crime beyond reasonable doubt—where in Criminal
Case No. 98-969952 there was no pronouncement as regards the civil
liability of the accused and in Criminal Case No. 98-969953 where the
trial court declared that the liability of the accused was only civil in
nature—produced the legal effect of a reservation by the petitioner of
her right to litigate separately the civil action impliedly instituted with
the estafa cases, following Article 29 of the Civil Code.17
However, although this civil action could have been litigated separately
on account of the dismissal of the estafa cases on reasonable doubt, the
petitioner was deemed to have also elected that such civil action be
prosecuted together with the BP Blg. 22 cases in light of the Rodriguez
v. Ponferrada ruling.
12
With the dismissal of the BP Blg. 22 cases for failure to establish the
identity of the accused, the question that arises is whether such
dismissal would have the same legal effect as the dismissed estafa
cases. Put differently, may petitioner’s action to recover respondents’
civil liability be also allowed to prosper separately after the BP Blg. 22
cases were dismissed?
Section 1 (b), Rule 111 of the 2000 Revised Rules on Criminal
Procedure states –
Section 1. Institution of criminal and civil actions. –
xxx
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be
deemed to include the corresponding civil action. No reservation to file
such civil action separately shall be allowed.
Upon filing of the joint criminal and civil actions, the offended party
shall pay in full the filing fees based on the amount of the check
involved, which shall be considered as the actual damages claimed.
Where the complaint or information also seeks to recover liquidated,
moral, nominal, temperate or exemplary damages, the offended party
shall pay the filing fees based on the amounts alleged therein. If the
amounts are not so alleged but any of these damages [is] subsequently
awarded by the court, the filing fees based on the amount awarded shall
constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof has not
yet commenced, it may be consolidated with the criminal action upon
application with the court trying the latter case. If the application is
granted, the trial of both actions shall proceed in accordance with
section 2 of this Rule governing consolidation of the civil and criminal
actions.
Petitioner is in error when she insists that the 2000 Rules on Criminal
Procedure should not apply because she filed her BP Blg. 22 complaints
in 1999. It is now settled that rules of procedure apply even to cases
already pending at the time of their promulgation. The fact that
procedural statutes may somehow affect the litigants’ rights does not
preclude their retroactive application to pending actions. It is axiomatic
that the retroactive application of procedural laws does not violate any
right of a person who may feel that he is adversely affected, nor is it
constitutionally objectionable. The reason for this is that, as a general
rule, no vested right may attach to, nor arise from, procedural laws. 18
Indeed, under the present revised Rules, the criminal action for
violation of BP Blg. 22 includes the corresponding civil action to
recover the amount of the checks. It should be stressed, this policy is
intended to discourage the separate filing of the civil action. In fact, the
Rules even prohibits the reservation of a separate civil action, i.e., one
can no longer file a separate civil case after the criminal complaint is
filed in court. The only instance when separate proceedings are allowed
is when the civil action is filed ahead of the criminal case. Even then,
the Rules encourages the consolidation of the civil and criminal cases.
Thus, where petitioner’s rights may be fully adjudicated in the
proceedings before the court trying the BP Blg. 22 cases, resort to a
separate action to recover civil liability is clearly unwarranted on
account of res judicata, for failure of petitioner to appeal the civil aspect
of the cases. In view of this special rule governing actions for violation
of BP Blg. 22, Article 31 of the Civil Code is not applicable.19
Be it remembered that rules governing procedure before the courts,
while not cast in stone, are for the speedy, efficient, and orderly
dispensation of justice and should therefore be adhered to in order to
attain this objective.20
However, in applying the procedure discussed above, it appears that
petitioner would be left without a remedy to recover from respondents
the ₱600,000.00 allegedly loaned from her. This could prejudice even
the petitioner’s Notice of Claim involving the same amount filed in
Special Proceedings No. 98-88390 (Petition for Voluntary Insolvency
by Kolin Enterprises, William Sy and Tessie Sy), which case was
reportedly archived for failure to prosecute the petition for an
unreasonable length of time.21 Expectedly, respondents would raise the
same defense that petitioner had already elected to litigate the civil
action to recover the amount of the checks along with the BP Blg. 22
cases.
It is in this light that we find petitioner’s contention that she was not
assisted by a private prosecutor during the BP Blg. 22 proceedings
critical. Petitioner indirectly protests that the public prosecutor failed to
protect and prosecute her cause when he failed to have her establish the
identities of the accused during the trial and when he failed to appeal
the civil action deemed impliedly instituted with the BP Blg. 22 cases.
On this ground, we agree with petitioner.
Faced with the dismissal of the BP Blg. 22 cases, petitioner’s recourse
pursuant to the prevailing rules of procedure would have been to appeal
the civil action to recover the amount loaned to respondents
corresponding to the bounced checks. Hence, the said civil action may
proceed requiring only a preponderance of evidence on the part of
petitioner. Her failure to appeal within the reglementary period was
tantamount to a waiver altogether of the remedy to recover the civil
liability of respondents. However, due to the gross mistake of the
prosecutor in the BP Blg. 22 cases, we are constrained to digress from
this rule.
It is true that clients are bound by the mistakes, negligence and
omission of their counsel.22 But this rule admits of exceptions – (1)
where the counsel’s mistake is so great and serious that the client is
prejudiced and denied his day in court, or (2) where the counsel is
guilty of gross negligence resulting in the client’s deprivation of liberty
or property without due process of law.23 Tested against these
guidelines, we hold that petitioner’s lot falls within the exceptions.
It is an oft-repeated exhortation to counsels to be well-informed of
existing laws and rules and to keep abreast with legal developments,
recent enactments and jurisprudence. Unless they faithfully comply
with such duty, they may not be able to discharge competently and
diligently their obligations as members of the Bar.24 Further, lawyers in
the government service are expected to be more conscientious in the
performance of their duties as they are subject to public scrutiny. They
are not only members of the Bar but are also public servants who owe
utmost fidelity to public service.25 Apparently, the public prosecutor
neglected to equip himself with the knowledge of the proper procedure
for BP Blg. 22 cases under the 2000 Rules on Criminal Procedure such
that he failed to appeal the civil action impliedly instituted with the BP
Blg. 22 cases, the only remaining remedy available to petitioner to be
able to recover the money she loaned to respondents, upon the dismissal
of the criminal cases on demurrer. By this failure, petitioner was denied
her day in court to prosecute the respondents for their obligation to pay
their loan.
Moreover, we take into consideration the trial court’s observation when
it dismissed the estafa charge in Criminal Case No. 98-969953 that if
there was any liability on the part of respondents, it was civil in nature.
Hence, if the loan be proven true, the inability of petitioner to recover
the loaned amount would be tantamount to unjust enrichment of
respondents, as they may now conveniently evade payment of their
obligation merely on account of a technicality applied against
petitioner.
13
There is unjust enrichment when (1) a person is unjustly benefited, and
(2) such benefit is derived at the expense of or with damages to another.
This doctrine simply means that a person shall not be allowed to profit
or enrich himself inequitably at another’s expense. One condition for
invoking this principle of unjust enrichment is that the aggrieved party
has no other recourse based on contract, quasi-contract, crime, quasi-
delict or any other provision of law.26

Court litigations are primarily designed to search for the truth, and a
liberal interpretation and application of the rules which will give the
parties the fullest opportunity to adduce proof is the best way to ferret
out the truth. The dispensation of justice and vindication of legitimate
grievances should not be barred by technicalities.27 For reasons of
substantial justice and equity, as the complement of the legal
jurisdiction that seeks to dispense justice where courts of law, through
the inflexibility of their rules and want of power to adapt their
judgments to the special circumstances of cases, are incompetent to do
so,28 we thus rule, pro hac vice, in favor of petitioner.

WHEREFORE, the petition is GRANTED. Civil Case No. 05-112452

entitled Anita Cheng v. Spouses William Sy and Tessie Sy is hereby
ordered REINSTATED. No pronouncement as to costs.

SO ORDERED.

14
G.R. No. 189649, April 20, 2015
ADORACION CAROLINO (SPOUSE AND IN SUBSTITUTION
OF THE DECEASED JEREMIAS A.
CAROLINO), Petitioner, v. GEN. GENEROSO SENGA, AS
CHIEF OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES (AFP); BRIG. GEN. FERNANDO ZABAT, AS
CHIEF OF THE AFP FINANCE CENTER; COMMO.
REYNALDO BASILIO, AS CHIEF OF THE AFP-GHQ
MANAGEMENT AND FISCAL OFFICE; AND COMMO.
EMILIO MARAYAG, PENSION AND GRATUITY OFFICER,
PENSION AND GRATUITY MANAGEMENT CENTER, AFP
FINANCE CENTER, Respondent.
DECISION
PERALTA, J.:
Before us is a petition for review under Rule 45 seeking to reverse and
set aside the Decision1 dated May 25, 2009 of the Court of Appeals
(CA) in CA-G.R. SP No. 103502 and the Resolution2 dated September
10, 2009 denying reconsideration thereof.
The factual and legal antecedents are as follows:
On December 1, 1976, Jeremias A. Carolino, petitioner's husband,
retired3 from the Armed Forces of the Philippines (AFP) with the rank
of Colonel under General Order No. 1208 dated November 29, 1976,
pursuant to the provisions of Sections 1(A) and 10 of Republic Act
(RA) No. 340,4 as amended. He started receiving his monthly retirement
pay in the amount of P18,315.00 in December 1976 until the same was
withheld by respondents in March 2005. On June 3, 2005, Jeremias
wrote a letter5 addressed to the AFP Chief of Staff asking for the
reasons of the withholding of his retirement pay. In a letter
reply,6Myrna F. Villaruz, LTC (FS) PA, Pension and Gratuity Officer
of the AFP Finance Center, informed Jeremias that his loss of Filipino
citizenship caused the deletion of his name in the alpha list of the AFP
Pensioners' Payroll effective March 5, 2005; and that he could avail of
re-entitlement to his retirement benefits and the restoration of his name
in the AFP Pensioners' Masterlist Payroll by complying with the
requirements prescribed under RA No. 9225, or the Dual Citizenship
Act.
It appeared that the termination of Jeremias' pension was done pursuant
to Disposition Form7 dated October 29, 2004, which was approved by
the Chief of Staff and made effective in January 2005. In the said
Disposition Form, the AFP Judge Advocate General opined that under
the provisions of Sections 4, 5, and 6 of RA No. 340, retired military
personnel are disqualified from receiving pension benefits once
incapable to render military service as a result of his having sworn
allegiance to a foreign country. It was also mentioned that termination
of retirement benefits of pensioner of the AFP could be done pursuant
to the provisions of Presidential Decree (PD) No. 1638 8 which provides
that the name of a retiree who loses his Filipino citizenship shall be
removed from the retired list and his retirement benefits terminated
upon such loss. It being in consonance with the policy consideration
that all retirement laws inconsistent with the provisions of PD No. 1638
are repealed and modified accordingly.
On August 24, 2006, Jeremias filed with the Regional Trial Court
(RTC) of Quezon City, a Petition for Mandamus9 against Gen.
Generoso Senga, as Chief of Staff of the AFP, Brig. Gen. Fernando
Zabat, as Chief of the AFP Finance Center, Comm. Reynaldo Basilio,
as Chief of the AFP-GHQ Management and Fiscal Office, and Comm.
Emilio Marayag, Pension and Gratuity Management Officer, Pension
and Gratuity Management Center, AFP Finance Center, seeking
reinstatement of his name in the list of the AFP retired officers,
resumption of payment of his retirement benefits under RA No. 340,
and the reimbursement of all his retirement pay and benefits which
accrued from March 5, 2005 up to the time his name is reinstated and,
thereafter, with claim for damages and attorney's fees. The case was
docketed as Civil Case No. Q-06-58686, and raffled off to Branch 220.
On February 26, 2007, the RTC rendered its Decision 10 granting the
petition for mandamus, the dispositive portion of which
reads:chanroblesvirtuallawlibrary
WHEREFORE, judgment is hereby rendered ordering General
Hermogenes Esperon, Jr., as Chief of Staff of the AFP, Brigadier
General Fernando Zabat, as the Commanding Officer of the AFP
Finance Center, Commodore Reynaldo Basilio, as Chief of the AFP-
GFIQ Management and Fiscal Office, and Captain Theresa M. Nicdao,
as Pension and Gratuity Officer of the Pension and Gratuity
Management Center, or any of their respective successors and those
taking instructions from them as agents or subordinates, to:
a. immediately reinstate the name of petitioner in the list of
retired AFP Officers, and to resume payment of his retirement
benefits under RA 340; and
b. release to [petitioner] all retirement benefits due him under
RA 340 which accrued to him from March 2005 continuously
up to the time his name is reinstated in the list of AFP retired
officers.11
The RTC found that the issue for resolution is the applicability of RA
No. 340 and PD No. 1638 upon Jeremias' retirement benefits. It found
that he retired as a commissioned officer of the AFP in 1976; thus,
RANo. 340 is the law applicable in determining his entitlement to his
retirement benefits and not PD No. 1638 which was issued only in
1979. Article 4 of the Civil Code provides that "laws shall have no
retroactive effect unless the contrary is provided." PD No. 1638 does
not provide for such retroactive application. Also, it could not have
been the intendment of PD No. 1638 to deprive its loyal soldiers of a
monthly pension during their old age especially where, as here, the
right had been vested to them through time. RA No. 340 does not
provide that the loss of Filipino citizenship would terminate one's
retirement benefits; and that PD No. 1638 does not reduce whatever
benefits that any person has already been receiving under existing law.
Respondents sought reconsideration,12 but the RTC denied the same in
an Order13 dated May 25, 2007, the decretal portion of which
reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the instant Motion for
Reconsideration is hereby DENIED, considering that the questioned
decision has not yet attained.its finality. The Motion for Execution in
the meantime is hereby DENIED.14cralawlawlibrary
Aggrieved, respondents elevated the case to the CA. After the
submission of the parties' respective memoranda, the case was
submitted for decision.
Jeremias died on September 30, 200715 and was substituted by his wife,
herein petitioner.
On May 25, 2009, the CA granted respondents' appeal. The dispositive
portion of the CA decision reads:
WHEREFORE, premises considered, the instant appeal
is GRANTED. The appealed decision is REVOKED and SET
ASIDE.16cralawlawlibrary
In so ruling, the CA found that while it is true that Jeremias retired in
1976 under the provisions of RA No. 340, as amended, which does not
15
contain any provision anent cessation or loss of retirement benefits
upon acquiring another citizenship, PD No. 1638, which was signed in
1979, effectively repealed RA No. 340, as amended. Section 27 of PD
No. 1638, which provides that the name of a retiree who loses his
Filipino citizenship shall be removed from the retired list and his
retirement benefits terminated upon such loss, was correctly made
applicable to Jeremias' retirement benefits. Logic dictates that since
Jeremias had already renounced his allegiance to the Philippines, he
cannot now be compelled by the State to render active service and to
render compulsory military service when the need arises. The CA found
that for the writ of mandamus to lie, it is essential that Jeremias should
have a clear legal right to the thing demanded and it must be the
imperative duty of respondents to perform the act required which
petitioner failed to show; thus, mandamus will not lie.
Petitioner's motion for reconsideration was denied in a Resolution dated
September 10, 2009.
Hence, this petition raising the following:
RESPONDENT COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN RENDERING THE ASSAILED
DECISION AND RESOLUTION WHICH SET ASIDE AND
REVERSED THE 26 FEBRUARY 2007 DECISION OF THE QC
RTC BECAUSE:
PD 1638 should not have been applied and cannot be used against
petitioner as her husband's retirement and pension were granted to him
by the AFP under RA 340 which was not superseded by PD 1638, a
later statute.
Petitioner correctly availed of the remedy of mandamus to compel the
reinstatement of his pension and benefits from the AFP under RA 340
as PD 1638 was not applicable to him.
Petitioner contends that her husband's retirement from the active service
in 1976 was pursuant to the provisions of RA No. No. 340 as PD No.
1638 was not yet in existence then, and there was nothing in RA No.
340 that disqualifies a retired military personnel from receiving
retirement benefits after acquiring foreign citizenship. The concept of
retirement benefits is such that one is entitled to them for services
already rendered and not for those to be made at a future time.
Retirement benefits due petitioner's husband under RA No. 340, is an
acquired right which cannot be taken away by a subsequent law. PD
No. 1638 does not expressly provide for its retroactive application.
Respondents, being officers of the AFP tasked to implement the
provisions of RA No. 340 have neglected their function thereunder by
delisting petitioner's husband as a retiree, thus, mandamus is proper.
In his Comment, the Solicitor General argues that PD No. 1638 applies
to all military personnel in the service of the AFP whether active or
retired; hence, it applies retroactively to petitioner's husband. Even
when a retiree is no longer in the active service, his being a Filipino still
makes him a part of the Citizen Armed Forces; that whether a military
personnel retires under the provisions of RA No. 340 or under PD No.
1638, he is still in the service of the military and/or the State only that
he is retired, thus, they should not be treated differently upon the loss of
Filipino citizenship. He argues when there is an irreconcilable conflict
between the two laws of different vintages, i.e., RA No. 340 and PD
No. 1638, the latter enactment prevails.
The Solicitor General argues that mandamus will not issue to enforce a
right to compel compliance with a duty which is questionable or over
which a substantial doubt exists. In this case, petitioner's husband does
not have a well-defined, clear and certain legal right to continuously
receive retirement benefits after becoming an American citizen.
Likewise, the AFP does not have a clear and imperative duty to grant
the said benefits considering that Section 27 of PD No. 1638 provides
that the name of a retiree who loses his Filipino citizenship shall be
removed from the retired list and his retirement benefits terminated
upon such loss.
Petitioner filed her reply thereto. We find merit in the petition.
Petitioner's husband retired in 1976 under RA No. 340. He was already
receiving his monthly retirement benefit in the amount of P18,315.00
since December 1976 until it was terminated in March 2005. Section 5,
RA No. 340 provides: Sec. 5. Officers and enlisted men placed in the
retired list shall be subject to the rules and articles of war and to trial by
court-martial for any breach thereof. At any time said officers and
enlisted men may be called to active service by the President. Refusal
on the part of any officer or enlisted man to perform such services shall
terminate his right to further participation in the benefits of this Act
provided he resides in the Philippines and is physically fit for service.
Such fitness for service shall be determined by applicable regulations.
The afore-quoted provision clearly shows how a retiree's retirement
benefits may be terminated, i.e., when the retiree refuses to perform
active service when called to do so provided that (1) the retiree resides
in the Philippines and (2) is physically fit for service. There is no other
requirement found in the law which would be the reason for the
termination of a retiree's retirement benefits. Petitioner's husband was
never called to perform active service and refused to do so, however,
his retirement benefit was terminated. The reason for such termination
was his loss of Filipino citizenship based on Section 27 of PD No.
1638, to wit:
Section 27. Military personnel retired under Sections 4, 5, 10, 11 and 12
shall be carried in the retired list of the Armed Forces of the
Philippines. The name of a retiree who loses his Filipino citizenship
shall be removed from the retired list and his retirement benefits
terminated upon such loss.
We find that the CA erred in applying PD No. 1638 to the retirement
benefits of petitioner's husband.
Firstly, PD No. 1638 was signed by then President Ferdinand Marcos
on September 10, 1979. Under Article 4 of the Civil Code, it is
provided that laws shall have no retroactive effect, unless the contrary
is provided. It is said that the law looks to the future only and has no
retroactive effect unless the legislator may have formally given that
effect to some legal provisions;17 that all statutes are to be construed as
having only prospective operation, unless the purpose and intention of
the legislature to give them a retrospective effect is expressly declared
or is necessarily implied from the language used; and that every case of
doubt must be resolved against retrospective effect.18 These principles
also apply to amendments of statutes.
PD No. 1638 does not contain any provision regarding its retroactive
application, nor the same may be implied from its language. In fact,
Section 36 of PD No. 1638 clearly provides that the decree shall take
effect upon its approval. As held in Parreno v. COA,19 there is no
question that PD No. 1638, as amended, applies prospectively. Since
PD No. 1638, as amended, is about the new system of retirement and
separation from service of military personnel, it should apply to those
who were in the service at the time of its approval.20 Conversely, PD
No. 1638 is not applicable to those who retired before its effectivity in
1979. The rule is familiar that after an act is amended, the original act
continues to be in force with regard to all rights that had accrued prior
to such amendment.21
16
Moreover, Section 27 of PD No. 1638 specifically provides for the
retirees to whom the law shall be applied, to wit:
Section 27. Military personnel retired under Sections 4, 5, 10, 11
and 12 shall be carried in the retired list of the Armed Forces of the
Philippines. The name of a retiree who loses his Filipino citizenship
shall be removed from the retired list and his retirement benefits
terminated upon such loss, (emphasis supplied)
Notably, petitioner's husband did not retire under those above-
enumerated Sections of PD No. 1638 as he retired under RA No. 340.
Secondly, it has been held that before a right to retirement benefits or
pension vests in an employee, he must have met the stated conditions of
eligibility with respect to the nature of employment, age, and length of
service.22 Undeniably, petitioner's husband had complied with the
conditions of eligibility to retirement benefits as he was then receiving
his retirement benefits on a monthly basis until it was terminated.
Where the employee retires and meets the eligibility requirements, he
acquires a vested right to the benefits that is protected by the due
process clause.23 It is only upon retirement that military personnel
acquire a vested right to retirement benefits.24 Retirees enjoy a
protected property interest whenever they acquire a right to immediate
payment under pre-existing law.25
In Ayog v. Cusi,26 we expounded the nature of a vested right, thus:
"A right is vested when the right to enjoyment has become the property
of some particular person or persons as a present interest" (16 C.J.S.
1173). It is "the privilege to enjoy property legally vested, to enforce
contracts, and enjoy the rights of property conferred by the existing
law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest in
property which has become fixed and established and is no longer open
to doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited
in Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. "A
state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or by a
change in the constitution of the State, except in a legitimate exercise of
the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses
the concept of present fixed interest, which in right reason and natural
justice should be protected against arbitrary State action, or an innately
just and imperative right which an enlightened free society, sensitive to
inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174,
Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs.
Rosenthal, 192 Atl. 2nd 587).27cralawlawlibrary
Petitioner's husband acquired vested right to the payment of his
retirement benefits which must be respected and cannot be affected by
the subsequent enactment of PD No. 1638 which provides that loss of
Filipino citizenship terminates retirement benefits. Vested rights
include not only legal or equitable title to the enforcement of a demand,
but also an exemption from new obligations after the right has vested. 28
In fact, Sections 33 and 35 of PD No. 1638 recognize such vested right,
to wit:
Section 33. Nothing in this Decree shall be construed in any manner to
reduce whatever retirement and separation pay or gratuity or other
monetary benefits which any person is heretofore receiving or is
entitled to receive under the provisions of existing law.
xxxx
Section. 35. Except those necessary to give effect to the provisions of
this Decree and to preserve the rights granted to retired or separated
military personnel, all laws, rules and regulations inconsistent with the
provisions of this Decree are hereby repealed or modified accordingly.
Section 33 of PD No. 1638 is clear that the law has no intention to
reduce or to revoke whatever retirement benefits being enjoyed by a
retiree at the time of its passage. Hence, Section 35 provides for an
exception to what the decree repealed or modified, i.e., except those
necessary to preserve the rights granted to retired or separated military
personnel.
We also find that the CA erred in finding that mandamus will not lie.
Section 3, Rule 65 of the Rules of Court lay down under what
circumstances petition for mandamus may be filed, to wit:
SEC. 3. Petition for mandamus. - When any tribunal, corporation,
board, officer or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there
is no other plain, speedy and adequate remedy in the ordinary course of
law, the person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment
be rendered commanding the respondent, immediately or at some other
time to be specified by the court, to do the act required to be done to
protect the rights of the petitioner, and to pay the damages sustained by
the petitioner by reason of the wrongful acts of the respondent.
A writ of mandamus can be issued only when petitioner's legal right to
the performance of a particular act which is sought to be compelled is
clear and complete. A clear legal right is a right which is indubitably
granted by law or is inferable as a matter of law.29 A doctrine well-
embedded in our jurisprudence is that mandamus will issue only when
the petitioner has a clear legal right to the performance of the act sought
to be compelled and the respondent has an imperative duty to perform
the same.30 The remedy of mandamus lies to compel the performance of
a ministerial duty.31 A purely ministerial act or duty is one that an
officer or tribunal performs in a given state of facts, in a prescribed
manner, in obedience to the mandate of a legal authority, without
regard to or the exercise of its own judgment upon the propriety or
impropriety of the act done.32 If the law imposes a duty upon a public
officer, and gives him the right to decide how or when the duty shall be
performed, such duty is discretionary and not ministerial. 33
The petition for mandamus filed by petitioner's husband with the RTC
was for the payment of his terminated retirement benefits, which has
become vested, and being a ministerial duty on the part of the
respondents to pay such claim, mandamus is the proper remedy to
compel such payment.
The doctrine of exhaustion of administrative remedies calls for resort first to the
appropriate administrative authorities in the resolution of a controversy falling
under their jurisdiction before the same may be elevated to the courts of justice
for review.34 However, the principle of exhaustion of administrative remedies
need not be adhered to when the question is purely legal.35 This is because issues
of law cannot be resolved with finality by the administrative officer. 36 Appeal to
the administrative officer would only be an exercise in futility. 37 Here, the
question raised is purely legal, i.e., what law should be applied in the payment of
retirement benefits of petitioner's husband. Thus, there was no need to exhaust
all administrative remedies before a judicial relief can be sought.
WHEREFORE, the petition is GRANTED. The Decision dated May 25, 2009
and the Resolution dated September 10, 2009 of the Court of Appeals are
hereby REVERSED and SET ASIDE. The Decision dated February 26, 2007
17
G.R. No. 150429 August 29, 2006
ROBERTO G. FAMANILA, Petitioner,
vs.
THE COURT OF APPEALS (Spc. Fmr. Seventh Division) and
BARBERSHIP MANAGEMENT LIMITED and NFD
INTERNATIONAL MANNING AGENTS, INC. Respondents.
DECISION
YNARES-SANTIAGO, J.:
Before us is a petition for review on certiorari assailing the
Decision 1 of the Court of Appeals in CA-G.R. SP No. 50615 dated
March 30, 2001 which affirmed the Decision 2 of the National Labor
Relations Commission (NLRC) dated March 31, 1998 dismissing
petitioner’s complaint for payment of disability and other benefits for
lack of merit and the Resolution 3 dated October 5, 2001 of the Court of
Appeals denying petitioner’s motion for reconsideration.
The antecedent facts are as follows:
In 1989, respondent NFD International Manning Agents, Inc. hired the
services of petitioner Roberto G. Famanila as Messman 4 for Hansa
Riga, a vessel registered and owned by its principal and co-respondent,
Barbership Management Limited.
On June 21, 1990, while Hansa Riga was docked at the port of Eureka,
California, U.S.A. and while petitioner was assisting in the loading
operations, the latter complained of a headache. Petitioner experienced
dizziness and he subsequently collapsed. Upon examination, it was
determined that he had a sudden attack of left cerebral hemorrhage
from a ruptured cerebral aneurysm. 5 Petitioner underwent a brain
operation and he was confined at the Emmanuel Hospital in Portland,
Oregon, U.S.A. On July 19, 1990, he underwent a second brain
operation.
Owing to petitioner’s physical and mental condition, he was repatriated
to the Philippines. On August 21, 1990, he was examined at the
American Hospital in Intramuros, Manila where the examining
physician, Dr. Patricia Abesamis declared that he "cannot go back to
sea duty and has been observed for 120 days, he is being declared
permanently, totally disabled." 6
Thereafter, authorized representatives of the respondents convinced him
to settle his claim amicably by accepting the amount of
US$13,200. 7 Petitioner accepted the offer as evidenced by his signature
in the Receipt and Release dated February 28, 1991. 8 His wife, Gloria
Famanila and one Richard Famanila, acted as witnesses in the signing
of the release.
On June 11, 1997, petitioner filed a complaint 9 with the NLRC which
was docketed as NLRC OCW Case No. 6-838-97-L praying for an
award of disability benefits, share in the insurance proceeds, moral
damages and attorney’s fees. On September 29, 1997, Acting Executive
Labor Arbiter Voltaire A. Balitaan dismissed the complaint on the
ground of prescription. Petitioner appealed the decision with the NLRC.
On March 31, 1998, the NLRC promulgated its decision 10 finding the
appeal to be without merit and ordered its dismissal. When the motion
for reconsideration11 was denied by the NLRC in its resolution dated
June 29, 1998, 12 petitioner filed a petition for certiorari with this Court.
On December 2, 1998, we resolved to refer the case to the Court of
Appeals pursuant to our ruling in St. Martin Funeral Home v. National
Labor Relations Commission. 13
On March 30, 2001, the Court of Appeals promulgated the assailed
decision which dismissed the petition for lack of merit. Petitioner’s
motion for reconsideration was denied, hence, the present petition for
review raising the following issues:
I. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN UPHOLDING THE VALIDITY OF THE
RECEIPT AND RELEASE SINCE PETITIONER’S CONSENT
THERETO WAS VITIATED THEREBY MAKING THE SAME
VOID AND UNENFORCEABLE.
II. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN HOLDING THAT THE PRESCRIPTION
PERIOD APPLICABLE TO THE CLAIM OF THE PETITIONER IS
THE 3-YEAR PERIOD PROVIDED FOR UNDER THE LABOR
CODE OF THE PHILIPPINES AND NOT THE 10-YEAR PERIOD
PROVIDED FOR UNDER THE CIVIL CODE.
Petitioner claims that he did not sign the Receipt and Release
voluntarily or freely because he was permanently disabled and in
financial constraints. These factors allegedly vitiated his consent which
makes the Receipt and Release void and unenforceable.
The petition lacks merit.
It is fundamental that the scope of the Supreme Court’s judicial review
under Rule 45 of the Rules of Court is confined only to errors of law. It
does not extend to questions of fact. More so in labor cases where the
doctrine applies with greater force. 14 The Labor Arbiter and the NLRC
have already determined the factual issues, and these were affirmed by
the Court of Appeals. Thus, they are accorded not only great respect but
also finality and are deemed binding upon this Court so long as they are
supported by substantial evidence. 15 We reviewed the records of the
case and we find no reason to deviate from the findings of the labor
arbiter, NLRC and the Court of Appeals.
A vitiated consent does not make a contract void and unenforceable. A
vitiated consent only gives rise to a voidable agreement. Under the
Civil Code, the vices of consent are mistake, violence, intimidation,
undue influence or fraud.16 If consent is given through any of the
aforementioned vices of consent, the contract is voidable. 17 A voidable
contract is binding unless annulled by a proper action in court. 18
Petitioner contends that his permanent and total disability vitiated his
consent to the Receipt and Release thereby rendering it void and
unenforceable. However, disability is not among the factors that may
vitiate consent. Besides, save for petitioner’s self-serving allegations,
there is no proof on record that his consent was vitiated on account of
his disability. In the absence of such proof of vitiated consent, the
validity of the Receipt and Release must be upheld. We agree with the
findings of the Court of Appeals that:
In the case at bar, there is nothing in the records to show that
petitioner’s consent was vitiated when he signed the agreement.
Granting that petitioner has not fully recovered his health at the time he
signed the subject document, the same cannot still lead to the
conclusion that he did not voluntar[il]y accept the agreement, for his
wife and another relative witnessed his signing.
Moreover, the document entitled receipt and release which was attached
by petitioner in his appeal does not show on its face any violation of
law or public policy. In fact, petitioner did not present any proof to
show that the consideration for the same is not reasonable and
acceptable. Absent any evidence to support the same, the Court cannot,
on its own accord, decide against the unreasonableness of the
consideration. 19
18
It is true that quitclaims and waivers are oftentimes frowned upon and
are considered as ineffective in barring recovery for the full measure of
the worker’s right and that acceptance of the benefits therefrom does
not amount to estoppel. 20 The reason is plain. Employer and employee,
obviously do not stand on the same footing. 21 However, not all waivers
and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is
binding on the parties and may not later be disowned simply because of
change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of the
settlement are unconscionable on its face, that the law will step in to
annul the questionable transaction. But where it is shown that the
person making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and
binding undertaking, 22 as in this case.
To be valid and effective, waivers must be couched in clear and
unequivocal terms, leaving no doubt as to the intention of those giving
up a right or a benefit that legally pertains to them. 23 We have
reviewed the terms and conditions contained in the Receipt and Release
and we find the same to be clear and unambiguous. The signing was
even witnessed by petitioner’s wife, Gloria T. Famanila and one
Richard T. Famanila. The Receipt and Release provides in part:
may be pleaded as an absolute and final bar to any suit or suits or legal
proceedings that may hereafter be prosecuted by me or by any one
claiming by, through, or under me, against any of the persons or things
referred to or related herein, for any matter or thing referred to or
related herein. 24
It is elementary that a contract is perfected by mere consent and from
that moment the parties are bound not only to the fulfillment of what
has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and
law. 25 Further, dire necessity is not an acceptable ground for annulling
the Receipt and Release since it has not been shown that petitioner was
forced to sign it. 26
Regarding prescription, the applicable prescriptive period for the
money claims against the respondents is the three year period pursuant
to Article 291 of the Labor Code which provides that:
ART. 291. Money Claims. – All money claims arising from employer-
employee relations accruing during the effectivity of this Code shall be
filed within three (3) years from the time the cause of action accrued;
otherwise they shall be forever barred.
xxxx

That for and in consideration of the sum of THIRTEEN THOUSAND Since petitioner’s demand for an award of disability benefits is a money
TWO HUNDRED DOLLARS (US$13,200.00) or its equivalent in claim arising from his employment, Article 291 of the Labor Code
Philippine currency THREE HUNDRED SIXTY FIVE THOUSAND applies. From the time petitioner was declared permanently and totally
NINE HUNDRED FOUR PESOS (365,904.00), the receipt of which is disabled on August 21, 1990 which gave rise to his entitlement to
hereby acknowledged to my full and complete satisfaction x x x I, disability benefits up to the time that he filed the complaint on June 11,
ROBERTO G. FAMANILA, x x x hereby remise, release and forever 1997, more than three years have elapsed thereby effectively barring his
discharge said vessel "HANSA RIGA", her Owners, operators, claim.
managers, charterers, agents, underwriters, P and I Club, master,
WHEREFORE, the petition is DENIED. The Decision of the Court of
officers, and crew and all parties at interest therein or thereon, whether
Appeals dated March 30, 2001 in CA-G.R. SP No. 50615 which
named or not named, including but not limited to BARBER SHIP
affirmed the Decision of the National Labor Relations Commission
MANAGEMENT LIMITED, NFD INTERNATIONAL MANNING
dismissing petitioner’s complaint for disability and other benefits for
AGENTS, INC. and ASSURANCEFORENIGEN GARD from any and
lack of merit, and
all claims, demands, debts, dues, liens, actions or causes of action, at
law or in equity, in common law or in admiralty, statutory or the Resolution dated October 5, 2001 denying the motion for
contractual, arising from and under the laws of the United States of reconsideration, are AFFIRMED.
America, Norway, Hongkong or the Republic of the Philippines and/or
any other foreign country now held, owned or possessed by me or by SO ORDERED.
any person or persons, arising from or related to or concerning whether
directly or indirectly, proximately or remotely, without being limited to
but including the said illness suffered by me on board the vessel
"HANSA RIGA" on or about 21st June 1990 at Portland, Oregon and
disability compensation in connection therewith.

This instrument is a GENERAL RELEASE intended to release all

liabilities of any character and/or claims or damages and/or losses
and/or any other liabilities whatsoever, whether contractual or statutory,
at common law or in equity, tortious or in admiralty, now or henceforth
in any way related to or occurring as a consequence of the illness
suffered by me as Messman of the vessel "HANSA RIGA", including
but not limited to all damages and/or losses consisting of loss of
support, loss of earning capacity, loss of all benefits of whatsoever
nature and extent incurred, physical pain and suffering and/or all
damages and/or indemnities claimable in law, tort, contract, common
law, equity and/or admiralty by me or by any person or persons
pursuant to the laws of the United States of America, Norway,
Hongkong or the Republic of the Philippines and of all other countries
whatsoever.

I hereby certify that I am of legal age and that I fully understand this
instrument which was read to me in the local dialect and I agree that
this is a FULL AND FINAL RELEASE AND DISCHARGE of all
parties and things referred to herein, and I further agree that this release
19
G.R. No. 163707 September 15, 2006
MICHAEL C. GUY, petitioner,
vs.
HON. COURT OF APPEALS, HON. SIXTO MARELLA, JR.,
Presiding Judge, RTC, Branch 138, Makati City and minors,
KAREN DANES WEI and KAMILLE DANES WEI, represented
by their mother, REMEDIOS OANES,respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the January 22, 2004
Decision1 of the Court of Appeals in CA-G.R. SP No. 79742, which
affirmed the Orders dated July 21, 20002 and July 17, 20033 of the
Regional Trial Court of Makati City, Branch 138 in SP Proc. Case No.
4549 denying petitioner's motion to dismiss; and its May 25, 2004
Resolution4 denying petitioner's motion for reconsideration.
The facts are as follows:
On June 13, 1997, private respondent-minors Karen Oanes Wei and
Kamille Oanes Wei, represented by their mother Remedios Oanes
(Remedios), filed a petition for letters of administration5 before the
Regional Trial Court of Makati City, Branch 138. The case was
docketed as Sp. Proc. No. 4549 and entitled Intestate Estate of Sima
Wei(a.k.a. Rufino Guy Susim).
Private respondents alleged that they are the duly acknowledged
illegitimate children of Sima Wei, who died intestate in Makati City on
October 29, 1992, leaving an estate valued at P10,000,000.00 consisting
of real and personal properties. His known heirs are his surviving
spouse Shirley Guy and children, Emy, Jeanne, Cristina, George and
Michael, all surnamed Guy. Private respondents prayed for the
appointment of a regular administrator for the orderly settlement of
Sima Wei's estate. They likewise prayed that, in the meantime,
petitioner Michael C. Guy, son of the decedent, be appointed as Special
Administrator of the estate. Attached to private respondents' petition
was a Certification Against Forum Shopping6 signed by their counsel,
Atty. Sedfrey A. Ordoñez.
In his Comment/Opposition,7 petitioner prayed for the dismissal of the
petition. He asserted that his deceased father left no debts and that his
estate can be settled without securing letters of administration pursuant
to Section 1, Rule 74 of the Rules of Court. He further argued that
private respondents should have established their status as illegitimate
children during the lifetime of Sima Wei pursuant to Article 175 of the
Family Code.
The other heirs of Sima Wei filed a Joint Motion to Dismiss8 on the
ground that the certification against forum shopping should have been
signed by private respondents and not their counsel. They contended
that Remedios should have executed the certification on behalf of her
minor daughters as mandated by Section 5, Rule 7 of the Rules of
Court.
In a Manifestation/Motion as Supplement to the Joint Motion to
Dismiss,9 petitioner and his co-heirs alleged that private respondents'
claim had been paid, waived, abandoned or otherwise extinguished by
reason of Remedios' June 7, 1993 Release and Waiver of Claim stating
that in exchange for the financial and educational assistance received
from petitioner, Remedios and her minor children discharge the estate
of Sima Wei from any and all liabilities.
The Regional Trial Court denied the Joint Motion to Dismiss as well as
the Supplemental Motion to Dismiss. It ruled that while the Release and
Waiver of Claim was signed by Remedios, it had not been established
that she was the duly constituted guardian of her minor daughters.
Thus, no renunciation of right occurred. Applying a liberal application
of the rules, the trial court also rejected petitioner's objections on the
certification against forum shopping.
Petitioner moved for reconsideration but was denied. He filed a petition
for certiorari before the Court of Appeals which affirmed the orders of
the Regional Trial Court in its assailed Decision dated January 22,
2004, the dispositive portion of which states:
WHEREFORE, premises considered, the present petition is hereby
DENIED DUE COURSE and accordingly DISMISSED, for lack of
merit. Consequently, the assailed Orders dated July 21, 2000 and July
17, 2003 are hereby both AFFIRMED. Respondent Judge is hereby
DIRECTED to resolve the controversy over the illegitimate filiation of
the private respondents (sic) minors [-] Karen Oanes Wei and Kamille
Oanes Wei who are claiming successional rights in the intestate estate
of the deceased Sima Wei, a.k.a. Rufino Guy Susim.
SO ORDERED.10
The Court of Appeals denied petitioner's motion for reconsideration,
hence, this petition.
Petitioner argues that the Court of Appeals disregarded existing rules on
certification against forum shopping; that the Release and Waiver of
Claim executed by Remedios released and discharged the Guy family
and the estate of Sima Wei from any claims or liabilities; and that
private respondents do not have the legal personality to institute the
petition for letters of administration as they failed to prove their
filiation during the lifetime of Sima Wei in accordance with Article 175
of the Family Code.
Private respondents contend that their counsel's certification can be
considered substantial compliance with the rules on certification of
non-forum shopping, and that the petition raises no new issues to
warrant the reversal of the decisions of the Regional Trial Court and the
Court of Appeals.
The issues for resolution are: 1) whether private respondents' petition
should be dismissed for failure to comply with the rules on certification
of non-forum shopping; 2) whether the Release and Waiver of Claim
precludes private respondents from claiming their successional rights;
and 3) whether private respondents are barred by prescription from
proving their filiation.
The petition lacks merit.
Rule 7, Section 5 of the Rules of Court provides that the certification of
non-forum shopping should be executed by the plaintiff or the principal
party. Failure to comply with the requirement shall be cause for
dismissal of the case. However, a liberal application of the rules is
proper where the higher interest of justice would be served. In Sy Chin
v. Court of Appeals,11 we ruled that while a petition may have been
flawed where the certificate of non-forum shopping was signed only by
counsel and not by the party, this procedural lapse may be overlooked
in the interest of substantial justice.12 So it is in the present controversy
where the merits13 of the case and the absence of an intention to violate
the rules with impunity should be considered as compelling reasons to
temper the strict application of the rules.
As regards Remedios' Release and Waiver of Claim, the same does not
bar private respondents from claiming successional rights. To be valid
and effective, a waiver must be couched in clear and unequivocal terms
which leave no doubt as to the intention of a party to give up a right or
benefit which legally pertains to him. A waiver may not be attributed to
a person when its terms do not explicitly and clearly evince an intent to
abandon a right.14
20
In this case, we find that there was no waiver of hereditary rights. The
Release and Waiver of Claim does not state with clarity the purpose of
its execution. It merely states that Remedios received P300,000.00 and
an educational plan for her minor daughters "by way of financial
assistance and in full settlement of any and all claims of whatsoever
nature and kind x x x against the estate of the late Rufino Guy
Susim."15 Considering that the document did not specifically mention
private respondents' hereditary share in the estate of Sima Wei, it
cannot be construed as a waiver of successional rights.
Moreover, even assuming that Remedios truly waived the hereditary
rights of private respondents, such waiver will not bar the latter's claim.
Article 1044 of the Civil Code, provides:
ART. 1044. Any person having the free disposal of his property may
accept or repudiate an inheritance.
Any inheritance left to minors or incapacitated persons may be
accepted by their parents or guardians. Parents or guardians may
repudiate the inheritance left to their wards only by judicial
authorization.
The right to accept an inheritance left to the poor shall belong to the
persons designated by the testator to determine the beneficiaries and
distribute the property, or in their default, to those mentioned in Article
1030. (Emphasis supplied)
Parents and guardians may not therefore repudiate the inheritance of
their wards without judicial approval. This is because repudiation
amounts to an alienation of property16 which must pass the court's
scrutiny in order to protect the interest of the ward. Not having been
judicially authorized, the Release and Waiver of Claim in the instant
case is void and will not bar private respondents from asserting their
rights as heirs of the deceased.
Furthermore, it must be emphasized that waiver is the intentional
relinquishment of a known right. Where one lacks knowledge of a right,
there is no basis upon which waiver of it can rest. Ignorance of a
material fact negates waiver, and waiver cannot be established by a
consent given under a mistake or misapprehension of fact.17
In the present case, private respondents could not have possibly waived
their successional rights because they are yet to prove their status as
acknowledged illegitimate children of the deceased. Petitioner himself
has consistently denied that private respondents are his co-heirs. It
would thus be inconsistent to rule that they waived their hereditary
rights when petitioner claims that they do not have such right. Hence,
petitioner's invocation of waiver on the part of private respondents must
fail.
Anent the issue on private respondents' filiation, we agree with the
Court of Appeals that a ruling on the same would be premature
considering that private respondents have yet to present evidence.
Before the Family Code took effect, the governing law on actions for
recognition of illegitimate children was Article 285 of the Civil Code,
to wit:
ART. 285. The action for the recognition of natural children may be
brought only during the lifetime of the presumed parents, except in the
following cases:
(1) If the father or mother died during the minority of the child, in
which case the latter may file the action before the expiration of
four years from the attainment of his majority;
(2) If after the death of the father or of the mother a document should
appear of which nothing had been heard and in which either or both
parents recognize the child.
In this case, the action must be commenced within four years from the
finding of the document. (Emphasis supplied)
We ruled in Bernabe v. Alejo18 that illegitimate children who were still
minors at the time the Family Code took effect and whose putative
parent died during their minority are given the right to seek recognition
for a period of up to four years from attaining majority age. This vested
right was not impaired or taken away by the passage of the Family
Code.19
On the other hand, Articles 172, 173 and 175 of the Family Code,
which superseded Article 285 of the Civil Code, provide:
ART. 172. The filiation of legitimate children is established by any of
the following:
(1) The record of birth appearing in the civil register or a final
judgment; or
(2) An admission of legitimate filiation in a public document or a
private handwritten instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall
be proved by:
(1) The open and continuous possession of the status of a legitimate
child; or
(2) Any other means allowed by the Rules of Court and special laws.
ART. 173. The action to claim legitimacy may be brought by the child
during his or her lifetime and shall be transmitted to the heirs should the
child die during minority or in a state of insanity. In these cases, the
heirs shall have a period of five years within which to institute the
action.
The action already commenced by the child shall survive
notwithstanding the death of either or both of the parties.
ART. 175. Illegitimate children may establish their illegitimate filiation
in the same way and on the same, evidence as legitimate children.
The action must be brought within the same period specified in Article
173, except when the action is based on the second paragraph of Article
172, in which case the action may be brought during the lifetime of the
alleged parent.
Under the Family Code, when filiation of an illegitimate child is
established by a record of birth appearing in the civil register or a final
judgment, or an admission of filiation in a public document or a private
handwritten instrument signed by the parent concerned, the action for
recognition may be brought by the child during his or her lifetime.
However, if the action is based upon open and continuous possession of
the status of an illegitimate child, or any other means allowed by the
rules or special laws, it may only be brought during the lifetime of the
alleged parent.
It is clear therefore that the resolution of the issue of prescription
depends on the type of evidence to be adduced by private respondents
in proving their filiation. However, it would be impossible to determine
the same in this case as there has been no reception of evidence yet.
This Court is not a trier of facts. Such matters may be resolved only by
the Regional Trial Court after a full-blown trial.
While the original action filed by private respondents was a petition for
letters of administration, the trial court is not precluded from receiving
evidence on private respondents' filiation. Its jurisdiction extends to
matters incidental and collateral to the exercise of its recognized powers
in handling the settlement of the estate, including the determination of
the status of each heir.20 That the two causes of action, one to compel
21
recognition and the other to claim inheritance, may be joined in one
complaint is not new in our jurisprudence.21 As held in Briz v. Briz:22

The question whether a person in the position of the present plaintiff

can in any event maintain a complex action to compel recognition as a
natural child and at the same time to obtain ulterior relief in the
character of heir, is one which in the opinion of this court must be
answered in the affirmative, provided always that the conditions
justifying the joinder of the two distinct causes of action are present in
the particular case. In other words, there is no absolute necessity
requiring that the action to compel acknowledgment should have been
instituted and prosecuted to a successful conclusion prior to the action
in which that same plaintiff seeks additional relief in the character of
heir. Certainly, there is nothing so peculiar to the action to compel
acknowledgment as to require that a rule should be here applied
different from that generally applicable in other cases. x x x

The conclusion above stated, though not heretofore explicitly

formulated by this court, is undoubtedly to some extent supported by
our prior decisions. Thus, we have held in numerous cases, and the
doctrine must be considered well settled, that a natural child having a
right to compel acknowledgment, but who has not been in fact
acknowledged, may maintain partition proceedings for the division of
the inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil., 5;
Tiamson vs. Tiamson, 32 Phil., 62); and the same person may intervene
in proceedings for the distribution of the estate of his deceased natural
father, or mother (Capistrano vs. Fabella, 8 Phil., 135; Conde vs.
Abaya, 13 Phil., 249; Ramirez vs. Gmur, 42 Phil., 855). In neither of
these situations has it been thought necessary for the plaintiff to show a
prior decree compelling acknowledgment. The obvious reason is that in
partition suits and distribution proceedings the other persons who might
take by inheritance are before the court; and the declaration of heirship
is appropriate to such proceedings.

WHEREFORE, the instant petition is DENIED. The Decision dated

January 22, 2004 of the Court of Appeals in CA-G.R. SP No. 79742
affirming the denial of petitioner's motion to dismiss; and its Resolution
dated May 25, 2004 denying petitioner's motion for reconsideration,
are AFFIRMED. Let the records be REMANDED to the Regional
Trial Court of Makati City, Branch 138 for further proceedings.

SO ORDERED.

22
 WHEREAS, the undersigned affiant is the legal husband of EDNA M.
G.R. No. 189516, June 08, 2016 OTAMIAS and the father of Julie Ann, Jonathan, Jennifer, Jeffren and
Jemwel all residing at Patag, Cagayan de Oro City;
EDNA MABUGAY-OTAMIAS, JEFFREN M. OTAMIAS AND
MINOR JEMWEL M. OTAMIAS, REPRESENTED BY THEIR
WHEREAS, the undersigned will be retiring from the military service
MOTHER EDNA MABUGAY-
and expects to receive retirement benefits from the Armed Forces of the
OTAMIAS, Petitioners, v. REPUBLIC OF THE PHILIPPINES,
Philippines;
REPRESENTED BY COL. VIRGILIO O. DOMINGO, IN HIS
CAPACITY AS THE COMMANDING OFFICER OF THE
WHEREAS, the undersigned had expressed his willingness to give a
PENSION AND GRATUITY MANAGEMENT CENTER (PGMC)
share in his retirement benefits to my wife and five (5) abovenamed
OF THE ARMED FORCES OF THE PHILIPPINES, Respondent.
children,
DECISION
NOW, THEREFORE, for and in consideration of the foregoing
LEONEN, J.: premises, the undersigned hereby stipulated the following:
A writ of execution lies against the pension benefits of a retired officer
1. That the undersigned will give to my legal wife and five (5) children
of the Armed Forces of the Philippines, which is the subject of a deed
FIFTY PERCENT (50%) of my retirement benefits to be pro rated
of assignment drawn by him granting support to his wife and five (5)
among them.
children. The benefit of exemption from execution of pension benefits
is a statutory right that may be waived, especially in order to comply
2. That a separate check(s) be issued and to be drawn and encash [sic]
with a husband's duty to provide support under Article XV of the 1987
in the name of the legal wife and five (5) children pro-rating the fifty
Constitution and the Family Code.
(50%) percent of my retirement benefits.
Petitioner Edna Mabugay-Otamias (Edna) and retired Colonel
IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of
Francisco B. Otamias (Colonel Otamias) were married on June 16,
February 2003 at Fort Bonifacio, Makati City.9cralawred
1978 and had five (5) children.1ChanRoblesVirtualawlibrary
Colonel Otamias retired on April 1,
On September 2000, Edna and Colonel Otamias separated due to his 2003.10ChanRoblesVirtualawlibrary
alleged infidelity.2 Their children remained with
Edna.3ChanRoblesVirtualawlibrary The agreement was honored until January 6, 2006.11 Edna alleged that
"the A[rmed] F[orces] [of the] Philippines] suddenly decided not to
On August 2002, Edna filed a Complaint-Affidavit against Colonel honor the agreement"12 between Colonel Otamias and his legitimate
Otamias before the Provost Marshall Division of the Armed Forces of family.
the Philippines.4 Edna demanded monthly support equivalent to 75% of
Colonel Otamias' retirement benefits.5 Colonel Otamias executed an In a letter13 dated April 3, 2006, the Armed Forces of the Philippines
Affidavit, stating:chanRoblesvirtualLawlibrary Pension and Gratuity Management Center (AFP PGMC) informed
Edna that a court order was required for the AFP PGMC to recognize
That sometime in August or September 2002, I was summoned at the
the Deed of Assignment.14ChanRoblesVirtualawlibrary
Office of the Provost Marshal, Philippine Army, in connection with a
complaint affidavit submitted to said Office by my wife Mrs. Edna M.
In another letter15 dated April 17, 2006, the AFP PGMC reiterated that
Otamias signifying her intention 75% of my retirement benefits from
it could not act on Edna's request to receive a portion of Colonel
the AFP;
Otamias' pension "unless ordered by [the] appropriate
court."16ChanRoblesVirtualawlibrary
That at this point, I can only commit 50% of my retirement benefits to
be pro-rated among my wife and five (5) children;
Heeding the advice of the AFP PGMC, Edna, on behalf of herself and
Jeffren M. Otamias and Jemwel M. Otamias (Edna, et al.), filed before
That in order to implement this compromise, I am willing to enter into
the Regional Trial Court of Cagayan de Oro, Misamis Oriental an
Agreement with my wife covering the same;
action for support, docketed as F.C. Civil Case No. 2006-
039.17ChanRoblesVirtualawlibrary
That I am executing this affidavit to attest to the truth of the foregoing
facts and whatever legal purpose it may serve.6cralawred
The trial court's Sheriff tried to serve summons on Colonel Otamias
On February 26, 2003, Colonel Otamias executed a Deed of several times, to no avail.18Substituted service was resorted
Assignment where he waived 50% of his salary and pension benefits in to.19 Colonel Otamias was subsequently declared in default for failure
favor of Edna and their children.7 The Deed of Assignment was to file a responsive pleading despite order of the trial
considered by the parties as a compromise agreement.8 It court.20ChanRoblesVirtualawlibrary
stated:chanRoblesvirtualLawlibrary
The trial court ruled in favor of Edna, et al. and ordered the automatic
This Assignment, made and executed unto this 26th day of February deduction of the amount of support from the monthly pension of
2003 at Fort Bonifacio, Makati City, by the undersigned LTC Francisco Colonel Otamias.21ChanRoblesVirtualawlibrary
B. Otamias, 0-0-111045 (INP) PA, of legal age, married and presently
residing at Dama De Noche St., Pembo, Makati City. The dispositive portion of the trial court's Decision
stated:chanRoblesvirtualLawlibrary
WITNESSETH
ALL THE FOREGOING CONSIDERED, and in consonance with the
legal obligation of the defendant to the plaintiffs, the Armed Forces of

23
the Philippines, through its Finance Center and/or appropriate Finance
Officer thereof, is thereby ordered to release to Edna Mabugay Otamias
and minor Jemwel M. Otamias, herein represented by his mother Edna,
their fifty (50%) per cent share of each of the monthly pension due to
Colonel Francisco B. Otamias, AFP PA (Retired).
Defendant Francisco Otamias is also ordered to pay plaintiff Edna M.
Otamias, fifty (50%) per cent of whatever retirement benefits he has
already received from the Armed Forces of the Philippines AND the
arrears in support, effective January 2006 up to the time plaintiff
receives her share direct from the Finance Center of the Armed Forces
of the Philippines.
IT IS SO ORDERED.22cralawred
The Armed Forces of the Philippines, through the Office of the Judge
Advocate General, filed a Manifestation/Opposition 23 to the Decision of
the trial court, but it was not given due course due to its late
filing.24ChanRoblesVirtualawlibrary
Edna, et al., through counsel, filed a Motion for Issuance of Writ of
Execution25 dated February 22, 2008. The trial court granted the
Motion, and a writ of execution was issued by the trial court on April
10, 2008.26ChanRoblesVirtualawlibrary
The Armed Forces of the Philippines Finance Center (AFP Finance
Center), tlirough the Office of the Judge Advocate General, filed a
Motion to Quash27 the writ of execution and argued that the AFP
Finance Center's duty to disburse benefits is ministerial. It releases
benefits only upon the AFP PGMC's
approval.28ChanRoblesVirtualawlibrary
The trial court denied the Motion to Quash and held
that:chanRoblesvirtualLawlibrary
Under the law and existing jurisprudence, the "right to support" is
practically equivalent to the "right to life." The "right to life" always
takes precedence over "property rights." The "right to support/life" is
also a substantive right which always takes precedence over
technicalities/procedural rules. It being so, technical rules must yield to
substantive justice. Besides, this Court's Decision dated February 27,
2007 has long acquired finality, and as such, is ripe for
enforcement/execution.
THE FOREGOING CONSIDERED, the instant Motion is hereby
DENIED.29cralawred
The AFP PGMC moved for reconsideration of the order denying the
Motion to Quash,30 but the Motion was also denied by the trial court in
the Order31 dated August 6, 2008.
A Notice of Garnishment was issued by the trial court on July 15, 2008
and was received by the AFP PGMC on September 9,
2008.32ChanRoblesVirtualawlibrary
The AFP PGMC filed before the Court of Appeals a Petition for
Certiorari and Prohibition.33ChanRoblesVirtualawlibrary
The Court of Appeals granted34 the Petition for Certiorari and
Prohibition and partially nullified the trial court's Decision insofar as it
directed the automatic deduction of support from the pension benefits
of Colonel Otamias.
The Court of Appeals discussed that Section 3135 of Presidential Decree
No. 1638, otherwise known as the AFP Military Personnel Retirement
and Separation Decree of 1979, "provides for the exemption of the
monthly pension of retired military personnel from execution and
attachment[,]"36 while Rule 39, Section 13 of the Rules of Court
provides:chanRoblesvirtualLawlibrary
SEC. 13. Property exempt from execution. Except as otherwise
expressly provided by law, the following property, and no other, shall
be exempt from execution:
....
(1) The right to receive legal support, or money or property obtained as
such support, or any pension or gratuity from the
Government[.]cralawred
The Court of Appeals also cited Pacific Products, Inc. vs. Ong:37
[M]oneys sought to be garnished, as long as they remain in the hands of
the disbursing officer of the Government, belong to the latter, although
the defendant in garnishment may be entitled to a specific portion
thereof. And still another reason which covers both of the foregoing is
that every consideration of public policy forbids it.38cralawred
In addition, the AFP PGMC was not impleaded as a party in the action
for support; thus, it is not bound by the
Decision.39ChanRoblesVirtualawlibrary
The dispositive portion of the Court of Appeals Decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, the petition is GRANTED. The assailed Decision of
the Regional Trial Court, Branch 19, Cagayan de Oro City dated
February 27, 2007 in Civil Case No. 2006-039 is PARTIALLY
NULLIFIED in so far as it directs the Armed Forces of the Philippines
Finance Center to automatically deduct the financial support in favor of
private respondents, Edna Otamias and her children Jeffren and Jemwel
Otamias, from the pension benefits of Francisco Otamias, a retired
military officer. The Order dated June 10, 2008, Order dated August 6,
2008 and Writ of Execution dated April 10, 2008, all issued by the
court a quoare likewise SET ASIDE. Perforce, let a writ of permanent
injunction issue enjoining the implementation of the assailed Writ of
Execution dated April 10, 2008 and the corresponding Notice of
Garnishment dated July 15, 2008. No pronouncement as to costs.
SO ORDERED.40 (Emphasis in the original)cralawred
Edna, et al. moved for reconsideration, but the Motion was denied by
the Court of Appeals.41ChanRoblesVirtualawlibrary
Edna, et al. filed before this Court a Petition for Review on
Certiorari42 on November 11, 2009. In the Resolution43 dated January
20, 2010, this Court required respondent to comment.
In the Resolution44 dated August 4, 2010, this Court noted the
Comment filed by the Office of the Solicitor General and required
Edna, et al. to file a reply.45ChanRoblesVirtualawlibrary
A Reply46 was filed on September 27, 2010.
Edna, et al. argue that the Deed of Assignment Colonel Otamias
executed Is valid and legal.47ChanRoblesVirtualawlibrary
They claim that Section 31 of Presidential Decree No. 163848 "does not
include support";49 hence, the retirement benefits of Colonel Otamias
can be executed upon.
Edna, et al. also argue that the Court of Appeals erred in granting
respondent's Petition because it effectively rendered the Deed of
24
Assignment of no force and effect.50 On the other hand, the trial court's
Decision implements the Deed of Assignment and Edna, et al.'s right to
support.51ChanRoblesVirtualawlibrary
Further, the AFP PGMC had already recognized the validity of the
agreement and had made payments to them until it suddenly stopped
payment.52 After Edna, et al. obtained a court order, the AFP PGMC
still refused to honor the Deed of
Assignment.53ChanRoblesVirtualawlibrary
The Armed Forces of the Philippines, through the Office of the
Solicitor General, argues that it was not a party to the case filed by
Edna, et al.54 Thus, "it cannot be compelled to release part of the
monthly pension benefits of retired Colonel Otamias in favor of [Edna,
et al]."55ChanRoblesVirtualawlibrary
The Office of the Solicitor General avers that the AFP PGMC never
submitted itself to the jurisdiction of the trial court. 56 It was not a party
to the case as the trial court never acquired jurisdiction over the AFP
PGMC.57ChanRoblesVirtualawlibrary
The Office of the Solicitor General also argues that Section 31 of
Presidential Decree No. 1638 and Rule 39, Section 13(1) of the Rules
of Court support the Court of Appeals Decision that Colonel Otamias'
pension benefits are exempt from
execution.58ChanRoblesVirtualawlibrary
Section 31 of Presidential Decree No. 1638 "does not deprive the
survivor/s of a retired or separated officer or enlisted man of their right
to support."59 Rather, "[w]hat is prohibited is for respondent [AFP
PGMC] to segregate a portion of the pension benefit in favor of the
retiree's family while still in the hands of the A[rmed] F[orces] [of the]
Philippines]."60ChanRoblesVirtualawlibrary
Thus, the AFP PGMC "cannot be compelled to directly give or issue a
check in favor of [Edna, et al.] out of the pension gratuity of Col.
Otamias."61ChanRoblesVirtualawlibrary
In their Reply,62 Edna, et al. argue that the Armed Forces of the
Philippines should not be allowed to question the legal recourse they
took because it was an officer of the Armed Forces of the Philippines
who had advised them to file an action for
support.63ChanRoblesVirtualawlibrary
They argue that the phrase "while in the active service" in Section 31 of
Presidential Decree No. 1638 refers to the "time when the retired
officer incurred his accountabilities in favor of a private
creditor[,]"64who is a third person. The phrase also "serves as a timeline
designed to separate the debts incurred by the retired officer after his
retirement from those which he incurred prior
thereto."65ChanRoblesVirtualawlibrary
Further, the accountabilities referred to in Section 31 of Presidential
Decree No. 1638 refer to debts or loans, not to
support.66ChanRoblesVirtualawlibrary
The issues for resolution are:
First, whether the Court of Appeals erred in ruling that the AFP Finance
Center cannot be directed to automatically deduct the amount of
support needed by the legitimate family of Colonel Otamias; and
Second, whether Colonel Otamias' pension benefits can be executed
upon for the financial support of his legitimate family.
The Petition is granted.
I
Article 6 of the Civil Code provides:chanRoblesvirtualLawlibrary
Article 6. Rights may be waived, unless the waiver is contrary to law,
public order, public policy, morals or good customs, or prejudicial to a
third person with a right recognized by law.cralawred
The concept of waiver has been defined by this Court
as:chanRoblesvirtualLawlibrary
a voluntary and intentional relinquishment or abandonment of a known
existing legal right, advantage, benefit, claim or privilege, which except
for such waiver the party would have enjoyed; the voluntary
abandonment or surrender, by a capable person, of a right known by
him to exist, with the intent that such right shall be surrendered and
such person forever deprived of its benefit; or such conduct as warrants
an inference of the relinquishment of such right; or the intentional
doing of an act inconsistent with claiming it.67cralawred
In determining whether a statutory right can be waived, this Court is
guided by the following pronouncement:chanRoblesvirtualLawlibrary
[T]he doctrine of waiver extends to rights and privileges of any
character, and, since the word 'waiver' covers every conceivable right, it
is the general rule that a person may waive any matter which affects his
property, and any alienable right or privilege of which he is the owner
or which belongs to him or to which he is legally entitled, whether
secured by contract, conferred with statute, or guaranteed by
constitution, provided such rights and privileges rest in the
individual, are intended for his sole benefit, do not infringe on the
rights of others, and further provided the waiver of the right or
privilege is not forbidden by law, and does not contravene public
policy; and the principle is recognized that everyone has a right to
waive, and agree to waive, the advantage of a law or rule made solely
for the benefit and protection of the individual in his private capacity, if
it can be dispensed with and relinquished without infringing on any
public right, and without detriment to the community at
large[.]68 (Emphasis in the original)cralawred
When Colonel Otamias executed the Deed of Assignment, he
effectively waived his right to claim that his retirement benefits are
exempt from execution. The right to receive retirement benefits belongs
to Colonel Otamias. His decision to waive a portion of his retirement
benefits does not infringe on the right of third persons, but even
protects the right of his family to receive support.
In addition, the Deed of Assignment should be considered as the law
between the parties, and its provisions should be respected in the
absence of allegations that Colonel Otamias was coerced or defrauded
in executing it. The general rule is that a contract is the law between
parties and parties are free to stipulate terms and conditions that are not
contrary to law, morals, good customs, public order, or public
policy.69ChanRoblesVirtualawlibrary
The Deed of Assignment executed by Colonel Otamias was not
contrary to law; it was in accordance with the provisions on support in
the Family Code. Hence, there was no reason for the AFP PGMC not to
recognize its validity.
Further, this Court notes that the AFP PGMC granted the request for
support of the wives of other retired military personnel in a similar
situation as that of petitioner in this case. Attached to the Petition are
the affidavits of the wives of retired members of the military, who have
25
received a portion of their husbands'
pensions.70ChanRoblesVirtualawlibrary
One affidavit stated:chanRoblesvirtualLawlibrary
4. That when I consulted and appeared before the Office of
PGMC, I was instructed to submit a Special Power of
Authority from my husband so they can release part of his
pension to me;
5. That my husband signed the Special Power of Attorney at the
PGMC ceding 50% of his pension to me; the SPA form was
given to us by the PGMC and the same was signed by my
husband at the PGMC;. . .
....
7. That the amount was deposited directly to my account by the
PGMC- Finance Center AFP out of the pension of my
husband;
8. That only the Special Power of Attorney was required by the
PGMC in order for them to segregate my share of my
husband's pension and deposit the same to my account[.] 71
The other affidavit stated:chanRoblesvirtualLawlibrary
8. That my husband signed the Special Power of Attorney at the
PGMC ceding 50% of his pension to me; the SPA form was
given to us by the PGMC and the same was signed by my
husband at the PGMC[.]72
In addition, the AFP PGMC's website informs the public of the
following procedure:chanRoblesvirtualLawlibrary
Tanong: My husband-retiree cut-off my allotment. How can I have it
restored?
Sagot: Pension benefits are separate properties of the retiree and can
not [sic] be subject of a Ocurt [sic] Order for execution nor can they be
assigned to any third party (Sec 31, PD 1638, as amended). However, a
valid Special Power of Attorney (SPA) by the retiree himself
empowering the AFP Finance Center to deduct certain amount from his
lumpsum [sic] or pension pay as the case maybe, as a rule, is a valid
waiver of rights which can be effectively implemented by the AFP
F[inance] C[enter].73cralawred
Clearly, the AFP PGMC allows deductions from a retiree's pension for
as long as the retiree executes a Special Power of Attorney authorizing
the AFP PGMC to deduct a certain amount for the benefit of the
retiree's beneficiary.
It is curious why Colonel Otamias was allowed to execute a Deed of
Assignment by the administering officer when, in the first place, the
AFP PGMC's recognized procedure was to execute a Special Power of
Attorney, which would have been the easier remedy for Colonel
Otamias' family.
Instead, Colonel Otamias' family was forced to incur litigation expenses
just to be able to receive the financial support that Colonel Otamias was
willing to give to Edna, et al.
II
Section 31 of Presidential Decree No. 1638
provides:chanRoblesvirtualLawlibrary
Section 31. The benefits authorized under this Decree, except as
provided herein, shall not be subject to attachment, garnishment, levy,
execution or any tax whatsoever; neither shall they be assigned, ceded,
or conveyed to any third person: Provided, That if a retired or separated
officer or enlisted man who is entitled to any benefit under this Decree
has unsettled money and/or property accountabilities incurred while in
the active service, not more than fifty per centum of the pension
gratuity or other payment due such officer or enlisted man or his
survivors under this Decree may be withheld and be applied to settle
such accountabilities.cralawred
Under Section 31, Colonel Otamias' retirement benefits are exempt
from execution. Retirement benefits are exempt from execution so as to
ensure that the retiree has enough funds to support himself and his
family.
On the other hand, the right to receive support is provided under the
Family Code. Article 194 of the Family Code defines support as
follows:chanRoblesvirtualLawlibrary
Art. 194. Support comprises everything indispensable for sustenance,
dwelling, clothing, medical attendance, education and transportation, in
keeping with the financial capacity of the family.
The education of the person entitled to be supported referred to in the
preceding paragraph shall include his schooling or training for some
profession, trade or vocation, even beyond the age of majority.
Transportation shall include expenses in going to and from school, or to
and from place of work.cralawred
The provisions of the Family Code also state who are obliged to give
support, thus:chanRoblesvirtualLawlibrary
Art. 195. Subject to the provisions of the succeeding articles, the
following are obliged to support each other to the whole extent set forth
in the preceding article:
(1) The spouses;
(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and
illegitimate children of the latter;
(4) Parents and their illegitimate children and the legitimate and
illegitimate children of the latter; and
(5) Legitimate brothers and sisters, whether of the full or half- blood.
Art. 196. Brothers and sisters not legitimately related, whether of the
full or half-blood, are likewise bound to support each other to the full
extent set forth in Article 194 except only when the need for support of
the brother or sister, being of age, is due to a cause imputable to the
claimant's fault or negligence.
Art. 197. For the support of legitimate ascendants; descendants,
whether legitimate or illegitimate; and brothers and sisters, whether
legitimately or illegitimately related, only the separate property of the
person obliged to give support shall be answerable provided that in case
the obligor has no separate property, the absolute community or the
conjugal partnership, if financially capable, shall advance the support,
which shall be deducted from the share of the spouses obliged upon the
liquidation of the absolute community or of the conjugal
partnership[.]cralawred
The provisions of Rule 39 of the Rules of Court that are applicable to
this case are in apparent conflict with each other. Section 4 provides
that judgments in actions for support are immediately executory. On the
26
other hand, Section 13(1) provides that the right to receive pension
from government is exempt from execution,
thus:chanRoblesvirtualLawlibrary
RULE 39
EXECUTION, SATISFACTION, AND EFFECT OF JUDGMENTS
....
SEC. 4. Judgments not stayed by appeal. — Judgments in actions for
injunction, receivership, accounting and support, and such other
judgments as are now or may hereafter be declared to be immediately
executory, shall be enforceable after their rendition and shall not, be
stayed by an appeal taken therefrom, unless otherwise ordered by the
trial court. On appeal therefrom, the appellate court in its discretion
may make an order suspending, modifying, restoring or granting the
injunction, receivership, accounting, or award of support.
The stay of execution shall be upon such terms as to bond or otherwise
as may be considered proper for the security or protection of the rights
of the adverse party.
....
SEC. 13. Property exempt from execution. — Except as otherwise
expressly provided by law, the following property, and no other, shall
be exempt from execution:
....
(1) The right to receive legal support, or money or property obtained as
such support, or any pension or gratuity from the Government;
....
But no article or species of property mentioned in this section shall be
exempt from execution issued upon a judgment recovered for its price
or upon a judgment of foreclosure of a mortgage thereon. (Emphasis
supplied)cralawred
Based on the Family Code, Colonel Otamias is obliged to give support
to his family, petitioners in this case. However, he retired in 2003, and
his sole source of income is his pension. Judgments in actions for
support are immediately executory, yet under Section 31 of Presidential
Decree No. 1638, his pension cannot be executed upon.
However, considering that Colonel Otamias has waived a portion of his
retirement benefits through his Deed of Assignment, resolution on the
conflict between the civil code provisions on support and Section 31 of
Presidential Decree No. 1638 should be resolved in a more appropriate
case.
III
Republic v. Yahon74 is an analogous case because it involved the grant
of support to the spouse of a retired member of the Armed Forces of the
Philippines.
In Republic v. Yahon, Daisy R. Yahon filed a Petition for the Issuance
of Protection Order under Republic Act No. 9262.75 She alleged that
she did not have any source of income because her husband made her
resign from her job.76 The trial court issued a temporary restraining
order, a portion of which stated:chanRoblesvirtualLawlibrary
To insure that petitioner [Daisy R. Yahon] can receive a fair share
of respondent's retirement and other benefits, the following
agencies thru their heads are directed to WITHHOLD any
retirement, pension [,] and other benefits of respondent, S/SGT.
CHARLES A. YAHON, a member of the Armed Forces of the
Philippines assigned at 4ID, Camp Evangelista, Patag, Cagayan de Oro
City until further orders from the court:chanRoblesvirtualLawlibrary
1. Commanding General/Officer of the Finance Center of the Armed
Forces of the Philippines, Camp Emilio Aguinaldo, Quezon City;
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro
City.77(Emphasis in the original)cralawred
The trial court subsequently granted Daisy's Petition and issued a
permanent protection order78 and held:
Pursuant to the order of the court dated February 6, 2007, respondent,
S/Sgt. Charles A. Yahon is directed to give it to petitioner 50% of
whatever retirement benefits and other claims that may be due or
released to him from the government and the said share of petitioner
shall be automatically deducted from respondent's benefits and claims
and be given directly to the petitioner, Daisy R. Yahon.
Let copy of this decision be sent to the Commanding General/Officer of
Finance Center of the Armed Forces of the Philippines, Camp Emilio
Aguinaldo, Quezon City; the Management of RSBS, Camp Emilio
Aguinaldo, Quezon City and the Regional Manager of PAG-IBIG,
Mortola St., Cagayan de Oro City for their guidance and strict
compliance.79cralawred
In that case, the AFP Finance Center filed before the trial court a
Manifestation and Motion stating that "it was making a limited and
special appearance"80 and argued that the trial court did not acquire
jurisdiction over the Armed Forces of the Philippines. Hence, the
Armed Forces of the Philippines is not bound by the trial court's
ruling.81ChanRoblesVirtualawlibrary
The Armed Forces of the Philippines also cited Pacific Products, where
this Court ruled that:chanRoblesvirtualLawlibrary
A rule, which has never been seriously questioned, is that money in the
hands of public officers, although it may be due government
employees, is not liable to the creditors of these employees in the
process of garnishment. One reason is, that the State, by virtue of its
sovereignty may not be sued in its own courts except by express
authorization by the Legislature, and to subject its officers to
garnishment would be to permit indirectly what is prohibited directly.
Another reason is that moneys sought to be garnished, as long as they
remain in the hands of the disbursing officer of the Government, belong
to the latter, although the defendant in garnishment may be entitled to a
specific portion thereof. And still another reason which covers both of
the foregoing is that every consideration of public policy forbids
it.82 (Citations omitted)cralawred
This Court in Republic v. Yahon denied the Petition and discussed that
because Republic Act No. 9262 is the later enactment, its provisions
should prevail,83 thus:chanRoblesvirtualLawlibrary
We hold that Section 8(g) of R.A. No. 9262, being a later enactment,
should be construed as laying down an exception to the general rule
above stated that retirement benefits are exempt from execution. The
law itself declares that the court shall order the withholding of a
percentage of the income or salary of the respondent by the employer,
which shall be automatically remitted directly to the woman
27
"[n]otwithstanding other laws to the contrary"84 (Emphasis in the CA-G.R. SP No. 02555-MIN are REVERSED and SET ASIDE. The
original) Regional Trial Court Decision dated February 27, 2007 in F.C. Civil
Case No. 2006-039 is REINSTATED.
IV
SO ORDERED.
The 1987 Constitution gives much importance to the family as the basic
unit of society, such that Article XV85 is devoted to it.

The passage of the Family Code further implemented Article XV of the

Constitution. This Court has recognized the importance of granting
support to minor children, provided that the filiation of the child is
proven. In this case, the filiation of Jeffren M. Otamias and Jemwel M.
Otamias was admitted by Colonel Otamias in the Deed of Assignment.

Even before the passage of the Family Code, this Court has given
primary consideration to the right of a child to receive support.
In Samson v. Yatco,87 a petition for support was dismissed with
prejudice by the trial court on the ground that the minor asking for
support was not present in court during trial. An appeal was filed, but it
was dismissed for having been filed out of time. This Court relaxed the
rules of procedure and held that "[i]f the order of dismissal with
prejudice of the petition for support were to stand, the petitioners would
be deprived of their right to present and nature support."

In Gan v. Reyes,89 Augustus Caezar R. Gan (Gan) questioned the trial

court's decision requiring him to give support and claimed that that he
was not the father of the minor seeking support. He also argued that he
was not given his day in court. This Court held that Gan's arguments
were meant to delay the execution of the judgment, and that in any
case, Gan himself filed a Motion for Leave to Deposit in Court Support
Pendente Lite:

In all cases involving a child, his interest and welfare are always the
paramount concerns. There may be instances where, in view of the
poverty of the child, it would be a travesty of justice to refuse him
support until the decision of the trial court attains finality while time
continues to slip away. An excerpt from the early case of De Leon v.
Soriano is relevant, thus:

The money and property adjudged for support and education should and
must be given presently and without delay because if it had to wait the
final judgment, the children may in the meantime have suffered because
of lack of food or have missed and lost years in school because of lack
of funds. One cannot delay the payment of such funds for support and
education for the reason that if paid long afterwards, however much the
accumulated amount, its payment cannot cure the evil and repair the
damage caused. The children with such belated payment for support
and education cannot act as gluttons and eat voraciously and unwisely,
afterwards, to make up for the years of hunger and starvation. Neither
may they enrol in several classes and schools and take up numerous
subjects all at once to make up for the years they missed in school, due
to non-payment of the funds when needed.90

The non-inclusion of the AFP PGMC or the AFP Finance Center in the
action for support was proper, considering that both the AFP PGMC
and the AFP Finance Center are not the persons obliged to give support
to Edna, et al. Thus, it was not a real party-in-interest.91 Nor was the
AFP PGMC a necessary party because complete relief could be
obtained even without impleading the AFP PGMC.

WHEREFORE, the Petition is GRANTED. The Court of Appeals

Decision dated May 22, 2009 and Resolution dated August 11, 2009 in

28

G.R. No. 174689 October 22, 2007
ROMMEL JACINTO DANTES SILVERIO, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, respondent.
DECISION
CORONA, J.:
When God created man, He made him in the likeness of God; He
created them male and female. (Genesis 5:1-2)
Amihan gazed upon the bamboo reed planted by Bathala and she heard
voices coming from inside the bamboo. "Oh North Wind! North Wind!
Please let us out!," the voices said. She pecked the reed once, then
twice. All of a sudden, the bamboo cracked and slit open. Out came two
human beings; one was a male and the other was a female. Amihan
named the man "Malakas" (Strong) and the woman "Maganda"
(Beautiful). (The Legend of Malakas and Maganda)
When is a man a man and when is a woman a woman? In particular,
does the law recognize the changes made by a physician using scalpel,
drugs and counseling with regard to a person’s sex? May a person
successfully petition for a change of name and sex appearing in the
birth certificate to reflect the result of a sex reassignment surgery?
On November 26, 2002, petitioner Rommel Jacinto Dantes Silverio
filed a petition for the change of his first name and sex in his birth
certificate in the Regional Trial Court of Manila, Branch 8. The
petition, docketed as SP Case No. 02-105207, impleaded the civil
registrar of Manila as respondent.
Petitioner alleged in his petition that he was born in the City of Manila
to the spouses Melecio Petines Silverio and Anita Aquino Dantes on
April 4, 1962. His name was registered as "Rommel Jacinto Dantes
Silverio" in his certificate of live birth (birth certificate). His sex was
registered as "male."
He further alleged that he is a male transsexual, that is, "anatomically
male but feels, thinks and acts as a female" and that he had always
identified himself with girls since childhood.1 Feeling trapped in a
man’s body, he consulted several doctors in the United States. He
underwent psychological examination, hormone treatment and breast
augmentation. His attempts to transform himself to a "woman"
culminated on January 27, 2001 when he underwent sex reassignment
surgery2 in Bangkok, Thailand. He was thereafter examined by Dr.
Marcelino Reysio-Cruz, Jr., a plastic and reconstruction surgeon in the
Philippines, who issued a medical certificate attesting that he
(petitioner) had in fact undergone the procedure.
From then on, petitioner lived as a female and was in fact engaged to be
married. He then sought to have his name in his birth certificate
changed from "Rommel Jacinto" to "Mely," and his sex from "male" to
"female."
An order setting the case for initial hearing was published in the
People’s Journal Tonight, a newspaper of general circulation in Metro
Manila, for three consecutive weeks.3 Copies of the order were sent to
the Office of the Solicitor General (OSG) and the civil registrar of
Manila.
On the scheduled initial hearing, jurisdictional requirements were
established. No opposition to the petition was made.
During trial, petitioner testified for himself. He also presented Dr.
Reysio-Cruz, Jr. and his American fiancé, Richard P. Edel, as
witnesses.
On June 4, 2003, the trial court rendered a decision 4 in favor of
petitioner. Its relevant portions read:
Petitioner filed the present petition not to evade any law or judgment or
any infraction thereof or for any unlawful motive but solely for the
purpose of making his birth records compatible with his present sex.
The sole issue here is whether or not petitioner is entitled to the relief
asked for.
The [c]ourt rules in the affirmative.
Firstly, the [c]ourt is of the opinion that granting the petition would be
more in consonance with the principles of justice and equity. With his
sexual [re-assignment], petitioner, who has always felt, thought and
acted like a woman, now possesses the physique of a female.
Petitioner’s misfortune to be trapped in a man’s body is not his own
doing and should not be in any way taken against him.
Likewise, the [c]ourt believes that no harm, injury [or] prejudice will be
caused to anybody or the community in granting the petition. On the
contrary, granting the petition would bring the much-awaited happiness
on the part of the petitioner and her [fiancé] and the realization of their
dreams.
Finally, no evidence was presented to show any cause or ground to
deny the present petition despite due notice and publication thereof.
Even the State, through the [OSG] has not seen fit to interpose any
[o]pposition.
WHEREFORE, judgment is hereby rendered GRANTING the petition
and ordering the Civil Registrar of Manila to change the entries
appearing in the Certificate of Birth of [p]etitioner, specifically for
petitioner’s first name from "Rommel Jacinto" to MELY and
petitioner’s gender from "Male" to FEMALE. 5
On August 18, 2003, the Republic of the Philippines (Republic), thru
the OSG, filed a petition for certiorari in the Court of Appeals. 6 It
alleged that there is no law allowing the change of entries in the birth
certificate by reason of sex alteration.
On February 23, 2006, the Court of Appeals7 rendered a decision8 in
favor of the Republic. It ruled that the trial court’s decision lacked legal
basis. There is no law allowing the change of either name or sex in the
certificate of birth on the ground of sex reassignment through surgery.
Thus, the Court of Appeals granted the Republic’s petition, set aside the
decision of the trial court and ordered the dismissal of SP Case No. 02-
105207. Petitioner moved for reconsideration but it was denied. 9 Hence,
this petition.
Petitioner essentially claims that the change of his name and sex in his
birth certificate is allowed under Articles 407 to 413 of the Civil Code,
Rules 103 and 108 of the Rules of Court and RA 9048. 10
The petition lacks merit.
A Person’s First Name Cannot Be Changed On the Ground of Sex
Reassignment
Petitioner invoked his sex reassignment as the ground for his petition
for change of name and sex. As found by the trial court:
Petitioner filed the present petition not to evade any law or judgment or
any infraction thereof or for any unlawful motive but solely for the
purpose of making his birth records compatible with his present
sex. (emphasis supplied)
29
Petitioner believes that after having acquired the physical features of a
female, he became entitled to the civil registry changes sought. We
disagree.
The State has an interest in the names borne by individuals and entities
for purposes of identification.11 A change of name is a privilege, not a
right.12 Petitions for change of name are controlled by statutes. 13 In this
connection, Article 376 of the Civil Code provides:
ART. 376. No person can change his name or surname without judicial
authority.
This Civil Code provision was amended by RA 9048 (Clerical Error
Law). In particular, Section 1 of RA 9048 provides:
SECTION 1. Authority to Correct Clerical or Typographical Error and
Change of First Name or Nickname. – No entry in a civil register shall
be changed or corrected without a judicial order, except for clerical or
typographical errors and change of first name or nickname which can
be corrected or changed by the concerned city or municipal civil
registrar or consul general in accordance with the provisions of this Act
and its implementing rules and regulations.
RA 9048 now governs the change of first name.14 It vests the power and
authority to entertain petitions for change of first name to the city or
municipal civil registrar or consul general concerned. Under the law,
therefore, jurisdiction over applications for change of first name is now
primarily lodged with the aforementioned administrative officers. The
intent and effect of the law is to exclude the change of first name from
the coverage of Rules 103 (Change of Name) and 108 (Cancellation or
Correction of Entries in the Civil Registry) of the Rules of Court, until
and unless an administrative petition for change of name is first filed
and subsequently denied.15 It likewise lays down the corresponding
venue,16 form17 and procedure. In sum, the remedy and the proceedings
regulating change of first name are primarily administrative in nature,
not judicial.
RA 9048 likewise provides the grounds for which change of first name
may be allowed:
SECTION 4. Grounds for Change of First Name or Nickname. – The
petition for change of first name or nickname may be allowed in any of
the following cases:
(1) The petitioner finds the first name or nickname to be ridiculous,
tainted with dishonor or extremely difficult to write or pronounce;
(2) The new first name or nickname has been habitually and
continuously used by the petitioner and he has been publicly known by
that first name or nickname in the community; or
(3) The change will avoid confusion.
Petitioner’s basis in praying for the change of his first name was his sex
reassignment. He intended to make his first name compatible with the
sex he thought he transformed himself into through surgery. However, a
change of name does not alter one’s legal capacity or civil status.18 RA
9048 does not sanction a change of first name on the ground of sex
reassignment. Rather than avoiding confusion, changing petitioner’s
first name for his declared purpose may only create grave complications
in the civil registry and the public interest.
Before a person can legally change his given name, he must present
proper or reasonable cause or any compelling reason justifying such
change.19 In addition, he must show that he will be prejudiced by the
use of his true and official name.20 In this case, he failed to show, or
even allege, any prejudice that he might suffer as a result of using his
true and official name.
In sum, the petition in the trial court in so far as it prayed for the change
of petitioner’s first name was not within that court’s primary
jurisdiction as the petition should have been filed with the local civil
registrar concerned, assuming it could be legally done. It was an
improper remedy because the proper remedy was administrative, that is,
that provided under RA 9048. It was also filed in the wrong venue as
the proper venue was in the Office of the Civil Registrar of Manila
where his birth certificate is kept. More importantly, it had no merit
since the use of his true and official name does not prejudice him at all.
For all these reasons, the Court of Appeals correctly dismissed
petitioner’s petition in so far as the change of his first name was
concerned.
No Law Allows The Change of Entry In The Birth Certificate As
To Sex On the Ground of Sex Reassignment
The determination of a person’s sex appearing in his birth certificate is
a legal issue and the court must look to the statutes.21 In this
connection, Article 412 of the Civil Code provides:
ART. 412. No entry in the civil register shall be changed or corrected
without a judicial order.
Together with Article 376 of the Civil Code, this provision was
amended by RA 9048 in so far as clerical or typographical errors are
involved. The correction or change of such matters can now be made
through administrative proceedings and without the need for a judicial
order. In effect, RA 9048 removed from the ambit of Rule 108 of the
Rules of Court the correction of such errors.22 Rule 108 now applies
only to substantial changes and corrections in entries in the civil
register.23
Section 2(c) of RA 9048 defines what a "clerical or typographical
error" is:
SECTION 2. Definition of Terms. – As used in this Act, the following
terms shall mean:
xxx xxx xxx
(3) "Clerical or typographical error" refers to a mistake committed in
the performance of clerical work in writing, copying, transcribing or
typing an entry in the civil register that is harmless and innocuous, such
as misspelled name or misspelled place of birth or the like, which is
visible to the eyes or obvious to the understanding, and can be corrected
or changed only by reference to other existing record or
records: Provided, however, That no correction must involve the
change of nationality, age, status or sex of the petitioner. (emphasis
supplied)
Under RA 9048, a correction in the civil registry involving the change
of sex is not a mere clerical or typographical error. It is a substantial
change for which the applicable procedure is Rule 108 of the Rules of
Court.
The entries envisaged in Article 412 of the Civil Code and correctable
under Rule 108 of the Rules of Court are those provided in Articles 407
and 408 of the Civil Code:24
ART. 407. Acts, events and judicial decrees concerning the civil status
of persons shall be recorded in the civil register.
ART. 408. The following shall be entered in the civil register:
(1) Births; (2) marriages; (3) deaths; (4) legal separations; (5)
annulments of marriage; (6) judgments declaring marriages void from
the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments of
natural children; (10) naturalization; (11) loss, or (12) recovery of
citizenship; (13) civil interdiction; (14) judicial determination of
30
filiation; (15) voluntary emancipation of a minor; and (16) changes of
name.
The acts, events or factual errors contemplated under Article 407 of the
Civil Code include even those that occur after birth.25 However, no
reasonable interpretation of the provision can justify the conclusion that
it covers the correction on the ground of sex reassignment.
To correct simply means "to make or set aright; to remove the faults or
error from" while to change means "to replace something with
something else of the same kind or with something that serves as a
substitute."26 The birth certificate of petitioner contained no error. All
entries therein, including those corresponding to his first name and sex,
were all correct. No correction is necessary.
Article 407 of the Civil Code authorizes the entry in the civil registry of
certain acts (such as legitimations, acknowledgments of illegitimate
children and naturalization), events (such as births, marriages,
naturalization and deaths) and judicial decrees (such as legal
separations, annulments of marriage, declarations of nullity of
marriages, adoptions, naturalization, loss or recovery of citizenship,
civil interdiction, judicial determination of filiation and changes of
name). These acts, events and judicial decrees produce legal
consequences that touch upon the legal capacity, status and nationality
of a person. Their effects are expressly sanctioned by the laws. In
contrast, sex reassignment is not among those acts or events mentioned
in Article 407. Neither is it recognized nor even mentioned by any law,
expressly or impliedly.
"Status" refers to the circumstances affecting the legal situation (that is,
the sum total of capacities and incapacities) of a person in view of his
age, nationality and his family membership.27
The status of a person in law includes all his personal qualities and
relations, more or less permanent in nature, not ordinarily
terminable at his own will, such as his being legitimate or illegitimate,
or his being married or not. The comprehensive term status… include
such matters as the beginning and end of legal personality, capacity to
have rights in general, family relations, and its various aspects, such as
birth, legitimation, adoption, emancipation, marriage, divorce, and
sometimes even succession.28 (emphasis supplied)
A person’s sex is an essential factor in marriage and family relations. It
is a part of a person’s legal capacity and civil status. In this connection,
Article 413 of the Civil Code provides:
ART. 413. All other matters pertaining to the registration of civil status
shall be governed by special laws.
But there is no such special law in the Philippines governing sex
reassignment and its effects. This is fatal to petitioner’s cause.
Moreover, Section 5 of Act 3753 (the Civil Register Law) provides:
SEC. 5. Registration and certification of births. – The declaration of the
physician or midwife in attendance at the birth or, in default thereof, the
declaration of either parent of the newborn child, shall be sufficient for
the registration of a birth in the civil register. Such declaration shall be
exempt from documentary stamp tax and shall be sent to the local civil
registrar not later than thirty days after the birth, by the physician or
midwife in attendance at the birth or by either parent of the newborn
child.
In such declaration, the person above mentioned shall certify to the
following facts: (a) date and hour of birth; (b) sex and nationality of
infant; (c) names, citizenship and religion of parents or, in case the
father is not known, of the mother alone; (d) civil status of parents; (e)
place where the infant was born; and (f) such other data as may be
required in the regulations to be issued.
xxx xxx xxx (emphasis supplied)
Under the Civil Register Law, a birth certificate is a historical record of
the facts as they existed at the time of birth.29Thus, the sex of a person
is determined at birth, visually done by the birth attendant (the
physician or midwife) by examining the genitals of the infant.
Considering that there is no law legally recognizing sex reassignment,
the determination of a person’s sex made at the time of his or her birth,
if not attended by error,30 is immutable.31
When words are not defined in a statute they are to be given their
common and ordinary meaning in the absence of a contrary legislative
intent. The words "sex," "male" and "female" as used in the Civil
Register Law and laws concerning the civil registry (and even all other
laws) should therefore be understood in their common and ordinary
usage, there being no legislative intent to the contrary. In this
connection, sex is defined as "the sum of peculiarities of structure and
function that distinguish a male from a female"32 or "the distinction
between male and female."33Female is "the sex that produces ova or
bears young"34 and male is "the sex that has organs to produce
spermatozoa for fertilizing ova."35 Thus, the words "male" and "female"
in everyday understanding do not include persons who have undergone
sex reassignment. Furthermore, "words that are employed in a statute
which had at the time a well-known meaning are presumed to have
been used in that sense unless the context compels to the
contrary."36 Since the statutory language of the Civil Register Law was
enacted in the early 1900s and remains unchanged, it cannot be argued
that the term "sex" as used then is something alterable through surgery
or something that allows a post-operative male-to-female transsexual to
be included in the category "female."
For these reasons, while petitioner may have succeeded in altering his
body and appearance through the intervention of modern surgery, no
law authorizes the change of entry as to sex in the civil registry for that
reason. Thus, there is no legal basis for his petition for the correction or
change of the entries in his birth certificate.
Neither May Entries in the Birth Certificate As to First Name or
Sex Be Changed on the Ground of Equity
The trial court opined that its grant of the petition was in consonance
with the principles of justice and equity. It believed that allowing the
petition would cause no harm, injury or prejudice to anyone. This is
wrong.
The changes sought by petitioner will have serious and wide-ranging
legal and public policy consequences. First, even the trial court itself
found that the petition was but petitioner’s first step towards his
eventual marriage to his male fiancé. However, marriage, one of the
most sacred social institutions, is a special contract of permanent
union between a man and a woman.37 One of its essential requisites is
the legal capacity of the contracting parties who must be a male and a
female.38 To grant the changes sought by petitioner will substantially
reconfigure and greatly alter the laws on marriage and family relations.
It will allow the union of a man with another man who has undergone
sex reassignment (a male-to-female post-operative transsexual).
Second, there are various laws which apply particularly to women such
as the provisions of the Labor Code on employment of
women,39 certain felonies under the Revised Penal Code40 and the
presumption of survivorship in case of calamities under Rule 131 of the
Rules of Court,41 among others. These laws underscore the public
policy in relation to women which could be substantially affected if
petitioner’s petition were to be granted.
It is true that Article 9 of the Civil Code mandates that "[n]o judge or
court shall decline to render judgment by reason of the silence,
obscurity or insufficiency of the law." However, it is not a license for
31
courts to engage in judicial legislation. The duty of the courts is to
apply or interpret the law, not to make or amend it.

In our system of government, it is for the legislature, should it choose to

do so, to determine what guidelines should govern the recognition of
the effects of sex reassignment. The need for legislative guidelines
becomes particularly important in this case where the claims asserted
are statute-based.

To reiterate, the statutes define who may file petitions for change of
first name and for correction or change of entries in the civil registry,
where they may be filed, what grounds may be invoked, what proof
must be presented and what procedures shall be observed. If the
legislature intends to confer on a person who has undergone sex
reassignment the privilege to change his name and sex to conform with
his reassigned sex, it has to enact legislation laying down the guidelines
in turn governing the conferment of that privilege.

It might be theoretically possible for this Court to write a protocol on

when a person may be recognized as having successfully changed his
sex. However, this Court has no authority to fashion a law on that
matter, or on anything else. The Court cannot enact a law where no law
exists. It can only apply or interpret the written word of its co-equal
branch of government, Congress.

Petitioner pleads that "[t]he unfortunates are also entitled to a life of

happiness, contentment and [the] realization of their dreams." No
argument about that. The Court recognizes that there are people whose
preferences and orientation do not fit neatly into the commonly
recognized parameters of social convention and that, at least for them,
life is indeed an ordeal. However, the remedies petitioner seeks involve
questions of public policy to be addressed solely by the legislature, not
by the courts.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED.

32

G.R. No. 193707 December 10, 2014
NORMA A. DEL SOCORRO, for and in behalf of her minor child
RODERIGO NORJO VAN WILSEM, Petitioner,
vs.
ERNST JOHAN BRINKMAN VAN WILSEM, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of
the Rules of Court seeking to reverse and set aside the Orders1 dated
February 19, 2010 and September 1, 2010, respectively, of the Regional
Trial Court of Cebu City (RTC-Cebu), which dismissed the criminal
case entitled People of the Philippines v. Ernst Johan Brinkman Van
Wilsem, docketed as Criminal Case No. CBU-85503, for violation of
Republic Act (R.A.) No. 9262, otherwise known as the Anti-Violence
Against Women and Their Children Act of 2004.
The following facts are culled from the records:
Petitioner Norma A. Del Socorro and respondent Ernst Johan Brinkman
Van Wilsem contracted marriage in Holland on September 25,
1990.2 On January 19, 1994, they were blessed with a son named
Roderigo Norjo Van Wilsem, who at the time of the filing of the instant
petition was sixteen (16) years of age.3
Unfortunately, their marriage bond ended on July 19, 1995 by virtue of
a Divorce Decree issued by the appropriate Court of Holland. 4 At that
time, their son was only eighteen (18) months old.5 Thereafter,
petitioner and her son came home to the Philippines.6
According to petitioner, respondent made a promise to provide monthly
support to their son in the amount of Two Hundred Fifty (250)
Guildene (which is equivalent to Php17,500.00 more or
less).7 However, since the arrival of petitioner and her son in the
Philippines, respondent never gave support to the son, Roderigo. 8
Not long thereafter, respondent cameto the Philippines and remarried in
Pinamungahan, Cebu, and since then, have been residing
thereat.9 Respondent and his new wife established a business known as
Paree Catering, located at Barangay Tajao, Municipality of
Pinamungahan, Cebu City.10 To date, all the parties, including their son,
Roderigo, are presently living in Cebu City.11
On August 28, 2009, petitioner, through her counsel, sent a letter
demanding for support from respondent. However, respondent refused
to receive the letter.12
Because of the foregoing circumstances, petitioner filed a complaint
affidavit with the Provincial Prosecutor of Cebu City against
respondent for violation of Section 5, paragraph E(2) of R.A. No. 9262
for the latter’s unjust refusal to support his minor child with
petitioner.13 Respondent submitted his counter-affidavit thereto, to
which petitioner also submitted her reply-affidavit.14 Thereafter, the
Provincial Prosecutor of Cebu City issued a Resolution recommending
the filing of an information for the crime charged against herein
respondent.
The information, which was filed with the RTC-Cebu and raffled to
Branch 20 thereof, states that:
That sometime in the year 1995 and up to the present, more or less, in
the Municipality of Minglanilla, Province of Cebu, Philippines, and
within the jurisdiction of this Honorable Court, the above-named
accused, did then and there wilfully, unlawfully and deliberately
deprive, refuse and still continue to deprive his son RODERIGO
NORJO VAN WILSEM, a fourteen (14) year old minor, of financial
support legally due him, resulting in economic abuse to the victim.
CONTRARY TO LAW.15
Upon motion and after notice and hearing, the RTC-Cebu issued a Hold
Departure Order against respondent.16Consequently, respondent was
arrested and, subsequently, posted bail.17 Petitioner also filed a
Motion/Application of Permanent Protection Order to which respondent
filed his Opposition.18 Pending the resolution thereof, respondent was
arraigned.19 Subsequently, without the RTC-Cebu having resolved the
application of the protection order, respondent filed a Motion to
Dismiss on the ground of: (1) lack of jurisdiction over the offense
charged; and (2) prescription of the crime charged.20
On February 19, 2010, the RTC-Cebu issued the herein assailed
Order,21 dismissing the instant criminal case against respondent on the
ground that the facts charged in the information do not constitute an
offense with respect to the respondent who is an alien, the dispositive
part of which states:
WHEREFORE, the Court finds that the facts charged in the information
do not constitute an offense with respect to the accused, he being an
alien, and accordingly, orders this case DISMISSED.
The bail bond posted by accused Ernst Johan Brinkman Van Wilsem
for his provisional liberty is hereby cancelled (sic) and ordered
released.
SO ORDERED.
Cebu City, Philippines, February 19, 2010.22
Thereafter, petitioner filed her Motion for Reconsideration thereto
reiterating respondent’s obligation to support their child under Article
19523 of the Family Code, thus, failure to do so makes him liable under
R.A. No. 9262 which "equally applies to all persons in the Philippines
who are obliged to support their minor children regardless of the
obligor’s nationality."24
On September 1, 2010, the lower court issued an Order25 denying
petitioner’s Motion for Reconsideration and reiterating its previous
ruling. Thus:
x x x The arguments therein presented are basically a rehash of those
advanced earlier in the memorandum of the prosecution. Thus, the court
hereby reiterates its ruling that since the accused is a foreign national he
is not subject to our national law (The Family Code) in regard to a
parent’s duty and obligation to givesupport to his child. Consequently,
he cannot be charged of violating R.A. 9262 for his alleged failure to
support his child. Unless it is conclusively established that R.A. 9262
applies to a foreigner who fails to give support tohis child,
notwithstanding that he is not bound by our domestic law which
mandates a parent to give such support, it is the considered opinion of
the court that no prima faciecase exists against the accused herein,
hence, the case should be dismissed.
WHEREFORE, the motion for reconsideration is hereby DENIED for
lack of merit.
SO ORDERED.
Cebu City, Philippines, September 1, 2010.26
Hence, the present Petition for Review on Certiorari raising the
following issues:
1. Whether or not a foreign national has an obligation to support his
minor child under Philippine law; and
33
2. Whether or not a foreign national can be held criminally liable under
R.A. No. 9262 for his unjustified failure to support his minor child.27
At the outset, let it be emphasized that We are taking cognizance of the
instant petition despite the fact that the same was directly lodged with
the Supreme Court, consistent with the ruling in Republic v. Sunvar
Realty Development Corporation,28 which lays down the instances
when a ruling of the trial court may be brought on appeal directly to the
Supreme Court without violating the doctrine of hierarchy of courts, to
wit:
x x x Nevertheless, the Rules do not prohibit any of the parties from
filing a Rule 45 Petition with this Court, in case only questions of law
are raised or involved. This latter situation was one that petitioners
found themselves in when they filed the instant Petition to raise only
questions of law. In Republic v. Malabanan, the Court clarified the
three modes of appeal from decisions of the RTC, to wit: (1) by
ordinary appeal or appeal by writ of error under Rule 41, whereby
judgment was rendered in a civil or criminal action by the RTC in the
exercise of its original jurisdiction; (2) by a petition for review under
Rule 42, whereby judgment was rendered by the RTC in the exercise of
its appellate jurisdiction; and (3) by a petition for review on certiorari
before the Supreme Court under Rule 45. "The first mode of appeal is
taken to the [Court of Appeals] on questions of fact or mixed questions
of fact and law. The second mode of appeal is brought to the CA on
questions of fact, of law, or mixed questions of fact and law. The third
mode of appealis elevated to the Supreme Court only on questions of
law." (Emphasis supplied)
There is a question of law when the issue does not call for an
examination of the probative value of the evidence presented or of the
truth or falsehood of the facts being admitted, and the doubt concerns
the correct application of law and jurisprudence on the matter. The
resolution of the issue must rest solely on what the law provides on the
given set of circumstances.29
Indeed, the issues submitted to us for resolution involve questions of
law – the response thereto concerns the correct application of law and
jurisprudence on a given set of facts, i.e.,whether or not a foreign
national has an obligation to support his minor child under Philippine
law; and whether or not he can be held criminally liable under R.A. No.
9262 for his unjustified failure to do so.
It cannot be negated, moreover, that the instant petition highlights a
novel question of law concerning the liability of a foreign national who
allegedly commits acts and omissions punishable under special criminal
laws, specifically in relation to family rights and duties. The
inimitability of the factual milieu of the present case, therefore,
deserves a definitive ruling by this Court, which will eventually serve
as a guidepost for future cases. Furthermore, dismissing the instant
petition and remanding the same to the CA would only waste the time,
effort and resources of the courts. Thus, in the present case,
considerations of efficiency and economy in the administration of
justice should prevail over the observance of the hierarchy of courts.
Now, on the matter of the substantive issues, We find the petition
meritorious. Nonetheless, we do not fully agree with petitioner’s
contentions.
To determine whether or not a person is criminally liable under R.A.
No. 9262, it is imperative that the legal obligation to support exists.
Petitioner invokes Article 19530 of the Family Code, which provides the
parent’s obligation to support his child. Petitioner contends that
notwithstanding the existence of a divorce decree issued in relation to
Article 26 of the Family Code,31 respondent is not excused from
complying with his obligation to support his minor child with
petitioner.
On the other hand, respondent contends that there is no sufficient and
clear basis presented by petitioner that she, as well as her minor son, are
entitled to financial support.32 Respondent also added that by reason of
the Divorce Decree, he is not obligated topetitioner for any financial
support.33
On this point, we agree with respondent that petitioner cannot rely on
Article 19534 of the New Civil Code in demanding support from
respondent, who is a foreign citizen, since Article 15 35 of the New Civil
Code stresses the principle of nationality. In other words, insofar as
Philippine laws are concerned, specifically the provisions of the Family
Code on support, the same only applies to Filipino citizens. By analogy,
the same principle applies to foreigners such that they are governed by
their national law with respect to family rights and duties.36
The obligation to give support to a child is a matter that falls under
family rights and duties. Since the respondent is a citizen of Holland or
the Netherlands, we agree with the RTC-Cebu that he is subject to the
laws of his country, not to Philippinelaw, as to whether he is obliged to
give support to his child, as well as the consequences of his failure to
do so.37
In the case of Vivo v. Cloribel,38 the Court held that –
Furthermore, being still aliens, they are not in position to invoke the
provisions of the Civil Code of the Philippines, for that Code cleaves to
the principle that family rights and duties are governed by their
personal law, i.e.,the laws of the nation to which they belong even when
staying in a foreign country (cf. Civil Code, Article 15). 39
It cannot be gainsaid, therefore, that the respondent is not obliged to
support petitioner’s son under Article195 of the Family Code as a
consequence of the Divorce Covenant obtained in Holland. This does
not, however, mean that respondent is not obliged to support
petitioner’s son altogether.
In international law, the party who wants to have a foreign law applied
to a dispute or case has the burden of proving the foreign law. 40 In the
present case, respondent hastily concludes that being a national of the
Netherlands, he is governed by such laws on the matter of provision of
and capacity to support.41 While respondent pleaded the laws of the
Netherlands in advancing his position that he is not obliged to support
his son, he never proved the same.
It is incumbent upon respondent to plead and prove that the national
law of the Netherlands does not impose upon the parents the obligation
to support their child (either before, during or after the issuance of a
divorce decree), because Llorente v. Court of Appeals,42 has already
enunciated that:
True, foreign laws do not prove themselves in our jurisdiction and our
courts are not authorized to takejudicial notice of them. Like any other
fact, they must be alleged and proved.43
In view of respondent’s failure to prove the national law of the
Netherlands in his favor, the doctrine of processual presumption shall
govern. Under this doctrine, if the foreign law involved is not properly
pleaded and proved, our courts will presume that the foreign law is the
same as our local or domestic or internal law.44 Thus, since the law of
the Netherlands as regards the obligation to support has not been
properly pleaded and proved in the instant case, it is presumed to be the
same with Philippine law, which enforces the obligation of parents to
support their children and penalizing the non-compliance therewith.
Moreover, while in Pilapil v. Ibay-Somera,45 the Court held that a
divorce obtained in a foreign land as well as its legal effects may be
recognized in the Philippines in view of the nationality principle on the
matter of status of persons, the Divorce Covenant presented by
34
respondent does not completely show that he is notliable to give
support to his son after the divorce decree was issued. Emphasis is
placed on petitioner’s allegation that under the second page of the
aforesaid covenant, respondent’s obligation to support his child is
specifically stated,46 which was not disputed by respondent.
We likewise agree with petitioner that notwithstanding that the national
law of respondent states that parents have no obligation to support their
children or that such obligation is not punishable by law, said law
would still not find applicability,in light of the ruling in Bank of
America, NT and SA v. American Realty Corporation,47 to wit:
In the instant case, assuming arguendo that the English Law on the
matter were properly pleaded and proved in accordance with Section
24, Rule 132 of the Rules of Court and the jurisprudence laid down in
Yao Kee, et al. vs. Sy-Gonzales, said foreign law would still not find
applicability.
Thus, when the foreign law, judgment or contract is contrary to a sound
and established public policy of the forum, the said foreign law,
judgment or order shall not be applied.
Additionally, prohibitive laws concerning persons, their acts or
property, and those which have for their object public order, public
policy and good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions agreed
upon in a foreign country.
The public policy sought to be protected in the instant case is the
principle imbedded in our jurisdiction proscribing the splitting up of a
single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is pertinent
— children.
If two or more suits are instituted on the basis of the same cause of
action, the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the others. Moreover, foreign
law should not be applied when its application would work undeniable
injustice to the citizens or residents of the forum. To give justice is the
most important function of law; hence, a law, or judgment or contract
that is obviously unjust negates the fundamental principles of Conflict
of Laws.48
Applying the foregoing, even if the laws of the Netherlands neither
enforce a parent’s obligation to support his child nor penalize the
noncompliance therewith, such obligation is still duly enforceable in the
Philippines because it would be of great injustice to the child to be
denied of financial support when the latter is entitled thereto.
We emphasize, however, that as to petitioner herself, respondent is no
longer liable to support his former wife, in consonance with the ruling
in San Luis v. San Luis,49 to wit:
As to the effect of the divorce on the Filipino wife, the Court ruled that
she should no longerbe considered marriedto the alien spouse. Further,
she should not be required to perform her marital duties and
obligations. It held:
To maintain, as private respondent does, that, under our laws, petitioner
has to be considered still married to private respondent and still subject
to a wife's obligations under Article 109, et. seq. of the Civil Code
cannot be just. Petitioner should not be obliged to live together with,
observe respect and fidelity, and render support to private respondent.
The latter should not continue to be one of her heirs with possible rights
to conjugal property. She should not be discriminated against in her
own country if the ends of justice are to be served. (Emphasis added) 50
Based on the foregoing legal precepts, we find that respondent may be
made liable under Section 5(e) and (i) of R.A. No. 9262 for unjustly
refusing or failing to give support topetitioner’s son, to wit:
SECTION 5. Acts of Violence Against Women and Their Children.-
The crime of violence against women and their children is committed
through any of the following acts:
xxxx
(e) Attempting to compel or compelling the woman or her child to
engage in conduct which the woman or her child has the right to desist
from or desist from conduct which the woman or her child has the right
to engage in, or attempting to restrict or restricting the woman's or her
child's freedom of movement or conduct by force or threat of force,
physical or other harm or threat of physical or other harm, or
intimidation directed against the woman or child. This shall include,
butnot limited to, the following acts committed with the purpose or
effect of controlling or restricting the woman's or her child's movement
or conduct:
xxxx
(2) Depriving or threatening to deprive the woman or her children of
financial support legally due her or her family, or deliberately providing
the woman's children insufficient financial support; x x x x
(i) Causing mental or emotional anguish, public ridicule or humiliation
to the woman or her child, including, but not limited to, repeated verbal
and emotional abuse, and denial of financial support or custody of
minor childrenof access to the woman's child/children.51
Under the aforesaid special law, the deprivation or denial of financial
support to the child is considered anact of violence against women and
In addition, considering that respondent is currently living in the Philippines, we
find strength in petitioner’s claim that the Territoriality Principle in criminal law,
in relation to Article 14 of the New Civil Code, applies to the instant case, which
provides that: "[p]enal laws and those of public security and safety shall be
obligatory upon all who live and sojourn in Philippine territory, subject to the
principle of public international law and to treaty stipulations." On this score, it
is indisputable that the alleged continuing acts of respondent in refusing to
support his child with petitioner is committed here in the Philippines as all of the
parties herein are residents of the Province of Cebu City. As such, our courts
have territorial jurisdiction over the offense charged against respondent. It is
likewise irrefutable that jurisdiction over the respondent was acquired upon his
arrest.
Finally, we do not agree with respondent’s argument that granting, but not
admitting, that there is a legal basis for charging violation of R.A. No. 9262 in
the instant case, the criminal liability has been extinguished on the ground of
prescription of crime52 under Section 24 of R.A. No. 9262, which provides that:
SECTION 24. Prescriptive Period. – Acts falling under Sections 5(a) to 5(f) shall
prescribe in twenty (20) years. Acts falling under Sections 5(g) to 5(I) shall
prescribe in ten (10) years.
The act of denying support to a child under Section 5(e)(2) and (i) of R.A. No.
9262 is a continuing offense,53 which started in 1995 but is still ongoing at
present. Accordingly, the crime charged in the instant case has clearly not
prescribed.
Given, however, that the issue on whether respondent has provided support to
petitioner’s child calls for an examination of the probative value of the evidence
presented, and the truth and falsehood of facts being admitted, we hereby
remand the determination of this issue to the RTC-Cebu which has jurisdiction
over the case.
WHEREFORE, the petition is GRANTED. The Orders dated February 19, 2010
and September 1, 2010, respectively, of the Regional Trial Court of the City of
Cebu are hereby REVERSED and SET ASIDE. The case is REMANDED to the
same court to conduct further proceedings based on the merits of the case.
35
G.R. No. L-68470 October 8, 1985
ALICE REYES VAN DORN, petitioner,
vs.
HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch
CX, Regional Trial Court of the National Capital Region Pasay
City and RICHARD UPTON respondents.
MELENCIO-HERRERA, J.:\
In this Petition for certiorari and Prohibition, petitioner Alice Reyes
Van Dorn seeks to set aside the Orders, dated September 15, 1983 and
August 3, 1984, in Civil Case No. 1075-P, issued by respondent Judge,
which denied her Motion to Dismiss said case, and her Motion for
Reconsideration of the Dismissal Order, respectively.
The basic background facts are that petitioner is a citizen of the
Philippines while private respondent is a citizen of the United States;
that they were married in Hongkong in 1972; that, after the marriage,
they established their residence in the Philippines; that they begot two
children born on April 4, 1973 and December 18, 1975, respectively;
that the parties were divorced in Nevada, United States, in 1982; and
that petitioner has re-married also in Nevada, this time to Theodore Van
Dorn.
Dated June 8, 1983, private respondent filed suit against petitioner in
Civil Case No. 1075-P of the Regional Trial Court, Branch CXV, in
Pasay City, stating that petitioner's business in Ermita, Manila, (the
Galleon Shop, for short), is conjugal property of the parties, and asking
that petitioner be ordered to render an accounting of that business, and
that private respondent be declared with right to manage the conjugal
property. Petitioner moved to dismiss the case on the ground that the
cause of action is barred by previous judgment in the divorce
proceedings before the Nevada Court wherein respondent had
acknowledged that he and petitioner had "no community property" as of
June 11, 1982. The Court below denied the Motion to Dismiss in the
mentioned case on the ground that the property involved is located in
the Philippines so that the Divorce Decree has no bearing in the case.
The denial is now the subject of this certiorari proceeding.
Generally, the denial of a Motion to Dismiss in a civil case is
interlocutory and is not subject to appeal. certiorari and Prohibition are
neither the remedies to question the propriety of an interlocutory order
of the trial Court. However, when a grave abuse of discretion was
patently committed, or the lower Court acted capriciously and
whimsically, then it devolves upon this Court in a certiorari proceeding
to exercise its supervisory authority and to correct the error committed
which, in such a case, is equivalent to lack of jurisdiction. 1 Prohibition
would then lie since it would be useless and a waste of time to go ahead
with the proceedings. 2 Weconsider the petition filed in this case within
the exception, and we have given it due course.
For resolution is the effect of the foreign divorce on the parties and
their alleged conjugal property in the Philippines.
Petitioner contends that respondent is estopped from laying claim on
the alleged conjugal property because of the representation he made in
the divorce proceedings before the American Court that they had no
community of property; that the Galleon Shop was not established
through conjugal funds, and that respondent's claim is barred by prior
judgment.
For his part, respondent avers that the Divorce Decree issued by the
Nevada Court cannot prevail over the prohibitive laws of the
Philippines and its declared national policy; that the acts and
declaration of a foreign Court cannot, especially if the same is contrary
to public policy, divest Philippine Courts of jurisdiction to entertain
matters within its jurisdiction.
For the resolution of this case, it is not necessary to determine whether
the property relations between petitioner and private respondent, after
their marriage, were upon absolute or relative community property,
upon complete separation of property, or upon any other regime. The
pivotal fact in this case is the Nevada divorce of the parties.
The Nevada District Court, which decreed the divorce, had obtained
jurisdiction over petitioner who appeared in person before the Court
during the trial of the case. It also obtained jurisdiction over private
respondent who, giving his address as No. 381 Bush Street, San
Francisco, California, authorized his attorneys in the divorce case, Karp
& Gradt Ltd., to agree to the divorce on the ground of incompatibility
in the understanding that there were neither community property nor
community obligations. 3 As explicitly stated in the Power of Attorney
he executed in favor of the law firm of KARP & GRAD LTD., 336 W.
Liberty, Reno, Nevada, to represent him in the divorce proceedings:
xxx xxx xxx
You are hereby authorized to accept service of Summons, to file an
Answer, appear on my behalf and do an things necessary and proper to
represent me, without further contesting, subject to the following:
1. That my spouse seeks a divorce on the ground of incompatibility.
2. That there is no community of property to be adjudicated by the
Court.
3. 'I'hat there are no community obligations to be adjudicated by the
court.
xxx xxx xxx 4
There can be no question as to the validity of that Nevada divorce in
any of the States of the United States. The decree is binding on private
respondent as an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of the Union. What
he is contending in this case is that the divorce is not valid and binding
in this jurisdiction, the same being contrary to local law and public
policy.
It is true that owing to the nationality principle embodied in Article 15
of the Civil Code, 5 only Philippine nationals are covered by the policy
against absolute divorces the same being considered contrary to our
concept of public police and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. 6 In this case, the divorce
in Nevada released private respondent from the marriage from the
standards of American law, under which divorce dissolves the
marriage. As stated by the Federal Supreme Court of the United States
in Atherton vs. Atherton, 45 L. Ed. 794, 799:
The purpose and effect of a decree of divorce from the bond of
matrimony by a court of competent jurisdiction are to change the
existing status or domestic relation of husband and wife, and to free
them both from the bond. The marriage tie when thus severed as to one
party, ceases to bind either. A husband without a wife, or a wife without
a husband, is unknown to the law. When the law provides, in the nature
of a penalty. that the guilty party shall not marry again, that party, as
well as the other, is still absolutely freed from the bond of the former
marriage.
Thus, pursuant to his national law, private respondent is no longer the
husband of petitioner. He would have no standing to sue in the case
below as petitioner's husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own country's Court,
36
which validly exercised jurisdiction over him, and whose decision he
does not repudiate, he is estopped by his own representation before said
Court from asserting his right over the alleged conjugal property.

To maintain, as private respondent does, that, under our laws, petitioner

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

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

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

Without costs.

SO ORDERED.

37
G.R. No. 80116 June 30, 1989
IMELDA MANALAYSAY PILAPIL, petitioner,
vs.
HON. CORONA IBAY-SOMERA, in her capacity as Presiding
Judge of the Regional Trial Court of Manila, Branch XXVI; HON.
LUIS C. VICTOR, in his capacity as the City Fiscal of Manila; and
ERICH EKKEHARD GEILING, respondents.
REGALADO, J.:
An ill-starred marriage of a Filipina and a foreigner which ended in a
foreign absolute divorce, only to be followed by a criminal infidelity
suit of the latter against the former, provides Us the opportunity to lay
down a decisional rule on what hitherto appears to be an unresolved
jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino
citizen, and private respondent Erich Ekkehard Geiling, a German
national, were married before the Registrar of Births, Marriages and
Deaths at Friedensweiler in the Federal Republic of Germany. The
marriage started auspiciously enough, and the couple lived together for
some time in Malate, Manila where their only child, Isabella Pilapil
Geiling, was born on April 20, 1980. 1
Thereafter, marital discord set in, with mutual recriminations between
the spouses, followed by a separation de facto between them.
After about three and a half years of marriage, such connubial
disharmony eventuated in private respondent initiating a divorce
proceeding against petitioner in Germany before the Schoneberg Local
Court in January, 1983. He claimed that there was failure of their
marriage and that they had been living apart since April, 1982. 2
Petitioner, on the other hand, filed an action for legal separation,
support and separation of property before the Regional Trial Court of
Manila, Branch XXXII, on January 23, 1983 where the same is still
pending as Civil Case No. 83-15866. 3
On January 15, 1986, Division 20 of the Schoneberg Local Court,
Federal Republic of Germany, promulgated a decree of divorce on the
ground of failure of marriage of the spouses. The custody of the child
was granted to petitioner. The records show that under German law said
court was locally and internationally competent for the divorce
proceeding and that the dissolution of said marriage was legally
founded on and authorized by the applicable law of that foreign
jurisdiction. 4
On June 27, 1986, or more than five months after the issuance of the
divorce decree, private respondent filed two complaints for adultery
before the City Fiscal of Manila alleging that, while still married to said
respondent, petitioner "had an affair with a certain William Chia as
early as 1982 and with yet another man named Jesus Chua sometime in
1983". Assistant Fiscal Jacinto A. de los Reyes, Jr., after the
corresponding investigation, recommended the dismissal of the cases
on the ground of insufficiency of evidence. 5 However, upon review,
the respondent city fiscal approved a resolution, dated January 8, 1986,
directing the filing of two complaints for adultery against the
petitioner. 6 The complaints were accordingly filed and were eventually
raffled to two branches of the Regional Trial Court of Manila. The case
entitled "People of the Philippines vs. Imelda Pilapil and William
Chia", docketed as Criminal Case No. 87-52435, was assigned to
Branch XXVI presided by the respondent judge; while the other
case, "People of the Philippines vs. Imelda Pilapil and James Chua",
docketed as Criminal Case No. 87-52434 went to the sala of Judge
Leonardo Cruz, Branch XXV, of the same court. 7
On March 14, 1987, petitioner filed a petition with the Secretary of
Justice asking that the aforesaid resolution of respondent fiscal be set
aside and the cases against her be dismissed. 8 A similar petition was
filed by James Chua, her co-accused in Criminal Case No. 87-52434.
The Secretary of Justice, through the Chief State Prosecutor, gave due
course to both petitions and directed the respondent city fiscal to inform
the Department of Justice "if the accused have already been arraigned
and if not yet arraigned, to move to defer further proceedings" and to
elevate the entire records of both cases to his office for review. 9
Petitioner thereafter filed a motion in both criminal cases to defer her
arraignment and to suspend further proceedings thereon. 10 As a
consequence, Judge Leonardo Cruz suspended proceedings in Criminal
Case No. 87-52434. On the other hand, respondent judge merely reset
the date of the arraignment in Criminal Case No. 87-52435 to April 6,
1987. Before such scheduled date, petitioner moved for the cancellation
of the arraignment and for the suspension of proceedings in said
Criminal Case No. 87-52435 until after the resolution of the petition for
review then pending before the Secretary of Justice. 11 A motion to
quash was also filed in the same case on the ground of lack of
jurisdiction, 12 which motion was denied by the respondent judge in an
order dated September 8, 1987. The same order also directed the
arraignment of both accused therein, that is, petitioner and William
Chia. The latter entered a plea of not guilty while the petitioner refused
to be arraigned. Such refusal of the petitioner being considered by
respondent judge as direct contempt, she and her counsel were fined
and the former was ordered detained until she submitted herself for
arraignment. 13 Later, private respondent entered a plea of not guilty. 14
On October 27, 1987, petitioner filed this special civil action
for certiorari and prohibition, with a prayer for a temporary restraining
order, seeking the annulment of the order of the lower court denying
her motion to quash. The petition is anchored on the main ground that
the court is without jurisdiction "to try and decide the charge of
adultery, which is a private offense that cannot be prosecuted de
officio (sic), since the purported complainant, a foreigner, does not
qualify as an offended spouse having obtained a final divorce decree
under his national law prior to his filing the criminal complaint." 15
On October 21, 1987, this Court issued a temporary restraining order
enjoining the respondents from implementing the aforesaid order of
September 8, 1987 and from further proceeding with Criminal Case No.
87-52435. Subsequently, on March 23, 1988 Secretary of Justice
Sedfrey A. Ordoñez acted on the aforesaid petitions for review and,
upholding petitioner's ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the complaints
against the petitioner. 16
We find this petition meritorious. The writs prayed for shall
accordingly issue.
Under Article 344 of the Revised Penal Code, 17 the crime of adultery,
as well as four other crimes against chastity, cannot be prosecuted
except upon a sworn written complaint filed by the offended spouse. It
has long since been established, with unwavering consistency, that
compliance with this rule is a jurisdictional, and not merely a formal,
requirement. 18 While in point of strict law the jurisdiction of the court
over the offense is vested in it by the Judiciary Law, the requirement for
a sworn written complaint is just as jurisdictional a mandate since it is
that complaint which starts the prosecutory proceeding 19 and without
which the court cannot exercise its jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for adultery and
concubinage the person who can legally file the complaint should be
the offended spouse, and nobody else. Unlike the offenses of seduction,
abduction, rape and acts of lasciviousness, no provision is made for the
prosecution of the crimes of adultery and concubinage by the parents,
38
grandparents or guardian of the offended party. The so-called exclusive
and successive rule in the prosecution of the first four offenses above
mentioned do not apply to adultery and concubinage. It is significant
that while the State, as parens patriae, was added and vested by the
1985 Rules of Criminal Procedure with the power to initiate the
criminal action for a deceased or incapacitated victim in the aforesaid
offenses of seduction, abduction, rape and acts of lasciviousness, in
default of her parents, grandparents or guardian, such amendment did
not include the crimes of adultery and concubinage. In other words,
only the offended spouse, and no other, is authorized by law to initiate
the action therefor.
Corollary to such exclusive grant of power to the offended spouse to
institute the action, it necessarily follows that such initiator must have
the status, capacity or legal representation to do so at the time of the
filing of the criminal action. This is a familiar and express rule in civil
actions; in fact, lack of legal capacity to sue, as a ground for a motion to
dismiss in civil cases, is determined as of the filing of the complaint or
petition.
The absence of an equivalent explicit rule in the prosecution of criminal
cases does not mean that the same requirement and rationale would not
apply. Understandably, it may not have been found necessary since
criminal actions are generally and fundamentally commenced by the
State, through the People of the Philippines, the offended party being
merely the complaining witness therein. However, in the so-called
"private crimes" or those which cannot be prosecuted de oficio, and the
present prosecution for adultery is of such genre, the offended spouse
assumes a more predominant role since the right to commence the
action, or to refrain therefrom, is a matter exclusively within his power
and option.
This policy was adopted out of consideration for the aggrieved party
who might prefer to suffer the outrage in silence rather than go through
the scandal of a public trial. 20 Hence, as cogently argued by petitioner,
Article 344 of the Revised Penal Code thus presupposes that the marital
relationship is still subsisting at the time of the institution of the
criminal action for, adultery. This is a logical consequence since
the raison d'etre of said provision of law would be absent where the
supposed offended party had ceased to be the spouse of the alleged
offender at the time of the filing of the criminal case. 21
In these cases, therefore, it is indispensable that the status and capacity
of the complainant to commence the action be definitely established
and, as already demonstrated, such status or capacity must indubitably
exist as of the time he initiates the action. It would be absurd if his
capacity to bring the action would be determined by his
status beforeor subsequent to the commencement thereof, where such
capacity or status existed prior to but ceased before, or was acquired
subsequent to but did not exist at the time of, the institution of the case.
We would thereby have the anomalous spectacle of a party bringing
suit at the very time when he is without the legal capacity to do so.
To repeat, there does not appear to be any local precedential
jurisprudence on the specific issue as to when precisely the status of a
complainant as an offended spouse must exist where a criminal
prosecution can be commenced only by one who in law can be
categorized as possessed of such status. Stated differently and with
reference to the present case, the inquiry ;would be whether it is
necessary in the commencement of a criminal action for adultery that
the marital bonds between the complainant and the accused be
unsevered and existing at the time of the institution of the action by the
former against the latter.
American jurisprudence, on cases involving statutes in that jurisdiction
which are in pari materia with ours, yields the rule that after a divorce
has been decreed, the innocent spouse no longer has the right to
institute proceedings against the offenders where the statute provides
that the innocent spouse shall have the exclusive right to institute a
prosecution for adultery. Where, however, proceedings have been
properly commenced, a divorce subsequently granted can have no legal
effect on the prosecution of the criminal proceedings to a conclusion. 22
In the cited Loftus case, the Supreme Court of Iowa held that —
'No prosecution for adultery can be commenced except on the
complaint of the husband or wife.' Section 4932, Code. Though Loftus
was husband of defendant when the offense is said to have been
committed, he had ceased to be such when the prosecution was begun;
and appellant insists that his status was not such as to entitle him to
make the complaint. We have repeatedly said that the offense is against
the unoffending spouse, as well as the state, in explaining the reason for
this provision in the statute; and we are of the opinion that the
unoffending spouse must be such when the prosecution is commenced.
(Emphasis supplied.)
We see no reason why the same doctrinal rule should not apply in this
case and in our jurisdiction, considering our statutory law and jural
policy on the matter. We are convinced that in cases of such nature, the
status of the complainant vis-a-vis the accused must be determined as
of the time the complaint was filed. Thus, the person who initiates the
adultery case must be an offended spouse, and by this is meant that he
is still married to the accused spouse, at the time of the filing of the
complaint.
In the present case, the fact that private respondent obtained a valid
divorce in his country, the Federal Republic of Germany, is admitted.
Said divorce and its legal effects may be recognized in the Philippines
insofar as private respondent is concerned 23 in view of the nationality
principle in our civil law on the matter of status of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24 after a
divorce was granted by a United States court between Alice Van Dornja
Filipina, and her American husband, the latter filed a civil case in a trial
court here alleging that her business concern was conjugal property and
praying that she be ordered to render an accounting and that the
plaintiff be granted the right to manage the business. Rejecting his
pretensions, this Court perspicuously demonstrated the error of such
stance, thus:
There can be no question as to the validity of that Nevada divorce in
any of the States of the United States. The decree is binding on private
respondent as an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of the Union. ...
It is true that owing to the nationality principle embodied in Article 15
of the Civil Code, only Philippine nationals are covered by the policy
against absolute divorces the same being considered contrary to our
concept of public policy and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided
they are valid according to their national law. ...
Thus, pursuant to his national law, private respondent is no longer the
husband of petitioner. He would have no standing to sue in the case
below as petitioner's husband entitled to exercise control over conjugal
assets. ... 25
Under the same considerations and rationale, private respondent, being
no longer the husband of petitioner, had no legal standing to commence
the adultery case under the imposture that he was the offended spouse
at the time he filed suit.
The allegation of private respondent that he could not have brought this
case before the decree of divorce for lack of knowledge, even if true, is
of no legal significance or consequence in this case. When said
39
respondent initiated the divorce proceeding, he obviously knew that
there would no longer be a family nor marriage vows to protect once a
dissolution of the marriage is decreed. Neither would there be a danger
of introducing spurious heirs into the family, which is said to be one of
the reasons for the particular formulation of our law on
adultery, 26 since there would thenceforth be no spousal relationship to
speak of. The severance of the marital bond had the effect of
dissociating the former spouses from each other, hence the actuations of
one would not affect or cast obloquy on the other.

The aforecited case of United States vs. Mata cannot be successfully

relied upon by private respondent. In applying Article 433 of the old
Penal Code, substantially the same as Article 333 of the Revised Penal
Code, which punished adultery "although the marriage be afterwards
declared void", the Court merely stated that "the lawmakers intended to
declare adulterous the infidelity of a married woman to her marital
vows, even though it should be made to appear that she is entitled to
have her marriage contract declared null and void, until and unless she
actually secures a formal judicial declaration to that effect". Definitely,
it cannot be logically inferred therefrom that the complaint can still be
filed after the declaration of nullity because such declaration that the
marriage is void ab initio is equivalent to stating that it never existed.
There being no marriage from the beginning, any complaint for
adultery filed after said declaration of nullity would no longer have a
leg to stand on. Moreover, what was consequently contemplated and
within the purview of the decision in said case is the situation where the
criminal action for adultery was filed beforethe termination of the
marriage by a judicial declaration of its nullity ab initio. The same rule
and requisite would necessarily apply where the termination of the
marriage was effected, as in this case, by a valid foreign divorce.

Private respondent's invocation of Donio-Teves, et al. vs.

Vamenta, hereinbefore cited, 27 must suffer the same fate of
inapplicability. A cursory reading of said case reveals that the offended
spouse therein had duly and seasonably filed a complaint for adultery,
although an issue was raised as to its sufficiency but which was
resolved in favor of the complainant. Said case did not involve a factual
situation akin to the one at bar or any issue determinative of the
controversy herein.

WHEREFORE, the questioned order denying petitioner's motion to

quash is SET ASIDE and another one entered DISMISSING the
complaint in Criminal Case No. 87-52435 for lack of jurisdiction. The
temporary restraining order issued in this case on October 21, 1987 is
hereby made permanent.

SO ORDERED.

40

G.R. No. 138322 October 2, 2001
GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-
RECIO, petitioner,
vs.
REDERICK A. RECIO, respondents.
PANGANIBAN, J.:
A divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided such decree is valid according to the national law
of the foreigner. However, the divorce decree and the governing
personal law of the alien spouse who obtained the divorce must be
proven. Our courts do not take judicial notice of foreign laws and
judgment; hence, like any other facts, both the divorce decree and the
national law of the alien must be alleged and proven according to our
law on evidence.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court,
seeking to nullify the January 7, 1999 Decision 1 and the March 24,
1999 Order2 of the Regional Trial Court of Cabanatuan City, Branch
28, in Civil Case No. 3026-AF. The assailed Decision disposed as
follows:
"WHEREFORE, this Court declares the marriage between Grace J.
Garcia and Rederick A. Recio solemnized on January 12, 1994 at
Cabanatuan City as dissolved and both parties can now remarry under
existing and applicable laws to any and/or both parties."3
The assailed Order denied reconsideration of the above-quoted
Decision.
The Facts
Rederick A. Recio, a Filipino, was married to Editha Samson, an
Australian citizen, in Malabon, Rizal, on March 1, 1987. 4 They lived
together as husband and wife in Australia. On May 18, 1989, 5 a decree
of divorce, purportedly dissolving the marriage, was issued by an
Australian family court.
On June 26, 1992, respondent became an Australian citizen, as shown
by a "Certificate of Australian Citizenship" issued by the Australian
government.6 Petitioner – a Filipina – and respondent were married on
January 12, 1994 in Our Lady of Perpetual Help Church in Cabanatuan
City.7 In their application for a marriage license, respondent was
declared as "single" and "Filipino."8
Starting October 22, 1995, petitioner and respondent lived separately
without prior judicial dissolution of their marriage. While the two were
still in Australia, their conjugal assets were divided on May 16, 1996, in
accordance with their Statutory Declarations secured in Australia.9
On March 3, 1998, petitioner filed a Complaint for Declaration of
Nullity of Marriage10 in the court a quo, on the ground of bigamy –
respondent allegedly had a prior subsisting marriage at the time he
married her on January 12, 1994. She claimed that she learned of
respondent's marriage to Editha Samson only in November, 1997.
In his Answer, respondent averred that, as far back as 1993, he had
revealed to petitioner his prior marriage and its subsequent
dissolution.11 He contended that his first marriage to an Australian
citizen had been validly dissolved by a divorce decree obtained in
Australian in 1989;12 thus, he was legally capacitated to marry
petitioner in 1994.1âwphi1.nêt
On July 7, 1998 – or about five years after the couple's wedding and
while the suit for the declaration of nullity was pending – respondent
was able to secure a divorce decree from a family court in Sydney,
Australia because the "marriage ha[d] irretrievably broken down."13
Respondent prayed in his Answer that the Complained be dismissed on
the ground that it stated no cause of action.14 The Office of the Solicitor
General agreed with respondent.15 The court marked and admitted the
documentary evidence of both parties.16 After they submitted their
respective memoranda, the case was submitted for resolution. 17
Thereafter, the trial court rendered the assailed Decision and Order.
Ruling of the Trial Court
The trial court declared the marriage dissolved on the ground that the
divorce issued in Australia was valid and recognized in the Philippines.
It deemed the marriage ended, but not on the basis of any defect in an
essential element of the marriage; that is, respondent's alleged lack of
legal capacity to remarry. Rather, it based its Decision on the divorce
decree obtained by respondent. The Australian divorce had ended the
marriage; thus, there was no more martial union to nullify or annual.
Hence, this Petition.18
Issues
Petitioner submits the following issues for our consideration:
"I
The trial court gravely erred in finding that the divorce decree obtained
in Australia by the respondent ipso facto terminated his first marriage to
Editha Samson thereby capacitating him to contract a second marriage
with the petitioner.
"2
The failure of the respondent, who is now a naturalized Australian, to
present a certificate of legal capacity to marry constitutes absence of a
substantial requisite voiding the petitioner' marriage to the respondent.
"3
The trial court seriously erred in the application of Art. 26 of the Family
Code in this case.
"4
The trial court patently and grievously erred in disregarding Arts. 11,
13, 21, 35, 40, 52 and 53 of the Family Code as the applicable
provisions in this case.
"5
The trial court gravely erred in pronouncing that the divorce gravely
erred in pronouncing that the divorce decree obtained by the respondent
in Australia ipso facto capacitated the parties to remarry, without first
securing a recognition of the judgment granting the divorce decree
before our courts."19
The Petition raises five issues, but for purposes of this Decision, we
shall concentrate on two pivotal ones: (1) whether the divorce between
respondent and Editha Samson was proven, and (2) whether respondent
was proven to be legally capacitated to marry petitioner. Because of our
ruling on these two, there is no more necessity to take up the rest.
The Court's Ruling
The Petition is partly meritorious.
41
First Issue:
Proving the Divorce Between Respondent and Editha Samson
Petitioner assails the trial court's recognition of the divorce between
respondent and Editha Samson. Citing Adong v. Cheong Seng
Gee,20 petitioner argues that the divorce decree, like any other foreign
judgment, may be given recognition in this jurisdiction only upon proof
of the existence of (1) the foreign law allowing absolute divorce and (2)
the alleged divorce decree itself. She adds that respondent miserably
failed to establish these elements.
Petitioner adds that, based on the first paragraph of Article 26 of the
Family Code, marriages solemnized abroad are governed by the law of
the place where they were celebrated (the lex loci celebrationist). In
effect, the Code requires the presentation of the foreign law to show the
conformity of the marriage in question to the legal requirements of the
place where the marriage was performed.
At the outset, we lay the following basic legal principles as the take-off
points for our discussion. Philippine law does not provide for absolute
divorce; hence, our courts cannot grant it.21 A marriage between two
Filipinos cannot be dissolved even by a divorce obtained abroad,
because of Articles 1522 and 1723 of the Civil Code.24 In mixed
marriages involving a Filipino and a foreigner, Article 2625 of the
Family Code allows the former to contract a subsequent marriage in
case the divorce is "validly obtained abroad by the alien spouse
capacitating him or her to remarry."26 A divorce obtained abroad by a
couple, who are both aliens, may be recognized in the Philippines,
provided it is consistent with their respective national laws.27
A comparison between marriage and divorce, as far as pleading and
proof are concerned, can be made. Van Dorn v. Romillo Jr. decrees that
"aliens may obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their national
law."28 Therefore, before a foreign divorce decree can be recognized by
our courts, the party pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing it. 29 Presentation
solely of the divorce decree is insufficient.
Divorce as a Question of Fact
Petitioner insists that before a divorce decree can be admitted in
evidence, it must first comply with the registration requirements under
Articles 11, 13 and 52 of the Family Code. These articles read as
follows:
"ART. 11. Where a marriage license is required, each of the contracting
parties shall file separately a sworn application for such license with the
proper local civil registrar which shall specify the following:
xxx xxx xxx
"(5) If previously married, how, when and where the previous marriage
was dissolved or annulled;
xxx xxx xxx
"ART. 13. In case either of the contracting parties has been previously
married, the applicant shall be required to furnish, instead of the birth of
baptismal certificate required in the last preceding article, the death
certificate of the deceased spouse or the judicial decree of annulment or
declaration of nullity of his or her previous marriage. x x x.
"ART. 52. The judgment of annulment or of absolute nullity of the
marriage, the partition and distribution of the properties of the spouses,
and the delivery of the children's presumptive legitimes shall be
recorded in the appropriate civil registry and registries of property;
otherwise, the same shall not affect their persons."
Respondent, on the other hand, argues that the Australian divorce
decree is a public document – a written official act of an Australian
family court. Therefore, it requires no further proof of its authenticity
and due execution.
Respondent is getting ahead of himself. Before a foreign judgment is
given presumptive evidentiary value, the document must first be
presented and admitted in evidence.30 A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best evidence of a
judgment is the judgment itself.31 The decree purports to be a written
act or record of an act of an officially body or tribunal of a foreign
country.32
Under Sections 24 and 25 of Rule 132, on the other hand, a writing or
document may be proven as a public or official record of a foreign
country by either (1) an official publication or (2) a copy thereof
attested33 by the officer having legal custody of the document. If the
record is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign
country in which the record is kept and (b) authenticated by the seal of
his office.34
The divorce decree between respondent and Editha Samson appears to
be an authentic one issued by an Australian family court. 35 However,
appearance is not sufficient; compliance with the aforemetioned rules
on evidence must be demonstrated.
Fortunately for respondent's cause, when the divorce decree of May 18,
1989 was submitted in evidence, counsel for petitioner objected, not to
its admissibility, but only to the fact that it had not been registered in
the Local Civil Registry of Cabanatuan City.36 The trial court ruled that
it was admissible, subject to petitioner's qualification.37Hence, it was
admitted in evidence and accorded weight by the judge. Indeed,
petitioner's failure to object properly rendered the divorce decree
admissible as a written act of the Family Court of Sydney, Australia. 38
Compliance with the quoted articles (11, 13 and 52) of the Family Code
is not necessary; respondent was no longer bound by Philippine
personal laws after he acquired Australian citizenship in
1992.39 Naturalization is the legal act of adopting an alien and clothing
him with the political and civil rights belonging to a
citizen.40 Naturalized citizens, freed from the protective cloak of their
former states, don the attires of their adoptive countries. By becoming
an Australian, respondent severed his allegiance to the Philippines and
the vinculum juris that had tied him to Philippine personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian divorce law
falls upon petitioner, because she is the party challenging the validity of
a foreign judgment. He contends that petitioner was satisfied with the
original of the divorce decree and was cognizant of the marital laws of
Australia, because she had lived and worked in that country for quite a
long time. Besides, the Australian divorce law is allegedly known by
Philippine courts: thus, judges may take judicial notice of foreign laws
in the exercise of sound discretion.
We are not persuaded. The burden of proof lies with "the party who
alleges the existence of a fact or thing necessary in the prosecution or
defense of an action."41 In civil cases, plaintiffs have the burden of
proving the material allegations of the complaint when those are denied
by the answer; and defendants have the burden of proving the material
allegations in their answer when they introduce new matters.42 Since
the divorce was a defense raised by respondent, the burden of proving
the pertinent Australian law validating it falls squarely upon him.
42
It is well-settled in our jurisdiction that our courts cannot take judicial
notice of foreign laws.43 Like any other facts, they must be alleged and
proved. Australian marital laws are not among those matters that judges
are supposed to know by reason of their judicial function. 44 The power
of judicial notice must be exercised with caution, and every reasonable
doubt upon the subject should be resolved in the negative.
Second Issue:
Respondent's Legal Capacity to Remarry
Petitioner contends that, in view of the insufficient proof of the divorce,
respondent was legally incapacitated to marry her in 1994.
Hence, she concludes that their marriage was void ab initio.
Respondent replies that the Australian divorce decree, which was
validly admitted in evidence, adequately established his legal capacity
to marry under Australian law.
Respondent's contention is untenable. In its strict legal
sense, divorce means the legal dissolution of a lawful union for a cause
arising after marriage. But divorces are of different types. The two
basic ones are (1) absolute divorce or a vinculo matrimonii and (2)
limited divorce or a mensa et thoro. The first kind terminates the
marriage, while the second suspends it and leaves the bond in full
force.45 There is no showing in the case at bar which type of divorce
was procured by respondent.
Respondent presented a decree nisi or an interlocutory decree – a
conditional or provisional judgment of divorce. It is in effect the same
as a separation from bed and board, although an absolute divorce may
follow after the lapse of the prescribed period during which no
reconciliation is effected.46
Even after the divorce becomes absolute, the court may under some
foreign statutes and practices, still restrict remarriage. Under some
other jurisdictions, remarriage may be limited by statute; thus, the
guilty party in a divorce which was granted on the ground of adultery
may be prohibited from remarrying again. The court may allow a
remarriage only after proof of good behavior.47
On its face, the herein Australian divorce decree contains a restriction
that reads:
"1. A party to a marriage who marries again before this decree becomes
absolute (unless the other party has died) commits the offence of
bigamy."48
This quotation bolsters our contention that the divorce obtained by
respondent may have been restricted. It did not absolutely establish his
legal capacity to remarry according to his national law. Hence, we find
no basis for the ruling of the trial court, which erroneously assumed that
the Australian divorce ipso facto restored respondent's capacity to
remarry despite the paucity of evidence on this matter.
We also reject the claim of respondent that the divorce decree raises a
disputable presumption or presumptive evidence as to his civil status
based on Section 48, Rule 3949 of the Rules of Court, for the simple
reason that no proof has been presented on the legal effects of the
divorce decree obtained under Australian laws.
Significance of the Certificate of Legal Capacity
Petitioner argues that the certificate of legal capacity required by
Article 21 of the Family Code was not submitted together with the
application for a marriage license. According to her, its absence is proof
that respondent did not have legal capacity to remarry.
We clarify. To repeat, the legal capacity to contract marriage is
determined by the national law of the party concerned. The certificate
mentioned in Article 21 of the Family Code would have been sufficient
to establish the legal capacity of respondent, had he duly presented it in
court. A duly authenticated and admitted certificate is prima facie
evidence of legal capacity to marry on the part of the alien applicant for
a marriage license.50
As it is, however, there is absolutely no evidence that proves
respondent's legal capacity to marry petitioner. A review of the records
before this Court shows that only the following exhibits were presented
before the lower court: (1) for petitioner: (a) Exhibit "A" –
Complaint;51 (b) Exhibit "B" – Certificate of Marriage Between
Rederick A. Recto (Filipino-Australian) and Grace J. Garcia (Filipino)
on January 12, 1994 in Cabanatuan City, Nueva Ecija;52 (c) Exhibit "C"
– Certificate of Marriage Between Rederick A. Recio (Filipino) and
Editha D. Samson (Australian) on March 1, 1987 in Malabon, Metro
Manila;53 (d) Exhibit "D" – Office of the City Registrar of Cabanatuan
City Certification that no information of annulment between Rederick
A. Recto and Editha D. Samson was in its records;54 and (e) Exhibit "E"
– Certificate of Australian Citizenship of Rederick A. Recto;55 (2) for
respondent: (Exhibit "1" – Amended Answer;56 (b) Exhibit "S" –
Family Law Act 1975 Decree Nisi of Dissolution of Marriage in the
Family Court of Australia;57 (c) Exhibit "3" – Certificate of Australian
Citizenship of Rederick A. Recto;58 (d) Exhibit "4" – Decree Nisi of
Dissolution of Marriage in the Family Court of Australia
Certificate;59 and Exhibit "5" – Statutory Declaration of the Legal
Separation Between Rederick A. Recto and Grace J. Garcia Recio since
October 22, 1995.60
Based on the above records, we cannot conclude that respondent, who
was then a naturalized Australian citizen, was legally capacitated to
marry petitioner on January 12, 1994. We agree with petitioner's
contention that the court a quo erred in finding that the divorce decree
ipso facto clothed respondent with the legal capacity to remarry without
requiring him to adduce sufficient evidence to show the Australian
personal law governing his status; or at the very least, to prove his legal
capacity to contract the second marriage.
Neither can we grant petitioner's prayer to declare her marriage to
respondent null and void on the ground of bigamy. After all, it may turn
out that under Australian law, he was really capacitated to marry
petitioner as a direct result of the divorce decree. Hence, we believe that
the most judicious course is to remand this case to the trial court to
receive evidence, if any, which show petitioner's legal capacity to
marry petitioner. Failing in that, then the court a quo may declare a
nullity of the parties' marriage on the ground of bigamy, there being
already in evidence two existing marriage certificates, which were both
obtained in the Philippines, one in Malabon, Metro Manila dated March
1, 1987 and the other, in Cabanatuan City dated January 12, 1994.
WHEREFORE, in the interest of orderly procedure and substantial
justice, we REMAND the case to the court a quofor the purpose of
receiving evidence which conclusively show respondent's legal capacity
to marry petitioner; and failing in that, of declaring the parties' marriage
void on the ground of bigamy, as above discussed. No costs.
SO ORDERED.
43

G.R. No. 124862 December 22, 1998
FE D. QUITA, petitioner,
vs.
COURT OF APPEALS and BLANDINA DANDAN, * respondents.
BELLOSILLO, J.:
FE D. QUITA and Arturo T. Padlan, both Filipinos, were married in the
Philippines on 18 May 1941. They were not however blessed with
children. Somewhere along the way their relationship soured.
Eventually Fe sued Arturo for divorce in San Francisco, California,
U.S.A. She submitted in the divorce proceedings a private writing dated
19 July 1950 evidencing their agreement to live separately from each
other and a settlement of their conjugal properties. On 23 July 1954 she
obtained a final judgment of divorce. Three (3) weeks thereafter she
married a certain Felix Tupaz in the same locality but their relationship
also ended in a divorce. Still in the U.S.A., she married for the third
time, to a certain Wernimont.
On 16 April 1972 Arturo died. He left no will. On 31 August 1972 Lino
Javier Inciong filed a petition with the Regional Trial Court of Quezon
City for issuance of letters of administration concerning the estate of
Arturo in favor of the Philippine Trust Company. Respondent Blandina
Dandan (also referred to as Blandina Padlan), claiming to be the
surviving spouse of Arturo Padlan, and Claro, Alexis, Ricardo,
Emmanuel, Zenaida and Yolanda, all surnamed Padlan, named in the
children of Arturo Padlan opposed the petition and prayed for the
appointment instead of Atty. Leonardo Casaba, which was resolved in
favor of the latter. Upon motion of the oppositors themselves, Atty.
Cabasal was later replaced by Higino Castillon. On 30 April 1973 the
oppositors (Blandina and Padlan children) submitted certified
photocopies of the 19 July 1950 private writing and the final judgment
of divorce between petitioner and Arturo. Later Ruperto T. Padlan,
claiming to be the sole surviving brother of the deceased Arturo,
intervened.
On 7 October 1987 petitioner moved for the immediate declaration of
heirs of the decedent and the distribution of his estate. At the scheduled
hearing on 23 October 1987, private respondent as well as the six (6)
Padlan children and Ruperto failed to appear despite due notice. On the
same day, the trial court required the submission of the records of birth
of the Padlan children within ten (10) days from receipt thereof, after
which, with or without the documents, the issue on the declaration of
heirs would be considered submitted for resolution. The prescribed
period lapsed without the required documents being submitted.
The trial court invoking Tenchavez v. Escaño 1 which held that "a
foreign divorce between Filipino citizens sought and decreed after the
effectivity of the present Civil Code (Rep. Act 386) was not entitled to
recognition as valid in this jurisdiction," 2 disregarded the divorce
between petitioner and Arturo. Consecuently, it expressed the view that
their marriage subsisted until the death of Arturo in 1972. Neither did it
consider valid their extrajudicial settlement of conjugal properties due
to lack of judicial approval. 3On the other hand, it opined that there was
no showing that marriage existed between private respondent and
Arturo, much less was it shown that the alleged Padlan children had
been acknowledged by the deceased as his children with her. As regards
Ruperto, it found that he was a brother of Arturo. On 27 November
1987 4 only petitioner and Ruperto were declared the intestate heirs of
Arturo. Accordingly, equal adjudication of the net hereditary estate was
ordered in favor of the two intestate heirs. 5
On motion for reconsideration, Blandina and the Padlan children were
allowed to present proofs that the recognition of the children by the
deceased as his legitimate children, except Alexis who was recognized
as his illegitimate child, had been made in their respective records of
birth. Thus on 15 February 1988 6 partial reconsideration was granted
declaring the Padlan children, with the exception of Alexis, entitled to
one-half of the estate to the exclusion of Ruperto Padlan, and petitioner
to the other half. 7 Private respondent was not declared an heir.
Although it was stated in the aforementioned records of birth that she
and Arturo were married on 22 April 1947, their marriage was clearly
void since it was celebrated during the existence of his previous
marriage to petitioner.
In their appeal to the Court of Appeals, Blandina and her children
assigned as one of the errors allegedly committed by the trial court the
circumstance that the case was decided without a hearing, in violation
of Sec. 1, Rule 90, of the Rules of Court, which provides that if there is
a controversy before the court as to who are the lawful heirs of the
deceased person or as to the distributive shares to which each person is
entitled under the law, the controversy shall be heard and decided as in
ordinary cases.
Respondent appellate court found this ground alone sufficient to sustain
the appeal; hence, on 11 September 1995 it declared null and void the
27 November 1987 decision and 15 February 1988 order of the trial
court, and directed the remand of the case to the trial court for further
proceedings. 8 On 18 April 1996 it denied reconsideration. 9
Should this case be remanded to the lower court for further
proceedings? Petitioner insists that there is no need because, first, no
legal or factual issue obtains for resolution either as to the heirship of
the Padlan children or as to the decedent; and, second, the issue as to
who between petitioner and private respondent is the proper hier of the
decedent is one of law which can be resolved in the present petition
based on establish facts and admissions of the parties.
We cannot sustain petitioner. The provision relied upon by respondent
court is clear: If there is a controversy before the court as to who are
the lawful heirs of the deceased person or as to the distributive shares to
which each person is entitled under the law, the controversy shall be
heard and decided as in ordinary cases.
We agree with petitioner that no dispute exists either as to the right of
the six (6) Padlan children to inherit from the decedent because there
are proofs that they have been duly acknowledged by him and
petitioner herself even recognizes them as heirs of Arturo Padlan; 10 nor
as to their respective hereditary shares. But controversy remains as to
who is the legitimate surviving spouse of Arturo. The trial court, after
the parties other than petitioner failed to appear during the scheduled
hearing on 23 October 1987 of the motion for immediate declaration of
heirs and distribution of estate, simply issued an order requiring the
submission of the records of birth of the Padlan children within ten (10)
days from receipt thereof, after which, with or without the documents,
the issue on declaration of heirs would be deemed submitted for
resolution.
We note that in her comment to petitioner's motion private respondent
raised, among others, the issue as to whether petitioner was still entitled
to inherit from the decedent considering that she had secured a divorce
in the U.S.A. and in fact had twice remarried. She also invoked the
above quoted procedural rule. 11 To this, petitioner replied that Arturo
was a Filipino and as such remained legally married to her in spite of
the divorce they obtained. 12 Reading between the lines, the implication
is that petitioner was no longer a Filipino citizen at the time of her
divorce from Arturo. This should have prompted the trial court to
conduct a hearing to establish her citizenship. The purpose of a hearing
is to ascertain the truth of the matters in issue with the aid of
44
documentary and testimonial evidence as well as the arguments of the WHEREFORE, the petition is DENIED. The decision of respondent
parties either supporting or opposing the evidence. Instead, the lower Court of Appeals ordering the remand of the case to the court of origin
court perfunctorily settled her claim in her favor by merely applying the for further proceedings and declaring null and void its decision holding
ruling in Tenchavez v. Escaño. petitioner Fe D. Quita and Ruperto T. Padlan as intestate heirs is
AFFIRMED. The order of the appellate court modifying its previous
Then in private respondent's motion to set aside and/or reconsider the decision by granting one-half (1/2) of the net hereditary estate to the
lower court's decision she stressed that the citizenship of petitioner was Padlan children, namely, Claro, Ricardo, Emmanuel, Zenaida and
relevant in the light of the ruling in Van Dorn v. Romillo Jr. 13 that Yolanda, with the exception of Alexis, all surnamed Padlan, instead of
aliens may obtain divorces abroad, which may be recognized in the Arturo's brother Ruperto Padlan, is likewise AFFIRMED. The Court
Philippines, provided they are valid according to their national law. She however emphasizes that the reception of evidence by the trial
prayed therefore that the case be set for hearing. 14 Petitioner opposed court should he limited to the hereditary rights of petitioner as the
the motion but failed to squarely address the issue on her surviving spouse of Arturo Padlan.
citizenship. 15 The trial court did not grant private respondent's prayer
for a hearing but proceeded to resolve her motion with the finding that The motion to declare petitioner and her counsel in contempt of court
both petitioner and Arturo were "Filipino citizens and were married in and to dismiss the present petition for forum shopping is DENIED.
the Philippines." 16 It maintained that their divorce obtained in 1954 in
San Francisco, California, U.S.A., was not valid in Philippine SO ORDERED.
jurisdiction. We deduce that the finding on their citizenship pertained
solely to the time of their marriage as the trial court was not supplied
with a basis to determine petitioner's citizenship at the time of their
divorce. The doubt persisted as to whether she was still a Filipino
citizen when their divorce was decreed. The trial court must have
overlooked the materiality of this aspect. Once proved that she was no
longer a Filipino citizen at the time of their divorce, Van Dorn would
become applicable and petitioner could very well lose her right to
inherit from Arturo.

Respondent again raised in her appeal the issue on petitioner's

citizenship; 17 it did not merit enlightenment however from
petitioner. 18 In the present proceeding, petitioner's citizenship is
brought anew to the fore by private respondent. She even furnishes the
Court with the transcript of stenographic notes taken on 5 May 1995
during the hearing for the reconstitution of the original of a certain
transfer certificate title as well as the issuance of new owner's duplicate
copy thereof before another trial court. When asked whether she was an
American citizen petitioner answered that she was since
1954. 19 Significantly, the decree of divorce of petitioner and Arturo
was obtained in the same year. Petitioner however did not bother to file
a reply memorandum to erase the uncertainty about her citizenship at
the time of their divorce, a factual issue requiring hearings to be
conducted by the trial court. Consequently, respondent appellate court
did not err in ordering the case returned to the trial court for further
proceedings.

We emphasize however that the question to be determined by the trial

court should be limited only to the right of petitioner to inherit from
Arturo as his surviving spouse. Private respondent's claim to heirship
was already resolved by the trial court. She and Arturo were married on
22 April 1947 while the prior marriage of petitioner and Arturo was
subsisting thereby resulting in a bigamous marriage considered void
from the beginning under Arts. 80 and 83 of the Civil Code.
Consequently, she is not a surviving spouse that can inherit from him as
this status presupposes a legitimate relationship. 20

As regards the motion of private respondent for petitioner and a her

counsel to be declared in contempt of court and that the present petition
be dismissed for forum shopping, 21 the same lacks merit. For forum
shopping to exist the actions must involve the same transactions and
same essential facts and circumstances. There must also be identical
causes of action, subject matter and issue. 22 The present petition deals
with declaration of heirship while the subsequent petitions filed before
the three (3) trial courts concern the issuance of new owner's duplicate
copies of titles of certain properties belonging to the estate of Arturo.
Obviously, there is no reason to declare the existence of forum
shopping.

45

G.R. No. 162580 January 27, 2006
ELMAR O. PEREZ, Petitioner,
vs.
COURT OF APPEALS, Fifth Division, TRISTAN A. CATINDIG
and LILY GOMEZ-CATINDIG, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for certiorari and prohibition under Rule 65 of the Rules of
Court assails the July 25, 2003 Decision1 of the Court of Appeals in
CA-G.R. SP No. 74456 which set aside and declared as null and void
the September 30, 2002 Order2 of the Regional Trial Court of Quezon
City, Branch 84, granting petitioner’s motion for leave to file
intervention and admitting the Complaint-in-Intervention3 in Civil Case
No. Q-01-44847; and its January 23, 2004 Resolution4 denying the
motion for reconsideration.
Private respondent Tristan A. Catindig married Lily Gomez
Catindig5 twice on May 16, 1968. The first marriage ceremony was
celebrated at the Central Methodist Church at T.M. Kalaw Street,
Ermita, Manila while the second took place at the Lourdes Catholic
Church in La Loma, Quezon City. The marriage produced four
children.
Several years later, the couple encountered marital problems that they
decided to separate from each other. Upon advice of a mutual friend,
they decided to obtain a divorce from the Dominican Republic. Thus,
on April 27, 1984, Tristan and Lily executed a Special Power of
Attorney addressed to the Judge of the First Civil Court of San
Cristobal, Dominican Republic, appointing an attorney-in-fact to
institute a divorce action under its laws.6
Thereafter, on April 30, 1984, the private respondents filed a joint
petition for dissolution of conjugal partnership with the Regional Trial
Court of Makati. On June 12, 1984, the civil court in the Dominican
Republic ratified the divorce by mutual consent of Tristan and Lily.
Subsequently, on June 23, 1984, the Regional Trial Court of Makati
City, Branch 133, ordered the complete separation of properties
between Tristan and Lily.
On July 14, 1984, Tristan married petitioner Elmar O. Perez in the State
of Virginia in the United States7 and both lived as husband and wife
until October 2001. Their union produced one offspring. 8
During their cohabitation, petitioner learned that the divorce decree
issued by the court in the Dominican Republic which "dissolved" the
marriage between Tristan and Lily was not recognized in the
Philippines and that her marriage to Tristan was deemed void under
Philippine law. When she confronted Tristan about this, the latter
assured her that he would legalize their union after he obtains an
annulment of his marriage with Lily. Tristan further promised the
petitioner that he would adopt their son so that he would be entitled to
an equal share in his estate as that of each of his children with Lily.9
On August 13, 2001, Tristan filed a petition for the declaration of
nullity of his marriage to Lily with the Regional Trial Court of Quezon
City, docketed as Case No. Q-01-44847.
Subsequently, petitioner filed a Motion for Leave to File
Intervention10 claiming that she has a legal interest in the matter in
litigation because she knows certain information which might aid the
trial court at a truthful, fair and just adjudication of the annulment case,
which the trial court granted on September 30, 2002. Petitioner’s
complaint-in-intervention was also ordered admitted.
Tristan filed a petition for certiorari and prohibition with the Court of
Appeals seeking to annul the order dated September 30, 2002 of the
trial court. The Court of Appeals granted the petition and declared as
null and void the September 30, 2002 Order of the trial court granting
the motion for leave to file intervention and admitting the complaint-in-
intervention.
Petitioner’s motion for reconsideration was denied, hence this petition
for certiorari and prohibition filed under Rule 65 of the Rules of Court.
Petitioner contends that the Court of Appeals gravely abused its
discretion in disregarding her legal interest in the annulment case
between Tristan and Lily.
The petition lacks merit.
Ordinarily, the proper recourse of an aggrieved party from a decision of
the Court of Appeals is a petition for review on certiorari under Rule 45
of the Rules of Court. However, if the error subject of the recourse is
one of jurisdiction, or the act complained of was granted by a court with
grave abuse of discretion amounting to lack or excess of jurisdiction, as
alleged in this case, the proper remedy is a petition for certiorari under
Rule 65 of the said Rules.11This is based on the premise that in issuing
the assailed decision and resolution, the Court of Appeals acted with
grave abuse of discretion, amounting to excess of lack of jurisdiction
and there is no plain, speedy and adequate remedy in the ordinary
course of law. A remedy is considered plain, speedy, and adequate if it
will promptly relieve the petitioner from the injurious effect of the
judgment and the acts of the lower court.12
It is therefore incumbent upon the petitioner to establish that the Court
of Appeals acted with grave abuse of discretion amounting to excess or
lack of jurisdiction when it promulgated the assailed decision and
resolution.
We have previously ruled that grave abuse of discretion may arise when
a lower court or tribunal violates or contravenes the Constitution, the
law or existing jurisprudence. By grave abuse of discretion is meant,
such capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction. The abuse of discretion must be grave as where the
power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility and must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform
the duty enjoined by or to act at all in contemplation of law. 13 The word
"capricious," usually used in tandem with the term "arbitrary," conveys
the notion of willful and unreasoning action. Thus, when seeking the
corrective hand of certiorari, a clear showing of caprice and
arbitrariness in the exercise of discretion is imperative.14
The Rules of Court laid down the parameters before a person, not a
party to a case can intervene, thus:
Who may intervene. — A person who has a legal interest in the matter
in litigation, or in the success of either of the parties, or an interest
against both, or is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court
or of an officer thereof may, with leave of court, be allowed to
intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights
of the original parties, and whether or not the intervenor’s rights may be
fully protected in a separate proceeding.15
The requirements for intervention are: [a] legal interest in the matter in
litigation; and [b] consideration must be given as to whether the
adjudication of the original parties may be delayed or prejudiced, or
whether the intervenor’s rights may be protected in a separate
proceeding or not.16
46
Legal interest, which entitles a person to intervene, must be in the
matter in litigation and of such direct and immediate character that the
intervenor will either gain or lose by direct legal operation and effect of
the judgment.17Such interest must be actual, direct and material, and not
simply contingent and expectant.18

Petitioner claims that her status as the wife and companion of Tristan
for 17 years vests her with the requisite legal interest required of a
would-be intervenor under the Rules of Court.

Petitioner’s claim lacks merit. Under the law, petitioner was never the
legal wife of Tristan, hence her claim of legal interest has no basis.

When petitioner and Tristan married on July 14, 1984, Tristan was still
lawfully married to Lily. The divorce decree that Tristan and Lily
obtained from the Dominican Republic never dissolved the marriage
bond between them. It is basic that laws relating to family rights and
duties, or to the status, condition and legal capacity of persons are
binding upon citizens of the Philippines, even though living
abroad.19 Regardless of where a citizen of the Philippines might be, he
or she will be governed by Philippine laws with respect to his or her
family rights and duties, or to his or her status, condition and legal
capacity. Hence, if a Filipino regardless of whether he or she was
married here or abroad, initiates a petition abroad to obtain an absolute
divorce from spouse and eventually becomes successful in getting an
absolute divorce decree, the Philippines will not recognize such
absolute divorce.20

When Tristan and Lily married on May 18, 1968, their marriage was
governed by the provisions of the Civil Code21which took effect on
August 30, 1950. In the case of Tenchavez v. Escano22 we held:

(1) That a foreign divorce between Filipino citizens, sought and decreed
after the effectivity of the present Civil Code (Rep. Act No. 386), is not
entitled to recognition as valid in this jurisdiction; and neither is the
marriage contracted with another party by the divorced consort,
subsequently to the foreign decree of divorce, entitled to validity in the
country. (Emphasis added)

Thus, petitioner’s claim that she is the wife of Tristan even if their
marriage was celebrated abroad lacks merit. Thus, petitioner never
acquired the legal interest as a wife upon which her motion for
intervention is based.

Since petitioner’s motion for leave to file intervention was bereft of the
indispensable requirement of legal interest, the issuance by the trial
court of the order granting the same and admitting the complaint-in-
intervention was attended with grave abuse of discretion. Consequently,
the Court of Appeals correctly set aside and declared as null and void
the said order.

WHEREFORE, the petition is DISMISSED. The assailed Decision

dated July 25, 2003 and Resolution dated January 23, 2004 of the Court
of Appeals in CA-G.R. SP No. 74456 are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

47
G.R. No. 133743 February 6, 2007
EDGAR SAN LUIS, Petitioner,
vs.
FELICIDAD SAN LUIS, Respondent.
x ---------------------------------------------------- x
G.R. No. 134029 February 6, 2007
RODOLFO SAN LUIS, Petitioner,
vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN
LUIS, Respondent.
DECISION
YNARES-SANTIAGO, J.:
Before us are consolidated petitions for review assailing the February 4,
1998 Decision 1 of the Court of Appeals in CA-G.R. CV No. 52647,
which reversed and set aside the September 12, 1995 2 and January 31,
1996 3Resolutions of the Regional Trial Court of Makati City, Branch
134 in SP. Proc. No. M-3708; and its May 15, 1998
Resolution 4 denying petitioners’ motion for reconsideration.
The instant case involves the settlement of the estate of Felicisimo T.
San Luis (Felicisimo), who was the former governor of the Province of
Laguna. During his lifetime, Felicisimo contracted three marriages. His
first marriage was with Virginia Sulit on March 17, 1942 out of which
were born six children, namely: Rodolfo, Mila, Edgar, Linda, Emilita
and Manuel. On August 11, 1963, Virginia predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee
Corwin, with whom he had a son, Tobias. However, on October 15,
1971, Merry Lee, an American citizen, filed a Complaint for
Divorce 5 before the Family Court of the First Circuit, State of Hawaii,
United States of America (U.S.A.), which issued a Decree Granting
Absolute Divorce and Awarding Child Custody on December 14,
1973. 6
On June 20, 1974, Felicisimo married respondent Felicidad San Luis,
then surnamed Sagalongos, before Rev. Fr. William Meyer, Minister of
the United Presbyterian at Wilshire Boulevard, Los Angeles, California,
U.S.A. 7 He had no children with respondent but lived with her for 18
years from the time of their marriage up to his death on December 18,
1992.
Thereafter, respondent sought the dissolution of their conjugal
partnership assets and the settlement of Felicisimo’s estate. On
December 17, 1993, she filed a petition for letters of
administration 8 before the Regional Trial Court of Makati City,
docketed as SP. Proc. No. M-3708 which was raffled to Branch 146
thereof.
Respondent alleged that she is the widow of Felicisimo; that, at the time
of his death, the decedent was residing at 100 San Juanico Street, New
Alabang Village, Alabang, Metro Manila; that the decedent’s surviving
heirs are respondent as legal spouse, his six children by his first
marriage, and son by his second marriage; that the decedent left real
properties, both conjugal and exclusive, valued at ₱30,304,178.00 more
or less; that the decedent does not have any unpaid debts. Respondent
prayed that the conjugal partnership assets be liquidated and that letters
of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of the children
of Felicisimo by his first marriage, filed a motion to dismiss 9 on the
grounds of improper venue and failure to state a cause of action.
Rodolfo claimed that the petition for letters of administration should
have been filed in the Province of Laguna because this was Felicisimo’s
place of residence prior to his death. He further claimed that respondent
has no legal personality to file the petition because she was only a
mistress of Felicisimo since the latter, at the time of his death, was still
legally married to Merry Lee.
On February 15, 1994, Linda invoked the same grounds and joined her
brother Rodolfo in seeking the dismissal 10of the petition. On February
28, 1994, the trial court issued an Order 11 denying the two motions to
dismiss.
Unaware of the denial of the motions to dismiss, respondent filed on
March 5, 1994 her opposition 12 thereto. She submitted documentary
evidence showing that while Felicisimo exercised the powers of his
public office in Laguna, he regularly went home to their house in New
Alabang Village, Alabang, Metro Manila which they bought sometime
in 1982. Further, she presented the decree of absolute divorce issued by
the Family Court of the First Circuit, State of Hawaii to prove that the
marriage of Felicisimo to Merry Lee had already been dissolved. Thus,
she claimed that Felicisimo had the legal capacity to marry her by
virtue of paragraph 2, 13 Article 26 of the Family Code and the doctrine
laid down in Van Dorn v. Romillo, Jr. 14
Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis,
separately filed motions for reconsideration from the Order denying
their motions to dismiss. 15 They asserted that paragraph 2, Article 26 of
the Family Code cannot be given retroactive effect to validate
respondent’s bigamous marriage with Felicisimo because this would
impair vested rights in derogation of Article 256 16 of the Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his first
marriage, filed a motion to disqualify Acting Presiding Judge Anthony
E. Santos from hearing the case.
On October 24, 1994, the trial court issued an Order 17 denying the
motions for reconsideration. It ruled that respondent, as widow of the
decedent, possessed the legal standing to file the petition and that venue
was properly laid. Meanwhile, the motion for disqualification was
deemed moot and academic 18 because then Acting Presiding Judge
Santos was substituted by Judge Salvador S. Tensuan pending the
resolution of said motion.
Mila filed a motion for inhibition 19 against Judge Tensuan on
November 16, 1994. On even date, Edgar also filed a motion for
reconsideration 20 from the Order denying their motion for
reconsideration arguing that it does not state the facts and law on which
it was based.
On November 25, 1994, Judge Tensuan issued an Order 21 granting the
motion for inhibition. The case was re-raffled to Branch 134 presided
by Judge Paul T. Arcangel.
On April 24, 1995, 22 the trial court required the parties to submit their
respective position papers on the twin issues of venue and legal
capacity of respondent to file the petition. On May 5, 1995, Edgar
manifested 23 that he is adopting the arguments and evidence set forth in
his previous motion for reconsideration as his position paper.
Respondent and Rodolfo filed their position papers on June 14, 24 and
June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the petition for letters
of administration. It held that, at the time of his death, Felicisimo was
the duly elected governor and a resident of the Province of Laguna.
Hence, the petition should have been filed in Sta. Cruz, Laguna and not
in Makati City. It also ruled that respondent was without legal capacity
to file the petition for letters of administration because her marriage
with Felicisimo was bigamous, thus, void ab initio. It found that the
decree of absolute divorce dissolving Felicisimo’s marriage to Merry
48
Lee was not valid in the Philippines and did not bind Felicisimo who
was a Filipino citizen. It also ruled that paragraph 2, Article 26 of the
Family Code cannot be retroactively applied because it would impair
the vested rights of Felicisimo’s legitimate children.
Respondent moved for reconsideration 26 and for the
disqualification 27 of Judge Arcangel but said motions were denied. 28
Respondent appealed to the Court of Appeals which reversed and set
aside the orders of the trial court in its assailed Decision dated February
4, 1998, the dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995 and January 31,
1996 are hereby REVERSED and SET ASIDE; the Orders dated
February 28 and October 24, 1994 are REINSTATED; and the records
of the case is REMANDED to the trial court for further proceedings. 29
The appellante court ruled that under Section 1, Rule 73 of the Rules of
Court, the term "place of residence" of the decedent, for purposes of
fixing the venue of the settlement of his estate, refers to the personal,
actual or physical habitation, or actual residence or place of abode of a
person as distinguished from legal residence or domicile. It noted that
although Felicisimo discharged his functions as governor in Laguna, he
actually resided in Alabang, Muntinlupa. Thus, the petition for letters of
administration was properly filed in Makati City.
The Court of Appeals also held that Felicisimo had legal capacity to
marry respondent by virtue of paragraph 2, Article 26 of the Family
Code and the rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. Ibay-
Somera. 31 It found that the marriage between Felicisimo and Merry
Lee was validly dissolved by virtue of the decree of absolute divorce
issued by the Family Court of the First Circuit, State of Hawaii. As a
result, under paragraph 2, Article 26, Felicisimo was capacitated to
contract a subsequent marriage with respondent. Thus –
With the well-known rule – express mandate of paragraph 2, Article 26,
of the Family Code of the Philippines, the doctrines in Van Dorn,
Pilapil, and the reason and philosophy behind the enactment of E.O.
No. 227, — there is no justiciable reason to sustain the individual view
— sweeping statement — of Judge Arc[h]angel, that "Article 26, par. 2
of the Family Code, contravenes the basic policy of our state against
divorce in any form whatsoever." Indeed, courts cannot deny what the
law grants. All that the courts should do is to give force and effect to
the express mandate of the law. The foreign divorce having
been obtained by the Foreigner on December 14, 1992, 32 the Filipino
divorcee, "shall x x x have capacity to remarry under Philippine laws".
For this reason, the marriage between the deceased and petitioner
should not be denominated as "a bigamous marriage.
Therefore, under Article 130 of the Family Code, the petitioner as the
surviving spouse can institute the judicial proceeding for the settlement
of the estate of the deceased. x x x 33
Edgar, Linda, and Rodolfo filed separate motions for
reconsideration 34 which were denied by the Court of Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant petition
for review on certiorari. 35 Rodolfo later filed a manifestation and
motion to adopt the said petition which was granted. 36
In the instant consolidated petitions, Edgar and Rodolfo insist that the
venue of the subject petition for letters of administration was
improperly laid because at the time of his death, Felicisimo was a
resident of Sta. Cruz, Laguna. They contend that pursuant to our rulings
in Nuval v. Guray 37 and Romualdez v. RTC, Br. 7, Tacloban
City, 38"residence" is synonymous with "domicile" which denotes a
fixed permanent residence to which when absent, one intends to return.
They claim that a person can only have one domicile at any given time.
Since Felicisimo never changed his domicile, the petition for letters of
administration should have been filed in Sta. Cruz, Laguna.
Petitioners also contend that respondent’s marriage to Felicisimo was
void and bigamous because it was performed during the subsistence of
the latter’s marriage to Merry Lee. They argue that paragraph 2, Article
26 cannot be retroactively applied because it would impair vested rights
and ratify the void bigamous marriage. As such, respondent cannot be
considered the surviving wife of Felicisimo; hence, she has no legal
capacity to file the petition for letters of administration.
The issues for resolution: (1) whether venue was properly laid, and (2)
whether respondent has legal capacity to file the subject petition for
letters of administration.
The petition lacks merit.
Under Section 1, 39 Rule 73 of the Rules of Court, the petition for
letters of administration of the estate of Felicisimo should be filed in the
Regional Trial Court of the province "in which he resides at the time of
his death." In the case of Garcia Fule v. Court of Appeals, 40 we laid
down the doctrinal rule for determining the residence – as
contradistinguished from domicile – of the decedent for purposes of
fixing the venue of the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence" as
distinguished from "legal residence or domicile." This term "resides,"
like the terms "residing" and "residence," is elastic and should be
interpreted in the light of the object or purpose of the statute or rule in
which it is employed. In the application of venue statutes and rules –
Section 1, Rule 73 of the Revised Rules of Court is of such nature –
residence rather than domicile is the significant factor. Even where the
statute uses the word "domicile" still it is construed as meaning
residence and not domicile in the technical sense. Some cases make a
distinction between the terms "residence" and "domicile" but as
generally used in statutes fixing venue, the terms are synonymous, and
convey the same meaning as the term "inhabitant." In other words,
"resides" should be viewed or understood in its popular sense, meaning,
the personal, actual or physical habitation of a person, actual residence
or place of abode. It signifies physical presence in a place and actual
stay thereat. In this popular sense, the term means merely residence,
that is, personal residence, not legal residence or domicile. Residence
simply requires bodily presence as an inhabitant in a given place, while
domicile requires bodily presence in that place and also an intention to
make it one’s domicile. No particular length of time of residence is
required though; however, the residence must be more than
temporary. 41 (Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for purposes of
fixing the venue of the settlement of the estate of Felicisimo, is
synonymous with "domicile." The rulings in Nuval and Romualdez are
inapplicable to the instant case because they involve election cases.
Needless to say, there is a distinction between "residence" for purposes
of election laws and "residence" for purposes of fixing the venue of
actions. In election cases, "residence" and "domicile" are treated as
synonymous terms, that is, the fixed permanent residence to which
when absent, one has the intention of returning. 42 However, for
purposes of fixing venue under the Rules of Court, the "residence" of a
person is his personal, actual or physical habitation, or actual residence
or place of abode, which may not necessarily be his legal residence or
domicile provided he resides therein with continuity and
consistency. 43 Hence, it is possible that a person may have his
residence in one place and domicile in another.
In the instant case, while petitioners established that Felicisimo was
domiciled in Sta. Cruz, Laguna, respondent proved that he also
maintained a residence in Alabang, Muntinlupa from 1982 up to the
49
time of his death. Respondent submitted in evidence the Deed of
Absolute Sale 44 dated January 5, 1983 showing that the deceased
purchased the aforesaid property. She also presented billing
statements 45 from the Philippine Heart Center and Chinese General
Hospital for the period August to December 1992 indicating the address
of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa."
Respondent also presented proof of membership of the deceased in the
Ayala Alabang Village Association 46 and Ayala Country Club,
Inc., 47 letter-envelopes 48 from 1988 to 1990 sent by the deceased’s
children to him at his Alabang address, and the deceased’s calling
cards 49 stating that his home/city address is at "100 San Juanico, Ayala
Alabang Village, Muntinlupa" while his office/provincial address is in
"Provincial Capitol, Sta. Cruz, Laguna."
From the foregoing, we find that Felicisimo was a resident of Alabang,
Muntinlupa for purposes of fixing the venue of the settlement of his
estate. Consequently, the subject petition for letters of administration
was validly filed in the Regional Trial Court 50 which has territorial
jurisdiction over Alabang, Muntinlupa. The subject petition was filed
on December 17, 1993. At that time, Muntinlupa was still a
municipality and the branches of the Regional Trial Court of the
National Capital Judicial Region which had territorial jurisdiction over
Muntinlupa were then seated in Makati City as per Supreme Court
Administrative Order No. 3. 51 Thus, the subject petition was validly
filed before the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidad’s legal personality to file the
petition for letters of administration, we must first resolve the issue of
whether a Filipino who is divorced by his alien spouse abroad may
validly remarry under the Civil Code, considering that Felicidad’s
marriage to Felicisimo was solemnized on June 20, 1974, or before the
Family Code took effect on August 3, 1988. In resolving this issue, we
need not retroactively apply the provisions of the Family Code,
particularly Art. 26, par. (2) considering that there is sufficient
jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a
foreigner and his Filipino wife, which marriage was subsequently
dissolved through a divorce obtained abroad by the latter. Claiming that
the divorce was not valid under Philippine law, the alien spouse alleged
that his interest in the properties from their conjugal partnership should
be protected. The Court, however, recognized the validity of the
divorce and held that the alien spouse had no interest in the properties
acquired by the Filipino wife after the divorce. Thus:
In this case, the divorce in Nevada released private respondent from the
marriage from the standards of American law, under which divorce
dissolves the marriage. As stated by the Federal Supreme Court of the
United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the bond of
matrimony by a competent jurisdiction are to change the existing status
or domestic relation of husband and wife, and to free them both from
the bond. The marriage tie, when thus severed as to one party, ceases to
bind either. A husband without a wife, or a wife without a husband, is
unknown to the law. When the law provides, in the nature of a penalty,
that the guilty party shall not marry again, that party, as well as the
other, is still absolutely freed from the bond of the former marriage."
Thus, pursuant to his national law, private respondent is no longer the
husband of petitioner. He would have no standing to sue in the case
below as petitioner’s husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own country’s Court,
which validly exercised jurisdiction over him, and whose decision he
does not repudiate, he is estopped by his own representation before said
Court from asserting his right over the alleged conjugal property. 53
As to the effect of the divorce on the Filipino wife, the Court ruled that
she should no longer be considered married to the alien spouse. Further,
she should not be required to perform her marital duties and
obligations. It held:
To maintain, as private respondent does, that, under our laws,
petitioner has to be considered still marriedto private
respondent and still subject to a wife's obligations under Article
109, et. seq. of the Civil Code cannot be just. Petitioner should not be
obliged to live together with, observe respect and fidelity, and render
support to private respondent. The latter should not continue to be one
of her heirs with possible rights to conjugal property. She should not
be discriminated against in her own country if the ends of justice
are to be served.54 (Emphasis added)
This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where
the Court recognized the validity of a divorce obtained abroad. In the
said case, it was held that the alien spouse is not a proper party in filing
the adultery suit against his Filipino wife. The Court stated that "the
severance of the marital bond had the effect of dissociating the former
spouses from each other, hence the actuations of one would not affect
or cast obloquy on the other." 56
Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a
Filipino is divorced by his naturalized foreign spouse, the ruling in Van
Dorn applies. 58 Although decided on December 22, 1998, the divorce
in the said case was obtained in 1954 when the Civil Code provisions
were still in effect.
The significance of the Van Dorn case to the development of limited
recognition of divorce in the Philippines cannot be denied. The ruling
has long been interpreted as severing marital ties between parties in a
mixed marriage and capacitating the Filipino spouse to remarry as a
necessary consequence of upholding the validity of a divorce obtained
abroad by the alien spouse. In his treatise, Dr. Arturo M. Tolentino
cited Van Dorn stating that "if the foreigner obtains a valid foreign
divorce, the Filipino spouse shall have capacity to remarry under
Philippine law." 59In Garcia v. Recio, 60 the Court likewise cited the
aforementioned case in relation to Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the historical
background and legislative intent behind paragraph 2, Article 26 of the
Family Code were discussed, to wit:
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law
Executive Order No. 209, otherwise known as the "Family Code,"
which took effect on August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with
the laws in force in the country where they were solemnized, and valid
there as such, shall also be valid in this country, except those prohibited
under Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code,
Executive Order No. 227 was likewise signed into law, amending
Articles 26, 36, and 39 of the Family Code. A second paragraph was
added to Article 26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in
accordance with the laws in force in the country where they were
solemnized, and valid there as such, shall also be valid in this country,
except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and
38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the
alien spouse capacitating him or her to remarry, the Filipino spouse
50
shall have capacity to remarry under Philippine law. (Emphasis
supplied)
xxxx
Legislative Intent
Records of the proceedings of the Family Code deliberations showed
that the intent of Paragraph 2 of Article 26, according to Judge Alicia
Sempio-Diy, a member of the Civil Code Revision Committee, is to
avoid the absurd situation where the Filipino spouse remains married to
the alien spouse who, after obtaining a divorce, is no longer married to
the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985
case of Van Dorn v. Romillo, Jr. The Van Dorn case involved a
marriage between a Filipino citizen and a foreigner. The Court
held therein that a divorce decree validly obtained by the alien
spouse is valid in the Philippines, and consequently, the Filipino
spouse is capacitated to remarry under Philippine law. 63 (Emphasis
added)
As such, the Van Dorn case is sufficient basis in resolving a situation
where a divorce is validly obtained abroad by the alien spouse. With the
enactment of the Family Code and paragraph 2, Article 26 thereof, our
lawmakers codified the law already established through judicial
precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by rendering its
continuance intolerable to one of the parties and productive of no
possible good to the community, relief in some way should be
obtainable. 64 Marriage, being a mutual and shared commitment
between two parties, cannot possibly be productive of any good to the
society where one is considered released from the marital bond while
the other remains bound to it. Such is the state of affairs where the alien
spouse obtains a valid divorce abroad against the Filipino spouse, as in
this case.
Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that
the divorce is void under Philippine law insofar as Filipinos are
concerned. However, in light of this Court’s rulings in the cases
discussed above, the Filipino spouse should not be discriminated
against in his own country if the ends of justice are to be served. 67 In
Alonzo v. Intermediate Appellate Court, 68 the Court stated:
But as has also been aptly observed, we test a law by its results; and
likewise, we may add, by its purposes. It is a cardinal rule that, in
seeking the meaning of the law, the first concern of the judge should be
to discover in its provisions the intent of the lawmaker.
Unquestionably, the law should never be interpreted in such a way as to
cause injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume the good
motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in
consonance with justice. Law and justice are inseparable, and we must
keep them so. To be sure, there are some laws that, while generally
valid, may seem arbitrary when applied in a particular case because of
its peculiar circumstances. In such a situation, we are not bound,
because only of our nature and functions, to apply them just the same,
in slavish obedience to their language. What we do instead is find a
balance between the word and the will, that justice may be done even as
the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly
apply the law as it is worded, yielding like robots to the literal
command without regard to its cause and consequence. "Courts are apt
to err by sticking too closely to the words of a law," so we are warned,
by Justice Holmes again, "where these words import a policy that goes
beyond them."
xxxx
More than twenty centuries ago, Justinian defined justice "as the
constant and perpetual wish to render every one his due." That wish
continues to motivate this Court when it assesses the facts and the law
in every case brought to it for decision. Justice is always an essential
ingredient of its decisions. Thus when the facts warrants, we interpret
the law in a way that will render justice, presuming that it was the
intention of the lawmaker, to begin with, that the law be dispensed with
justice. 69
Applying the above doctrine in the instant case, the divorce decree
allegedly obtained by Merry Lee which absolutely allowed Felicisimo
to remarry, would have vested Felicidad with the legal personality to
file the present petition as Felicisimo’s surviving spouse. However, the
records show that there is insufficient evidence to prove the validity of
the divorce obtained by Merry Lee as well as the marriage of
respondent and Felicisimo under the laws of the U.S.A. In Garcia v.
Recio, 70 the Court laid down the specific guidelines for pleading and
proving foreign law and divorce judgments. It held that presentation
solely of the divorce decree is insufficient and that proof of its
authenticity and due execution must be presented. Under Sections 24
and 25 of Rule 132, a writing or document may be proven as a public or
official record of a foreign country by either (1) an official publication
or (2) a copy thereof attested by the officer having legal custody of the
document. If the record is not kept in the Philippines, such copy must
be (a) accompanied by a certificate issued by the proper diplomatic or
consular officer in the Philippine foreign service stationed in the foreign
country in which the record is kept and (b) authenticated by the seal of
his office. 71
With regard to respondent’s marriage to Felicisimo allegedly
solemnized in California, U.S.A., she submitted photocopies of the
Marriage Certificate and the annotated text 72 of the Family Law Act of
California which purportedly show that their marriage was done in
accordance with the said law. As stated in Garcia, however, the Court
cannot take judicial notice of foreign laws as they must be alleged and
proved. 73
Therefore, this case should be remanded to the trial court for further
reception of evidence on the divorce decree obtained by Merry Lee and
the marriage of respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to marry respondent
in 1974, nevertheless, we find that the latter has the legal personality to
file the subject petition for letters of administration, as she may be
considered the co-owner of Felicisimo as regards the properties that
were acquired through their joint efforts during their cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that letters of
administration may be granted to the surviving spouse of the decedent.
However, Section 2, Rule 79 thereof also provides in part:
SEC. 2. Contents of petition for letters of administration. – A petition
for letters of administration must be filed by an interested person and
must show, as far as known to the petitioner: x x x.
An "interested person" has been defined as one who would be benefited
by the estate, such as an heir, or one who has a claim against the estate,
such as a creditor. The interest must be material and direct, and not
merely indirect or contingent. 75
In the instant case, respondent would qualify as an interested person
who has a direct interest in the estate of Felicisimo by virtue of their
cohabitation, the existence of which was not denied by petitioners. If
51
she proves the validity of the divorce and Felicisimo’s capacity to
remarry, but fails to prove that her marriage with him was validly
performed under the laws of the U.S.A., then she may be considered as
a co-owner under Article 144 76 of the Civil Code. This provision
governs the property relations between parties who live together as
husband and wife without the benefit of marriage, or their marriage is
void from the beginning. It provides that the property acquired by either
or both of them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership. In a co-
ownership, it is not necessary that the property be acquired through
their joint labor, efforts and industry. Any property acquired during the
union is prima facie presumed to have been obtained through their joint
efforts. Hence, the portions belonging to the co-owners shall be
presumed equal, unless the contrary is proven. 77

Meanwhile, if respondent fails to prove the validity of both the divorce

and the marriage, the applicable provision would be Article 148 of the
Family Code which has filled the hiatus in Article 144 of the Civil
Code by expressly regulating the property relations of couples living
together as husband and wife but are incapacitated to
marry. 78 In Saguid v. Court of Appeals, 79 we held that even if the
cohabitation or the acquisition of property occurred before the Family
Code took effect, Article 148 governs. 80 The Court described the
property regime under this provision as follows:

The regime of limited co-ownership of property governing the union of

parties who are not legally capacitated to marry each other, but who
nonetheless live together as husband and wife, applies to properties
acquired during said cohabitation in proportion to their respective
contributions. Co-ownership will only be up to the extent of the proven
actual contribution of money, property or industry. Absent proof of the
extent thereof, their contributions and corresponding shares shall be
presumed to be equal.

xxxx

In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which

involved the issue of co-ownership of properties acquired by the parties
to a bigamous marriage and an adulterous relationship, respectively, we
ruled that proof of actual contribution in the acquisition of the property
is essential. x x x

As in other civil cases, the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts an
affirmative issue. Contentions must be proved by competent evidence
and reliance must be had on the strength of the party’s own evidence
and not upon the weakness of the opponent’s defense. x x x 81

In view of the foregoing, we find that respondent’s legal capacity to file

the subject petition for letters of administration may arise from her
status as the surviving wife of Felicisimo or as his co-owner under
Article 144 of the Civil Code or Article 148 of the Family Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of

Appeals reinstating and affirming the February 28, 1994 Order of the
Regional Trial Court which denied petitioners’ motion to dismiss and
its October 24, 1994 Order which dismissed petitioners’ motion for
reconsideration is AFFIRMED. Let this case be REMANDED to the
trial court for further proceedings.

SO ORDERED.

52
G.R. No. 171914 July 23, 2014
SOLEDAD L. LAVADIA, Petitioner,
vs.
HEIRS OF JUAN LUCES LUNA, represented by GREGORIO Z.
LUNA and EUGENIA ZABALLERO-LUNA,Respondents.
DECISION
BERSAMIN, J.:
Divorce between Filipinos is void and ineffectual under the nationality
rule adopted by Philippine law. Hence, any settlement of property
between the parties of the first marriage involving Filipinos submitted
as an incident of a divorce obtained in a foreign country lacks
competent judicial approval, and cannot be enforceable against the
assets of the husband who contracts a subsequent marriage.
The Case
The petitioner, the second wife of the late Atty. Juan Luces Luna,
appeals the adverse decision promulgated on November 11,
2005,1 whereby the Court of Appeals (CA) affirmed with modification
the decision rendered on August 27, 2001 by the Regional Trial Court
(RTC), Branch 138, in Makati City.2 The CA thereby denied her right
in the 25/100 pro indiviso share of the husband in a condominium unit,
and in the law books of the husband acquired during the second
marriage.
Antecedents
The antecedent facts were summarized by the CA as follows:
ATTY. LUNA, a practicing lawyer, was at first a name partner in the
prestigious law firm Sycip, Salazar, Luna, Manalo, Hernandez &
Feliciano Law Offices at that time when he was living with his first
wife, herein intervenor-appellant Eugenia Zaballero-Luna (EUGENIA),
whom he initially married ina civil ceremony conducted by the Justice
of the Peace of Parañaque, Rizal on September 10, 1947 and later
solemnized in a church ceremony at the Pro-Cathedral in San Miguel,
Bulacan on September 12, 1948. In ATTY. LUNA’s marriage to
EUGENIA, they begot seven (7) children, namely: Regina Maria L.
Nadal, Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria L.
Tabunda, Gregorio Macario Luna, Carolina Linda L. Tapia, and Cesar
Antonio Luna. After almost two (2) decades of marriage, ATTY.
LUNA and EUGENIA eventually agreed to live apart from each other
in February 1966 and agreed to separation of property, to which end,
they entered into a written agreement entitled "AGREEMENT FOR
SEPARATION AND PROPERTY SETTLEMENT" dated November
12, 1975, whereby they agreed to live separately and to dissolve and
liquidate their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce decree of his
marriage with EUGENIA from the Civil and Commercial Chamber of
the First Circumscription of the Court of First Instance of Sto.
Domingo, Dominican Republic. Also in Sto.Domingo, Dominican
Republic, on the same date, ATTY. LUNA contracted another
marriage, this time with SOLEDAD. Thereafter, ATTY. LUNA and
SOLEDAD returned to the Philippines and lived together as husband
and wife until 1987.
Sometime in 1977, ATTY. LUNA organized a new law firm named:
Luna, Puruganan, Sison and Ongkiko (LUPSICON) where ATTY.
LUNA was the managing partner.
On February 14, 1978, LUPSICON through ATTY. LUNA purchased
from Tandang Sora Development Corporation the 6th Floor of Kalaw-
Ledesma Condominium Project(condominium unit) at Gamboa St.,
Makati City, consisting of 517.52 square meters, for ₱1,449,056.00, to
be paid on installment basis for 36months starting on April 15, 1978.
Said condominium unit was to be usedas law office of LUPSICON.
After full payment, the Deed of Absolute Sale over the condominium
unit was executed on July 15, 1983, and CCT No. 4779 was issued on
August 10, 1983, which was registered bearing the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO
E. ONGKIKO, married to Sonia P.G. Ongkiko (25/100); GREGORIO
R. PURUGANAN, married to Paz A. Puruganan (17/100); and
TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100) x x
x" Subsequently, 8/100 share of ATTY. LUNA and 17/100 share of
Atty. Gregorio R. Puruganan in the condominium unit was sold to Atty.
Mario E. Ongkiko, for which a new CCT No. 21761 was issued on
February 7, 1992 in the following names:
"JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO
E. ONGKIKO, married to Sonia P.G. Ongkiko (50/100); TERESITA
CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x"
Sometime in 1992, LUPSICON was dissolved and the condominium
unit was partitioned by the partners but the same was still registered in
common under CCT No. 21716. The parties stipulated that the interest
of ATTY. LUNA over the condominium unit would be 25/100 share.
ATTY. LUNA thereafter established and headed another law firm with
Atty. Renato G. Dela Cruzand used a portion of the office
condominium unit as their office. The said law firm lasted until the
death of ATTY. JUAN on July 12, 1997.
After the death of ATTY. JUAN, his share in the condominium unit
including the lawbooks, office furniture and equipment found therein
were taken over by Gregorio Z. Luna, ATTY. LUNA’s son of the first
marriage. Gregorio Z. Luna thenleased out the 25/100 portion of the
condominium unit belonging to his father to Atty. Renato G. De la Cruz
who established his own law firm named Renato G. De la Cruz &
Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit
as well as the law books, office furniture and equipment became the
subject of the complaint filed by SOLEDAD against the heirs of ATTY.
JUAN with the RTC of Makati City, Branch 138, on September 10,
1999, docketed as Civil Case No. 99-1644. The complaint alleged that
the subject properties were acquired during the existence of the
marriage between ATTY. LUNA and SOLEDAD through their joint
efforts that since they had no children, SOLEDAD became co-owner of
the said properties upon the death of ATTY. LUNA to the extent of ¾
pro-indiviso share consisting of her ½ share in the said properties plus
her ½ share in the net estate of ATTY. LUNA which was bequeathed to
her in the latter’s last will and testament; and thatthe heirs of ATTY.
LUNA through Gregorio Z. Luna excluded SOLEDAD from her share
in the subject properties. The complaint prayed that SOLEDAD be
declared the owner of the ¾ portion of the subject properties;that the
same be partitioned; that an accounting of the rentals on the
condominium unit pertaining to the share of SOLEDAD be conducted;
that a receiver be appointed to preserve ad administer the subject
properties;and that the heirs of ATTY. LUNA be ordered to pay
attorney’s feesand costs of the suit to SOLEDAD.3
Ruling of the RTC
On August 27, 2001, the RTC rendered its decision after trial upon the
aforementioned facts,4 disposing thusly:
WHEREFORE, judgment is rendered as follows:
(a) The 24/100 pro-indiviso share in the condominium unit located at
the SIXTH FLOOR of the KALAW LEDESMA CONDOMINIUM
PROJECT covered by Condominium Certificate of Title No. 21761
consisting of FIVE HUNDRED SEVENTEEN (517/100) SQUARE
53
METERS is adjudged to have been acquired by Juan Lucas Luna
through his sole industry;
(b) Plaintiff has no right as owner or under any other concept over the
condominium unit, hence the entry in Condominium Certificate of Title
No. 21761 of the Registry of Deeds of Makati with respect to the civil
status of Juan Luces Luna should be changed from "JUAN LUCES
LUNA married to Soledad L. Luna" to "JUAN LUCES LUNA married
to Eugenia Zaballero Luna";
(c) Plaintiff is declared to be the owner of the books Corpus Juris,
Fletcher on Corporation, American Jurisprudence and Federal Supreme
Court Reports found in the condominium unit and defendants are
ordered to deliver them to the plaintiff as soon as appropriate
arrangements have been madefor transport and storage.
No pronouncement as to costs.
SO ORDERED.5
Decision of the CA
Both parties appealed to the CA.6
On her part, the petitioner assigned the following errors to the RTC,
namely:
I. THE LOWER COURT ERRED IN RULING THAT THE
CONDOMINIUM UNIT WAS ACQUIRED THRU THE SOLE
INDUSTRY OF ATTY. JUAN LUCES LUNA;
II. THE LOWER COURT ERRED IN RULING THAT
PLAINTIFFAPPELLANT DID NOT CONTRIBUTE MONEY FOR
THE ACQUISITION OF THE CONDOMINIUM UNIT;
III. THE LOWER COURT ERRED IN GIVING CREDENCE TO
PORTIONS OF THE TESTIMONY OF GREGORIO LUNA, WHO
HAS NO ACTUAL KNOWLEDGE OF THE ACQUISITION OF THE
UNIT, BUT IGNORED OTHER PORTIONS OF HIS TESTIMONY
FAVORABLE TO THE PLAINTIFF-APPELLANT;
IV. THE LOWER COURT ERRED IN NOT GIVING
SIGNIFICANCE TO THE FACT THAT THE CONJUGAL
PARTNERSHIP BETWEEN LUNA AND INTERVENOR-
APPELLANT WAS ALREADY DISSOLVED AND LIQUIDATED
PRIOR TO THE UNION OF PLAINTIFF-APPELLANT AND LUNA;
V. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE ABSENCE OF THE DISPOSITION OF
THE CONDOMINIUM UNIT IN THE HOLOGRAPHIC WILL OF
THE PLAINTIFF-APPELLANT;
VI. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE FACTTHAT THE NAME OF PLAINTIFF-
APPELLANT DID NOT APPEAR IN THE DEED OF ABSOLUTE
SALE EXECUTED BY TANDANG SORA DEVELOPMENT
CORPORATION OVER THE CONDOMINIUM UNIT;
VII. THE LOWER COURT ERRED IN RULING THAT NEITHER
ARTICLE 148 OF THE FAMILYCODE NOR ARTICLE 144 OF THE
CIVIL CODE OF THE PHILIPPINES ARE APPLICABLE;
VIII. THE LOWER COURT ERRED IN NOT RULING THAT THE
CAUSE OF ACTION OF THE INTERVENOR-APPELLANT HAS
BEEN BARRED BY PESCRIPTION AND LACHES; and
IX. THE LOWER COURT ERRED IN NOT
EXPUNGING/DISMISSING THE INTERVENTION FOR FAILURE
OF INTERVENOR-APPELLANT TO PAY FILING FEE.7
In contrast, the respondents attributedthe following errors to the trial
court, to wit:
I. THE LOWER COURT ERRED IN HOLDING THAT CERTAIN
FOREIGN LAW BOOKS IN THE LAW OFFICE OF ATTY. LUNA
WERE BOUGHT WITH THE USE OF PLAINTIFF’S MONEY;
II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF
PROVED BY PREPONDERANCE OF EVIDENCE (HER CLAIM
OVER) THE SPECIFIED FOREIGN LAW BOOKS FOUND IN
ATTY. LUNA’S LAW OFFICE; and
III. THE LOWER COURT ERRED IN NOT HOLDING THAT,
ASSUMING PLAINTIFF PAID FOR THE SAID FOREIGN LAW
BOOKS, THE RIGHT TO RECOVER THEM HAD PRESCRIBED
AND BARRED BY LACHES AND ESTOPPEL.8
On November 11, 2005, the CA promulgated its assailed modified
decision,9 holding and ruling:
EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA
until the latter’s death on July 12, 1997. The absolute divorce decree
obtained by ATTY. LUNA inthe Dominican Republic did not terminate
his prior marriage with EUGENIA because foreign divorce between
Filipino citizens is not recognized in our jurisdiction. x x x10
xxxx
WHEREFORE, premises considered, the assailed August 27, 2001
Decision of the RTC of MakatiCity, Branch 138, is hereby
MODIFIEDas follows:
(a) The 25/100 pro-indiviso share in the condominium unit at the
SIXTH FLOOR of the KALAW LEDESMA CONDOMINIUM
PROJECT covered by Condominium Certificate of Title No. 21761
consisting of FIVE HUNDRED SEVENTEEN (517/100) (sic)
SQUARE METERS is hereby adjudged to defendants-appellants, the
heirs of Juan Luces Luna and Eugenia Zaballero-Luna (first marriage),
having been acquired from the sole funds and sole industry of Juan
Luces Luna while marriage of Juan Luces Luna and Eugenia Zaballero-
Luna (first marriage) was still subsisting and valid;
(b) Plaintiff-appellant Soledad Lavadia has no right as owner or under
any other concept over the condominium unit, hence the entry in
Condominium Certificate of Title No. 21761 of the Registry of Deeds
ofMakati with respect to the civil status of Juan Luces Luna should be
changed from "JUAN LUCES LUNA married to Soledad L. Luna" to
"JUAN LUCES LUNA married to Eugenia Zaballero Luna";
(c) Defendants-appellants, the heirs of Juan Luces Luna and Eugenia
Zaballero-Luna(first marriage) are hereby declared to be the owner of
the books Corpus Juris, Fletcher on Corporation, American
Jurisprudence and Federal Supreme Court Reports found in the
condominium unit.
No pronouncement as to costs.
SO ORDERED.11
On March 13, 2006,12 the CA denied the petitioner’s motion for
reconsideration.13
Issues
In this appeal, the petitioner avers in her petition for review on
certiorarithat:
A. The Honorable Court of Appeals erred in ruling that the Agreement
for Separation and Property Settlement executed by Luna and
54
Respondent Eugenia was unenforceable; hence, their conjugal
partnership was not dissolved and liquidated;
B. The Honorable Court of Appeals erred in not recognizing the
Dominican Republic court’s approval of the Agreement;
C. The Honorable Court of Appeals erred in ruling that Petitioner failed
to adduce sufficient proof of actual contribution to the acquisition of
purchase of the subjectcondominium unit; and
D. The Honorable Court of Appeals erred in ruling that Petitioner was
not entitled to the subject law books.14
The decisive question to be resolved is who among the contending
parties should be entitled to the 25/100 pro indivisoshare in the
condominium unit; and to the law books (i.e., Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal Supreme Court
Reports).
The resolution of the decisive question requires the Court to ascertain
the law that should determine, firstly, whether the divorce between
Atty. Luna and Eugenia Zaballero-Luna (Eugenia) had validly
dissolved the first marriage; and, secondly, whether the second
marriage entered into by the late Atty. Luna and the petitioner entitled
the latter to any rights in property. Ruling of the Court
We affirm the modified decision of the CA.
1. Atty. Luna’s first marriage with Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia, both Filipinos, was
solemnized in the Philippines on September 10, 1947. The law in force
at the time of the solemnization was the Spanish Civil Code, which
adopted the nationality rule. The Civil Codecontinued to follow the
nationality rule, to the effect that Philippine laws relating to family
rights and duties, or to the status, condition and legal capacity of
persons were binding upon citizens of the Philippines, although living
abroad.15 Pursuant to the nationality rule, Philippine laws governed
thiscase by virtue of bothAtty. Luna and Eugenio having remained
Filipinos until the death of Atty. Luna on July 12, 1997 terminated their
marriage.
From the time of the celebration ofthe first marriage on September 10,
1947 until the present, absolute divorce between Filipino spouses has
not been recognized in the Philippines. The non-recognition of absolute
divorce between Filipinos has remained even under the Family
Code,16 even if either or both of the spouses are residing
abroad.17 Indeed, the only two types of defective marital unions under
our laws have beenthe void and the voidable marriages. As such, the
remedies against such defective marriages have been limited to the
declaration of nullity ofthe marriage and the annulment of the marriage.
It is true that on January 12, 1976, the Court of First Instance (CFI) of
Sto. Domingo in the Dominican Republic issued the Divorce Decree
dissolving the first marriage of Atty. Luna and Eugenia.18 Conformably
with the nationality rule, however, the divorce, even if voluntarily
obtained abroad, did not dissolve the marriage between Atty. Luna and
Eugenia, which subsisted up to the time of his death on July 12, 1997.
This finding conforms to the Constitution, which characterizes marriage
as an inviolable social institution,19 and regards it as a special contract
of permanent union between a man and a woman for the establishment
of a conjugal and family life.20 The non-recognition of absolute divorce
in the Philippines is a manifestation of the respect for the sanctity of the
marital union especially among Filipino citizens. It affirms that the
extinguishment of a valid marriage must be grounded only upon the
death of either spouse, or upon a ground expressly provided bylaw. For
as long as this public policy on marriage between Filipinos exists, no
divorce decree dissolving the marriage between them can ever be given
legal or judicial recognition and enforcement in this jurisdiction.
2. The Agreement for Separation and Property Settlement
was void for lack of court approval
The petitioner insists that the Agreement for Separation and Property
Settlement (Agreement) that the late Atty. Luna and Eugenia had
entered into and executed in connection with the divorce proceedings
before the CFI of Sto. Domingo in the Dominican Republic to dissolve
and liquidate their conjugal partnership was enforceable against
Eugenia. Hence, the CA committed reversible error in decreeing
otherwise.
The insistence of the petitioner was unwarranted.
Considering that Atty. Luna and Eugenia had not entered into any
marriage settlement prior to their marriage on September 10, 1947, the
system of relative community or conjugal partnership of gains governed
their property relations. This is because the Spanish Civil Code, the law
then in force at the time of their marriage, did not specify the property
regime of the spouses in the event that they had not entered into any
marriage settlement before or at the time of the marriage. Article 119 of
the Civil Codeclearly so provides, to wit:
Article 119. The future spouses may in the marriage settlements agree
upon absolute or relative community of property, or upon complete
separation of property, or upon any other regime. In the absence of
marriage settlements, or when the same are void, the system of relative
community or conjugal partnership of gains as established in this Code,
shall govern the property relations between husband and wife.
Article 142 of the Civil Codehas defined a conjugal partnership of gains
thusly:
Article 142. By means of the conjugal partnership of gains the husband
and wife place in a common fund the fruits of their separate property
and the income from their work or industry, and divide equally, upon
the dissolution of the marriage or of the partnership, the net gains or
benefits obtained indiscriminately by either spouse during the marriage.
The conjugal partnership of gains subsists until terminated for any of
various causes of termination enumerated in Article 175 of the Civil
Code, viz:
Article 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article 191.
The mere execution of the Agreement by Atty. Luna and Eugenia did
not per sedissolve and liquidate their conjugal partnership of gains. The
approval of the Agreement by a competent court was still required
under Article 190 and Article 191 of the Civil Code, as follows:
Article 190. In the absence of an express declaration in the marriage
settlements, the separation of property between spouses during the
marriage shall not take place save in virtue of a judicial order. (1432a)
Article 191. The husband or the wife may ask for the separation of
property, and it shall be decreed when the spouse of the petitioner has
been sentenced to a penalty which carries with it civil interdiction, or
has been declared absent, or when legal separation has been granted.
xxxx
55
The husband and the wife may agree upon the dissolution of the
conjugal partnership during the marriage, subject to judicial approval.
All the creditors of the husband and of the wife, as well as of the
conjugal partnership shall be notified of any petition for
judicialapproval or the voluntary dissolution of the conjugal
partnership, so that any such creditors may appear atthe hearing to
safeguard his interests. Upon approval of the petition for dissolution of
the conjugal partnership, the court shall take such measures as may
protect the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of articles
214 and 215 shall apply. The provisions of this Code concerning the
effect of partition stated in articles 498 to 501 shall be applicable.
(1433a)
But was not the approval of the Agreement by the CFI of Sto. Domingo
in the Dominican Republic sufficient in dissolving and liquidating the
conjugal partnership of gains between the late Atty. Luna and Eugenia?
The query is answered in the negative. There is no question that the
approval took place only as an incident ofthe action for divorce
instituted by Atty. Luna and Eugenia, for, indeed, the justifications for
their execution of the Agreement were identical to the grounds raised in
the action for divorce.21 With the divorce not being itself valid and
enforceable under Philippine law for being contrary to Philippine public
policy and public law, the approval of the Agreement was not also
legally valid and enforceable under Philippine law. Consequently, the
conjugal partnership of gains of Atty. Luna and Eugenia subsisted in
the lifetime of their marriage.
3. Atty. Luna’s marriage with Soledad, being bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership
What law governed the property relations of the second marriage
between Atty. Luna and Soledad?
The CA expressly declared that Atty. Luna’s subsequent marriage to
Soledad on January 12, 1976 was void for being bigamous, 22 on the
ground that the marriage between Atty. Luna and Eugenia had not been
dissolved by the Divorce Decree rendered by the CFI of Sto. Domingo
in the Dominican Republic but had subsisted until the death of Atty.
Luna on July 12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous, polygamous, or
incestuous are void. Article 71 of the Civil Codeclearly states:
Article 71. All marriages performed outside the Philippines in
accordance with the laws in force in the country where they were
performed, and valid there as such, shall also be valid in this country,
except bigamous, polygamous, or incestuous marriages as determined
by Philippine law.
Bigamy is an illegal marriage committed by contracting a second or
subsequent marriage before the first marriage has been legally
dissolved, or before the absent spouse has been declared presumptively
dead by means of a judgment rendered in the proper proceedings. 23 A
bigamous marriage is considered void ab initio.24
Due to the second marriage between Atty. Luna and the petitioner being
void ab initioby virtue of its being bigamous, the properties acquired
during the bigamous marriage were governed by the rules on co-
ownership, conformably with Article 144 of the Civil Code, viz:
Article 144. When a man and a woman live together as husband and
wife, but they are not married, ortheir marriage is void from the
beginning, the property acquired by eitheror both of them through their
work or industry or their wages and salaries shall be governed by the
rules on co-ownership.(n)
In such a situation, whoever alleges co-ownership carried the burden of
proof to confirm such fact.1âwphi1 To establish co-ownership,
therefore, it became imperative for the petitioner to offer proof of her
actual contributions in the acquisition of property. Her mere allegation
of co-ownership, without sufficient and competent evidence, would
warrant no relief in her favor. As the Court explained in Saguid v.
Court of Appeals:25
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which
involved the issue of co-ownership ofproperties acquired by the parties
to a bigamous marriage and an adulterous relationship, respectively, we
ruled that proof of actual contribution in the acquisition of the property
is essential. The claim of co-ownership of the petitioners therein who
were parties to the bigamous and adulterousunion is without basis
because they failed to substantiate their allegation that they contributed
money in the purchase of the disputed properties. Also in Adriano v.
Court of Appeals, we ruled that the fact that the controverted property
was titled in the name of the parties to an adulterous relationship is not
sufficient proof of coownership absent evidence of actual contribution
in the acquisition of the property.
As in other civil cases, the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts an
affirmative issue. Contentions must be proved by competent evidence
and reliance must be had on the strength of the party’s own evidence
and not upon the weakness of the opponent’s defense. This applies with
more vigor where, as in the instant case, the plaintiff was allowed to
present evidence ex parte.1âwphi1 The plaintiff is not automatically
entitled to the relief prayed for. The law gives the defendantsome
measure of protection as the plaintiff must still prove the allegations in
the complaint. Favorable relief can be granted only after the court
isconvinced that the facts proven by the plaintiff warrant such relief.
Indeed, the party alleging a fact has the burden of proving it and a
mereallegation is not evidence.26
The petitioner asserts herein that she sufficiently proved her actual
contributions in the purchase of the condominium unit in the aggregate
amount of at least ₱306,572.00, consisting in direct contributions of
₱159,072.00, and in repaying the loans Atty. Luna had obtained from
Premex Financing and Banco Filipino totaling ₱146,825.30; 27 and that
such aggregate contributions of ₱306,572.00 corresponded to almost
the entire share of Atty. Luna in the purchase of the condominium unit
amounting to ₱362,264.00 of the unit’s purchase price of
₱1,449,056.00.28 The petitioner further asserts that the lawbooks were
paid for solely out of her personal funds, proof of which Atty. Luna had
even sent her a "thank you" note;29 that she had the financial capacity to
make the contributions and purchases; and that Atty. Luna could not
acquire the properties on his own due to the meagerness of the income
derived from his law practice.
Did the petitioner discharge her burden of proof on the co-ownership?
In resolving the question, the CA entirely debunked the petitioner’s
assertions on her actual contributions through the following findings
and conclusions, namely:
SOLEDAD was not able to prove by preponderance of evidence that
her own independent funds were used to buy the law office
condominium and the law books subject matter in contentionin this case
– proof that was required for Article 144 of the New Civil Code and
Article 148 of the Family Code to apply – as to cases where properties
were acquired by a man and a woman living together as husband and
wife but not married, or under a marriage which was void ab initio.
Under Article 144 of the New Civil Code, the rules on co-ownership
56
would govern. But this was not readily applicable to many situations
and thus it created a void at first because it applied only if the parties
were not in any way incapacitated or were without impediment to
marry each other (for it would be absurd to create a co-ownership
where there still exists a prior conjugal partnership or absolute
community between the man and his lawful wife). This void was filled
upon adoption of the Family Code. Article 148 provided that: only the
property acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned in common
and in proportion to their respective contributions. Such contributions
and corresponding shares were prima faciepresumed to be equal.
However, for this presumption to arise, proof of actual contribution was
required. The same rule and presumption was to apply to joint deposits
of money and evidence of credit. If one of the parties was validly
married to another, his or her share in the co-ownership accrued to the
absolute community or conjugal partnership existing in such valid
marriage. If the party who acted in bad faith was not validly married to
another, his or her share shall be forfeited in the manner provided in the
last paragraph of the Article 147. The rules on forfeiture applied even if
both parties were in bad faith. Co-ownership was the exception while
conjugal partnership of gains was the strict rule whereby marriage was
an inviolable social institution and divorce decrees are not recognized
in the Philippines, as was held by the Supreme Court in the case of
Tenchavez vs. Escaño, G.R. No. L-19671, November 29, 1965, 15
SCRA 355, thus:
xxxx
As to the 25/100pro-indivisoshare of ATTY. LUNA in the
condominium unit, SOLEDAD failed to prove that she made an actual
contribution to purchase the said property. She failed to establish that
the four (4) checks that she presented were indeed used for the
acquisition of the share of ATTY. LUNA in the condominium unit.
This was aptly explained in the Decision of the trial court, viz.:
well settled that registration does not confer title but merely confirms
one already existing. The phrase "married to" preceding "Soledad L.
Luna" is merely descriptive of the civil status of ATTY. LUNA.
SOLEDAD, the second wife, was not even a lawyer. So it is but logical
that SOLEDAD had no participation in the law firm or in the purchase
of books for the law firm. SOLEDAD failed to prove that she had
anything to contribute and that she actually purchased or paid for the
law office amortization and for the law books. It is more logical to
presume that it was ATTY. LUNA who bought the law office space and
the law books from his earnings from his practice of law rather than
embarrassingly beg or ask from SOLEDAD money for use of the law
firm that he headed.30
The Court upholds the foregoing findings and conclusions by the CA
both because they were substantiated by the records and because we
have not been shown any reason to revisit and undo them. Indeed, the
petitioner, as the party claiming the co-ownership, did not discharge her
burden of proof. Her mere allegations on her contributions, not being
evidence,31 did not serve the purpose. In contrast, given the subsistence
of the first marriage between Atty. Luna and Eugenia, the presumption
that Atty. Luna acquired the properties out of his own personal funds
and effort remained. It should then be justly concluded that the
properties in litislegally pertained to their conjugal partnership of gains
as of the time of his death. Consequently, the sole ownership of the
25/100 pro indivisoshare of Atty. Luna in the condominium unit, and of
the lawbooks pertained to the respondents as the lawful heirs of Atty.
Luna.
WHEREFORE, the Court AFFIRMS the decision promulgated on
November 11, 2005; and ORDERS the petitioner to pay the costs of
suit.
SO ORDERED.

"x x x The first check, Exhibit "M" for ₱55,000.00 payable to Atty.
Teresita Cruz Sison was issued on January 27, 1977, which was thirteen
(13) months before the Memorandum of Agreement, Exhibit "7" was
signed. Another check issued on April 29, 1978 in the amount of
₱97,588.89, Exhibit "P" was payable to Banco Filipino. According to
the plaintiff, thiswas in payment of the loan of Atty. Luna. The third
check which was for ₱49,236.00 payable to PREMEX was dated May
19, 1979, also for payment of the loan of Atty. Luna. The fourth check,
Exhibit "M", for ₱4,072.00 was dated December 17, 1980. None of the
foregoing prove that the amounts delivered by plaintiff to the payees
were for the acquisition of the subject condominium unit. The
connection was simply not established. x x x"

SOLEDAD’s claim that she made a cash contribution of ₱100,000.00 is

unsubstantiated. Clearly, there is no basis for SOLEDAD’s claim of co-
ownership over the 25/100 portion of the condominium unit and the
trial court correctly found that the same was acquired through the sole
industry of ATTY. LUNA, thus:

"The Deed of Absolute Sale, Exhibit "9", covering the condominium

unit was in the name of Atty. Luna, together with his partners in the law
firm. The name of the plaintiff does not appear as vendee or as the
spouse of Atty. Luna. The same was acquired for the use of the Law
firm of Atty. Luna. The loans from Allied Banking Corporation and Far
East Bank and Trust Company were loans of Atty. Luna and his
partners and plaintiff does not have evidence to show that she paid for
them fully or partially. x x x"

The fact that CCT No. 4779 and subsequently, CCT No. 21761 were in
the name of "JUAN LUCES LUNA, married to Soledad L. Luna" was
no proof that SOLEDAD was a co-owner of the condominium unit.
Acquisition of title and registration thereof are two different acts. It is

57
 $550,000.00
G.R. No. 188289 August 20, 2014 (unpaid debt of
$285,000.00)
DAVID A. NOVERAS, Petitioner,
vs. Furniture and furnishings $3,000
LETICIA T. NOVERAS, Respondent.

DECISION Jewelries (ring and watch) $9,000

PEREZ, J.:
2000 Nissan Frontier 4x4 pickup $13,770.00
Before the Court is a petition for review assailing the 9 May 2008 truck
Decision1 of the Court of Appeals in CA-G.R .. CV No. 88686, which
affirmed in part the 8 December 2006 Decision2 of the Regional Trial Bank of America Checking Account $8,000
Court (RTC) of Baler, Aurora, Branch 96.

The factual antecedents are as follow: Bank of America Cash Deposit

David A. Noveras (David) and Leticia T. Noveras (Leticia) were

married on 3 December 1988 in Quezon City, Philippines. They resided Life Insurance (Cash Value) $100,000.00
in California, United States of America (USA) where they eventually
acquired American citizenship. They then begot two children, namely: 4
Retirement, pension, profit-sharing, $56,228.00
Jerome T. annuities

Noveras, who was born on 4 November 1990 and JenaT. Noveras, born The Sampaloc property used to beowned by David’s parents. The
on 2 May 1993. David was engaged in courier service business while parties herein secured a loan from a bank and mortgaged the property.
Leticia worked as a nurse in San Francisco, California. When said property was about to be foreclosed, the couple paid a total
During the marriage, they acquired the following properties in the of ₱1.5 Million for the redemption of the same.
Philippines and in the USA: Due to business reverses, David left the USA and returned to the
Philippines in 2001. In December 2002,Leticia executed a Special
PHILIPPINES Power of Attorney (SPA) authorizing David to sell the Sampaloc
property for ₱2.2 Million. According to Leticia, sometime in September
FAIR MARKET 2003, David abandoned his family and lived with Estrellita Martinez in
PROPERTY
VALUE Aurora province. Leticia claimed that David agreed toand executed a
Joint Affidavit with Leticia in the presence of David’s father, Atty.
Isaias Noveras, on 3 December 2003 stating that: 1) the ₱1.1Million
House and Lot with an area of 150 sq. ₱1,693,125.00
proceeds from the sale of the Sampaloc property shall be paid to and
m. located at 1085 Norma Street,
collected by Leticia; 2) that David shall return and pay to Leticia
Sampaloc, Manila (Sampaloc
₱750,000.00, which is equivalent to half of the amount of the
property)
redemption price of the Sampaloc property; and 3) that David shall
renounce and forfeit all his rights and interest in the conjugal and real
Agricultural land with an area of ₱400,000.00 properties situated in the Philippines.5 David was able to collect
20,742 sq. m. located at Laboy, ₱1,790,000.00 from the sale of the Sampaloc property, leaving an
Dipaculao, Aurora unpaid balance of ₱410,000.00.

Upon learning that David had an extra-marital affair, Leticia filed a

A parcel of land with an area of 2.5
hectares located at Maria Aurora,
Aurora
A parcel of land with an area of 175
sq.m. located at Sabang Baler, Aurora
3-has. coconut plantation in San
Joaquin Maria Aurora, Aurora
USA
PROPERTY
₱490,000.00
petition for divorce with the Superior Court of California, County of
San Mateo, USA. The California court granted the divorce on 24 June
2005 and judgment was duly entered on 29 June 2005. 6 The California
court granted to Leticia the custody of her two children, as well as all
₱175,000.00 3
the couple’s properties in the USA.7
On 8 August 2005, Leticia filed a petition for Judicial Separation of
Conjugal Property before the RTC of Baler, Aurora. She relied on the 3
₱750,000.00 December 2003 Joint Affidavit and David’s failure to comply with his
obligation under the same. She prayed for: 1) the power to administer
all conjugal properties in the Philippines; 2) David and his partner to
cease and desist from selling the subject conjugal properties; 3) the
declaration that all conjugal properties be forfeited in favor of her
children; 4) David to remit half of the purchase price as share of Leticia
FAIR MARKET
from the sale of the Sampaloc property; and 5) the payment
VALUE
of₱50,000.00 and ₱100,000.00 litigation expenses.8

House and Lot at 1155 Hanover In his Answer, David stated that a judgment for the dissolution of their
Street, Daly City, California marriage was entered on 29 June 2005 by the Superior Court of
California, County of San Mateo. He demanded that the conjugal

58
partnership properties, which also include the USA properties, be
liquidated and that all expenses of liquidation, including attorney’s fees
of both parties be charged against the conjugal partnership.9
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras committed acts of
abandonment and marital infidelity which can result intothe forfeiture
of the parties’ properties in favor of the petitioner and their two (2)
children.
2. Whether or not the Court has jurisdiction over the properties in
California, U.S.A. and the same can be included in the judicial
separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by petitioner
Leticia T. Noveras and respondent David A. Noveras will amount to a
waiver or forfeiture of the latter’s property rights over their conjugal
properties.
4. Whether or not Leticia T. Noveras isentitled to reimbursement of
onehalf of the ₱2.2 [M]illion sales proceeds of their property in
Sampaloc, Manila and one-half of the ₱1.5 [M]illion used to redeem the
property of Atty. Isaias Noveras, including interests and charges.
5. How the absolute community properties should be distributed.
6. Whether or not the attorney’s feesand litigation expenses of the
parties were chargeable against their conjugal properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the parties are entitled to
support and presumptive legitimes.10
On 8 December 2006, the RTC rendered judgment as follows:
1. The absolute community of property of the parties is hereby declared
DISSOLVED;
2. The net assets of the absolute community of property ofthe parties in
the Philippines are hereby ordered to be awarded to respondent David
A. Noveras only, with the properties in the United States of America
remaining in the sole ownership of petitioner Leticia Noveras a.k.a.
Leticia Tacbiana pursuant to the divorce decree issuedby the Superior
Court of California, County of San Mateo, United States of America,
dissolving the marriage of the parties as of June 24, 2005. The titles
presently covering said properties shall be cancelled and new titles be
issued in the name of the party to whom said properties are awarded;
3. One-half of the properties awarded to respondent David A. Noveras
in the preceding paragraph are hereby given to Jerome and Jena, his
two minor children with petitioner LeticiaNoveras a.k.a. Leticia
Tacbiana as their presumptive legitimes and said legitimes must be
annotated on the titles covering the said properties.Their share in the
income from these properties shall be remitted to them annually by the
respondent within the first half of January of each year, starting January
2008;
4. One-half of the properties in the United States of America awarded
to petitioner Leticia Noveras a.k.a. Leticia Tacbiana in paragraph 2 are
hereby given to Jerome and Jena, her two minor children with
respondent David A. Noveras as their presumptive legitimes and said
legitimes must be annotated on the titles/documents covering the said
properties. Their share in the income from these properties, if any, shall
be remitted to them annually by the petitioner within the first half of
January of each year, starting January 2008;
5. For the support of their two (2) minor children, Jerome and Jena,
respondent David A. Noveras shall give them US$100.00 as monthly
allowance in addition to their income from their presumptive legitimes,
while petitioner Leticia Tacbiana shall take care of their food, clothing,
education and other needs while they are in her custody in the USA.
The monthly allowance due from the respondent shall be increased in
the future as the needs of the children require and his financial capacity
can afford;
6. Of the unpaid amount of ₱410,000.00 on the purchase price of the
Sampaloc property, the Paringit Spouses are hereby ordered to pay
₱5,000.00 to respondent David A. Noveras and ₱405,000.00 to the two
children. The share of the respondent may be paid to him directly but
the share of the two children shall be deposited with a local bank in
Baler, Aurora, in a joint account tobe taken out in their names,
withdrawal from which shall only be made by them or by their
representative duly authorized with a Special Power of Attorney. Such
payment/deposit shall be made withinthe period of thirty (30) days after
receipt of a copy of this Decision, with the passbook of the joint
account to be submitted to the custody of the Clerk of Court of this
Court within the same period. Said passbook can be withdrawn from
the Clerk of Court only by the children or their attorney-in-fact; and
7. The litigation expenses and attorney’s fees incurred by the parties
shall be shouldered by them individually.11
The trial court recognized that since the parties are US citizens, the
laws that cover their legal and personalstatus are those of the USA.
With respect to their marriage, the parties are divorced by virtue of the
decree of dissolution of their marriage issued by the Superior Court of
California, County of San Mateo on 24June 2005. Under their law, the
parties’ marriage had already been dissolved. Thus, the trial court
considered the petition filed by Leticia as one for liquidation of the
absolute community of property regime with the determination of the
legitimes, support and custody of the children, instead of an action for
judicial separation of conjugal property.
With respect to their property relations, the trial court first classified
their property regime as absolute community of property because they
did not execute any marriage settlement before the solemnization of
their marriage pursuant to Article 75 of the Family Code. Then, the trial
court ruled that in accordance with the doctrine of processual
presumption, Philippine law should apply because the court cannot take
judicial notice of the US law since the parties did not submit any proof
of their national law. The trial court held that as the instant petition does
not fall under the provisions of the law for the grant of judicial
separation of properties, the absolute community properties cannot
beforfeited in favor of Leticia and her children. Moreover, the trial
court observed that Leticia failed to prove abandonment and infidelity
with preponderant evidence.
The trial court however ruled that Leticia is not entitled to the
reimbursements she is praying for considering that she already acquired
all of the properties in the USA. Relying still on the principle of equity,
the Court also adjudicated the Philippine properties to David, subject to
the payment of the children’s presumptive legitimes. The trial court
held that under Article 89 of the Family Code, the waiver or
renunciation made by David of his property rights in the Joint Affidavit
is void.
On appeal, the Court of Appeals modified the trial court’s Decision by
directing the equal division of the Philippine properties between the
spouses. Moreover with respect to the common children’s presumptive
legitime, the appellate court ordered both spouses to each pay their
children the amount of ₱520,000.00, thus:
WHEREFORE, the instant appeal is PARTLY GRANTED. Numbers 2,
4 and 6 of the assailedDecision dated December 8, 2006 of Branch 96,
59
RTC of Baler, Aurora Province, in Civil Case No. 828 are hereby
MODIFIED to read as follows:
2. The net assets of the absolute community of property of the parties in
the Philippines are hereby divided equally between petitioner Leticia
Noveras a.k.a. Leticia Tacbiana (sic) and respondent David A. Noveras;
xxx
4. One-half of the properties awarded to petitioner Leticia Tacbiana
(sic) in paragraph 2 shall pertain to her minor children, Jerome and
Jena, as their presumptive legitimes which shall be annotated on the
titles/documents covering the said properties. Their share in the income
therefrom, if any, shall be remitted to them by petitioner annually
within the first half of January, starting 2008;
xxx
6. Respondent David A. Noveras and petitioner Leticia Tacbiana (sic)
are each ordered to pay the amount of₱520,000.00 to their two children,
Jerome and Jena, as their presumptive legitimes from the sale of the
Sampaloc property inclusive of the receivables therefrom, which shall
be deposited to a local bank of Baler, Aurora, under a joint account in
the latter’s names. The payment/deposit shall be made within a period
of thirty (30) days from receipt ofa copy of this Decision and the
corresponding passbook entrusted to the custody ofthe Clerk of Court a
quowithin the same period, withdrawable only by the children or their
attorney-in-fact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay petitioner
Leticia Tacbiana (sic) the amount of ₱1,040,000.00 representing her
share in the proceeds from the sale of the Sampaloc property.
The last paragraph shall read as follows:
Send a copy of this Decision to the local civil registry of Baler, Aurora;
the local civil registry of Quezon City; the Civil RegistrarGeneral,
National Statistics Office, Vibal Building, Times Street corner EDSA,
Quezon City; the Office of the Registry of Deeds for the Province of
Aurora; and to the children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.12
In the present petition, David insists that the Court of Appeals should
have recognized the California Judgment which awarded the Philippine
properties to him because said judgment was part of the pleading
presented and offered in evidence before the trial court. David argues
that allowing Leticia to share in the Philippine properties is tantamount
to unjust enrichment in favor of Leticia considering that the latter was
already granted all US properties by the California court.
In summary and review, the basic facts are: David and Leticia are US
citizens who own properties in the USA and in the Philippines. Leticia
obtained a decree of divorce from the Superior Court of California in
June 2005 wherein the court awarded all the properties in the USA to
Leticia. With respect to their properties in the Philippines, Leticiafiled a
petition for judicial separation ofconjugal properties.
At the outset, the trial court erred in recognizing the divorce decree
which severed the bond of marriage between the parties. In Corpuz v.
Sto. Tomas,13 we stated that:
The starting point in any recognition of a foreign divorce judgment is
the acknowledgment that our courts do not take judicial notice of
foreign judgments and laws. Justice Herrera explained that, as a rule,
"no sovereign is bound to give effect within its dominion to a judgment
rendered by a tribunal of another country." This means that the foreign
judgment and its authenticity must beproven as facts under our rules on
evidence, together with the alien’s applicable national law to show the
effect of the judgment on the alien himself or herself. The recognition
may be made in an action instituted specifically for the purpose or in
another action where a party invokes the foreign decree as an integral
aspect of his claim or defense.14
The requirements of presenting the foreign divorce decree and the
national law of the foreigner must comply with our Rules of Evidence.
Specifically, for Philippine courts to recognize a foreign judgment
relating to the status of a marriage, a copy of the foreign judgment may
be admitted in evidence and proven as a fact under Rule 132, Sections
24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.15
Under Section 24 of Rule 132, the record of public documents of a
sovereign authority or tribunal may be proved by: (1) an official
publication thereof or (2) a copy attested by the officer having the legal
custody thereof. Such official publication or copy must beaccompanied,
if the record is not kept in the Philippines, with a certificate that the
attesting officer has the legal custody thereof. The certificate may be
issued by any of the authorized Philippine embassy or consular officials
stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office. The attestation must state, in
substance, that the copy is a correct copy of the original, or a specific
part thereof, asthe case may be, and must be under the official seal of
the attesting officer.
Section 25 of the same Rule states that whenever a copy of a document
or record is attested for the purpose of evidence, the attestation must
state, in substance, that the copy is a correct copy of the original, or a
specific part thereof, as the case may be. The attestation must be under
the official seal of the attesting officer, if there be any, or if hebe the
clerk of a court having a seal, under the seal of such court.
Based on the records, only the divorce decree was presented in
evidence. The required certificates to prove its authenticity, as well as
the pertinent California law on divorce were not presented.
It may be noted that in Bayot v. Court of Appeals,16 we relaxed the
requirement on certification where we held that "[petitioner therein]
was clearly an American citizenwhen she secured the divorce and that
divorce is recognized and allowed in any of the States of the Union, the
presentation of a copy of foreign divorce decree duly authenticatedby
the foreign court issuing said decree is, as here, sufficient." In this case
however, it appears that there is no seal from the office where the
divorce decree was obtained.
Even if we apply the doctrine of processual presumption 17 as the lower
courts did with respect to the property regime of the parties, the
recognition of divorce is entirely a different matter because, to begin
with, divorce is not recognized between Filipino citizens in the
Philippines. Absent a valid recognition of the divorce decree, it follows
that the parties are still legally married in the Philippines. The trial
court thus erred in proceeding directly to liquidation.
As a general rule, any modification in the marriage settlements must be
made before the celebration of marriage. An exception to this rule is
allowed provided that the modification isjudicially approved and refers
only to the instances provided in Articles 66,67, 128, 135 and 136 of
the Family Code.18
Leticia anchored the filing of the instant petition for judicial separation
of property on paragraphs 4 and 6 of Article 135 of the Family Code, to
wit:
Art. 135. Any of the following shall be considered sufficient cause for
judicial separation of property:
60
(1) That the spouse of the petitioner has been sentenced to a penalty
which carries with it civil interdiction;
(2) That the spouse of the petitioner has been judicially declared an
absentee;
(3) That loss of parental authority ofthe spouse of petitioner has been
decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter or failed
to comply with his or her obligations to the family as provided for in
Article 101;
(5) That the spouse granted the power of administration in the marriage
settlements has abused that power; and
(6) That at the time of the petition, the spouses have been separated in
fact for at least one year and reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the presentation
of the final judgment against the guiltyor absent spouse shall be enough
basis for the grant of the decree ofjudicial separation of property.
(Emphasis supplied).
The trial court had categorically ruled that there was no abandonment in
this case to necessitate judicial separation of properties under paragraph
4 of Article 135 of the Family Code. The trial court ratiocinated:
Moreover, abandonment, under Article 101 of the Family Code quoted
above, must be for a valid cause and the spouse is deemed to have
abandoned the other when he/she has left the conjugal dwelling without
intention of returning. The intention of not returning is prima facie
presumed if the allegedly [sic] abandoning spouse failed to give any
information as to his or her whereabouts within the period of three
months from such abandonment.
In the instant case, the petitioner knows that the respondent has returned
to and stayed at his hometown in Maria Aurora, Philippines, as she
even went several times to visit him there after the alleged
abandonment. Also, the respondent has been going back to the USA to
visit her and their children until the relations between them worsened.
The last visit of said respondent was in October 2004 when he and the
petitioner discussed the filing by the latter of a petition for dissolution
of marriage with the California court. Such turn for the worse of their
relationship and the filing of the saidpetition can also be considered as
valid causes for the respondent to stay in the Philippines.19
Separation in fact for one year as a ground to grant a judicial separation
of property was not tackled in the trial court’s decision because, the
trial court erroneously treated the petition as liquidation of the absolute
community of properties.
The records of this case are replete with evidence that Leticia and
David had indeed separated for more than a year and that reconciliation
is highly improbable. First, while actual abandonment had not been
proven, it is undisputed that the spouses had been living separately
since 2003 when David decided to go back to the Philippines to set up
his own business. Second, Leticia heard from her friends that David has
been cohabiting with Estrellita Martinez, who represented herself as
Estrellita Noveras. Editha Apolonio, who worked in the hospital where
David was once confined, testified that she saw the name of Estrellita
listed as the wife of David in the Consent for Operation form.20Third
and more significantly, they had filed for divorce and it was granted by
the California court in June 2005.
Having established that Leticia and David had actually separated for at
least one year, the petition for judicial separation of absolute
community of property should be granted.
The grant of the judicial separation of the absolute community property
automatically dissolves the absolute community regime, as stated in the
4th paragraph of Article 99 ofthe Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under
Articles 134 to 138. (Emphasis supplied).
Under Article 102 of the same Code, liquidation follows the dissolution
of the absolute community regime and the following procedure should
apply:
Art. 102. Upon dissolution of the absolute community regime, the
following procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties
of the absolute community and the exclusive properties of each spouse.
(2) The debts and obligations of the absolute community shall be paid
out of its assets. In case of insufficiency of said assets, the spouses shall
be solidarily liable for the unpaid balance with their separate properties
in accordance with the provisions of the second paragraph of Article 94.
(3) Whatever remains of the exclusive properties of the spouses shall
thereafter be delivered to each of them.
(4) The net remainder of the properties of the absolute community shall
constitute its net assets, which shall be divided equally between
husband and wife, unless a different proportion or division was agreed
upon in the marriage settlements, or unless there has been a voluntary
waiver of such share provided in this Code. For purposes of computing
the net profits subject to forfeiture in accordance with Articles 43, No.
(2) and 63, No. (2),the said profits shall be the increase in value
between the market value of the community property at the time of the
celebration of the marriage and the market value at the time of its
dissolution.
(5) The presumptive legitimes of the common children shall be
delivered upon partition, in accordance with Article 51.
(6) Unless otherwise agreed upon by the parties, in the partition of the
properties, the conjugal dwelling and the lot on which it is situated shall
be adjudicated tothe spouse with whom the majority of the common
children choose to remain. Children below the age of seven years are
deemed to have chosen the mother, unless the court has decided
otherwise. In case there is no such majority, the court shall decide,
taking into consideration the best interests of said children. At the risk
of being repetitious, we will not remand the case to the trial court.
Instead, we shall adopt the modifications made by the Court of Appeals
on the trial court’s Decision with respect to liquidation.
We agree with the appellate court that the Philippine courts did not
acquire jurisdiction over the California properties of David and Leticia.
Indeed, Article 16 of the Civil Code clearly states that real property as
well as personal property is subject to the law of the country where it is
situated. Thus, liquidation shall only be limited to the Philippine
properties.
We affirm the modification madeby the Court of Appeals with respect
to the share of the spouses in the absolutecommunity properties in the
Philippines, as well as the payment of their children’s presumptive
legitimes, which the appellate court explained in this wise:
61
Leticia and David shall likewise have an equal share in the proceeds of
the Sampaloc property.1âwphi1 While both claimed to have contributed
to the redemption of the Noveras property, absent a clear showing
where their contributions came from, the same is presumed to have
come from the community property. Thus, Leticia is not entitled to
reimbursement of half of the redemption money.
David's allegation that he used part of the proceeds from the sale of the
Sampaloc property for the benefit of the absolute community cannot be
given full credence. Only the amount of ₱120,000.00 incurred in going
to and from the U.S.A. may be charged thereto. Election expenses in
the amount of ₱300,000.00 when he ran as municipal councilor cannot
be allowed in the absence of receipts or at least the Statement of
Contributions and Expenditures required under Section 14 of Republic
Act No. 7166 duly received by the Commission on Elections. Likewise,
expenses incurred to settle the criminal case of his personal driver is not
deductible as the same had not benefited the family. In sum, Leticia and
David shall share equally in the proceeds of the sale net of the amount
of ₱120,000.00 or in the respective amounts of ₱1,040,000.00.
xxxx
Under the first paragraph of Article 888 of the Civil Code, "(t)he
legitime of legitimate children and descendants consists of one-half or
the hereditary estate of the father and of the mother." The children arc
therefore entitled to half of the share of each spouse in the net assets of
the absolute community, which shall be annotated on the
titles/documents covering the same, as well as to their respective shares
in the net proceeds from the sale of the Sampaloc property including the
receivables from Sps. Paringit in the amount of ₱410,000.00.
Consequently, David and Leticia should each pay them the amount of
₱520,000.00 as their presumptive legitimes therefrom.21
WHEREFORE, the petition is DENIED. The assailed Decision of the
Court of Appeals in CA G.R. CV No. 88686 is AFFIRMED
G.R. No. 205487 November 12, 2014
ORION SAVINGS BANK, Petitioner,
vs.
SHIGEKANE SUZUKI, Respondent.
DECISION
BRION, J.:
Before us is the Petition for Review on Certiorari1 filed by petitioner
Orion Savings Bank (Orion) under Rule 45 of the Rules of Court,
assailing the decision2 dated August 23, 2012 and the resolution3 dated
January 25, 2013 of the Court of Appeals (CA) in CA-G.R. CV No.
94104.
The Factual Antecedents
In the first week of August 2003, respondent Shigekane Suzuki
(Suzuki), a Japanese national, met with Ms. Helen Soneja (Soneja) to
inquire about a condominium unit and a parking slot at Cityland
Pioneer, Mandaluyong City, allegedly owned by Yung Sam Kang
(Kang), a Korean national and a Special Resident Retiree's Visa
(SRRV) holder.
At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by
Condominium Certificate of Title (CCT) No. 18186] 4 and Parking Slot
No. 42 [covered by CCT No. 9118] 5 were for sale for ₱3,000,000.00.
Soneja likewise assured Suzuki that the titles to the unit and the parking
slot were clean. After a brief negotiation, the parties agreed to reduce
the price to ₱2,800,000.00. On August 5, 2003, Suzuki issued Kang a
Bank of the Philippine Island (BPI) Check No. 83349 6 for One
Hundred Thousand Pesos (₱100,000.00) as reservation fee.7 On August
21, 2003, Suzuki issued Kang another check, BPI Check No.
83350,8 this time for ₱2,700,000.00 representing the remaining balance
of the purchase price. Suzuki and Kang then executed a Deed of
Absolute Sale dated August 26, 20039covering Unit No. 536 and
Parking Slot No. 42. Soon after, Suzuki took possession of the
condominium unit and parking lot, and commenced the renovation of
the interior of the condominium unit.
Kang thereafter made several representations with Suzuki to deliver the
titles to the properties, which were then allegedly in possession of
Alexander Perez (Perez, Orion’s Loans Officer) for safekeeping.
Despite several verbal demands, Kang failed to deliver the documents.
Suzuki later on learned that Kang had left the country, prompting
Suzuki to verify the status of the properties with the Mandaluyong City
Registry of Deeds.
Before long, Suzuki learned that CCT No. 9118 representing the title to
the Parking Slot No. 42 contained no annotations although it remained
under the name of Cityland Pioneer. This notwithstanding, Cityland
Pioneer, through Assistant Vice President Rosario D. Perez, certified
that Kang had fully paid the purchase price of Unit. No. 536 10 and
Parking Slot No. 42.11 CCT No. 18186 representing the title to the
condominium unit had no existing encumbrance, except for
anannotation under Entry No. 73321/C-10186 which provided that any
conveyance or encumbrance of CCT No. 18186 shall be subject to
approval by the Philippine Retirement Authority (PRA). Although CCT
No. 18186 contained Entry No. 66432/C-10186 dated February 2, 1999
representing a mortgage in favor of Orion for a ₱1,000,000.00 loan, that
annotation was subsequently cancelled on June 16, 2000 by Entry No.
73232/T. No. 10186. Despite the cancellation of the mortgage to Orion,
the titles to the properties remained in possession of Perez.
To protect his interests, Suzuki thenexecuted an Affidavit of Adverse
Claim12 dated September 8, 2003, withthe Registry of Deeds of
Mandaluyong City, annotated as Entry No. 3292/C-No. 18186 in CCT
No. 18186. Suzuki then demanded the delivery of the titles.13 Orion,
(through Perez), however, refused to surrender the titles, and cited the
need to consult Orion’s legal counsel as its reason.
On October 14, 2003, Suzuki received a letter from Orion’s counsel
dated October 9, 2003, stating that Kang obtained another loan in the
amount of ₱1,800,000.00. When Kang failed to pay, he executed a
Dacion en Pagodated February 2, 2003, in favorof Orion covering Unit
No. 536. Orion, however, did not register the Dacion en Pago, until
October 15, 2003.
On October 28, 2003, Suzuki executed an Affidavit of Adverse Claim
over Parking Slot No. 42 (covered by CCT No. 9118) and this was
annotated as Entry No. 4712/C-No. 9118 in the parking lot’s title.
On January 27, 2004, Suzuki filed a complaint for specific performance
and damages against Kang and Orion. At the pre-trial, the parties made
the following admissions and stipulations:
1. That as of August 26, 2003, Kang was the registered owner of Unit
No. 536 and Parking Slot No. 42;
2. That the mortgage in favor ofOrion supposedly executed by Kang,
with Entry No. 66432/C-10186 dated February 2, 1999, was
subsequently cancelled by Entry No. 73232/T No. 10186 dated June 16,
2000;
3. That the alleged Dacion en Pagowas never annotated in CCT Nos.
18186 and 9118;
4. That Orion only paid the appropriate capital gains tax and the
documentary stamp tax for the alleged Dacion en Pago on October 15,
2003;
62
5. That Parking Slot No. 42, covered by CCT No. 9118, was never
mortgaged to Orion; and
6. That when Suzuki bought the properties, he went to Orion to obtain
possession of the titles.
The RTC Ruling
In its decision14 dated June 29, 2009, the Regional Trial Court (RTC),
Branch 213, Mandaluyong City ruled infavor of Suzuki and ordered
Orion to deliver the CCT Nos. 18186 and 9118 to Suzuki.
The court found that Suzuki was an innocent purchaser for value whose
rights over the properties prevailed over Orion’s. The RTC further
noted that Suzuki exerted efforts to verify the status of the properties
but he did not find any existing encumbrance inthe titles. Although
Orion claims to have purchased the property by way of a Dacion en
Pago, Suzuki only learned about it two (2) months after he bought the
properties because Orion never bothered to register or annotate the
Dacion en Pagoin CCT Nos. 18186 and 9116.
The RTC further ordered Orion and Kang to jointly and severally pay
Suzuki moral damages, exemplary damages, attorney’s fees,
appearance fees, expenses for litigation and cost ofsuit. Orion timely
appealed the RTC decision with the CA.
The CA Ruling
On August 23, 2012, the CA partially granted Orion’s appeal and
sustained the RTC insofar as it upheld Suzuki’s right over the
properties. The CA further noted that Entry No. 73321/C-10186
pertaining to the withdrawal of investment of an SRRV only serves as a
warning to an SRRV holder about the implications of a conveyance of a
property investment. It deviated from the RTC ruling, however, by
deleting the award for moral damages, exemplary damages, attorney’s
fees, expenses for litigation and cost of suit.
Orion sought a reconsideration of the CA decision but the CA denied
the motion in its January 25, 2013 resolution. Orion then filed a petition
for review on certiorariunder Rule 45 with this Court.
The Petition and Comment
Orion’s petition is based on the following grounds/arguments:15
1. The Deed of Sale executed by Kang in favor of Suzuki is null and
void. Under Korean law, any conveyance of a conjugal property should
be made with the consent of both spouses;
2. Suzuki is not a buyer in good faith for he failed to check the owner’s
duplicate copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No. 73321/C-10186,
which prohibits any conveyance or encumbrance of the property
investment, defeats the alleged claim of good faith by Suzuki; and
4. Orion should not be faulted for exercising due diligence.
In his Comment,16 Suzuki asserts that the issue on spousal consent was
belatedly raised on appeal. Moreover, proof of acquisition during the
marital coverture is a condition sine qua nonfor the operation of the
presumption of conjugal ownership.17 Suzuki additionally maintains
that he is a purchaser in good faith, and is thus entitled to the protection
of the law.
The Court’s Ruling
We deny the petition for lack of merit.
The Court may inquire into conclusions of fact when the inference
made is manifestly mistaken
In a Rule 45 petition, the latitude of judicial review generally excludes
a factual and evidentiary re-evaluation, and the Court ordinarily abides
by the uniform factual conclusions of the trial court and the appellate
court.18 In the present case, while the courts below both arrived at the
same conclusion, there appears tobe an incongruence in their factual
findings and the legal principle they applied to the attendant factual
circumstances. Thus, we are compelled to examine certain factual
issues in the exercise of our sound discretion to correct any mistaken
inference that may have been made.19
Philippine Law governs the transfer of real property
Orion believes that the CA erred in not ruling on the issue of spousal
consent. We cannot uphold this position, however, because the issue of
spousal consent was only raised on appeal to the CA. It is a well-settled
principle that points of law, theories, issues, and arguments not brought
to the attention of the trial court cannot be raised for the first time on
appeal and considered by a reviewing court.20 To consider these belated
arguments would violate basic principles of fairplay, justice, and due
process.
Having said these, we shall nonetheless discuss the issues Orion
belatedly raised, if only to put an end to lingering doubts on the
correctness of the denial of the present petition.
It is a universal principle thatreal or immovable property is exclusively
subject to the laws of the country or state where it is located.21 The
reason is found in the very nature of immovable property — its
immobility. Immovables are part of the country and so closely
connected to it that all rights over them have their natural center of
gravity there.22
Thus, all matters concerning the titleand disposition ofreal property are
determined by what is known as the lex loci rei sitae, which can alone
prescribe the mode by which a title canpass from one person to another,
or by which an interest therein can be gained or lost.23 This general
principle includes all rules governing the descent, alienation and
transfer of immovable property and the validity, effect and construction
of wills and other conveyances.24
This principle even governs the capacity of the person making a deed
relating to immovable property, no matter what its nature may be. Thus,
an instrument will be ineffective to transfer title to land if the person
making it is incapacitated by the lex loci rei sitae, even though under
the law of his domicile and by the law of the place where the instrument
is actually made, his capacity is undoubted.25
On the other hand, property relations between spouses are governed
principally by the national law of the spouses.26 However, the party
invoking the application of a foreign law has the burden of proving the
foreign law. The foreign law is a question of fact to be properly pleaded
and proved as the judge cannot take judicial notice of a foreign
law.27 He is presumed to know only domestic or the law of the forum. 28
To prove a foreign law, the party invoking it must present a copy
thereof and comply with Sections 24 and 25 of Rule 132 of the Revised
Rules of Court which reads:
SEC. 24. Proof of official record. — The record of public documents
referred to in paragraph (a) of Section 19, when admissible for any
purpose, may be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of the record, or by
his deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. If the
office in which the record is kept is in a foreign country, the certificate
may be made by a secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign country inwhich the
63
record is kept, and authenticated by the seal of his office. (Emphasis
supplied)
SEC. 25. What attestation ofcopy must state. — Whenever a copy of a
document or record is attested for the purpose of the evidence, the
attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be. The attestation
must be under the official seal of the attesting officer, if there be any, or
if he be the clerk of a court having a seal, under the seal of such court.
Accordingly, matters concerning the title and disposition of real
property shall be governed by Philippine law while issues pertaining to
the conjugal natureof the property shall be governed by South Korean
law, provided it is proven as a fact.
In the present case, Orion, unfortunately failed to prove the South
Korean law on the conjugal ownership ofproperty. It merely attached a
"Certification from the Embassy of the Republic of Korea"29 to prove
the existence of Korean Law. This certification, does not qualify as
sufficient proof of the conjugal nature of the property for there is no
showing that it was properly authenticated bythe seal of his office, as
required under Section 24 of Rule 132.30
Accordingly, the International Law doctrine of presumed-identity
approachor processual presumption comes into play, i.e., where a
foreign law is not pleaded or, evenif pleaded, is not proven, the
presumption is that foreign law is the same as Philippine Law. 31
Under Philippine Law, the phrase "Yung Sam Kang ‘married to' Hyun
Sook Jung" is merely descriptive of the civil status of Kang. 32 In other
words, the import from the certificates of title is that Kang is the owner
of the properties as they are registered in his name alone, and that he is
married to Hyun Sook Jung.
We are not unmindful that in numerous cases we have held that
registration of the property in the name of only one spouse does not
negate the possibility of it being conjugal or community property. 33 In
those cases, however, there was proof that the properties, though
registered in the name of only one spouse, were indeed either conjugal
or community properties.34 Accordingly, we see no reason to declare as
invalid Kang’s conveyance in favor of Suzuki for the supposed lack of
spousal consent.
The petitioner failed to adduce sufficient evidence to prove the due
execution of the Dacion en Pago
Article 1544 of the New Civil Codeof the Philippines provides that:
ART. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may have
first taken possession thereof in good faith, if it should be movable
property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry of
Property.
Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession; and, in the absence
thereof, to the person who presents the oldest title, provided there is
good faith.
The application of Article 1544 of the New Civil Code presupposes the
existence of two or more duly executed contracts of sale. In the present
case, the Deed of Sale dated August 26, 200335 between Suzuki and
Kang was admitted by Orion36 and was properly identified by Suzuki’s
witness Ms. Mary Jane Samin (Samin).37
It is not disputed, too, that the Deed of Sale dated August 26, 2003 was
consummated. In a contract of sale, the seller obligates himself to
transfer the ownership of the determinate thing sold, and to deliver the
same to the buyer, who obligates himself to pay a price certain to the
seller.38 The execution of the notarized deed of saleand the actual
transfer of possession amounted to delivery that produced the legal
effect of transferring ownership to Suzuki.39
On the other hand, although Orion claims priority in right under the
principle of prius tempore, potior jure (i.e.,first in time, stronger in
right), it failedto prove the existence and due execution of the Dacion
en Pagoin its favor.
At the outset, Orion offered the Dacion en Pagoas Exhibit "5"with
submarkings "5-a" to "5-c" to prove the existence of the February 6,
2003 transaction in its Formal Offer dated July 20, 2008. Orion
likewise offered in evidence the supposed promissory note dated
September 4, 2002 as Exhibit "12"to prove the existence of the
additional ₱800,000.00 loan. The RTC, however, denied the admission
of Exhibits "5" and "12,"among others, in its order dated August 19,
2008 "since the same [were] not identified in court by any witness."40
Despite the exclusion of its most critical documentary evidence, Orion
failed to make a tender ofexcluded evidence, as provided under Section
40, Rule 132 of the Rules of Court. For this reason alone, we are
prevented from seriously considering Exhibit "5" and its submarkings
and Exhibit "12" in the present petition.
Moreover, even if we consider Exhibit "5" and its submarkings and
Exhibit "12" in the present petition, the copious inconsistencies and
contradictions in the testimonial and documentary evidence of Orion,
militate against the conclusion that the Dacion en Pagowas duly
executed. First, there appears to be no due and demandable obligation
when the Dacion en Pago was executed, contrary to the allegations of
Orion. Orion’s witness Perez tried to impress upon the RTC that Kang
was in default in his ₱1,800,000.00 loan. During his direct examination,
he stated:
ATTY. CRUZAT:
Q: Okay, so this loan of ₱1.8 million, what happened to this loan, Mr.
Witness?
A: Well it became past due, there has been delayed interest payment by
Mr. Kangand...
Q: So what did you do after there were defaults[?]
A: We have to secure the money or the investment of the bank through
loans and we have executed a dacion en pagobecause Mr. Kang said he
has no money. So we just execute[d] the dacion en pago rather than
going through the Foreclosure proceedings.
xxxx
Q: Can you tell the court when was this executed?
A: February 6, 2003, your Honor.41
A reading of the supposed promissory note, however, shows that there
was nodefault to speak of when the supposed Dacion en Pagowas
executed.
Based on the promissory note, Kang’s loan obligation wouldmature
only on August 27, 2003. Neither can Orion claim that Kang had been
in default in his installment payments because the wordings of the
promissory note provide that "[t]he principal of this loanand its interest
and other charges shall be paid by me/us in accordance hereunder:
SINGLE PAYMENT LOANS.42 "There was thus no due and
64
demandable loan obligation when the alleged Dacion en Pago was
executed.
Second, Perez, the supposed person who prepared the Dacion en
Pago,appears to only have a vague idea of the transaction he supposedly
prepared. During his cross-examination, he testified:
ATTY. DE CASTRO:
Q: And were you the one who prepared this [dacion en pago] Mr.
witness?
A: Yes, sir. I personally prepared this.
xxxx
Q: So this 1.8 million pesos is already inclusive of all the penalties,
interest and surcharge due from Mr. Yung Sam Kang?
A: It’s just the principal, sir.
Q: So you did not state the interest [and] penalties?
A: In the [dacion en pago], we do not include interest, sir. We may
actually includethat but....
Q: Can you read the Second Whereas Clause, Mr. Witness?
A: Whereas the first party failed to pay the said loan to the second party
and as of February 10, 2003, the outstanding obligation which is due
and demandable principal and interest and other charges included
amounts to ₱1,800,000.00 pesos, sir.
xxxx
Q: You are now changing your answer[.] [I]t now includes interest and
other charges, based on this document?
A: Yes, based on that document, sir.43
Third, the Dacion en Pago,mentioned that the ₱1,800,000.00 loan was
secured by a real estate mortgage. However, no document was ever
presented to prove this real estate mortgage aside from it being
mentioned in the Dacion en Pago itself.
ATTY. DE CASTRO:
Q: Would you know if there is any other document like a supplement to
that Credit Line Agreement referring to this 1.8 million peso loan by
Mr. Yung Sam Kang which says that there was a subsequent
collateralization or security given by Mr. Yung [Sam]
Kang for the loan?
xxxx
A: The [dacion en pago], sir.44
Fourth,the Dacion en Pago was first mentioned only two (2) months
after Suzuki and Samin demanded the delivery of the titles sometime in
August 2003,and after Suzuki caused the annotation of his affidavit of
adverse claim. Records show that it was only on October 9, 2003, when
Orion, through its counsel, Cristobal Balbin Mapile & Associates first
spoke of the Dacion en Pago.45 Not even Perez mentioned any Dacion
en Pago on October 1, 2003, when he personally received a letter
demanding the delivery of the titles.Instead, Perez refused to accept the
letter and opted to first consult with his lawyer.46
Notably, even the October 9, 2003 letter contained material
inconsistencies in its recital of facts surrounding the execution of the
Dacion en Pago. In particular, it mentioned that "on [September 4,
2002], after paying the original loan, [Kang] applied and was granted a
new Credit Line Facility by [Orion] x x x for ONE MILLION EIGHT
HUNDRED THOUSAND PESOS (₱1,800,000.00)." Perez, however,
testified that there was "no cash movement" in the original
₱1,000,000.00 loan. In his testimony, he said:
COURT:
xxxx
Q: Would you remember what was the subject matter of that real estate
mortgage for that first ₱1,000,000.00 loan?
A: It’s a condominium Unit in Cityland, sir.
xxxx
Q: Would you recall if there was any payment by Mr. Yung Sam Kang
of this ₱1,000,000.00 loan?
A: None sir.
Q: No payments?
A: None sir.
Q: And from 1999 to 2002, there was no payment, either by way of
payment to the principal, by way ofpayment of interest, there was no
payment by Mr. Yung Sam Kang of this loan?
A: Literally, there was no actual cash movement, sir.
Q: There was no actual cash?
A: Yes, sir.
Q: And yet despite no payment, the bank Orion Savings Bank still
extended an ₱800,000.00 additional right?
A: Yes, sir.47
Fifth, it is undisputed that notwithstanding the supposed execution of
theDacion en Pago on February 2, 2003, Kang remained in possession
of the condominium unit. In fact, nothing in the records shows that
Orion even bothered to take possession of the property even six (6)
months after the supposed date of execution of the Dacion en Pago.
Kang was even able to transfer possession of the condominium unit to
Suzuki, who then made immediate improvements thereon. If Orion
really purchased the condominium unit on February 2, 2003 and
claimed to be its true owner, why did it not assert its ownership
immediately after the alleged sale took place? Why did it have to assert
its ownership only after Suzuki demanded the delivery of the titles?
These gaps have remained unanswered and unfilled.
In Suntay v. CA,48 we held that the most prominent index of simulation
is the complete absence of anattempt on the part of the vendee to assert
his rights of ownership over the property in question. After the sale, the
vendee should have entered the land and occupied the premises. The
absence of any attempt on the part of Orion to assert its right of
dominion over the property allegedly soldto it is a clear badge of fraud.
That notwithstanding the execution of the Dacion en Pago, Kang
remained in possession of the disputed condominium unit – from the
time of the execution of the Dacion en Pagountil the property’s
subsequent transfer to Suzuki – unmistakably strengthens the fictitious
nature of the Dacion en Pago.
These circumstances, aside from the glaring inconsistencies in the
documents and testimony of Orion’s witness, indubitably prove the
spurious nature of the Dacion en Pago.
The fact that the Dacion en Pago
is a notarized document does not
65
support the conclusion that the
sale it embodies is a true
conveyance

Public instruments are evidence of the facts that gave rise to their
execution and are to be considered as containing all the terms of the
agreement.49 While a notarized document enjoys this presumption, "the
fact that a deed is notarized is not a guarantee of the validity of its
contents."50 The presumption of regularity of notarized documents is
not absolute and may be rebutted by clear and convincing evidence to
the contrary.51

In the present case, the presumption cannot apply because the regularity
in the execution of the Dacion en Pago and the loan documents was
challenged in the proceedings below where their prima facievalidity
was overthrown by the highly questionable circumstances surrounding
their execution.52

Effect of the PRA restriction on

the validity of Suzuki’s title to the
property

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

We reject this suggested approachoutright because, to our mind, the

PRA restriction cannot affect the conveyance in favor of Suzuki. On
this particular point, we concur withthe following findings of the CA:

x x x the annotation merely servesas a warning to the owner who holds

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

Section 14. Should the retiree-investor withdraw his investment from

the Philippines, or transfer the same to another domestic enterprise,
orsell, convey or transfer his condominium unit or units to another
person, natural or juridical without the prior approval of the Authority,
the Special Resident Retiree’s Visa issued to him, and/or unmarried
minor child or children[,] may be cancelled or revoked by the
Philippine Government, through the appropriate government
department or agency, upon recommendation of the Authority. 54

Moreover, Orion should not be allowed to successfully assail the good

faith of Suzuki on the basis of the PRA restriction. Orion knew of the
PRA restriction when it transacted with Kang. Incidentally, Orion
admitted accommodating Kang’s request to cancel the mortgage
annotation despite the lack of payment to circumvent the PRA
restriction. Orion, thus, is estopped from impugning the validity of the
conveyance in favor of Suzuki on the basis of the PRA restriction that
Orion itself ignored and "attempted" to circumvent.

With the conclusion that Orion failed to prove the authenticity of the
Dacion en Pago, we see no reason for the application of the rules on
double sale under Article 1544 of the New Civil Code. Suzuki,
moreover, successfully adduced sufficient evidence to establish the
validity of conveyance in his favor.

WHEREFORE, premises considered, we DENY the petition for lack of

merit. Costs against petitioner Orion Savings Bank.

SO ORDERED.

66
G.R. No. 157314 July 29, 2005
FAR EAST BANK AND TRUST COMPANY, NOW BANK OF
THE PHILIPPINE ISLANDS, Petitioners,
vs.
THEMISTOCLES PACILAN, JR., Respondent.
DECISION
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari filed by Far
East Bank and Trust Company (now Bank of the Philippines Islands)
seeking the reversal of the Decision1 dated August 30, 2002 of the
Court of Appeals (CA) in CA-G.R. CV No. 36627 which ordered it,
together with its branch accountant, Roger Villadelgado, to pay
respondent Themistocles Pacilan, Jr.2 the total sum of ₱100,000.00 as
moral and exemplary damages. The assailed decision affirmed with
modification that of the Regional Trial Court (RTC) of Negros
Occidental, Bacolod City, Branch 54, in Civil Case No. 4908. Likewise
sought to be reversed and set aside is the Resolution dated January 17,
2003 of the appellate court, denying petitioner bank’s motion for
reconsideration.
The case stemmed from the following undisputed facts:
Respondent Pacilan opened a current account with petitioner bank’s
Bacolod Branch on May 23, 1980. His account was denominated as
Current Account No. 53208 (0052-00407-4). The respondent had since
then issued several postdated checks to different payees drawn against
the said account. Sometime in March 1988, the respondent issued
Check No. 2434886 in the amount of ₱680.00 and the same was
presented for payment to petitioner bank on April 4, 1988.
Upon its presentment on the said date, Check No. 2434886 was
dishonored by petitioner bank. The next day, or on April 5, 1988, the
respondent deposited to his current account the amount of ₱800.00. The
said amount was accepted by petitioner bank; hence, increasing the
balance of the respondent’s deposit to ₱1,051.43.
Subsequently, when the respondent verified with petitioner bank about
the dishonor of Check No. 2434866, he discovered that his current
account was closed on the ground that it was "improperly handled." The
records of petitioner bank disclosed that between the period of March
30,
1988 and April 5, 1988, the respondent issued four checks, to wit:
Check No. 2480416 for ₱6,000.00; Check No. 2480419 for ₱50.00;
Check No. 2434880 for ₱680.00 and; Check No. 2434886 for ₱680.00,
or a total amount of ₱7,410.00. At the time, however, the respondent’s
current account with petitioner bank only had a deposit of ₱6,981.43.
Thus, the total amount of the checks presented for payment on April 4,
1988 exceeded the balance of the respondent’s deposit in his account.
For this reason, petitioner bank, through its branch accountant,
Villadelgado, closed the respondent’s current account effective the
evening of April 4, 1988 as it then had an overdraft of ₱428.57. As a
consequence of the overdraft, Check No. 2434886 was dishonored.
On April 18, 1988, the respondent wrote to petitioner bank complaining
that the closure of his account was unjustified. When he did not receive
a reply from petitioner bank, the respondent filed with the RTC of
Negros Occidental, Bacolod City, Branch 54, a complaint for damages
against petitioner bank and Villadelgado. The case was docketed as
Civil Case No. 4908. The respondent, as complainant therein, alleged
that the closure of his current account by petitioner bank was
unjustified because on the first banking hour of April 5, 1988, he
already deposited an amount sufficient to fund his checks. The
respondent pointed out that Check No. 2434886, in particular, was
delivered to petitioner bank at the close of banking hours on April 4,
1988 and, following normal banking procedure, it
(petitioner bank) had until the last clearing hour of the following day, or
on April 5, 1988, to honor the check or return it, if not funded. In
disregard of this banking procedure and practice, however, petitioner
bank hastily closed the respondent’s current account and dishonored his
Check No. 2434886.
The respondent further alleged that prior to the closure of his current
account, he had issued several other postdated checks. The petitioner
bank’s act of closing his current account allegedly preempted the
deposits that he intended to make to fund those checks. Further, the
petitioner bank’s act exposed him to criminal prosecution for violation
of Batas Pambansa Blg. 22.
According to the respondent, the indecent haste that attended the
closure of his account was patently malicious and intended to embarrass
him. He claimed that he is a Cashier of Prudential Bank and Trust
Company, whose branch office is located just across that of petitioner
bank, and a prominent and respected leader both in the civic and
banking communities. The alleged malicious acts of petitioner bank
besmirched the respondent’s reputation and caused him "social
humiliation, wounded feelings, insurmountable worries and sleepless
nights" entitling him to an award of damages.
In their answer, petitioner bank and Villadelgado maintained that the
respondent’s current account was subject to petitioner bank’s Rules and
Regulations Governing the Establishment and Operation of Regular
Demand
Deposits which provide that "the Bank reserves the right to close an
account if the depositor frequently draws checks against insufficient
funds and/or uncollected deposits" and that "the Bank reserves the right
at any time to return checks of the depositor which are drawn against
insufficient funds or for any reason."3
They showed that the respondent had improperly and irregularly
handled his current account. For example, in 1986, the respondent’s
account was overdrawn 156 times, in 1987, 117 times and in 1988, 26
times. In all these instances, the account was overdrawn due to the
issuance of checks against insufficient funds. The respondent had also
signed several checks with a different signature from the specimen on
file for dubious reasons.
When the respondent made the deposit on April 5, 1988, it was
obviously to cover for issuances made the previous day against an
insufficiently funded account. When his Check No. 2434886 was
presented for payment on April 4, 1988, he had already incurred an
overdraft; hence, petitioner bank rightfully dishonored the same for
insufficiency of funds.
After due proceedings, the court a quo rendered judgment in favor of
the respondent as it ordered the petitioner bank and Villadelgado,
jointly and severally, to pay the respondent the amounts of ₱100,000.00
as moral damages and ₱50,000.00 as exemplary damages and costs of
suit. In so ruling, the court a quo also cited petitioner bank’s rules and
regulations which state that "a charge of ₱10.00 shall be levied against
the depositor for any check that is taken up as a returned item due to
‘insufficiency of funds’ on the date of receipt from the clearing office
even if said check is honored and/or covered by sufficient deposit the
following banking day." The same rules and regulations also provide
that "a check returned for insufficiency of funds for any reason of
similar import may be subsequently recleared for one more time only,
subject to the same charges."
According to the court a quo, following these rules and regulations, the
respondent, as depositor, had the right to put up sufficient funds for a
check that was taken as a returned item for insufficient funds the day
following the receipt of said check from the clearing office. In fact, the
67
said check could still be recleared for one more time. In previous
instances, petitioner bank notified the respondent when he incurred an
overdraft and he would then deposit sufficient funds the following day
to cover the overdraft. Petitioner bank thus acted unjustifiably when it
immediately closed the respondent’s account on April 4, 1988 and
deprived him of the opportunity to reclear his check or deposit
sufficient funds therefor the following day.
As a result of the closure of his current account, several of the
respondent’s checks were subsequently dishonored and because of this,
the respondent was humiliated, embarrassed and lost his credit standing
in the business community. The court a quo further ratiocinated that
even granting arguendo that petitioner bank had the right to close the
respondent’s account, the manner which attended the closure
constituted an abuse of the
said right. Citing Article 19 of the Civil Code of the Philippines which
states that "[e]very person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith" and Article 20 thereof which states that
"[e]very person who, contrary to law, wilfully or negligently causes
damage to another, shall indemnify the latter for the same," the court a
quo adjudged petitioner bank of acting in bad faith. It held that, under
the foregoing circumstances, the respondent is entitled to an award of
moral and exemplary damages.
The decretal portion of the court a quo’s decision reads:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby
rendered:
1. Ordering the defendants [petitioner bank and Villadelgado], jointly
and severally, to pay plaintiff [the respondent] the sum of ₱100,000.00
as moral damages;
2. Ordering the defendants, jointly and severally, to pay plaintiff the
sum of ₱50,000.00 as exemplary damages plus costs and expenses of
the suit; and
3. Dismissing [the] defendants’ counterclaim for lack of merit.
SO ORDERED.4
On appeal, the CA rendered the Decision dated August 30, 2002,
affirming with modification the decision of the court a quo.
The appellate court substantially affirmed the factual findings of the
court a quo as it held that petitioner bank unjustifiably closed the
respondent’s account notwithstanding that its own rules and regulations
allow that a check returned for insufficiency of funds or any reason of
similar import, may be subsequently recleared for one more time,
subject to standard charges. Like the court a quo, the appellate court
observed that in several instances in previous years, petitioner bank
would inform the respondent when he incurred an overdraft and
allowed him to make a timely deposit to fund the checks that were
initially dishonored for insufficiency of funds. However, on April 4,
1988, petitioner bank immediately closed the respondent’s account
without even notifying him that he had incurred an overdraft. Even
when they had already closed his account on April 4, 1988, petitioner
bank still accepted the deposit that the respondent made on April 5,
1988, supposedly to cover his checks.
Echoing the reasoning of the court a quo, the CA declared that even as
it may be conceded that petitioner bank had reserved the right to close
an account for repeated overdrafts by the respondent, the exercise of
that right must never be despotic or arbitrary. That petitioner bank
chose to close the account outright and return the check, even after
accepting a deposit sufficient to cover the said check, is contrary to its
duty to handle the respondent’s account with utmost fidelity. The
exercise of the right is not absolute and good faith, at least, is required.
The manner by which petitioner bank closed the account of the
respondent runs afoul of Article 19 of the Civil Code which enjoins
every person, in the exercise of his rights, "to give every one his due,
and observe honesty and good faith."
The CA concluded that petitioner bank’s precipitate and imprudent
closure of the respondent’s account had caused him, a respected officer
of several civic and banking associations, serious anxiety and
humiliation. It had, likewise, tainted his credit standing. Consequently,
the award of damages is warranted. The CA, however, reduced the
amount of damages awarded by the court a quo as it found the same to
be excessive:
We, however, find excessive the amount of damages awarded by the
RTC. In our view the reduced amount of ₱75,000.00 as moral damages
and ₱25,000.00 as exemplary damages are in order. Awards for
damages are not meant to enrich the plaintiff-appellee [the respondent]
at the expense of defendants-appellants [the petitioners], but to obviate
the moral suffering he has undergone. The award is aimed at the
restoration, within limits possible, of the status quo ante, and should be
proportionate to the suffering inflicted.5
The dispositive portion of the assailed CA decision reads:
WHEREFORE, the decision appealed from is hereby AFFIRMED,
subject to the MODIFICATION that the award of moral damages is
reduced to ₱75,000.00 and the award of exemplary damages reduced to
₱25,000.00.
SO ORDERED.6
Petitioner bank sought the reconsideration of the said decision but in
the assailed Resolution dated January 17, 2003, the appellate court
denied its motion. Hence, the recourse to this Court.
Petitioner bank maintains that, in closing the account of the respondent
in the evening of April 4, 1988, it acted in good faith and in accordance
with the rules and regulations governing the operation of a
regular demand deposit which reserves to the bank "the right to close an
account if the depositor frequently draws checks against insufficient
funds and/or uncollected deposits." The same rules and regulations also
provide that "the depositor is not entitled, as a matter of right, to
overdraw on this deposit and the bank reserves the right at any time to
return checks of the depositor which are drawn against insufficient
funds or for any reason."
It cites the numerous instances that the respondent had overdrawn his
account and those instances where he deliberately signed checks using a
signature different from the specimen on file. Based on these facts,
petitioner bank was constrained to close the respondent’s account for
improper and irregular handling and returned his Check No. 2434886
which was presented to the bank for payment on April 4, 1988.
Petitioner bank further posits that there is no law or rule which gives
the respondent a legal right to make good his check or to deposit the
corresponding amount to cover said check within 24 hours after the
same is dishonored or returned by the bank for having been drawn
against insufficient funds. It vigorously denies having violated Article
19 of the Civil Code as it insists that it acted in good faith and in
accordance with the pertinent banking rules and regulations.
The petition is impressed with merit.
A perusal of the respective decisions of the court a quo and the
appellate court show that the award of damages in the respondent’s
68
favor was anchored mainly on Article 19 of the Civil Code which,
quoted anew below, reads:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
The elements of abuse of rights are the following: (a) the existence of a
legal right or duty; (b) which is exercised in bad faith; and (c) for the
sole intent of prejudicing or injuring another.7 Malice or bad faith is at
the core of the said provision.8 The law always presumes good faith and
any person who seeks to be awarded damages due to acts of another has
the burden of proving that the latter acted in bad faith or with ill-
motive.9 Good faith refers to the state of the mind which is manifested
by the acts of the individual concerned. It consists of the intention to
abstain from taking an unconscionable and unscrupulous advantage of
another.10 Bad faith does not simply connote bad judgment or simple
negligence, dishonest purpose or some moral obliquity and conscious
doing of a wrong, a breach of known duty due to some motives or
interest or ill-will that partakes of the nature of fraud.11 Malice connotes
ill-will or spite and speaks not in response to duty. It implies an
intention to do ulterior and unjustifiable harm. Malice is bad faith or
bad motive.12
Undoubtedly, petitioner bank has the right to close the account of the
respondent based on the following provisions of its Rules and
Regulations Governing the Establishment and Operation of Regular
Demand Deposits:
10) The Bank reserves the right to close an account if the depositor
frequently draws checks against insufficient funds and/or uncollected
deposits.
… amount to a legal injury or wrong. These situations are often
12) …
However, it is clearly understood that the depositor is not entitled, as a
matter of right, to overdraw on this deposit and the bank reserves the
right at any time to return checks of the depositor which are drawn
against insufficient funds or for any other reason.
The facts, as found by the court a quo and the appellate court, do not
establish that, in the exercise of this right, petitioner bank committed an
abuse thereof. Specifically, the second and third elements for abuse of
rights are not attendant in the present case. The evidence presented by
petitioner bank negates the existence of bad faith or malice on its part in
closing the respondent’s account on April 4, 1988 because on the said
date the same was already overdrawn. The respondent issued four
checks, all due on April 4, 1988, amounting to ₱7,410.00 when the
balance of his current account deposit was only ₱6,981.43. Thus, he
incurred an overdraft of ₱428.57 which resulted in the dishonor of his
Check No. 2434886. Further, petitioner bank showed that in 1986, the
current account of the respondent was overdrawn 156 times due to his
issuance of checks against insufficient funds.13 In 1987, the said
account was overdrawn 117 times for the same
reason.14 Again, in 1988, 26 times.15 There were also several instances
when the respondent issued checks deliberately using a signature
different from his specimen signature on file with petitioner bank. 16 All
these circumstances taken together justified the petitioner bank’s
closure of the respondent’s account on April 4, 1988 for "improper
handling."
It is observed that nowhere under its rules and regulations is petitioner
bank required to notify the respondent, or any depositor for that matter,
of the closure of the account for frequently drawing checks against
insufficient funds. No malice or bad faith could be imputed on
petitioner bank for so acting since the records bear out that the
respondent had indeed been improperly and irregularly handling his
account not just a few times but hundreds of times. Under the
circumstances, petitioner bank could not be faulted for exercising its
right in accordance with the express rules and regulations governing the
current accounts of its depositors. Upon the opening of his account, the
respondent had agreed to be bound by these terms and conditions.
Neither the fact that petitioner bank accepted the deposit made by the
respondent the day following the closure of his account constitutes bad
faith or malice on the part of petitioner bank. The same could be
characterized as simple negligence by its personnel. Said act, by itself,
is not constitutive of bad faith.
The respondent had thus failed to discharge his burden of proving bad
faith on the part of petitioner bank or that it was motivated by ill-will or
spite in closing his account on April 4, 1988 and in inadvertently
accepting his deposit on April 5, 1988.
Further, it has not been shown that these acts were done by petitioner
bank with the sole intention of prejudicing and injuring the respondent.
It is conceded that the respondent may have suffered damages as a
result of the closure of his current account. However, there is a material
distinction between damages and injury. The Court had the occasion to
explain the distinction between damages and injury in this wise:
… Injury is the illegal invasion of a legal right; damage is the loss, hurt
or harm which results from the injury; and damages are the recompense
or compensation awarded for the damage suffered. Thus, there can be
damage without injury in those instances in which the loss or harm was
not the result of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person alone, the law
affords no remedy for damages resulting from an act which does not
called damnum absque injuria.
In other words, in order that a plaintiff may maintain an action for the
injuries of which he complains, he must establish that such injuries
resulted from a breach of duty which the defendant owed to the plaintiff
– a concurrence of injury to the plaintiff and legal responsibility by the
person causing it. The underlying basis for the award of tort damages is
the premise that the individual was injured in contemplation of law.
Thus, there must first be a breach of some duty and the imposition of
liability for that breach before damages may be awarded; and the
breach of such duty should be the proximate cause of the injury. 17
Whatever damages the respondent may have suffered as a
consequence, e.g., dishonor of his other insufficiently funded checks,
would have to be borne by him alone. It was the respondent’s repeated
improper
and irregular handling of his account which constrained petitioner bank
to close the same in accordance with the rules and regulations
governing its depositors’ current accounts. The respondent’s case is
clearly one of damnum absque injuria.
WHEREFORE, the petition is GRANTED. The Decision dated
August 30, 2002 and Resolution dated January 17, 2003 of the Court of
Appeals in CA-G.R. CV No. 36627 are REVERSED AND SET
ASIDE.
SO ORDERED.
69
G.R. No. 146322 December 6, 2006
ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING
SONS, INC., petitioners,
vs.
ERNESTO QUIAMCO, respondent.
DECISION
CORONA, J.:
Honeste vivere, non alterum laedere et jus suum cuique tribuere. To
live virtuously, not to injure others and to give everyone his due. These
supreme norms of justice are the underlying principles of law and order
in society. We reaffirm them in this petition for review on certiorari
assailing the July 26, 2000 decision1 and October 18, 2000 resolution of
the Court of Appeals (CA) in CA-G.R. CV No. 47571.
In 1982, respondent Ernesto C. Quiamco was approached by Juan
Davalan,2 Josefino Gabutero and Raul Generoso to amicably settle the
civil aspect of a criminal case for robbery3 filed by Quiamco against
them. They surrendered to him a red Honda XL-100 motorcycle and a
photocopy of its certificate of registration. Respondent asked for the
original certificate of registration but the three accused never came to
see him again. Meanwhile, the motorcycle was parked in an open space
inside respondent’s business establishment, Avesco-AVNE Enterprises,
where it was visible and accessible to the public.
It turned out that, in October 1981, the motorcycle had been sold on
installment basis to Gabutero by petitioner Ramas Uypitching Sons,
Inc., a family-owned corporation managed by petitioner Atty. Ernesto
Ramas Uypitching. To secure its payment, the motorcycle was
mortgaged to petitioner corporation.4
When Gabutero could no longer pay the installments, Davalan assumed
the obligation and continued the payments. In September 1982,
however, Davalan stopped paying the remaining installments and told
petitioner corporation’s collector, Wilfredo Veraño, that the motorcycle
had allegedly been "taken by respondent’s men."
Nine years later, on January 26, 1991, petitioner Uypitching,
accompanied by policemen,5 went to Avesco-AVNE Enterprises to
recover the motorcycle. The leader of the police team, P/Lt. Arturo
Vendiola, talked to the clerk in charge and asked for respondent. While
P/Lt. Vendiola and the clerk were talking, petitioner Uypitching paced
back and forth inside the establishment uttering "Quiamco is a thief of a
motorcycle."
On learning that respondent was not in Avesco-AVNE Enterprises, the
policemen left to look for respondent in his residence while petitioner
Uypitching stayed in the establishment to take photographs of the
motorcycle. Unable to find respondent, the policemen went back to
Avesco-AVNE Enterprises and, on petitioner Uypitching’s instruction
and over the clerk’s objection, took the motorcycle.
On February 18, 1991, petitioner Uypitching filed a criminal complaint
for qualified theft and/or violation of the Anti-Fencing Law6 against
respondent in the Office of the City Prosecutor of Dumaguete
City.7 Respondent moved for dismissal because the complaint did not
charge an offense as he had neither stolen nor bought the motorcycle.
The Office of the City Prosecutor dismissed the complaint8 and denied
petitioner Uypitching’s subsequent motion for reconsideration.
Respondent filed an action for damages against petitioners in the RTC
of Dumaguete City, Negros Oriental, Branch 37.9 He sought to hold the
petitioners liable for the following: (1) unlawful taking of the
motorcycle; (2) utterance of a defamatory remark (that respondent was
a thief) and (3) precipitate filing of a baseless and malicious complaint.
These acts humiliated and embarrassed the respondent and injured his
reputation and integrity.
On July 30, 1994, the trial court rendered a decision10 finding that
petitioner Uypitching was motivated with malice and ill will when he
called respondent a thief, took the motorcycle in an abusive manner and
filed a baseless complaint for qualified theft and/or violation of the
Anti-Fencing Law. Petitioners’ acts were found to be contrary to
Articles 1911 and 2012 of the Civil Code. Hence, the trial court held
petitioners liable to respondent for P500,000 moral damages, P200,000
exemplary damages and P50,000 attorney’s fees plus costs.
Petitioners appealed the RTC decision but the CA affirmed the trial
court’s decision with modification, reducing the award of moral and
exemplary damages to P300,000 and P100,000,
respectively.13 Petitioners sought reconsideration but it was denied.
Thus, this petition.
In their petition and memorandum, petitioners submit that the sole
(allegedly) issue to be resolved here is whether the filing of a complaint
for qualified theft and/or violation of the Anti-Fencing Law in the
Office of the City Prosecutor warranted the award of moral damages,
exemplary damages, attorney’s fees and costs in favor of respondent.
Petitioners’ suggestion is misleading. They were held liable for
damages not only for instituting a groundless complaint against
respondent but also for making a slanderous remark and for taking the
motorcycle from respondent’s establishment in an abusive manner.
Correctness of the Findings of the RTC and CA
As they never questioned the findings of the RTC and CA that malice
and ill will attended not only the public imputation of a crime to
respondent14 but also the taking of the motorcycle, petitioners were
deemed to have accepted the correctness of such findings. This alone
was sufficient to hold petitioners liable for damages to respondent.
Nevertheless, to address petitioners’ concern, we also find that the trial
and appellate courts correctly ruled that the filing of the complaint was
tainted with malice and bad faith. Petitioners themselves in fact
described their action as a "precipitate act."15 Petitioners were bent on
portraying respondent as a thief. In this connection, we quote with
approval the following findings of the RTC, as adopted by the CA:
x x x There was malice or ill-will [in filing the complaint before the
City Prosecutor’s Office] because Atty. Ernesto Ramas Uypitching
knew or ought to have known as he is a lawyer, that there was no
probable cause at all for filing a criminal complaint for qualified theft
and fencing activity against [respondent]. Atty. Uypitching had no
personal knowledge that [respondent] stole the motorcycle in question.
He was merely told by his bill collector ([i.e.] the bill collector of
Ramas Uypitching Sons, Inc.)[,] Wilfredo Veraño[,] that Juan Dabalan
will [no longer] pay the remaining installment(s) for the motorcycle
because the motorcycle was taken by the men of [respondent]. It must
be noted that the term used by Wilfredo Veraño in informing Atty.
Ernesto Ramas Uypitching of the refusal of Juan Dabalan to pay for the
remaining installment was [‘]taken[’], not [‘]unlawfully taken[’] or
‘stolen.’ Yet, despite the double hearsay, Atty. Ernesto Ramas
Uypitching not only executed the [complaint-affidavit] wherein he
named [respondent] as ‘the suspect’ of the stolen motorcycle but also
charged [respondent] of ‘qualified theft and fencing activity’ before the
City [Prosecutor’s] Office of Dumaguete. The absence of probable
cause necessarily signifies the presence of malice. What is deplorable in
70
all these is that Juan Dabalan, the owner of the motorcycle, did not
accuse [respondent] or the latter’s men of stealing the motorcycle[,]
much less bother[ed] to file a case for qualified theft before the
authorities. That Atty. Uypitching’s act in charging [respondent] with
qualified theft and fencing activity is tainted with malice is also shown
by his answer to the question of Cupid Gonzaga16 [during one of their
conversations] - "why should you still file a complaint? You have
already recovered the motorcycle…"[:] "Aron motagam ang kawatan
ug motor." ("To teach a lesson to the thief of motorcycle.")17
Moreover, the existence of malice, ill will or bad faith is a factual
matter. As a rule, findings of fact of the trial court, when affirmed by
the appellate court, are conclusive on this Court. We see no compelling
reason to reverse the findings of the RTC and the CA.
Petitioners Abused Their Right of Recovery as Mortgagee(s)
Petitioners claim that they should not be held liable for petitioner
corporation’s exercise of its right as seller-mortgagee to recover the
mortgaged vehicle preliminary to the enforcement of its right to
foreclose on the mortgage in case of default. They are clearly mistaken.
unfounded complaint could not in any way be considered to be in
accordance with the purpose for which the right to prosecute a crime
was established. Thus, the totality of petitioners’ actions showed a
calculated design to embarrass, humiliate and publicly ridicule
respondent. Petitioners acted in an excessively harsh fashion to the
prejudice of respondent. Contrary to law, petitioners willfully caused
damage to respondent. Hence, they should indemnify him. 22
WHEREFORE, the petition is hereby DENIED. The July 26, 2000
decision and October 18, 2000 resolution of the Court of Appeals in
CA-G.R. CV No. 47571 are AFFIRMED.
Triple costs against petitioners, considering that petitioner Ernesto
Ramas Uypitching is a lawyer and an officer of the court, for his
improper behavior.
SO ORDERED.

True, a mortgagee may take steps to recover the mortgaged property to

enable it to enforce or protect its foreclosure right thereon. There is,
however, a well-defined procedure for the recovery of possession of
mortgaged property: if a mortgagee is unable to obtain possession of a
mortgaged property for its sale on foreclosure, he must bring a civil
action either to recover such possession as a preliminary step to the
sale, or to obtain judicial foreclosure.18

Petitioner corporation failed to bring the proper civil action necessary to

acquire legal possession of the motorcycle. Instead, petitioner
Uypitching descended on respondent’s establishment with his
policemen and ordered the seizure of the motorcycle without a search
warrant or court order. Worse, in the course of the illegal seizure of the
motorcycle, petitioner Uypitching even mouthed a slanderous
statement.

No doubt, petitioner corporation, acting through its co-petitioner

Uypitching, blatantly disregarded the lawful procedure for the
enforcement of its right, to the prejudice of respondent. Petitioners’ acts
violated the law as well as public morals, and transgressed the proper
norms of human relations.

The basic principle of human relations, embodied in Article 19 of the

Civil Code, provides:

Art. 19. Every person must in the exercise of his rights and in the
performance of his duties, act with justice, give every one his due, and
observe honesty and good faith.

Article 19, also known as the "principle of abuse of right," prescribes

that a person should not use his right unjustly or contrary to honesty
and good faith, otherwise he opens himself to liability. 19 It seeks to
preclude the use of, or the tendency to use, a legal right (or duty) as a
means to unjust ends.

There is an abuse of right when it is exercised solely to prejudice or

injure another.20 The exercise of a right must be in accordance with the
purpose for which it was established and must not be excessive or
unduly harsh; there must be no intention to harm another. 21 Otherwise,
liability for damages to the injured party will attach.

In this case, the manner by which the motorcycle was taken at

petitioners’ instance was not only attended by bad faith but also
contrary to the procedure laid down by law. Considered in conjunction
with the defamatory statement, petitioners’ exercise of the right to
recover the mortgaged vehicle was utterly prejudicial and injurious to
respondent. On the other hand, the precipitate act of filing an
71
G.R. No. 160273 January 18, 2008
CEBU COUNTRY CLUB, INC., SABINO R. DAPAT, RUBEN D.
ALMENDRAS, JULIUS Z. NERI, DOUGLAS L. LUYM, CESAR
T. LIBI, RAMONTITO* E. GARCIA and JOSE B.
SALA, petitioners,
vs.
RICARDO F. ELIZAGAQUE, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the
Decision1 dated January 31, 2003 and Resolution dated October 2, 2003
of the Court of Appeals in CA-G.R. CV No. 71506.
The facts are:
Cebu Country Club, Inc. (CCCI), petitioner, is a domestic corporation
operating as a non-profit and non-stock private membership club,
having its principal place of business in Banilad, Cebu City. Petitioners
herein are members of its Board of Directors.
Sometime in 1987, San Miguel Corporation, a special company
proprietary member of CCCI, designated respondent Ricardo F.
Elizagaque, its Senior Vice President and Operations Manager for the
Visayas and Mindanao, as a special non-proprietary member. The
designation was thereafter approved by the CCCI’s Board of Directors.
In 1996, respondent filed with CCCI an application for proprietary
membership. The application was indorsed by CCCI’s two (2)
proprietary members, namely: Edmundo T. Misa and Silvano Ludo.
As the price of a proprietary share was around the P5 million range,
Benito Unchuan, then president of CCCI, offered to sell respondent a
share for only P3.5 million. Respondent, however, purchased the share
of a certain Dr. Butalid for only P3 million. Consequently, on
September 6, 1996, CCCI issued Proprietary Ownership Certificate No.
1446 to respondent.
During the meetings dated April 4, 1997 and May 30, 1997 of the CCCI
Board of Directors, action on respondent’s application for proprietary
membership was deferred. In another Board meeting held on July 30,
1997, respondent’s application was voted upon. Subsequently, or on
August 1, 1997, respondent received a letter from Julius Z. Neri,
CCCI’s corporate secretary, informing him that the Board disapproved
his application for proprietary membership.
On August 6, 1997, Edmundo T. Misa, on behalf of respondent, wrote
CCCI a letter of reconsideration. As CCCI did not answer, respondent,
on October 7, 1997, wrote another letter of reconsideration. Still, CCCI
kept silent. On November 5, 1997, respondent again sent CCCI a letter
inquiring whether any member of the Board objected to his application.
Again, CCCI did not reply.
Consequently, on December 23, 1998, respondent filed with the
Regional Trial Court (RTC), Branch 71, Pasig City a complaint for
damages against petitioners, docketed as Civil Case No. 67190.
After trial, the RTC rendered its Decision dated February 14, 2001 in
favor of respondent, thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiff:
1. Ordering defendants to pay, jointly and severally, plaintiff the
amount of P2,340,000.00 as actual or compensatory damages.
2. Ordering defendants to pay, jointly and severally, plaintiff the
amount of P5,000,000.00 as moral damages.
3. Ordering defendants to pay, jointly and severally, plaintiff the
amount of P1,000,000.00 as exemplary damages.
4. Ordering defendants to pay, jointly and severally, plaintiff the
amount of P1,000,000.00 as and by way of attorney’s fees
and P80,000.00 as litigation expenses.
5. Costs of suit.
Counterclaims are hereby DISMISSED for lack of merit.
SO ORDERED.2
On appeal by petitioners, the Court of Appeals, in its Decision dated
January 31, 2003, affirmed the trial court’s Decision with modification,
thus:
WHEREFORE, premises considered, the assailed Decision dated
February 14, 2001 of the Regional Trial Court, Branch 71, Pasig City in
Civil Case No. 67190 is hereby AFFIRMED with MODIFICATION as
follows:
1. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the amount of P2,000,000.00 as moral damages;
2. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the amount of P1,000,000.00 as exemplary damages;
3. Ordering defendants-appellants to pay, jointly and severally,
plaintiff-appellee the mount of P500,000.00 as attorney’s fees
and P50,000.00 as litigation expenses; and
4. Costs of the suit.
The counterclaims are DISMISSED for lack of merit.
SO ORDERED.3
On March 3, 2003, petitioners filed a motion for reconsideration and
motion for leave to set the motion for oral arguments. In its
Resolution4 dated October 2, 2003, the appellate court denied the
motions for lack of merit.
Hence, the present petition.
The issue for our resolution is whether in disapproving respondent’s
application for proprietary membership with CCCI, petitioners are
liable to respondent for damages, and if so, whether their liability is
joint and several.
Petitioners contend, inter alia, that the Court of Appeals erred in
awarding exorbitant damages to respondent despite the lack of evidence
that they acted in bad faith in disapproving the latter’s application; and
in disregarding their defense of damnum absque injuria.
For his part, respondent maintains that the petition lacks merit, hence,
should be denied.
CCCI’s Articles of Incorporation provide in part:
SEVENTH: That this is a non-stock corporation and membership
therein as well as the right of participation in its assets shall be limited
to qualified persons who are duly accredited owners of Proprietary
Ownership Certificates issued by the corporation in accordance with its
By-Laws.
Corollary, Section 3, Article 1 of CCCI’s Amended By-Laws provides:
72
SECTION 3. HOW MEMBERS ARE ELECTED – The procedure for
the admission of new members of the Club shall be as follows:
(a) Any proprietary member, seconded by another voting proprietary
member, shall submit to the Secretary a written proposal for the
admission of a candidate to the "Eligible-for-Membership List";
(b) Such proposal shall be posted by the Secretary for a period of thirty
(30) days on the Club bulletin board during which time any member
may interpose objections to the admission of the applicant by
communicating the same to the Board of Directors;
(c) After the expiration of the aforesaid thirty (30) days, if no objections
have been filed or if there are, the Board considers the objections
unmeritorious, the candidate shall be qualified for inclusion in the
"Eligible-for-Membership List";
(d) Once included in the "Eligible-for-Membership List" and after the
candidate shall have acquired in his name a valid POC duly recorded in
the books of the corporation as his own, he shall become a Proprietary
Member, upon a non-refundable admission fee of P1,000.00, provided
that admission fees will only be collected once from any person.
On March 1, 1978, Section 3(c) was amended to read as follows:
(c) After the expiration of the aforesaid thirty (30) days, the Board may,
by unanimous vote of all directors present at a regular or special
meeting, approve the inclusion of the candidate in the "Eligible-for-
Membership List".
As shown by the records, the Board adopted a secret balloting known as
the "black ball system" of voting wherein each member will drop a ball
in the ballot box. A white ball represents conformity to the admission of
an applicant, while a black ball means disapproval. Pursuant to Section
3(c), as amended, cited above, a unanimous vote of the directors is
required. When respondent’s application for proprietary membership
was voted upon during the Board meeting on July 30, 1997, the ballot
box contained one (1) black ball. Thus, for lack of unanimity, his
application was disapproved.
Obviously, the CCCI Board of Directors, under its Articles of
Incorporation, has the right to approve or disapprove an application for
proprietary membership. But such right should not be exercised
arbitrarily. Articles 19 and 21 of the Civil Code on the Chapter on
Human Relations provide restrictions, thus:
Article 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Article 21. Any person who willfully causes loss or injury to another in
a manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
In GF Equity, Inc. v. Valenzona,5 we expounded Article 19 and
correlated it with Article 21, thus:
This article, known to contain what is commonly referred to as the
principle of abuse of rights, sets certain standards which must be
observed not only in the exercise of one's rights but also in the
performance of one's duties. These standards are the following: to act
with justice; to give everyone his due; and to observe honesty and good
faith. The law, therefore, recognizes a primordial limitation on all
rights; that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless become the
source of some illegality. When a right is exercised in a manner
which does not conform with the norms enshrined in Article 19 and
results in damage to another, a legal wrong is thereby committed
for which the wrongdoer must be held responsible. But while Article
19 lays down a rule of conduct for the government of human relations
and for the maintenance of social order, it does not provide a remedy
for its violation. Generally, an action for damages under either Article
20 or Article 21 would be proper. (Emphasis in the original)
In rejecting respondent’s application for proprietary membership, we
find that petitioners violated the rules governing human relations, the
basic principles to be observed for the rightful relationship between
human beings and for the stability of social order. The trial court and
the Court of Appeals aptly held that petitioners committed fraud and
evident bad faith in disapproving respondent’s applications. This is
contrary to morals, good custom or public policy. Hence, petitioners are
liable for damages pursuant to Article 19 in relation to Article 21 of the
same Code.
It bears stressing that the amendment to Section 3(c) of CCCI’s
Amended By-Laws requiring the unanimous vote of the directors
present at a special or regular meeting was not printed on the
application form respondent filled and submitted to CCCI. What was
printed thereon was the original provision of Section 3(c) which was
silent on the required number of votes needed for admission of an
applicant as a proprietary member.
Petitioners explained that the amendment was not printed on the
application form due to economic reasons. We find this excuse flimsy
and unconvincing. Such amendment, aside from being extremely
significant, was introduced way back in 1978 or almost twenty (20)
years before respondent filed his application. We cannot fathom why
such a prestigious and exclusive golf country club, like the CCCI,
whose members are all affluent, did not have enough money to cause
the printing of an updated application form.
It is thus clear that respondent was left groping in the dark wondering
why his application was disapproved. He was not even informed that a
unanimous vote of the Board members was required. When he sent a
letter for reconsideration and an inquiry whether there was an objection
to his application, petitioners apparently ignored him. Certainly,
respondent did not deserve this kind of treatment. Having been
designated by San Miguel Corporation as a special non-proprietary
member of CCCI, he should have been treated by petitioners with
courtesy and civility. At the very least, they should have informed him
why his application was disapproved.
The exercise of a right, though legal by itself, must nonetheless be in
accordance with the proper norm. When the right is exercised
arbitrarily, unjustly or excessively and results in damage to another, a
legal wrong is committed for which the wrongdoer must be held
responsible.6 It bears reiterating that the trial court and the Court of
Appeals held that petitioners’ disapproval of respondent’s application is
characterized by bad faith.
As to petitioners’ reliance on the principle of damnum absque injuria or
damage without injury, suffice it to state that the same is misplaced.
In Amonoy v. Gutierrez,7 we held that this principle does not apply
when there is an abuse of a person’s right, as in this case.
As to the appellate court’s award to respondent of moral damages, we
find the same in order. Under Article 2219 of the New Civil Code,
moral damages may be recovered, among others, in acts and actions
referred to in Article 21. We believe respondent’s testimony that he
suffered mental anguish, social humiliation and wounded feelings as a
result of the arbitrary denial of his application. However, the amount
of P2,000,000.00 is excessive. While there is no hard-and-fast rule in
determining what would be a fair and reasonable amount of moral
damages, the same should not be palpably and scandalously excessive.
Moral damages are not intended to impose a penalty to the wrongdoer,
73
neither to enrich the claimant at the expense of the defendant. 8 Taking
into consideration the attending circumstances here, we hold that an
award to respondent of P50,000.00, instead of P2,000,000.00, as moral
damages is reasonable.

Anent the award of exemplary damages, Article 2229 allows it by way

of example or correction for the public good. Nonetheless, since
exemplary damages are imposed not to enrich one party or impoverish
another but to serve as a deterrent against or as a negative incentive to
curb socially deleterious actions,9 we reduce the amount
from P1,000,000.00 to P25,000.00 only.

On the matter of attorney’s fees and litigation expenses, Article 2208 of

the same Code provides, among others, that attorney’s fees and
expenses of litigation may be recovered in cases when exemplary
damages are awarded and where the court deems it just and equitable
that attorney’s fees and expenses of litigation should be recovered, as in
this case. In any event, however, such award must be reasonable, just
and equitable. Thus, we reduce the amount of attorney’s fees
(P500,000.00) and litigation expenses (P50,000.00) to P50,000.00
and P25,000.00, respectively.

Lastly, petitioners’ argument that they could not be held jointly and
severally liable for damages because only one (1) voted for the
disapproval of respondent’s application lacks merit.

Section 31 of the Corporation Code provides:

SEC. 31. Liability of directors, trustees or officers. — Directors or

trustees who willfully and knowingly vote for or assent to patently
unlawful acts of the corporation or who are guilty of gross negligence
or bad faith in directing the affairs of the corporation or acquire any
personal or pecuniary interest in conflict with their duty as such
directors, or trustees shall be liable jointly and severally for all
damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons. (Emphasis ours)

WHEREFORE, we DENY the petition. The challenged Decision and

Resolution of the Court of Appeals in CA-G.R. CV No. 71506
are AFFIRMED with modification in the sense that (a) the award of
moral damages is reduced from P2,000,000.00 to P50,000.00; (b) the
award of exemplary damages is reduced from P1,000,000.00
to P25,000.00; and (c) the award of attorney’s fees and litigation
expenses is reduced from P500,000.00 and P50,000.00 to P50,000.00
and P25,000.00, respectively.

Costs against petitioners.

SO ORDERED.

74
G.R. No. 165443 April 16, 2009
CALATAGAN GOLF CLUB, INC. Petitioner,
vs.
SIXTO CLEMENTE, JR., Respondent.
DECISION
TINGA, J.:
Seeking the reversal of the Decision1 dated 1 June 2004 of the Court of
Appeals in CA-G.R. SP No. 62331 and the reinstatement of the
Decision dated 15 November 2000 of the Securities and Exchange
Commission (SEC) in SEC Case No. 04-98-5954, petitioner Calatagan
Golf Club, Inc. (Calatagan) filed this Rule 45 petition against
respondent Sixto Clemente, Jr. (Clemente).
The key facts are undisputed.
Clemente applied to purchase one share of stock of Calatagan,
indicating in his application for membership his mailing address at
"Phimco Industries, Inc. – P.O. Box 240, MCC," complete residential
address, office and residence telephone numbers, as well as the
company (Phimco) with which he was connected, Calatagan issued to
him Certificate of Stock No. A-01295 on 2 May 1990 after paying
₱120,000.00 for the share.2
Calatagan charges monthly dues on its members to meet expenses for
general operations, as well as costs for upkeep and improvement of the
grounds and facilities. The provision on monthly dues is incorporated in
Calatagan’s Articles of Incorporation and By-Laws. It is also
reproduced at the back of each certificate of stock.3 As reproduced in
the dorsal side of Certificate of Stock No. A-01295, the provision reads:
5. The owners of shares of stock shall be subject to the payment of
monthly dues in an amount as may be prescribed in the by-laws or by
the Board of Directors which shall in no case be less that [sic] ₱50.00 to
meet the expenses for the general operations of the club, and the
maintenance and improvement of its premises and facilities, in addition
to such fees as may be charged for the actual use of the facilities x x x
When Clemente became a member the monthly charge stood at
₱400.00. He paid ₱3,000.00 for his monthly dues on 21 March 1991
and another ₱5,400.00 on 9 December 1991. Then he ceased paying the
dues. At that point, his balance amounted to ₱400.00.4
Ten (10) months later, Calatagan made the initial step to collect
Clemente’s back accounts by sending a demand letter dated 21
September 1992. It was followed by a second letter dated 22 October
1992. Both letters were sent to Clemente’s mailing address as indicated
in his membership application but were sent back to sender with the
postal note that the address had been closed.5
Calatagan declared Clemente delinquent for having failed to pay his
monthly dues for more than sixty (60) days, specifically ₱5,600.00 as
of 31 October 1992. Calatagan also included Clemente’s name in the
list of delinquent members posted on the club’s bulletin board. On 1
December 1992, Calatagan’s board of directors adopted a resolution
authorizing the foreclosure of shares of delinquent members, including
Clemente’s; and the public auction of these shares.
On 7 December 1992, Calatagan sent a third and final letter to
Clemente, this time signed by its Corporate Secretary, Atty. Benjamin
Tanedo, Jr. The letter contains a warning that unless Clemente settles
his outstanding dues, his share would be included among the delinquent
shares to be sold at public auction on 15 January 1993. Again, this letter
was sent to Clemente’s mailing address that had already been closed. 6
On 5 January 1993, a notice of auction sale was posted on the Club’s
bulletin board, as well as on the club’s premises. The auction sale took
place as scheduled on 15 January 1993, and Clemente’s share sold for
₱64,000.7According to the Certificate of Sale issued by Calatagan after
the sale, Clemente’s share was purchased by a Nestor A. Virata.8 At the
time of the sale, Clemente’s accrued monthly dues amounted to
₱5,200.00.9 A notice of foreclosure of Clemente’s share was published
in the 26 May 1993 issue of the Business World. 10
Clemente learned of the sale of his share only in November of
1997.11 He filed a claim with the Securities and Exchange Commission
(SEC) seeking the restoration of his shareholding in Calatagan with
damages.
On 15 November 2000, the SEC rendered a decision dismissing
Clemente’s complaint. Citing Section 69 of the Corporation Code
which provides that the sale of shares at an auction sale can only be
questioned within six (6) months from the date of sale, the SEC
concluded that Clemente’s claim, filed four (4) years after the sale, had
already prescribed. The SEC further held that Calatagan had complied
with all the requirements for a valid sale of the subject share, Clemente
having failed to inform Calatagan that the address he had earlier
supplied was no longer his address. Clemente, the SEC ruled, had acted
in bad faith in assuming as he claimed that his non-payment of monthly
dues would merely render his share "inactive."
Clemente filed a petition for review with the Court of Appeals. On 1
June 2004, the Court of Appeals promulgated a decision reversing the
SEC. The appellate court restored Clemente’s one share with a directive
to Calatagan to issue in his a new share, and awarded to Clemente a
total of ₱400,000.00 in damages, less the unpaid monthly dues of
₱5,200.00.
In rejecting the SEC’s finding that the action had prescribed, the Court
of Appeals cited the SEC’s own ruling in SEC Case No. 4160, Caram
v. Valley Golf Country Club, Inc., that Section 69 of the Corporation
Code specifically refers to unpaid subscriptions to capital stock, and not
to any other debt of stockholders. With the insinuation that Section 69
does not apply to unpaid membership dues in non-stock corporations,
the appellate court employed Article 1140 of the Civil Code as the
proper rule of prescription. The provision sets the prescription period of
actions to recover movables at eight (8) years.
The Court of Appeals also pointed out that since that Calatagan’s first
two demand letters had been returned to it as sender with the notation
about the closure of the mailing address, it very well knew that its third
and final demand letter also sent to the same mailing address would not
be received by Clemente. It noted the by-law requirement that within
ten (10) days after the Board has ordered the sale at auction of a
member’s share of stock for indebtedness, the Corporate Secretary shall
notify the owner thereof and advise the Membership Committee of such
fact. Finally, the Court of Appeals ratiocinated that "a person who is in
danger of the imminent loss of his property has the right to be notified
and be given the chance to prevent the loss."12
Hence, the present appeal.
Calatagan maintains that the action of Clemente had prescribed
pursuant to Section 69 of the Corporation Code, and that the requisite
notices under both the law and the by-laws had been rendered to
Clemente.
Section 69 of the Code provides that an action to recover delinquent
stock sold must be commenced by the filing of a complaint within six
(6) months from the date of sale. As correctly pointed out by the Court
of Appeals, Section 69 is part of Title VIII of the Code entitled "Stocks
and Stockholders" and refers specifically to unpaid subscriptions to
75
capital stock, the sale of which is governed by the immediately
preceding Section 68.
The Court of Appeals debunked both Calatagan’s and the SEC’s
reliance on Section 69 by citing another SEC ruling in the case of
Caram v. Valley Golf. In connection with Section 69, Calatagan raises a
peripheral point made in the SEC’s Caram ruling. In Caram, the SEC,
using as take-off Section 6 of the Corporation Code which refers to
"such rights, privileges or restrictions as may be stated in the articles of
incorporation," pointed out that the Articles of Incorporation of Valley
Golf does not "impose any lien, liability or restriction on the Golf Share
[of Caram]," but only its (Valley Golf’s) By-Laws does. Here,
Calatagan stresses that its own Articles of Incorporation does provide
that the monthly dues assessed on owners of shares of the corporation,
along with all other obligations of the shareholders to the club, "shall
constitute a first lien on the shares… and in the event of delinquency
such shares may be ordered sold by the Board of Directors in the
manner provided in the By-Laws to satisfy said dues or other
obligations of the shareholders."13 With its illative but
incomprehensible logic, Calatagan concludes that the prescriptive
period under Section 69 should also apply to the sale of Clemente’s
share as the lien that Calatagan perceives to be a restriction is stated in
the articles of incorporation and not only in the by-laws.
We remain unconvinced.
There are fundamental differences that defy equivalence or even
analogy between the sale of delinquent stock under Section 68 and the
sale that occurred in this case. At the root of the sale of delinquent stock
is the non-payment of the subscription price for the share of stock itself.
The stockholder or subscriber has yet to fully pay for the value of the
share or shares subscribed. In this case, Clemente had already fully paid
for the share in Calatagan and no longer had any outstanding obligation
to deprive him of full title to his share. Perhaps the analogy could have
been made if Clemente had not yet fully paid for his share and the non-
stock corporation, pursuant to an article or by-law provision designed to
address that situation, decided to sell such share as a consequence. But
that is not the case here, and there is no purpose for us to apply Section
69 to the case at bar.
Calatagan argues in the alternative that Clemente’s suit is barred by
Article 1146 of the Civil Code which establishes four (4) years as the
prescriptive period for actions based upon injury to the rights of the
plaintiff on the hypothesis that the suit is purely for damages. As a
second alternative still, Calatagan posits that Clemente’s action is
governed by Article 1149 of the Civil Code which sets five (5) years as
the period of prescription for all other actions whose prescriptive
periods are not fixed in the Civil Code or in any other law. Neither
article is applicable but Article 1140 of the Civil Code which provides
that an action to recover movables shall prescribe in eight (8) years.
Calatagan’s action is for the recovery of a share of stock, plus damages.
Calatagan’s advertence to the fact that the constitution of a lien on the
member’s share by virtue of the explicit provisions in its Articles of
Incorporation and By-Laws is relevant but ultimately of no help to its
cause. Calatagan’s Articles of Incorporation states that the "dues,
together with all other obligations of members to the club, shall
constitute a first lien on the shares, second only to any lien in favor of
the national or local government, and in the event of delinquency such
shares may be ordered sold by the Board of Directors in the manner
provided in the By-Laws to satisfy said dues or other obligations of the
stockholders."14 In turn, there are several provisions in the By-laws that
govern the payment of dues, the lapse into delinquency of the member,
and the constitution and execution on the lien. We quote these
provisions:
ARTICLE XII – MEMBER’S ACCOUNT
SEC. 31. (a) Billing Members, Posting of Delinquent Members – The
Treasurer shall bill al members monthly. As soon as possible after the
end of every month, a statement showing the account of bill of a
member for said month will be prepared and sent to him. If the bill of
any member remains unpaid by the 20th of the month following that in
which the bill was incurred, the Treasurer shall notify him that if his bill
is not paid in full by the end of the succeeding month his name will be
posted as delinquent the following day at the Clubhouse bulletin board.
While posted, a member, the immediate members of his family, and his
guests, may not avail of the facilities of the Club.
(b) Members on the delinquent list for more than 60 days shall be
reported to the Board and their shares or the shares of the juridical
entities they represent shall thereafter be ordered sold by the Board at
auction to satisfy the claims of the Club as provided for in Section 32
hereon. A member may pay his overdue account at any time before the
auction sale.
Sec. 32. Lien on Shares; Sale of Share at Auction- The club shall have a
first lien on every share of stock to secure debts of the members to the
Club. This lien shall be annotated on the certificates of stock and may
be enforced by the Club in the following manner:
(a) Within ten (10) days after the Board has ordered the sale at auction
of a member’s share of stock for indebtedness under Section 31(b)
hereof, the Secretary shall notify the owner thereof, and shall advise the
Membership Committee of such fact.
(b) The Membership Committee shall then notify all applicants on the
Waiting List and all registered stockholders of the availability of a
share of stock for sale at auction at a specified date, time and place, and
shall post a notice to that effect in the Club bulletin board for at least
ten (10) days prior to the auction sale.
(c) On the date and hour fixed, the Membership Committee shall
proceed with the auction by viva voce bidding and award the sale of the
share of stock to the highest bidder.
(d) The purchase price shall be paid by the winning bidder to the Club
within twenty-four (24) hours after the bidding. The winning bidder or
the representative in the case of a juridical entity shall become a
Regular Member upon payment of the purchase price and issuance of a
new stock certificate in his name or in the name of the juridical entity
he represents. The proceeds of the sale shall be paid by the Club to the
selling stockholder after deducting his obligations to the Club.
(e) If no bids be received or if the winning bidder fails to pay the
amount of this bid within twenty-four (24) hours after the bidding, the
auction procedures may be repeated from time to time at the discretion
of the Membership Committee until the share of stock be sold.
(f) If the proceeds from the sale of the share of stock are not sufficient
to pay in full the indebtedness of the member, the member shall
continue to be obligated to the Club for the unpaid balance. If the
member whose share of stock is sold fails or refuse to surrender the
stock certificate for cancellation, cancellation shall be effected in the
books of the Club based on a record of the proceedings. Such
cancellation shall render the unsurrendered stock certificate null and
void and notice to this effect shall be duly published.
It is plain that Calatagan had endeavored to install a clear and
comprehensive procedure to govern the payment of monthly dues, the
declaration of a member as delinquent, and the constitution of a lien on
the shares and its eventual public sale to answer for the member’s
debts. Under Section 91 of the Corporation Code, membership in a non-
stock corporation "shall be terminated in the manner and for the causes
provided in the articles of incorporation or the by-laws." The By-law
provisions are elaborate in explaining the manner and the causes for the
76
termination of membership in Calatagan, through the execution on the
lien of the share. The Court is satisfied that the By-Laws, as written,
affords due protection to the member by assuring that the member
should be notified by the Secretary of the looming execution sale that
would terminate membership in the club. In addition, the By-Laws
guarantees that after the execution sale, the proceeds of the sale would
be returned to the former member after deducting the outstanding
obligations. If followed to the letter, the termination of membership
under this procedure outlined in the By-Laws would accord with
substantial justice.
Yet, did Calatagan actually comply with the by-law provisions when it
sold Clemente’s share? The appellate court’s finding on this point
warrants our approving citation, thus:
In accordance with this provision, Calatagan sent the third and final
demand letter to Clemente on December 7, 1992. The letter states that if
the amount of delinquency is not paid, the share will be included among
the delinquent shares to be sold at public auction. This letter was signed
by Atty. Benjamin Tanedo, Jr., Calatagan Golf’s Corporate
Secretary. It was again sent to Clemente’s mailing address – Phimco
Industries Inc., P.O. Box 240, MCC Makati. As expected, it was
returned because the post office box had been closed.
Under the By-Laws, the Corporate Secretary is tasked to "give or cause
to be given, all notices required by law or by these By-Laws. .. and …
keep a record of the addresses of all stockholders. As quoted above,
Sec. 32 (a) of the By-Laws further provides that "within ten (10) days
after the Board has ordered the sale at auction of a member’s share of
stock for indebtedness under Section 31 (b) hereof, the Secretary shall
notify the owner thereof and shall advise the Membership Committee of
such fact.," The records do not disclose what report the Corporate
Secretary transmitted to the Membership Committee to comply with
Section 32(a). Obviously, the reason for this mandatory requirement is
to give the Membership Committee the opportunity to find out, before
the share is sold, if proper notice has been made to the shareholder
member.
We presume that the Corporate Secretary, as a lawyer is knowledgeable
on the law and on the standards of good faith and fairness that the law
requires. As custodian of corporate records, he should also have known
that the first two letters sent to Clemente were returned because the
P.O. Box had been closed. Thus, we are surprised – given his
knowledge of the law and of corporate records – that he would send the
third and final letter – Clemente’s last chance before his share is sold
and his membership lost – to the same P.O. Box that had been closed.
Calatagan argues that it "exercised due diligence before the foreclosure
sale" and "sent several notices to Clemente’s specified mailing
address." We do not agree; we cannot label as due diligence
Calatagan’s act of sending the December 7, 1992 letter to Clemente’s
mailing address knowing fully well that the P.O. Box had been closed.
Due diligence or good faith imposes upon the Corporate Secretary – the
chief repository of all corporate records – the obligation to check
Clemente’s other address which, under the By-Laws, have to be kept on
file and are in fact on file. One obvious purpose of giving the Corporate
Secretary the duty to keep the addresses of members on file is
specifically for matters of this kind, when the member cannot be
reached through his or her mailing address. Significantly, the Corporate
Secretary does not have to do the actual verification of other addressees
on record; a mere clerk can do the very simple task of checking the files
as in fact clerks actually undertake these tasks. In fact, one telephone
call to Clemente’s phone numbers on file would have alerted him of his
impending loss.
Ultimately, the petition must fail because Calatagan had failed to duly
observe both the spirit and letter of its own by-laws. The by-law
provisions was clearly conceived to afford due notice to the delinquent
member of the impending sale, and not just to provide an intricate
façade that would facilitate Calatagan’s sale of the share. But then, the
bad faith on Calatagan’s part is palpable. As found by the Court of
Appeals, Calatagan very well knew that Clemente’s postal box to which
it sent its previous letters had already been closed, yet it persisted in
sending that final letter to the same postal box. What for? Just for the
exercise, it appears, as it had known very well that the letter would
never actually reach Clemente.1avvphi1
It is noteworthy that Clemente in his membership application had
provided his residential address along with his residence and office
telephone numbers. Nothing in Section 32 of Calatagan’s By-Laws
requires that the final notice prior to the sale be made solely through the
member’s mailing address. Clemente cites our aphorism-like
pronouncement in Rizal Commercial Banking Corporation v. Court of
Appeals15 that "[a] simple telephone call and an ounce of good faith x x
x could have prevented this present controversy." That memorable
observation is quite apt in this case.
Calatagan’s bad faith and failure to observe its own By-Laws had
resulted not merely in the loss of Clemente’s privilege to play golf at its
golf course and avail of its amenities, but also in significant pecuniary
damage to him. For that loss, the only blame that could be thrown
Clemente’s way was his failure to notify Calatagan of the closure of the
P.O. Box. That lapse, if we uphold Calatagan would cost Clemente a
lot. But, in the first place, does he deserve answerability for failing to
notify the club of the closure of the postal box? Indeed, knowing as he
did that Calatagan was in possession of his home address as well as
residence and office telephone numbers, he had every reason to assume
that the club would not be at a loss should it need to contact him. In
addition, according to Clemente, he was not even aware of the closure
of the postal box, the maintenance of which was not his responsibility
but his employer Phimco’s.
The utter bad faith exhibited by Calatagan brings into operation Articles
19, 20 and 21 of the Civil Code,16 under the Chapter on Human
Relations. These provisions, which the Court of Appeals did apply,
enunciate a general obligation under law for every person to act fairly
and in good faith towards one another. A non-stock corporation like
Calatagan is not exempt from that obligation in its treatment of its
members. The obligation of a corporation to treat every person honestly
and in good faith extends even to its shareholders or members, even if
the latter find themselves contractually bound to perform certain
obligations to the corporation. A certificate of stock cannot be a charter
of dehumanization.
We turn to the matter of damages. The award of actual damages is of
course warranted since Clemente has sustained pecuniary injury by
reason of Calatagan’s wrongful violation of its own By-Laws. It would
not be feasible to deliver Clemente’s original Certificate of Stock
because it had already been cancelled and a new one issued in its place
in the name of the purchases at the auction who was not impleaded in
this case. However, the Court of Appeals instead directed that
Calatagan to issue to Clemente a new certificate of stock. That
sufficiently redresses the actual damages sustained by Clemente. After
all, the certificate of stock is simply the evidence of the share.
The Court of Appeals also awarded Clemente ₱200,000.00 as moral
damages, ₱100,000.00 as exemplary damages, and ₱100,000.00 as
attorney’s fees. We agree that the award of such damages is warranted.
The Court of Appeals cited Calatagan for violation of Article 32 of the
Civil Code, which allows recovery of damages from any private
individual "who directly or indirectly obstructs, defeats, violates or in
any manner impedes or impairs" the right "against deprivation of
property without due process of laws." The plain letter of the provision
77
squarely entitles Clemente to damages from Calatagan. Even without
Article 32 itself, Calatagan will still be bound to pay moral and
exemplary damages to Clemente. The latter was able to duly prove that
he had sustained mental anguish, serious anxiety and wounded feelings
by reason of Calatagan’s acts, thereby entitling him to moral damages
under Article 2217 of the Civil Code. Moreover, it is evident that
Calatagan’s bad faith as exhibited in the

course of its corporate actions warrants correction for the public good,
thereby justifying exemplary damages under Article 2229 of the Civil
Code.

WHEREFORE, the petition is DENIED. The Decision of the Court of

Appeals is AFFIRMED. Costs against petitioner.

SO ORDERED.

78

G.R. No. 161921 July 17, 2013
JOYCE V. ARDIENTE, PETITIONER,
vs.
SPOUSES JAVIER AND MA. THERESA PASTORFIDE,
CAGAYAN DE ORO WATER DISTRICT AND GASPAR
GONZALEZ,* JR., RESPONDENTS.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of
the Rules of Court seeking to reverse and set aside the Decision 1 and
Resolution2 of the Court of Appeals (CA), dated August 28, 2003 and
December 17, 2003, respectively, in CA-G.R. CV No. 73000. The CA
Decision affirmed with modification the August 15, 2001 Decision 3of
the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 24,
while the CA Resolution denied petitioner's Motion for
Reconsideration.
The facts, as summarized by the CA, are as follows:
[Herein petitioner] Joyce V. Ardiente and her husband Dr. Roberto S.
Ardiente are owners of a housing unit at Emily Homes, Balulang,
Cagayan de Oro City with a lot area of one hundred fifty-three (153)
square meters and covered by Transfer Certificate of Title No. 69905.
On June 2, 1994, Joyce Ardiente entered into a Memorandum of
Agreement (Exh. "B", pp. 470-473, Records) selling, transferring and
conveying in favor of [respondent] Ma. Theresa Pastorfide all their
rights and interests in the housing unit at Emily Homes in consideration
of ₱70,000.00. The Memorandum of Agreement carries a stipulation:
"4. That the water and power bill of the subject property shall be for the
account of the Second Party (Ma. Theresa Pastorfide) effective June 1,
1994." (Records, p. 47)
vis-a-vis Ma. Theresa Pastorfide's assumption of the payment of the
mortgage loan secured by Joyce Ardiente from the National Home
Mortgage (Records, Exh. "A", pp. 468-469)
For four (4) years, Ma. Theresa's use of the water connection in the
name of Joyce Ardiente was never questioned nor perturbed (T.S.N.,
October 31, 2000, pp. 7-8) until on March 12, 1999, without notice, the
water connection of Ma. Theresa was cut off. Proceeding to the office
of the Cagayan de Oro Water District (COWD) to complain, a certain
Mrs. Madjos told Ma. Theresa that she was delinquent for three (3)
months corresponding to the months of December 1998, January 1999,
and February 1999. Ma. Theresa argued that the due date of her
payment was March 18, 1999 yet (T.S.N., October 31, 2000, pp. 11-
12). Mrs. Madjos later told her that it was at the instance of Joyce
Ardiente that the water line was cut off (T.S.N., February 5, 2001, p.
31).
On March 15, 1999, Ma. Theresa paid the delinquent bills (T.S.N.,
October 31, 2000, p. 12). On the same date, through her lawyer, Ma.
Theresa wrote a letter to the COWD to explain who authorized the
cutting of the water line (Records, p. 160).
On March 18, 1999, COWD, through the general manager,
[respondent] Gaspar Gonzalez, Jr., answered the letter dated March 15,
1999 and reiterated that it was at the instance of Joyce Ardiente that the
water line was cut off (Records, p. 161).
Aggrieved, on April 14, 1999, Ma. Theresa Pastorfide [and her
husband] filed [a] complaint for damages [against petitioner, COWD
and its manager Gaspar Gonzalez] (Records, pp. 2-6).
In the meantime, Ma. Theresa Pastorfide's water line was only restored
and reconnected when the [trial] court issued a writ of preliminary
mandatory injunction on December 14, 1999 (Records, p. 237).4
After trial, the RTC rendered judgment holding as follows:
xxxx
In the exercise of their rights and performance of their duties,
defendants did not act with justice, gave plaintiffs their due and observe
honesty and good faith. Before disconnecting the water supply,
defendants COWD and Engr. Gaspar Gonzales did not even send a
disconnection notice to plaintiffs as testified to by Engr. Bienvenido
Batar, in-charge of the Commercial Department of defendant COWD.
There was one though, but only three (3) days after the actual
disconnection on March 12, 1999. The due date for payment was yet on
March 15. Clearly, they did not act with justice. Neither did they
observe honesty.
They should not have been swayed by the prodding of Joyce V.
Ardiente. They should have investigated first as to the present
ownership of the house. For doing the act because Ardiente told them,
they were negligent. Defendant Joyce Ardiente should have requested
before the cutting off of the water supply, plaintiffs to pay. While she
attempted to tell plaintiffs but she did not have the patience of seeing
them. She knew that it was plaintiffs who had been using the water four
(4) years ago and not hers. She should have been very careful. x x x5
The dispositive portion of the trial court's Decision reads, thus:
WHEREFORE, premises considered, judgment is hereby rendered
ordering defendants [Ardiente, COWD and Gonzalez] to pay jointly
and severally plaintiffs, the following sums:
(a) ₱200,000.00 for moral damages;
(b) 200,000.00 for exemplary damages; and
(c) 50,000.00 for attorney's fee.
The cross-claim of Cagayan de Oro Water District and Engr. Gaspar
Gonzales is hereby dismissed. The Court is not swayed that the cutting
off of the water supply of plaintiffs was because they were influenced
by defendant Joyce Ardiente. They were negligent too for which they
should be liable.
SO ORDERED.6
Petitioner, COWD and Gonzalez filed an appeal with the CA.
On August 28, 2003, the CA promulgated its assailed Decision
disposing as follows:
IN VIEW OF ALL THE FOREGOING, the appealed decision is
AFFIRMED, with the modification that the awarded damages is
reduced to ₱100,000.00 each for moral and exemplary damages, while
attorney's fees is lowered to ₱25,000.00. Costs against appellants.
SO ORDERED.7
The CA ruled, with respect to petitioner, that she has a "legal duty to
honor the possession and use of water line by Ma. Theresa Pastorfide
pursuant to their Memorandum of Agreement" and "that when
[petitioner] applied for its disconnection, she acted in bad faith causing
prejudice and [injury to] Ma. Theresa Pastorfide."8
79
As to COWD and Gonzalez, the CA held that they "failed to give a
notice of disconnection and derelicted in reconnecting the water line
despite payment of the unpaid bills by the [respondent spouses
Pastorfide]."9
Petitioner, COWD and Gonzalez filed their respective Motions for
Reconsideration, but these were denied by the CA in its Resolution
dated December 17, 2003.
COWD and Gonzalez filed a petition for review on certiorari with this
Court, which was docketed as G.R. No. 161802. However, based on
technical grounds and on the finding that the CA did not commit any
reversible error in its assailed Decision, the petition was denied via a
Resolution10 issued by this Court on March 24, 2004. COWD and
Gonzalez filed a motion for reconsideration, but the same was denied
with finality through this Court's Resolution11 dated June 28, 2004.
Petitioner, on the other hand, timely filed the instant petition with the
following Assignment of Errors:
7.1 HONORABLE COURT OF APPEALS (ALTHOUGH IT HAS
REDUCED THE LIABILITY INTO HALF) HAS STILL
COMMITTED GRAVE AND SERIOUS ERROR WHEN IT UPHELD
THE JOINT AND SOLIDARY LIABILITY OF PETITIONER JOYCE
V. ARDIENTE WITH CAGAYAN DE ORO WATER DISTRICT
(COWD) AND ENGR. GASPAR D. GONZALES FOR THE
LATTER'S FAILURE TO SERVE NOTICE UPON RESPONDENTS
SPOUSES PASTORFIDE PRIOR TO THE ACTUAL
DISCONNECTION DESPITE EVIDENCE ADDUCED DURING
TRIAL THAT EVEN WITHOUT PETITIONER'S REQUEST, COWD
WAS ALREADY SET TO EFFECT DISCONNECTION OF
RESPONDENTS' WATER SUPPLY DUE TO NON-PAYMENT OF
ACCOUNT FOR THREE (3) MONTHS.
7.2 THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE AND SERIOUS ERROR WHEN IT RULED TOTALLY
AGAINST PETITIONER AND FAILED TO FIND THAT
RESPONDENTS ARE GUILTY OF CONTRIBUTORY
NEGLIGENCE WHEN THEY FAILED TO PAY THEIR WATER
BILLS FOR THREE MONTHS AND TO MOVE FOR THE
TRANSFER OF THE COWD ACCOUNT IN THEIR NAME, WHICH
WAS A VIOLATION OF THEIR MEMORANDUM OF
AGREEMENT WITH PETITIONER JOYCE V. ARDIENTE.
RESPONDENTS LIKEWISE DELIBERATELY FAILED TO
EXERCISE DILIGENCE OF A GOOD FATHER OF THE FAMILY
TO MINIMIZE THE DAMAGE UNDER ART. 2203 OF THE NEW
CIVIL CODE.
7.3 THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED WHEN IT DISREGARDED THE FACT THAT
RESPONDENT SPOUSES PASTORFIDE ARE LIKEWISE BOUND
TO OBSERVE ARTICLE 19 OF THE NEW CIVIL CODE, i.e., IN
THE EXERCISE OF THEIR RIGHTS AND IN THE
PERFORMANCE OF THEIR DUTIES TO ACT WITH JUSTICE,
GIVE EVERYONE HIS DUE AND OBSERVE HONESTY AND
GOOD FAITH.
7.4 THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT GRANTED AN AWARD OF MORAL AND
EXEMPLARY DAMAGES AND ATTORNEY'S FEES AS AGAINST
PETITIONER ARDIENTE.12
At the outset, the Court noticed that COWD and Gonzalez, who were
petitioner's co-defendants before the RTC and her co-appellants in the
CA, were impleaded as respondents in the instant petition. This cannot
be done. Being her co-parties before the RTC and the CA, petitioner
cannot, in the instant petition for review on certiorari, make COWD and
Gonzalez, adversary parties. It is a grave mistake on the part of
petitioner's counsel to treat COWD and Gonzalez as respondents. There
is no basis to do so, considering that, in the first place, there is no
showing that petitioner filed a cross-claim against COWD and
Gonzalez. Under Section 2, Rule 9 of the Rules of Court, a cross-claim
which is not set up shall be barred. Thus, for failing to set up a cross-
claim against COWD and Gonzalez before the RTC, petitioner is
already barred from doing so in the present petition.
More importantly, as shown above, COWD and Gonzalez's petition for
review on certiorari filed with this Court was already denied with
finality on June 28, 2004, making the presently assailed CA Decision
final and executory insofar as COWD and Gonzalez are concerned.
Thus, COWD and Gonzalez are already precluded from participating in
the present petition. They cannot resurrect their lost cause by filing
pleadings this time as respondents but, nonetheless, reiterating the same
prayer in their previous pleadings filed with the RTC and the CA.
As to the merits of the instant petition, the Court likewise noticed that
the main issues raised by petitioner are factual and it is settled that the
resolution of factual issues is the function of lower courts, whose
findings on these matters are received with respect and considered
binding by the Supreme Court subject only to certain exceptions, none
of which is present in this instant petition.13 This is especially true when
the findings of the RTC have been affirmed by the CA as in this case. 14
In any case, a perusal of the records at hand would readily show that the
instant petition lacks merit.
Petitioner insists that she should not be held liable for the disconnection
of respondent spouses' water supply, because she had no participation
in the actual disconnection. However, she admitted in the present
petition that it was she who requested COWD to disconnect the
Spouses Pastorfide's water supply. This was confirmed by COWD and
Gonzalez in their cross-claim against petitioner. While it was COWD
which actually discontinued respondent spouses' water supply, it cannot
be denied that it was through the instance of petitioner that the Spouses
Pastorfide's water supply was disconnected in the first place.
It is true that it is within petitioner's right to ask and even require the
Spouses Pastorfide to cause the transfer of the former's account with
COWD to the latter's name pursuant to their Memorandum of
Agreement. However, the remedy to enforce such right is not to cause
the disconnection of the respondent spouses' water supply. The exercise
of a right must be in accordance with the purpose for which it was
established and must not be excessive or unduly harsh; there must be no
intention to harm another.15 Otherwise, liability for damages to the
injured party will attach.16 In the present case, intention to harm was
evident on the part of petitioner when she requested for the
disconnection of respondent spouses’ water supply without warning or
informing the latter of such request. Petitioner claims that her request
for disconnection was based on the advise of COWD personnel and that
her intention was just to compel the Spouses Pastorfide to comply with
their agreement that petitioner's account with COWD be transferred in
respondent spouses' name. If such was petitioner's only intention, then
she should have advised respondent spouses before or immediately
after submitting her request for disconnection, telling them that her
request was simply to force them to comply with their obligation under
their Memorandum of Agreement. But she did not. What made matters
worse is the fact that COWD undertook the disconnection also without
prior notice and even failed to reconnect the Spouses Pastorfide’s water
supply despite payment of their arrears. There was clearly an abuse of
right on the part of petitioner, COWD and Gonzalez. They are guilty of
bad faith.
The principle of abuse of rights as enshrined in Article 19 of the Civil
Code provides that every person must, in the exercise of his rights and
80
in the performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith.
In this regard, the Court's ruling in Yuchengco v. The Manila Chronicle
Publishing Corporation17 is instructive, to wit:
xxxx
This provision of law sets standards which must be observed in the
exercise of one’s rights as well as in the performance of its duties, to
wit: to act with justice; give everyone his due; and observe honesty and
good faith.
In Globe Mackay Cable and Radio Corporation v. Court of Appeals, it
was elucidated that while Article 19 "lays down a rule of conduct for
the government of human relations and for the maintenance of social
order, it does not provide a remedy for its violation. Generally, an
action for damages under either Article 20 or Article 21 would be
proper." The Court said:
One of the more notable innovations of the New Civil Code is the
codification of "some basic principles that are to be observed for the
rightful relationship between human beings and for the stability of the
social order." [REPORT ON THE CODE COMMISSION ON THE
PROPOSED CIVIL CODE OF THE PHILIPPINES, p. 39]. The
framers of the Code, seeking to remedy the defect of the old Code
which merely stated the effects of the law, but failed to draw out its
spirit, incorporated certain fundamental precepts which were "designed
to indicate certain norms that spring from the fountain of good
conscience" and which were also meant to serve as "guides for human
conduct [that] should run as golden threads through society, to the end
that law may approach its supreme ideal, which is the sway and
dominance of justice." (Id.) Foremost among these principles is that
pronounced in Article 19 x x x.
xxxx
This article, known to contain what is commonly referred to as the
principle of abuse of rights, sets certain standards which must be
observed not only in the exercise of one's rights, but also in the
performance of one's duties. These standards are the following: to act
with justice; to give everyone his due; and to observe honesty and good
faith. The law, therefore, recognizes a primordial limitation on all
rights; that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless become the
source of some illegality. When a right is exercised in a manner which
does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. But while Article 19 lays down a
rule of conduct for the government of human relations and for the
maintenance of social order, it does not provide a remedy for its
violation. Generally, an action for damages under either Article 20 or
Article 21 would be proper.
The question of whether or not the principle of abuse of rights has been
violated resulting in damages under Article 20 or other applicable
provision of law, depends on the circumstances of each case. x x x18
To recapitulate, petitioner's acts which violated the abovementioned
provisions of law is her unjustifiable act of having the respondent
spouses' water supply disconnected, coupled with her failure to warn or
at least notify respondent spouses of such intention. On the part of
COWD and Gonzalez, it is their failure to give prior notice of the
impending disconnection and their subsequent neglect to reconnect
respondent spouses' water supply despite the latter's settlement of their
delinquent account.
On the basis of the foregoing, the Court finds no cogent reason to
depart from the ruling of both the RTC and the CA that petitioner,
COWD and Gonzalez are solidarily liable.
The Spouses Pastorfide are entitled to moral damages based on the
provisions of Article 2219,19 in connection with Articles 2020 and
2121 of the Civil Code.
As for exemplary damages, Article 2229 provides that exemplary
damages may be imposed by way of example or correction for the
public good. Nonetheless, exemplary damages are imposed not to
enrich one party or impoverish another, but to serve as a deterrent
against or as a negative incentive to curb socially deleterious
actions.22 In the instant case, the Court agrees with the CA in sustaining
the award of exemplary damages, although it reduced the amount
granted, considering that respondent spouses were deprived of their
water supply for more than nine (9) months, and such deprivation
would have continued were it not for the relief granted by the RTC.
With respect to the award of attorney's fees, Article 2208 of the Civil
Code provides, among others, that such fees may be recovered when
exemplary damages are awarded, when the defendant's act or omission
has compelled the plaintiff to litigate with third persons or to incur
expenses to protect his interest, and where the defendant acted in gross
and evident bad faith in refusing to satisfy the plaintiffs’ plainly valid,
just and demandable claim.
WHEREFORE, instant petition for review on certiorari is DENIED.
The Decision and Resolution of the Court of Appeals, dated August 28,
2003 and December 17, 2003, respectively, in CA-G.R. CV No. 73000
are AFFIRMED.
SO ORDERED.

Corollarilly, Article 20 provides that "every person who, contrary to

law, willfully or negligently causes damage to another shall indemnify
the latter for the same." It speaks of the general sanctions of all other
provisions of law which do not especially provide for its own sanction.
When a right is exercised in a manner which does not conform to the
standards set forth in the said provision and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer
must be responsible. Thus, if the provision does not provide a remedy
for its violation, an action for damages under either Article 20 or
Article 21 of the Civil Code would be proper.

81
G.R. No. 160689 March 26, 2014
RAUL H. SESBREÑO, Petitioner,
vs.
HONORABLE COURT OF APPEALS, JUAN I. COROMINA
(SUBSTITUTED BY ANITA COROMINA, ELIZABETH
COROMINA and ROSIEMARIE COROMINA), VICENTE E.
GARCIA (SUBSTITUTED BY EDGAR JOHN GARCIA),
FELIPE CONSTANTINO, RONALD ARCILLA, NORBETO
ABELLANA, DEMETRIO BALICHA, ANGELITA LHUILLIER,
JOSE E. GARCIA, AND VISA YAN ELECTRIC COMPANY
(VECO), Respondents.
DECISION
BERSAMIN, J.:
This case concerns the claim for damages of petitioner Raul H.
Sesbreño founded on abuse of rights. Sesbreño accused the violation of
contract (VOC) inspection team dispatched by the Visayan Electric
Company (VECO) to check his electric meter with conducting an
unreasonable search in his residential premises. But the Regional Trial
Court (RTC), Branch 13, in Cebu City rendered judgment on August
19, 1994 dismissing the claim;1 and the Court of Appeals (CA)
affirmed the dismissal on March 10, 2003.2
Hence, this appeal by Sesbreño.
Antecedents
At the time material to the petition, VECO was a public utility
corporation organized and existing under the laws of the Philippines.
VECO engaged in the sale and distribution of electricity within
Metropolitan Cebu. Sesbreño was one of VECO’s customers under the
metered service contract they had entered into on March 2,
1982.3 Respondent Vicente E. Garcia was VECO’s President, General
Manager and Chairman of its Board of Directors. Respondent Jose E.
Garcia was VECO’s Vice-President, Treasurer and a Member of its
Board of Directors. Respondent Angelita Lhuillier was another Member
of VECO’s Board of Directors. Respondent Juan Coromina was
VECO’s Assistant Treasurer, while respondent Norberto Abellana was
the Head of VECO’s Billing Section whose main function was to
compute back billings of customers found to have violated their
contracts.
To ensure that its electric meters were properly functioning, and that
none of it meters had been tampered with, VECO employed
respondents Engr. Felipe Constantino and Ronald Arcilla as violation
of contract (VOC) inspectors.4 Respondent Sgt. Demetrio Balicha, who
belonged to the 341st Constabulary Company, Cebu Metropolitan
Command, Camp Sotero Cabahug, Cebu City, accompanied and
escorted the VOC inspectors during their inspection of the households
of its customers on May 11, 1989 pursuant to a mission order issued to
him.5
The CA summarized the antecedent facts as follows:
x x x. Reduced to its essentials, however, the facts of this case are
actually simple enough, although the voluminous records might
indicate otherwise. It all has to do with an incident that occurred at
around 4:00 o’clock in the afternoon of May 11, 1989. On that day, the
Violation of Contracts (VOC) Team of defendants-appellees
Constantino and Arcilla and their PC escort, Balicha, conducted a
routine inspection of the houses at La Paloma Village, Labangon, Cebu
City, including that of plaintiff-appellant Sesbreño, for illegal
connections, meter tampering, seals, conduit pipes, jumpers, wiring
connections, and meter installations. After Bebe Baledio, plaintiff-
appellant Sesbreño’s maid, unlocked the gate, they inspected the
electric meter and found that it had been turned upside down.
Defendant-appellant Arcilla took photographs of the upturned electric
meter. With Chuchie Garcia, Peter Sesbreño and one of the maids
present, they removed said meter and replaced it with a new one. At
that time, plaintiff-appellant Sesbreño was in his office and no one
called to inform him of the inspection. The VOC Team then asked for
and received Chuchie Garcia’s permission to enter the house itself to
examine the kind and number of appliances and light fixtures in the
household and determine its electrical load. Afterwards, Chuchie Garcia
signed the Inspection Division Report, which showed the condition of
the electric meter on May 11, 1989 when the VOC Team inspected it,
with notice that it would be subjected to a laboratory test. She also
signed a Load Survey Sheet that showed the electrical load of plaintiff-
appellant Sesbreño.
But according to plaintiff-appellant Sesbreño there was nothing routine
or proper at all with what the VOC Team did on May 11, 1989 in his
house. Their entry to his house and the surrounding premises was
effected without his permission and over the objections of his maids.
They threatened, forced or coerced their way into his house. They
unscrewed the electric meter, turned it upside down and took
photographs thereof. They then replaced it with a new electric meter.
They searched the house and its rooms without his permission or a
search warrant. They forced a visitor to sign two documents, making
her appear to be his representative or agent. Afterwards, he found that
some of his personal effects were missing, apparently stolen by the
VOC Team when they searched the house.6
Judgment of the RTC
On August 19, 1994, the RTC rendered judgment dismissing the
complaint.7 It did not accord credence to the testimonies of Sesbreño’s
witnesses, Bebe Baledio, his housemaid, and Roberto Lopez, a part-
time salesman, due to inconsistencies on material points in their
respective testimonies. It observed that Baledio could not make up her
mind as to whether Sesbreño’s children were in the house when the
VOC inspection team detached and replaced the electric meter.
Likewise, it considered unbelievable that Lopez should hear the
exchanges between Constantino, Arcilla and Balicha, on one hand, and
Baledio, on the other, considering that Lopez could not even hear the
conversation between two persons six feet away from where he was
seated during the simulation done in court, the same distance he
supposedly had from the gate of Sesbreño’s house during the incident.
It pointed out that Lopez’s presence at the gate during the incident was
even contradicted by his own testimony indicating that an elderly
woman had opened the gate for the VECO personnel, because it was
Baledio, a lady in her 20s, who had repeatedly stated on her direct and
cross examinations that she had let the VECO personnel in. It
concluded that for Lopez to do nothing at all upon seeing a person
being threatened by another in the manner he described was simply
contrary to human experience.
In contrast, the RTC believed the evidence of the respondents showing
that the VOC inspection team had found the electric meter in
Sesbreño’s residence turned upside down to prevent the accurate
registering of the electricity consumption of the household, causing
them to detach and replace the meter. It held as unbelievable that the
team forcibly entered the house through threats and intimidation; that
they themselves turned the electric meter upside down in order to
incriminate him for theft of electricity, because the fact that the team
and Sesbreño had not known each other before then rendered it unlikely
for the team to fabricate charges against him; and that Sesbreño’s non-
presentation of Chuchie Garcia left her allegation of her being forced to
sign the two documents by the team unsubstantiated.
Decision of the CA
82
Sesbreño appealed, but the CA affirmed the RTC on March 10,
2003,8 holding thusly:
x x x. plaintiff-appellant Sesbreño’s account is simply too implausible
or far-fetched to be believed. For one thing, the inspection on his
household was just one of many others that the VOC Team had
conducted in that subdivision. Yet, none but plaintiff-appellant
Sesbreño complained of the alleged acts of the VOC Team.
Considering that there is no proof that they also perpetrated the same
illegal acts on other customers in the guise of conducting a Violation of
Contracts inspection, plaintiff-appellant Sesbreño likewise failed to
show why he alone was singled out. It is also difficult to believe that
the VOC Team would be brazen enough to want to antagonize a person
such as plaintiff-appellant Sesbreño. There is no evidence that the VOC
Team harbored any evil motive or grudge against plaintiff-appellant
Sesbreño, who is a total stranger to them. Until he came along, they did
not have any prior criminal records to speak of, or at least, no evidence
thereof was presented. It is equally difficult to believe that their
superiors would authorize or condone their alleged illegal acts.
Especially so since there is no indication that prior to the incident on
May 11, 1989, there was already bad blood or animosity between
plaintiff-appellant Sesbreño and defendant appellees to warrant such a
malevolent response. In fact, since availing of defendant-appellee
VECO’s power services, the relationship between them appears to have
been uneventful.
It becomes all the more apparent that the charges stemming from the
May 11, 1989 incident were fabricated when taken together with the
lower court’s evaluation of the alleged theft of plaintiff-appellant
Sesbreño’s personal effects. It stated that on August 8, 1989, plaintiff-
appellant Sesbreño wrote the barangay captain of Punta Princesa and
accused Chuchie Garcia and Victoria Villarta alias Victoria Rocamora
of theft of some of his things that earlier he claimed had been stolen by
members of the VOC Team. When he was confronted with these facts,
plaintiff-appellant Sesbreño further claimed that the items allegedly
stolen by Chuchie Garcia were part of the loot taken by defendants-
appellees Constantino and Arcilla. Yet not once did plaintiff-appellant
Sesbreño or any of his witnesses mention that a conspiracy existed
between these people. Clearly, much like his other allegations, it is
nothing more than an afterthought by plaintiff-appellant Sesbreño.
All in all, the allegations against defendants-appellees appear to be
nothing more than a put-on to save face. For the simple truth is that the
inspection exposed plaintiff-appellant Sesbreño as a likely cheat and
thief.
xxxx
Neither is this Court swayed by the testimonies of Baledio and
Lopez.1âwphi1 The lower court rightly described their testimonies as
fraught by discrepancies and inconsistencies on material points and
even called Lopez a perjured witness. On the other hand, it is odd that
plaintiff-appellant Sesbreño chose not to present the witness whose
testimony was very crucial. But even though Chuchie Garcia never
testified, her absence speaks volumes. Whereas plaintiff-appellant
Sesbreño claimed that the VOC Team forced her to sign two documents
that made her appear to be his authorized agent or representative, the
latter claimed otherwise and that she also gave them permission to enter
and search the house. The person most qualified to refute the VOC
Team’s claim is Chuchie Garcia herself. It is axiomatic that he who
asserts a fact or claim must prove it. He cannot transfer that burden to
the person against whom he asserts such fact or claim. When certain
evidence is suppressed, the presumption is that it will adversely affect
the cause of the party suppressing it, should it come to light. x x x 9
Upon denial of his motion for reconsideration,10 Sesbreño appealed.
Issue
Was Sesbreño entitled to recover damages for abuse of rights?
Ruling
The appeal has no merit.
Sesbreño’s main contention is that the inspection of his residence by the
VOC team was an unreasonable search for being carried out without a
warrant and for being allegedly done with malice or bad faith.
Before dealing with the contention, we have to note that two distinct
portions of Sesbreño’s residence were inspected by the VOS team – the
garage where the electric meter was installed, and the main premises
where the four bedrooms, living rooms, dining room and kitchen were
located.
Anent the inspection of the garage where the meter was installed, the
respondents assert that the VOC team had the continuing authority from
Sesbreño as the consumer to enter his premises at all reasonable hours
to conduct an inspection of the meter without being liable for trespass
to dwelling. The authority emanated from paragraph 9 of the metered
service contract entered into between VECO and each of its consumers,
which provided as follows:
9. The CONSUMER agrees to allow properly authorized employees or
representatives of the COMPANY to enter his premises at all
reasonable hours without being liable to trespass to dwelling for the
purpose of inspecting, installing, reading, removing, testing, replacing
or otherwise disposing of its property, and/or removing the
COMPANY’S property in the event of the termination of the contract
for any cause.11
Sesbreño contends, however, that paragraph 9 did not give Constantino,
Arcilla and Balicha the blanket authority to enter at will because the
only property VECO owned in his premises was the meter; hence,
Constantino and Arcilla should enter only the garage. He denies that
they had the right to enter the main portion of the house and inspect the
various rooms and the appliances therein because those were not the
properties of VECO. He posits that Balicha, who was not an employee
of VECO, had no authority whatsoever to enter his house and conduct a
search. He concludes that their search was unreasonable, and entitled
him to damages in light of their admission that they had entered and
inspected his premises without a search warrant.12
We do not accept Sesbreño’s conclusion.1avvphi1 Paragraph 9 clothed
the entire VOC team with unquestioned authority to enter the garage to
inspect the meter. The members of the team obviously met the
conditions imposed by paragraph 9 for an authorized entry. Firstly, their
entry had the objective of conducting the routine inspection of the
meter.13Secondly, the entry and inspection were confined to the garage
where the meter was installed.14 Thirdly, the entry was effected at
around 4 o’clock p.m., a reasonable hour.15 And, fourthly, the persons
who inspected the meter were duly authorized for the purpose by
VECO.
Although Balicha was not himself an employee of VECO,16 his
participation was to render police assistance to ensure the personal
security of Constantino and Arcilla during the inspection, rendering him
a necessary part of the team as an authorized representative. Under the
circumstances, he was authorized to enter considering that paragraph 9
expressly extended such authority to "properly authorized employees or
representatives" of VECO.
It is true, as Sesbreño urges, that paragraph 9 did not cover the entry
into the main premises of the residence. Did this necessarily mean that
any entry by the VOS team into the main premises required a search
warrant to be first secured?
83
Sesbreño insists so, citing Section 2, Article III of the 1987
Constitution, the clause guaranteeing the right of every individual
against unreasonable searches and seizures, viz:
Section 2. The right of the people to be secure in their persons, houses,
papers and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable, and no search
warrant or warrant of arrest shall issue except upon probable cause to
be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or
things to be seized.
He states that a violation of this constitutional guaranty rendered VECO
and its VOS team liable to him for damages by virtue of Article 32 (9)
of the Civil Code, which pertinently provides:
Article 32. Any public officer or employee, or any private individual,
who directly or indirectly obstructs, defeats, violates or in any manner
impedes or impairs any of the following rights and liberties of another
person shall be liable to the latter for damages:
xxxx
(9) The right to be secured in one’s person, house, papers, and effects
against unreasonable searches and seizures;
x x x x.
Sesbreño’s insistence has no legal and factual basis.
The constitutional guaranty against unlawful searches and seizures is
intended as a restraint against the Government and its agents tasked
with law enforcement. It is to be invoked only to ensure freedom from
arbitrary and unreasonable exercise of State power. The Court has made
this clear in its pronouncements, including that made in People v.
Marti,17 viz:
If the search is made upon the request of law enforcers, a warrant must
generally be first secured if it is to pass the test of constitutionality.
However, if the search is made at the behest or initiative of the
proprietor of a private establishment for its own and private purposes,
as in the case at bar, and without the intervention of police authorities,
the right against unreasonable search and seizure cannot be invoked for
only the act of private individual, not the law enforcers, is involved. In
sum, the protection against unreasonable searches and seizures cannot
be extended to acts committed by private individuals so as to bring it
within the ambit of alleged unlawful intrusion by the government.18
It is worth noting that the VOC inspectors decided to enter the main
premises only after finding the meter of Sesbreño turned upside down,
hanging and its disc not rotating. Their doing so would enable them to
determine the unbilled electricity consumed by his household. The
circumstances justified their decision, and their inspection of the main
premises was a continuation of the authorized entry. There was no
question then that their ability to determine the unbilled electricity
called for them to see for themselves the usage of electricity inside. Not
being agents of the State, they did not have to first obtain a search
warrant to do so.
Balicha’s presence participation in the entry did not make the
inspection a search by an agent of the State within the ambit of the
guaranty. As already mentioned, Balicha was part of the team by virtue
of his mission order authorizing him to assist and escort the team
during its routine inspection.19 Consequently, the entry into the main
premises of the house by the VOC team did not constitute a violation of
the guaranty.
Our holding could be different had Sesbreño persuasively demonstrated
the intervention of malice or bad faith on the part of Constantino and
Arcilla during their inspection of the main premises, or any
excessiveness committed by them in the course of the inspection. But
Sesbreño did not. On the other hand, the CA correctly observed that the
inspection did not zero in on Sesbreño’s residence because the other
houses within the area were similarly subjected to the routine
inspection.20 This, we think, eliminated any notion of malice or bad
faith.
Clearly, Sesbreño did not establish his claim for damages if the
respondents were not guilty of abuse of rights. To stress, the concept of
abuse of rights prescribes that a person should not use his right unjustly
or in bad faith; otherwise, he may be liable to another who suffers
injury. The rationale for the concept is to present some basic principles
to be followed for the rightful relationship between human beings and
the stability of social order.21Moreover, according to a
commentator,22 "the exercise of right ends when the right disappears,
and it disappears when it is abused, especially to the prejudice of
others[;] [i]t cannot be said that a person exercises a right when he
unnecessarily prejudices another." Article 19 of the Civil Code23 sets
the standards to be observed in the exercise of one’s rights and in the
performance of one’s duties, namely: (a) to act with justice; (b) to give
everyone his due; and (c) to observe honesty and good faith. The law
thereby recognizes the primordial limitation on all rights – that in the
exercise of the rights, the standards under Article 19 must be
observed.24
Although the act is not illegal, liability for damages may arise should
there be an abuse of rights, like when the act is performed without
prudence or in bad faith. In order that liability may attach under the
concept of abuse of rights, the following elements must be present, to
wit: (a) the existence of a legal right or duty, (b) which is exercised in
bad faith, and (c) for the sole intent of prejudicing or injuring
another.25 There is no hard and fast rule that can be applied to ascertain
whether or not the principle of abuse of rights is to be invoked. The
resolution of the issue depends on the circumstances of each case.
Sesbreño asserts that he did not authorize Baledio or Chuchie Garcia to
let anyone enter his residence in his absence; and that Baledio herself
confirmed that the members of the VOC team had intimidated her into
letting them in.
The assertion of Sesbreño is improper for consideration in this
appeal.1âwphi1 The RTC and the CA unanimously found the
testimonies of Sesbreño’s witnesses implausible because of
inconsistencies on material points; and even declared that the non-
presentation of Garcia as a witness was odd if not suspect. Considering
that such findings related to the credibility of the witnesses and their
testimonies, the Court cannot review and undo them now because it is
not a trier of facts, and is not also tasked to analyze or weigh evidence
all over again.26 Verily, a review that may tend to supplant the findings
of the trial court that had the first-hand opportunity to observe the
demeanor of the witnesses themselves should be undertaken by the
Court with prudent hesitation. Only when Sesbreño could make a clear
showing of abuse in their appreciation of the evidence and records by
the trial and the appellate courts should the Court do the unusual review
of the factual findings of the trial and appellate courts.27 Alas, that
showing was not made here.
Nor should the Court hold that Sesbreño was denied due process by the
refusal of the trial judge to inhibit from the case. Although the trial
judge had issued an order for his voluntary inhibition, he still rendered
the judgment in the end in compliance with the instruction of the
Executive Judge, whose exercise of her administrative authority on the
matter of the inhibition should be respected.28 In this connection, we
find to be apt the following observation of the CA, to wit:
84
x x x. Both Judge Paredes and Judge Priscila Agana serve the Regional
Trial Court and are therefore of co-equal rank. The latter has no
authority to reverse or modify the orders of Judge Paredes. But in
ordering Judge Paredes to continue hearing the case, Judge Agana did
not violate their co-equal status or unilaterally increased her
jurisdiction. It is merely part of her administrative responsibilities as
Executive Judge of the Regional Trial Court of Cebu City, of which
Judge Paredes is also a member.29

Lastly, the Court finds nothing wrong if the writer of the decision in the
CA refused to inhibit from participating in the resolution of the motion
for reconsideration filed by Sesbrefio. The motion for her inhibition
was grounded on suspicion of her bias and prejudice, 30 but suspicion of
bias and prejudice were not enough grounds for inhibition. 31

Suffice it to say that the records are bereft of any indication that even
suggested that the Associate Justices of the CA who participated in the
promulgation of the decision were tainted with bias against him.

WHEREFORE, the Court DENIES the pet1t1on for review on

certiorari; AFFIRMS the decision promulgated on March 10, 2003; and
DIRECTS the petitioner to pay the costs of suit.

SO ORDERED.

85
A.C. No. 4697 November 25, 2014
FLORENCIO A. SALADAGA, Complainant,
vs.
ATTY. ARTURO B. ASTORGA, Respondent.
x-----------------------x
A.C. No. 4728
FLORENCIO A. SALADAGA, Complainant,
vs.
ATTY. ARTURO B. ASTORGA, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Membership in the legal profession is a high personal privilege
burdened with conditions,1 including continuing fidelity to the law and
constant possession of moral fitness. Lawyers, as guardians of the law,
play a vital role in the preservation of society, and a consequent
obligation of lawyers is to maintain the highest standards of ethical
conduct.2 Failure to live by the standards of the legal profession and to
discharge the burden of the privilege conferred on one as a member of
the bar warrant the suspension or revocation of that privilege.
The Factual Antecedents
Complainant Florencio A. Saladaga and respondent Atty. Arturo B.
Astorga entered into a "Deed of Sale with Right to Repurchase" on
December 2, 1981 where respondent sold (with rightof repurchase) to
complainant a parcel of coconut land located at Barangay Bunga,
Baybay, Leyte covered by Transfer Certificate of Title (TCT) No. T-
662 for ₱15,000.00. Under the said deed, respondent represented that he
has "the perfect right to dispose as owner in fee simple" the subject
property and that the said property is "free from all liens and
encumbrances."3 The deed also provided that respondent, as vendor a
retro, had two years within which to repurchase the property, and if not
repurchased within the said period, "the parties shall renew [the]
instrument/agreement."4
Respondent failed to exercise his right of repurchase within the period
provided in the deed, and no renewal of the contract was made even
after complainant sent respondent a final demand dated May 10, 1984
for the latter to repurchase the property. Complainant remained in
peaceful possession of the property until December 1989 when he
received letters from the Rural Bank of Albuera (Leyte), Inc. (RBAI)
informing him that the property was mortgaged by respondent to RBAI,
that the bank had subsequently foreclosed on the property, and that
complainant should therefore vacate the property.5
Complainant was alarmed and made aninvestigation. He learned the
following:
(1) TCT No. T-662 was already cancelled by TCT No. T-3211 in the
name of Philippine National Bank (PNB) as early as November 17,
1972 after foreclosure proceedings;
(2) TCT No. T-3211 was cancelled by TCT No. T-7235 in the names of
respondent and his wife on January 4, 1982 pursuant to a deed of sale
dated March 27,1979 between PNB and respondent;
(3) Respondent mortgaged the subject property to RBAI on March 14,
1984, RBAI foreclosed on the property, and subsequently obtained
TCT No. TP-10635 on March 27, 1991.6 Complainant was
subsequently dispossessed of the property by RBAI.7
Aggrieved, complainant instituted a criminal complaint for estafa
against respondent with the Office of the Provincial Prosecutor of
Leyte, docketed as I.S. No. 95-144. The Provincial Prosecutor of Leyte
approved the Resolution8dated April 21, 1995 in I.S. No. 95-144
finding that "[t]he facts of [the] case are sufficient to engender a well-
founded belief that Estafa x x x has been committed and that respondent
herein is probably guilty thereof."9 Accordingly, an Information10 dated
January 8,1996 was filed before the Municipal Trial Court (MTC) of
Baybay, Leyte, formally charging respondent with the crime of estafa
under Article 316, paragraphs 1 and 2 of the Revised Penal
Code,11committed as follows:
On March 14, 1984, accused representing himself as the owner of a
parcel of land known as Lot No. 7661 of the Baybay Cadastre,
mortgaged the same to the Rural Bank of Albuera, Albuera, Leyte,
within the jurisdiction of this Honorable Court, knowing fully well that
the possessor and owner at that time was private complainant Florencio
Saladaga by virtue of a Pacto de Retro Sale which accused executed in
favor of private complainant on 2nd December, 1981, without first
redeeming/repurchasing the same. [P]rivate complainant knowing of
accused[’s] unlawful act only on or about the last week of February,
1991 when the rural bank dispossessed him of the property, the
mortgage having been foreclosed, private complainant thereby suffered
damages and was prejudiced by accused[’s] unlawful transaction and
misrepresentation.
The aforementioned estafa case against respondent was docketed as
Criminal Case No. 3112-A.
Complainant likewise instituted the instant administrative cases against
respondent by filing before this Court an Affidavit-Complaint12 dated
January 28, 1997 and Supplemental Complaint13 dated February 27,
1997, which were docketed as A.C. No. 4697 and A.C. No. 4728,
respectively. In both complaints, complainant sought the disbarment of
respondent.
The administrative cases were referred to the Integrated Bar of the
Philippines (IBP) for investigation, report and recommendation.14
In his Consolidated Answer15 dated August 16, 2003 filed before the
IBP, respondent denied that his agreement with complainant was a
pacto de retrosale. He claimed that it was an equitable mortgage and
that, if only complainant rendered an accounting of his benefits from
the produce of the land, the total amount would have exceeded
₱15,000.00.
Report and Recommendation of the Investigating Commissioner and
Resolution of the IBP Board of Governors
In a Report and Recommendation16 dated April 29, 2005, the
Investigating Commissioner of the IBP’s Commission on Bar
Discipline found that respondent was in bad faith when he dealt with
complainant and executed the "Deed of Sale with Right to Repurchase"
but later on claimed that the agreement was one of equitable mortgage.
Respondent was also guilty of deceit or fraud when he represented in
the "Deed of Sale with Right to Repurchase" dated December 2, 1981
that the property was covered by TCT No. T-662, even giving
complainant the owner’s copy of the said certificate of title, when the
said TCT had already been cancelled on November 17, 1972 by TCT
No. T-3211 in the name of Philippine National Bank (PNB).
Respondent made matters even worse, when he had TCT No. T-3211
cancelled with the issuance of TCT No. T-7235 under his and his wife’s
name on January 4,1982 without informing complainant. This was
compounded by respondent’s subsequent mortgage of the property to
RBAI, which led to the acquisition of the property by RBAI and the
dispossession thereof of complainant. Thus, the Investigating
Commissioner recommended that respondent be (1) suspended from the
practice of law for one year, with warning that a similar misdeed in the
future shall be dealt with more severity, and (2) ordered to return the
86
sum of ₱15,000.00, the amount he received as consideration for the
pacto de retrosale, with interest at the legal rate.
Considering respondent’s "commission of unlawful acts, especially
crimes involving moral turpitude, actsof dishonesty, grossly immoral
conduct and deceit," the IBP Board of Governors adopted and approved
the Investigating Commissioner’s Report and Recommendation with
modification as follows: respondent is(1) suspended from the practice
of law for two years, with warning that a similar misdeed in the future
shall be dealt with more severity, and (2) ordered to return the sum of
₱15,000.00 received in consideration of the pacto de retrosale, with
legal interest.17
The Court’s Ruling
The Court agrees with the recommendation of the IBP Board of
Governors to suspend respondent from the practice of law for two
years, but it refrains from ordering respondent to return the ₱15,000.00
consideration, plus interest.
Respondent does not deny executing the "Deed of Sale with Right to
Repurchase" dated December 2, 1981 in favor of complainant.
However, respondent insists that the deed is not one of sale with pacto
de retro, but one of equitable mortgage. Thus, respondent argues that he
still had the legal right to mortgage the subject property to other
persons. Respondent additionally asserts that complainant should render
an accounting of the produce the latter had collected from the said
property, which would already exceed the ₱15,000.00 consideration
stated in the deed.
There is no merit in respondent’s defense.
Regardless of whether the written contract between respondent and
complainant is actually one of sale with pacto de retroor of equitable
mortgage, respondent’s actuations in his transaction with complainant,
as well as in the present administrative cases, clearly show a disregard
for the highest standards of legal proficiency, morality, honesty,
integrity, and fair dealing required from lawyers, for which respondent
should be held administratively liable.
When respondent was admitted to the legal profession, he took an oath
where he undertook to "obey the laws," "do no falsehood," and
"conduct [him]self as a lawyer according to the best of [his] knowledge
and discretion."18 He gravely violated his oath.
The Investigating Commissioner correctly found, and the IBP Board of
Governors rightly agreed, that respondent caused the ambiguity or
vagueness in the "Deed of Sale with Right to Repurchase" as he was the
one who prepared or drafted the said instrument. Respondent could
have simply denominated the instrument as a deed of mortgage and
referred to himself and complainant as "mortgagor" and "mortgagee,"
respectively, rather than as "vendor a retro" and "vendee a retro." If
only respondent had been more circumspect and careful in the drafting
and preparation of the deed, then the controversy between him and
complainant could havebeen avoided or, at the very least, easily
resolved. His imprecise and misleading wording of the said deed on its
face betrayed lack oflegal competence on his part. He thereby fell short
of his oath to "conduct [him]self as a lawyer according to the best of
[his] knowledge and discretion."
More significantly, respondent transgressed the laws and the
fundamental tenet of human relations asembodied in Article 19 of the
Civil Code:
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Respondent, as owner of the property, had the right to mortgage it to
complainant but, as a lawyer, he should have seen to it that his
agreement with complainant is embodied in an instrument that clearly
expresses the intent of the contracting parties. A lawyer who drafts a
contract must see to it that the agreement faithfully and clearly reflects
the intention of the contracting parties. Otherwise, the respective rights
and obligations of the contracting parties will be uncertain, which opens
the door to legal disputes between the said parties. Indeed, the
uncertainty caused by respondent’s poor formulation of the "Deed of
Sale with Right to Repurchase" was a significant factor in the legal
controversy between respondent and complainant. Such poor
formulation reflects at the very least negatively on the legal competence
of respondent.
Under Section 63 of the Land Registration Act,19 the law in effect at the
time the PNB acquired the subject property and obtained TCT No. T-
3211 in its name in 1972, where a decree in favor of a purchaser who
acquires mortgaged property in foreclosure proceedings becomes final,
such purchaser becomes entitled to the issuance of a new certificate of
title in his name and a memorandum thereof shall be "indorsed upon the
mortgagor’s original certificate."20 TCT No. T-662, which respondent
gave complainant when they entered into the "Deed of Sale with Right
to Repurchase" dated December 2, 1981, does not bearsuch
memorandum but only a memorandum on the mortgage of the property
to PNB in 1963 and the subsequent amendment of the mortgage.
Respondent dealt with complainant with bad faith, falsehood, and
deceit when he entered into the "Deed of Sale with Right to
Repurchase" dated December 2, 1981 with the latter. He made it appear
that the property was covered by TCT No. T-662 under his name, even
giving complainant the owner’s copy of the said certificate oftitle, when
the truth is that the said TCT had already been cancelled some nine
years earlier by TCT No. T-3211 in the name of PNB. He did not
evencare to correct the wrong statement in the deed when he was
subsequently issued a new copy of TCT No. T-7235 on January 4,
1982,21 or barely a month after the execution of the said deed. All told,
respondent clearly committed an act of gross dishonesty and deceit
against complainant.
Canon 1 and Rule 1.01 of the Codeof Professional Responsibility
provide:
CANON 1 – A lawyer shall uphold the constitution, obey the laws of
the land and promote respect for law and legal processes.
Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral
or deceitful conduct. Under Canon 1, a lawyer is not only mandated to
personally obey the laws and the legal processes, he is moreover
expected to inspire respect and obedience thereto. On the other hand,
Rule 1.01 states the norm of conduct that is expected of all lawyers. 22
Any act or omission that is contrary to, prohibited or unauthorized by,
in defiance of, disobedient to, or disregards the law is "unlawful."
"Unlawful" conduct does not necessarily imply the element of
criminality although the concept is broad enough to include such
element.23
To be "dishonest" means the disposition to lie, cheat, deceive, defraud
or betray; be untrustworthy; lacking inintegrity, honesty, probity,
integrity in principle, fairness and straightforwardness. On the other
hand, conduct that is "deceitful" means as follows:
[Having] the proclivity for fraudulent and deceptive misrepresentation,
artifice or device that is used upon another who is ignorant of the true
facts, to the prejudice and damage of the party imposed upon. In order
to be deceitful, the person must either have knowledge of the falsity or
acted in reckless and conscious ignorance thereof, especially if the
parties are not on equal terms, and was done with the intent that the
87
aggrieved party act thereon, and the latter indeed acted in reliance of
the false statement or deed in the manner contemplated to his
injury.24 The actions of respondent in connection with the execution of
the "Deed of Sale with Right to Repurchase" clearly fall within the
concept of unlawful, dishonest, and deceitful conduct. They violate
Article 19 of the Civil Code. They show a disregard for Section 63 of
the Land Registration Act. They also reflect bad faith, dishonesty, and
deceit on respondent’s part. Thus, respondent deserves to be sanctioned.
Respondent’s breach of his oath, violation of the laws, lack of good
faith, and dishonesty are compounded by his gross disregard of this
Court’s directives, as well as the orders of the IBP’s Investigating
Commissioner (who was acting as an agent of this Court pursuant to the
Court’s referral of these cases to the IBP for investigation, report and
recommendation), which caused delay in the resolution of these
administrative cases.
In particular, the Court required respondent to comment on
complainant’s Affidavit-Complaint in A.C. No. 4697 and Supplemental
Complaint in A.C. No. 4728 on March 12, 1997 and June 25, 1997,
respectively.25 While he requested for several extensions of time within
which to submit his comment, no such comment was submitted
prompting the Court to require him in a Resolution dated February
4,1998 to (1) show cause why he should not be disciplinarily dealt with
or held in contempt for such failure, and (2) submit the consolidated
comment.26 Respondent neither showed cause why he should not be
disciplinarily dealt with or held in contempt for such failure, nor
submitted the consolidated comment.
When these cases were referred to the IBP and during the proceedings
before the IBP’s Investigating Commissioner, respondent was again
required several times to submit his consolidated answer. He only
complied on August 28, 2003, or more than six years after this Court
originally required him to do so. The Investigating Commissioner also
directed the parties to submit their respective position papers. Despite
having been given several opportunities to submit the same, respondent
did not file any position paper.27
Respondent’s disregard of the directives of this Court and of the
Investigating Commissioner, which caused undue delay in these
administrative cases, contravenes the following provisions of the Code
of Professional Responsibility:
CANON 11 – A lawyer shall observe and maintain the respect due to
the courts and to judicial officers and should insist on similar conduct
by others.
xxxx
CANON 12 – A lawyer shall exert every effort and consider it his duty
to assist in the speedy and efficient administration of justice.
xxxx
Rule 12.03 – A lawyer shall not, after obtaining extensions of time to
file pleadings, memoranda or briefs, let the period lapse without
submitting the same or offering an explanation for his failure to do so.
Rule 12.04 – A lawyer shall not unduly delay a case, impede the
execution of a judgment or misuse court processes.
Respondent’s infractions are aggravated by the fact that he has already
been imposed a disciplinary sanction before.1âwphi1 In Nuñez v. Atty.
Astorga,28 respondent was held liable for conduct unbecoming an
attorney for which he was fined ₱2,000.00.
Given the foregoing, the suspension of respondent from the practice of
law for two years, as recommended by the IBP Board of Governors, is
proper.
The Court, however, will not adopt the recommendation of the IBP to
order respondent to return the sum of ₱15,000.00 he received from
complainant under the "Deed of Sale with Right to Repurchase." This is
a civil liability best determined and awarded in a civil case rather than
the present administrative cases.
In Roa v. Moreno,29 the Court pronounced that "[i]n disciplinary
proceedings against lawyers, the only issue is whether the officer of the
court is still fit to be allowed to continue as a member of the Bar. Our
only concern is the determination of respondent’s administrative
liability. Our findings have no material bearing on other judicial action
which the parties may choose to file against each other."While the
respondent lawyer’s wrongful actuations may give rise at the same time
to criminal, civil, and administrative liabilities, each must be
determined in the appropriate case; and every case must be resolved in
accordance with the facts and the law applicable and the quantum of
proof required in each. Section 5,30 in relation to Sections 131 and
2,32 Rule 133 of the Rules of Court states that in administrative cases,
such as the ones atbar, only substantial evidence is required, not proof
beyond reasonable doubt as in criminal cases, or preponderance of
evidence asin civil cases. Substantial evidence is that amount of
relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.33
The Court notes that based on the same factual antecedents as the
present administrative cases, complainant instituted a criminal case for
estafa against respondent, docketed as Criminal Case No. 3112-A,
before the MTC. When a criminal action is instituted, the civil action
for the recovery of civil liability arising from the offense charged shall
be deemed instituted with the criminal action unless the offended party
waives the civil action, reserves the right to institute it separately or
institutes the civil action prior to the criminal action.34 Unless the
complainant waived the civil action, reserved the right to institute it
separately, or instituted the civil action prior to the criminal action, then
his civil action for the recovery of civil liability arising from the estafa
committed by respondent is deemed instituted with Criminal Case No.
3112-A. The civil liability that complainant may recover in Criminal
Case No. 3112-A includes restitution; reparation of the damage caused
him; and/or indemnification for consequential damages,35which may
already cover the ₱15,000.00 consideration complainant had paid for
the subject property.
WHEREFORE, respondent is hereby found GUILTY of the following:
breach of the Lawyer’s Oath; unlawful, dishonest, and deceitful
conduct; and disrespect for the Court and causing undue delay of these
cases, for which he is SUSPENDED from the practice of law for a
period of two (2) years, reckoned from receipt of this Decision, with
WARNING that a similar misconduct in the future shall be dealt with
more severely.
Let a copy of this Decision be furnished the Office of the Bar Confidant
and the Integrated Bar of the Philippines for their information and
guidance. The Court Administrator is directed to circulate this Decision
to all courts in the country.
SO ORDERED.
88
G.R. No. 190667, November 07, 2016
COCA-COLA BOTTLERS PHILIPPINES,
INC., Petitioner, v. SPOUSES JOSE R. BERNARDO AND
LILIBETH R. BERNARDO, DOING BUSINESS UNDER THE
NAME AND STYLE "JOLLY BEVERAGE
ENTERPRISES," Respondents.
DECISION
SERENO, C.J.:
This is a Petition for Review1 filed by Coca-Cola Bottlers Philippines,
Inc. (petitioner), from the Court of Appeals (CA) Decision 2 and
Resolution3 in CA-GR. CV No. 91096. The CA affirmed in toto the
Decision4 of Regional Trial Court (RTC) Branch 88 in Quezon City in
Civil Case No. Q-00-42320.
This case originated from the claim for damages filed by respondent
spouses Jose and Lilibeth Bernardo (respondents) against petitioner for
violation of Articles 19, 20, 21, and 28 of the Civil Code. The RTC
found petitioner liable to pay respondents temperate damages in the
amount of P500,000 for loss of goodwill, to be offset against the latter's
outstanding balance for deliveries in the amount of P449,154. The trial
court ordered petitioner to pay P50,000 as moral damages, P20,000 as
exemplary damages, and P100,000 as attorney's fees.
Petitioner asserts that the Complaint had no basis, and that the trial
court had no jurisdiction to award temperate damages in an amount
equivalent to the outstanding obligation of respondents. It prays not
only for the reversal of the assailed judgments, but also for an award of
moral and exemplary damages, as well as attorney's fees and litigation
expenses. It also asks that respondents be ordered to pay P449,154 plus
legal interest from the date of demand until full payment. 5
We deny the Petition.chanroblesvirtuallawlibrary
FACTS
Petitioner is a domestic corporation engaged in the large-scale
manufacture, sale, and distribution of beverages around the
country.6 On the other hand, respondents, doing business under the
name "Jolly Beverage Enterprises," are wholesalers of softdrinks in
Quezon City, particularly in the vicinities of Bulacan Street, V. Luna
Road, Katipunan Avenue, and Timog Avenue.7
The business relationship between the parties commenced in 1987
when petitioner designated respondents as its distributor.8 On 22 March
1994, the parties formally entered into an exclusive dealership contract
for three years.9 Under the Agreement,10 petitioner would extend
developmental assistance to respondents in the form of cash assistance
and trade discount incentives. For their part, respondents undertook to
sell petitioner's products exclusively, meet the sales quota of 7,000
cases per month, and assist petitioner in its marketing efforts.11
On 1 March 1997, the parties executed a similar agreement tor another
two years, or until 28 February 1999.12 This time, petitioner gave
respondents complimentary cases of its products instead of cash
assistance, and increased the latter's sales quota to 8,000 cases per
month.
For 13 years, the parties enjoyed a good and harmonious business
partnership.13 While the contracts contained a clause for breach, it was
never enforced.14
Sometime in late 1998 or early 1999, before the contract expired,
petitioner required respondents to submit a list of their customers on the
pretext that it would formulate a policy defining its territorial dealership
in Quezon City.15 It assured respondents that their contract would be
renewed for a longer period, provided that they would submit the
list.16 However, despite their compliance, the promise did not
materialize.17
Respondents discovered that in February 1999, petitioner started to
reach out to the persons whose names were on the list.18 Respondents
also received reports that their delivery trucks were being trailed by
petitioner's agents; and that as soon as the trucks left, the latter would
approach the former's customers.19 Further, respondents found out that
petitioner had employed a different pricing scheme, such that the price
given to distributors was significantly higher than that given to
supermarkets.20 It also enticed direct buyers and sari-sari store owners
in the area with its "Coke Alok" promo, in which it gave away one free
bottle for every case purchased.21 It further engaged a store adjacent to
respondents' warehouse to sell the former's products at a substantially
lower price.22
Respondents claimed that because of these schemes, they lost not only
their major customers - such as Peach Blossoms, May Flower
Restaurant, Saisaki Restaurant, and Kim Hong Restaurant but also
small stores, such as the canteen in the hospital where respondent Jose
Bernardo worked.23 They admitted that they were unable to pay
deliveries worth P449,154.24
Respondents filed a Complaint25 for damages, alleging that the acts of
petitioner constituted dishonesty, bad faith, gross negligence, fraud, and
unfair competition in commercial enterprise.26 The Complaint was later
amended27 to implead petitioner's officers and personnel, include
additional factual allegations, and increase the amount of damages
prayed for.
Petitioner denied the allegations.28 It maintained that it had obtained a
list of clients through surveys, and that promotional activities or
developmental strategies were implemented only after the expiration of
the Agreements.29 It opined that the filing of the complaint was a mere
ploy resorted to by respondents to evade the payment of the
deliveries.30
The RTC held petitioner liable for damages for abuse of rights in
violation of Articles 19, 20, and 21 of the Civil Code and for unfair
competition under Article 28. It found that petitioner's agents solicited
the list of clients in order to penetrate the market and directly supply
customers with its products.31 Moreover, the trial court found that
petitioner had recklessly ignored the rights of respondents to have a fair
chance to engage in business or earn a living when it deliberately used
oppressive methods to deprive them of their business.32 Its officers
were, however, absolved of liability, as there was no showing that they
had acted in their individual and personal capacities.33
In the body of its Decision, the RTC stated that petitioner should pay
respondents P500,000 as temperate damages, and that it was only just
and fair that the latter offset this amount against their outstanding
obligation to petitioner in the amount of P449,154.34 In the fallo, the
trial court awarded P50,000 as moral damages, P20,000 as exemplary
damages, and P100,000 as attorney's fees.35 It denied petitioner's
counterclaim for damages for lack of factual and legal
basis.36 Petitioner moved for reconsideration, but the motion was
denied.37
Petitioner then elevated the case to the CA, which affirmed the RTC
Decision in toto. According to the appellate court's ruling, petitioner
89
had used its sizable resources to railroad the business of
respondents:38chanroblesvirtuallawlibrary
[Petitioner] infiltrated certain areas in Quezon City at the expense of
and later, in derogation of its wholesalers, particularly [respondents].
As admitted by Allan Mercado, the Integrated Selling and Marketing
Manager of appellant, it was previously dependent on wholesalers to
circulate its products around the country. x x x.
xxxx
[T]owards the end of the partnership, appellant employed a different
marketing scheme purportedly to obviate the poor dealership
management from wholesalers in major areas. But as may be shown by
the incidents leading to the filing of this case, this method was designed
strategically to overrun [respondents'] business and take over the
customers of its wholesalers.
xxxx
One such method was "different pricing schemes" wherein the prices
given to supermarkets and grocery stores were considerably lower than
those imposed on wholesalers. No prior advice thereof was given to
[respondents] or any of the wholesalers. In fact, they only knew of it
when their customers began complaining about the variation in prices
of softdrinks sold in supermarkets and those that were sold by them.
When in fact [respondent] Bernardo personally inspected the products
in grocery stores, he discovered that a box of Coke-in-can is sold at
P40.00, lower than those offered by them as wholesalers.
About the same time, [petitioner] also implemented the "Area Market
Cooperatives" (AMC) and the "Coke-Alok" promo. Under the AMC,
customers of wholesalers can purchase [petitioner's] products from
prominent stores in heavily crowded areas for P76.00 per case, as
opposed to [respondent's] offering of P112.00. In "Coke-Alok,"
[petitioner] directly sold Coke products to wholesale customers with
incentives as free bottle of Coke for every case of softdrinks purchased.
Being of limited resources, [respondents had no] means to equal the
lucrative incentives given by [petitioner] to their customers.
xxxx
Apart from direct selling and other promotions, [petitioner] also
employed high-handed means that further shrunk [respondents'] market
coverage. In one instance, [petitioner's sales representative] advised
[respondents] and other wholesalers to keep away from major
thoroughfares. Apparently, [petitioner] was going to supply their
products to these stores themselves. x x x.
xxxx
x x x Furthermore, one of [petitioner's] representatives, Nelson
Pabulayan, admitted that he sold products at the canteen in V. Luna
Hospital [which was then being serviced by respondents].
As if that was not enough, petitioner engaged other stores, such as
Freezel's Bakeshop that was located adjacent to [respondent's]
warehouse, to sell Coke products at a price substantially lower than
[that offered by respondents].
ISSUES
Petitioner argues that the trial court had no jurisdiction to award
temperate damages that were not prayed for in the Complaint. It further
asserts that it did not violate Articles 19, 20, 21 or 28; hence, the award
of damages and attorney's fees was
improper.chanroblesvirtuallawlibrary
OUR RULING
The CA did not err in affirming the finding that petitioner was liable for
temperate, moral and exemplary damages, as well as attorney's fees, tor
abuse of rights and unfair competition.
The Petition raises questions of fact.
Petitioner ignores the nature of a petition for review as a remedy against
errors of law. Instead, it raises factual matters that have already been
passed upon by the RTC and the CA.
It insists on the following facts: 1) the "promotional activities" were
implemented after the dealership agreements expired;39 2) the
"developmental strategies" were implemented nationwide and were not
meant to destroy the business of respondents;40 3) its agents did not
follow the trucks of Jolly Beverages;41 4) the price difference resulted
because respondents could no longer avail of trade discounts and
incentives under the expired Agreement;42 and 5) there is no causal
connection between the promotional activities and the claimed losses of
respondents.43
Petitioner contends that since it did not assign any exclusive territory to
respondents, the latter had no exclusive right to any customer.44 It
supposedly decided to rely on its own sales personnel to push the sale
of its products, because the distributors had violated the terms of their
agreements by selling competing products, failing to meet the required
sales volume, or failing to pay on time.45 Petitioner, however, did not
allege that respondents committed any of these actions during the
existence of the agreement.
We have repeatedly held that factual findings of the trial court,
especially when affirmed by the appellate court, are given great weight,
even finality, by this Court.46 Petitioner fails to make a convincing
argument that this case falls under any of the exceptions to the rule. On
the contrary, the Decisions of the RTC and theCA appear to be
supported by the records.
Petitioner bewails the fact that the RTC and the CA, in establishing the
facts, relied heavily on the testimony of respondent Jose Bernardo.47
Petitioner, however, forgets that trial courts are in an ideal position to
observe the demeanor of the witnesses and can therefore discern if the
latter are telling the truth or not.48 In this case, both the trial and the
appellate courts found the testimonies of respondent Jose Bernardo and
his witnesses more credible than those of the witnesses presented by
petitioners. We shall not substitute our judgment for that of the trial
court, absent any compelling reason.
Petitioner is liable for damages for abuse of rights and unfair
competition under the Civil Code.
Both the RTC and the CA found that petitioner had employed
oppressive and high-handed schemes to unjustly limit the market
coverage and diminish the investment returns of respondents.49 The CA
summarized its findings as follows:50chanroblesvirtuallawlibrary
This [cut-throat competition] is precisely what appellant did in order to
take over the market: directly sell its products to or deal them off to
competing stores at a price substantially lower than those imposed on
its wholesalers. As a result, the wholesalers suffered losses, and in
90
[respondents'] case, laid ofT a number of employees and alienated the
patronage of its major customers including small-scale stores.
It must be emphasized that petitioner is not only a beverage giant, but
also the manufacturer of the products; hence, it sets the price. In
addition, it took advantage of the infonnation provided by respondents
to facilitate its takeover of the latter's usual business area. Distributors
like respondents, who had assisted petitioner in its marketing efforts,
suddenly found themselves with fewer customers. Other distributors
were left with no choice but to fold.51
Articles 19, 20, and 21 of the Civil Code provide the legal bedrock for
the award of damages to a party who suffers damage whenever another
person commits an act in violation of some legal provision; or an act
which, though not con'itituting a transgression of positive law,
nevertheless violates certain rudimentary rights of the party
aggrieved.52 The provisions read:chanRoblesvirtualLawlibrary
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Art. 20. Every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for the same.
Art. 21. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
In Albenson Enterprises Corp. v. CA,53 this Court held that under any of
the above provisions of law, an act that causes injury to another may be
made the basis for an award of damages. As explained by this Court
in GF Equity, Inc. v. Valenzona:54chanroblesvirtuallawlibrary
The exercise of a right ends when the right disappears; and it disappears
when it is abused, especially to the prejudice of others. The mask of a
right without the spirit of justice which gives it life is repugnant to the
modern concept of social law. It cannot be said that a person exercises a
right when he unnecessarily prejudices another or offends morals or
good customs. Over and above the specific precepts of positive law are
the supreme norms of justice which the law develops and which are
expressed in three principles: honeste vivere, alterum non
laedere and jus suum quique tribuere; and he who violates them
violates the law. For this reason, it is not permissible to abuse our rights
to prejudice others.
Meanwhile, the use of unjust, oppressive, or high-handed business
methods resulting in unfair competition also gives a right of action to
the injured party. Article 28 of the Civil Code
provides:chanRoblesvirtualLawlibrary
Art. 28. Unfair competition in agricultural, commercial or industrial
enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or highhanded method shall
give rise to a right of action by the person who thereby sutlers damage.
Petitioner cites Tolentino, who in turn cited Colin and Capitant.
According to the latter, the act of "a merchant [who] puts up a store
near the store of another and in this way attracts some of the latter's
patrons" is not an abuse of a right.55 The scenario in the present case is
vastly different: the merchant was also the producer who, with the use
of a list provided by its distributor, knocked on the doors of the latter's
customers and offered the products at a substantially lower price.
Unsatisfied, the merchant even sold its products at a preferential rate to
another store within the vicinity. Jurisprudence holds that when a
person starts an opposing place of business, not for the sake of profit,
but regardless of Joss and for the sole purpose of driving a competitor
out of business, in order to take advantage of the effects of a malevolent
purpose, that person is guilty of a wanton wrong.56
Temperate, moral, and exemplary damages, as well as attorney's fees,
were properly awarded.
Petitioner argues that the trial court did not have jurisdiction to grant an
award of temperate damages, because respondents did
not specifically pray for it in their Amended
Complaint:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, it is most respectfully prayed that
the Honorable Court render a judgment directing defendants to:
1. Pay plaintiffs the amount of P1,000,000.00 representing loss
of goodwill nurtured over the past 13 years as actual
damages.
2. Pay plaintiffs the amount of P200,000 representing moral
damages.
3. Pay plaintiffs the amount of P100,000 representing exemplary
damages.
4. Pay plaintiffs the amount of P100,000 representing attorney's
fees.
Other reliefs which are just and equitable under the premises are also
prayed for.
Petitioner's argument is flimsy and unsupported even by the cases it has
cited.57 The CA correctly ruled that the award of temperate damages
was justified, even if it was not specifically prayed for, because 1)
respondents did pray for the grant of "other reliefs," and 2) the award
was clearly warranted under the circumstances. Indeed, the law permits
judges to award a different kind of damages as an alternative to actual
damages:chanRoblesvirtualLawlibrary
Civil Code, Art. 2224. Temperate or moderate damages, which are
more than nominal but less than compensatory damages, may be
recovered when the court finds that some pecuniary loss has been
suffered but its amount can not, from the nature of the case, be provided
with certainty. (Emphasis supplied)
Compensatory damages may be awarded in the concept of temperate
damages for injury to business reputation or business standing, loss of
goodwill, and loss of customers who shifted their patronage to
competitors.58
It is not extraordinary for courts to award temperate damages in lieu of
actual damages. In Canada v. All Commodities Marketing
Corporation,59 this Court awarded temperate damages in recognition of
the pecuniary loss suffered, after finding that actual damages could not
be awarded for lack of proof. In Public Estates Authority v. Chu,60 this
Court held that temperate damages should have been awarded by the
trial court considering that the plaintiff therein had suffered some
pecuniary loss.
In this case, both the RTC and the CA found that respondents had
similarly suffered pecuniary loss by reason of petitioner's high-handed
machinations to eliminate competition in the market.61
We see no grave error on the part of the RTC when it ruled that the
unpaid obligation of respondents shall be offset against the temperate
damages due them from petitioner.62 However, the trial court was not
accurate in considering the P500,000 temperate damages as adequate to
completely extinguish the obligation of respondents to petitioner. 63 We
note that while the principal was P449,154, this amount earned legal
91
interest from the time of demand. Nonetheless, in view of the
established fact that respondents incurred the losses after their business
was systematically crippled by petitioner, it is only proper and just that
the obligation, as well as the legal interest that has accrued, be deemed
totally compensated by the temperate damages. Therefore, respondents
do not need to tender the amount of P449,154 plus legal interest to
petitioner, while the latter does not have to tender any amount as
temperate damages to the former.
hereby AFFIRMED with MODIFICATION in that the damages
awarded shall earn legal interest of 6% per annum from the date of
finality of this Decision until its full satisfaction. The total
compensation of respondents' unpaid obligation, including legal interest
that has accrued, and the temperate damages awarded to them, is hereby
upheld.
SO ORDERED.

With regard to moral damages, petitioner argues that respondents failed

to provide satisfactory proof that the latter had undergone any suffering
or injury.64 This is a factual question that has been resolved by the trial
court in a Decision affirmed by the CA. The award finds legal basis
under Article 2219(10) of the Civil Code, which states that moral
damages may be recovered in acts and actions referred to in Articles 21
and 28.65

Petitioner likewise questions the award of exemplary damages without

"competent proof."66 It cites Spouses Villafuerte v. CA67 as basis for
arguing that the CA should have based its Decision regarding the fact
and the amount of exemplary damages upon competent proof that
respondents have suffered injury and upon evidence of the actual
amount thereof. We enjoin petitioner's counsel to fully and carefully
read the text of our decisions before citing them as authority. 68 The
excerpt lifted pertains to compensatory damages, not exemplary
damages. We remind counsel that exemplary damages are awarded
under Article 2229 of the Civil Code by way of example or correction
for the public good. The determination of the amount is left to the
discretion of the judge; its proof is not incumbent upon the claimant.

There being no meritorious argument raised by petitioner, the award of

exemplary damages must be sustained to caution powerful business
owners against the use of oppressive and high-handed commercial
strategies to target and trample on the rights of small business owners,
who are striving to make a decent living.

Exemplary damages having been awarded, the grant of attorney's fees

was therefore warranted.69

Petitioner's counterclaims for moral and exemplary damages, as well

as attorney's fees and litigation expenses, were properly denied.

The counterclaim for the payment of P449,154 plus legal interet was
effectively granted when the trial court offset the temperate damages
awarded to respondents against the outstanding obligation of the latter
to petitioner.

The counterclaims for moral and exemplary damages, as well as

attorney's fees and litigation expenses, had no basis and were properly
denied. The fact that petitioner was compelled to engage the services of
counsel in order to defend itself against the suit of respondents did not
entitle it to attorney's fees.

According to petitioner, it is entitled to moral damages, because

"respondents clearly acted in a vexatious manner when they instituted
this suit."70 We see nothing in the record to sustain this argument.

With respect to the prayer for exemplary damages, neither do we find

any act of respondents that has to be deterred.

WHEREFORE, the Petition is DENIED. The Decision dated 23 July

2009 and Resolution dated 19 November 2009 rendered by the Court of
Appeals in CA-G.R. CV No. 91096, which affirmed in toto the
Decision dated 28 September 2007 issued by Regional Trial Court
Branch 88 Quezon City in Civil Case No. Q-00-42320, are

92
G.R. No. 217426, December 04, 2017
ST. MARTIN POLYCLINIC, INC., Petitioner, v. LWV
CONSTRUCTION CORPORATION, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated July 11, 2014 and the Resolution3 dated February 27,
2015 of the Court of Appeals (CA) in CA-G.R. SP No. 125451, which
affirmed with modification the Decision4 dated December 15, 2011 and
the Order dated May 25, 2012 of the Regional Trial Court of
Mandaluyong City, Branch 211 (RTC) in SCA Case No. MC11-879
(Civil Case No. 21881), and thereby ordered herein petitioner St.
Martin Polyclinic, Inc. (petitioner) to pay respondent LWV
Construction Corporation (respondent) temperate damages in the
amount of P50,000.00.
The Facts
Respondent is engaged in the business of recruiting Filipino workers
for deployment to Saudi Arabia.5 On the other hand, petitioner is an
accredited member of the Gulf Cooperative Council Approved Medical
Centers Association (GAMCA) and as such, authorized to conduct
medical examinations of prospective applicants for overseas
employment.6
On January 10, 2008, respondent referred prospective applicant
Jonathan V. Raguindin (Raguindin) to petitioner for a pre-deployment
medical examination in accordance with the instructions from
GAMCA.7After undergoing the required examinations, petitioner
cleared Raguindin and found him "fit for employment," as evidenced
by a Medical Report8 dated January 11, 2008 (Medical Report).9
Based on the foregoing, respondent deployed Raguindin to Saudi
Arabia, allegedly incurring expenses in the amount of
P84,373.41.10 Unfortunately, when Raguindin underwent another
medical examination with the General Care Dispensary of Saudi Arabia
(General Care Dispensary) on March 24, 2008, he purportedly tested
positive for HCV or the hepatitis C virus. The Ministry of Health of the
Kingdom of Saudi Arabia (Ministry of Health) required a re-
examination of Raguindin, which the General Care Dispensary
conducted on April 28, 2008.11 However, the results of the re-
examination remained the same, i.e., Raguindin was positive for HCV,
which results were reflected in a Certification12 dated April 28, 2008
(Certification). An undated HCV Confirmatory Test Report13 likewise
conducted by the Ministry of Health affirmed such finding, thereby
leading to Raguindin's repatriation to the Philippines.14
Claiming that petitioner was reckless in issuing its Medical Report
stating that Raguindin is "fit for employment" when a subsequent
finding in Saudi Arabia revealed that he was positive for HCV,
respondent filed a Complaint15 for sum of money and damages against
petitioner before the Metropolitan Trial Court of Mandaluyong City,
Branch 60 (MeTC). Respondent essentially averred that it relied on
petitioner's declaration and incurred expenses as a consequence. Thus,
respondent prayed for the award of damages in the amount of
P84,373.41 representing the expenses it incurred in deploying
Raguindin abroad.16
In its Answer with compulsory counterclaim,17 petitioner denied
liability and claimed that: first, respondent was not a proper party in
interest for lack of privity of contract between them; second, the MeTC
had no jurisdiction over the case as it involves the interpretation and
implementation of a contract of employment; third, the action is
premature as Raguindin has yet to undergo a post-employment medical
examination following his repatriation; and fourth, the complaint failed
to state a cause of action as the Medical Report issued by petitioner had
already expired on April 11, 2008, or three (3) months after its issuance
on January 11, 2008.18
The MeTC Ruling
In a Decision19 dated December 17, 2010, the MeTC rendered judgment
in favor of respondent and ordered petitioner to pay the amount of
P84,373.41 as actual damages, P20,000.00 as attorney's fees, and the
costs of suit.20
At the onset, the MeTC held that it had jurisdiction over the case, since
respondent was claiming actual damages incurred in the deployment of
Raguindin in the amount of P84,373.41.21 It further ruled that
respondent was a real party in interest, as it would not have incurred
expenses had petitioner not issued the Medical Report certifying that
Raguindin was fit to work.
On the merits, the MeTC found that respondent was entitled to be
informed accurately of the precise condition of Raguindin before
deploying the latter abroad and consequently, had sustained damage as
a result of the erroneous certification.22 In this relation, it rejected
petitioner's contention that Raguindin may have contracted the disease
after his medical examination in the Philippines up to the time of his
deployment, there being no evidence offered to corroborate the same. 23
Aggrieved, petitioner appealed to the RTC, contending,24 among others,
that respondent failed to comply with the requirements on the
authentication and proof of documents under Section 24,25 Rule 132 of
the Rules of Court, considering that respondent's evidence, particularly
the April 28, 2008 Certification issued by the General Care Dispensary
and the HCV Confirmatory Test Report issued by the Ministry of
Health, are foreign documents issued in Saudi Arabia.
The RTC Ruling
In a Decision26 dated December 15, 2011, the RTC dismissed
petitioner's appeal and affirmed the MeTC Decision in its
entirety.27 Additionally, the RTC pointed out that petitioner can no
longer change the theory of the case or raise new issues on appeal,
referring to the latter's argument on the authentication of respondent's
documentary evidence.28
Petitioner's motion for reconsideration29 was denied in an Order30 dated
May 25, 2012. Dissatisfied, petitioner elevated the case to the CA. 31
The CA Ruling
In a Decision32 dated July 11, 2014, the CA affirmed the RTC Decision,
with the modification deleting the award of actual damages and instead,
awarding temperate damages in the amount of P50,000.00.33
The CA held that petitioner failed to perform its duty to accurately
diagnose Raguindin when it issued its Medical Report declaring the
latter "fit for employment", considering that he was subsequently found
positive for HCV in Saudi Arabia.34 Further, the CA opined that the
Certification issued by the General Care Dispensary is not a public
document and in such regard, rejected petitioner's argument that the
same is inadmissible in evidence for not having been authenticated.
Moreover, it remarked that petitioner's own Medical Report does not
enjoy the presumption of regularity as petitioner is merely an accredited
clinic.35 Finally, the CA ruled that petitioner could not disclaim liability
on the ground that Raguindin tested positive for HCV in Saudi
Arabia after the expiration of the Medical Report on April 11, 2008,
noting that the General Care Dispensary issued its Certification on
April 28, 2008, or a mere seventeen (17) days from the expiration of
petitioner's Medical Report.36 Hence, the CA concluded that "it is
contrary to human experience that a newly-deployed overseas worker,
93
such as Raguindin, would immediately contract a serious virus at the
very beginning of a deployment."37
However, as the records are bereft of evidence to show that respondent
actually incurred the amount of P84,373.41 as expenses for Raguindin's
deployment, the CA deleted the award of actual damages and instead,
awarded temperate damages in the amount of P50,000.00.38
Aggrieved, petitioner filed a motion for partial reconsideration, 39 which
the CA denied in a Resolution40dated February 27, 2015; hence, this
petition.
The Issue Before the Court
The essential issue advanced for the Court's resolution is whether or not
petitioner was negligent in issuing the Medical Report declaring
Raguindin "fit for employment" and hence, should be held liable for
damages.
The Court's Ruling
The petition is granted.
I.
At the outset, it should be pointed out that a re-examination of factual
findings cannot be done acting on a petition for review
on certiorari because the Court is not a trier of facts but reviews only
questions of law.41 Thus, in petitions for review on certiorari, only
questions of law may generally be put into issue. This rule, however,
admits of certain exceptions, such as "when the inference made is
manifestly mistaken, absurd or impossible"; or "when the findings are
conclusions without citation of specific evidence on which they are
based."42 Finding a confluence of certain exceptions in this case, the
general rule that only legal issues may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court would not apply, and
the Court retains the authority to pass upon the evidence presented and
draw conclusions therefrom.43
II.
An action for damages due to the negligence of another may be
instituted on the basis of Article 2176 of the Civil Code, which defines
a quasi-delict:
Article 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
The elements of a quasi-delict are: (1) an act or omission; (2) the
presence of fault or negligencein the performance or non-
performance of the act; (3) injury; (4) a causal connection between
the negligent act and the injury; and (5) no pre-existing contractual
relation.44
As a general rule, any act or omission coming under the purview of
Article 2176 gives rise to a cause of action under quasi-delict. This, in
turn, gives the basis for a claim of damages.45 Notably, quasi-delict is
one among several sources of obligation. Article 1157 of the Civil Code
states:
Article 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
However, as explained by Associate Justice Marvic M.V.F. Leonen
(Justice Leonen) in his opinion in Alano v. Magud-Logmao46 (Alano),
"Article 2176 is not an all-encompassing enumeration of all
actionable wrongs which can give rise to the liability for damages.
Under the Civil Code, acts done in violation of Articles 19, 20, and
21 will also give rise to damages."47 These provisions - which were
cited as bases by the MTC, RTC and CA in their respective rulings in
this case - read as follows:
Article 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Article 20. Every person who, contrary to law, willfully
or negligently causes damage to another, shall indemnify the latter for
the same.
Article 21. Any person who willfully causes loss or injury to another in
a manner that is contrary to morals, good customs, or public policy
shall compensate the latter for the damage.
"[Article 19], known to contain what is commonly referred to as the
principle of abuse of rights, sets certain standards which must be
observed not only in the exercise of one's rights, but also in the
performance of one's duties."48 Case law states that "[w]hen a right is
exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong
is thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct for the
government of human relations and for the maintenance of social order,
it does not provide a remedy for its violation. Generally, an action for
damages under either Article 20 or Article 21 would [then] be
proper."49 Between these two provisions as worded, it is Article 20
which applies to both willful and negligent acts that are done contrary
to law. On the other hand, Article 21 applies only to willful acts
done contra bonos mores.50
In the Alano case, Justice Leonen aptly elaborated on the distinctive
applications of Articles 19, 20 and 21, which are general provisions on
human relations, vis-a-vis Article 2176, which particularly governs
quasi-delicts:
Article 19 is the general rule which governs the conduct of human
relations. By itself, it is not the basis of an actionable tort. Article 19
describes the degree of care required so that an actionable tort may arise
when it is alleged together with Article 20 or Article 21.
Article 20 concerns violations of existing law as basis for an injury.
It allows recovery should the act have been willful or negligent. Willful
may refer to the intention to do the act and the desire to achieve the
outcome which is considered by the plaintiff in tort action as injurious.
Negligence may refer to a situation where the act was consciously done
but without intending the result which the plaintiff considers as
injurious.
Article 21, on the other hand, concerns injuries that may be caused by
acts which are not necessarily proscribed by law. This article requires
that the act be willful, that is, that there was an intention to do the act
and a desire to achieve the outcome. In cases under Article 21, the legal
issues revolve around whether such outcome should be considered a
legal injury on the part of the plaintiff or whether the commission of the
act was done in violation of the standards of care required in Article 19.
Article 2176 covers situations where an injury happens through an act
or omission of the defendant. When it involves a positive act, the
intention to commit the outcome is irrelevant. The act itself must not
be a breach of an existing law or a pre-existing contractual
obligation. What will be considered is whether there is "fault or
94
negligence” attending the commission of the act which necessarily
leads to the outcome considered as injurious by the plaintiff. The
required degree of diligence will then be assessed in relation to the
circumstances of each and every case.51 (Emphases and underscoring
supplied)
Thus, with respect to negligent acts or omissions, it should therefore be
discerned that Article 20 of the Civil Code concerns "violations of
existing law as basis for an injury", whereas Article 2176 applies
when the negligent act causing damage to another does not
constitute "a breach of an existing law or a pre-existing contractual
obligation."
In this case, the courts a quo erroneously anchored their respective
rulings on the provisions of Articles 19, 20, and 21 of the Civil Code.
This is because respondent did not proffer (nor have these courts
mentioned) any law as basis for which damages may be recovered due
to petitioner's alleged negligent act. In its amended complaint,
respondent mainly avers that had petitioner not issue a "fit for
employment" Medical Report to Raguindin, respondent would not have
processed his documents, deployed him to Saudi Arabia, and later on -
in view of the subsequent findings that Raguindin was positive for
HCV and hence, unfit to work - suffered actual damages in the amount
of P84,373.41.52Thus, as the claimed negligent act of petitioner was not
premised on the breach of any law, and not to mention the incontestable
fact that no pre-existing contractual relation was averred to exist
between the parties, Article 2176 - instead of Articles 19, 20 and 21 - of
the Civil Code should govern.
III.
Negligence is defined as the failure to observe for the protection of the
interests of another person, that degree of care, precaution and vigilance
which the circumstances justly demand, whereby such other person
suffers injury.53
As early as the case of Picart v. Smith,54 the Court elucidated that "the
test by which to determine the existence of negligence in a particular
case is: Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person
would have used in the same situation? If not, then he is guilty of
negligence."55 Corollary thereto, the Court stated that "[t]he question as
to what would constitute the conduct of a prudent man in a given
situation must of course be always determined in the light of human
experience and in view of the facts involved in the particular
case. Abstract speculation cannot here be of much value x x x:
Reasonable men govern their conduct by the circumstances which are
before them or known to them. They are not, and are not supposed to
be, omniscient of the future. Hence[,] they can be expected to take
care only when there is something before them to suggest or warn
of danger."56
Under our Rules of Evidence, it is disputably presumed that a person
takes ordinary care of his concerns and that private transactions have
been fair and regular.57 In effect, negligence cannot be presumed,
and thus, must be proven by him who alleges it.58 In Huang v.
Philippine Hoteliers, Inc.:59
[T]he negligence or fault should be clearly established as it is the basis
of her action. The burden of proof is upon [the plaintiff]. Section 1,
Rule 131 of the Rules of Court provides that "burden of proof is the
duty of a party to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence required by
law." It is then up for the plaintiff to establish his cause of action or the
defendant to establish his defense. Therefore, if the plaintiff alleged
in his complaint that he was damaged because of the negligent acts
of the defendant, he has the burden of proving such negligence. It is
even presumed that a person takes ordinary care of his concerns.
The quantum of proof required is preponderance of
evidence.60 (Emphasis and underscoring supplied)
The records of this case show that the pieces of evidence mainly relied
upon by respondent to establish petitioner's negligence are: (a) the
Certification61 dated April 28, 2008; and (b) the HCV Confirmatory
Test Report.62 However, these issuances only indicate the results of the
General Care Dispensary and Ministry of Health's own medical
examination of Raguindin finding him to be positive for HCV. Notably,
the examination conducted by the General Care Dispensary, which was
later affirmed by the Ministry of Health, was conducted only on March
24, 2008, or at least two (2) months after petitioner issued its
Medical Report on January 11, 2008. Hence, even assuming that
Raguindin's diagnosis for HCV was correct, the fact that he later tested
positive for the same does not convincingly prove that he was already
under the same medical state at the time petitioner issued the Medical
Report on January 11, 2008. In this regard, it was therefore incumbent
upon respondent to show that there was already negligence at the
time the Medical Report was issued, may it be through evidence that
show that standard medical procedures were not carefully observed or
that there were already palpable signs that exhibited Raguindin's
unfitness for deployment at that time. This is hardly the case when
respondent only proffered evidence which demonstrate that months
after petitioner's Medical Report was issued, Raguindin, who had
already been deployed to Saudi Arabia, tested positive for HCV and as
such, was no longer "fit for employment".
In fact, there is a reasonable possibility that Raguindin became exposed
to the HCV only after his medical examination with petitioner on
January 11, 2008. Based on published reports from the World Health
Organization, HCV or the hepatitis C virus causes both acute and
chronic infection. Acute HCV infection is usually asymptomatic,63 and
is only very rarely associated with life-threatening diseases.
The incubation period64 for HCV is two (2) weeks to six (6) months,
and following initial infection, approximately 80% of people do not
exhibit any symptoms.65 Indisputably, Raguindin was not deployed to
Saudi Arabia immediately after petitioner's medical examination and
hence, could have possibly contracted the same only when he arrived
thereat. In light of the foregoing, the CA therefore erred in holding that
"[h]ad petitioner more thoroughly and diligently examined Raguindin,
it would likely have discovered the existence of the HCV because it
was contrary to human experience that a newly-deployed overseas
worker, such as Raguindin, would immediately have contracted the
disease at the beginning of his deployment"66
While petitioner's Medical Report indicates an expiration of April 11,
2008, the Court finds it fitting to clarify that the same could not be
construed as a certified guarantee coming from petitioner that
Raguindin's medical status at the time the report was issued on January
11, 2008 (i.e., that he was fit for employment) would remain the same
up until that date (i.e., April 11, 2008). As earlier intimated, the
intervening period could very well account for a number of variables
that could have led to a change in Raguindin's condition, such as his
deployment to a different environment in Saudi Arabia. If at all, the
expiration date only means that the Medical Report is valid - and as
such, could be submitted - as a formal requirement for overseas
employment up until April 11, 2008; it does not, by any means, create
legal basis to hold the issuer accountable for any intervening change of
condition from the time of issuance up until expiration. Truly, petitioner
could not be reasonably expected to predict, much less assure, that
Raguindin's medical status of being fit for employment would remain
unchanged. Thus, the fact that the Medical Report's expiration date of
April 11, 2008 was only seventeen (17) days away from the issuance of
the General Care Dispensary's April 28, 2008 Certification finding
95
Raguindin positive for HCV should not - as it does not - establish
petitioner's negligence.
IV.
At any rate, the fact that Raguindin tested positive for HCV could not
have been properly established since the courts a quo, in the first place,
erred in admitting and giving probative weight to the Certification of
the General Care Dispensary, which was written in an unofficial
language. Section 33, Rule 132 ofthe Rules of Court states that:
Section 33. Documentary evidence in an unofficial language. -
Documents written in an unofficial language shall not be admitted as
evidence, unless accompanied with a translation into English or
Filipino. To avoid interruption of proceedings, parties or their attorneys
are directed to have such translation prepared before trial. 67
A cursory examination of the subject document would reveal that while
it contains English words, the majority of it is in an unofficial language.
Sans any translation in English or Filipino provided by respondent, the
same should not have been admitted in evidence; thus their contents
could not be given probative value, and deemed to constitute proof of
the facts stated therein.
same was not accompanied by a certificate of the secretary of the
embassy or legation, consul-general, consul, vice-consul, or consular
agent or any officer in the foreign service of the Philippines stationed in
Saudi Arabia, where the record is kept, and authenticated by the seal of
his office.74
To be sure, petitioner - contrary to respondent's contention75 - has not
changed its theory of the case by questioning the foregoing documents.
As petitioner correctly argued, it merely amplified its defense76that it is
not liable for negligence when it further questioned the validity of the
issuances of the General Care Dispensary and Ministry of Health.
In Limpangco Sons v. Yangco77, the Court explained that "[t]here is a
difference x x x between a change in the theory of the case and a
shifting of the incidence of the emphasis placed during the trial or in the
briefs." "Where x x x the theory of the case as set out in the pleadings
remains the theory throughout the progress of the cause, the change of
emphasis from one phase of the case as presented by one set of facts to
another phase made prominent by another set of facts x x x does not
result in a change of theory x x x".78 In any case, petitioner had already
questioned the validity of these documents in its Position Paper79 before
the MeTC.80 Hence, there is no change of theory that would preclude
petitioner's arguments on this score.

Moreover, the due execution and authenticity of the said certification All told, there being no negligence proven by respondent through
were not proven in accordance with Section 20, Rule 132 of the Rules credible and admissible evidence, petitioner cannot be held liable for
of Court: damages under Article 2176 of the Civil Code as above-discussed.

Section 20. Proof of private document. - Before any private document
offered as authentic is received in evidence, its due execution and
authenticity must be proved either:
(a) By anyone who saw the document executed or written; or
WHEREFORE, the petition is GRANTED. Accordingly, the Decision
dated July 11, 2014 and the Resolution dated February 27, 2015 of the
Court of Appeals in CA-G.R. SP No. 125451 are REVERSED
and SET ASIDE, and a NEW ONE is entered, DISMISSING the
complaint of respondent LWV Construction Corporation for lack of
merit.

SO ORDERED.
(b) By evidence of the genuineness of the signature or handwriting of
the maker.

(c) Any other private document need only be identified as that which
it is claimed to be.

Notably, the foregoing provision applies since the Certification does not
fall within the classes of public documents under Section 19, Rule 132
of the Rules of Court68 - and hence, must be considered as private. It
has been settled that an unverified and unidentified private
document cannot be accorded probative value.69 In addition, case
law states that "since a medical certificate involves an opinion of one
who must first be established as an expert witness, it cannot be
given weight or credit unless the doctor who issued it is presented
in court to show his qualifications. It is precluded because the party
against whom it is presented is deprived of the right and opportunity to
cross-examine the person to whom the statements or writings are
attributed. Its executor or author should be presented as a witness to
provide the other party to the litigation the opportunity to question its
contents. Being mere hearsay evidence, failure to present the author of
the medical certificate renders its contents suspect and of no probative
value,"70 as in this case.

Similarly, the HCV Confirmatory Test Report issued by the Ministry of

Health of Saudi Arabia should have also been excluded as evidence.
Although the same may be considered a public document, being an
alleged written official act of an official body of a foreign country, 71 the
same was not duly authenticated in accordance with Section 24, 72 Rule
132 of the Rules of Court. While respondent provided a
translation73 thereof from the National Commission on Muslim
Filipinos, Bureau of External Relations, Office of the President, the

96
G.R. No. 127358 March 31, 2005
NOEL BUENAVENTURA, Petitioner,
vs.
COURT OF APPEALS and ISABEL LUCIA SINGH
BUENAVENTURA, respondents.
x-------------------x
G.R. No. 127449 March 31, 2005
NOEL BUENAVENTURA, Petitioner,
vs.
COURT OF APPEALS and ISABEL LUCIA SINGH
BUENAVENTURA, Respondents.
DECISION
AZCUNA, J.:
These cases involve a petition for the declaration of nullity of marriage,
which was filed by petitioner Noel Buenaventura on July 12, 1992, on
the ground of the alleged psychological incapacity of his wife, Isabel
Singh Buenaventura, herein respondent. After respondent filed her
answer, petitioner, with leave of court, amended his petition by stating
that both he and his wife were psychologically incapacitated to comply
with the essential obligations of marriage. In response, respondent filed
an amended answer denying the allegation that she was psychologically
incapacitated.1
On July 31, 1995, the Regional Trial Court promulgated a Decision, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Declaring and decreeing the marriage entered into between plaintiff
Noel A. Buenaventura and defendant Isabel Lucia Singh Buenaventura
on July 4, 1979, null and void ab initio;
2) Ordering the plaintiff to pay defendant moral damages in the amount
of 2.5 million pesos and exemplary damages of 1 million pesos with
6% interest from the date of this decision plus attorney’s fees
of P100,000.00;
3) Ordering the plaintiff to pay the defendant expenses of litigation
of P50,000.00, plus costs;
4) Ordering the liquidation of the assets of the conjugal partnership
property[,] particularly the plaintiff’s separation/retirement benefits
received from the Far East Bank [and] Trust Company[,] by ceding,
giving and paying to her fifty percent (50%) of the net amount
of P3,675,335.79 or P1,837,667.89 together with 12% interest per
annum from the date of this decision and one-half (1/2) of his
outstanding shares of stock with Manila Memorial Park and Provident
Group of Companies;
5) Ordering him to give a regular support in favor of his son Javy Singh
Buenaventura in the amount of P15,000.00 monthly, subject to
modification as the necessity arises;
6) Awarding the care and custody of the minor Javy Singh
Buenaventura to his mother, the herein defendant; and
7) Hereby authorizing the defendant to revert back to the use of her
maiden family name Singh.
Let copies of this decision be furnished the appropriate civil registry
and registries of properties.
SO ORDERED.2
Petitioner appealed the above decision to the Court of Appeals. While
the case was pending in the appellate court, respondent filed a motion
to increase the P15,000 monthly support pendente lite of their son Javy
Singh Buenaventura. Petitioner filed an opposition thereto, praying that
it be denied or that such incident be set for oral argument.3
On September 2, 1996, the Court of Appeals issued a Resolution
increasing the support pendente lite to P20,000.4Petitioner filed a
motion for reconsideration questioning the said Resolution.5
On October 8, 1996, the appellate court promulgated a Decision
dismissing petitioner’s appeal for lack of merit and affirming in toto the
trial court’s decision.6 Petitioner filed a motion for reconsideration
which was denied. From the abovementioned Decision, petitioner filed
the instant Petition for Review on Certiorari.
On November 13, 1996, through another Resolution, the Court of
Appeals denied petitioner’s motion for reconsideration of the
September 2, 1996 Resolution, which increased the monthly support for
the son.7 Petitioner filed a Petition for Certiorari to question these two
Resolutions.
On July 9, 1997, the Petition for Review on Certiorari8 and the Petition
for Certiorari9 were ordered consolidated by this Court.10
In the Petition for Review on Certiorari petitioner claims that the Court
of Appeals decided the case not in accord with law and jurisprudence,
thus:
1. WHEN IT AWARDED DEFENDANT-APPELLEE MORAL
DAMAGES IN THE AMOUNT OF P2.5 MILLION AND
EXEMPLARY DAMAGES OF P1 MILLION, WITH 6% INTEREST
FROM THE DATE OF ITS DECISION, WITHOUT ANY LEGAL
AND MORAL BASIS;
2. WHEN IT AWARDED P100,000.00 ATTORNEY’S FEES
AND P50,000.00 EXPENSES OF LITIGATION, PLUS COSTS, TO
DEFENDANT-APPELLEE, WITHOUT FACTUAL AND LEGAL
BASIS;
3. WHEN IT ORDERED PLAINTIFF-APPELLANT NOEL TO PAY
DEFENDANT-APPELLEE ONE-HALF OR P1,837,667.89 OUT OF
HIS RETIREMENT BENEFITS RECEIVED FROM THE FAR EAST
BANK AND TRUST CO., WITH 12% INTEREST THEREON FROM
THE DATE OF ITS DECISION, NOTWITHSTANDING THAT SAID
RETIREMENT BENEFITS ARE GRATUITOUS AND EXCLUSIVE
PROPERTY OF NOEL, AND ALSO TO DELIVER TO
DEFENDANT-APPELLEE ONE-HALF OF HIS SHARES OF
STOCK WITH THE MANILA MEMORIAL PARK AND THE
PROVIDENT GROUP OF COMPANIES, ALTHOUGH SAID
SHARES OF STOCK WERE ACQUIRED BY NOEL BEFORE HIS
MARRIAGE TO RESPONDENT ISABEL AND ARE, THEREFORE,
AGAIN HIS EXCLUSIVE PROPERTIES; AND
4. WHEN IT AWARDED EXCLUSIVE CARE AND CUSTODY
OVER THE PARTIES’ MINOR CHILD TO DEFENDANT-
APPELLEE WITHOUT ASKING THE CHILD (WHO WAS
ALREADY 13 YEARS OLD AT THAT TIME) HIS CHOICE AS TO
WHOM, BETWEEN HIS TWO PARENTS, HE WOULD LIKE TO
HAVE CUSTODY OVER HIS PERSON.11
In the Petition for Certiorari, petitioner advances the following
contentions:
THE COURT OF APPEALS GRAVELY ABUSED ITS
DISCRETION WHEN IT REFUSED TO SET RESPONDENT’S
MOTION FOR INCREASED SUPPORT FOR THE PARTIES’ SON
FOR HEARING.12
97
THERE WAS NO NEED FOR THE COURT OF APPEALS TO
INCREASE JAVY’S MONTHLY SUPPORT OF P15,000.00 BEING
GIVEN BY PETITIONER EVEN AT PRESENT PRICES.13
IN RESOLVING RESPONDENT’S MOTION FOR THE INCREASE
OF JAVY’S SUPPORT, THE COURT OF APPEALS SHOULD
HAVE EXAMINED THE LIST OF EXPENSES SUBMITTED BY
RESPONDENT IN THE LIGHT OF PETITIONER’S OBJECTIONS
THERETO, INSTEAD OF MERELY ASSUMING THAT JAVY IS
ENTITLED TO A P5,000 INCREASE IN SUPPORT AS SAID
AMOUNT IS "TOO MINIMAL."14
LIKEWISE, THE COURT OF APPEALS SHOULD HAVE GIVEN
PETITIONER AN OPPORTUNITY TO PROVE HIS PRESENT
INCOME TO SHOW THAT HE CANNOT AFFORD TO INCREASE
JAVY’S SUPPORT.15
With regard to the first issue in the main case, the Court of Appeals
articulated:
On Assignment of Error C, the trial court, after findings of fact
ascertained from the testimonies not only of the parties particularly the
defendant-appellee but likewise, those of the two psychologists,
awarded damages on the basis of Articles 21, 2217 and 2229 of the
Civil Code of the Philippines.
Thus, the lower court found that plaintiff-appellant deceived the
defendant-appellee into marrying him by professing true love instead of
revealing to her that he was under heavy parental pressure to marry and
that because of pride he married defendant-appellee; that he was not
ready to enter into marriage as in fact his career was and always would
be his first priority; that he was unable to relate not only to defendant-
appellee as a husband but also to his son, Javy, as a father; that he had
no inclination to make the marriage work such that in times of trouble,
he chose the easiest way out, that of leaving defendant–appellee and
their son; that he had no desire to keep defendant-appellee and their son
as proved by his reluctance and later, refusal to reconcile after their
separation; that the aforementioned caused defendant-appellee to suffer
mental anguish, anxiety, besmirched reputation, sleepless nights not
only in those years the parties were together but also after and
throughout their separation.
Plaintiff-appellant assails the trial court’s decision on the ground that
unlike those arising from a breach in ordinary contracts, damages
arising as a consequence of marriage may not be awarded. While it is
correct that there is, as yet, no decided case by the Supreme Court
where damages by reason of the performance or non-performance of
marital obligations were awarded, it does not follow that no such award
for damages may be made.
Defendant-appellee, in her amended answer, specifically prayed for
moral and exemplary damages in the total amount of 7 million pesos.
The lower court, in the exercise of its discretion, found full justification
of awarding at least half of what was originally prayed for. We find no
reason to disturb the ruling of the trial court.16
The award by the trial court of moral damages is based on Articles
2217 and 21 of the Civil Code, which read as follows:
ART. 2217. Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are
the proximate result of the defendant’s wrongful act or omission.
ART. 21. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
The trial court referred to Article 21 because Article 221917 of the Civil
Code enumerates the cases in which moral damages may be recovered
and it mentions Article 21 as one of the instances. It must be noted that
Article 21 states that the individual must willfully cause loss or injury
to another. There is a need that the act is willful and hence done in
complete freedom. In granting moral damages, therefore, the trial court
and the Court of Appeals could not but have assumed that the acts on
which the moral damages were based were done willfully and freely,
otherwise the grant of moral damages would have no leg to stand on.
On the other hand, the trial court declared the marriage of the parties
null and void based on Article 36 of the Family Code, due to
psychological incapacity of the petitioner, Noel Buenaventura. Article
36 of the Family Code states:
A marriage contracted by any party who, at the time of the celebration,
was psychologically incapacitated to comply with the essential marital
obligations of marriage, shall likewise be void even if such incapacity
becomes manifest only after its solemnization.
Psychological incapacity has been defined, thus:
. . . no less than a mental (not physical) incapacity that causes a party to
be truly incognitive of the basic marital covenants that
concomitantly must be assumed and discharged by the parties to
the marriagewhich, as so expressed by Article 68 of the Family Code,
include their mutual obligations to live together, observe love, respect
and fidelity and render help and support. There is hardly any doubt that
the intendment of the law has been to confine the meaning of
"psychological incapacity" to the most serious cases of personality
disorders clearly demonstrative of an utter insensitivity or inability to
give meaning and significance to the marriage. . . . 18
The Court of Appeals and the trial court considered the acts of the
petitioner after the marriage as proof of his psychological incapacity,
and therefore a product of his incapacity or inability to comply with the
essential obligations of marriage. Nevertheless, said courts considered
these acts as willful and hence as grounds for granting moral damages.
It is contradictory to characterize acts as a product of psychological
incapacity, and hence beyond the control of the party because of an
innate inability, while at the same time considering the same set of acts
as willful. By declaring the petitioner as psychologically incapacitated,
the possibility of awarding moral damages on the same set of facts was
negated. The award of moral damages should be predicated, not on the
mere act of entering into the marriage, but on specific evidence that it
was done deliberately and with malice by a party who had knowledge
of his or her disability and yet willfully concealed the same. No such
evidence appears to have been adduced in this case.
For the same reason, since psychological incapacity means that one is
truly incognitive of the basic marital covenants that one must assume
and discharge as a consequence of marriage, it removes the basis for the
contention that the petitioner purposely deceived the private
respondent. If the private respondent was deceived, it was not due to a
willful act on the part of the petitioner. Therefore, the award of moral
damages was without basis in law and in fact.
Since the grant of moral damages was not proper, it follows that the
grant of exemplary damages cannot stand since the Civil Code provides
that exemplary damages are imposed in addition to moral, temperate,
liquidated or compensatory damages.19
With respect to the grant of attorney’s fees and expenses of litigation
the trial court explained, thus:
Regarding Attorney’s fees, Art. 2208 of the Civil Code authorizes an
award of attorney’s fees and expenses of litigation, other than judicial
costs, when as in this case the plaintiff’s act or omission has compelled
98
the defendant to litigate and to incur expenses of litigation to protect her
interest (par. 2), and where the Court deems it just and equitable that
attorney’s fees and expenses of litigation should be recovered. (par.
11)20
The Court of Appeals reasoned as follows:
On Assignment of Error D, as the award of moral and exemplary
damages is fully justified, the award of attorney’s fees and costs of
litigation by the trial court is likewise fully justified.21
The acts or omissions of petitioner which led the lower court to deduce
his psychological incapacity, and his act in filing the complaint for the
annulment of his marriage cannot be considered as unduly compelling
the private respondent to litigate, since both are grounded on
petitioner’s psychological incapacity, which as explained above is a
mental incapacity causing an utter inability to comply with the
obligations of marriage. Hence, neither can be a ground for attorney’s
fees and litigation expenses. Furthermore, since the award of moral and
exemplary damages is no longer justified, the award of attorney’s fees
and expenses of litigation is left without basis.
Anent the retirement benefits received from the Far East Bank and
Trust Co. and the shares of stock in the Manila Memorial Park and the
Provident Group of Companies, the trial court said:
The third issue that must be resolved by the Court is what to do with the
assets of the conjugal partnership in the event of declaration of
annulment of the marriage. The Honorable Supreme Court has held that
the declaration of nullity of marriage carries ipso facto a judgment for
the liquidation of property (Domingo v. Court of Appeals, et al., G.R.
No. 104818, Sept. 17, 1993, 226 SCRA, pp. 572 – 573, 586). Thus,
speaking through Justice Flerida Ruth P. Romero, it was ruled in this
case:
When a marriage is declared void ab initio, the law states that the final
judgment therein shall provide for the liquidation, partition and
distribution of the properties of the spouses, the custody and support of
the common children and the delivery of their presumptive legitimes,
unless such matters had been adjudicated in the previous proceedings.
The parties here were legally married on July 4, 1979, and therefore, all
property acquired during the marriage, whether the acquisition appears
to have been made, contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the contrary is proved (Art.
116, New Family Code; Art. 160, Civil Code). Art. 117 of the Family
Code enumerates what are conjugal partnership properties. Among
others they are the following:
1) Those acquired by onerous title during the marriage at the expense of
the common fund, whether the acquisition be for the partnership, or for
only one of the spouses;
2) Those obtained from the labor, industry, work or profession of either
or both of the spouses;
3) The fruits, natural, industrial, or civil, due or received during the
marriage from the common property, as well as the net fruits from the
exclusive property of each spouse. . . .
Applying the foregoing legal provisions, and without prejudice to
requiring an inventory of what are the parties’ conjugal properties and
what are the exclusive properties of each spouse, it was disclosed
during the proceedings in this case that the plaintiff who worked first as
Branch Manager and later as Vice-President of Far East Bank & Trust
Co. received separation/retirement package from the said bank in the
amount of P3,701,500.00 which after certain deductions amounting
to P26,164.21 gave him a net amount of P3,675,335.79 and actually
paid to him on January 9, 1995 (Exhs. 6, 7, 8, 9, 10, 11). Not having
shown debts or obligations other than those deducted from the said
retirement/separation pay, under Art. 129 of the Family Code "The net
remainder of the conjugal partnership properties shall constitute the
profits, which shall be divided equally between husband and wife,
unless a different proportion or division was agreed upon in the
marriage settlement or unless there has been a voluntary waiver or
forfeiture of such share as provided in this Code." In this particular
case, however, there had been no marriage settlement between the
parties, nor had there been any voluntary waiver or valid forfeiture of
the defendant wife’s share in the conjugal partnership properties. The
previous cession and transfer by the plaintiff of his one-half (1/2) share
in their residential house and lot covered by T.C.T. No. S-35680 of the
Registry of Deeds of Parañaque, Metro Manila, in favor of the
defendant as stipulated in their Compromise Agreement dated July 12,
1993, and approved by the Court in its Partial Decision dated August 6,
1993, was actually intended to be in full settlement of any and all
demands for past support. In reality, the defendant wife had allowed
some concession in favor of the plaintiff husband, for were the law
strictly to be followed, in the process of liquidation of the conjugal
assets, the conjugal dwelling and the lot on which it is situated shall,
unless otherwise agreed upon by the parties, be adjudicated to the
spouse with whom their only child has chosen to remain (Art. 129, par.
9). Here, what was done was one-half (1/2) portion of the house was
ceded to defendant so that she will not claim anymore for past unpaid
support, while the other half was transferred to their only child as his
presumptive legitime.
Consequently, nothing yet has been given to the defendant wife by way
of her share in the conjugal properties, and it is but just, lawful and fair,
that she be given one-half (1/2) share of the separation/retirement
benefits received by the plaintiff the same being part of their conjugal
partnership properties having been obtained or derived from the labor,
industry, work or profession of said defendant husband in accordance
with Art. 117, par. 2 of the Family Code. For the same reason, she is
entitled to one-half (1/2) of the outstanding shares of stock of the
plaintiff husband with the Manila Memorial Park and the Provident
Group of Companies.22
The Court of Appeals articulated on this matter as follows:
On Assignment of Error E, plaintiff-appellant assails the order of the
trial court for him to give one-half of his separation/retirement benefits
from Far East Bank & Trust Company and half of his outstanding
shares in Manila Memorial Park and Provident Group of Companies to
the defendant-appellee as the latter’s share in the conjugal partnership.
On August 6, 1993, the trial court rendered a Partial Decision
approving the Compromise Agreement entered into by the parties. In
the same Compromise Agreement, the parties had agreed that
henceforth, their conjugal partnership is dissolved. Thereafter, no steps
were taken for the liquidation of the conjugal partnership.
Finding that defendant-appellee is entitled to at least half of the
separation/retirement benefits which plaintiff-appellant received from
Far East Bank & Trust Company upon his retirement as Vice-President
of said company for the reason that the benefits accrued from plaintiff–
appellant’s service for the bank for a number of years, most of which
while he was married to defendant-appellee, the trial court adjudicated
the same. The same is true with the outstanding shares of plaintiff-
appellant in Manila Memorial Park and Provident Group of Companies.
As these were acquired by the plaintiff-appellant at the time he was
married to defendant-appellee, the latter is entitled to one-half thereof
as her share in the conjugal partnership. We find no reason to disturb
the ruling of the trial court.23
Since the present case does not involve the annulment of a bigamous
marriage, the provisions of Article 50 in relation to Articles 41, 42 and
99
43 of the Family Code, providing for the dissolution of the absolute
community or conjugal partnership of gains, as the case may be, do not
apply. Rather, the general rule applies, which is that in case a marriage
is declared void ab initio, the property regime applicable and to be
liquidated, partitioned and distributed is that of equal co-ownership.
In Valdes v. Regional Trial Court, Branch 102, Quezon City,24 this
Court expounded on the consequences of a void marriage on the
property relations of the spouses and specified the applicable provisions
of law:
The trial court correctly applied the law. In a void marriage, regardless
of the cause thereof, the property relations of the parties during the
period of cohabitation is governed by the provisions of Article 147 or
Article 148, such as the case may be, of the Family Code. Article 147 is
a remake of Article 144 of the Civil Code as interpreted and so applied
in previous cases; it provides:
ART. 147. When a man and a woman who are capacitated to marry
each other, live exclusively with each other as husband and wife
without the benefit of marriage or under a void marriage, their wages
and salaries shall be owned by them in equal shares and the property
acquired by both of them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they
lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former's efforts
consisted in the care and maintenance of the family and of the
household.
Neither party can encumber or dispose by acts inter vivos of his or her
share in the property acquired during cohabitation and owned in
common, without the consent of the other, until after the termination of
their cohabitation.
When only one of the parties to a void marriage is in good faith, the
share of the party in bad faith in the co-ownership shall be forfeited in
favor of their common children. In case of default of or waiver by any
or all of the common children or their descendants, each vacant share
shall belong to the respective surviving descendants. In the absence of
descendants, such share shall belong to the innocent party. In all cases,
the forfeiture shall take place upon termination of the cohabitation.
This peculiar kind of co-ownership applies when a man and a woman,
suffering no legal impediment to marry each other, so exclusively live
together as husband and wife under a void marriage or without the
benefit of marriage. The term "capacitated" in the provision (in the first
paragraph of the law) refers to the legal capacityof a party to contract
marriage, i.e., any "male or female of the age of eighteen years or
upwards not under any of the impediments mentioned in Articles 37
and 38" of the Code.
Under this property regime, property acquired by both spouses through
their work and industry shall be governed by the rules on equal co-
ownership. Any property acquired during the union is prima facie
presumed to have been obtained through their joint efforts. A party who
did not participate in the acquisition of the property shall still be
considered as having contributed thereto jointly if said party's "efforts
consisted in the care and maintenance of the family household." Unlike
the conjugal partnership of gains, the fruits of the couple's separate
property are not included in the co-ownership.
Article 147 of the Family Code, in substance and to the above extent,
has clarified Article 144 of the Civil Code; in addition, the law now
expressly provides that —
(a) Neither party can dispose or encumber by act[s] inter vivos [of] his
or her share in co-ownership property, without the consent of the other,
during the period of cohabitation; and
(b) In the case of a void marriage, any party in bad faith shall forfeit his
or her share in the co-ownership in favor of their common children; in
default thereof or waiver by any or all of the common children, each
vacant share shall belong to the respective surviving descendants, or
still in default thereof, to the innocent party. The forfeiture shall take
place upon the termination of the cohabitation or declaration of nullity
of the marriage.
…
In deciding to take further cognizance of the issue on the settlement of
the parties' common property, the trial court acted neither imprudently
nor precipitately; a court which had jurisdiction to declare the marriage
a nullity must be deemed likewise clothed with authority to resolve
incidental and consequential matters. Nor did it commit a reversible
error in ruling that petitioner and private respondent own the "family
home" and all their common property in equal shares, as well as in
concluding that, in the liquidation and partition of the property owned
in common by them, the provisions on co-ownership under the Civil
Code, not Articles 50, 51 and 52, in relation to Articles 102 and 129, of
the Family Code, should aptly prevail. The rules set up to govern the
liquidation of either the absolute community or the conjugal partnership
of gains, the property regimes recognized for valid and voidable
marriages (in the latter case until the contract is annulled), are irrelevant
to the liquidation of the co-ownership that exists between common-law
spouses. The first paragraph of Article 50 of the Family Code, applying
paragraphs (2), (3), (4) and (5) of Article 43, relates only, by its explicit
terms, to voidable marriages and, exceptionally, to void marriages
under Article 40 of the Code, i.e., the declaration of nullity of a
subsequent marriage contracted by a spouse of a prior void marriage
before the latter is judicially declared void. The latter is a special rule
that somehow recognizes the philosophy and an old doctrine that void
marriages are inexistent from the very beginning and no judicial decree
is necessary to establish their nullity. In now requiring for purposes of
remarriage, the declaration of nullity by final judgment of the
previously contracted void marriage, the present law aims to do away
with any continuing uncertainty on the status of the second marriage. It
is not then illogical for the provisions of Article 43, in relation to
Articles 41 and 42, of the Family Code, on the effects of the
termination of a subsequent marriage contracted during the subsistence
of a previous marriage to be made applicable pro hac vice. In all other
cases, it is not to be assumed that the law has also meant to have
coincident property relations, on the one hand, between spouses in valid
and voidable marriages (before annulment) and, on the other, between
common-law spouses or spouses of void marriages, leaving to ordain,
in the latter case, the ordinary rules on co-ownership subject to the
provision of Article 147 and Article 148 of the Family Code. It must be
stressed, nevertheless, even as it may merely state the obvious, that the
provisions of the Family Code on the "family home," i.e., the
provisions found in Title V, Chapter 2, of the Family Code, remain in
force and effect regardless of the property regime of the spouses. 25
Since the properties ordered to be distributed by the court a quo were
found, both by the trial court and the Court of Appeals, to have been
acquired during the union of the parties, the same would be covered by
the co-ownership. No fruits of a separate property of one of the parties
appear to have been included or involved in said distribution. The
liquidation, partition and distribution of the properties owned in
common by the parties herein as ordered by the court a quo should,
100
therefore, be sustained, but on the basis of co-ownership and not of the
Hadji Gulam November 11,
regime of conjugal partnership of gains. P-5205 49,996
Ngilay 1986
As to the issue on custody of the parties over their only child, Javy
Singh Buenaventura, it is now moot since he is about to turn twenty- November 11,
five years of age on May 27, 200526 and has, therefore, attained the age P-5206 49,875 Edris A. Ngilay
1986
of majority.

With regard to the issues on support raised in the Petition Robayca A. November 11,
P-5207 44,797
for Certiorari, these would also now be moot, owing to the fact that the Ngilay 1986
son, Javy Singh Buenaventura, as previously stated, has attained the age
of majority.
November 11,
P-5209 20,000 Omar Ngilay
WHEREFORE, the Decision of the Court of Appeals dated October 8, 1986
1996 and its Resolution dated December 10, 1996 which are contested
in the Petition for Review (G.R. No. 127449), are hereby MODIFIED, November 11,
in that the award of moral and exemplary damages, attorney’s fees, P-5211 29,990 Tayba Ngilay
1986
expenses of litigation and costs are deleted. The order giving
respondent one-half of the retirement benefits of petitioner from Far
East Bank and Trust Co. and one-half of petitioner’s shares of stock in P-5212 48,055 Kiram Ngilay
November 11,
Manila Memorial Park and in the Provident Group of Companies 1986
is sustained but on the basis of the liquidation, partition and
distribution of the co-ownership and not of the regime of conjugal November 24,
partnership of gains. The rest of said Decision and Resolution are P-5578 20,408 Nadjer Esquevel
1991
AFFIRMED.

The Petition for Review on Certiorari (G.R. No. 127358) contesting the November 24,
Court of Appeals’ Resolutions of September 2, 1996 and November 13, P-5579 35,093 Unos Bantangan
1991
1996 which increased the support pendente lite in favor of the parties’
son, Javy Singh Buenaventura, is now MOOT and ACADEMIC and is,
accordingly, DISMISSED. November 24,
P-5580 39,507 Moner Ngilay
1991
G.R. No. 174715 October 11, 2012

FILINVEST LAND, INC., EFREN C. GUTIERRE and LINA DE November 24,

P-5582 44,809 Baiya Ngilay
GUZMAN-FERRER, Petitioners, 1991
vs.
ABDUL BACKY, ABEHERA, BAIYA, EDRIS, HADJI GULAM, November 24,
JAMELLA, KIRAM, LUCAYA, MONER, OMAR, RAMIR, P-5583 10,050 Jamela Ngilay
1991
ROBAYCA, SATAR, TAYBA ALL SURNAMED NGILAY,
EDMER ANDONG, UNOS BANTANGAN and NADJER
ESQUIVEL, Respondents. November 24,
P-5584 49,993 Ramir Ngilay
1991
DECISION

PERALTA, J.: November 24,

P-5586 40,703 Satar Ngilay
1991
For this Court's consideration is the Petition for Review on Certiorari
under Rule 45, dated November 9, 2006, of petitioner Filinvest Land,
Inc., which seeks to set aside the Decision1 dated March 30, 2006 and November 24,
P-5590 20,000 Abehara Ngilay
Resolution2 dated September 18, 2006 of the Court of Appeals (CA) 1991
partially reversing the Decision3 dated October 1, 2003 of the Regional
Trial Court, Las Piñas, Branch 253 (RTC). November 24,
P-5592 41,645 Lucaya Ngilay
1991
The factual antecedents, as found in the records follow.

Respondents were grantees of agricultural public lands located in November 24,

Tambler, General Santos City through Homestead and Fee patents P-5595 13,168 Edmer Andong
1991
sometime in 1986 and 1991 which are covered by and specifically
described in the following Original Certificates of Title issued by the
Negotiations were made by petitioner, represented by Lina de Guzman-
Register of Deeds of General Santos City:
Ferrer with the patriarch of the Ngilays, Hadji Gulam Ngilay sometime
in 1995. Eventually, a Deed of Conditional Sale of the above-
OCT Area (sq. enumerated properties in favor of petitioner Filinvest Land, Inc. was
Grantee Date Granted
No. m.) executed. Upon its execution, respondents were asked to deliver to
petitioner the original owner's duplicate copy of the certificates of title
Abdul Backy November 11, of their respective properties. Respondents received the downpayment
P-5204 38,328 for the properties on October 28, 1995.
Ngilay 1986

101
A few days after the execution of the aforestated deeds and the delivery
of the corresponding documents to petitioner, respondents came to
know that the sale of their properties was null and void, because it was
done within the period that they were not allowed to do so and that the
sale did not have the approval of the Secretary of the Department of
Environment and Natural Resources (DENR) prompting them to file a
case for the declaration of nullity of the deeds of conditional and
absolute sale of the questioned properties and the grant of right of way
with the RTC, Las Piñas, Branch 253.
On the other hand, petitioner claims that sometime in 1995, the
representative of Hadji Ngilay approached petitioner to propose the sale
of a portion of his properties. Thereafter, representatives of petitioner
flew to General Santos City from Manila to conduct an ocular
inspection of the subject properties. Petitioner was willing to purchase
the properties but seeing that some of the properties were registered as
land grants through homestead patents, representatives of petitioner
informed Ngilay that they would return to General Santos City in a few
months to finalize the sale as ten (10) certificates of title were issued on
November 24, 1991.
According to petitioner, Ngilay and his children prevailed upon the
representatives of petitioner to make an advance payment. To
accommodate the Ngilays, petitioner acceded to making an advance
with the understanding that petitioner could demand anytime the return
of the advance payment should Ngilay not be able to comply with the
conditions of the sale. The Ngilays likewise undertook to secure the
necessary approvals of the DENR before the consummation of the sale.
The RTC ruled in favor of Filinvest Land, Inc. and upheld the sale of all
the properties in litigation. It found that the sale of those properties
whose original certificates of title were issued by virtue of the 1986
Patents was valid, considering that the prohibitory period ended in
1991, or way before the transaction took place. As to those patents
awarded in 1991, the same court opined that since those properties were
the subject of a deed of conditional sale, compliance with those
conditions is necessary for there to be a perfected contract between the
parties. The RTC also upheld the grant of right of way as it adjudged
that the right of way agreement showed that the right of way was
granted to provide access from the highway to the properties to be
purchased. The dispositive portion of the Decision dated October 1,
2003 reads:
WHEREFORE, premises considered, the Court upholds the sale of all
the properties in litigation. It likewise upholds the grant of right of way
in favor of the respondent. Consequently, the petition is DISMISSED.
No pronouncement as to damages for failure to prove the same.
Costs against the petitioners.
SO ORDERED.4
Respondents elevated the case to the CA in which the latter modified
the judgment of the RTC.1âwphi1 While the CA upheld the validity of
the sale of the properties the patents of which were awarded in 1986,
including the corresponding grant of right of way for the same lots, it
nullified the disposition of those properties granted through patents in
1991 and the right of way on the same properties. As to the "1991
Patents," the CA ruled that the contract of sale between the parties was
a perfected contract, hence, the parties entered into a prohibited
conveyance of a homestead within the prohibitive period of five years
from the issuance of the patent. The CA Decision dated March 30, 2006
disposed the case as follows:
WHEREFORE, the assailed Decision dated October 1, 2003 is
MODIFIED:
a) The Deed of Conditional Sale and Deed of Absolute Sale for the
properties covered by the "1991 Patents", as well as the Right of Way
Agreement thereto, are declared null and void. The Register of Deeds
of General Santos City is consequently directed to cancel the
certificates of title covered by the "1991 Patents" issued in favor of
appellee Filinvest and to issue new titles in favor of herein appellants.
b) The sale of the properties covered by the "1986 Patents", including
the corresponding grant of way for said lots, are declared valid.
SO ORDERED.5
Petitioners filed a Motion for Partial Reconsideration, but it was denied
by the CA.
Hence, the present petition.
The grounds relied upon are:
1.
A CONDITIONAL SALE INVOLVING THE 1991 PATENTS DID
NOT VIOLATE THE PROHIBITION AGAINST ALIENATION OF
HOMESTEADS UNDER THE PUBLIC LAND ACT SINCE NO
ACTUAL TRANSFER OR DISPOSITION WAS PERFECTED
UNTIL ALL THE CONDITIONS OF THE DEED ARE FULFILLED.
2.
REGISTRATION IS THE OPERATIVE ACT THAT CONVEYS OR
DISPOSES RIGHTS IN REAL PROPERTY. BEING
UNREGISTERED, THE DEED OF CONDITIONAL SALE DID NOT
CONVEY OR DISPOSE OF THE 1991 HOMESTEADS OR ANY
RIGHTS THEREIN IN VIOLATION OF THE PUBLIC LAND ACT.
3.
ASSUMING THE NULLITY OF THE SALE OF THE 1991
PATENTS, THE HONORABLE COURT OF APPEALS SHOULD
HAVE ORDERED RESPONDENTS AS A MATTER OF LAW TO
RETURN TO PETITIONERS WHAT THEY HAVE RECEIVED.6
In their Comment7 dated March 5, 2007, respondents stated the
following counter-arguments:
(1) The Honorable Court of Appeals did not err in holding that the
Deed of Conditional Sale and Deed of Absolute Sale for the properties
covered by the 1991 Patents, as well as the Right of Way Agreement
thereto is null and void for the simplest reason that the said transactions
were volatile of the Public Land Act.
(2) The questions raised by the Petitioner, Filinvest Land Inc. (FLI) are
unsubstantial to require consideration.8
In its Reply9 dated July 30, 2007, petitioner insists that the prohibition
against alienation and disposition of land covered by Homestead
Patents is a prohibition against the actual loss of the homestead within
the five-year prohibitory period, not against all contracts including
those that do not result in such an actual loss of ownership or
possession. It also points out that respondents themselves admit that the
transfer certificates of title covering the ten parcels of land are all dated
1998, which confirms its declaration that the lands covered by 1991
Homestead Patents were not conveyed to Filinvest until after the five-
year prohibitory period.
The petition is unmeritorious.
The five-year prohibitory period following the issuance of the
homestead patent is provided under Section 118 of Commonwealth Act
No. 141, as amended by Commonwealth Act No. 456, otherwise known
102
as the Public Land Act.10 It bears stressing that the law was enacted to
give the homesteader or patentee every chance to preserve for himself
and his family the land that the State had gratuitously given to him as a
reward for his labour in cleaning and cultivating it.11 Its basic objective,
as the Court had occasion to stress, is to promote public policy that is to
provide home and decent living for destitute, aimed at providing a class
of independent small landholders which is the bulwark of peace and
order.12 Hence, any act which would have the effect of removing the
property subject of the patent from the hands of a grantee will be struck
down for being violative of the law.13
In the present case, the negotiations for the purchase of the properties
covered by the patents issued in 1991 were made in 1995 and,
eventually, an undated Deed of Conditional Sale was executed. On
October 28, 1995, respondents received the downpayment of
P14,000.000.00 for the properties covered by the patents issued in
1991. Applying the five-year prohibition, the properties covered by the
patent issued on November 24, 1991 could only be alienated after
November 24, 1996. Therefore, the sale, having been consummated on
October 28, 1995, or within the five-year prohibition, is as ruled by the
CA, void.
the sale which created the obligation of petitioner to pay the agreed
amount having been declared void, respondents have the duty to return
the down payment as they no longer have the right to keep it. The
principle of unjust enrichment essentially contemplates payment when
there is no duty to pay, and the person who receives the payment has no
right to receive it.20 As found by the CA and undisputed by the parties,
the amount or the down payment made is P14,000,000.00 which shall
also be the amount to be returned by respondents.
WHEREFORE, the Petition for Review on Certiorari dated November
9, 2006 or petitioner Filinvest Land, Inc. is hereby DENIED.
Consequently, the Decision dated March 30, 2006 and Resolution dated
September 18, 2006 or the Court of Appeals are hereby AFFIRMED
with the MODIFICATION that respondents return the amount of
P14,000,000.00 given by petitioner as down payment for the sale which
is ruled to be void ab initio.
SO ORDERED.

Petitioner argues that the correct formulation of the issue is not whether
there was a perfected contract between the parties during the period of
prohibition, but whether by such deed of conditional sale there was
"alienation or encumbrance" within the contemplation of the law. This
is wrong. The prohibition does not distinguish between consummated
and executory sale. The conditional sale entered into by the parties is
still a conveyance of the homestead patent. As correctly ruled by the
CA, citing Ortega v. Tan:14

And, even assuming that the disputed sale was not yet perfected or
consummated, still, the transaction cannot be validated. The prohibition
of the law on the sale or encumbrance of the homestead within five
years after the grant is MANDATORY. The purpose of the law is to
promote a definite policy, i.e., "to preserve and keep in the family of the
homesteader that portion of the public land which the State has
gratuitously given to him." Thus, the law does not distinguish between
executory and consummated sales. Where the sale of a homestead was
perfected within the prohibitory period of five years, the fact that the
formal deed of sale was executed after the expiration of the staid period
DID NOT and COULD NOT legalize a contract that was void from its
inception. To hold valid such arrangement would be to throw the door
open to all possible fraudulent subterfuges and schemes which persons
interested in the land given to a homesteader may devise in
circumventing and defeating the legal provisions prohibiting their
alienation within five years from the issuance of the patent. 15

To repeat, the conveyance of a homestead before the expiration of the

five-year prohibitory period following the issuance of the homestead
patent is null and void and cannot be enforced, for it is not within the
competence of any citizen to barter away what public policy by law
seeks to preserve.16

Nevertheless, petitioner does not err in seeking the return of the down
payment as a consequence of the sale having been declared void. The
rule is settled that the declaration of nullity of a contract which is void
ab initio operates to restore things to the state and condition in which
they were found before the execution thereof.17Petitioner is correct in
its argument that allowing respondents to keep the amount received
from petitioner is tantamount to judicial acquiescence to unjust
enrichment. Unjust enrichment exists "when a person unjustly retains a
benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity
and good conscience."18 There is unjust enrichment under Article 22 of
the Civil Code when (1) a person is unjustly benefited, and (2) such
benefit is derived at the expense of or with damages to another. 19 Thus,
103
 in 1995. Eventually, a Deed of Conditional Sale of the above-
enumerated properties in favor of petitioner Filinvest Land, Inc. was
G.R. No. 174715 October 11, 2012 executed. Upon its execution, respondents were asked to deliver to
petitioner the original owner's duplicate copy of the certificates of title
FILINVEST LAND, INC., EFREN C. GUTIERRE and LINA DE
of their respective properties. Respondents received the downpayment
GUZMAN-FERRER, Petitioners,
for the properties on October 28, 1995.
vs.
A few days after the execution of the aforestated deeds and the delivery
ABDUL BACKY, ABEHERA, BAIYA, EDRIS, HADJI GULAM, of the corresponding documents to petitioner, respondents came to
JAMELLA, KIRAM, LUCAYA, MONER, OMAR, RAMIR, know that the sale of their properties was null and void, because it was
ROBAYCA, SATAR, TAYBA ALL SURNAMED NGILAY, done within the period that they were not allowed to do so and that the
EDMER ANDONG, UNOS BANTANGAN and NADJER sale did not have the approval of the Secretary of the Department of
ESQUIVEL, Respondents. Environment and Natural Resources (DENR) prompting them to file a
case for the declaration of nullity of the deeds of conditional and
DECISION absolute sale of the questioned properties and the grant of right of way
with the RTC, Las Piñas, Branch 253.
PERALTA, J.:
On the other hand, petitioner claims that sometime in 1995, the
For this Court's consideration is the Petition for Review on Certiorari
representative of Hadji Ngilay approached petitioner to propose the sale
under Rule 45, dated November 9, 2006, of petitioner Filinvest Land,
of a portion of his properties. Thereafter, representatives of petitioner
Inc., which seeks to set aside the Decision1 dated March 30, 2006 and
flew to General Santos City from Manila to conduct an ocular
Resolution2 dated September 18, 2006 of the Court of Appeals (CA)
inspection of the subject properties. Petitioner was willing to purchase
partially reversing the Decision3 dated October 1, 2003 of the Regional
the properties but seeing that some of the properties were registered as
Trial Court, Las Piñas, Branch 253 (RTC).
land grants through homestead patents, representatives of petitioner
The factual antecedents, as found in the records follow. informed Ngilay that they would return to General Santos City in a few
months to finalize the sale as ten (10) certificates of title were issued on
Respondents were grantees of agricultural public lands located in November 24, 1991.
Tambler, General Santos City through Homestead and Fee patents
sometime in 1986 and 1991 which are covered by and specifically According to petitioner, Ngilay and his children prevailed upon the
described in the following Original Certificates of Title issued by the representatives of petitioner to make an advance payment. To
Register of Deeds of General Santos City: accommodate the Ngilays, petitioner acceded to making an advance
with the understanding that petitioner could demand anytime the return
OCT No. Area (sq. m.) Grantee Date Granted of the advance payment should Ngilay not be able to comply with the
conditions of the sale. The Ngilays likewise undertook to secure the
P-5204 38,328 Abdul Backy Ngilay November 11, 1986 necessary approvals of the DENR before the consummation of the sale.
P-5205 49,996 Hadji Gulam Ngilay November 11, 1986 The RTC ruled in favor of Filinvest Land, Inc. and upheld the sale of all
the properties in litigation. It found that the sale of those properties
P-5206 49,875 Edris A. Ngilay November 11, 1986
whose original certificates of title were issued by virtue of the 1986
P-5207 44,797 Robayca A. Ngilay November 11, 1986 Patents was valid, considering that the prohibitory period ended in
1991, or way before the transaction took place. As to those patents
P-5209 20,000 Omar Ngilay November 11, 1986 awarded in 1991, the same court opined that since those properties were
the subject of a deed of conditional sale, compliance with those
P-5211 29,990 Tayba Ngilay November 11, 1986
conditions is necessary for there to be a perfected contract between the
P-5212 48,055 Kiram Ngilay November 11, 1986 parties. The RTC also upheld the grant of right of way as it adjudged
that the right of way agreement showed that the right of way was
P-5578 20,408 Nadjer Esquevel November 24, 1991 granted to provide access from the highway to the properties to be
purchased. The dispositive portion of the Decision dated October 1,
P-5579 35,093 Unos Bantangan November 24, 1991 2003 reads:
P-5580 39,507 Moner Ngilay November 24, 1991 WHEREFORE, premises considered, the Court upholds the sale of all
the properties in litigation. It likewise upholds the grant of right of way
P-5582 44,809 Baiya Ngilay November 24, 1991
in favor of the respondent. Consequently, the petition is DISMISSED.
P-5583 10,050 Jamela Ngilay November 24, 1991
No pronouncement as to damages for failure to prove the same.
P-5584 49,993 Ramir Ngilay November 24, 1991
Costs against the petitioners.
P-5586 40,703 Satar Ngilay November 24, 1991
SO ORDERED.4
P-5590 20,000 Abehara Ngilay November 24, 1991
Respondents elevated the case to the CA in which the latter modified
P-5592 41,645 Lucaya Ngilay November 24, 1991 the judgment of the RTC.1âwphi1 While the CA upheld the validity of
the sale of the properties the patents of which were awarded in 1986,
P-5595 13,168 Edmer Andong November 24, 1991 including the corresponding grant of right of way for the same lots, it
nullified the disposition of those properties granted through patents in
1991 and the right of way on the same properties. As to the "1991
Negotiations were made by petitioner, represented by Lina de Guzman- Patents," the CA ruled that the contract of sale between the parties was
Ferrer with the patriarch of the Ngilays, Hadji Gulam Ngilay sometime a perfected contract, hence, the parties entered into a prohibited

104
conveyance of a homestead within the prohibitive period of five years
from the issuance of the patent. The CA Decision dated March 30, 2006
disposed the case as follows:
WHEREFORE, the assailed Decision dated October 1, 2003 is
MODIFIED:
a) The Deed of Conditional Sale and Deed of Absolute Sale for the
properties covered by the "1991 Patents", as well as the Right of Way
Agreement thereto, are declared null and void. The Register of Deeds
of General Santos City is consequently directed to cancel the
certificates of title covered by the "1991 Patents" issued in favor of
appellee Filinvest and to issue new titles in favor of herein appellants.
b) The sale of the properties covered by the "1986 Patents", including
the corresponding grant of way for said lots, are declared valid.
SO ORDERED.5
Petitioners filed a Motion for Partial Reconsideration, but it was denied
by the CA.
Hence, the present petition.
The grounds relied upon are:
1.
A CONDITIONAL SALE INVOLVING THE 1991 PATENTS DID
NOT VIOLATE THE PROHIBITION AGAINST ALIENATION OF
HOMESTEADS UNDER THE PUBLIC LAND ACT SINCE NO
ACTUAL TRANSFER OR DISPOSITION WAS PERFECTED
UNTIL ALL THE CONDITIONS OF THE DEED ARE FULFILLED.
2.
REGISTRATION IS THE OPERATIVE ACT THAT CONVEYS OR
DISPOSES RIGHTS IN REAL PROPERTY. BEING
UNREGISTERED, THE DEED OF CONDITIONAL SALE DID NOT
CONVEY OR DISPOSE OF THE 1991 HOMESTEADS OR ANY
RIGHTS THEREIN IN VIOLATION OF THE PUBLIC LAND ACT.
3.
ASSUMING THE NULLITY OF THE SALE OF THE 1991
PATENTS, THE HONORABLE COURT OF APPEALS SHOULD
HAVE ORDERED RESPONDENTS AS A MATTER OF LAW TO
RETURN TO PETITIONERS WHAT THEY HAVE RECEIVED.6
In their Comment7 dated March 5, 2007, respondents stated the
following counter-arguments:
(1) The Honorable Court of Appeals did not err in holding that the
Deed of Conditional Sale and Deed of Absolute Sale for the properties
covered by the 1991 Patents, as well as the Right of Way Agreement
thereto is null and void for the simplest reason that the said transactions
were volatile of the Public Land Act.
(2) The questions raised by the Petitioner, Filinvest Land Inc. (FLI) are
unsubstantial to require consideration.8
In its Reply9 dated July 30, 2007, petitioner insists that the prohibition
against alienation and disposition of land covered by Homestead
Patents is a prohibition against the actual loss of the homestead within
the five-year prohibitory period, not against all contracts including
those that do not result in such an actual loss of ownership or
possession. It also points out that respondents themselves admit that the
transfer certificates of title covering the ten parcels of land are all dated
1998, which confirms its declaration that the lands covered by 1991
Homestead Patents were not conveyed to Filinvest until after the five-
year prohibitory period.
The petition is unmeritorious.
The five-year prohibitory period following the issuance of the
homestead patent is provided under Section 118 of Commonwealth Act
No. 141, as amended by Commonwealth Act No. 456, otherwise known
as the Public Land Act.10 It bears stressing that the law was enacted to
give the homesteader or patentee every chance to preserve for himself
and his family the land that the State had gratuitously given to him as a
reward for his labour in cleaning and cultivating it.11 Its basic
objective, as the Court had occasion to stress, is to promote public
policy that is to provide home and decent living for destitute, aimed at
providing a class of independent small landholders which is the
bulwark of peace and order.12 Hence, any act which would have the
effect of removing the property subject of the patent from the hands of
a grantee will be struck down for being violative of the law.13
In the present case, the negotiations for the purchase of the properties
covered by the patents issued in 1991 were made in 1995 and,
eventually, an undated Deed of Conditional Sale was executed. On
October 28, 1995, respondents received the downpayment of
P14,000.000.00 for the properties covered by the patents issued in
1991. Applying the five-year prohibition, the properties covered by the
patent issued on November 24, 1991 could only be alienated after
November 24, 1996. Therefore, the sale, having been consummated on
October 28, 1995, or within the five-year prohibition, is as ruled by the
CA, void.
Petitioner argues that the correct formulation of the issue is not whether
there was a perfected contract between the parties during the period of
prohibition, but whether by such deed of conditional sale there was
"alienation or encumbrance" within the contemplation of the law. This
is wrong. The prohibition does not distinguish between consummated
and executory sale. The conditional sale entered into by the parties is
still a conveyance of the homestead patent. As correctly ruled by the
CA, citing Ortega v. Tan:14
And, even assuming that the disputed sale was not yet perfected or
consummated, still, the transaction cannot be validated. The prohibition
of the law on the sale or encumbrance of the homestead within five
years after the grant is MANDATORY. The purpose of the law is to
promote a definite policy, i.e., "to preserve and keep in the family of the
homesteader that portion of the public land which the State has
gratuitously given to him." Thus, the law does not distinguish between
executory and consummated sales. Where the sale of a homestead was
perfected within the prohibitory period of five years, the fact that the
formal deed of sale was executed after the expiration of the staid period
DID NOT and COULD NOT legalize a contract that was void from its
inception. To hold valid such arrangement would be to throw the door
open to all possible fraudulent subterfuges and schemes which persons
interested in the land given to a homesteader may devise in
circumventing and defeating the legal provisions prohibiting their
alienation within five years from the issuance of the patent.15
To repeat, the conveyance of a homestead before the expiration of the
five-year prohibitory period following the issuance of the homestead
patent is null and void and cannot be enforced, for it is not within the
competence of any citizen to barter away what public policy by law
seeks to preserve.16
Nevertheless, petitioner does not err in seeking the return of the down
payment as a consequence of the sale having been declared void. The
rule is settled that the declaration of nullity of a contract which is void
ab initio operates to restore things to the state and condition in which
they were found before the execution thereof.17 Petitioner is correct in
105
its argument that allowing respondents to keep the amount received
from petitioner is tantamount to judicial acquiescence to unjust
enrichment. Unjust enrichment exists "when a person unjustly retains a
benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity
and good conscience."18 There is unjust enrichment under Article 22 of
the Civil Code when (1) a person is unjustly benefited, and (2) such
benefit is derived at the expense of or with damages to another.19 Thus,
the sale which created the obligation of petitioner to pay the agreed
amount having been declared void, respondents have the duty to return
the down payment as they no longer have the right to keep it. The
principle of unjust enrichment essentially contemplates payment when
there is no duty to pay, and the person who receives the payment has no
right to receive it.20 As found by the CA and undisputed by the parties,
the amount or the down payment made is P14,000,000.00 which shall
also be the amount to be returned by respondents.

WHEREFORE, the Petition for Review on Certiorari dated November

9, 2006 or petitioner Filinvest Land, Inc. is hereby DENIED.
Consequently, the Decision dated March 30, 2006 and Resolution dated
September 18, 2006 or the Court of Appeals are hereby AFFIRMED
with the MODIFICATION that respondents return the amount of
P14,000,000.00 given by petitioner as down payment for the sale which
is ruled to be void ab initio.

SO ORDERED.

106
G.R. No. 160600 January 15, 2014
DOMINGO GONZALO, Petitioner,
vs.
JOHN TARNATE, JR., Respondent.
DECISION
BERSAMIN, J.:
The doctrine of in pari delicto which stipulates that the guilty parties to
an illegal contract are not entitled to any relief, cannot prevent a
recovery if doing so violates the public policy against unjust
enrichment.
Antecedents
After the Department of Public Works and Highways (DPWH) had
awarded on July 22, 1997 the contract for the improvement of the
Sadsadan-Maba-ay Section of the Mountain Province-Benguet Road in
the total amount of 7 014 963 33 to his company, Gonzalo
Construction,1 petitioner Domingo Gonzalo (Gonzalo) subcontracted to
respondent John Tarnate, Jr. (Tarnate) on October 15, 1997, the supply
of materials and labor for the project under the latter s business known
as JNT Aggregates. Their agreement stipulated, among others, that
Tarnate would pay to Gonzalo eight percent and four percent of the
contract price, respectively, upon Tarnate s first and second billing in
the project.2
In furtherance of their agreement, Gonzalo executed on April 6, 1999 a
deed of assignment whereby he, as the contractor, was assigning to
Tarnate an amount equivalent to 10% of the total collection from the
DPWH for the project. This 10% retention fee (equivalent to
₱233,526.13) was the rent for Tarnate’s equipment that had been
utilized in the project. In the deed of assignment, Gonzalo further
authorized Tarnate to use the official receipt of Gonzalo Construction in
the processing of the documents relative to the collection of the 10%
retention fee and in encashing the check to be issued by the DPWH for
that purpose.3 The deed of assignment was submitted to the DPWH on
April 15, 1999. During the processing of the documents for the
retention fee, however, Tarnate learned that Gonzalo had unilaterally
rescinded the deed of assignment by means of an affidavit of
cancellation of deed of assignment dated April 19, 1999 filed in the
DPWH on April 22, 1999;4 and that the disbursement voucher for the
10% retention fee had then been issued in the name of Gonzalo, and the
retention fee released to him.5
Tarnate demanded the payment of the retention fee from Gonzalo, but
to no avail. Thus, he brought this suit against Gonzalo on September
13, 1999 in the Regional Trial Court (RTC) in Mountain Province to
recover the retention fee of ₱233,526.13, moral and exemplary damages
for breach of contract, and attorney’s fees.6
In his answer, Gonzalo admitted the deed of assignment and the
authority given therein to Tarnate, but averred that the project had not
been fully implemented because of its cancellation by the DPWH, and
that he had then revoked the deed of assignment. He insisted that the
assignment could not stand independently due to its being a mere
product of the subcontract that had been based on his contract with the
DPWH; and that Tarnate, having been fully aware of the illegality and
ineffectuality of the deed of assignment from the time of its execution,
could not go to court with unclean hands to invoke any right based on
the invalid deed of assignment or on the product of such deed of
assignment.7
Ruling of the RTC
On January 26, 2001, the RTC, opining that the deed of assignment was
a valid and binding contract, and that Gonzalo must comply with his
obligations under the deed of assignment, rendered judgment in favor
of Tarnate as follows:
WHEREFORE, premises considered and as prayed for by the plaintiff,
John Tarnate, Jr. in his Complaint for Sum of Money, Breach of
Contract With Damages is hereby RENDERED in his favor and against
the above-named defendant Domingo Gonzalo, the Court now hereby
orders as follows:
1. Defendant Domingo Gonzalo to pay the Plaintiff, John Tarnate, Jr.,
the amount of TWO HUNDRED THIRTY THREE THOUSAND FIVE
HUNDRED TWENTY SIX and 13/100 PESOS (₱233,526.13)
representing the rental of equipment;
2. Defendant to pay Plaintiff the sum of THIRTY THOUSAND
(₱30,000.00) PESOS by way of reasonable Attorney’s Fees for having
forced/compelled the plaintiff to litigate and engage the services of a
lawyer in order to protect his interest and to enforce his right. The claim
of the plaintiff for attorney’s fees in the amount of FIFTY
THOUSAND PESOS (₱50,000.00) plus THREE THOUSAND PESOS
(₱3,000.00) clearly appears to be unconscionable and therefore reduced
to Thirty Thousand Pesos (₱30,000.00) as aforestated making the same
to be reasonable;
3. Defendant to pay Plaintiff the sum of FIFTEEN THOUSAND
PESOS (₱15,000.00) by way of litigation expenses;
4. Defendant to pay Plaintiff the sum of TWENTY THOUSAND
PESOS (₱20,000.00) for moral damages and for the breach of contract;
and
5. To pay the cost of this suit.
Award of exemplary damages in the instant case is not warranted for
there is no showing that the defendant acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner analogous to the case of
Xentrex Automotive, Inc. vs. Court of Appeals, 291 SCRA 66. 8
Gonzalo appealed to the Court of Appeals (CA).
Decision of the CA
On February 18, 2003, the CA affirmed the RTC. 9
Although holding that the subcontract was an illegal agreement due to
its object being specifically prohibited by Section 6 of Presidential
Decree No. 1594; that Gonzalo and Tarnate were guilty of entering into
the illegal contract in violation of Section 6 of Presidential Decree No.
1594; and that the deed of assignment, being a product of and
dependent on the subcontract, was also illegal and unenforceable, the
CA did not apply the doctrine of in pari delicto, explaining that the
doctrine applied only if the fault of one party was more or less
equivalent to the fault of the other party. It found Gonzalo to be more
guilty than Tarnate, whose guilt had been limited to the execution of the
two illegal contracts while Gonzalo had gone to the extent of violating
the deed of assignment. It declared that the crediting of the 10%
retention fee equivalent to ₱233,256.13 to his account had unjustly
enriched Gonzalo; and ruled, accordingly, that Gonzalo should
reimburse Tarnate in that amount because the latter’s equipment had
been utilized in the project.
Upon denial of his motion for reconsideration,10 Gonzalo has now come
to the Court to seek the review and reversal of the decision of the CA.
Issues
Gonzalo contends that the CA erred in affirming the RTC because: (1)
both parties were in pari delicto; (2) the deed of assignment was void;
107
and (3) there was no compliance with the arbitration clause in the
subcontract.
Gonzalo submits in support of his contentions that the subcontract and
the deed of assignment, being specifically prohibited by law, had no
force and effect; that upon finding both him and Tarnate guilty of
violating the law for executing the subcontract, the RTC and the CA
should have applied the rule of in pari delicto, to the effect that the law
should not aid either party to enforce the illegal contract but should
leave them where it found them; and that it was erroneous to accord to
the parties relief from their predicament.11
Ruling
We deny the petition for review, but we delete the grant of moral
damages, attorney’s fees and litigation expenses.
There is no question that every contractor is prohibited from
subcontracting with or assigning to another person any contract or
project that he has with the DPWH unless the DPWH Secretary has
approved the subcontracting or assignment. This is pursuant to Section
6 of Presidential Decree No. 1594, which provides:
Section 6. Assignment and Subcontract. – The contractor shall not
assign, transfer, pledge, subcontract or make any other disposition of
the contract or any part or interest therein except with the approval of
the Minister of Public Works, Transportation and Communications, the
Minister of Public Highways, or the Minister of Energy, as the case
may be. Approval of the subcontract shall not relieve the main
contractor from any liability or obligation under his contract with the
Government nor shall it create any contractual relation between the
subcontractor and the Government.
Gonzalo, who was the sole contractor of the project in question,
subcontracted the implementation of the project to Tarnate in violation
of the statutory prohibition. Their subcontract was illegal, therefore,
because it did not bear the approval of the DPWH Secretary.
Necessarily, the deed of assignment was also illegal, because it sprung
from the subcontract. As aptly observed by the CA:
x x x. The intention of the parties in executing the Deed of Assignment
was merely to cover up the illegality of the sub-contract agreement.
They knew for a fact that the DPWH will not allow plaintiff-appellee to
claim in his own name under the Sub-Contract Agreement.
Obviously, without the Sub-Contract Agreement there will be no Deed
of Assignment to speak of. The illegality of the Sub-Contract
Agreement necessarily affects the Deed of Assignment because the rule
is that an illegal agreement cannot give birth to a valid contract. To rule
otherwise is to sanction the act of entering into transaction the object of
which is expressly prohibited by law and thereafter execute an
apparently valid contract to subterfuge the illegality. The legal
proscription in such an instance will be easily rendered nugatory and
meaningless to the prejudice of the general public.12
Under Article 1409 (1) of the Civil Code, a contract whose cause,
object or purpose is contrary to law is a void or inexistent contract. As
such, a void contract cannot produce a valid one. 13 To the same effect is
Article 1422 of the Civil Code, which declares that "a contract, which is
the direct result of a previous illegal contract, is also void and
inexistent."
We do not concur with the CA’s finding that the guilt of Tarnate for
violation of Section 6 of Presidential Decree No. 1594 was lesser than
that of Gonzalo, for, as the CA itself observed, Tarnate had voluntarily
entered into the agreements with Gonzalo.14 Tarnate also admitted that
he did not participate in the bidding for the project because he knew
that he was not authorized to contract with the DPWH.15 Given that
Tarnate was a businessman who had represented himself in the
subcontract as "being financially and organizationally sound and
established, with the necessary personnel and equipment for the
performance of the project,"16 he justifiably presumed to be aware of
the illegality of his agreements with Gonzalo. For these reasons,
Tarnate was not less guilty than Gonzalo.
According to Article 1412 (1) of the Civil Code, the guilty parties to an
illegal contract cannot recover from one another and are not entitled to
an affirmative relief because they are in pari delicto or in equal fault.
The doctrine of in pari delicto is a universal doctrine that holds that no
action arises, in equity or at law, from an illegal contract; no suit can be
maintained for its specific performance, or to recover the property
agreed to be sold or delivered, or the money agreed to be paid, or
damages for its violation; and where the parties are in pari delicto, no
affirmative relief of any kind will be given to one against the other.17
Nonetheless, the application of the doctrine of in pari delicto is not
always rigid.1âwphi1 An accepted exception arises when its application
contravenes well-established public policy.18 In this jurisdiction, public
policy has been defined as "that principle of the law which holds that no
subject or citizen can lawfully do that which has a tendency to be
injurious to the public or against the public good."19
Unjust enrichment exists, according to Hulst v. PR Builders,
Inc.,20 "when a person unjustly retains a benefit at the loss of another,
or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience." The
prevention of unjust enrichment is a recognized public policy of the
State, for Article 22 of the Civil Code explicitly provides that "[e]very
person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense
of the latter without just or legal ground, shall return the same to him."
It is well to note that Article 22 "is part of the chapter of the Civil Code
on Human Relations, the provisions of which were formulated as basic
principles to be observed for the rightful relationship between human
beings and for the stability of the social order; designed to indicate
certain norms that spring from the fountain of good conscience; guides
for human conduct that should run as golden threads through society to
the end that law may approach its supreme ideal which is the sway and
dominance of justice."21
There is no question that Tarnate provided the equipment, labor and
materials for the project in compliance with his obligations under the
subcontract and the deed of assignment; and that it was Gonzalo as the
contractor who received the payment for his contract with the DPWH
as well as the 10% retention fee that should have been paid to Tarnate
pursuant to the deed of assignment.22 Considering that Gonzalo refused
despite demands to deliver to Tarnate the stipulated 10% retention fee
that would have compensated the latter for the use of his equipment in
the project, Gonzalo would be unjustly enriched at the expense of
Tarnate if the latter was to be barred from recovering because of the
rigid application of the doctrine of in pari delicto. The prevention of
unjust enrichment called for the exception to apply in Tarnate’s favor.
Consequently, the RTC and the CA properly adjudged Gonzalo liable
to pay Tarnate the equivalent amount of the 10% retention fee (i.e.,
₱233,526.13).
Gonzalo sought to justify his refusal to turn over the ₱233,526.13 to
Tarnate by insisting that he (Gonzalo) had a debt of ₱200,000.00 to
Congressman Victor Dominguez; that his payment of the 10% retention
fee to Tarnate was conditioned on Tarnate paying that debt to
Congressman Dominguez; and that he refused to give the 10% retention
fee to Tarnate because Tarnate did not pay to Congressman
Dominguez.23 His justification was unpersuasive, however, because,
firstly, Gonzalo presented no proof of the debt to Congressman
Dominguez; secondly, he did not competently establish the agreement
108
on the condition that supposedly bound Tarnate to pay to Congressman
Dominguez;24 and, thirdly, burdening Tarnate with Gonzalo’s personal
debt to Congressman Dominguez to be paid first by Tarnate would
constitute another case of unjust enrichment.

The Court regards the grant of moral damages, attorney’s fees and
litigation expenses to Tarnate to be inappropriate. We have ruled that
no damages may be recovered under a void contract, which, being
nonexistent, produces no juridical tie between the parties involved. 25 It
is notable, too, that the RTC and the CA did not spell out the sufficient
factual and legal justifications for such damages to be granted.

Lastly, the letter and spirit of Article 22 of the Civil Code command
Gonzalo to make a full reparation or compensation to Tarnate. The
illegality of their contract should not be allowed to deprive Tarnate
from being fully compensated through the imposition of legal interest.
Towards that end, interest of 6% per annum reckoned from September
13, 1999, the time of the judicial demand by Tarnate, is imposed on the
amount of ₱233,526.13. Not to afford this relief will make a travesty of
the justice to which Tarnate was entitled for having suffered too long
from Gonzalo’s unjust enrichment.

WHEREFORE, we AFFIRM the decision promulgated on February 18,

2003, but DELETE the awards of moral damages, attorney’s fees and
litigation expenses; IMPOSE legal interest of 6% per annum on the
principal oL₱233,526.13 reckoned from September 13, 1999; and
DIRECT the petitioner to pay the costs of suit.

SO ORDERED.

109

THIRD DIVISION
G.R. No. 213233, August 05, 2015
BLISS DEVELOPMENT CORP./HOME GUARANTY
CORPORATION, Petitioner, v. MONTANO DIAZ, DOMINGO
TAPAY, AND EDGAR H. ARREZA, Respondents.
DECISION
VELASCO JR., J.:
The Case
This is a Petition for Review on Certiorari assailing the Decision1 of the
Court of Appeals (CA), promulgated on January 21, 2014, and its
subsequent Resolution dated June 27, 2014, both in CA-G.R. CV No.
99179. The assailed Decision reversed and set aside the Decision of the
Regional Trial Court (RTC), Makati City, Branch 59, dated November
21, 2011, in Civil Case No. 96-1372. The assailed Resolution,
meanwhile, denied petitioner’s Motion for Reconsideration.
The Facts
Petitioner Bliss Development Corporation (BDC) (subsequently
reorganized as Home Guaranty Corporation) is the registered owner of
Lot No. 27, Block 30, New Capitol Estates I, Brgy. Matandang Balara,
Diliman, Quezon City, and covered by Transfer Certificate of Title
(TCT) No. 331582. On October 19, 1984, it entered into and executed a
Deed of Sale over the said property in favor of Spouses Emiliano and
Leonila Melgazo (Sps. Melgazo), both of whom are now
deceased.2redarclaw
On May 7, 1991, a certain Rodolfo Nacua (Nacua) sent a letter to BDC,
saying that Sps. Melgazo transferred to him their rights over the
property. He further expressed willingness to pay the outstanding
obligations of Sps. Melgazo to BDC. Before the property was fully
paid, however, Nacua sold his rights to Olivia Garcia (Garcia), through
a Deed of Transfer of Rights. Later, Garcia transferred her rights to
Elizabeth Reyes (Reyes). Reyes then transferred her rights to Domingo
Tapay (Tapay), who then later sold his rights to herein respondent
Montano Diaz (Diaz) for Six Hundred Thousand Pesos (P600,000.00).
Diaz then paid BDC the amortizations due on the property, amounting
to P406,915.15, and BDC issued a permit to occupy the property in
favor of Diaz. Diaz then introduced improvements on the property,
amounting to P700,000.00.
On April 14, 1992, BDC executed a Contract to Sell in favor of
Diaz.3 On April 15, 1994, however, BDC informed Diaz that
respondent Edgar Arreza (Arreza) was claiming that the heirs of Sps.
Melgazo sold to him the rights over the property.4 BDC then placed
Diaz’s account in “inactive status.” To resolve the conflicting claims of
Arreza and Diaz, BDC filed a complaint for Interpleader against them,
before the RTC, Makati City, Branch 146. On March 27, 1996, the
Makati City RTC Branch 146 ruled that the signatures of Sps. Melgazo
transferring their rights to Nacua were mere forgeries. Thus, it ruled
that Arreza had a better right over the property. This decision became
final and executory.5redarclaw
On August 27, 1996, Diaz filed the present complaint for sum of money
against BDC before the RTC, Makati City, Branch 59.6 This was later
amended to include Arreza and Tapay as defendants. Diaz argued that
BDC and Tapay’s representations led him to believe that he had a good
title over the property, but due to the court’s ruling in the interpleader
case, he was constrained to transfer the property to Arreza. Thus, he
prayed for the following:LawlibraryofCRAlaw
(1) For BDC and Arreza to pay him P1,106,915.58, plus interest,
representing the amount he paid for the assumption of Tapay’s rights;
(2) For Tapay to pay him P600,000.00, plus interests, representing the
amount he paid Tapay;
(3) For BDC and Tapay to pay him P500,000.00 as moral damages;
(4) For BDC to pay him P500,000 as exemplary damages; and
(5) For BDC, Tapay, and Arreza to pay him P100,000 as attorney’s fees
and costs of suit.7
Both BDC and Tapay argued that their respective acts were lawful and
done in good faith.Arreza filed a Motion to Dismiss, citing res
judicata, arguing that the claim of Diaz is a compulsory counterclaim
that should have been pleaded in the Interpleader case. The RTC denied
the Motion to Dismiss, which the CA, on certiorari, affirmed. When the
issue reached this Court in G.R. No. 133113,8 this Court ruled that the
claim as against Arreza is barred by res judicata. The Court upheld the
argument that the claim is in the nature of a compulsory counterclaim.
Thus, the case against Arreza was dismissed.
The Decision of the RTC
After trial, the RTC rendered its Decision on November 21, 2011,
finding that Diaz failed to prove that he is an assignee in good faith, and
thus dismissed the complaint for lack of merit in this
wise:LawlibraryofCRAlaw
Plaintiff must show that he inquired not only into the title of the
assignor but also into the assignor’s capacity to convey. The failure of
plaintiff to diligently inquire as such, indicated that he is not an
assignee in good faith. Plaintiff Diaz downplays the need to extend his
examination to intervening transferor farther than Domingo Tapay from
whom he acquired the subject property. Such attitude, however, is not
in accord with what a reasonably prudent person would do under the
circumstances.
xxxx
WHEREFORE, premises considered, plaintiff’s Complaint is hereby
DISMISSED for lack of merit. Defendant Domingo Tapay’s
[counterclaim] is likewise dismissed. No costs.9
Aggrieved, Diaz appealed to the CA.
The Decision of the CA
In its presently assailed Decision promulgated on January 21, 2014, the
CA reversed the ruling of the RTC and, instead,ruled that Diaz is
entitled to be paid reimbursement and damages. The CA anchored its
ruling on its finding that Diaz is both a buyer in good faith and a builder
in good faith, thus:LawlibraryofCRAlaw
A careful examination of the records convinces Us that Diaz is both a
buyer and builder in good faith. We note that while Bliss executed a
Deed of Sale with Mortgage in favor of the spouses Emiliano and
Leonila Melgazo, title over the property was in Bliss’ name. The title
remained in Bliss’ name when Tapay offered to transfer his rights over
the property to Diaz. Considering that the property involved is
110
registered land, Diaz need not go beyond the title to be considered a
buyer in good faith. Indeed, after Diaz accepted Tapay’s offer, he dealt
directly with Bliss which received the monthly amortizations due on the
property. For almost three years, from 1991 to 1994, Bliss accepted
Diaz’s payment without informing Diaz of Arreza’s conflicting claim
over the property. Bliss even issued Diaz a permit to occupy the
property in 1992; thus, allowing Diaz to introduce improvements on the
property. In other words, at the time when Diaz purchased the property
from Tapay and when he introduced the improvements, he had no
notice that some other person has a right over the property. He also had
a well-founded belief that the property he was building on was his.
Accordingly, Diaz is a buyer and builder in good faith. 10
In ruling that Diaz is a buyer in good faith, the CA noted that Diaz need
not go beyond the title to be considered a buyer in good faith, because
what is involved is a registered land.
With regard to the liability of BDC, the CA ruled that the provision in
the Contract to Sell excusing it from reimbursing the monthly
amortizations to Diaz cannot exempt it from liability, because it acted
in bad faith. The CA said:LawlibraryofCRAlaw
Next, Bliss’ argument that the Additional Provision in the Contract to
Sell excuses it from reimbursing the monthly amortizations paid by
Diaz cannot be given credence. Any stipulation exempting the vendor
from the obligation to answer for eviction shall be void, if he acted in
bad faith. The vendor’s bad faith consists in his knowledge beforehand
at the time of the sale, of the presence of the fact giving rise to eviction,
and its possible consequence. It is undisputed that Bliss knew about
Arreza’s claim in 1991. It even received amortization payments from
Arreza. Yet, Bliss is aware that should Arreza pursue his claim in court,
Diaz may be evicted from the property. Yet, Bliss only informed Diaz
about Arreza’s claim in 1994 when Arreza followed up his claim.
Indubitably, Bliss acted in bad faith in dealing with Diaz and should not
be absolved from liability by the Additional Provision in the Contract to
Sell.11
Thus, the CA dispositively held:LawlibraryofCRAlaw
FOR THESE REASONS, the November 21, 2011 Decision of the
Regional Trial Court of Makati City, Branch 59, is SET ASIDE. The
Court hereby DIRECTS: (1) Defendant-appellee Bliss Development
Corporation/Home Guaranty Corporation to PAY plaintiff-apellant
Montano Diaz P1,106,915.58 for the amortizations paid and amount
spent on improvements on the property, P100,000.00 as moral
damages, P50,000.00 as exemplary damages, and P25,000.00 as
attorney’s fee; and (2) defendant-appellee Domingo Tapay to PAY
plaintiff-appellant Montano M. Diaz P600,000.00, the amount he paid
for the transfer of rights.
Petitioner BDC moved for reconsideration, insisting that Diaz cannot be
declared a buyer in good faith, in light of the March 27, 1996 Decision
of the Makati City RTC, Branch 146 in the Interpleader case, which had
long been final and executory. Tapay also moved for reconsideration,
arguing that he was not aware of the defect in the title sold to Diaz, and,
hence, he should not be made liable for the P600,000.00 that Diaz paid
to him. In the CA’s assailed Resolution dated June 27, 2014,12 the CA
denied both motions for reconsideration.
Hence, the present Petition for Review on Certiorari filed by BDC,
raising the following issues:LawlibraryofCRAlaw
I.
WHETHER THE CA ERREDIN NOT DISMISSING THE APPEAL,
IN VIEW OF THE APPLICATION OF THE DOCTRINE OF
IMMUTABILITY OF JUDGMENT IN THE DECISION OF THE
COURT IN G.R. NO. 133113
II.
WHETHER THE CA ERRED IN DECLARING BDC IN BAD FAITH
III.
WHETHER THE CA ERRED IN DECLARING THAT THERE WAS
UNJUST ENRICHMENT ON THE PART OF BDC
IV.
WHETHER DIAZ CAN STILL CLAIM REIMBURSEMENT EVEN
IF UNDER THE CONTRACT, HIS POSSESSION IS IN THE
NATURE OF A LESSOR
V.
WHETHER BDC IS LIABLE TO REIMBURSE DIAZ OF THE
AMOUNT OF P1,106,915.58
In fine, petitioner argues that it is not liable to respondent Diaz, both for
the amortizations that Diaz paid to it, and the value of the
improvements that Diaz introduced to the property.
Meanwhile, Tapay failed to elevate before this Court the CA’s ruling
against him.
The Court’s Ruling
The petition is partially granted. The CA committed reversible error in
ruling that Diaz was a buyer in good faith and for value. Nevertheless,
BDC is liable to Diaz because it acted in bad faith, as discussed below.
The claim is not barred by the
doctrine of immutability of judgment
First, We dispose of the issue of the applicability of the doctrine of
immutability of judgment, in view of the ruling of this Court in G.R.
No. 133113. We find that the present claim is not barred by the court’s
ruling in G.R. No. 133113––to the effect that Diaz can no longer claim
reimbursement from Arrezabecause of res judicata––for his failure to
allege the claim in the interpleader case between them.
In G.R. No. 133113, We ruled that the claim against Arreza is barred
by res judicata, because of a prior Interpleader case between Arreza
and Diaz. We ruled that the claim for reimbursement should have been
alleged and proved in the prior case, and failure to do so bars any future
action on such claims. We reiterated the rule on res judicata,
thus:LawlibraryofCRAlaw
In cases involving res adjudicata, the parties and the causes of action
are identical or substantially the same in the prior as well as the
subsequent action. The judgment in the first action is conclusive as to
every matter offered and received therein and as to any other matter
admissible therein and which might have been offered for that purpose,
hence said judgment is an absolute bar to a subsequent action for the
same cause.The bar extends to questions necessarily involved in an
111
issue, and necessarily adjudicated, or necessarily implied in the final
judgment, although no specific finding may have been made in
reference thereto, and although such matters were directly referred to in
the pleadings and were not actually or formally presented. Said prior
judgment is conclusive in a subsequent suit between the same
parties on the same subject matter, and on the same cause of
action, not only as to matters which were decided in the first action, but
also as to every other matter which the parties could have properly set
up in the prior suit.13 (emphasis added)
In the case at bar, We find that the essential elements of res judicata are
not present. First, the interpleader case was between Arreza and Diaz.
While it was BDC that initiated the interpleader case, the opposing
parties in that prior case is, in fact, Arreza and Diaz. Second, the issues
resolved in the interpleader case revolved around the conflicting claims
of Arreza and Diaz, and not whatever claim either of them may have
against BDC. Thus, there is no identity of parties, nor identity of
subject matter, between the interpleader case and the one at bar.
Petitioner BDC acted in bad faith
in dealing with respondent Diaz
On the second issue, We find that the CA committed no reversible error
in finding that BDC acted in bad faith, when it allowed Diaz to take
over the payment of the amortizations over the subject property. As the
CA correctly noted, “It is undisputed that Bliss knew about Arreza’s
claim in 1991. It even received amortization payments from Arreza.
Yet, Bliss acknowledged the transfer to Diaz and received the monthly
amortizations paid by Diaz. Also, Bliss is aware that should Arreza
pursue his claim in court, Diaz may be evicted from the
property.”14redarclaw
BDC anchors its claim of good faith on the fact that it did not act as
seller to Diaz. Rather, BDC claims, it was Diaz who came forward and
presented himself to BDC as the lawful successor-in-interest of
Emiliano and Leonila Melgazo, by virtue of the several deeds of
transfer of rights, all of which he presented to BDC. It was on the basis
of this claim that BDC allowed Diaz to occupy the property and pay
amortizations accruing over the property.15redarclaw
Nevertheless, BDC does not dispute that as early as 1991, even before
respondent came forward presenting the deeds of transfer to BDC, BDC
was already aware of the claim of Arreza. In fact, it even received
amortizations from Arreza. Despite this, BDC also later acknowledged
the transfer to Diaz, and also accepted amortizations from him.16 This
uncontroverted sequence of events led the CA to correctly rule that
BDC, indeed, acted in bad faith.
When Diaz came forward and presented the deeds of transfer, including
the deed of transfer executed by Tapay in his favor, BDC was already
well aware of a conflicting claim by Arreza. Instead of waiting for the
resolution on the matter, BDC immediately accepted the deed of
transfer presented by Diaz, as well as the amortizations he paid over the
property. It was only in 1994 that BDC filed the Interpleader case to
resolve the conflicting case. This is nothing short of evident bad faith.
Respondent Diaz is not a purchaser
for value and in good faith
We,however, fail to find sufficient basis for the CA’s ruling that Diaz is
a purchaser for value and in good faith. In a long line of cases, this
Court had ruled that a purchaser in good faith and for value is one who
buys property of another without notice that some other person has a
right to, or interest in, such property and pays full and fair price for the
same at the time of such purchase or before he or she has notice of the
claim or interest of some other person in the property.17For one to be
considered a purchaser in good faith, the following requisites must
concur: (1) that the purchaser buys the property of another without
notice that some other person has a right to or interest in such property;
and (2) that the purchaser pays a full and fair price for the property at
the time of such purchase or before he or she has notice of the claim of
another.18 We find that in the case at bar, the first element is lacking.
The CA, in disposing the issue of Diaz’s good faith, merely said that
“considering that the property involved is registered land, Diaz need not
go beyond the title to be considered a buyer in good faith.”19We find
this to be a serious and reversible error on the part of the CA. In the
first place, while it is true that the subject lot is registered lot, the
doctrine of not going beyond the face of the title does not apply in the
case here, because what was subjected to a series of sales was not the
lot itself but the right to purchase the lot from BDC. The CA itself
observed: “while [BDC] executed a Deed of Sale with Mortgage in
favor of the spouses Emiliano and Leonila Melgazo, title over the
property was in [BDC’s] name. The title remained in [BDC’s] name
when Tapay offered to transfer his rights over the property to
Diaz.”20Notably, the several transfers themselves did not purport to be
Deeds of Absolute Sale, but merely deeds of assignment of rights. The
subject of those deeds of assignment was never the real right over the
subject property, but merely the personal right to purchase it. Therefore,
the mirror doctrine finds no application in the case at bar.
A careful review of the records of this case reveals that Diaz, in fact,
failed to diligently inquire into the title of his predecessor before
entering into the contract of sale. As such, he cannot be considered a
buyer in good faith. There is no issue that despite the several transfers
of rights from Nacua to Garcia to Reyes to Tapay to Diaz, title over the
property remained in BDC’s name.When Diaz transacted with Tapay, it
was also clear that what was being transferred was merely rights to
purchase the property, and not title over the lot itself; if it were, the sale
would have been void because Tapay never had ownership over the
subject property. As the buyer in such a transaction, it was incumbent
upon Diaz not only to inquire as to the right of Tapay to transfer his
rights, but also to trace the source of that right to purchase the property.
Had he discharged this duty diligently, he would have found out that
Nacua’s right was without basis, because it was founded on a forged
deed. For his failure to inquire diligently and trace the source of the
right to purchase the property, Diaz cannot claim to be a purchaser in
good faith and for value.
Petitioner BDC is liable to return the
amortizations paid by respondent Diaz,
under the doctrine of unjust enrichment
Notwithstanding the fact that Diaz is not an innocent purchaser in good
faith and for value, BDC is nevertheless liable to return to him the
amortizations which he already paid on the property, applying the rule
on unjust enrichment.
Unjust enrichment exists when a person unjustly retains a benefit to the
loss of another, or when a person retains money or property of another
against the fundamental principles of justice, equity and good
conscience. Under Article 22 of the Civil Code,21 there is unjust
enrichment when (1) a person is unjustly benefited and (2) such benefit
is derived at the expense of or with damages to another.22redarclaw
Allowing BDC to keep the amortizations paid by Diaz is tantamount to
unjust enrichment. It would result in BDC receiving amortizations
twice the amount it should have received, that is, the amortizations paid
by Diaz and Arreza. While BDC claims that it did not receive
amortizations from both Diaz and Arreza covering the same period,
112
such a claim is self-serving, and is not amply supported by any
documentary evidence.
Even if BDC can prove that there was no overlap between the payments
made by Diaz and those made by Arreza, allowing it to keep the
amortizations paid by Diaz still amounts to unjust enrichment. As a
direct result of the final and executory ruling that Arreza is the rightful
buyer of the subject property, the buyer-seller relationship between
Diaz and BDC is rendered null and void. Consequently, there remains
no valid consideration whatsoever for the payments made by Diaz to
BDC. There being no indication of intent to donate, because such
payments were made under the impression that Diaz is the rightful
buyer of the property, it is only but just that Diaz be allowed to claim
back what he has paid. This is only a natural consequence of the final
and executory ruling that Diaz is not the rightful buyer of the subject
property. Allowing BDC to keep such payments, at the expense of and
to the damage of Diaz, still amounts to unjust enrichment.
Both parties being in bad faith,
BDC is liable to Diaz for the value
of the improvements he introduced
on the subject property
Next, We resolve the issue of whether BDC is liable to Diaz for the
value of the improvements that Diaz introduced to the property. Arts.
448, 453, 546, and 548 of the Civil Code are material in resolving the
issue:LawlibraryofCRAlaw
Art. 448. The owner of the land on which anything has been built, sown
or planted in good faith, shall have the right to appropriate as his own
the works, sowing or planting, after payment of the indemnity provided
for in Articles 546 and 548, or to oblige the one who built or planted to
pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its
value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The
parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
Art. 453. If there was bad faith, not only on the part of the person who
built, planted or sowed on the land of another, but also on the part of
the owner of such land, the rights of one and the other shall be the same
as though both had acted in good faith.
The CA may have made the erroneous conclusion that Diaz acted in
good faith, but because BDC equally acted in bad faith, Art. 453 of the
Civil Code commands that the rights of one and the other shall be the
same as though both had acted in good faith. The CA made the correct
observation then, when it said:LawlibraryofCRAlaw
Under Article 448, the landowner is given the option, either to
appropriate the improvement as his own upon payment of the proper
amount of indemnity or to sell the land to the possessor in good faith.
Relatedly Article 546 provides that a builder in good faith is entitled to
full reimbursement for all the necessary and useful expenses incurred.
In this case, however, the option of selling the land to the builder in
good faith is no longer viable in light of the ruling in the interpleader
case. Hence, there is only one thing left for [BDC] to do: indemnify
Diaz for the improvements introduced on the property.23
Nevertheless, because the law treats both parties as if they acted in
good faith, the CA committed reversible error in awarding moral and
exemplary damages, there being no basis therefor. We find it proper to
delete the award of P100,000.00 as moral damages, P50,000.00 as
exemplary damages, and P25,000.00 as attorney’s fees.
In sum, the CA correctly reversed the ruling of the RTC, and ordered
BDC to pay Diaz the amount he paid as amortizations, as well as the
value of the improvements that he introduced on the subject property.
However, because both parties acted in bad faith, there is no basis for
the award of moral and exemplary damages, as well as attorney’s fees.
WHEREFORE, in view of the foregoing, the January 21, 2014
Decision of the Court of Appeals in CA-G.R. CV No. 99179 is hereby
MODIFIED to read as follows: (1) petitioner Bliss Development
Corporation/Home Guaranty Corporation is ordered topay respondent
Montano M. Diaz the amount of P1,106,915.58 for the amortizations
paid and the amount spent on improvements on the property; and (2)
Domingo Tapay is ordered to pay respondent Montano M. Diaz the
amount of P600,000.00, the amount he paid for the transfer of rights.
SO ORDERED.

It is understood that there is bad faith on the part of the landowner

whenever the act was done with his knowledge and without opposition
on his part.

Art. 546. Necessary expenses shall be refunded to every possessor; but

only the possessor in good faith may retain the thing until he has been
reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith

with the same right of retention, the person who has defeated him in the
possession having the option of refunding the amount of the expenses
or of paying the increase in value which the thing may have acquired by
reason thereof.

Art. 548. Expenses for pure luxury or mere pleasure shall not be
refunded to the possessor in good faith; but he may remove the
ornaments with which he has embellished the principal thing if it
suffers no injury thereby, and if his successor in the possession does not
prefer to refund the amount expended.

113

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 180832 July 23, 2008
JEROME CASTRO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
RESOLUTION
CORONA, J.:
This petition for review on certiorari1 emanated from the
complaint for grave oral defamation2 filed by Albert P. Tan
against petitioner Jerome Castro.
The facts follow.
On November 11, 2002, Reedley International School (RIS)
dismissed Tan’s son, Justin Albert (then a Grade 12 student), for
violating the terms of his disciplinary probation.3 Upon Tan’s
request, RIS reconsidered its decision but imposed "non-
appealable" conditions such as excluding Justin Albert from
participating in the graduation ceremonies.
Aggrieved, Tan filed a complaint in the Department of Education
(Dep-Ed) for violation of the Manual of Regulation of Private
Schools, Education Act of 1982 and Article 19 of the Civil
Code4 against RIS. He alleged that the dismissal of his son was
undertaken with malice, bad faith and evident premeditation.
After investigation, the Dep-Ed found that RIS’ code violation
point system allowed the summary imposition of unreasonable
sanctions (which had no basis in fact and in law). The system
therefore violated due process. Hence, the Dep-Ed nullified it. 5
Meanwhile, on November 20, 2002, the Dep-Ed ordered RIS to
readmit Justin Albert without any condition.6 Thus, he was able
to graduate from RIS and participate in the commencement
ceremonies held on March 30, 2003.
After the graduation ceremonies, Tan met Bernice C. Ching, a
fellow parent at RIS. In the course of their conversation, Tan
intimated that he was contemplating a suit against the officers of
RIS in their personal capacities, including petitioner who was the
assistant headmaster.
Ching telephoned petitioner sometime the first week of April and
told him that Tan was planning to sue the officers of RIS in their
personal capacities. Before they hung up, petitioner told Ching:
Okay, you too, take care and be careful talking to [Tan], that’s
dangerous.
Ching then called Tan and informed him that petitioner said
"talking to him was dangerous."
Insulted, Tan filed a complaint for grave oral defamation in the
Office of the City Prosecutor of Mandaluyong City against
petitioner on August 21, 2003.
On November 3, 2003, petitioner was charged with grave oral
defamation in the Metropolitan Trial Court (MeTC) of
Mandaluyong City, Branch 607 under the following Information:
That on or about the 13th day of March, 2003 in the City of
Mandaluyong, Philippines, a place within the jurisdiction of this
Honorable Court, the above-named [petitioner], with deliberate
intent of bringing ATTY. ALBERT P. TAN, into discredit,
dishonor, disrepute and contempt, did then and there, willfully,
unlawfully and feloniously speak and utter the following words to
Ms. Bernice C. Ching:
"OK, YOU TOO, YOU TAKE CARE AND BE CAREFUL
TALKING TO [TAN], THAT’S DANGEROUS."
and other words of similar import of a serious and insulting
nature.
CONTRARY TO LAW.
Petitioner pleaded not guilty during arraignment.
The prosecution essentially tried to establish that petitioner
depicted Tan as a "dangerous person." Ching testified that
petitioner warned her that talking to Tan was dangerous. Tan, on
the other hand, testified that petitioner’s statement shocked him
as it portrayed him as "someone capable of committing
undesirable acts." He added that petitioner probably took offense
because of the complaint he filed against RIS in the Dep-Ed.
For his defense, petitioner denied harboring ill-feelings against
Tan despite the latter’s complaint against RIS in the Dep-Ed.
Although he admitted conversing with Ching (whom he
considered as a close acquaintance) on the telephone a few
days after RIS’ 2003 commencement exercises, petitioner
asserted that he never said or insinuated that Tan or talking to
Tan was dangerous. On cross-examination, however, he did not
categorically deny the veracity of Ching’s statement.
The MeTC found that Ching’s statements in her affidavit and in
open court were consistent and that she did not have any motive
to fabricate a false statement. Petitioner, on the other hand,
harbored personal resentment, aversion and ill-will against Tan
since the Dep-Ed compelled RIS to readmit his son. Thus, the
MeTC was convinced that petitioner told Ching talking to Tan
was dangerous and that he uttered the statement with the
intention to insult Tan and tarnish his social and professional
reputation.
In a decision dated December 27, 2005, the MeTC found
petitioner guilty beyond reasonable doubt of grave oral
defamation:8
WHEREFORE, judgment is hereby rendered finding accused,
Jerome Castro GUILTY beyond reasonable doubt of the crime of
Grave Oral Defamation, sentencing him therefore, in accordance
to Article 358(1) of the Revised Penal Code and applying the
Indeterminate Sentence Law to suffer the penalty of
imprisonment of 1 month and 1 day of arresto mayor as
minimum to 4 months and 1 day of arresto mayor as maximum.
On appeal, the Regional Trial Court (RTC) affirmed the factual
findings of the MeTC. However, in view of the animosity between
the parties, it found petitioner guilty only of slight oral defamation.
But because Tan filed his complaint in the Office of the City
Prosecutor of Mandaluyong City only on August 21, 2003 (or
almost five months from discovery), the RTC ruled that
prescription had already set in; it therefore acquitted petitioner on
that ground. 9
On April 19, 2007, the Office of the Solicitor General (OSG) filed
a petition for certiorari in the Court of Appeals (CA) assailing the
decision of the RTC.10 It contended that the RTC acted with
114
grave abuse of discretion when it downgraded petitioner’s
offense to slight oral defamation. The RTC allegedly
misappreciated the antecedents which provoked petitioner to
utter the allegedly defamatory statement against Tan.
The CA found that the RTC committed grave abuse of discretion
when it misapprehended the totality of the circumstances and
found petitioner guilty only of slight oral defamation. Thus, the
CA reinstated the MeTC decision.11
Petitioner moved for reconsideration but it was denied.12 Hence,
this recourse.
Petitioner basically contends that the CA erred in taking
cognizance of the petition for certiorari inasmuch as the OSG
raised errors of judgment (i.e., that the RTC misappreciated the
evidence presented by the parties) but failed to prove that the
RTC committed grave abuse of discretion. Thus, double jeopardy
attached when the RTC acquitted him.
We grant the petition.
No person shall be twice put in jeopardy of punishment for the
same offense.13 This constitutional mandate is echoed in Section
7 of Rule 117 of the Rules of Court which provides:
Section 7. Former conviction or acquittal; double jeopardy. –
When an accused has been convicted or acquitted or the case
against him dismissed or otherwise terminated without his
express consent by a court of competent jurisdiction, upon a
valid complaint or in information or other formal charge sufficient
in form and substance to sustain a conviction and after the
accused had pleaded to the charge, the conviction or acquittal of
the accused or the dismissal of the case shall be a bar to another
prosecution for the offense charged or for any attempt to commit
the same or frustration thereof, or for any offense which
necessarily includes or is necessarily included in the offense
charged in the former complaint or information.
xxx xxx xxx
Under this provision, double jeopardy occurs upon (1) a valid
indictment (2) before a competent court (3) after arraignment (4)
when a valid plea has been entered and (5) when the accused
was acquitted or convicted or the case was dismissed or
otherwise terminated without the express consent of the
accused.14 Thus, an acquittal, whether ordered by the trial or
appellate court, is final and unappealable on the ground of
double jeopardy.15
What the OSG therefore questioned were errors of judgment (or
those involving misappreciation of evidence or errors of law).
However, a court, in a petition for certiorari, cannot review the
public respondent’s evaluation of the evidence and factual
findings.18 Errors of judgment cannot be raised in a Rule 65
petition as a writ of certiorari can only correct errors of jurisdiction
(or those involving the commission of grave abuse of
discretion).19
Because the OSG did not raise errors of jurisdiction, the CA
erred in taking cognizance of its petition and, worse, in reviewing
the factual findings of the RTC.20 We therefore reinstate the RTC
decision so as not to offend the constitutional prohibition against
double jeopardy.
At most, petitioner could have been liable for damages under
Article 26 of the Civil Code21 :
Article 26. Every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other
persons. The following and similar acts, though they may not
constitute a criminal offense, shall produce a cause of action for
damages, prevention and other relief:
xxx xxx xxx
(3) Intriguing to cause another to be alienated from his
friends;
xxx xxx xxx
Petitioner is reminded that, as an educator, he is supposed to be
a role model for the youth. As such, he should always act with
justice, give everyone his due and observe honesty and good
faith.22
WHEREFORE, the petition is hereby GRANTED. The August 29,
2007 decision and December 5, 2007 resolution of the Court of
Appeals in CA-G.R. SP No. 98649 are REVERSED and SET
ASIDE. The November 20, 2006 decision of the Regional Trial
Court of Mandaluyong City, Branch 212 is REINSTATED.
Petitioner Jerome Castro is ACQUITTED of slight oral
defamation as defined and penalized in Article 358 of the
Revised Penal Code.
No pronouncement as to costs.
SO ORDERED.

The only exception is when the trial court acted with grave abuse
of discretion or, as we held in Galman v. Sandiganbayan,16 when
there was mistrial. In such instances, the OSG can assail the
said judgment in a petition for certiorari establishing that the
State was deprived of a fair opportunity to prosecute and prove
its case.17

The rationale behind this exception is that a judgment rendered

by the trial court with grave abuse of discretion was issued
without jurisdiction. It is, for this reason, void. Consequently,
there is no double jeopardy.

In this case, the OSG merely assailed the RTC’s finding on the
nature of petitioner’s statement, that is, whether it constituted
grave or slight oral defamation. The OSG premised its allegation
of grave abuse of discretion on the RTC’s "erroneous" evaluation
and assessment of the evidence presented by the
parties.1awph!1

115
G.R. No. L-54598 April 15, 1988
JOSE B. LEDESMA, petitioner,
vs.
HON. COURT OF APPEALS, Spouses PACIFICO DELMO and
SANCHA DELMO (as private respondents), respondents.
The Solicitor General for petitioner.
Luzel D. Demasu-ay for respondent.
GUTIERREZ, JR., J.:
This petition seeks to reverse the decision of the respondent Court of
Appeals which afirmed the decision of the Court of First Instance of
Iloilo, adjudging the petitioner, who was then the President of the West
Visayas College liable for damages under Article 27 of the Civil Code
of the Philippines for failure to graduate a student with honors.
The facts are not disputed.
An organization named Student Leadership Club was formed by some
students of the West Visayas College. They elected the late Violets
Delmo as the treasurer. In that capacity, Delmo extended loans from the
funds of the club to some of the students of the school. "the petitioner
claims that the said act of extending loans was against school rules and
regulations. Thus, the petitioner, as President of the School, sent a letter
to Delmo informing her that she was being dropped from the
membership of the club and that she would not be a candidate for any
award or citation from the school.
Delmo asked for a reconsideration of the decision but the petitioner
denied it. Delmo, thus, appealed to the Office of the Director of the
Bureau of Public Schools.
The Director after due investigation, rendered a decison on April 13,
1966 which provided:
Records of the preliminary investigation conducted by one of the legal
officers of this Office disclosed the following: That Violeta Delmo was
the treasurer of the Student Leadership Club, an exclusive student
organization; that pursuant to Article IX of the of the Constitution and
By-Laws of the club, it passed Resolution No. 2, authorizing the
treasurer to disburse funds of the Club to student for financial aid and
other humanitarian purposes; that in compliance with said resolution
and as treasurer of the Club, Violeta Delmo extended loans to some
officers and members of the Club upon proper application duly
approved by the majority of the members of the Executive Board; and
that upon receiving the report from Mr. Jesse Dagoon, adviser of the
funds of the Club, that Office conducted an investigation on the matter
and having been convinced of the guilt of Violets Delmo and the other
officers and members of the Club, that Office rendered the order or
decision in question. In justifying that Office's order or decision, it is
contended that approval by that Office of the Constitution and By-Laws
of the Club is necessary for its effectivity and validity and since it was
never submitted to that Office, the Club had no valid constitution and
By-Laws and that as a consequence, Resolution No. 2 which was
passed based on the Constitution and By-Laws- is without any force
and effect and the treasurer, Violeta Delmo, who extended loans to
some officers and members of the Club pursuant thereto are illegal
(sic), hence, she and the other students involved are deemed guilty of
misappropriating the funds of the Club. On the other hand, Raclito
Castaneda, Nestor Golez and Violeta Delmo, President, Secretary and
Treasurer of the Club, respectively, testified that the Club had adopted
its Constitution and By-Laws in a meeting held last October 3, 1965,
and that pursuant to Article I of said Constitution and By-Laws, the
majority of the members of the Executive Board passed Resolution No.
2, which resolution became the basis for the extension on of loans to
some officers and members of the Club, that the Club honestly believed
that its Constitution and By-Laws has been approved by the
superintendent because the adviser of the Club, Mr. Jesse Dagoon,
assured the President of the Club that he will cause the approval of the
Constitution and By-Laws by the Superintendent; the officers of the
Club have been inducted to office on October 9,1965 by the
Superintendent and that the Club had been likewise allowed to
cosponsor the Education Week Celebration.
After a careful study of the records, this Office sustains the action taken
by the Superintendent in penalizing the adviser of the Club as well as
the officers and members thereof by dropping them from membership
therein. However, this Office is convinced that Violets M. Delmo had
acted in good faith, in her capacity as Club Treasurer, in extending
loans to the officers and members of the Student partnership Club.
Resolution No. 2 authorizing the Club treasurer to discharge finds to
students in need of financial assistance and other humanitarian purposes
had been approved by the Club adviser, Mr. Jesse Dagoon, with the
notation that approval was given in his capacity as adviser of the Club
and extension of the Superintendent's personality. Aside from
misleading the officers and members of the Club, Mr. Dagoon, had
unsatisfactorily explained why he failed to give the Constitution and
By-Laws of the Club to the Superintendent for approval despite his
assurance to the Club president that he would do so. With this finding
of negligence on the part of the Club adviser, not to mention laxity in
the performance of his duties as such, this Office considers as too
severe and unwarranted that portion of the questioned order stating that
Violeta Delmo "shall not be a candidate for any award or citation from
this school or any organization in this school." Violeta Delmo, it is
noted, has been a consistent full scholar of the school and she alone has
maintained her scholarship. The decision in question would, therefore,
set at naught all her sacrifice and frustrate her dreams of graduating
with honors in this year's commencement exercises.
In view of all the foregoing, this Office believes and so holds and
hereby directs that appellant Violeta. M. Delmo, and for that matter all
other Club members or officers involved in this case, be not deprived of
any award, citation or honor from the school, if they are otherwise
entitled thereto. (Rollo, pp. 28-30)
On April 27, 1966, the petitioner received by mail the decision of the
Director and all the records of the case. On the same day, petitioner
received a telegram stating the following:
"AIRMAIL RECORDS DELMO CASE MISSENT THAT OFFICE"
The Director asked for the return only of the records but the petitioner
allegedly mistook the telegram as ordering him to also send the
decision back. On the same day, he returned by mail all the records plus
the decision of the Director to the Bureau of Public Schools.
The next day, the petitioner received another telegram from the
Director order him to furnish Delmo with a copy of the decision. The
petitioner, in turn, sent a night letter to the Director informing the latter
that he had sent the decision back and that he had not retained a copy
thereof..
On May 3, 1966, the day of the graduation, the petitioner received
another telegram from the Director ordering him not to deprive Delmo
of any honors due her. As it was impossible by this time to include
Delmo's name in the program as one of the honor students, the
petitioner let her graduate as a plain student instead of being awarded
the Latin honor of Magna Cum Laude.
To delay the matter further, the petitioner on May 5, 1966, wrote the
Director for a reconsideration of the latters" decision because he
116
believed that Delmo should not be allowed to graduate with honors.
The Director denied the petitioner's request.
On July 12, 1966, the petitioner finally instructed the Registrar of the
school to enter into the scholastic records of Delmo the honor, "Magna
Cum Laude."
On July 30, 1966, Delmo, then a minor, was joined by her parents in
flag action for damages against the petitioner. During the pendency of
the action, however, Delmo passed away, and thus, an Amended and
Supplemental Complaint was filed by her parents as her sole and only
heirs.
The trial court after hearing rendered judgment against the petitioner
and in favor of the spouses Delmo. The court said:
Let us go to specific badges of the defendants (now petitioners) bad
faith. Per investigation of Violeta Delmo's appeal to Director Vitaliano
Bernardino of the Bureau of Public Schools (Exhibit L it was the
defendant who inducted the officers of the Student Leadership Club on
October 9, 1965. In fact the Club was allowed to cosponsor the
Education Week Celebration. (Exh. "L"). If the defendant he not
approve of the constitution and by-laws of the Club, why did he induct
the officers into office and allow the Club to sponsor the Education
Week Celebration"? It was through his own act that the students were
misled to do as they did. Coupled with the defendants tacit recognition
of the Club was the assurance of Mr. Jemm Dagoon, Club Adviser, who
made the students believe that he was acting as an extension of Mr.
Ledesma's personality. (Exhibit "L").
Another badge of the defendan'ts want of good faith is the fact that,
although, he kaew as early as April 27,1966 that per on of r Bernardino,
Exhibit "L," he was directed to give honors to Miss Delmo, he kept Id
information to . He told the Court that he knew that the letter of
Director Bernardino directed him not to deprive Miss Delmo the honors
due her, but she (sic) says that he has not finished reading the letter-
decision, Exhibit "L," of Director Bernardino 0, him to give honors to
Miss Delmo. (Tsn, Feb. 5, 1974, testimony of Mr. Ledesma, pp. .33-
35). It could not be true that he has not finished reading the letter-
decision, Exh. "L," because said letter consisted of only three pages,
and the portion which directed that Miss Delmo "be not deprived of any
award, citation or honor from the school, if otherwise entitled thereto is
found at the last paragraph of the same. How did he know the last
paragraph if he did not read the letter.
Defendants actuations regarding Miss Delmo's cam had been one of
bias and prejudice. When his action would favor him, he was deliberate
and aspect to the utter prejudice and detriment of Miss Delmo. Thus,
although, as early as April 27, 1966, he knew of the exoneration of
Miss Delino by Director Bernardino, he withheld the information from
Miss Delmo. This is eloquently dramatized by Exh. "11" and Exh. "13"
On April 29,1966, Director Bernardino cabled him to furnish Violeta
Delmo copy of the Decision, Exh. "L," but instead of informing Miss
Delmo about the decision, since he said he mailed back the decision on
April 28,1966, he sent a night letter on April 29,1966, to Director
Bernardino, informing the latter that he had returned the decision (Exh.
"l3"), together with the record. Why a night letter when the matter was
of utmost urgency to the parties in the case, because graduation day was
only four days ahead? An examination of the telegrams sent by the
defendant shows that he had been sending ordinary telegram and not
night letters. (Exh. "5", Exhibit "7"). At least, if the defendant could not
furnish a copy of the decision, (Exh. "L"), to Miss Delmo, he should
have told her about it or that Miss Delmo's honors and citation in the
commencement be announced or indicated. But Mr. Ledesma is one
who cannot admit a mistake. Very ungentlemanly this is home out by
his own testimony despite his knowledge that his decision to deprive
Miss Delmo of honors due to her was overturned by Director
Bernardino, he on his wrong belief. To quote the defendant,1 believed
that she did not deserve those honors(Tsn Feb. 5, 1974, p.
43,Empasized supplied). Despite the telegram of Director Bernardino
which the defendant received hours before the commencement
executory on May 3-4,1966, he did not obey Director Bernardino
because he said in his testimony that he would be embarrassment . Tan
Feb 5,1974, P. 46). Evidently, he knew only his embarrassment and not
that of r Bernardino whose order was being flagrantly and wantonly
disregarded by bim And certainly, not the least of Miss Delmo's
embarrassment. His acts speak eloquently of ho bad faith and unjust of
mindwarped by his delicate sensitivity for having been challenged by
Miss Delmo, a mere student.
xxx xxx xxx
Finally the defendant's behaviour relative to Miss s case smacks of
contemptuous arrogance, oppression and abuse of power. Come to
think of it. He refused to obey the directive of Be o and instead, chose
to feign ignorance of it." (Reward on Appeal, p. 72-76).
The trial court awarded P20,000.00 to the estate of Violeta Delmo and
P10,000.00 to her parents for moral damages; P5,000.00 for nominal
damages to Violeta's estate; exemplary damages of P10,000.00 and
P2,000.00 attorney's fees.
On appeal, the Court of Appeals affirmed the decision. Hence, this
petition.
The issues raised in this petition can be reduced to the sole question of
whether or not the respondent Court of Appeals erred in affirming the
trial court's finding that petitioner is liable for damages under Article 27
of the New Civil Code.
We find no reason why the findings of the trial and appellate courts
should be reversed. It cannot be disputed that Violeta Delmo went
through a painful ordeal which was brought about by the petitioner's
neglect of duty and callousness. Thus, moral damages are but proper.
As we have affirmed in the case of (Prudenciado v. Alliance Transport
System, Inc., 148 SCRA 440, 448):
There is no argument that moral damages include physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be
recovered if they are the proximate result of defendant's wrongly act or
omission." (People v. Baylon, 129 SCRA 62 (1984).
The Solicitor-General tries to cover-up the petitioner's deliberate
omission to inform Miss Delmo by stating that it was not the duty of
the petitioner to furnish her a copy of the Director's decision. Granting
this to be true, it was nevertheless the petitioner's duty to enforce the
said decision. He could have done so considering that he received the
decision on April 27, 1966 and even though he sent it back with the
records of the case, he undoubtedly read the whole of it which consisted
of only three pages. Moreover, the petitioner should have had the
decency to meet with Mr. Delmo, the girl's father, and inform the latter,
at the very least of the decision. This, the petitioner likewise failed to
do, and not without the attendant bad faith which the appellate court
correctly pointed out in its decision, to wit:
Third, assuming that defendant could not furnish Miss Delmo of a copy
of the decision, he could have used his discretion and plain common
sense by informing her about it or he could have directed the inclusion
of Miss Delmo's honor in the printed commencement program or
announced it during the commencement exercises.
Fourth, defendant despite receipt of the telegram of Director Benardino
hours before the commencement exercises on May 3-4, 1966,
117
disobeyed his superior by refusing to give the honors due Miss Delmo
with a lame excuse that he would be embarrassed if he did so, to the
prejudice of and in complete disregard of Miss Delmo's rights.

Fifth, defendant did not even extend the courtesy of meeting Mr.
Pacifico Delmo, father of Miss Delmo, who tried several times to see
defendant in his office thus Mr. Delmo suffered extreme
disappointment and humiliation.

xxx xxx xxx

Defendant, being a public officer should have acted with

circumspection and due regard to the rights of Miss Delmo. Inasmuch
as he exceeded the scope of his authority by defiantly disobeying the
lawful directive of his superior, Director Bernardino, defendant is liable
for damages in his personal capacity. . . . (Rollo, pp- 57-58)

Based on the undisputed facts, exemplary damages are also in order. In

the same case of Prudenciado v. Alliance Transport System,
Inc., supra., at p. 450, we ruled:

The rationale behind exemplary or corrective damages is, as the name

implies, to provide an example or correction for the public good
(Lopez, et al. v. Pan American World Airways, 16 SCRA 431).

However, we do not deem it appropriate to award the spouses Delmo

damages in the amount of P10,000.00 in their individual capacity,
separately from and in addition to what they are already entitled to as
sole heirs of the deceased Violeta Delmo. Thus, the decision is
modified insofar as moral damages are awarded to the spouses in their
own behalf.

WHEREFORE, the petition is DISMISSED for lack of merit. The

decision of the Court of Appeals is AFFIRMED with the slight
modification as stated in the preceding paragraph. This decision is
immediately executory.

SO ORDERED.

118

A.C. No. 8261 March 11, 2015
JESSIE T. CAMPUGAN and ROBERT C.
TORRES, Complainants,
vs.
ATTY. FEDERICO S. TOLENTINO, JR., ATTY. RENATO G.
CUNANAN, ATTY. DANIEL F. VICTORIO, JR., and ATTY.
ELBERT T. QUILALA, Respondents.
x-----------------------x
A.C. No. 8725
JESSIE T. CAMPUGAN and ROBERT C.
TORRES, Complainants,
vs.
ATTY. CONSTANTE P. CALUYA, JR. and ATTY. ELBERT T.
QUILALA, Respondents.
DECISION
BERSAMIN, J.:
In this consolidated administrative case, complainants Jessie T.
Campugan and Robert C. Torres seek the disbarment of respondents
Atty. Federico S. Tolentino, Jr., Atty. Daniel F. Victorio, Jr., Atty.
Renato G. Cunanan, Atty. Elbert T. Quilala and Atty. Constante P.
Caluya, Jr. for allegedly falsifying a court order that became the basis
for the cancellation of their annotation of the notice ofadverse claim
and the notice of lis pendens in the Registry of Deeds in Quezon City.
Antecedents
Atty. Victorio, Jr. had replaced Atty. Edgardo Abad as counsel of the
complainants in a civil action they brought to seek the annulment of
Transfer Certificate of Title (TCT) No. N-290546 of the Registry of
Deeds of Quezon City in the first week of January 2007 in the Regional
Trial Court (RTC) in Quezon City (Civil Case No. Q-07-59598). They
impleaded as defendants Ramon and Josefina Ricafort, Juliet Vargas
and the Register of Deeds of Quezon City. They caused to be annotated
on TCT No. N-290546 their affidavit of adverse claim, as well as the
notice of lis pendens.1 Atty. Tolentino, Jr. was the counsel of defendant
Ramon and Josefina Ricafort.
In their sworn complaint for disbarment dated April 23, 2009 (later
docketed as A.C. No. 8261),2 the complainants narrated that as the
surviving children of the late Spouses Antonio and Nemesia Torres,
they inherited upon the deaths of their parents a residential lot located at
No. 251 Boni Serrano Street, Murphy, Cubao, Quezon City registered
under Transfer Certificate of Title (TCT) No. RT-64333(35652) of the
Register of Deeds of Quezon City;3that on August 24, 2006, they
discovered that TCT No. RT-64333(35652) had been unlawfully
cancelled and replaced by TCT No. N-290546 of the Register of Deeds
of Quezon City under the names of Ramon and Josefina Ricafort;4 and
that, accordingly, they immediately caused the annotation of their
affidavit of adverse claim on TCT No. N-290546.
It appears that the parties entered into an amicable settlement during the
pendency of Civil Case No. Q-07-59598 in order to end their
dispute,5 whereby the complainants agreed to sell the property and the
proceeds thereof would be equally divided between the parties, and the
complaint and counterclaim would be withdrawn respectively by the
complainants (as the plaintiffs) and the defendants. Pursuant to the
terms of the amicable settlement, Atty. Victorio, Jr. filed a Motion to
Withdraw Complaint dated February 26, 2008,6 which the RTC granted
in its order dated May 16, 2008 upon noting the defendants’ lack of
objection thereto and the defendants’ willingness to similarly withdraw
their counterclaim.7
The complainants alleged that from the time of the issuance by the RTC
of the order dated May 16, 2008, they could no longer locate or contact
Atty. Victorio, Jr. despite making several phone calls and visits to his
office; that they found out upon verification at the Register of Deeds of
Quezon City that new annotations were made on TCT No. N-290546,
specifically: (1) the annotation of the letter-request appearing to be filed
by Atty. Tolentino, Jr.8 seeking the cancellation of the affidavit of
adverse claim and the notice of lis pendens annotated on TCT No. N-
290546; and (2) the annotation of the decision dated May 16, 2008
rendered in Civil Case No. Q-07-59598 by the RTC, Branch 95, in
Quezon City, granting the complainants’ Motion to Withdraw
Complaint;9 and that a copy of the letter request dated June 30, 2008
addressed to Atty. Quilala, Registrar of Deeds of Quezon City,
disclosed that it was defendant Ramon Ricafort who had signed the
letter.
Feeling aggrieved by their discovery, the complainants filed an appeal
en consulta with the Land Registration Authority (LRA), docketed as
Consulta No. 4707, assailing the unlawful cancellation of their notice of
adverse claim and their notice of lis pendens under primary entries PE-
2742 and PE-3828-9, respectively. The LRA set Consulta No. 4707 for
hearing on March 30, 2009, and directed the parties to submit their
respective memoranda and/or supporting documents on or beforesuch
scheduled hearing.10 However, the records do not disclose whether
Consulta No. 4707 was already resolved, or remained pending at the
LRA.
Unable to receive any response or assistance from Atty. Victorio, Jr.
despite their having paid him for his professional services, the
complainants felt that said counsel had abandoned their case. They
submitted that the cancellation of their notice of adverse claim and their
notice of lis pendens without a court order specifically allowing such
cancellation resulted from the connivance and conspiracy between Atty.
Victorio, Jr. and Atty. Tolentino, Jr., and from the taking advantage of
their positions as officials in the Registry of Deeds by respondents Atty.
Quilala, the Chief Registrar, and Atty. Cunanan, the acting Registrar
and signatory of the new annotations. Thus, they claimed to be thereby
prejudiced.
On July 6, 2009, the Court required the respondents to comment on the
verified complaint.11 Atty. Victorio, Jr. asserted in his Comment dated
August 17, 200912 that complainant Robert Torres had been actively
involved in the proceedings in Civil Case No. Q-07-59598, which
included the mediation process; that the complainants, after having
aggressively participated in the drafting of the amicable settlement,
could not now claim that they had been deceived into entering the
agreement in the same way that they could not feign ignorance of the
conditions contained therein; that he did not commit any abandonment
as alleged, but had performed in good faith his duties as the counsel for
the complainants in Civil Case No. Q-07-59598; that he should not be
held responsible for their representation in other proceedings, such as
that before the LRA, which required a separate engagement; and that
the only payment he had received from the complainants were those for
his appearance fees of ₱1,000.00 for every hearing in the RTC.
In his Comment dated August 24, 2009,13 Atty. Tolentino, Jr. refuted
the charge of conspiracy, stressing that he was not acquainted with the
other respondents, except Atty. Victorio, Jr. whom he had met during
the hearings in Civil Case No. Q-07-59598; that although he had
notarized the letter request dated June 30, 2008 of Ramon Ricafort to
the Register of Deeds, he had no knowledge about how said letter-
request had been disposed of by the Register of Deeds; and that the
present complaint was the second disbarment case filed by the
119
complainants against him with no other motive except to harass and
intimidate him.
Atty. Quilala stated in his Comment dated September 1, 2009 14 that it
was Atty. Caluya, Jr., another Deputy Register of Deeds, who was the
actual signing authority of the annotations that resulted in the
cancellation of the affidavit of adverse claim and the notice of lis
pendens on TCT No. N-290546; that the cancellation of the annotations
was undertaken in the regular course of official duty and in the exercise
of the ministerial duty of the Register of Deeds; that no irregularity
occurred or was performed in the cancellation of the annotations; and
that the Register of Deeds was impleaded in Civil Case No. Q-07-
59598 only as a nominal party, thereby discounting any involvement in
the proceedings in the case.
Atty. Cunanan did not file any comment.15
As the result of Atty. Quilala’s allegation in his Comment in A.C. No.
8261 that it had been Atty. Caluya, Jr.’s signature that appeared below
the cancelled entries, the complainants filed another sworn disbarment
complaint dated August 26, 2010 alleging that Atty. Caluya, Jr. had
forged the signature of Atty. Cunanan.16 This disbarment complaint was
docketed as A.C. No. 8725, and was later on consolidated with A.C.
No. 826117 because the complaints involved the same parties and rested
on similar allegations against the respondents.
Atty. Quilala filed his Comment in A.C. No. 8725 to belie the
allegation of forgery and to reiterate the arguments he had made in A.C.
No. 8261.18 On his part, Atty. Caluya, Jr. manifested that he adopted
Atty. Quilala’s Comment.19
Ruling
We dismiss the complaints for disbarment for being bereft of merit.
Well entrenched in this jurisdiction is the rule that a lawyer may be
disciplined for misconduct committed either in his professional or
private capacity. The test is whether his conduct shows him to be
wanting in moral character, honesty, probity, and good demeanor, or
whether his conduct renders him unworthy to continue as an officer of
the Court.20 Verily, Canon 7 of the Code of Professional Responsibility
mandates all lawyers to uphold at all times the dignity and integrity of
the Legal Profession. Lawyers are similarly required under Rule 1.01,
Canon 1 of the same Code not to engage in any unlawful, dishonest and
immoral or deceitful conduct. Failure to observe these tenets of the
Code of Professional Responsibility exposes the lawyer to disciplinary
sanctions as provided in Section 27, Rule 138 of the Rules of Court, as
amended, viz.:
Section 27. Disbarment or suspension of attorneys by Supreme Court,
grounds therefor. — A member of the bar may be disbarred or
suspended from his office as attorney by the Supreme Court for any
deceit, malpractice, or other gross misconduct in such office, grossly
immoral conduct, or by reason of his conviction of a crime involving
moral turpitude, or for any violation of the oath which he is required to
take before the admission to practice, or for a wilful disobedience
appearing as an attorney for a party to a case without authority so to do.
The practice of soliciting cases at law for the purpose of gain, either
personally or through paid agents or brokers, constitutes malpractice.
The complainants’ allegations of the respondents’ acts and omissions
are insufficient to establish any censurable conduct against them.
Section 10 of Presidential Decree No. 1529 (Property Registration
Decree) enumerates the general duties of the Register of Deeds, as
follows:
Section 10. General functions of Registers of Deeds. – x x x
It shall be the duty of the Register of Deeds to immediately register an
instrument presented for registration dealing with real or personal
property which complies with all the requisites for registration. He shall
see to it that said instrument bears the proper documentary science
stamps and that the same are properly canceled. If the instrument is not
registrable, he shall forthwith deny registration thereof and inform the
present or of such denial in writing, stating the ground or reason
therefor, and advising him of his right to appeal by consulta in
accordance with Section 117 of this Decree. (Emphasis supplied)
The aforementioned duty of the Register of Deeds is ministerial in
nature.21 A purely ministerial act or duty is one that an officer or
tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the
exercise of his own judgment upon the propriety or impropriety of the
act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty
is discretionary, not ministerial. The duty is ministerial only when its
discharge requires neither the exercise of official discretion nor the
exercise of judgment.22
In Gabriel v. Register of Deeds of Rizal,23 the Court underscores that
registration is a merely ministerial act of the Register of Deeds,
explaining:
x x x [W]hether the document is invalid, frivolous or intended to harass,
is not the duty of a Register of Deeds to decide, but a court of
competent jurisdiction, and that it is his concern to see whether the
documents sought to be registered conform with the formal and legal
requirements for such documents.
In view of the foregoing, we find no abuse of authority or irregularity
committed by Atty. Quilala, Atty. Cunanan, and Atty. Caluya, Jr. with
respect to the cancellation of the notice of adverse claim and the notice
of lis pendens annotated on TCT No. N-290546. Whether or not the
RTC order dated May 16, 2008 or the letter-request dated June 30,2008
had been falsified, fraudulent or invalid was not for them to determine
inasmuch as their duty to examine documents presented for registration
was limited only to what appears on the face of the documents. If, upon
their evaluation of the letter-request and the RTC order, they found the
same to be sufficient in law and to be in conformity with existing
requirements, it became obligatory for them to perform their ministerial
duty without unnecessary delay.24
Should they be aggrieved by said respondents’ performance of duty, the
complainants were not bereft of any remedy because they could
challenge the performance of duty by bringing the matter by way of
consulta with the LRA, as provided by Section 11725 of Presidential
Decree No. 1529. But, as enunciated in Gabriel v. Register of Deeds of
Rizal,26 it was ultimately within the province of a court of competent
jurisdiction to resolve issues concerning the validity or invalidity of a
document registered by the Register of Deeds.
The complainants charge Atty. Victorio, Jr. and Atty. Tolentino, Jr.
with having conspired with each other to guarantee that the parties in
Civil Case No. Q-59598 would enter into the amicable settlement, and
then to cause the cancellation of the affidavit of adverse claim and
notice of lis pendens annotated on TCT No. N-290546. The
complainants further fault Atty. Victorio, Jr. with having abandoned
their cause since the issuance of the RTC of its order dated May 16,
2008. The complainants’ charges are devoid of substance.
Although it is not necessary to prove a formal agreement in order to
establish conspiracy because conspiracy may be inferred from the
circumstances attending the commission of an act, it is nonetheless
essential that conspiracy be established by clear and convincing
evidence.27 The complainants failed in this regard. Outside of their bare
120
assertions that Atty. Victorio, Jr. and Atty. Tolentino, Jr. had conspired
with each other in order to cause the dismissal of the complaint and
then discharge of the annotations, they presented no evidence to support
their allegation of conspiracy. On the contrary, the records indicated
their own active participation in arriving at the amicable settlement with
the defendants in Civil Case No. Q-07-59598. Hence, they could not
now turn their backs on the amicable settlement that they had
themselves entered into.

Even assuming that Atty. Victorio, Jr. and Atty. Tolentino, Jr. initiated
and participated in the settlement of the case, there was nothing wrong
in their doing so. It was actually their obligation as lawyers to do so,
pursuant to Rule 1.04, Canon 1 of the Code of Professional
Responsibility, viz.:

RULE 1.04 – A lawyer shall encourage his clients to avoid, end or

settle a controversy if it will admit of a fair settlement.1âwphi1

In fine, the presumption of the validity of the amicable settlement of the

complainants and the defendants in Civil Case No. Q-07-59598
subsisted.28

Anent the complainants’ charge of abandonment against Atty. Victorio,

Jr., Rule 18.03 and Rule 18.04, Canon 18 of the Code of Professional
Responsibility are applicable, to wit:

CANON 18 – A lawyer shall serve his client with competence and

diligence.

Rule 18.03 – A lawyer shall not neglecta legal matter entrusted to him,
and his negligence in connection therewith shall render him liable.

Rule 18.04 – A lawyer shall keep the client informed of the status of his
case and shall respond within a reasonable time to the client’s request
for information.

There is no issue that the complainants engaged the services of Atty.

Victorio, Jr. as their counsel in Civil Case No. Q-07-59598. Atty.
Victorio, Jr. served as such counsel. With Atty. Victorio, Jr. assistance,
the complainants obtained a fair settlement consisting in receiving half
of the proceeds of the sale of the property in litis, without any portion
of the proceeds accruing to counsel as his legal fees. The complainants
did not competently and persuasively show any unfaithfulness on the
part of Atty. Victorio, Jr. as far as their interest in the litigation was
concerned. Hence, Atty. Victorio, Jr. was not liable for abandonment.

Atty. Victorio, Jr. could not be faulted for the perceived inattention to
any other matters subsequent to the termination of Civil Case No. Q-07-
59598. Unless otherwise expressly stipulated between them at any time
during the engagement, the complainants had no right to assume that
Atty. Victorio, Jr.’s legal representation was indefinite as to extend to
his representation of them in the LRA. The Law Profession did not
burden its members with the responsibility of indefinite service to the
clients; hence, the rendition of professional services depends on the
agreement between the attorney and the client. Atty. Victorio, Jr.’s
alleged failure to respond to the complainants’ calls or visits, or to
provide them with his whereabouts to enable them to have access to
him despite the termination of his engagement in Civil Case No. Q-07-
59598 did not equate to abandonment without the credible showing that
he continued to come under the professional obligation towards them
after the termination of Civil Case No. Q-07-59598.

WHEREFORE, the Court DISMISSES the baseless disbarment

complaints against Atty. Federico S. Tolentino, Jr., Atty. Renato G.
Cunanan, Atty. Daniel F. Victoria, Jr., Atty. Elbert T. Quilala and Atty.
Constante P. Caluya, Jr.

SO ORDERED.

121

G.R. No. 102007 September 2, 1994
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ROGELIO BAYOTAS y CORDOVA, accused-appellant.
The Solicitor General for plaintiff-appellee.
Public Attorney's Office for accused-appellant.
ROMERO, J.:
In Criminal Case No. C-3217 filed before Branch 16, RTC Roxas City,
Rogelio Bayotas y Cordova was charged with Rape and eventually
convicted thereof on June 19, 1991 in a decision penned by Judge
Manuel E. Autajay. Pending appeal of his conviction, Bayotas died on
February 4, 1992 at
the National Bilibid Hospital due to cardio respiratory arrest secondary
to hepatic encephalopathy secondary to hipato carcinoma gastric
malingering. Consequently, the Supreme Court in its Resolution of May
20, 1992 dismissed the criminal aspect of the appeal. However, it
required the Solicitor General to file its comment with regard to
Bayotas' civil liability arising from his commission of the offense
charged.
In his comment, the Solicitor General expressed his view that the death
of accused-appellant did not extinguish his civil liability as a result of
his commission of the offense charged. The Solicitor General, relying
on the case of People v. Sendaydiego 1 insists that the appeal should
still be resolved for the purpose of reviewing his conviction by the
lower court on which the civil liability is based.
Counsel for the accused-appellant, on the other hand, opposed the view
of the Solicitor General arguing that the death of the accused while
judgment of conviction is pending appeal extinguishes both his criminal
and civil penalties. In support of his position, said counsel invoked the
ruling of the Court of Appeals in People v. Castillo and
Ocfemia 2 which held that the civil obligation in a criminal case takes
root in the criminal liability and, therefore, civil liability is extinguished
if accused should die before final judgment is rendered.
We are thus confronted with a single issue: Does death of the accused
pending appeal of his conviction extinguish his civil liability?
In the aforementioned case of People v. Castillo, this issue was settled
in the affirmative. This same issue posed therein was phrased thus:
Does the death of Alfredo Castillo affect both his criminal
responsibility and his civil liability as a consequence of the alleged
crime?
It resolved this issue thru the following disquisition:
Article 89 of the Revised Penal Code is the controlling statute. It reads,
in part:
Art. 89. How criminal liability is totally extinguished. — Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and as to the
pecuniary penalties liability therefor is extinguished only when the
death of the offender occurs before final judgment;
With reference to Castillo's criminal liability, there is no question. The
law is plain. Statutory construction is unnecessary. Said liability is
extinguished.
The civil liability, however, poses a problem. Such liability is
extinguished only when the death of the offender occurs before final
judgment. Saddled upon us is the task of ascertaining the legal import
of the term "final judgment." Is it final judgment as contradistinguished
from an interlocutory order? Or, is it a judgment which is final and
executory?
We go to the genesis of the law. The legal precept contained in Article
89 of the Revised Penal Code heretofore transcribed is lifted from
Article 132 of the Spanish El Codigo Penal de 1870 which, in part,
recites:
La responsabilidad penal se extingue.
1. Por la muerte del reo en cuanto a las penas personales siempre, y
respecto a las pecuniarias, solo cuando a su fallecimiento no hubiere
recaido sentencia firme.
xxx xxx xxx
The code of 1870 . . . it will be observed employs the term "sentencia
firme." What is "sentencia firme" under the old statute?
XXVIII Enciclopedia Juridica Española, p. 473, furnishes the ready
answer: It says:
SENTENCIA FIRME. La sentencia que adquiere la fuerza de las
definitivas por no haberse utilizado por las partes litigantes recurso
alguno contra ella dentro de los terminos y plazos legales concedidos al
efecto.
"Sentencia firme" really should be understood as one which is definite.
Because, it is only when judgment is such that, as Medina y Maranon
puts it, the crime is confirmed — "en condena determinada;" or, in the
words of Groizard, the guilt of the accused becomes — "una verdad
legal." Prior thereto, should the accused die, according to Viada, "no
hay legalmente, en tal caso, ni reo, ni delito, ni responsabilidad criminal
de ninguna clase." And, as Judge Kapunan well explained, when a
defendant dies before judgment becomes executory, "there cannot be
any determination by final judgment whether or not the felony upon
which the civil action might arise exists," for the simple reason that
"there is no party defendant." (I Kapunan, Revised Penal Code,
Annotated, p. 421. Senator Francisco holds the same view. Francisco,
Revised Penal Code, Book One, 2nd ed., pp. 859-860)
The legal import of the term "final judgment" is similarly reflected in
the Revised Penal Code. Articles 72 and 78 of that legal body mention
the term "final judgment" in the sense that it is already enforceable.
This also brings to mind Section 7, Rule 116 of the Rules of Court
which states that a judgment in a criminal case becomes final "after the
lapse of the period for perfecting an appeal or when the sentence has
been partially or totally satisfied or served, or the defendant has
expressly waived in writing his right to appeal."
By fair intendment, the legal precepts and opinions here collected
funnel down to one positive conclusion: The term final judgment
employed in the Revised Penal Code means judgment beyond recall.
Really, as long as a judgment has not become executory, it cannot be
truthfully said that defendant is definitely guilty of the felony charged
against him.
Not that the meaning thus given to final judgment is without reason.
For where, as in this case, the right to institute a separate civil action is
not reserved, the decision to be rendered must, of necessity, cover "both
the criminal and the civil aspects of the case." People
vs. Yusico (November 9, 1942), 2 O.G., No. 100, p. 964. See
also: People vs. Moll, 68 Phil., 626, 634; Francisco, Criminal
Procedure, 1958 ed., Vol. I, pp. 234, 236. Correctly, Judge Kapunan
observed that as "the civil action is based solely on the felony
122
committed and of which the offender might be found guilty, the death
of the offender extinguishes the civil liability." I Kapunan, Revised
Penal Code, Annotated, supra.
Here is the situation obtaining in the present case: Castillo's criminal
liability is out. His civil liability is sought to be enforced by reason of
that criminal liability. But then, if we dismiss, as we must, the criminal
action and let the civil aspect remain, we will be faced with the
anomalous situation whereby we will be called upon to clamp civil
liability in a case where the source thereof — criminal liability — does
not exist. And, as was well stated in Bautista, et al. vs. Estrella, et al.,
CA-G.R.
No. 19226-R, September 1, 1958, "no party can be found and held
criminally liable in a civil suit," which solely would remain if we are to
divorce it from the criminal proceeding."
This ruling of the Court of Appeals in the Castillo case 3 was adopted
by the Supreme Court in the cases of People of the Philippines
v. Bonifacio Alison, et al., 4 People of the Philippines v. Jaime Jose, et
al. 5 and People of the Philippines v. Satorre 6 by dismissing the appeal
in view of the death of the accused pending appeal of said cases.
As held by then Supreme Court Justice Fernando in the Alison case:
The death of accused-appellant Bonifacio Alison having been
established, and considering that there is as yet no final judgment in
view of the pendency of the appeal, the criminal and civil liability of
the said accused-appellant Alison was extinguished by his death (Art.
89, Revised Penal Code; Reyes' Criminal Law, 1971 Rev. Ed., p. 717,
citing People v. Castillo and Ofemia C.A., 56 O.G. 4045);
consequently, the case against him should be dismissed.
On the other hand, this Court in the subsequent cases of Buenaventura
Belamala v. Marcelino Polinar 7 and Lamberto Torrijos v. The
Honorable Court of Appeals 8 ruled differently. In the former, the issue
decided by this court was: Whether the civil liability of one accused of
physical injuries who died before final judgment is extinguished by his
demise to the extent of barring any claim therefore against his estate. It
was the contention of the administrator-appellant therein that the death
of the accused prior to final judgment extinguished all criminal and
civil liabilities resulting from the offense, in view of Article 89,
paragraph 1 of the Revised Penal Code. However, this court ruled
therein:
We see no merit in the plea that the civil liability has been extinguished,
in view of the provisions of the Civil Code of the Philippines of 1950
(Rep. Act No. 386) that became operative eighteen years after the
revised Penal Code. As pointed out by the Court below, Article 33 of
the Civil Code establishes a civil action for damages on account of
physical injuries, entirely separate and distinct from the criminal
action.
Art. 33. In cases of defamation, fraud, and physical injuries, a civil
action for damages, entirely separate and distinct from the criminal
action, may be brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution, and shall require
only a preponderance of evidence.
Assuming that for lack of express reservation, Belamala's civil action
for damages was to be considered instituted together with the criminal
action still, since both proceedings were terminated without final
adjudication, the civil action of the offended party under Article 33 may
yet be enforced separately.
In Torrijos, the Supreme Court held that:
xxx xxx xxx
It should be stressed that the extinction of civil liability follows the
extinction of the criminal liability under Article 89, only when the civil
liability arises from the criminal act as its only basis. Stated differently,
where the civil liability does not exist independently of the criminal
responsibility, the extinction of the latter by death, ipso
facto extinguishes the former, provided, of course, that death
supervenes before final judgment. The said principle does not apply in
instant case wherein the civil liability springs neither solely nor
originally from the crime itself but from a civil contract of purchase and
sale. (Emphasis ours)
xxx xxx xxx
In the above case, the court was convinced that the civil liability of the
accused who was charged with estafa could likewise trace its genesis to
Articles 19, 20 and 21 of the Civil Code since said accused had
swindled the first and second vendees of the property subject matter of
the contract of sale. It therefore concluded: "Consequently, while the
death of the accused herein extinguished his criminal liability including
fine, his civil liability based on the laws of human relations remains."
Thus it allowed the appeal to proceed with respect to the civil liability
of the accused, notwithstanding the extinction of his criminal liability
due to his death pending appeal of his conviction.
To further justify its decision to allow the civil liability to survive, the
court relied on the following ratiocination: Since Section 21, Rule 3 of
the Rules of Court 9 requires the dismissal of all money claims against
the defendant whose death occurred prior to the final judgment of the
Court of First Instance (CFI), then it can be inferred that actions for
recovery of money may continue to be heard on appeal, when the death
of the defendant supervenes after the CFI had rendered its judgment. In
such case, explained this tribunal, "the name of the offended party shall
be included in the title of the case as plaintiff-appellee and the legal
representative or the heirs of the deceased-accused should be
substituted as defendants-appellants."
It is, thus, evident that as jurisprudence evolved from Castillo to
Torrijos, the rule established was that the survival of the civil liability
depends on whether the same can be predicated on sources of
obligations other than delict. Stated differently, the claim for civil
liability is also extinguished together with the criminal action if it were
solely based thereon, i.e., civil liability ex delicto.
However, the Supreme Court in People v. Sendaydiego, et
al. 10 departed from this long-established principle of law. In this case,
accused Sendaydiego was charged with and convicted by the lower
court of malversation thru falsification of public documents.
Sendaydiego's death supervened during the pendency of the appeal of
his conviction.
This court in an unprecedented move resolved to dismiss Sendaydiego's
appeal but only to the extent of his criminal liability. His civil liability
was allowed to survive although it was clear that such claim thereon
was exclusively dependent on the criminal action already extinguished.
The legal import of such decision was for the court to continue
exercising appellate jurisdiction over the entire appeal, passing upon the
correctness of Sendaydiego's conviction despite dismissal of the
criminal action, for the purpose of determining if he is civilly liable. In
doing so, this Court issued a Resolution of July 8, 1977 stating thus:
The claim of complainant Province of Pangasinan for the civil liability
survived Sendaydiego because his death occurred after final judgment
was rendered by the Court of First Instance of Pangasinan, which
convicted him of three complex crimes of malversation through
falsification and ordered him to indemnify the Province in the total sum
of P61,048.23 (should be P57,048.23).
123
The civil action for the civil liability is deemed impliedly instituted
with the criminal action in the absence of express waiver or its
reservation in a separate action (Sec. 1, Rule 111 of the Rules of Court).
The civil action for the civil liability is separate and distinct from the
criminal action (People and Manuel vs. Coloma, 105 Phil. 1287; Roa
vs. De la Cruz, 107 Phil. 8).
When the action is for the recovery of money and the defendant dies
before final judgment in the Court of First Instance, it shall be
dismissed to be prosecuted in the manner especially provided in Rule
87 of the Rules of Court (Sec. 21, Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money judgment
had been rendered against him by the Court of First Instance, the action
survives him. It may be continued on appeal (Torrijos vs. Court of
Appeals, L-40336, October 24, 1975; 67 SCRA 394).
The accountable public officer may still be civilly liable for the funds
improperly disbursed although he has no criminal liability (U.S. vs.
Elvina, 24 Phil. 230; Philippine National Bank vs. Tugab, 66 Phil. 583).
In view of the foregoing, notwithstanding the dismissal of the appeal of
the deceased Sendaydiego insofar as his criminal liability is concerned,
the Court Resolved to continue exercising appellate jurisdiction over
his possible civil liability for the money claims of the Province of
Pangasinan arising from the alleged criminal acts complained of, as if
no criminal case had been instituted against him, thus making
applicable, in determining his civil liability, Article 30 of the Civil
Code . . . and, for that purpose, his counsel is directed to inform this
Court within ten (10) days of the names and addresses of the decedent's
heirs or whether or not his estate is under administration and has a duly
appointed judicial administrator. Said heirs or administrator will be
substituted for the deceased insofar as the civil action for the civil
liability is concerned (Secs. 16 and 17, Rule 3, Rules of Court).
Succeeding cases 11 raising the identical issue have maintained
adherence to our ruling in Sendaydiego; in other words, they were a
reaffirmance of our abandonment of the settled rule that a civil liability
solely anchored on the criminal (civil liability ex delicto) is
extinguished upon dismissal of the entire appeal due to the demise of
the accused.
But was it judicious to have abandoned this old ruling? A re-
examination of our decision in Sendaydiego impels us to revert to the
old ruling.
To restate our resolution of July 8, 1977 in Sendaydiego: The resolution
of the civil action impliedly instituted in the criminal action can
proceed irrespective of the latter's extinction due to death of the accused
pending appeal of his conviction, pursuant to Article 30 of the Civil
Code and Section 21, Rule 3 of the Revised Rules of Court.
Article 30 of the Civil Code provides:
When a separate civil action is brought to demand civil liability arising
from a criminal offense, and no criminal proceedings are instituted
during the pendency of the civil case, a preponderance of evidence shall
likewise be sufficient to prove the act complained of.
Clearly, the text of Article 30 could not possibly lend support to the
ruling in Sendaydiego. Nowhere in its text is there a grant of authority
to continue exercising appellate jurisdiction over the accused's civil
liability ex delicto when his death supervenes during appeal. What
Article 30 recognizes is an alternative and separate civil action which
may be brought to demand civil liability arising from a criminal offense
independently of any criminal action. In the event that no criminal
proceedings are instituted during the pendency of said civil case, the
quantum of evidence needed to prove the criminal act will have to be
that which is compatible with civil liability and that is, preponderance
of evidence and not proof of guilt beyond reasonable doubt. Citing or
invoking Article 30 to justify the survival of the civil action despite
extinction of the criminal would in effect merely beg the question of
whether civil liability ex delicto survives upon extinction of the
criminal action due to death of the accused during appeal of his
conviction. This is because whether asserted in
the criminal action or in a separate civil action, civil liability ex
delicto is extinguished by the death of the accused while his conviction
is on appeal. Article 89 of the Revised Penal Code is clear on this
matter:
Art. 89. How criminal liability is totally extinguished. — Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and as to
pecuniary penalties, liability therefor is extinguished only when the
death of the offender occurs before final judgment;
xxx xxx xxx
However, the ruling in Sendaydiego deviated from the expressed intent
of Article 89. It allowed claims for civil liability ex delicto to survive
by ipso facto treating the civil action impliedly instituted with the
criminal, as one filed under Article 30, as though no criminal
proceedings had been filed but merely a separate civil action. This had
the effect of converting such claims from one which is dependent on the
outcome of the criminal action to an entirely new and separate one, the
prosecution of which does not even necessitate the filing of criminal
proceedings. 12 One would be hard put to pinpoint the statutory
authority for such a transformation. It is to be borne in mind that in
recovering civil liability ex delicto, the same has perforce to be
determined in the criminal action, rooted as it is in the court's
pronouncement of the guilt or innocence of the accused. This is but to
render fealty to the intendment of Article 100 of the Revised Penal
Code which provides that "every person criminally liable for a felony is
also civilly liable." In such cases, extinction of the criminal action due
to death of the accused pending appeal inevitably signifies the
concomitant extinction of the civil liability. Mors Omnia Solvi. Death
dissolves all things.
In sum, in pursuing recovery of civil liability arising from crime, the
final determination of the criminal liability is a condition precedent to
the prosecution of the civil action, such that when the criminal action is
extinguished by the demise of accused-appellant pending appeal
thereof, said civil action cannot survive. The claim for civil liability
springs out of and is dependent upon facts which, if true, would
constitute a crime. Such civil liability is an inevitable consequence of
the criminal liability and is to be declared and enforced in the criminal
proceeding. This is to be distinguished from that which is contemplated
under Article 30 of the Civil Code which refers to the institution of a
separate civil action that does not draw its life from a criminal
proceeding. The Sendaydiego resolution of July 8, 1977, however,
failed to take note of this fundamental distinction when it allowed the
survival of the civil action for the recovery of civil liability ex
delicto by treating the same as a separate civil action referred to under
Article 30. Surely, it will take more than just a summary judicial
pronouncement to authorize the conversion of said civil action to an
independent one such as that contemplated under Article 30.
Ironically however, the main decision in Sendaydiego did not apply
Article 30, the resolution of July 8, 1977 notwithstanding. Thus, it was
held in the main decision:
Sendaydiego's appeal will be resolved only for the purpose of showing
his criminal liability which is the basis of the civil liability for which
his estate would be liable. 13
124
In other words, the Court, in resolving the issue of his civil liability,
concomitantly made a determination on whether Sendaydiego, on the
basis of evidenced adduced, was indeed guilty beyond reasonable doubt
of committing the offense charged. Thus, it upheld Sendaydiego's
conviction and pronounced the same as the source of his civil liability.
Consequently, although Article 30 was not applied in the final
determination of Sendaydiego's civil liability, there was a reopening of
the criminal action already extinguished which served as basis for
Sendaydiego's civil liability. We reiterate: Upon death of the accused
pending appeal of his conviction, the criminal action is extinguished
inasmuch as there is no longer a defendant to stand as the accused; the
civil action instituted therein for recovery of civil liability ex
delicto is ipso facto extinguished, grounded as it is on the criminal.
Section 21, Rule 3 of the Rules of Court was also invoked to serve as
another basis for the Sendaydiego resolution of July 8, 1977. In citing
Sec. 21, Rule 3 of the Rules of Court, the Court made the inference that
civil actions of the type involved in Sendaydiego consist of money
claims, the recovery of which may be continued on appeal if defendant
dies pending appeal of his conviction by holding his estate liable
therefor. Hence, the Court's conclusion:
"When the action is for the recovery of money" "and the defendant dies
before final judgment in the court of First Instance, it shall be dismissed
to be prosecuted in the manner especially provided" in Rule 87 of the
Rules of Court (Sec. 21, Rule 3 of the Rules of Court).
The implication is that, if the defendant dies after a money judgment
had been rendered against him by the Court of First Instance, the action
survives him. It may be continued on appeal.
Sadly, reliance on this provision of law is misplaced. From the
standpoint of procedural law, this course taken in Sendaydiego cannot
be sanctioned. As correctly observed by Justice Regalado:
xxx xxx xxx
I do not, however, agree with the justification advanced in
both Torrijos and Sendaydiego which, relying on the provisions of
Section 21, Rule 3 of the Rules of Court, drew the strained implication
therefrom that where the civil liability instituted together with the
criminal liabilities had already passed beyond the judgment of the then
Court of First Instance (now the Regional Trial Court), the Court of
Appeals can continue to exercise appellate jurisdiction thereover
despite the extinguishment of the component criminal liability of the
deceased. This pronouncement, which has been followed in the Court's
judgments subsequent and consonant to Torrijos and Sendaydiego,
should be set aside and abandoned as being clearly erroneous and
unjustifiable.
Said Section 21 of Rule 3 is a rule of civil procedure in ordinary civil
actions. There is neither authority nor justification for its application in
criminal procedure to civil actions instituted together with and as part
of criminal actions. Nor is there any authority in law for the summary
conversion from the latter category of an ordinary civil action upon the
death of the offender. . . .
Moreover, the civil action impliedly instituted in a criminal proceeding
for recovery of civil liability ex delicto can hardly be categorized as an
ordinary money claim such as that referred to in Sec. 21, Rule 3
enforceable before the estate of the deceased accused.
Ordinary money claims referred to in Section 21, Rule 3 must be
viewed in light of the provisions of Section 5, Rule 86 involving claims
against the estate, which in Sendaydiego was held liable for
Sendaydiego's civil liability. "What are contemplated in Section 21 of
Rule 3, in relation to Section 5 of Rule 86, 14 are contractual money
claims while the claims involved in civil liability ex delicto may include
even the restitution of personal or real property." 15 Section 5, Rule 86
provides an exclusive enumeration of what claims may be filed against
the estate. These are: funeral expenses, expenses for the last illness,
judgments for money and claim arising from contracts, expressed or
implied. It is clear that money claims arising from delict do not form
part of this exclusive enumeration. Hence, there could be no legal basis
in (1) treating a civil action ex delicto as an ordinary contractual money
claim referred to in Section 21, Rule 3 of the Rules of Court and (2)
allowing it to survive by filing a claim therefor before the estate of the
deceased accused. Rather, it should be extinguished upon extinction of
the criminal action engendered by the death of the accused pending
finality of his conviction.
Accordingly, we rule: if the private offended party, upon extinction of
the civil liability ex delicto desires to recover damages from the same
act or omission complained of, he must subject to Section 1, Rule
111 16 (1985 Rules on Criminal Procedure as amended) file a separate
civil action, this time predicated not on the felony previously charged
but on other sources of obligation. The source of obligation upon which
the separate civil action is premised determines against whom the same
shall be enforced.
If the same act or omission complained of also arises from quasi-
delict or may, by provision of law, result in an injury to person or
property (real or personal), the separate civil action must be filed
against the executor or administrator 17 of the estate of the accused
pursuant to Sec. 1, Rule 87 of the Rules of Court:
Sec. 1. Actions which may and which may not be brought against
executor or administrator. — No action upon a claim for the recovery
of money or debt or interest thereon shall be commenced against the
executor or administrator; but actions to recover real or personal
property, or an interest therein, from the estate, or to enforce a lien
thereon, and actions to recover damages for an injury to person or
property, real or personal, may be commenced against him.
This is in consonance with our ruling in Belamala 18 where we held
that, in recovering damages for injury to persons thru an independent
civil action based on Article 33 of the Civil Code, the same must be
filed against the executor or administrator of the estate of deceased
accused and not against the estate under Sec. 5, Rule 86 because this
rule explicitly limits the claim to those for funeral expenses, expenses
for the last sickness of the decedent, judgment for money and claims
arising from contract, express or implied. Contractual money claims,
we stressed, refers only topurely personal obligations other than those
which have their source in delict or tort.
Conversely, if the same act or omission complained of also arises from
contract, the separate civil action must be filed against the estate of the
accused, pursuant to Sec. 5, Rule 86 of the Rules of Court.
From this lengthy disquisition, we summarize our ruling herein:
1. Death of the accused pending appeal of his conviction extinguishes
his criminal liability as well as the civil liability based solely thereon.
As opined by Justice Regalado, in this regard, "the death of the accused
prior to final judgment terminates his criminal liability and only the
civil liability directly arising from and based solely on the offense
committed, i.e., civil liability ex delicto in senso strictiore."
2. Corollarily, the claim for civil liability survives notwithstanding the
death of accused, if the same may also be predicated on a source of
obligation other than delict. 19 Article 1157 of the Civil Code
enumerates these other sources of obligation from which the civil
liability may arise as a result of the same act or omission:
a) Law 20
125
b) Contracts

c) Quasi-contracts

d) . . .

e) Quasi-delicts

3. Where the civil liability survives, as explained in Number 2 above,

an action for recovery therefor may be pursued but only by way of
filing a separate civil action and subject to Section 1, Rule 111 of the
1985 Rules on Criminal Procedure as amended. This separate civil
action may be enforced either against the executor/administrator or the
estate of the accused, depending on the source of obligation upon which
the same is based as explained above.

4. Finally, the private offended party need not fear a forfeiture of his
right to file this separate civil action by prescription, in cases where
during the prosecution of the criminal action and prior to its extinction,
the private-offended party instituted together therewith the civil action.
In such case, the statute of limitations on the civil liability is deemed
interrupted during the pendency of the criminal case, conformably with
provisions of Article 1155 21 of the Civil Code, that should thereby
avoid any apprehension on a possible privation of right by
prescription. 22

Applying this set of rules to the case at bench, we hold that the death of
appellant Bayotas extinguished his criminal liability and the civil
liability based solely on the act complained of, i.e., rape. Consequently,
the appeal is hereby dismissed without qualification.

WHEREFORE, the appeal of the late Rogelio Bayotas is DISMISSED

with costs de oficio.

SO ORDERED.

126
G.R. No. 155223 April 4, 2007
BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact,
MARIE F. FUJITA, Petitioner,
vs.
FLORA SAN DIEGO-SISON, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari filed by Bobie Rose V.
Frias represented by her Attorney-in-fact, Marie Regine F. Fujita
(petitioner) seeking to annul the Decision1 dated June 18, 2002 and the
Resolution2 dated September 11, 2002 of the Court of Appeals (CA) in
CA-G.R. CV No. 52839.
Petitioner is the owner of a house and lot located at No. 589 Batangas
East, Ayala Alabang, Muntinlupa, Metro Manila, which she acquired
from Island Masters Realty and Development Corporation (IMRDC) by
virtue of a Deed of Sale dated Nov. 16, 1990.3 The property is covered
by TCT No. 168173 of the Register of Deeds of Makati in the name of
IMRDC.4
On December 7, 1990, petitioner, as the FIRST PARTY, and Dra. Flora
San Diego-Sison (respondent), as the SECOND PARTY, entered into a
Memorandum of Agreement5 over the property with the following
terms:
NOW, THEREFORE, for and in consideration of the sum of THREE
MILLION PESOS (₱3,000,000.00) receipt of which is hereby
acknowledged by the FIRST PARTY from the SECOND PARTY, the
parties have agreed as follows:
1. That the SECOND PARTY has a period of Six (6) months from the
date of the execution of this contract within which to notify the FIRST
PARTY of her intention to purchase the aforementioned parcel of land
together within (sic) the improvements thereon at the price of SIX
MILLION FOUR HUNDRED THOUSAND PESOS (₱6,400,000.00).
Upon notice to the FIRST PARTY of the SECOND PARTY’s intention
to purchase the same, the latter has a period of another six months
within which to pay the remaining balance of ₱3.4 million.
2. That prior to the six months period given to the SECOND PARTY
within which to decide whether or not to purchase the above-mentioned
property, the FIRST PARTY may still offer the said property to other
persons who may be interested to buy the same provided that the
amount of ₱3,000,000.00 given to the FIRST PARTY BY THE
SECOND PARTY shall be paid to the latter including interest based on
prevailing compounded bank interest plus the amount of the sale in
excess of ₱7,000,000.00 should the property be sold at a price more
than ₱7 million.
3. That in case the FIRST PARTY has no other buyer within the first
six months from the execution of this contract, no interest shall be
charged by the SECOND PARTY on the P3 million however, in the
event that on the sixth month the SECOND PARTY would decide not
to purchase the aforementioned property, the FIRST PARTY has a
period of another six months within which to pay the sum of ₱3 million
pesos provided that the said amount shall earn compounded bank
interest for the last six months only. Under this circumstance, the
amount of P3 million given by the SECOND PARTY shall be treated
as [a] loan and the property shall be considered as the security for the
mortgage which can be enforced in accordance with law.
x x x x.6
Petitioner received from respondent two million pesos in cash and one
million pesos in a post-dated check dated February 28, 1990, instead of
1991, which rendered said check stale.7 Petitioner then gave respondent
TCT No. 168173 in the name of IMRDC and the Deed of Absolute Sale
over the property between petitioner and IMRDC.
Respondent decided not to purchase the property and notified petitioner
through a letter8 dated March 20, 1991, which petitioner received only
on June 11, 1991,9 reminding petitioner of their agreement that the
amount of two million pesos which petitioner received from respondent
should be considered as a loan payable within six months. Petitioner
subsequently failed to pay respondent the amount of two million pesos.
On April 1, 1993, respondent filed with the Regional Trial Court (RTC)
of Manila, a complaint10 for sum of money with preliminary attachment
against petitioner. The case was docketed as Civil Case No. 93-65367
and raffled to Branch 30. Respondent alleged the foregoing facts and in
addition thereto averred that petitioner tried to deprive her of the
security for the loan by making a false report11 of the loss of her
owner’s copy of TCT No. 168173 to the Tagig Police Station on June 3,
1991, executing an affidavit of loss and by filing a petition 12 for the
issuance of a new owner’s duplicate copy of said title with the RTC of
Makati, Branch 142; that the petition was granted in an Order13dated
August 31, 1991; that said Order was subsequently set aside in an Order
dated April 10, 199214 where the RTC Makati granted respondent’s
petition for relief from judgment due to the fact that respondent is in
possession of the owner’s duplicate copy of TCT No. 168173, and
ordered the provincial public prosecutor to conduct an investigation of
petitioner for perjury and false testimony. Respondent prayed for the
ex-parte issuance of a writ of preliminary attachment and payment of
two million pesos with interest at 36% per annum from December 7,
1991, ₱100,000.00 moral, corrective and exemplary damages and
₱200,000.00 for attorney’s fees.
In an Order dated April 6, 1993, the Executive Judge of the RTC of
Manila issued a writ of preliminary attachment upon the filing of a
bond in the amount of two million pesos.15
Petitioner filed an Amended Answer16 alleging that the Memorandum
of Agreement was conceived and arranged by her lawyer, Atty.
Carmelita Lozada, who is also respondent’s lawyer; that she was asked
to sign the agreement without being given the chance to read the same;
that the title to the property and the Deed of Sale between her and the
IMRDC were entrusted to Atty. Lozada for safekeeping and were never
turned over to respondent as there was no consummated sale yet; that
out of the two million pesos cash paid, Atty. Lozada took the one
million pesos which has not been returned, thus petitioner had filed a
civil case against her; that she was never informed of respondent’s
decision not to purchase the property within the six month period fixed
in the agreement; that when she demanded the return of TCT No.
168173 and the Deed of Sale between her and the IMRDC from Atty.
Lozada, the latter gave her these documents in a brown envelope on
May 5, 1991 which her secretary placed in her attache case; that the
envelope together with her other personal things were lost when her car
was forcibly opened the following day; that she sought the help of Atty.
Lozada who advised her to secure a police report, to execute an
affidavit of loss and to get the services of another lawyer to file a
petition for the issuance of an owner’s duplicate copy; that the petition
for the issuance of a new owner’s duplicate copy was filed on her
behalf without her knowledge and neither did she sign the petition nor
testify in court as falsely claimed for she was abroad; that she was a
victim of the manipulations of Atty. Lozada and respondent as shown
by the filing of criminal charges for perjury and false testimony against
her; that no interest could be due as there was no valid mortgage over
the property as the principal obligation is vitiated with fraud and
deception. She prayed for the dismissal of the complaint, counter-claim
for damages and attorney’s fees.
127
Trial on the merits ensued. On January 31, 1996, the RTC issued a
decision,17 the dispositive portion of which reads:
WHEREFORE, judgment is hereby RENDERED:
1) Ordering defendant to pay plaintiff the sum of P2 Million plus
interest thereon at the rate of thirty two (32%) per cent per annum
beginning December 7, 1991 until fully paid.
2) Ordering defendant to pay plaintiff the sum of ₱70,000.00
representing premiums paid by plaintiff on the attachment bond with
legal interest thereon counted from the date of this decision until fully
paid.
3) Ordering defendant to pay plaintiff the sum of ₱100,000.00 by way
of moral, corrective and exemplary damages.
4) Ordering defendant to pay plaintiff attorney’s fees of ₱100,000.00
plus cost of litigation.18
The RTC found that petitioner was under obligation to pay respondent
the amount of two million pesos with compounded interest pursuant to
their Memorandum of Agreement; that the fraudulent scheme employed
by petitioner to deprive respondent of her only security to her loaned
money when petitioner executed an affidavit of loss and instituted a
petition for the issuance of an owner’s duplicate title knowing the same
was in respondent’s possession, entitled respondent to moral damages;
and that petitioner’s bare denial cannot be accorded credence because
her testimony and that of her witness did not appear to be credible.
The RTC further found that petitioner admitted that she received from
respondent the two million pesos in cash but the fact that petitioner
gave the one million pesos to Atty. Lozada was without respondent’s
knowledge thus it is not binding on respondent; that respondent had
also proven that in 1993, she initially paid the sum of ₱30,000.00 as
premium for the issuance of the attachment bond, ₱20,000.00 for its
renewal in 1994, and ₱20,000.00 for the renewal in 1995, thus plaintiff
should be reimbursed considering that she was compelled to go to court
and ask for a writ of preliminary attachment to protect her rights under
the agreement.
Petitioner filed her appeal with the CA. In a Decision dated June 18,
2002, the CA affirmed the RTC decision with modification, the
dispositive portion of which reads:
WHEREFORE, premises considered, the decision appealed from is
MODIFIED in the sense that the rate of interest is reduced from 32% to
25% per annum, effective June 7, 1991 until fully paid. 19
The CA found that: petitioner gave the one million pesos to Atty.
Lozada partly as her commission and partly as a loan; respondent did
not replace the mistakenly dated check of one million pesos because
she had decided not to buy the property and petitioner knew of her
decision as early as April 1991; the award of moral damages was
warranted since even granting petitioner had no hand in the filing of the
petition for the issuance of an owner’s copy, she executed an affidavit
of loss of TCT No. 168173 when she knew all along that said title was
in respondent’s possession; petitioner’s claim that she thought the title
was lost when the brown envelope given to her by Atty. Lozada was
stolen from her car was hollow; that such deceitful conduct caused
respondent serious anxiety and emotional distress.
The CA concluded that there was no basis for petitioner to say that the
interest should be charged for six months only and no more; that a loan
always bears interest otherwise it is not a loan; that interest should
commence on June 7, 199120 with compounded bank interest prevailing
at the time the two million was considered as a loan which was in June
1991; that the bank interest rate for loans secured by a real estate
mortgage in 1991 ranged from 25% to 32% per annum as certified to by
Prudential Bank,21 that in fairness to petitioner, the rate to be charged
should be 25% only.
Petitioner’s motion for reconsideration was denied by the CA in a
Resolution dated September 11, 2002.
Hence the instant Petition for Review on Certiorari filed by petitioner
raising the following issues:
(A) WHETHER OR NOT THE COMPOUNDED BANK INTEREST
SHOULD BE LIMITED TO SIX (6) MONTHS AS CONTAINED IN
THE MEMORANDUM OF AGREEMENT.
(B) WHETHER OR NOT THE RESPONDENT IS ENTITLED TO
MORAL DAMAGES.
(C) WHETHER OR NOT THE GRANT OF CORRECTIVE AND
EXEMPLARY DAMAGES AND ATTORNEY’S FEES IS PROPER
EVEN IF NOT MENTIONED IN THE TEXT OF THE DECISION.22
Petitioner contends that the interest, whether at 32% per annum
awarded by the trial court or at 25% per annum as modified by the CA
which should run from June 7, 1991 until fully paid, is contrary to the
parties’ Memorandum of Agreement; that the agreement provides that
if respondent would decide not to purchase the property, petitioner has
the period of another six months to pay the loan with compounded bank
interest for the last six months only; that the CA’s ruling that a loan
always bears interest otherwise it is not a loan is contrary to Art. 1956
of the New Civil Code which provides that no interest shall be due
unless it has been expressly stipulated in writing.
We are not persuaded.
While the CA’s conclusion, that a loan always bears interest otherwise
it is not a loan, is flawed since a simple loan may be gratuitous or with
a stipulation to pay interest,23 we find no error committed by the CA in
awarding a 25% interest per annum on the two-million peso loan even
beyond the second six months stipulated period.
The Memorandum of Agreement executed between the petitioner and
respondent on December 7, 1990 is the law between the parties. In
resolving an issue based upon a contract, we must first examine the
contract itself, especially the provisions thereof which are relevant to
the controversy.24 The general rule is that if the terms of an agreement
are clear and leave no doubt as to the intention of the contracting
parties, the literal meaning of its stipulations shall prevail.25 It is further
required that the various stipulations of a contract shall be interpreted
together, attributing to the doubtful ones that sense which may result
from all of them taken jointly.26
In this case, the phrase "for the last six months only" should be taken in
the context of the entire agreement. We agree with and adopt the CA’s
interpretation of the phrase in this wise:
Their agreement speaks of two (2) periods of six months each. The first
six-month period was given to plaintiff-appellee (respondent) to make
up her mind whether or not to purchase defendant-appellant’s
(petitioner's) property. The second six-month period was given to
defendant-appellant to pay the P2 million loan in the event that
plaintiff-appellee decided not to buy the subject property in which case
interest will be charged "for the last six months only", referring to the
second six-month period. This means that no interest will be charged
for the first six-month period while appellee was making up her mind
whether to buy the property, but only for the second period of six
months after appellee had decided not to buy the property. This is the
meaning of the phrase "for the last six months only". Certainly, there is
nothing in their agreement that suggests that interest will be charged for
six months only even if it takes defendant-appellant an eternity to pay
the loan.27
128
The agreement that the amount given shall bear compounded bank
interest for the last six months only, i.e., referring to the second six-
month period, does not mean that interest will no longer be charged
after the second six-month period since such stipulation was made on
the logical and reasonable expectation that such amount would be paid
within the date stipulated. Considering that petitioner failed to pay the
amount given which under the Memorandum of Agreement shall be
considered as a loan, the monetary interest for the last six months
continued to accrue until actual payment of the loaned amount.
The payment of regular interest constitutes the price or cost of the use
of money and thus, until the principal sum due is returned to the
creditor, regular interest continues to accrue since the debtor continues
to use such principal amount.28 It has been held that for a debtor to
continue in possession of the principal of the loan and to continue to
use the same after maturity of the loan without payment of the
monetary interest, would constitute unjust enrichment on the part of the
debtor at the expense of the creditor.29
Petitioner and respondent stipulated that the loaned amount shall earn
compounded bank interests, and per the certification issued by
Prudential Bank, the interest rate for loans in 1991 ranged from 25% to
32% per annum. The CA reduced the interest rate to 25% instead of the
32% awarded by the trial court which petitioner no longer
assailed.1awphi1.nét
In Bautista v. Pilar Development Corp.,30 we upheld the validity of a
21% per annum interest on a ₱142,326.43 loan. In Garcia v. Court of
Appeals,31 we sustained the agreement of the parties to a 24% per
annum interest on an ₱8,649,250.00 loan. Thus, the interest rate of 25%
per annum awarded by the CA to a ₱2 million loan is fair and
reasonable.
Petitioner next claims that moral damages were awarded on the
erroneous finding that she used a fraudulent scheme to deprive
respondent of her security for the loan; that such finding is baseless
since petitioner was acquitted in the case for perjury and false
testimony filed by respondent against her.
We are not persuaded.
Article 31 of the Civil Code provides that when the civil action is based
on an obligation not arising from the act or omission complained of as a
felony, such civil action may proceed independently of the criminal
proceedings and regardless of the result of the latter.32
While petitioner was acquitted in the false testimony and perjury cases
filed by respondent against her, those actions are entirely distinct from
the collection of sum of money with damages filed by respondent
against petitioner.
We agree with the findings of the trial court and the CA that
petitioner’s act of trying to deprive respondent of the security of her
loan by executing an affidavit of loss of the title and instituting a
petition for the issuance of a new owner’s duplicate copy of TCT No.
168173 entitles respondent to moral damages.1a\^/phi1.net Moral
damages may be awarded in culpa contractual or breach of contract
cases when the defendant acted fraudulently or in bad faith. Bad faith
does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of
wrong. It partakes of the nature of fraud.33
The Memorandum of Agreement provides that in the event that
respondent opts not to buy the property, the money given by respondent
to petitioner shall be treated as a loan and the property shall be
considered as the security for the mortgage. It was testified to by
respondent that after they executed the agreement on December 7,
1990, petitioner gave her the owner’s copy of the title to the property,
the Deed of Sale between petitioner and IMRDC, the certificate of
occupancy, and the certificate of the Secretary of the IMRDC who
signed the Deed of Sale.34 However, notwithstanding that all those
documents were in respondent’s possession, petitioner executed an
affidavit of loss that the owner’s copy of the title and the Deed of Sale
were lost.
Although petitioner testified that her execution of the affidavit of loss
was due to the fact that she was of the belief that since she had
demanded from Atty. Lozada the return of the title, she thought that the
brown envelope with markings which Atty. Lozada gave her on May 5,
1991 already contained the title and the Deed of Sale as those
documents were in the same brown envelope which she gave to Atty.
Lozada prior to the transaction with respondent.35 Such statement
remained a bare statement. It was not proven at all since Atty. Lozada
had not taken the stand to corroborate her claim. In fact, even
petitioner’s own witness, Benilda Ynfante (Ynfante), was not able to
establish petitioner's claim that the title was returned by Atty. Lozada in
view of Ynfante's testimony that after the brown envelope was given to
petitioner, the latter passed it on to her and she placed it in petitioner’s
attaché case36and did not bother to look at the envelope.37
It is clear therefrom that petitioner’s execution of the affidavit of loss
became the basis of the filing of the petition with the RTC for the
issuance of new owner’s duplicate copy of TCT No. 168173.
Petitioner’s actuation would have deprived respondent of the security
for her loan were it not for respondent’s timely filing of a petition for
relief whereby the RTC set aside its previous order granting the
issuance of new title. Thus, the award of moral damages is in order.
The entitlement to moral damages having been established, the award
of exemplary damages is proper.38Exemplary damages may be imposed
upon petitioner by way of example or correction for the public
good.39 The RTC awarded the amount of ₱100,000.00 as moral and
exemplary damages. While the award of moral and exemplary damages
in an aggregate amount may not be the usual way of awarding said
damages,40 no error has been committed by CA. There is no question
that respondent is entitled to moral and exemplary damages.
Petitioner argues that the CA erred in awarding attorney’s fees because
the trial court’s decision did not explain the findings of facts and law to
justify the award of attorney’s fees as the same was mentioned only in
the dispositive portion of the RTC decision.
We agree.
Article 220841 of the New Civil Code enumerates the instances where
such may be awarded and, in all cases, it must be reasonable, just and
equitable if the same were to be granted.42 Attorney's fees as part of
damages are not meant to enrich the winning party at the expense of the
losing litigant. They are not awarded every time a party prevails in a
suit because of the policy that no premium should be placed on the right
to litigate.43 The award of attorney's fees is the exception rather than the
general rule. As such, it is necessary for the trial court to make findings
of facts and law that would bring the case within the exception and
justify the grant of such award. The matter of attorney's fees cannot be
mentioned only in the dispositive portion of the decision. 44 They must
be clearly explained and justified by the trial court in the body of its
decision. On appeal, the CA is precluded from supplementing the bases
for awarding attorney’s fees when the trial court failed to discuss in its
Decision the reasons for awarding the same. Consequently, the award
of attorney's fees should be deleted.
WHEREFORE, in view of all the foregoing, the Decision dated June
18, 2002 and the Resolution dated September 11, 2002 of the Court of
Appeals in CA-G.R. CV No. 52839 are AFFIRMED with
MODIFICATION that the award of attorney’s fees is DELETED.
129
G.R. No. 210148 December 8, 2014
ANTONIO L. DALURAYA, Petitioner,
vs.
MARLA OLIVA, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated
June 28, 2013 and the Resolution3 dated November 22, 2013 rendered
by the Court of Appeals (CA) in CA-G.R. SP No. 125113 finding
petitioner Antonio L. Daluraya (Daluraya) civilly liable for the death of
Marina Arabit Oliva (Marina Oliva) despite having been acquitted for
Reckless Imprudence Resulting in Homicide on the ground of
insufficiency of evidence.
The Facts
On January 4, 2006, Daluraya was charged in an Information4 for
Reckless Imprudence Resulting in Homicide in connection with the
death5 of Marina Oliva. Records reveal that sometime in the afternoon
of January 3, 2006, Marina Oliva was crossing the street when a Nissan
Vanette, bearing plate number UPN-172 and traversing EDSA near the
Quezon Avenue flyover in Quezon City, ran her over.6 While Marina
Oliva was rushed to the hospital to receive medical attention,she
eventually died, prompting her daughter, herein respondent Marla Oliva
(Marla), to file a criminal case for Reckless Imprudence Resulting in
Homicide against Daluraya, the purported driver of the vehicle.7
During the proceedings, the prosecution presented as witness Shem
Serrano (Serrano), an eye-witness to the incident, who testified that on
said date, he saw a woman crossing EDSA heading towards the island
near the flyover and that the latter was bumped by a Nissan Vanette
bearing plate number UPN-172. The prosecution also offered the
testimonies of (a) Marla, who testified as to the civil damages sustained
by her family as a result of her mother’s death; (b) Dr. Paul Ortiz (Dr.
Ortiz), who presented his findings on the autopsy conducted upon the
body of Marina Oliva; and (c) Police Senior Inspector Lauro Gomez
(PSI Gomez), who conducted the investigation following the incident
and claimed that Marina Oliva was hit by the vehicle being driven by
Daluraya, albeit he did not witness the incident.8
After the prosecution rested its case, Daluraya filed an Urgent Motion
to Dismiss (demurrer)9 asserting, inter alia, that he was not positively
identified by any of the prosecution witnesses as the driver of the
vehicle that hit the victim, and that there was no clear and competent
evidence of how the incident transpired.10
The MeTC Ruling
In an Order11 dated May 24, 2010, the Metropolitan Trial Court of
Quezon City, Branch 38 (MeTC) granted Daluraya’s demurrer and
dismissed the case for insufficiency of evidence. It found that the
testimonies of the prosecution witnesses were wanting in material
details and that they failed to sufficiently establish that Daluraya
committed the crime imputed upon him.12 Deconstructing the
testimonies of the prosecution witnesses individually, the MeTC found
that: (a) Marla merely testified on the damages sustained by her family
but she failed to identify Daluraya as the driver of the vehicle that hit
her mother; (b) Serrano also did not identify
Daluraya as the driver of the said vehicle; (c) Dr. Ortiz merely testified
on the autopsy results; and (d) PSI Gomez, while he did investigate the
incident, likewise declared thathe did not witness the same.13
Marla moved for reconsideration,14 which the MeTC denied in an
Order15 dated November 4, 2010, clarifying that the grant of Daluraya’s
demurrer had the effect of an acquittal and that reconsideration of its
Order granting Daluraya’s demurrer would violate the latter’s right
against double jeopardy.16 With respect to the civil aspect of the case,
the MeTC likewise denied the same, holding that no civil liability can
be awarded absent any evidence proving that Daluraya was the person
responsible for Marina Oliva’s demise.17
Aggrieved, Marla appealed18 to the Regional Trial Court of Quezon
City, Branch 76 (RTC), insisting that the MeTC failed to make any
finding as to the civil liability of Daluraya,19 which finding was not
precluded by the dismissal of the criminal aspect of the case.
The RTC Ruling
In a Decision20 dated September 8, 2011, the RTC dismissed the appeal
and affirmed the MeTC’s ruling,declaring that "the act from which the
criminal responsibility may spring did not at all exist."21
Marla filed a motion for reconsideration22 which, although filed beyond
the reglementary period, was nonetheless accepted. However, the RTC
found the same without merit and thus, sustained the factual findings
and rulings of the MeTC in its Order23 dated May 10, 2012.
Dissatisfied, Marla elevated the case to the CA via petition for review,
maintaining that Daluraya must be held civilly liable.
The CA Ruling
In a Decision24 dated June 28, 2013, the CA granted the petition and
reversed the RTC Decision, ordering Daluraya to pay Marla the
amounts of ₱152,547.00 as actual damages, ₱50,000.00 as civil
indemnity, and ₱50,000.00 as moral damages.25 In so ruling, the CA
held that the MeTC’s Order showed that Daluraya’s acquittal was based
on the fact that the prosecution failed to prove his guilt beyond
reasonable doubt. As such, Daluraya was not exonerated from civil
liability.26
Moreover, the CA considered the following pieces of evidence to
support its finding that Daluraya must be held civilly liable: (a) the
inadmissible sworn statement executed by Daluraya where he admitted
that he drove the subject vehicle which hit Marina Oliva; (b) the
conclusion derived from Serrano’s testimony that the woman he saw
crossing the street who was hit by a Nissan Vanette with plate number
UPN-172, and the victim who eventually died, are one and the same;
(c) the Philippine National Police Referral Letter of one Police Chief
Inspector Virgilio Pereda identifying Daluraya as the suspectin the case
of Reckless Imprudence Resulting in Homicide involving the death of
Marina Oliva, and stating that he brought the victim to the Quezon City
General Hospital for treatment but was declared dead on arrival; and (d)
the subject vehicle was registered in the name of Daluraya’s aunt,
Gloria Zilmar,27 who authorized him to claim the vehicle from the
MeTC.28
Daluraya filed a motion for reconsideration,29 which the CA denied in a
Resolution30 dated November 22, 2013,hence, this petition.
The Issue Before the Court
The sole issue advanced for the Court’s resolution is whether or not the
CA was correct in finding Daluraya civilly liable for Marina Oliva’s
death despite his acquittal in the criminal case for Reckless Imprudence
Resulting in Homicide on the ground of insufficiency of evidence.
The Court’s Ruling
The petition is meritorious.
Every person criminally liable for a felony is also civilly liable. The
acquittal of an accused of the crime charged, however, does not
necessarily extinguish his civil liability.31 In Manantan v. CA,32 the
130
Court expounded on the two kinds of acquittal recognized by our law
and their concomitant effects on the civil liability of the accused, as
follows:
Our law recognizes two kinds of acquittal, with different effects on the
civil liability of the accused. First is an acquittal on the ground that the
accused is not the author of the actor omission complained of. This
instance closes the door to civil liability, for a person who has been
found to be not the perpetrator of any act or omission cannot and can
never be held liable for such act or omission. There being no delict,
civil liability ex delictois out of the question, and the civil action, if any,
which may be instituted must be based on grounds other than the delict
complained of. This is the situation contemplated inRule 111 of the
Rules of Court. The second instance is an acquittal based on reasonable
doubt on the guilt of the accused. In this case, even if the guilt of the
accused has not been satisfactorily established, he is not exempt from
civil liability which may be proved by preponderance of evidence
only.33
In Dayap v. Sendiong,34 the Court explained further:
The acquittal of the accused does not automatically preclude a
judgment against him on the civil aspect of the case.1âwphi1The
extinction of the penal action does not carry with it the extinction of the
civil liability where: (a) the acquittal is based on reasonable doubt as
only preponderance of evidence is required; (b) the court declares that
the liability of the accused is only civil; and (c) the civil liability of the
accused does not arise from or is not based upon the crime of which the
accused is acquitted. However, the civil action based on delictmay be
deemed extinguished if there is a finding on the final judgment in the
criminal action that the act or omission from which the civil liability
may arise did not exist or where the accused did not commit the acts or
omission imputed to him.
to establish that the accused was the driver of the Nissan Vanette which
bumped Marina Oliva"38 and that "there is no competent evidence on
hand which proves that the accused was the person responsible for the
death of Marina Oliva."39
Clearly, therefore, the CA erred in construing the findings of the MeTC,
as affirmed by the RTC, that Daluraya’s acquittal was anchored on
reasonable doubt, which would necessarily call for a remand of the case
to the court a quo for the reception of Daluraya’s evidence on the civil
aspect.1âwphi1 Records disclose that Daluraya’s acquittal was based on
the fact that "the act or omission from which the civil liability may arise
did not exist" in view of the failure of the prosecution to sufficiently
establish that he was the author of the crime ascribed against him.
Consequently, his civil liability should be deemed as non-existent by
the nature of such acquittal.
WHEREFORE, the petition is GRANTED. The Decision dated June
28, 2013 and the Resolution dated November 22, 2013 of the Court of
Appeals in CA-G.R. SP No. 125113 are hereby REVERSED and SET
ASIDE. The Decision dated September 8,2011 and the Order dated
May 10, 2012 of the Regional Trial Court of Quezon City, Branch 76
are REINSTATED.
SO ORDERED.

Thus, if demurrer is granted and the accused is acquitted by the court,

the accused has the right to adduce evidence on the civil aspect of the
case unless the court also declares that the act or omission from which
the civil liability may arise did not exist. This is because when the
accused files a demurrer to evidence, he has not yet adduced evidence
both on the criminal and civil aspects of the case. The only evidence on
record is the evidence for the prosecution. What the trial court should
do is issue an order or partial judgment granting the demurrer to
evidence and acquitting the accused, and set the case for continuation of
trial for the accused to adduce evidence on the civil aspect of the case
and for the private complainant to adduce evidence by way of rebuttal.
Thereafter, the court shall render judgment on the civil aspect of the
case.35

(Emphases supplied)

In case of an acquittal, the Rules of Court requires that the judgment

state "whether the evidence of the prosecution absolutely failed to
prove the guilt of the accused or merely failed to prove his guilt beyond
reasonable doubt. In either case, the judgment shall determine if the act
or omission from which the civil liability might arise did not exist."36

A punctilious examination of the MeTC’s Order, which the RTC

sustained, will show that Daluraya’s acquittal was based on the
conclusion that the act or omission from which the civil liability may
arise did not exist, given that the prosecution was not able to establish
that he was the author of the crime imputed against him. Such
conclusion is clear and categorical when the MeTC declared that "the
testimonies of the prosecution witnesses are wanting in material details
and they did not sufficiently establish that the accused precisely
committed the crime charged against him."37 Furthermore, when Marla
sought reconsideration of the MeTC’s Order acquitting Daluraya, said
court reiterated and firmly clarified that "the prosecution was not able

131
G.R. No. 207949

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
ARMANDO DIONALDO y EBRON, RENATO
DIONALDO y EBRON, MARIANO GARIGUEZ, JR. y RAMOS,
and RODOLFO LARIDO y EBRON, Accused-Appellants.

RESOLUTION

PERLAS-BERNABE, J.:

On July 23, 2014, the Court rendered its Resolution 1 in this case finding
accused-appellants Armando Dionaldo y Ebron, Renato
Dionaldo y Ebron (Renato), Mariano Gariguez, Jr. y Ramos, and
Rodolfo Lari do y Ebron (accused-appellants) guilty beyond reasonable
doubt of the special complex crime of Kidnapping for Ransom with
Homicide, the dispositive portion of which reads:

WHEREFORE, the appeal is DISMISSED. The Decision dated

February 15, 2013 of the Court of Appeals in CA-G.R. CR-H.C. No.
02888 is hereby AFFIRMED with the MODIFICATION that all the
accused-appellants herein are equally found GUILTY of the special
complex crime of Kidnapping for Ransom with Homicide, and are
sentenced to each suffer the penalty of reclusion perpetua, without
eligibility for parole, and to pay, jointly and severally, the family of the
kidnap victim Edwin Navarro the following amounts: (1) PI00,000.00
as civil indemnity; (2) PI00,000.00 as moral damages; and (3)
Pl00,000.00 as exemplary damages, all with interest at the rate of six
percent (6%) per annum from the date of finality of judgment until fully
paid.

SO ORDERED.

Accused-appellants collectively moved for reconsideration2 thereof,

which the court denied with finality in it’s Resolution3 dated September
24, 2014.

On even date, the Court received a letter4 from the Bureau of

Corrections dated September 16, 2014 informing Us of the death of one
of the accused-appellants in this case, Renato, on June I 0, 2014, as
evidenced by the Certificate of Death5 attached thereto.1âwphi1 As
Renato's death transpired before the promulgation of the Court's July
23, 2014 Resolution in this case, i.e., when his appeal before the Court
was still pending resolution, his criminal liability is totally extinguished
in view of the provisions of Article 89 of the Revised Penal Code which
states:

Art. 89. How criminal liability is totally extinguished. - Criminal

liability is totally extinguished:

1. By the death of the convict, as to the personal penalties; and as to

pecuniary penalties, liability therefor is extinguished only when the
death of the offender occurs before final judgment;

xxxx

In People v. Amistoso,6 the Court explained that the death of the

accused pending appeal of his conviction extinguishes his criminal
liability, as well as his civil liability ex delicto.7 Consequently, Renato's
death on une 10, 2014 renders the Court's July 23, 2014 Resolution
irrelevant and ineffectual as to him, and is therefore set aside.
Accordingly, the criminal case against Renato is dismissed.

WHEREFORE, the Resolutions dated July 23, 2014 and September

24, 2014 of the Court are hereby SET ASIDE and Criminal Case No.
C-68329 before the Regional Trial Court of Caloocan City, Branch 129
is DISMISSED insofar as accused-appellant RENATO
DIONALDO y EBRON is concerned, in view of his demise.

132
G.R. No. 207949 SO ORDERED.

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
ARMANDO DIONALDO y EBRON, RENATO
DIONALDO y EBRON, MARIANO GARIGUEZ, JR. y RAMOS,
and RODOLFO LARIDO y EBRON, Accused-Appellants.

RESOLUTION

PERLAS-BERNABE, J.:

On July 23, 2014, the Court rendered its Resolution 1 in this case finding
accused-appellants Armando Dionaldo y Ebron, Renato
Dionaldo y Ebron (Renato), Mariano Gariguez, Jr. y Ramos, and
Rodolfo Lari do y Ebron (accused-appellants) guilty beyond reasonable
doubt of the special complex crime of Kidnapping for Ransom with
Homicide, the dispositive portion of which reads:

WHEREFORE, the appeal is DISMISSED. The Decision dated

February 15, 2013 of the Court of Appeals in CA-G.R. CR-H.C. No.
02888 is hereby AFFIRMED with the MODIFICATION that all the
accused-appellants herein are equally found GUILTY of the special
complex crime of Kidnapping for Ransom with Homicide, and are
sentenced to each suffer the penalty of reclusion perpetua, without
eligibility for parole, and to pay, jointly and severally, the family of the
kidnap victim Edwin Navarro the following amounts: (1) PI00,000.00
as civil indemnity; (2) PI00,000.00 as moral damages; and (3)
Pl00,000.00 as exemplary damages, all with interest at the rate of six
percent (6%) per annum from the date of finality of judgment until fully
paid.

SO ORDERED.

Accused-appellants collectively moved for reconsideration2 thereof,

which the court denied with finality in it’s Resolution3 dated September
24, 2014.

On even date, the Court received a letter4 from the Bureau of

Corrections dated September 16, 2014 informing Us of the death of one
of the accused-appellants in this case, Renato, on June I 0, 2014, as
evidenced by the Certificate of Death5 attached thereto.1âwphi1 As
Renato's death transpired before the promulgation of the Court's July
23, 2014 Resolution in this case, i.e., when his appeal before the Court
was still pending resolution, his criminal liability is totally extinguished
in view of the provisions of Article 89 of the Revised Penal Code which
states:

Art. 89. How criminal liability is totally extinguished. - Criminal

liability is totally extinguished:

1. By the death of the convict, as to the personal penalties; and as to

pecuniary penalties, liability therefor is extinguished only when the
death of the offender occurs before final judgment;

xxxx

In People v. Amistoso,6 the Court explained that the death of the

accused pending appeal of his conviction extinguishes his criminal
liability, as well as his civil liability ex delicto.7 Consequently, Renato's
death on une 10, 2014 renders the Court's July 23, 2014 Resolution
irrelevant and ineffectual as to him, and is therefore set aside.
Accordingly, the criminal case against Renato is dismissed.

WHEREFORE, the Resolutions dated July 23, 2014 and September

24, 2014 of the Court are hereby SET ASIDE and Criminal Case No.
C-68329 before the Regional Trial Court of Caloocan City, Branch 129
is DISMISSED insofar as accused-appellant RENATO
DIONALDO y EBRON is concerned, in view of his demise.

133

THIRD DIVISION
G.R. No. 189081, August 10, 2016
GLORIA S. DY, Petitioner, v. PEOPLE OF THE PHILIPPINES,
MANDY COMMODITIES CO., INC., REPRESENTED BY ITS
PRESIDENT, WILLIAM MANDY, Respondent.
DECISION
JARDELEZA, J.:
Our law states that every person criminally liable for a felony is also
civilly liable. This civil liability ex delicto may be recovered through a
civil action which, under our Rules of Court, is deemed instituted with
the criminal action. While they are actions mandatorily fused, 1 they are,
in truth, separate actions whose existences are not dependent on each
other. Thus, civil liability ex delicto survives an acquittal in a criminal
case for failure to prove guilt beyond reasonable doubt. However, the
Rules of Court limits this mandatory fusion to a civil action for the
recovery of civil liability ex delicto. It, by no means, includes a civil
liability arising from a different source of obligation, as in the case of a
contract. Where the civil liability is ex contractu, the court hearing the
criminal case has no authority to award damages.
The Case
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court. Petitioner Gloria S. Dy (petitioner) seeks the reversal of the
decision of the Court of Appeals (CA) dated February 25, 2009
(Assailed Decision)2 ordering her to pay Mandy Commodities
Company, Inc. (MCCI) in the amount of
P21,706,281.00.3chanrobleslaw
The Facts
Petitioner was the former General Manager of MCCL. In the course of
her employment, petitioner assisted MCCI in its business involving
several properties. One such business pertained to the construction of
warehouses over a property (Numancia Property) that MCCI leased
from the Philippine National Bank (PNB). Sometime in May 1996, in
pursuit of MCCI's business, petitioner proposed to William Mandy
(Mandy), President of MCCI, the purchase of a property owned by
Pantranco. As the transaction involved a large amount of money,
Mandy agreed to obtain a loan from the International China Bank of
Commerce (ICBC). Petitioner represented that she could facilitate the
approval of the loan. True enough, ICBC granted a loan to MCCI in the
amount of P20,000,000.00, evidenced by a promissory note. As
security, MCCI also executed a chattel mortgage over the warehouses
in the Numancia Property. Mandy entrusted petitioner with the
obligation to manage the payment of the loan. 4chanrobleslaw
In February 1999, MCCI received a notice of foreclosure over the
mortgaged property due to its default in paying the loan obligation.5 In
order to prevent the foreclosure, Mandy instructed petitioner to
facilitate the payment of the loan. MCCI, through Mandy, issued 13
Allied Bank checks and 12 Asia Trust Bank checks in varying amounts
and in different dates covering the period from May 18, 1999 to April
4, 2000.6 The total amount of the checks, which were all payable to
cash, was P21,706,281.00. Mandy delivered the checks to petitioner.
Mandy claims that he delivered the checks with the instruction that
petitioner use the checks to pay the loan.7 Petitioner, on the other hand,
testified that she encashed the checks and returned the money to
Mandy.8 ICBC eventually foreclosed the mortgaged property as MCCI
continued to default in its obligation to pay. Mandy claims that it was
only at this point in time that he discovered that not a check was paid to
ICBC.9chanrobleslaw
Thus, on October 7, 2002, MCCI, represented by Mandy, filed a
Compiamt-Affidavit for Estafa10 before the Office of the City
Prosecutor of Manila. On March 3, 2004, an Information 11 was filed
against petitioner before the Regional Trial Court (RTC) Manila.
After a full-blown trial, the RTC Manila rendered a decision12 dated
November 11, 2005 (RTC Decision) acquitting petitioner. The RTC
Manila found that while petitioner admitted that she received the
checks, the prosecution failed to establish that she was under any
obligation to deliver them to ICBC in payment of MCCFs loan. The
trial court made this finding on the strength of Mandy's admission that
he gave the checks to petitioner with the agreement that she would
encash them. Petitioner would then pay ICBC using her own checks.
The trial court further made a finding that Mandy and petitioner entered
into a contract of loan.13 Thus, it held that the prosecution failed to
establish an important element of the crime of estafa—misappropriation
or conversion. However, while the RTC Manila acquitted petitioner, it
ordered her to pay the amount of the checks. The dispositive portion of
the RTC Decision states —
WHEREFORE, the prosecution having failed to establish the guilt of
the accused beyond reasonable doubt, judgment is hereby rendered
ACQUITTING the accused of the offense charged. With costs de
officio.
The accused is however civilly liable to the complainant for the amount
of P21,706,281.00.
SO ORDERED.14chanroblesvirtuallawlibrary
Petitioner filed an appeal15 of the civil aspect of the RTC Decision with
the CA. In the Assailed Decision,16the CA found the appeal without
merit. It held that the acquittal of petitioner does not necessarily absolve
her of civil liability. The CA said that it is settled that when an accused
is acquitted on the basis of reasonable doubt, courts may still find him
or her civilly liable if the evidence so warrant. The CA explained that
the evidence on record adequately prove that petitioner received the
checks as a loan from MCCI. Thus, preventing the latter from
recovering the amount of the checks would constitute unjust
enrichment. Hence, the Assailed Decision ruled
WHEREFORE, in view of the foregoing, the appeal is DENIED. The
Decision dated November 11, 2005 of the Regional Trial Court,
Manila, Branch 33 in Criminal Case No. 04-224294 which found
Gloria Dy civilly liable to William Mandy is AFFIRMED.
SO ORDERED.17chanroblesvirtuallawlibrary
The CA also denied petitioner's motion for reconsideration in a
resolution18 dated August 3, 2009.
Hence, this Petition for Review on Certiorari (Petition). Petitioner
argues that since she was acquitted for failure of the prosecution to
prove all the elements of the crime charged, there was therefore no
crime committed.19 As there was no crime, any civil liability ex
delicto cannot be awarded.
The Issues
The central issue is the propriety of making a finding of civil liability in
a criminal case for estafa when the accused is acquitted for failure of
the prosecution to prove all the elements of the crime charged.
134
The Ruling of the Court
We grant the petition.
Civil Liability Arising From Crime
Our laws recognize a bright line distinction between criminal and civil
liabilities. A crime is a liability against the state. It is prosecuted by and
for the state. Acts considered criminal are penalized by law as a means
to protect the society from dangerous transgressions. As criminal
liability involves a penalty affecting a person's liberty, acts are only
treated criminal when the law clearly says so. On the other hand, civil
liabilities take a less public and more private nature. Civil liabilities are
claimed through civil actions as a means to enforce or protect a right or
prevent or redress a wrong.20 They do not carry with them the
imposition of imprisonment as a penalty. Instead, civil liabilities are
compensated in the form of damages.
Nevertheless, our jurisdiction recognizes that a crime has a private civil
component. Thus, while an act considered criminal is a breach of law
against the State, our legal system allows for the recovery of civil
damages where there is a private person injured by a criminal act. It is
in recognition of this dual nature of a criminal act that our Revised
Penal Code provides that every person criminally liable is also civilly
liable.21 This is the concept of civil liability ex delicto.
This is echoed by the New Civil Code when it recognizes acts or
omissions punished by law as a separate source of obligation. 22 This is
reinforced by Article 30 of the same code which refers to the filing of a
separate civil action to demand civil liability arising from a criminal
offense.23chanrobleslaw
The Revised Penal Code fleshes out this civil liability in Article
10424 which states that it includes restitution, reparation of damage
caused and indemnification for consequential damages.
Rules of procedure for criminal and civil actions involving the same act
or omission
The law and the rules of procedure provide for a precise mechanism in
instituting a civil action pertaining to an act or omission which is also
subject of a criminal case. Our Rules of Court prescribes a kind of
fusion such that, subject to certain defined qualifications, when a
criminal action is instituted, the civil action for the recovery of the civil
liability arising from the offense is deemed instituted as
well.25cralawredchanrobleslaw
However, there is an important difference between civil and criminal
proceedings that require a fine distinction as to how these twin actions
shall proceed. These two proceedings involve two different standards of
proof. A criminal action requires proof of guilt beyond reasonable
doubt while a civil action requires a lesser quantum of proof, that of
preponderance of evidence. This distinction also agrees with the
essential principle in our legal system that while a criminal liability
carries with it a corresponding civil liability, they are nevertheless
separate and distinct. In other words, these two liabilities may co-exist
but their existence is not dependent on each other.26chanrobleslaw
The Civil Code states that when an accused in a criminal prosecution is
acquitted on the ground that his guilt has not been proven beyond
reasonable doubt, a civil action for damages for the same act or
omission may be filed. In the latter case, only preponderance of
evidence is required.27 This is supported by the Rules of Court which
provides that the extinction of the criminal action does not result in the
extinction of the corresponding civil action.28 The latter may only be
extinguished when there is a "finding in a final judgment in the criminal
action that the act or omission from which the civil liability may arise
did not exist."29 Consistent with this, the Rules of Court requires that in
judgments of acquittal the court must state whether "the evidence of the
prosecution absolutely failed to prove the guilt of the accused or merely
failed to prove his guilt beyond reasonable doubt. In either case, the
judgment shall determine if the act or omission from which the civil
liability might arise did not exist."30chanrobleslaw
Thus, whether an exoneration from the criminal action should affect the
corresponding civil action depends on the varying kinds of acquittal.
In Manantan v. Court of Appeals,31 we explained —
Our law recognizes two kinds of acquittal, with different effects on the
civil liability of the accused. First is an acquittal on the ground that the
accused is not the author of the act or omission complained of. This
instance closes the door to civil liability, for a person who has been
found to be not the perpetrator of any act or omission cannot and can
never be held liable for such act or omission. There being no delict civil
liability ex delicto is out of the question, and the civil action, if any,
which may be instituted must be based on grounds other than
the delict complained of. This is the situation contemplated in Rule 111
of the Rules of Court. The second instance is an acquittal based on
reasonable doubt on the guilt of the accused. In this case, even if the
guilt of the accused has not been satisfactorily established, he is not
exempt from civil liability which may be proved by preponderance of
evidence only. This is the situation contemplated in Article 29 of the
Civil Code, where the civil action for damages is "for the same act or
omission." Although the two actions have different purposes, the
matters discussed in the civil case are similar to those discussed in the
criminal case. However, the judgment In the criminal proceeding
cannot be read in evidence In the civil action to establish any fact there
determined, even though both actions involve the same act or omission.
The reason for this rule is that the parties are not the same and
secondarily, different rules of evidence are applicable. Hence,
notwithstanding herein petitioner's acquittal, the Court of Appeals in
determining whether Article 29 applied, was not precluded from
looking into the question of petitioner's negligence or reckless
imprudence.32chanroblesvirtuallawlibrary
In Dayap v. Sendiong,33 we further said —
The acquittal of the accused does not automatically preclude a
judgment against him on the civil aspect of the case. The extinction of
the penal action does not carry with it the extinction of the civil liability
where: (a) the acquittal is based on reasonable doubt as only
preponderance of evidence is required; (b) the court declares that the
liability of the accused is only civil; and (c) the civil liability of the
accused does not arise from or is not based upon the crime of which the
accused is acquitted. However, the civil action based on delict may be
deemed extinguished if mere is a finding on the final judgment in the
criminal action that the act or omission from which the civil liability
may arise did not exist or where the accused did not commit the acts or
omission imputed to him.34chanroblesvirtuallawlibrary
Hence, a civil action filed for the purpose of enforcing civil liability ex
delicto, even if mandatorily instituted with the corresponding criminal
action, survives an acquittal when it is based on the presence of
reasonable doubt. In these instances, while the evidence presented does
not establish the fact of the crime with moral certainty, the civil action
still prevails for as long as the greater weight of evidence tilts in favor
of a finding of liability. This means that while the mind of the court
cannot rest easy in penalizing the accused for the commission of a
crime, it nevertheless finds that he or she committed or omitted to
perform acts which serve as a separate source of obligation. There is no
sufficient proof that the act or omission is criminal beyond reasonable
doubt, but there is a preponderance of evidence to show that the act or
135
omission caused injury which demands compensation.
Civil Liability Ex Delicto in Estafa Cases
Our laws penalize criminal fraud which causes damage capable of
pecuniary estimation through estafaunder Article 315 of the Revised
Penal Code. In general, the elements
of estafa are:ChanRoblesVirtualawlibrary
(1) That the accused defrauded another (a) by abuse of confidence, or
(b) by means of deceit; and
(2) That damage or prejudice capable of pecuniary estimation is
caused to the offended party or third person.
The essence of the crime is the unlawful abuse of confidence or deceit
in order to cause damage. As this Court previously held, "the element
of fraud or bad faith is indispensable."35 Our law abhors the act of
defrauding another person by abusing his trust or deceiving him, such
that, it criminalizes this kind of fraud.
Article 315 of the Revised Penal Code identifies the circumstances
which constitute estafa. Article 315, paragraph 1 (b) states that estafa is
committed by abuse of confidence —
Art. 315. Swindling (estafa) - x x x (b) By misappropriating or
converting, to the prejudice of another, money, goods, or any other
personal property received by the offender in trust or on commission, or
for administration, or under any other obligation involving the duty to
make delivery of or to return the same, even though such obligation be
totally or partially guaranteed by a bond; or by denying having received
such money, goods, or other property.
In this kind of estafa, the fraud which the law considers as criminal is
the act of misappropriation or conversion. When the element of
misappropriation or conversion is missing, there can be no estafa. In
such case, applying the foregoing discussions on civil liability ex
delicto, there can be no civil liability as there is no act or omission from
which any civil liability may be sourced. However, when an accused is
acquitted because a reasonable doubt exists as to the existence of
misappropriation or conversion, then civil liability may still be
awarded. This means that, while there is evidence to prove fraud, such
evidence does not suffice to convince the court to the point of moral
certainty that the act of fraud amounts to estafa. As the act was
nevertheless proven, albeit without sufficient proof justifying the
imposition of any criminal penalty, civil liability exists.
In this case, the RTC Manila acquitted petitioner because the
prosecution failed to establish by sufficient evidence the element of
misappropriation or conversion. There was no adequate evidence to
prove that Mandy gave the checks to petitioner with the instruction that
she will use them to pay the ICBC loan. Citing Mandy's own testimony
in open court, the RTC Manila held that when Mandy delivered the
checks to petitioner, their agreement was that it was a "sort of
loan."36 In the dispositive portion of the RTC Decision, the RTC Manila
ruled that the prosecution "failed to establish the guilt of the accused
beyond reasonable doubt."37 It then proceeded to order petitioner to pay
the amount of the loan.
The ruling of the RTC Manila was affirmed by the CA. It said that
"[t]he acquittal of Gloria Dy is anchored on the ground that her guilt
was not proved beyond reasonable doubt - not because she is not the
author of the act or omission complained of. x x x The trial court found
no trickery nor deceit in obtaining money from the private complainant;
instead, it concluded that the money obtained was undoubtedly a
loan."38
Our jurisprudence on this matter diverges.
Earlier cases ordered the dismissal of the civil action for recovery of
civil liability ex delicto whenever there is a finding that there was
no estafa but rather an obligation to pay under a contract. In People v.
Pantig,39 this Court affirmed the ruling of the lower court acquitting
Pantig, but revoked the portion sentencing him to pay the offended
party the amount of money alleged to have been obtained through false
and fraudulent representations, thus —
The trial court found as a fact that the sum of P1,200, ordered to be paid
in the judgment of acquittal, was received by the defendant-appellant as
loan. This finding is inconsistent with the existence of the criminal act
charged in the information. The liability of the defendant for the
return of the amount so received arises from a civil contract, not
from a criminal act, and may not be enforced in the criminal case.
The portion of the judgment appealed from, which orders the
defendant-appellant to pay the sum of Pi ,200 to the offended party, is
hereby revoked, without prejudice to the filing of a civil action for the
recovery of the said amount.40chanroblesvirtuallawlibrary
This was also the import of the ruling in People v. Singson.41 In that
case, this Court found that "the evidence [was] not sufficient to
establish the existence of fraud or deceit on the part of the accused. x x
x And when there is no proven deceit or fraud, there is no crime
of estafa."42 While we also said that the established facts may prove
Singson's civil liability (obligation to pay under a contract of sale), we
nevertheless made no finding of civil liability because "our mind cannot
rest easy on the certainty of guilt"43 considering the above finding. The
dispositive portion stated that Singson is acquitted "without prejudice to
any civil liability which may be established in a civil case against
her."44chanrobleslaw
However, our jurisprudence on the matter appears to have changed in
later years.
In Eusebio-Calderon v. People,45 this Court affirmed the finding of the
CA that Calderon "did not employ trickery or deceit in obtaining money
from the private complainants, instead, it concluded that the money
obtained was undoubtedly loans for which [Calderon] paid
interest."46 Thus, this Court upheld Calderon's acquittal of estafa, but
found her civilly liable for the principal amount borrowed from the
private complainants.47chanrobleslaw
The ruling was similar in People v. Cuyugan.48 In that case, we
acquitted Cuyugan of estafa for failure of the prosecution to prove
fraud. We held that the transaction between Cuyugan and private
complainants was a loan to be used by Cuyugan in her business. Thus,
this Court ruled that Cuyugan has the obligation, which is civil in
character, to pay the amount borrowed.49chanrobleslaw
We hold that the better rule in ascertaining civil liability in estafa cases
is that pronounced in Pantig and Singson. The rulings in these cases are
more in accord with the relevant provisions of the Civil Code, and the
Rules of Court. They are also logically consistent with this Court's
pronouncement in Manantan.
Under Pantig and Singson, whenever the elements of estafa are not
established, and that the delivery of any personal property was made
pursuant to a contract, any civil liability arising from the estafa cannot
be awarded in the criminal case. This is because the civil liability
136
arising from the contract is not civil liability ex delicto, which arises
from the same act or omission constituting the crime. Civil liability ex
delicto is the liability sought to be recovered in a civil action deemed
instituted with the criminal case.
The situation envisioned in the foregoing cases, as in this case, is civil
liability ex contractu where the civil liability arises from an entirely
different source of obligation. Therefore, it is not the type of civil action
deemed instituted in the criminal case, and consequently must be filed
separately. This is necessarily so because whenever the court makes a
finding that the elements of estafa do not exist, it effectively says that
there is no crime. There is no act or omission that constitutes criminal
fraud. Civil liability ex delicto cannot be awarded as it cannot be
sourced from something that does not exist.
When the court finds that the source of obligation is in fact, a contract,
as in a contract of loan, it takes a position completely inconsistent with
the presence of estafa. In estafa, a person parts with his money because
of abuse of confidence or deceit. In a contract, a person willingly binds
himself or herself to give something or to render some
service.50 In estafa, the accused's failure to account for the property
received amounts to criminal fraud. In a contract, a party's failure to
comply with his obligation is only a contractual breach. Thus, any
finding that the source of obligation is a contract negates estafa. The
finding, in turn, means that there is no civil liability ex delicto. Thus,
the rulings in the foregoing cases are consistent with the concept of
fused civil and criminal actions, and the different sources of obligations
under our laws.
We apply this doctrine to the facts of this case. Petitioner was acquitted
by the RTC Manila because of the absence of the element of
misappropriation or conversion. The RTC Manila, as affirmed by the
CA, found that Mandy delivered the checks to petitioner pursuant to a
loan agreement. Clearly, there is no crime of estafa. There is no proof
of the presence of any act or omission constituting criminal fraud. Thus,
civil liability ex delicto cannot be awarded because there is no act or
omission punished by law which can serve as the source of obligation.
Any civil liability arising from the loan takes the nature of a civil
liability ex contractu. It does not pertain to the civil action deemed
instituted with the criminal case.
In Manantan, this Court explained the effects of this result on the civil
liability deemed instituted with the criminal case. At the risk of
repetition, Manantan held that when there is no delict, "civil liability ex
delicto is out of the question, and the civil action, if any, which may be
instituted must be based on grounds other than the delict complained
of."51 In Dy's case, the civil liability arises out of contract—a different
source of obligation apart from an act or omission punished by law—
and must be claimed in a separate civil action.
Violation of Due Process
We further note that the evidence on record never fully established the
terms of this loan contract. As the trial before the RTC Manila was
focused on proving estafa, the loan contract was, as a consequence,
only tangentially considered. This provides another compelling reason
why the civil liability arising from the loan should be instituted in a
separate civil case. A civil action for collection of sum of money filed
before the proper court will provide for a better venue where the terms
of the loan and other relevant details may be received. While this may
postpone a warranted recovery of the civil liability, this Court deems it
more important to uphold the principles underlying the inherent
differences in the various sources of obligations under our law, and the
rule that fused actions only refer to criminal and civil actions involving
the same act or omission. These legal tenets play a central role in this
legal system. A confusion of these principles will ultimately jeopardize
the interests of the parties involved. Actions focused on
proving estafa is not the proper vehicle to thresh out civil liability
arising from a contract.52 The Due Process Clause of the Constitution
dictates that a civil liability arising from a contract must be litigated in a
separate civil action.
Section 1 of the Bill of Rights states that no person shall be deprived of
property without due process of law. This provision protects a person's
right to both substantive and procedural due process. Substantive due
process looks into the validity of a law and protects against
arbitrariness.53 Procedural due process, on the other hand, guarantees
procedural fairness.54 It requires an ascertainment of "what process is
due, when it is due, and the degree of what is due."55 This aspect of due
process is at the heart of this case.
In general terms, procedural due process means the right to notice and
hearing.56 More specifically, our Rules of Court provides for a set of
procedures through which a person may be notified of the claims
against him or her as well as methods through which he or she may be
given the adequate opportunity to be heard.
The Rules of Court requires that any person invoking the power of the
judiciary to protect or enforce a right or prevent or redress a
wrong57 must file an initiatory pleading which embodies a cause of
action,58which is defined as the act or omission by which a party
violates a right of another.59 The contents of an initiatory pleading
alleging a cause of action will vary depending on the source of the
obligation involved. In the case of an obligation arising from a contract,
as in this case, the cause of action in an initiatory pleading will involve
the duties of the parties to the contract, and what particular obligation
was breached. On the other hand, when the obligation arises from an act
or omission constituting a crime, the cause of action must necessarily
be different. In such a case, the initiatory pleading will assert as a cause
of action the act or omission of respondent, and the specific criminal
statute he or she violated. Where the initiatory pleading fails to state a
cause of action, the respondent may file a motion to dismiss even
before trial.60 These rules embody the fundamental right to notice under
the Due Process Clause of the Constitution.
In a situation where a court (in a fused action for the enforcement of
criminal and civil liability) may validly order an accused-respondent to
pay an obligation arising from a contract, a person's right to be notified
of the complaint, and the right to have the complaint dismissed if there
is no cause of action, are completely defeated. In this event, the
accused-respondent is completely unaware of the nature of the liability
claimed against him or her at the onset of the case. The accused-
respondent will not have read any complaint stating the cause of action
of an obligation arising from a contract. All throughout the trial, the
accused-respondent is made to believe that should there be any civil
liability awarded against him or her, this liability is rooted from the act
or omission constituting the crime. The accused-respondent is also
deprived of the remedy of having the complaint dismissed through a
motion to dismiss before trial. In a fused action, the accused-respondent
could not have availed of this remedy because he or she was not even
given an opportunity to ascertain what cause of action to look for in the
initiatory pleading. In such a case, the accused-respondent is blindsided.
He or she could not even have prepared the appropriate defenses and
evidence to protect his or her interest. This is not the concept of fair
play embodied in the Due Process Clause. It is a clear violation of a
person's right to due process.
The Rules of Court also allows a party to a civil action certain remedies
that enable him or her to effectively present his or her case. A party
may file a cross-claim, a counterclaim or a third-party complaint.61 The
137
Rules of Court prohibits these remedies in a fused civil and criminal
case.62 The Rules of Court requires that any cross-claim, counterclaim
or third-party complaint must be instituted in a separate civil
action.63 In a legal regime where a court may order an accused in a
fused action to pay civil liability arising from a contract, the accused-
respondent is completely deprived of the remedy to file a cross-claim, a
counterclaim or a third-party complaint. This—coupled with an
accused-respondent's inability to adequately prepare his or her defense
because of lack of adequate notice of the claims against him or her—
prevents the accused-respondent from having any right to a meaningful
hearing. The right to be heard under the Due Process Clause requires
not just any kind of an opportunity to be heard. It mandates that a party
to a case must have the chance to be heard in a real and meaningful
sense. It does not require a perfunctory hearing, but a court proceeding
where the party may adequately avail of the procedural remedies
granted to him or her. A court decision resulting from this falls short of
the mandate of the Due Process Clause.
Indeed, the language of the Constitution is clear. No person shall be
deprived of property without due process of law. Due Process, in its
procedural sense, requires, in essence, the right to notice and hearing.
These rights are further fleshed out in the Rules of Court. The Rules of
Court enforces procedural due process because, to repeat the words of
this Court in Secretary of Justice v. Lantion, it provides for "what
process is due, when it is due, and the degree of what is due."64 A court
ordering an accused in a fused action to pay his or her contractual
liability deprives him or her of his or her property without the right to
notice and hearing as expressed in the procedures and remedies under
the Rules of Court. Thus, any court ruling directing an accused in a
fused action to pay civil liability arising from a contract is one that
completely disregards the Due Process Clause. This ruling must be
reversed and the Constitution upheld.
Conclusion
accused was acquitted on the ground that there is no crime. Litigants,
such as MCCI, cannot be blamed for relying on prior rulings where the
recovery on a contract of loan in a criminal case for estafawas allowed.
We have found the opportunity to clarify this matter through this
decision. As it is only now that we delineate the rules governing the
fusion of criminal and civil actions pertaining to estafa, it is only upon
the promulgation of this judgment that litigants have a clear
understanding of the proper recourse in similar cases. We therefore rule
that insofar as MCCI is concerned, the filing of an action, if any (that
may be sourced from the contract of loan), becomes a legal possibility
only upon the finality of this decision which definitively ruled upon the
principles on fused actions.
We add, however, that upon finality of this decision, prospective
litigants should become more circumspect in ascertaining their course
of action in similar cases. Whenever a litigant erroneously pursues
an estafa case, and the accused is subsequently acquitted because the
obligation arose out of a contract, the prescriptive period will still be
counted from the time the cause of action arose. In this eventuality, it is
probable that the action has already prescribed by the time the criminal
case shall have been completed. This possibility demands that
prospective litigants do not haphazardly pursue the filing of
an estafa case in order to force an obligor to pay his or her obligation
with the threat of criminal conviction. It compels litigants to be honest
and fair in their judgment as to the proper action to be filed. This ruling
should deter litigants from turning to criminal courts as their collection
agents, and should provide a disincentive to the practice of filing of
criminal cases based on unfounded grounds in order to provide a
litigant a bargaining chip in enforcing contracts.
WHEREFORE, in view of the foregoing, the Petition is GRANTED.
The Decision of the CA dated February 25, 2009 is REVERSED. This
is however, without prejudice to any civil action which may be filed to
claim civil liability arising from the contract.

The lower courts erred when they ordered petitioner to pay her civil SO ORDERED.
obligation arising from a contract of loan in the same criminal case
where she was acquitted on the ground that there was no crime. Any
contractual obligation she may have must be litigated in a separate civil
action involving the contract of loan. We clarify that in cases where the
accused is acquitted on the ground that there is no crime, the civil
action deemed instituted with the criminal case cannot prosper precisely
because there is no delict from which any civil obligation may be
sourced. The peculiarity of this case is the finding that petitioner, in
fact, has an obligation arising from a contract. This civil action arising
from the contract is not necessarily extinguished. It can be instituted in
the proper court through the proper civil action.

We note that while there is no written contract of loan in this case, there
is an oral contract of loan which must be brought within six
years.65 Under the facts of the case, it appears that any breach in the
obligation to pay the loan may have happened between 1996 and 1999,
or more than six years since this case has been instituted. This
notwithstanding, we find that the civil action arising from the contract
of loan has not yet prescribed. Article 1150 of the Civil Code states —

Art. 1150. The time for prescription for all kinds of actions, when there
is no special provision which ordains otherwise, shall be counted from
the day they may be brought.

We held in numerous cases that it is the legal possibility of bringing the

action that determines the starting point for the computation of the
period of prescription.67 We highlight the unique circumstances
surrounding this case. As discussed in this decision, there has been
diverse jurisprudence as to the propriety of ordering an accused to pay
an obligation arising from a contract in the criminal case where the

138
G.R. No. 229856
PEOPLE OF THE PHILIPPINES, Plaintiff-appellee
vs.
RUBEN CALOMIA, Accused-appellant
RESOLUTION
LEONARDO-DE CASTRO, J.:
In Criminal Case Nos. 1317 and 1318, accused-appellant Ruben
Calomia was ·charged before the Regional Trial Court (RTC) of Loay,
Bohol, Branch 50, with two counts of qualified rape of his minor
daughter, AAA,1 which he allegedly committed sometime in August
2007 and April 2008.2
After trial on the merits, the RTC promulgated its Decision on March
11, 2015 finding accused-appellant guilty beyond reasonable doubt of
both counts of qualified rape and sentencing him as follows:
WHEREFORE, in the light of the foregoing evidence, the court finds
the accused guilty beyond reasonable doubt of (Qualified) Incestuous
Rape in Crim. Case No. 1317 and Statutory Incestuous Rape in Crim.
Case No. 1318.
Accordingly, in both cases, the court has no recourse but to impose on
the accused the penalties mandated by law. Although the crimes of
Qualified Incestuous Rape and Statutory Incestuous Rape would have
been punishable by death, in view of the passage of R.A. [No.] 9346
(which prohibits the imposition of the death penalty), the penalty
imposable for each of the two offenses is only reclusion perpetua.
Because of the qualifying or aggravating circumstance of relationship,
the victim is entitled to civil indemnity in each case of ₱75,000 ex
delicto, ₱75,000 in moral damages (People v. Lauga, G.R. No. 186228,
Mar. 15, 2010), and ₱30,000 in exemplary damages (ibid.).3
Accused-appellant's appeal before the Court of Appeals was docketed
as CA-G.R. CEB-CR-HC No. 02040. In its Decision dated August 26,
2016, the appellate court upheld accused-appellant's conviction, but
modified the award of damages to AAA. The Court of Appeals decreed:
WHEREFORE, in view of the foregoing, We find no error committed
by the Trial Court and, hence, DENY the appeal. The Decision dated 11
March 2015 rendered by the Regional Trial Court of Loay,
Bohol 7th Judicial Region, Branch 50, in Criminal Case Nos. 1317 and
1318, is AFFIRMED with MODIFICATION.
As modified, [accused-]appellant Ruben Calomia is ordered to pay the
victim AAA the amounts of ₱l00,000.00 as civil indemnity,
₱l00,000.001 as moral damages, and ₱l00,000.00 as exemplary
damages. Interest is imposed on all damages awarded at the rate of
6% per annum from date of finality of this Decision until fully paid.4
On September 21, 2016, accused-appellant filed his Notice of Appeal
expressing his intention to appeal the foregoing Decision before this
Court.
The Court issued a Resolution dated April 25, 2017 requiring the
parties to file their respective supplemental briefs, if they so desired,
within 30 days from notice; ordering the Provincial Jail Warden, Bohol
Detention and Rehabilitation Center, Tagbilaran City, to transfer
accused-appellant to the Bureau of Corrections, Muntinlupa City and to
submit a report of such transfer; and ordering the Director General of
the Bureau of Corrections to confirm the confinement of accused-
appellant to said prison and submit a report thereon.
However, the Court received on September 4, 201 7 a letter dated
August 2, 2017 from Jail Chief Inspector (J/CINSP) Felipe A. Montejo
(Montejo), DDM, Bohol District Jail Warden, stating thus:
Please be informed that the said appellant [has] died while in the
confinement of Bohol District Jail last Sept. 29, 2015 due to Asphyxia
due to Strangulation, Self Inflicted, Hanging and declared dead by Dr.
Calvelo, Medical Officer III, City Health Office, Tagbilaran City,
Bohol per Certificate of Death from Local Civil Registrar.
Accused Ruben Calomia was due for transfer at BUCOR Muntinlupa
City at that time pending the approval of budget but unfortunately he
died with the aforementioned cause of death before the scheduled date
and time to transfer.5
Attached to J/CINSP Montejo's letter is a copy of accused-appellant's
Death Certificate issued by the Office of the Civil Registrar General
indicating that accused-appellant died on September 29, 2015 in
Cabawan District, Tagbilaran City, Bohol, of "Asphyxia due to
Strangulation, Self Inflicted, Hanging."
Paragraph 1 of Article 89 of the Revised Penal Code, as amended,
provides that the death of an accused pending his appeal extinguishes
both his criminal and civil liability ex delicto, thus:
Art. 89. How criminal liability is totally extinguished. - Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and as to
pecuniary penalties, liability therefore is extinguished only when the
death of the offender occurs before final judgment[.]
In People v. Bayotas,6 the Court construed the above provision and
pronounced these guidelines:
1. Death of the accused pending appeal of his conviction extinguishes
his criminal liability as well as the civil liability based solely thereon.
As opined by Justice Regalado, in this regard, "the death of the accused
prior to final judgment terminates his criminal liability and only the
civil liability directly arising from and based solely on the offense
committed, i.e., civil liability ex delicto in senso strictiore."
2. Corollarily, the claim for civil liability survives notwithstanding the
death of accused, if the same may also be predicated on a source of
obligation other than delict. Article 1157 of the Civil Code enumerates
these other sources of obligation from which the civil liability may arise
as a result of the same act or omission:
a) Law
b) Contracts
c) Quasi-contracts
d) xxx
e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2 above,
an action for recovery therefor may be pursued but only by way of
filing a separate civil action and subject to Section 1, Rule 111 of the
1985 Rules on Criminal Procedure as amended. This separate civil
action may be enforced either against the executor/administrator or the
estate of the accused, depending on the source of obligation upon which
the same is based as explained above.
4. Finally, the private offended party need not fear a forfeiture of his
right to file this separate civil action by prescription, in cases where
during the prosecution of the criminal action and prior to its extinction,
the private-offended party instituted together therewith the civil action.
139
In such case, the statute of limitations on the civil liability is deemed
interrupted during the pendency of the criminal case, conformably with
provisions of Article 1155 of the Civil Code, that should thereby avoid
any apprehension on a possible privation of right by prescription.
(Emphases supplied.)

The death of an accused pending the appeal of his conviction

extinguishes the criminal action, as there is no longer a defendant to
stand as the accused; and the civil action instituted therein for the
recovery of civil liability ex delictois likewise ipso facto extinguished,
as it is grounded on the criminal action.7

In the instant case, accused-appellant's death occurred prior to the

finality of the judgment of conviction rendered against him.1âwphi1 In
fact, accused-appellant died way back on September 29, 2015, during
the pendency of his appeal before the Court of Appeals. Unfortunately,
the appellate court was not timely inf9rmed of accused-appellant's
death prior to the promulgation of its Decision in CA-G.R. CEB-CR-
HC No. 02040 on August 26, 2016.

Irrefragably, accused-appellant's death extinguished his criminal

liability and his civil liabilities directly arising from and based solely on
the crime/s he committed. Accused-appellant's conviction by the RTC,
as affirmed by the Court of Appeals, must therefore be set aside as the
same had already been rendered ineffectual.

WHEREFORE, the Court RESOLVES to SET ASIDE the Decision

dated August 26, 2016 of the Court of Appeals in CA-G.R. CEB-CR-
HC No. 02040 and to DISMISS Criminal Case Nos. 131 7 and 1318
before the Regional Trial Court of Loay, Bohol, Branch 50, by reason
of the death of the sole accused therein, Ruben Calomia, on September
29, 2015.

SO ORDERED.

140
G.R. No. 110544 October 17, 1995
REYNALDO V. TUANDA, Mayor of the Municipality of
Jimalalud, Negros Oriental, HERMINIGILDO FABURADA,
(former Vice-Mayor), SANTOS A. VILLANUEVA, Incumbent
Member of the Sangguniang Bayan, MANUEL LIM, NICANOR R.
AGOSTO, ERENIETA K. MENDOZA MAXIMINO A. VIERNES,
HACUBINA V. SERILLO, ILUMINADO D. ESTRELLANES, and
FORMER MEMBERS OF THE SANGGUNIANG BAYAN OF
JIMALALUD, NEGROS ORIENTAL, petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, (THIRD DIVISION),
BARTOLOME BINAOHAN and DELIA
ESTRELLANES, respondents.
KAPUNAN, J.:
Petitioners institute this special civil action for certiorari and
prohibition under Rule 65 of the Revised Rules of Court to set aside the
resolution of the Sandiganbayan dated 17 February 1992 and its orders
dated 19 August 1992 and 13 May 1993 in Criminal Case No. 16936
entitled "People of the Philippines versus Reynaldo Tuanda, et al."
denying petitioners' motion for suspension of their arraignment.
The present controversy arose from the following antecedents:
On 9 February 1989, private respondents Delia Estrellanes and
Bartolome Binaohan were designated as industrial labor sectoral
representative and agricultural labor sectoral representative
respectively, for the Sangguniang Bayan of Jimalalud, Province of
Negros Oriental by then Secretary Luis T. Santos of the Department of
Local Government. Private respondents Binaohan and Estrellanes took
their oath of office on 16 February 1989 and 17 February 1989,
respectively.
Subsequently, petitioners filed an undated petition with the Office of
the President for review and recall of said designations. The latter,
however, in a letter dated 20 March 1989, denied the petition and
enjoined Mayor Reynaldo Tuanda to recognize private respondents as
sectoral representatives.
On 4 May 1990, private respondents filed a petition for mandamus with
the Regional Trial Court of Negros Oriental, Branch 35, docketed as
Special Civil Action No. 9661, for recognition as members of the
Sangguniang Bayan. It was dismissed on 23 July 1991.
Thereafter, on 20 June 1991, petitioners filed an action with the
Regional Trial Court of Dumaguete City to declare null and void the
designations of private respondents as sectoral representatives,
docketed as Civil Case No. 9955 entitled "Reynaldo Tuanda, et al.
versus Secretary of the Department of Local Government, et al."
On 21 July 1991, an information was filed before the Sandiganbayan,
docketed as Criminal Case No. 16936 entitled "People of the
Philippines versus Reynaldo Tuanda, et al." charging petitioners thus:
INFORMATION
The undersigned Special Prosecution Officer of the Special Prosecutor,
hereby accuses REYNALDO V. TUANDA, HERMENEGILDO G.
FABURADA, MANUEL LIM, NICANOR P. AGOSTO, ERENIETA
K. MENDOZA, MAXIMO VIERNES, HACUBINA V. SERILLO, and
SANTOS A. VILLANUEVA of Violation of Section 3(e) of R.A. No.
3019, as amended, committed as follows:
That during the period from February 1989 to February 1991 and
subsequent thereto, in the Municipality of Jimalalud, Negros Oriental,
and within the jurisdiction of this Honorable Court, accused, all public
officers, Mayor REYNALDO V. TUANDA, Vice-Mayor
HERMENEGILDO G. FABURADA, Sangguniang Members
MANUEL LIM, NICANOR P. AGOSTO, ERENIETA K.
MENDOZA, MAXIMO A. VIERNES, HACUBINA V. SERILLO,
ILUMINADO D. ESTRELLANES and SANTOS A. VILLANUEVA
while in the performance of their official functions and taking
advantage of their public positions, with evident bad faith, manifest
partiality, and conspiring and confederating with each other did, then
and there, wilfully and unlawfully cause undue injury to Sectoral
Members Bartolome M. Binaohan and Delia T. Estrellanes by refusing
to pay despite demand the amount of NINETY FIVE THOUSAND
THREE HUNDRED FIFTY PESOS (P95,350.00) and ONE
HUNDRED EIGHT THOUSAND NINE HUNDRED PESOS
(P108,900.00) representing respectively their per diems, salaries and
other privileges and benefits, and such undue injury continuing to the
present to the prejudice and damage of Bartolome Binaohan and Delia
Estrellanes.
CONTRARY TO LAW. 1
On 9 September 1991, petitioners filed a motion with the
Sandiganbayan for suspension of the proceedings in Criminal Case No.
16936 on the ground that a prejudicial question exists in Civil Case No.
9955 pending before the Regional Trial Court of Dumaguete City. 2
On 16 January 1992, the Regional Trial Court rendered a decision
declaring null and void ab initio the designations issued by the
Department of Local Government to the private respondents as sectoral
representatives for having been done in violation of Section 146 (2) of
B.P. Blg. 337, otherwise known as the Local Government Code. 3
The trial court expounded thus:
The Supreme Court in the case of Johnny D. Supangan Jr. v. Luis T.
Santos, et al., G.R. No. 84663, along with 7 companion cases of similar
import, (G.R. Nos. 05012, 87601, 87602, 87792, 87935, 88072, and
90205) all promulgated on August 24, 1990, ruled that:
B.P. Blg. 337 explicitly required that before the President (or the
Secretary of the Department of Local Government) may appoint
members of the local legislative bodies to represent the Industrial and
Agricultural Labor Sectors, there must be a determination to be made
by the Sanggunian itself that the said sectors are of sufficient number in
the city or municipality to warrant representation after consultation with
associations and persons belonging to the sector concerned.
The Supreme Court further ruled —
For that matter, the Implementing Rules and Regulations of the Local
Government Code even prescribe the time and manner by which such
determination is to be conducted by the Sanggunian.
Consequently, in cases where the Sanggunian concerned has not yet
determined that the Industrial and Agricultural Labor Sectors in their
particular city or municipality are of sufficient number to warrant
representation, there will absolutely be no basis for the
designation/appointments.
In the process of such inquiry as to the sufficiency in number of the
sector concerned to warrant representation, the Sanggunian is enjoined
by law (B.P. Blg. 337) to consult with associations and persons
belonging to the sector concerned. Consultation with the sector
concerned is made a pre-requisite. This is so considering that those who
belong to the said sector are the ones primarily interested in being
represented in the Sanggunian. In the same aforecited case, the
Supreme Court considers such prior determination by the Sanggunian
141
itself (not by any other person or body) as a condition sine qua non to a
valid appointment or designation.
Since in the present case, there was total absence of the required prior
determination by the Sangguniang Bayan of Jimalalud, this Court
cannot help but declare the designations of private defendants as
sectoral representatives null and void.
This verdict is not without precedence. In several similar cases, the
Supreme Court invariably nullified the designations where the
requirements of Sec. 146 (2), B.P. Blg. 337 were not complied with.
Just to cite one case, the Supreme Court ruled:
There is no certification from the Sangguniang Bayan of Valenzuela
that the sectors concerned are of sufficient number to warrant
representation and there was no consultation whatsoever with the
associations and persons belonging to the Industrial and Agricultural
Labor Sectors. Therefore, the appointment of private respondents
Romeo F. Bularan and Rafael Cortez are null and void (Romeo
Llanado, et al. v. Hon. Luis Santos, et al., G.R. No. 86394, August 24,
1990).4
Private respondents appealed the aforestated decision to the Court of
Appeals, docketed as CA-G.R. CV No. 36769, where the same is
currently pending resolution.
Meanwhile, on 17 February 1992, respondent Sandiganbayan issued a
resolution denying the motion for suspension of proceedings filed by
petitioners. Said respondent Sandiganbayan:
Despite the pendency of Civil Case No. 9955 of the Regional Trial
Court of Negros Oriental, it appears, nevertheless, that the private
complainants have been rendering services on the basis of their
respective appointments as sectoral members of the Sangguniang Bayan
of the Municipality of Jimalalud, Negros Oriental; and that their said
appointments enjoy the presumption of regularity. Having rendered
such services, the private complainants are entitled to the salaries
attached to their office. Even assuming arguendo that the said Regional
Trial Court shall later decide that the said appointments of the private
complainants are null and void, still the private complainants are
entitled to their salaries and compensation for service they have actually
rendered, for the reason that before such judicial declaration of nullity,
the private complainants are considered at least de facto public officers
acting as such on the basis of apparently valid appointments issued by
competent authorities. In other words, regardless of the decision that
may be rendered in Civil Case
No. 9955, the private complainants are entitled to their withheld salaries
for the services they have actually rendered as sectoral representatives
of the said Sangguniang Bayan. Hence, the decision that may be
rendered by the Regional Trial Court in Civil Case No. 9955 would not
be determinative of the innocence or guilt of the accused.
WHEREFORE, the subject Petition for the Suspension of Proceedings
in Virtue of Prejudicial Question filed by the accused through counsel,
is hereby DENIED for lack of merit.
SO ORDERED.5
Petitioners filed a motion for reconsideration of the aforementioned
resolution in view of the decision promulgated by the trial court
nullifying the appointments of private respondents but it was, likewise,
denied in an order issued by respondent Sandiganbayan on 19 August
1992 on the justification that the grounds stated in the said motion were
a mere rehash of petitioners' original motion to hold the case in
abeyance.6 The dispositive portion of its order reads as follows:
WHEREFORE, in view of the foregoing, the arraignment of the
accused which was scheduled today is cancelled. Mayor Reynaldo
Tuanda, Hermenegildo Faburada, Nicanor P. Agosto, Erenieta K.
Mendoza, Hacubina V. Serillo and Iluminado Estrellanes are, however,
hereby ordered to show cause in writing within ten (10) days from
service hereof why they should not be cited for contempt of court for
their failure to appear in court today for arraignment.
In case of an adverse resolution on the motion to quash which is to be
filed by the counsel for the defense, set this case for arraignment, pre-
trial and trial on January 4 & 5, 1993, on all dates the trial to start at
8:30 o'clock in the morning.
SO ORDERED.7
On 19 February 1993, respondent Sandiganbayan issued an order
holding consideration of all incidents pending the issuance of an
extended resolution.8
No such resolution, however, was issued and in its assailed order dated
13 May 1992, respondent Sandiganbayan set the arraignment of
petitioners on 30 June 1993. The dispositive portion of the order reads:
WHEREFORE, considering the absence of the accused from the
scheduled hearing today which We deem to be excusable, reset this
case for arraignment on June 30, 1993 and for trial on the merits on
June 30 and July 1 and 2, 1993, on all dates the trial to start at 8:30
o'clock in the morning.
Give proper notice to the accused and principal counsel, Atty. Alfonso
Briones. Considering that the accused come all the way from
Himalalud, Negros Oriental, no postponement will be allowed.
SO ORDERED.9
Hence, this special civil action for certiorari and prohibition where
petitioners attribute to respondent Sandiganbayan the following errors:
A. The Respondent Court committed grave abuse of discretion in
denying petitioners' motions for the suspension of the proceedings in
Criminal Case No. 16936 in spite of the pendency of a prejudicial issue
before the Court of Appeals in CA-G.R. CV No. 36769;
B. The Respondent Court acted without or in excess of jurisdiction in
refusing to suspend the proceedings that would entail a retrial and
rehearing by it of the basic issue involved, i.e., the validity of the
appointments of private respondents and their entitlement to
compensation which is already pending resolution by the Court of
Appeals in C.A. G.R. CV No. 36769; and
C. The Respondent Court committed grave abuse of discretion and/or
acted without or in excess of jurisdiction in effectively allowing
petitioners to be prosecuted under two alternative theories that private
respondents are de jure and/or de facto officers in violation of
petitioners' right to due process.10
In sum, the only issue in the case at bench is whether or not the legality
or validity of private respondents' designation as sectoral
representatives which is pending resolution in CA-G.R. No. 36769 is a
prejudicial question justifying suspension of the proceedings in the
criminal case against petitioners.
A prejudicial question is one that must be decided before any criminal
prosecution may be instituted or before it may proceed (see Art. 36,
Civil Code) because a decision on that point is vital to the eventual
judgment in the criminal case. Thus, the resolution of the prejudicial
question is a logical antecedent of the issues involved in said criminal
case.11
A prejudicial question is defined as that which arises in a case the
resolution of which is a logical antecedent of the issue involved therein,
142
and the cognizance of which pertains to another tribunal. The
prejudicial question must be determinative of the case before the court
but the jurisdiction to try and resolve the question must be lodged in
another court or tribunal.12 It is a question based on a fact distinct and
separate from "the crime but so intimately connected with it that it
determines the guilt or innocence of the accused, and for it to suspend
the criminal action, it must appear not only that said case involves facts
intimately related to those upon which the criminal prosecution would
be based but also that in the resolution of the issue or issues raised in
the civil case, the guilt or innocence of the accused would necessarily
be determined. It comes into play generally in a situation where a civil
action and a criminal action are both pending and there exists in the
former an issue which must be preemptively resolved before the
criminal action may proceed, because howsoever the issue raised in the
civil action is resolved would be determinative juris et de jure of the
guilt or innocence of the accused in the criminal case."13
The rationale behind the principle of prejudicial question is to avoid
two conflicting decisions.14 It has two essential elements:
(a) the civil action involves an issue similar or intimately related to the
issue raised in the criminal action; and
(b) the resolution of such issue determines whether or not the criminal
action may proceed.15
Applying the foregoing principles to the case at bench, we find that the
issue in the civil case, CA-G.R. CV No. 36769, constitutes a valid
prejudicial question to warrant suspension of the arraignment and
further proceedings in the criminal case against petitioners.
All the elements of a prejudicial question are clearly and unmistakably
present in this case. There is no doubt that the facts and issues involved
in the civil action (No. 36769) and the criminal case (No. 16936) are
closely related. The filing of the criminal case was premised on
petitioners' alleged partiality and evident bad faith in not paying private
respondents' salaries and per diems as sectoral representatives, while
the civil action was instituted precisely to resolve whether or not the
designations of private respondents as sectoral representatives were
made in accordance with law.
representatives have been challenged by petitioners. They began with a
petition filed with the Office of the President copies of which were
received by private respondents on 26 February 1989, barely eight (8)
days after they took their oath of office.17 Hence, private respondents'
claim that they have actually rendered services as sectoral
representatives has not been established.
Finally, we find unmeritorious respondent Sandiganbayan's thesis that
even in the event that private respondents' designations are finally
declared invalid, they may still be considered de facto public officers
entitled to compensation for services actually rendered.
The conditions and elements of de facto officership are the following:
1) There must be a de jure office;
2) There must be color of right or general acquiescence by the public;
and
3) There must be actual physical possession of the office in good
faith.18
One can qualify as a de facto officer only if all the aforestated elements
are present. There can be no de facto officer where there is no de
jure office, although there may be a de facto officer in a de
jure office.19
WHEREFORE, the resolution dated 17 February 1992 and orders dated
19 August 1992 and 13 May 1993 of respondent Sandiganbayan in
Criminal Case No. 16936 are hereby SET ASIDE. Respondent
Sandiganbayan is enjoined from proceeding with the arraignment and
trial of petitioners in Criminal Case No. 16936 pending final resolution
of CA-G.R. CV No. 36769.
SO ORDERED.

More importantly, ,the resolution of the civil case will certainly

determine if there will still be any reason to proceed with the criminal
action.

Petitioners were criminally charged under the Anti-Graft & Corrupt

Practices Act (RA 3019, sec, 3[e]) due to their refusal, allegedly in bad
faith and with manifest partiality, to pay private respondents' salaries as
sectoral representatives. This refusal, however, was anchored on
petitioners' assertion that said designations were made in violation of
the Local Government Code (B.P. Blg. 337) and thus, were null and
void. Therefore, should the Court of Appeals uphold the trial court's
decision declaring null and void private respondents' designations as
sectoral representatives for failure to comply with the provisions of the
Local Government Code (B.P. Blg. 337, sec. 146[2]), the charges
against petitioners would no longer, so to speak, have a leg to stand on.
Petitioners cannot be accused of bad faith and partiality there being in
the first place no obligation on their part to pay private respondents'
claims. Private respondents do not have any legal right to demand
salaries, per diems and other benefits. In other words, the Court of
Appeals' resolution of the issues raised in the civil action will ultimately
determine whether or not there is basis to proceed with the criminal
case.

Private respondents insist that even if their designations are nullified,

they are entitled to compensation for actual services rendered.16 We
disagree. As found by the trial court and as borne out by the records,
from the start, private respondents' designations as sectoral
143

G.R. No. 137567 June 20, 2000
MEYNARDO L. BELTRAN, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, and HON. JUDGE
FLORENTINO TUAZON, JR., being the Judge of the RTC, Brach
139, Makati City, respondents.
BUENA, J.:
This petition for review, filed under Rule 45 of the 1997 Rules of Civil
Procedure, seeks to review and set aside the Order dated January 28,
1999 issued by Judge Florentino A. Tuazon, Jr. of the Regional Trial
Court of Makati City, Branch 139 in Special Civil Case No. 98-3056,
entitled "Meynardo Beltran vs. People of the Philippines and Hon.
Judge Alden Cervantes of the Metropolitan Trial Court of Makati City,
Branch 61." The said Order denied petitioner's prayer for the issuance
of a writ of preliminary injunction to enjoin Judge Cervantes from
proceeding with the trial of Criminal Case No. 236176, a concubinage
case against petitioner on the ground that the pending petition for
declaration of nullity of marriage filed by petitioner against his wife
constitutes a prejudicial question.
The antecedent facts of the case are undisputed:
Petitioner Meynardo Beltran and wife Charmaine E. Felix were married
on June 16, 1973 at the Immaculate Concepcion Parish Church in
Cubao, Quezon City.1
On February 7, 1997, after twenty-four years of marriage and four
children,2 petitioner filed a petition for nullity of marriage on the
ground of psychological incapacity under Article 36 of the Family Code
before Branch 87 of the Regional Trial Court of Quezon City. The case
was docketed as Civil Case No. Q-97-30192.3
In her Answer to the said petition, petitioner's wife Charmaine Felix
alleged that it was petitioner who abandoned the conjugal home and
lived with a certain woman named Milagros Salting. 4 Charmaine
subsequently filed a criminal complaint for concubinage5 under Article
334 of the Revised Penal Code against petitioner and his paramour
before the City Prosecutor's Office of Makati who, in a Resolution
dated September 16, 1997, found probable cause and ordered the filing
of an Information6 against them. The case, docketed as Criminal Case
No. 236176, was filed before the Metropolitan Trial Court of Makati
City, Branch 61.1awphi1
On March 20, 1998, petitioner, in order to forestall the issuance of a
warrant for his arrest, filed a Motion to Defer Proceedings Including the
Issuance of the Warrant of Arrest in the criminal case. Petitioner argued
that the pendency of the civil case for declaration of nullity of his
marriage posed a prejudicial question to the determination of the
criminal case. Judge Alden Vasquez Cervantes denied the foregoing
motion in the Order7 dated August 31, 1998. Petitioner's motion for
reconsideration of the said Order of denial was likewise denied in an
Order dated December 9, 1998.
In view of the denial of his motion to defer the proceedings in the
concubinage case, petitioner went to the Regional Trial Court of Makati
City, Branch 139 on certiorari, questioning the Orders dated August
31, 1998 and December 9, 1998 issued by Judge Cervantes and praying
for the issuance of a writ of preliminary injunction. 8 In an Order9 dated
January 28, 1999, the Regional Trial Court of Makati denied the
petition for certiorari. Said Court subsequently issued another
Order 10 dated February 23, 1999, denying his motion for
reconsideration of the dismissal of his petition.
Undaunted, petitioner filed the instant petition for review.
Petitioner contends that the pendency of the petition for declaration of
nullity of his marriage based on psychological incapacity under Article
36 of the Family Code is a prejudicial question that should merit the
suspension of the criminal case for concubinage filed against him by his
wife.
Petitioner also contends that there is a possibility that two conflicting
decisions might result from the civil case for annulment of marriage
and the criminal case for concubinage. In the civil case, the trial court
might declare the marriage as valid by dismissing petitioner's complaint
but in the criminal case, the trial court might acquit petitioner because
the evidence shows that his marriage is void on ground of
psychological incapacity. Petitioner submits that the possible conflict of
the courts' ruling regarding petitioner's marriage can be avoided, if the
criminal case will be suspended, until the court rules on the validity of
marriage; that if petitioner's marriage is declared void by reason of
psychological incapacity then by reason of the arguments submitted in
the subject petition, his marriage has never existed; and that,
accordingly, petitioner could not be convicted in the criminal case
because he was never before a married man.
Petitioner's contentions are untenable.
The rationale behind the principle of prejudicial question is to avoid
two conflicting decisions. It has two essential elements: (a) the civil
action involves an issue similar or intimately related to the issue raised
in the criminal action; and (b) the resolution of such issue determines
whether or not the criminal action may proceed. 11
The pendency of the case for declaration of nullity of petitioner's
marriage is not a prejudicial question to the concubinage case. For a
civil case to be considered prejudicial to a criminal action as to cause
the suspension of the latter pending the final determination of the civil
case, it must appear not only that the said civil case involves the same
facts upon which the criminal prosecution would be based, but also that
in the resolution of the issue or issues raised in the aforesaid civil
action, the guilt or innocence of the accused would necessarily be
determined.
Art. 40 of the Family Code provides:
The absolute nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final judgment declaring
such previous marriage void.
In Domingo vs. Court of Appeals, 12 this Court ruled that the import of
said provision is that for purposes of remarriage, the only legally
acceptable basis for declaring a previous marriage an absolute nullity is
a final judgment declaring such previous marriage void, whereas, for
purposes of other than remarriage, other evidence is acceptable. The
pertinent portions of said Decision read:
. . . Undoubtedly, one can conceive of other instances where a party
might well invoke the absolute nullity of a previous marriage for
purposes other than remarriage, such as in case of an action for
liquidation, partition, distribution and separation of property between
the erstwhile spouses, as well as an action for the custody and support
of their common children and the delivery of the latters' presumptive
legitimes. In such cases, evidence needs must be adduced, testimonial
or documentary, to prove the existence of grounds rendering such a
previous marriage an absolute nullity. These needs not be limited solely
to an earlier final judgment of a court declaring such previous marriage
void.
So that in a case for concubinage, the accused, like the herein petitioner
need not present a final judgment declaring his marriage void for he can
adduce evidence in the criminal case of the nullity of his marriage other
than proof of a final judgment declaring his marriage void.
144
With regard to petitioner's argument that he could be acquitted of the
charge of concubinage should his marriage be declared null and void,
suffice it to state that even a subsequent pronouncement that his
marriage is void from the beginning is not a defense.

Analogous to this case is that of Landicho vs. Relova 1 cited in Donato

vs. Luna 14 where this Court held that:

. . . Assuming that the first marriage was null and void on the ground
alleged by petitioner, that fact would not be material to the outcome of
the criminal case. Parties to the marriage should not be permitted to
judge for themselves its nullity, for the same must be submitted to the
judgment of the competent courts and only when the nullity of the
marriage is so declared can it be held as void, and so long as there is no
such declaration the presumption is that the marriage exists. Therefore,
he who contracts a second marriage before the judicial declaration of
nullity of the first marriage assumes the risk of being prosecuted for
bigamy.

Thus, in the case at bar it must also be held that parties to the marriage
should not be permitted to judge for themselves its nullity, for the same
must be submitted to the judgment of the competent courts and only
when the nullity of the marriage is so declared can it be held as void,
and so long as there is no such declaration the presumption is that the
marriage exists for all intents and purposes. Therefore, he who cohabits
with a woman not his wife before the judicial declaration of nullity of
the marriage assumes the risk of being prosecuted for concubinage. The
lower court therefore, has not erred in affirming the Orders of the judge
of the Metropolitan Trial Court ruling that pendency of a civil action for
nullity of marriage does not pose a prejudicial question in a criminal
case for concubinage.

WHEREFORE, for lack of merit, the instant petition is DISMISSED.

SO ORDERED.

145
G.R. No. 134887 July 27, 2006
PHILIPPINE AGILA SATELLITE, INC. represented by
MICHAEL C. U. DE GUZMAN, petitioner,
vs.
SEC. JOSEFINA TRINIDAD LICHAUCO and the HON.
OMBUDSMAN, respondents.
DECISION
CARPIO MORALES, J.:
On June 6, 1994, a Memorandum of Understanding1 (MOU) was
entered into by a consortium of private telecommunications carriers and
the Department of Transportation and Communications (DOTC)
represented by then Secretary Jesus B. Garcia, Jr. relative to the
launching, ownership, operation and management of a Philippine
satellite by a Filipino-owned or controlled private consortium or
corporation.
Pursuant to Article IV of the MOU, the consortium of private
telecommunications carriers formed a corporation and adopted the
corporate name Philippine Agila Satellite, Inc. (PASI), herein
petitioner.
By letter2 dated June 28, 1996, PASI president Rodrigo A. Silverio
(Silverio) requested the then DOTC Secretary Amado S. Lagdameo, Jr.
for official government confirmation of the assignment of Philippine
orbital slots 161ºE and 153ºE to PASI for its AGILA satellites.
In response to Silverio’s letter, Secretary Lagdameo, by letter3 dated
July 3, 1996, confirmed the government’s assignment of Philippine
orbital slots 161ºE and 153ºE to PASI for its AGILA satellites.
PASI thereupon undertook preparations for the launching, operation
and management of its satellites by, among other things, obtaining
loans, increasing its capital, conducting negotiations with its business
partners, and making an initial payment of US$ 3.5 million to
Aerospatiale, a French satellite manufacturer.
Michael de Guzman (de Guzman), PASI President and Chief Executive
Officer (CEO), later informed Jesli Lapuz (Lapuz), President and CEO
of the Landbank of the Philippines, by letter4 of December 3, 1996, of
the government’s assignment to PASI of orbital slots 161ºE and 153ºE
and requested the bank’s confirmation of its participation in a club loan
in the amount of US$ 11 million, the proceeds of which would be
applied to PASI’s interim satellite.
It appears that Lapuz sent a copy of De Guzman’s letter to then DOTC
Undersecretary Josefina T. Lichauco, (Lichauco) who, by letter5 of
December 5, 1996, wrote Lapuz as follows:
1. Kindly be informed that there is simply no basis for Michael de
Guzman to allege that the DOTC has assigned two (2) slots to PASI.
He conveniently neglected to attach as another annex, in addition to
Sec. Lagdameo’s letter of 3 July 1996 (Annex "A") the letter of 28 June
(Annex "B") in response to which the July 3rd letter had been sent to
PASI. Annex "B" precisely provides that one slot (153º E, to which the
interim satellite was supposed to migrate) was to be used for the
migration of the Russian satellite in time for the APEC Leaders’
Summit. This particular endeavor was not successful. The interim
satellite "Gorizont" never moved from its orbital location of 130ºE
Longitude. Annex "C" is a letter from an official of the Subic Bay
Satellite Systems Inc., with its attachments, addressed to me stating that
as of the 13th of November, no such voyage to 153ºE orbital slot had
been commenced. In fact DHI hid this fact from me, and in fact stated
that Gorizont had already moved and was on its way to 153ºE.
Since this timely migration did not happen in time for the APEC
Leaders Meeting on 24 November, this 153ºE Longitude slot can no
longer be assigned to PASI.
The other slot 161ºE Longitude is the one that can be made available
for PASI’s eventual launch, in 1998 most likely, in exchange for one
free satellite transponder unit utilization, for all requirements of
Government. These have yet to be embodied in a contract between
PASI and the DOTC.
2. I understand from my meeting with DHI/PASI this morning, and
from the de Guzman letter you sent to me, that the latter are still
interested in pursuing their "interim satellite project" and are applying
for a loan with your bank. Of course they can always pursue this as a
business venture of DHI/PASI which is their own corporate business
decision. The DOTC supports this venture but they will be getting only
one orbital slot for both the Interim Satellite Project and for the Launch
Project. I understand from today’s meeting with them that this is
technically feasible.
3. As regards the use of the name "Agila", Mr. de Guzman’s allegation
that DHI/PASI has registered "Agila" as a "corporate alias/trademark"
is FALSE. There is no such thing as registration of a "corporate alias".
Nor for that matter can the trade name of a satellite be registered for
just any satellite, where it was the President who chose the name for the
first Philippine satellite in orbit. No one else coined that name but he.
He has therefore given the name "Agila I" to the Mabuhay satellite now
in orbit at 144ºE, being the first Philippine satellite in orbit. He made
this announcement in the presence of all the APEC Heads of State just
before the presentation to him of the Manila Action Plan for APEC.
(Underscoring supplied)
Lichauco subsequently issued, in December 1997, a Notice of
Offer6 for several orbital slots including 153ºE.
PASI, claiming that the offer was without its knowledge and that it
subsequently came to learn that another company whose identity had
not been disclosed had submitted a bid and won the award for orbital
slot 153ºE, filed on January 23, 1998 a complaint7 before the Regional
Trial Court (RTC) of Mandaluyong City against Lichauco and the
"Unknown Awardee," for injunction to enjoin the award of orbital slot
153ºE, declare its nullity, and for damages.
PASI also filed on February 23, 1998 a complaint before the Office of
the Ombudsman against Secretary Josefina Trinidad Lichauco. In his
affidavit-complaint, de Guzman charged Lichauco with gross violation
of Section 3(e) of Republic Act No. 3019, otherwise known as the Anti-
Graft and Corrupt Practices Act, as amended, reading:
(e) Causing any undue injury to any party, including the Government,
or giving any private party any unwarranted benefits, advantage or
preference in the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith or gross
inexcusable negligence. This provision shall apply to officers and
employees of officers or government corporations charged with the
grant of licenses or permits or other concessions.
The complaint was docketed as OMB Case No. 0-98-0416. The
Evaluation and Preliminary Investigation Bureau (EPIB) of the Office
of the Ombudsman, by Evaluation Report8 dated April 15, 1998, found
the existence of a prejudicial question after considering that "the case
filed with the RTC involves facts intimately related to those upon
which the criminal prosecution would be based and that the guilt or the
innocence of the accused would necessarily be determined in the
resolution of the issues raised in the civil case." It thus concluded that
the filing of the complaint before the Ombudsman "is premature since
the issues involved herein are now subject of litigation in the case filed
with the RTC," and accordingly recommended its dismissal. Then
146
Ombudsman Aniano A. Desierto approved on April 24, 1998 the
recommendation of the EPIB.
PASI moved to reconsider9 the dismissal of the complaint, but was
denied by Order10 dated July 17, 1998.
In the meantime, a motion to dismiss the civil case against respondent
was denied by the trial court. On elevation of the order of denial to the
Court of Appeals, said court, by Decision dated February 21, 2000,
ordered the dismissal of the case. This Court, by Decision dated May 3,
2006, ordered the reinstatement of the case, however.11
PASI is now before this Court via petition for review on certiorari,
arguing that the Ombudsman erred in dismissing the complaint.
In issue are 1) whether there exists a prejudicial question and, if in the
affirmative, 2) whether the dismissal of the complaint on that account is
in order.
Section 7, Rule 111 of the Rules on Criminal Procedure provides:
Section 7. Elements of prejudicial question. – The elements of a
prejudicial question are: (a) the previously instituted civil action
involves an issue similar or intimately related to the issue raised in the
subsequent criminal action, and (b) the resolution of such issue
determines whether or not the criminal action may proceed.
The rationale for the principle of prejudicial question is that although it
does not conclusively resolve the guilt or innocence of the accused, it
tests the sufficiency of the allegations in the complaint or information
in order to sustain the further prosecution of the criminal case. 12 Hence,
the need for its prior resolution before further proceedings in the
criminal action may be had.
PASI concedes that the issues in the civil case are similar or intimately
related to the issue raised in the criminal case. It contends, however,
that the resolution of the issues in the civil case is not determinative of
the guilt or innocence of Lichauco, it arguing that even if she is
adjudged liable for damages, it does not necessarily follow that she
would be convicted of the crime charged.
To determine the existence of a prejudicial question in the case before
the Ombudsman, it is necessary to examine the elements of Section 3(e)
of R.A. 3019 for which Lichauco was charged and the causes of action
in the civil case.
Section 3(e) of R.A. 3019 which was earlier quoted has the following
elements:
1. The accused is a public officer discharging administrative or official
functions or private persons charged in conspiracy with them;
2. The public officer committed the prohibited act during the
performance of his official duty or in relation to his public position;
3. The public officer acted with manifest partiality, evident bad faith or
gross, inexcusable negligence; and
4. His action caused undue injury to the Government or any private
party, or gave any party any unwarranted benefit, advantage or
preference to such parties.13
The civil case against Lichauco on the other hand involves three causes
of action. The first, for injunction, seeks to enjoin the award of orbital
slot 153ºE, the DOTC having previously assigned the same to PASI;
the second, for declaration of nullity of award, seeks to nullify the
award given to the undisclosed bidder for being beyond Lichauco’s
authority; and the third, for damages arising from Lichauco’s
questioned acts.
If the award to the undisclosed bidder of orbital slot 153ºE is, in the
civil case, declared valid for being within Lichauco’s scope of authority
to thus free her from liability for damages, there would be
no prohibited act to speak of nor would there be basis for undue
injury claimed to have been suffered by petitioner. The finding by the
Ombudsman of the existence of a prejudicial question is thus well-
taken.
Respecting the propriety of the dismissal by the Ombudsman of the
complaint due to the pendency of a prejudicial question, PASI argues
that since the Rules of Procedure of the Office of the Ombudsman is
silent on the matter, the Rules of Court, specifically Section 6, Rule 111
of the Rules of Court, which now reads:
SECTION 6. Suspension by reason of prejudicial question. – A petition
for suspension of the criminal action based upon the pendency of a
prejudicial question in a civil action may be filed in the office of the
prosecutor or the court conducting the preliminary investigation. When
the criminal action has been filed in court for trial, the petition to
suspend shall be filed in the same criminal action at any time before the
prosecution rests. (Underscoring supplied),
applies in a suppletory character.
The Ombudsman, on the other hand, argues that the above-quoted
provision of the Rules of Court applies to cases which are at the
preliminary or trial stage and not to those, like the case subject of the
present petition, at the evaluation stage.
The Ombudsman goes on to proffer that at the evaluation stage, the
investigating officer may recommend any of several causes of action
including dismissal of the complaint for want of palpable merit or
subjecting the complaint to preliminary investigation, and the
evaluation of the complaint involves the discretion of the investigating
officer which this Court cannot interfere with.
While the evaluation of a complaint involves the discretion of the
investigating officer, its exercise should not be abused14 or wanting in
legal basis.
Rule II, Section 2 of the Rules of Procedure of the Office of the
Ombudsman reads:
SECTION 2. Evaluation. – Upon evaluating the complaint, the
investigating officer shall recommend whether it may be:
a) dismissed outright for want of palpable merit;
b) referred to respondent for comment;
c) indorsed to the proper government office or agency which has
jurisdiction over the case;
d) forwarded to the appropriate office or official for fact-finding
investigation;
e) referred for administrative adjudication; or
f) subjected to a preliminary investigation. (Underscoring supplied)
From the above-quoted provision, a complaint at the evaluation stage
may be dismissed outright only for want of palpable merit. Want of
palpable merit obviously means that there is no basis for the charge or
charges. If the complaint has prima facie merit, however, the
investigating officer shall recommend the adoption of any of the actions
enumerated above from (b) to (f).15
When, in the course of the actions taken by those to whom the
complaint is endorsed or forwarded, a prejudicial question is found to
be pending, Section 6, Rule 111 of the Rules of Court should be applied
147
in a suppletory character.16 As laid down in Yap v. Paras,17 said rule The Ombudsman is ORDERED to REINSTATE to its docket for
directs that the proceedings may only be suspended, not dismissed, and further proceedings, in line with the foregoing ratiocination, OMB Case
that it may be made only upon petition,and not at the instance of the No. 0-98-0416.
judge alone or as in this case, the investigating officer.
SO ORDERED
To give imprimatur to the Ombudsman’s dismissal of petitioner’s
criminal complaint due to prejudicial question would not only run
counter to the provision of Section 6 of Rule 111 of the Rules of Court.
It would sanction the extinguishment of criminal liability, if there be
any, through prescription under Article 89 vis a vis Articles 90 and 91
of the Revised Penal Code which respectively read:

ART. 89. How criminal liability is totally extinguished. — Criminal

liability is totally extinguished:

1. By the death of the convict, as to the personal penalties; and as to

pecuniary penalties, liability therefore is extinguished only when the
death of the offender occurs before final judgment;

2. By service of the sentence;

3. By amnesty, which completely extinguishes the penalty and all its

effects;

4. By absolute pardon;

5. By prescription of the crime;

6. By prescription of the penalty;

7. By the marriage of the offended woman, as provided in Article 344

of this Code. (Underscoring supplied)

ART. 90. Prescription of crimes. — Crimes punishable by

death, reclusion perpetua or reclusion temporalshall prescribe in
twenty years.

Crimes punishable by other afflictive penalties shall prescribe in fifteen

years.

Those punishable by a correctional penalty shall prescribe in ten years;

with the exception of those punishable by arresto mayor, which shall
prescribe in five years.

The crime of libel or other similar offenses shall prescribe in one year.

The offenses of oral defamation and slander by deed shall prescribe in

six months.

Light offenses prescribe in two months.

When the penalty fixed by law is a compound one, the highest penalty
shall be made the basis of the application of the rules contained in the
first, second, and third paragraphs of this article. x x x

ART. 91. Computation of prescription of offenses. — The period of

prescription shall commence to run from the day on which the crime is
discovered by the offended party, the authorities, or their agents, and
shall be interrupted by the filing of the complaint or information, and
shall commence to run again when such proceedings
terminate without the accused being convicted or acquitted, or are
unjustifiably stopped for any reason not imputable to him.

x x x x (Emphasis and underscoring supplied)

WHEREFORE, the Order dated July 17, 1998 of respondent

Ombudsman dismissing OMB Case No. 0-98-0416 against respondent
then Secretary Josefina Trinidad Lichauco is SET ASIDE.

148

G.R. No. 159186 June 5, 2009
JESSE Y. YAP, Petitioner,
vs.
HON. MONICO G. CABALES, Presiding Judge, Regional Trial
Court, Branch 35, General Santos City; MUNICIPAL TRIAL
COURT, Branch 1, General Santos City; COURT OF APPEALS,
PEOPLE OF THE PHILIPPINES, JOVITA DIMALANTA and
MERGYL MIRABUENO, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of
Court with prayer for the issuance of a writ of preliminary
injunction and/or issuance of status quo order seeking to annul and set
aside the Resolution1 of the Court of Appeals (CA) dated July 17, 2003
denying petitioner's motion for reconsideration of the Decision 2 dated
April 30, 2003 in CA-G.R. SP No. 68250.
The facts of the case are as follows:
Petitioner Jesse Y. Yap and his spouse Bessie Yap are engaged in the
real estate business through their company Primetown Property Group.
Sometime in 1996, petitioner purchased several real properties from a
certain Evelyn Te (Evelyn). In consideration of said purchases,
petitioner issued several Bank of the Philippine Islands (BPI) postdated
checks to Evelyn. Thereafter, spouses Orlando and Mergyl Mirabueno
and spouses Charlie and Jovita Dimalanta, rediscounted the checks
from Evelyn.
In the beginning, the first few checks were honored by the bank, but in
the early part of 1997, when the remaining checks were deposited with
the drawee bank, they were dishonored for the reason that the "Account
is Closed." Demands were made by Spouses Mirabueno and Spouses
Dimalanta to the petitioner to make good the checks. Despite this,
however, the latter failed to pay the amounts represented by the said
checks.
On December 8, 1997, Spouses Mirabueno filed a civil action for
collection of sum of money, damages and attorney's fee with prayer for
the issuance of a writ of preliminary attachment against petitioner
before the Regional Trial Court (RTC) of General Santos City,
docketed as Civil Case No. 6231.3 On December 15, 1997, Spouses
Dimalanta followed suit and instituted a similar action, which was
docketed as Civil Case No. 6238.4
Subsequently, on various dates, the Office of the City Prosecutor of
General Santos City filed several informations for violation of Batas
Pambansa Bilang (B.P. Blg.) 22 against the petitioner with the
Municipal Trial Court in Cities (MTCC), General Santos City. The
criminal complaints were docketed as Criminal Case Nos. 34873,
34874, 34862 to 34869, and Criminal Case No. 35522-I.5
In the criminal cases, petitioner filed separate motions to suspend
proceedings on account of the existence of a prejudicial question and
motion to exclude the private prosecutor from participating in the
proceedings.6 Petitioner prayed that the proceedings in the criminal
cases be suspended until the civil cases pending before the RTC were
finally resolved.
The MTCC, in its Orders7 dated June 21, 2000 and July 4, 2000, denied
the motions for lack of merit. Petitioner filed a Partial Motion for
Reconsideration8 relative to Criminal Case Nos. 34873, 34874, 34862
to 34869 and a Motion for Reconsideration of the Part of the Order
Denying the Motion to Suspend Proceedings on Account of the
Existence of a Prejudicial Question relative to Criminal Case No.
35522-I.9 The subsequent motions were denied in the Order10 dated
October 18, 2000.
Aggrieved, petitioner filed a Petition for Certiorari with a Prayer for
the Issuance of a Writ of Preliminary Injunction11before the RTC,
docketed as SPL. Civil Case No. 539, imputing grave abuse of
discretion on the part of the MTCC Judge. On July 2, 2001, the RTC
issued an Order12 denying the petition.
Petitioner then filed a Motion for Reconsideration,13 which was denied
in an Order dated October 18, 2001.14
Thereafter, petitioner filed with the CA a Petition for Certiorari
Prohibition and Mandamus with Urgent Prayer for the Issuance
of Status Quo Order and Writ of Preliminary Injunction,15 docketed as
CA-G.R. SP No. 68250.
On April 30, 2003, the CA rendered a Decision16 dismissing the
petition for lack of merit. The CA opined that Civil Case Nos. 6231 and
6238 did not pose a prejudicial question to the prosecution of the
petitioner for violation of B.P. Blg. 22.
The CA ruled:
In the instant case, a careful perusal of Civil Cases Nos. 6231 and 6238
reveals that the issue involved therein is not the validity of the sale as
incorrectly pointed out by the petitioner, but it is, whether or not the
complainants therein are entitled to collect from the petitioner the sum
or the value of the checks which they have rediscounted from Evelyn
Te. It behooves this Court to state that the sale and the rediscounting of
the checks are two transactions, separate and distinct from each other. It
so happened that in the subject civil cases it is not the sale that is in
question, but rather the rediscounting of the checks. Therefore,
petitioner's contention that the main issue involved in said civil cases is
the validity of the sale stands on hollow ground. Furthermore, if it is
indeed the validity of the sale that is contested in the subject civil cases,
then, We cannot fathom why the petitioner never contested such sale by
filing an action for the annulment thereof or at least invoked or prayed
in his answer that the sale be declared null and void. Accordingly, even
if Civil Cases Nos. 6231 and 6238 are tried and the resolution of the
issues therein is had, it cannot be deduced therefrom that the petitioner
cannot be held liable anymore for violation of B.P. Blg. 22. 17
Petitioner filed a Motion for Reconsideration,18 which was denied in the
Order19 dated July 17, 2003.
Hence, the petition assigning the following errors:
1. THE HONORABLE COURT OF APPEALS ERRED IN RULING
THAT THERE IS NO PREJUDICIAL QUESTION IN THE CIVIL
CASES (FOR COLLECTION OF SUMS OF MONEY INSTITUTED
BY PRIVATE RESPONDENTS OVER CHECKS ISSUED BY THE
PETITIONER, CIVIL CASE NOS. 6238 AND 6231) THAT WOULD
WARRANT SUSPENSION OF THE CRIMINAL CASES (CASE NO.
35522-1, FOR VIOLATION OF B.P. 22, SUBJECT OF WHICH ARE
THE VERY SAME CHECKS).
2. THE HONORABLE COURT OF APPEALS ERRED IN NOT
GRANTING THE PRAYER FOR THE ISSUANCE OF A WRIT OF
PRELIMINARY INJUNCTION AND/OR STATUS QUO ORDER.20
The main contention of the petitioner is that a prejudicial question, as
defined by law and jurisprudence, exists in the present case. It is the
petitioner's assertion that Civil Case Nos. 6231 and 6238 for collection
of sum of money and damages were filed ahead of the criminal cases
for violation of B.P. Blg. 22. He further alleged that, in the pending
civil cases, the issue as to whether private respondents are entitled to
149
collect from the petitioner despite the lack of consideration, is an issue
that is a logical antecedent to the criminal cases for violation of B.P.
Blg. 22. For if the court rules that there is no valid consideration for the
check's issuance, as petitioner contends, then it necessarily follows that
he could not also be held liable for violation of B.P. Blg. 22.
Petitioner further avers that B.P. Blg. 22 specifically requires, among
other elements, that the check should have been issued for account or
for value. There must be a valid consideration; otherwise, no violation
of the said law could be rightfully pursued. Petitioner said that the
reason for the dishonor of the checks was his order to the drawee bank
to stop payment and to close his account in order to avoid necessary
penalty from the bank. He made this order due to the failure of Evelyn
to deliver to him the titles to the purchased properties to him.
On the other hand, the Office of the Solicitor General (OSG) contends
that there is no prejudicial question in Civil Case Nos. 6231 and 6238
which would warrant the suspension of the proceedings in the criminal
cases for violation of B.P. Blg. 22 against the petitioner. The issue in
the civil cases is not the validity of the sale between the petitioner and
Evelyn, but whether the complainants therein are entitled to damages
arising from the checks. These checks were issued by the petitioner in
favor of Evelyn, who, thereafter, negotiated the same checks to private
complainants. The checks were subsequently dishonored due to
insufficiency of funds. The OSG maintains that the resolution of such
issue has absolutely no bearing on the issue of whether petitioner may
be held liable for violation of B.P. Blg. 22.21
The present case hinges on the determination of whether there exists a
prejudicial question that necessitates the suspension of the proceedings
in the MTCC.
We find that there is none and, thus, we resolve to deny the petition.
A prejudicial question generally exists in a situation where a civil
action and a criminal action are both pending, and there exists in the
former an issue that must be preemptively resolved before the latter
may proceed, because howsoever the issue raised in the civil action is
resolved would be determinative juris et de jure of the guilt or
innocence of the accused in the criminal case. The rationale behind the
principle of prejudicial question is to avoid two conflicting decisions. It
has two essential elements: (i) the civil action involves an issue similar
or intimately related to the issue raised in the criminal action; and (ii)
the resolution of such issue determines whether or not the criminal
action may proceed.22
If both civil and criminal cases have similar issues, or the issue in one is
intimately related to the issues raised in the other, then a prejudicial
question would likely exist, provided the other element or characteristic
is satisfied. It must appear not only that the civil case involves the same
facts upon which the criminal prosecution would be based, but also that
the resolution of the issues raised in the civil action would be
necessarily determinative of the guilt or innocence of the accused. If the
resolution of the issue in the civil action will not determine the criminal
responsibility of the accused in the criminal action based on the same
facts, or if there is no necessity that the civil case be determined first
before taking up the criminal case, the civil case does not involve a
prejudicial question.23 Neither is there a prejudicial question if the civil
and the criminal action can, according to law, proceed independently of
each other.24
The issue in the criminal cases is whether the petitioner is guilty of
violating B.P. Blg. 22, while in the civil case, it is whether the private
respondents are entitled to collect from the petitioner the sum or the
value of the checks that they have rediscounted from Evelyn.lavvphil
The resolution of the issue raised in the civil action is not determinative
of the guilt or innocence of the accused in the criminal cases against
him, and there is no necessity that the civil case be determined first
before taking up the criminal cases.
In the aforementioned civil actions, even if petitioner is declared not
liable for the payment of the value of the checks and damages, he
cannot be adjudged free from criminal liability for violation of B.P.
Blg. 22. The mere issuance of worthless checks with knowledge of the
insufficiency of funds to support the checks is in itself an offense. 25
In Jose v. Suarez,26 the prejudicial question under determination was
whether the daily interest rate of 5% was void, such that the checks
issued by respondents to cover said interest were likewise void for
being contra bonos mores, and thus the cases for B.P. Blg. 22 will no
longer prosper. In resolving the issue, We ruled that "whether or not the
interest rate imposed by petitioners is eventually declared void for
being contra bonos mores will not affect the outcome of the BP Blg. 22
cases because what will ultimately be penalized is the mere issuance of
bouncing checks. In fact, the primordial question posed before the court
hearing the B.P. Blg. 22 cases is whether the law has been breached;
that is, if a bouncing check has been issued."
Further, We held in Ricaforte v. Jurado,27 that:
The gravamen of the offense punished by B.P. Blg. 22 is the act of
making and issuing a worthless check; that is, a check that is
dishonored upon its presentation for payment. In Lozano v. Martinez,
we have declared that it is not the non-payment of an obligation which
the law punishes. The law is not intended or designed to coerce a debtor
to pay his debt. The thrust of the law is to prohibit, under pain of penal
sanctions, the making and circulation of worthless checks. Because of
its deleterious effects on the public interest, the practice is proscribed
by the law. The law punishes the act not as an offense against property,
but an offense against public order. In People v. Nitafan, we said that a
check issued as an evidence of debt - though not intended to be
presented for payment - has the same effect as an ordinary check and
would fall within the ambit of B.P. Blg. 22.
xxxx
x x x The mere act of issuing a worthless check - whether as a deposit,
as a guarantee or even as evidence of pre-existing debt - is malum
prohibitum.
To determine the reason for which checks are issued, or the terms and
conditions for their issuance, will greatly erode the faith the public
reposes in the stability and commercial value of checks as currency
substitutes, and bring about havoc in trade and in banking communities.
So what the law punishes is the issuance of a bouncing check and not
the purpose for which it was issued or the terms and conditions relating
to its issuance. The mere act of issuing a worthless check is malum
prohibitum.28
Moreover, petitioner's reliance on Ras v. Rasul29 is misplaced. The case
of Ras involves a complaint for nullification of a deed of sale on the
ground of an alleged double sale. While the civil case was pending, an
information for estafa was filed against Ras (the defendant in the civil
case) arising from the same alleged double sale, subject matter of the
civil complaint. The Court ruled that there was a prejudicial question
considering that the defense in the civil case was based on the very
same facts that would be determinative of the guilt or innocence of the
accused in the estafa case.
The instant case is different from Ras, inasmuch as the determination of
whether the petitioner is liable to pay the private respondents the value
of the checks and damages, will not affect the guilt or innocence of the
petitioner because the material question in the criminal cases is whether
petitioner had issued bad checks, regardless of the purpose or condition
of its issuance.
150
Guided by the following legal precepts, it is clear that the determination
of the issues involved in Civil Case Nos. 6231 and 6238 for collection
of sum of money and damages is irrelevant to the guilt or innocence of
the petitioner in the criminal cases for violation of B.P. Blg. 22.

In addition, petitioner's claim of lack of consideration may be raised as

a defense during the trial of the criminal cases against him. The validity
and merits of a party’s defense and accusation, as well as the
admissibility and weight of testimonies and evidence brought before the
court, are better ventilated during trial proper.

Precisely, the reason why a state has courts of law is to ascertain the
respective rights of the parties, to examine and to put to test all their
respective allegations and evidence through a well designed machinery
termed "trial."Thus, all the defenses available to the accused should be
invoked in the trial of the criminal cases. This court is not the
proper forum that should ascertain the facts and decide the case for
violation of B.P. Blg. 22 filed against the petitioner.

In fine, the CA committed no reversible error in affirming the decision

of the RTC.

WHEREFORE, the petition is DENIED and the Decision dated April

30, 2003 and the Resolution dated July 17, 2003 of the Court of
Appeals in CA-G.R. SP No. 68250 are AFFIRMED.

SO ORDERED.

151
G.R. No. 184861 June 30, 2009
DREAMWORK CONSTRUCTION, INC., Petitioner,
vs.
CLEOFE S. JANIOLA and HON. ARTHUR A.
FAMINI, Respondents.
DECISION
VELASCO, JR., J.:
The Case
Petitioner Dreamwork Construction, Inc. seeks the reversal of the
August 26, 2008 Decision1 in SCA No. 08-0005 of the Regional Trial
Court (RTC), Branch 253 in Las Piñas City. The Decision affirmed the
Orders dated October 16, 20072 and March 12, 20083 in Criminal Case
Nos. 55554-61 issued by the Metropolitan Trial Court (MTC), Branch
79 in Las Piñas City.
The Facts
On October 18, 2004, petitioner, through its President, Roberto S.
Concepcion, and Vice-President for Finance and Marketing, Normandy
P. Amora, filed a Complaint Affidavit dated October 5, 2004 4 for
violation of Batas Pambansa Bilang 22 (BP 22) against private
respondent Cleofe S. Janiola with the Office of the City Prosecutor of
Las Piñas City. The case was docketed as I.S. No. 04-2526-33.
Correspondingly, petitioner filed a criminal information for violation of
BP 22 against private respondent with the MTC on February 2, 2005
docketed as Criminal Case Nos. 55554-61, entitled People of the
Philippines v. Cleofe S. Janiola.
On September 20, 2006, private respondent, joined by her husband,
instituted a civil complaint against petitioner by filing a Complaint
dated August 20065 for the rescission of an alleged construction
agreement between the parties, as well as for damages. The case was
filed with the RTC, Branch 197 in Las Piñas City and docketed as Civil
Case No. LP-06-0197. Notably, the checks, subject of the criminal
cases before the MTC, were issued in consideration of the construction
agreement.
Thereafter, on July 25, 2007, private respondent filed a Motion to
Suspend Proceedings dated July 24, 20076 in Criminal Case Nos.
55554-61, alleging that the civil and criminal cases involved facts and
issues similar or intimately related such that in the resolution of the
issues in the civil case, the guilt or innocence of the accused would
necessarily be determined. In other words, private respondent claimed
that the civil case posed a prejudicial question as against the criminal
cases.
Petitioner opposed the suspension of the proceedings in the criminal
cases in an undated Comment/Opposition to Accused’s Motion to
Suspend Proceedings based on Prejudicial Question7 on the grounds
that: (1) there is no prejudicial question in this case as the rescission of
the contract upon which the bouncing checks were issued is a separate
and distinct issue from the issue of whether private respondent violated
BP 22; and (2) Section 7, Rule 111 of the Rules of Court states that one
of the elements of a prejudicial question is that "the previously
instituted civil action involves an issue similar or intimately related to
the issue raised in the subsequent criminal action"; thus, this element is
missing in this case, the criminal case having preceded the civil case.
Later, the MTC issued its Order dated October 16, 2007, granting the
Motion to Suspend Proceedings, and reasoned that:
Should the trial court declare the rescission of contract and the
nullification of the checks issued as the same are without consideration,
then the instant criminal cases for alleged violation of BP 22 must be
dismissed. The belated filing of the civil case by the herein accused did
not detract from the correctness of her cause, since a motion for
suspension of a criminal action may be filed at any time before the
prosecution rests (Section 6, Rule 111, Revised Rules of Court). 8
In an Order dated March 12, 2008,9 the MTC denied petitioner’s
Motion for Reconsideration dated November 29, 2007.
Petitioner appealed the Orders to the RTC with a Petition dated May
13, 2008. Thereafter, the RTC issued the assailed decision dated August
26, 2008, denying the petition. On the issue of the existence of a
prejudicial question, the RTC ruled:
Additionally, it must be stressed that the requirement of a "previously"
filed civil case is intended merely to obviate delays in the conduct of
the criminal proceedings. Incidentally, no clear evidence of any intent
to delay by private respondent was shown. The criminal proceedings
are still in their initial stages when the civil action was instituted. And,
the fact that the civil action was filed after the criminal action was
instituted does not render the issues in the civil action any less
prejudicial in character.10
Hence, we have this petition under Rule 45.
The Issue
WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED IN
NOT PERCEIVING GRAVE ABUSE OF DISCRETION ON THE
PART OF THE INFERIOR COURT, WHEN THE LATTER RULED
TO SUSPEND PROCEEDINGS IN CRIM. CASE NOS. 55554-61 ON
THE BASIS OF "PREJUDICIAL QUESTION" IN CIVIL CASE NO.
LP-06-0197.11
The Court’s Ruling
This petition must be granted.
The Civil Action Must Precede the Filing of the
Criminal Action for a Prejudicial Question to Exist
Under the 1985 Rules on Criminal Procedure, as amended by Supreme
Court Resolutions dated June 17, 1988 and July 7, 1988, the elements
of a prejudicial question are contained in Rule 111, Sec. 5, which states:
SEC. 5. Elements of prejudicial question. — The two (2) essential
elements of a prejudicial question are: (a) the civil action involves an
issue similar or intimately related to the issue raised in the criminal
action; and (b) the resolution of such issue determines whether or not
the criminal action may proceed.
Thus, the Court has held in numerous cases12 that the elements of a
prejudicial question, as stated in the above-quoted provision and in
Beltran v. People,13 are:
The rationale behind the principle of prejudicial question is to avoid
two conflicting decisions. It has two essential elements: (a) the civil
action involves an issue similar or intimately related to the issue raised
in the criminal action; and (b) the resolution of such issue determines
whether or not the criminal action may proceed.
On December 1, 2000, the 2000 Rules on Criminal Procedure, however,
became effective and the above provision was amended by Sec. 7 of
Rule 111, which applies here and now provides:
SEC. 7. Elements of prejudicial question.—The elements of a
prejudicial question are: (a) the previously instituted civil action
involves an issue similar or intimately related to the issue raised in the
subsequent criminal action, and (b) the resolution of such issue
152
determines whether or not the criminal action may proceed. (Emphasis
supplied.)
Petitioner interprets Sec. 7(a) to mean that in order for a civil case to
create a prejudicial question and, thus, suspend a criminal case, it must
first be established that the civil case was filed previous to the filing of
the criminal case. This, petitioner argues, is specifically to guard
against the situation wherein a party would belatedly file a civil action
that is related to a pending criminal action in order to delay the
proceedings in the latter.
On the other hand, private respondent cites Article 36 of the Civil Code
which provides:
Art. 36. Pre-judicial questions which must be decided before any
criminal prosecution may be instituted or may proceed, shall be
governed by rules of court which the Supreme Court shall promulgate
and which shall not be in conflict with the provisions of this Code.
(Emphasis supplied.)
Private respondent argues that the phrase "before any criminal
prosecution may be instituted or may proceed" must be interpreted to
mean that a prejudicial question exists when the civil action is filed
either before the institution of the criminal action or during the
pendency of the criminal action. Private respondent concludes that there
is an apparent conflict in the provisions of the Rules of Court and the
Civil Code in that the latter considers a civil case to have presented a
prejudicial question even if the criminal case preceded the filing of the
civil case.
We cannot agree with private respondent.
First off, it is a basic precept in statutory construction that a "change in
phraseology by amendment of a provision of law indicates a legislative
intent to change the meaning of the provision from that it originally
had."14 In the instant case, the phrase, "previously instituted," was
inserted to qualify the nature of the civil action involved in a prejudicial
question in relation to the criminal action. This interpretation is further
buttressed by the insertion of "subsequent" directly before the term
criminal action. There is no other logical explanation for the
amendments except to qualify the relationship of the civil and criminal
actions, that the civil action must precede the criminal action.
Thus, this Court ruled in Torres v. Garchitorena15 that:
Even if we ignored petitioners’ procedural lapse and resolved their
petition on the merits, we hold that Sandiganbayan did not abuse its
discretion amounting to excess or lack of jurisdiction in denying their
omnibus motion for the suspension of the proceedings pending final
judgment in Civil Case No. 7160. Section 6, Rule lll of the Rules of
Criminal Procedure, as amended, reads:
Sec. 6. Suspension by reason of prejudicial question. - A petition for
suspension of the criminal action based upon the pendency of a
prejudicial question in a civil action may be filed in the office of the
prosecutor or the court conducting the preliminary investigation. When
the criminal action has been filed in court for trial, the petition to
suspend shall be filed in the same criminal action at any time before the
prosecution rests.
Sec. 7. Elements of prejudicial question. - The elements of a prejudicial
question are: (a) the previously instituted civil action involves an issue
similar or intimately related to the issue raised in the subsequent
criminal action, and (b) the resolution of such issue determines whether
or not the criminal action may proceed.
Under the amendment, a prejudicial question is understood in law as
that which must precede the criminal action and which requires a
decision before a final judgment can be rendered in the criminal action
with which said question is closely connected. The civil action must be
instituted prior to the institution of the criminal action. In this case, the
Information was filed with the Sandiganbayan ahead of the complaint
in Civil Case No. 7160 filed by the State with the RTC in Civil Case
No. 7160. Thus, no prejudicial question exists. (Emphasis supplied.)
Additionally, it is a principle in statutory construction that "a statute
should be construed not only to be consistent with itself but also to
harmonize with other laws on the same subject matter, as to form a
complete, coherent and intelligible system."16 This principle is
consistent with the maxim, interpretare et concordare leges legibus est
optimus interpretandi modus or every statute must be so construed and
harmonized with other statutes as to form a uniform system of
jurisprudence.171 a vv p h i l
In other words, every effort must be made to harmonize seemingly
conflicting laws. It is only when harmonization is impossible that resort
must be made to choosing which law to apply.
In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule 111 of
the Rules of Court are susceptible of an interpretation that would
harmonize both provisions of law. The phrase "previously instituted
civil action" in Sec. 7 of Rule 111 is plainly worded and is not
susceptible of alternative interpretations. The clause "before any
criminal prosecution may be instituted or may proceed" in Art. 36 of
the Civil Code may, however, be interpreted to mean that the motion to
suspend the criminal action may be filed during the preliminary
investigation with the public prosecutor or court conducting the
investigation, or during the trial with the court hearing the case.
This interpretation would harmonize Art. 36 of the Civil Code with Sec.
7 of Rule 111 of the Rules of Court but also with Sec. 6 of Rule 111 of
the Civil Code, which provides for the situations when the motion to
suspend the criminal action during the preliminary investigation or
during the trial may be filed. Sec. 6 provides:
SEC. 6. Suspension by reason of prejudicial question.—A petition for
suspension of the criminal action based upon the pendency of a
prejudicial question in a civil action may be filed in the office of the
prosecutor or the court conducting the preliminary investigation. When
the criminal action has been filed in court for trial, the petition to
suspend shall be filed in the same criminal action at any time before the
prosecution rests.
Thus, under the principles of statutory construction, it is this
interpretation of Art. 36 of the Civil Code that should govern in order to
give effect to all the relevant provisions of law.
It bears pointing out that the circumstances present in the instant case
indicate that the filing of the civil action and the subsequent move to
suspend the criminal proceedings by reason of the presence of a
prejudicial question were a mere afterthought and instituted to delay the
criminal proceedings.
In Sabandal v. Tongco,18 we found no prejudicial question existed
involving a civil action for specific performance, overpayment, and
damages, and a criminal complaint for BP 22, as the resolution of the
civil action would not determine the guilt or innocence of the accused
in the criminal case. In resolving the case, we said:
Furthermore, the peculiar circumstances of the case clearly indicate that
the filing of the civil case was a ploy to delay the resolution of the
criminal cases. Petitioner filed the civil case three years after the
institution of the criminal charges against him. Apparently, the civil
action was instituted as an afterthought to delay the proceedings in the
criminal cases.19
153
Here, the civil case was filed two (2) years after the institution of the
criminal complaint and from the time that private respondent allegedly
withdrew its equipment from the job site. Also, it is worth noting that
the civil case was instituted more than two and a half (2 ½) years from
the time that private respondent allegedly stopped construction of the
proposed building for no valid reason. More importantly, the civil case
praying for the rescission of the construction agreement for lack of
consideration was filed more than three (3) years from the execution of
the construction agreement.
Evidently, as in Sabandal, the circumstances surrounding the filing of
the cases involved here show that the filing of the civil action was a
mere afterthought on the part of private respondent and interposed for
delay. And as correctly argued by petitioner, it is this scenario that Sec.
7 of Rule 111 of the Rules of Court seeks to prevent. Thus, private
respondent’s positions cannot be left to stand.
The Resolution of the Civil Case Is Not
Determinative of the Prosecution of the Criminal Action
In any event, even if the civil case here was instituted prior to the
criminal action, there is, still, no prejudicial question to speak of that
would justify the suspension of the proceedings in the criminal case.
To reiterate, the elements of a prejudicial question under Sec. 7 of Rule
111 of the Rules of Court are: (1) the previously instituted civil action
involves an issue similar or intimately related to the issue raised in the
subsequent criminal action; and (2) the resolution of such issue
determines whether or not the criminal action may proceed.
Petitioner argues that the second element of a prejudicial question, as
provided in Sec. 7 of Rule 111 of the Rules, is absent in this case. Thus,
such rule cannot apply to the present controversy.
Private respondent, on the other hand, claims that if the construction
agreement between the parties is declared null and void for want of
consideration, the checks issued in consideration of such contract would
become mere scraps of paper and cannot be the basis of a criminal
prosecution.
We find for petitioner.
It must be remembered that the elements of the crime punishable under
BP 22 are as follows:
(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 there are no sufficient funds in or credit with the drawee bank for
the payment of such 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.20
Undeniably, the fact that there exists a valid contract or agreement to
support the issuance of the check/s or that the checks were issued for
valuable consideration does not make up the elements of the crime.
Thus, this Court has held in a long line of cases21 that the agreement
surrounding the issuance of dishonored checks is irrelevant to the
prosecution for violation of BP 22. In Mejia v. People, 22 we ruled:
It must be emphasized that the gravamen of the offense charge is the
issuance of a bad check. The purpose for which the check was issued,
the terms and conditions relating to its issuance, or any agreement
surrounding such issuance are irrelevant to the prosecution and
conviction of petitioner. To determine the reason for which checks are
issued, or the terms and conditions for their issuance, will greatly erode
the faith the public reposes in the stability and commercial value of
checks as currency substitutes, and bring havoc in trade and in banking
communities. The clear intention of the framers of B.P. 22 is to make
the mere act of issuing a worthless check malum prohibitum.
Lee v. Court of Appeals23 is even more poignant. In that case, we ruled
that the issue of lack of valuable consideration for the issuance of
checks which were later on dishonored for insufficient funds is
immaterial to the success of a prosecution for violation of BP 22, to wit:
Third issue. Whether or not the check was issued on account or for
value.
Petitioner’s claim is not feasible. We have held that upon issuance of a
check, in the absence of evidence to the contrary, it is presumed that the
same was issued for valuable consideration. Valuable consideration, in
turn, may consist either in some right, interest, profit or benefit accruing
to the party who makes the contract, or some forbearance, detriment,
loss or some responsibility, to act, or labor, or service given, suffered or
undertaken by the other side. It is an obligation to do, or not to do in
favor of the party who makes the contract, such as the maker or
indorser.
In this case, petitioner himself testified that he signed several checks in
blank, the subject check included, in exchange for 2.5% interest from
the proceeds of loans that will be made from said account. This is a
valuable consideration for which the check was issued. That there was
neither a pre-existing obligation nor an obligation incurred on the part
of petitioner when the subject check was given by Bautista to private
complainant on July 24, 1993 because petitioner was no longer
connected with Unlad or Bautista starting July 1989, cannot be given
merit since, as earlier discussed, petitioner failed to adequately prove
that he has severed his relationship with Bautista or Unlad.
At any rate, we have held that what the law punishes is the mere act of
issuing a bouncing check, not the purpose for which it was issued nor
the terms and conditions relating to its issuance. This is because the
thrust of the law is to prohibit the making of worthless checks and
putting them into circulation.24 (Emphasis supplied.)
Verily, even if the trial court in the civil case declares that the
construction agreement between the parties is void for lack of
consideration, this would not affect the prosecution of private
respondent in the criminal case. The fact of the matter is that private
respondent indeed issued checks which were subsequently dishonored
for insufficient funds. It is this fact that is subject of prosecution under
BP 22.lawphil.net
Therefore, it is clear that the second element required for the existence
of a prejudicial question, that the resolution of the issue in the civil
action would determine whether the criminal action may proceed, is
absent in the instant case. Thus, no prejudicial question exists and the
rules on it are inapplicable to the case before us.
WHEREFORE, we GRANT this petition. We hereby REVERSE and
SET ASIDE the August 26, 2008 Decision in SCA No. 08-0005 of the
RTC, Branch 253 in Las Piñas City and the Orders dated October 16,
2007 and March 12, 2008 in Criminal Case Nos. 55554-61 of the MTC,
Branch 79 in Las Piñas City. We order the MTC to continue with the
proceedings in Criminal Case Nos. 55554-61 with dispatch.
No costs.
SO ORDERED.
154
G.R. No. 172060 September 13, 2010
JOSELITO R. PIMENTEL, Petitioner,
vs.
MARIA CHRYSANTINE L. PIMENTEL and PEOPLE OF THE
PHILIPPINES, Respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review1 assailing the Decision2 of the
Court of Appeals, promulgated on 20 March 2006, in CA-G.R. SP No.
91867.
The Antecedent Facts
The facts are stated in the Court of Appeals’ decision:
On 25 October 2004, Maria Chrysantine Pimentel y Lacap (private
respondent) filed an action for frustrated parricide against Joselito R.
Pimentel (petitioner), docketed as Criminal Case No. Q-04-130415,
before the Regional Trial Court of Quezon City, which was raffled to
Branch 223 (RTC Quezon City).
On 7 February 2005, petitioner received summons to appear before the
Regional Trial Court of Antipolo City, Branch 72 (RTC Antipolo) for
the pre-trial and trial of Civil Case No. 04-7392 (Maria Chrysantine
Lorenza L. Pimentel v. Joselito Pimentel) for Declaration of Nullity of
Marriage under Section 36 of the Family Code on the ground of
psychological incapacity.
On 11 February 2005, petitioner filed an urgent motion to suspend the
proceedings before the RTC Quezon City on the ground of the
existence of a prejudicial question. Petitioner asserted that since the
relationship between the offender and the victim is a key element in
parricide, the outcome of Civil Case No. 04-7392 would have a bearing
in the criminal case filed against him before the RTC Quezon City.
The Decision of the Trial Court
The RTC Quezon City issued an Order dated 13 May 20053 holding
that the pendency of the case before the RTC Antipolo is not a
prejudicial question that warrants the suspension of the criminal case
before it. The RTC Quezon City held that the issues in Criminal Case
No. Q-04-130415 are the injuries sustained by respondent and whether
the case could be tried even if the validity of petitioner’s marriage with
respondent is in question. The RTC Quezon City ruled:
WHEREFORE, on the basis of the foregoing, the Motion to Suspend
Proceedings On the [Ground] of the Existence of a Prejudicial Question
is, for lack of merit, DENIED.
SO ORDERED.4
Petitioner filed a motion for reconsideration. In its 22 August 2005
Order,5 the RTC Quezon City denied the motion.
Petitioner filed a petition for certiorari with application for a writ of
preliminary injunction and/or temporary restraining order before the
Court of Appeals, assailing the 13 May 2005 and 22 August 2005
Orders of the RTC Quezon City.
The Decision of the Court of Appeals
In its 20 March 2006 Decision, the Court of Appeals dismissed the
petition. The Court of Appeals ruled that in the criminal case for
frustrated parricide, the issue is whether the offender commenced the
commission of the crime of parricide directly by overt acts and did not
perform all the acts of execution by reason of some cause or accident
other than his own spontaneous desistance. On the other hand, the issue
in the civil action for annulment of marriage is whether petitioner is
psychologically incapacitated to comply with the essential marital
obligations. The Court of Appeals ruled that even if the marriage
between petitioner and respondent would be declared void, it would be
immaterial to the criminal case because prior to the declaration of
nullity, the alleged acts constituting the crime of frustrated parricide
had already been committed. The Court of Appeals ruled that all that is
required for the charge of frustrated parricide is that at the time of the
commission of the crime, the marriage is still subsisting.
Petitioner filed a petition for review before this Court assailing the
Court of Appeals’ decision.
The Issue
The only issue in this case is whether the resolution of the action for
annulment of marriage is a prejudicial question that warrants the
suspension of the criminal case for frustrated parricide against
petitioner.
The Ruling of this Court
The petition has no merit.
Civil Case Must be Instituted
Before the Criminal Case
Section 7, Rule 111 of the 2000 Rules on Criminal
Procedure6 provides:
Section 7. Elements of Prejudicial Question. - The elements of a
prejudicial question are: (a) the previously instituted civil action
involves an issue similar or intimately related to the issue raised in the
subsequent criminal action and (b) the resolution of such issue
determines whether or not the criminal action may proceed.
The rule is clear that the civil action must be instituted first before the
filing of the criminal action. In this case, the Information 7 for Frustrated
Parricide was dated 30 August 2004. It was raffled to RTC Quezon City
on 25 October 2004 as per the stamped date of receipt on the
Information. The RTC Quezon City set Criminal Case No. Q-04-
130415 for pre-trial and trial on 14 February 2005. Petitioner was
served summons in Civil Case No. 04-7392 on 7 February
2005.8 Respondent’s petition9 in Civil Case No. 04-7392 was dated 4
November 2004 and was filed on 5 November 2004. Clearly, the civil
case for annulment was filed after the filing of the criminal case for
frustrated parricide. As such, the requirement of Section 7, Rule 111 of
the 2000 Rules on Criminal Procedure was not met since the civil
action was filed subsequent to the filing of the criminal action.
Annulment of Marriage is not a Prejudicial Question
in Criminal Case for Parricide
Further, the resolution of the civil action is not a prejudicial question
that would warrant the suspension of the criminal action.
There is a prejudicial question when a civil action and a criminal action
are both pending, and there exists in the civil action an issue which
must be preemptively resolved before the criminal action may proceed
because howsoever the issue raised in the civil action is resolved would
be determinative of the guilt or innocence of the accused in the criminal
case.10 A prejudicial question is defined as:
x x x one that arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of which
pertains to another tribunal. It is a question based on a fact distinct and
separate from the crime but so intimately connected with it that it
155
determines the guilt or innocence of the accused, and for it to suspend
the criminal action, it must appear not only that said case involves facts
intimately related to those upon which the criminal prosecution would
be based but also that in the resolution of the issue or issues raised in
the civil case, the guilt or innocence of the accused would necessarily
be determined.11

The relationship between the offender and the victim is a key element
in the crime of parricide,12 which punishes any person "who shall kill
his father, mother, or child, whether legitimate or illegitimate, or any of
his ascendants or descendants, or his spouse."13 The relationship
between the offender and the victim distinguishes the crime of parricide
from murder14 or homicide.15 However, the issue in the annulment of
marriage is not similar or intimately related to the issue in the criminal
case for parricide. Further, the relationship between the offender and
the victim is not determinative of the guilt or innocence of the accused.

The issue in the civil case for annulment of marriage under Article 36
of the Family Code is whether petitioner is psychologically
incapacitated to comply with the essential marital obligations. The issue
in parricide is whether the accused killed the victim. In this case, since
petitioner was charged with frustrated parricide, the issue is whether he
performed all the acts of execution which would have killed respondent
as a consequence but which, nevertheless, did not produce it by reason
of causes independent of petitioner’s will.16 At the time of the
commission of the alleged crime, petitioner and respondent were
married. The subsequent dissolution of their marriage, in case the
petition in Civil Case No. 04-7392 is granted, will have no effect on the
alleged crime that was committed at the time of the subsistence of the
marriage. In short, even if the marriage between petitioner and
respondent is annulled, petitioner could still be held criminally liable
since at the time of the commission of the alleged crime, he was still
married to respondent.1avvphi1

We cannot accept petitioner’s reliance on Tenebro v. Court of

Appeals17 that "the judicial declaration of the nullity of a marriage on
the ground of psychological incapacity retroacts to the date of the
celebration of the marriage insofar as the vinculum between the spouses
is concerned x x x." First, the issue in Tenebro is the effect of the
judicial declaration of nullity of a second or subsequent marriage on the
ground of psychological incapacity on a criminal liability for bigamy.
There was no issue of prejudicial question in that case. Second, the
Court ruled in Tenebro that "[t]here is x x x a recognition written into
the law itself that such a marriage, although void ab initio, may still
produce legal consequences."18 In fact, the Court declared in that case
that "a declaration of the nullity of the second marriage on the ground
of psychological incapacity is of absolutely no moment insofar as the
State’s penal laws are concerned."19

In view of the foregoing, the Court upholds the decision of the Court of
Appeals. The trial in Criminal Case No. Q-04-130415 may proceed as
the resolution of the issue in Civil Case No. 04-7392 is not
determinative of the guilt or innocence of petitioner in the criminal
case.

WHEREFORE, we DENY the petition. We AFFIRM the 20 March

2006 Decision of the Court of Appeals in CA-G.R. SP No. 91867.

SO ORDERED.

156
G.R. No. 161075 July 15, 2013
RAFAEL JOSE-CONSING, JR., Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
BERSAMIN, J.:
An independent civil action based on fraud initiated by the defrauded
party does not raise a prejudicial question to stop the proceedings in a
pending criminal prosecution of the defendant for estafa through
falsification. This is because the result of the independent civil action is
irrelevant to the issue of guilt or innocence of the accused.
The Case
On appeal is the amended decision promulgated on August 18,
2003,1 whereby the Court of Appeals (CA) granted the writ of certiorari
upon petition by the State in C.A.-G.R. No. 71252 entitled People v.
Han. Winlove M Dumayas, Presiding Judge, Branch 59, Regional Trial
Court, Makati City and Rafael Consing, Jr., and set aside the assailed
order issued on November 26, 2001 by the Regional Trial Court (RTC),
Branch 59, in Makati City deferring the arraignment of petitioner in
Criminal Case No. 00-120 entitled People v. Rafael Consing, Jr. upon
his motion on the ground of the existence of a prejudicial question in
the civil cases pending between him and the complainant in the trial
courts in Pasig City and Makati City.
Antecedents
Petitioner negotiated with and obtained for himself and his mother,
Cecilia de la Cruz (de la Cruz) various loans totaling ₱18,000,000.00
from Unicapital Inc. (Unicapital). The loans were secured by a real
estate mortgage constituted on a parcel of land (property) covered by
Transfer Certificate of Title (TCT) No. T-687599 of the Registry of
Deeds for the Province of Cavite registered under the name of de la
Cruz.2 In accordance with its option to purchase the mortgaged
property, Unicapital agreed to purchase one-half of the property for a
total consideration of ₱21,221,500.00. Payment was effected by off-
setting the amounts due to
Unicapital under the promissory notes of de la Cruz and Consing in the
amount of ₱18,000,000.00 and paying an additional amount of
₱3,145,946.50. The other half of the property was purchased by Plus
Builders, Inc. (Plus Builders), a joint venture partner of Unicapital.3
Before Unicapital and Plus Builders could develop the property, they
learned that the title to the property was really TCT No. 114708 in the
names of Po Willie Yu and Juanito Tan Teng, the parties from whom
the property had been allegedly acquired by de la Cruz. TCT No.
687599 held by De la Cruz appeared to be spurious.4
On its part, Unicapital demanded the return of the total amount of
₱41,377,851.48 as of April 19, 1999 that had been paid to and received
by de la Cruz and Consing, but the latter ignored the demands.5
On July 22, 1999, Consing filed Civil Case No. 1759 in the Pasig City
Regional Trial Court (RTC) (Pasig civil case) for injunctive relief,
thereby seeking to enjoin Unicapital from proceeding against him for
the collection of the ₱41,377,851.48 on the ground that he had acted as
a mere agent of his mother.
On the same date, Unicapital initiated a criminal complaint for estafa
through falsification of public document against Consing and de la Cruz
in the Makati City Prosecutor’s Office.6
On August 6, 1999, Unicapital sued Consing in the RTC in Makati City
(Civil Case No. 99-1418) for the recovery of a sum of money and
damages, with an application for a writ of preliminary attachment
(Makati civil case).7
On January 27, 2000, the Office of the City Prosecutor of Makati City
filed against Consing and De la Cruz an information for estafa through
falsification of public document in the RTC in Makati City (Criminal
Case No. 00-120), which was assigned to Branch 60 (Makati criminal
case).8
On February 15, 2001, Consing moved to defer his arraignment in the
Makati criminal case on the ground of existence of a prejudicial
question due to the pendency of the Pasig and Makati civil cases. On
September 25, 2001, Consing reiterated his motion for deferment of his
arraignment, citing the additional ground of pendency of CA-G.R. SP
No. 63712 in the CA. On November 19, 2001, the Prosecution opposed
the motion.9
On November 26, 2001, the RTC issued an order suspending the
proceedings in the Makati criminal case on the ground of the existence
of a prejudicial question, and on March 18, 2001, the RTC denied the
Prosecution’s motion for reconsideration.10
The State thus assailed in the CA the last two orders of the RTC in the
Makati criminal case via petition for certiorari (C.A.-G.R. SP No.
71252).
On May 20, 2003, the CA promulgated its decision in C.A.-G.R. SP
No. 71252,11 dismissing the petition for certiorari and upholding the
RTC’s questioned orders, explaining:
Is the resolution of the Pasig civil case prejudicial to the Cavite and
Makati criminal cases?
We hold that it is. The resolution of the issue in the Pasig case, i.e.
whether or not private respondent may be held liable in the questioned
transaction, will determine the guilt or innocence of private respondent
Consing in both the Cavite and Makati criminal cases.
The analysis and comparison of the Pasig civil case, Makati criminal
case, Makati civil case and Cavite criminal case show that: (1) the
parties are identical; (2) the transactions in controversy are identical; (3)
the Transfer Certificate of Titles (TCT) involved are identical; (4) the
questioned Deeds of Sale/Mortgage are identical; (5) the dates in
question are identical; and (6) the issue of private respondent’s
culpability for the questioned transactions is identical in all the
proceedings.
As discussed earlier, not only was the issue raised in the Pasig civil case
identical to or intimately related to the criminal cases in Cavite and
Makati. The similarities also extend to the parties in the cases and the
TCT and Deed of Sale/ Mortgage involved in the questioned
transactions.
The respondent Judge, in ordering the suspension of the arraignment of
private respondent in the Makati case, in view of CA-G.R. SP No.
63712, where Unicapital was not a party thereto, did so pursuant to its
mandatory power to take judicial notice of an official act of another
judicial authority. It was also a better legal tack to prevent multiplicity
of action, to which our legal system abhors.
Applying the Tuanda ruling, the pendency of CA-G.R. SP No. 63712
may be validly invoked to suspend private respondent’s arraignment in
the Makati City criminal case, notwithstanding the fact that CA-G.R.
SP No. 63712 was an offshoot, merely, in the Cavite criminal case. 12
157
In the meanwhile, on October 13, 1999, Plus Builders commenced its
own suit for damages against Consing (Civil Case No. 99-95381) in the
RTC in Manila (Manila civil case).13
On January 21, 2000, an information for estafa through falsification of
public document was filed against Consing and De la Cruz in the RTC
in Imus, Cavite, docketed as Criminal Case No. 7668-00 and assigned
to Branch 21 (Cavite criminal case). Consing filed a motion to defer the
arraignment on the ground of the existence of a prejudicial question,
i.e., the pendency of the Pasig and Manila civil cases. On January 27,
2000, however, the RTC handling the Cavite criminal case denied
Consing’s motion. Later on, it also denied his motion for
reconsideration. Thereafter, Consing commenced in the CA a special
civil action for certiorari with prayer for the issuance of a temporary
restraining order (TRO) and/or writ of preliminary injunction (C.A.-
G.R. SP No. 63712), seeking to enjoin his arraignment and trial in the
Cavite criminal case. The CA granted the TRO on March 19, 2001, and
later promulgated its decision on May 31, 2001, granting Consing’
petition for certiorari and setting aside the January 27, 2000 order of the
RTC, and permanently enjoining the RTC from proceeding with the
arraignment and trial until the Pasig and Manila civil cases had been
finally decided.
Not satisfied, the State assailed the decision of the CA in this Court
(G.R. No. 148193), praying for the reversal of the May 31, 2001
decision of the CA. On January 16, 2003, the Court granted the petition
for review in G.R. No. 148193, and reversed and set aside the May 31,
2001 decision of the CA,14 viz:
In the case at bar, we find no prejudicial question that would justify the
suspension of the proceedings in the criminal case (the Cavite criminal
case). The issue in Civil Case No. SCA 1759 (the Pasig civil case) for
Injunctive Relief is whether or not respondent (Consing) merely acted
as an agent of his mother, Cecilia de la Cruz; while in Civil Case No.
99-95381 (the Manila civil case), for Damages and Attachment, the
question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of his
mother in the transaction involving the sale of the questioned lot, he
cannot be adjudged free from criminal liability. An agent or any person
may be held liable for conspiring to falsify public documents. Hence,
the determination of the issue involved in Civil Case No. SCA 1759 for
Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification of public
document.
Likewise, the resolution of PBI’s right to be paid damages and the
purchase price of the lot in question will not be determinative of the
culpability of the respondent in the criminal case for even if PBI is held
entitled to the return of the purchase price plus damages, it does not
ipso facto follow that respondent should be held guilty of estafa through
falsification of public document. Stated differently, a ruling of the court
in the civil case that PBI should not be paid the purchase price plus
damages will not necessarily absolve respondent of liability in the
criminal case where his guilt may still be established under penal laws
as determined by other evidence.
Moreover, neither is there a prejudicial question if the civil and the
criminal action can, according to law, proceed independently of each
other. Under Rule 111, Section 3 of the Revised Rules on Criminal
Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the
Civil Code, the independent civil action may be brought by the
offended party. It shall proceed independently of the criminal action
and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same
act or omission charged in the criminal action.
Thus, in Rojas v. People, the petitioner was accused in a criminal case
for violation of Article 319 of the Revised Penal Code, for executing a
new chattel mortgage on personal property in favor of another party
without consent of the previous mortgagee. Thereafter, the offended
party filed a civil case for termination of management contract, one of
the causes of action of which consisted of petitioner having executed a
chattel mortgage while the previous chattel mortgage was still valid and
subsisting. Petitioner moved that the arraignment and trial of the
criminal case be held in abeyance on the ground that the civil case was
a prejudicial question, the resolution of which was necessary before the
criminal proceedings could proceed. The trial court denied the
suspension of the criminal case on the ground that no prejudicial
question exist. We affirmed the order of the trial court and ruled that:
… the resolution of the liability of the defendant in the civil case on the
eleventh cause of action based on the fraudulent misrepresentation that
the chattel mortgage the defendant executed in favor of the said CMS
Estate, Inc. on February 20, 1957, that his D-6 "Caterpillar" Tractor
with Serial No. 9-U-6565 was "free from all liens and encumbrances"
will not determine the criminal liability of the accused in the said
Criminal Case No. 56042 for violation of paragraph 2 of Article 319 of
the Revised Penal Code. . . . (i) That, even granting for the sake of
argument, a prejudicial question is involved in this case, the fact
remains that both the crime charged in the information in the criminal
case and the eleventh cause of action in the civil case are based upon
fraud, hence both the civil and criminal cases could proceed
independently of the other pursuant to Article 33 of the new Civil Code
which provides: "In cases of defamation, fraud and physical injuries, a
civil action for damages, entirely separate and distinct from the criminal
action shall proceed independently of the criminal prosecution, and
shall require only a preponderance of evidence." (j) That, therefore, the
act of respondent judge in issuing the orders referred to in the instant
petition was not made with "grave abuse of discretion."
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by respondent
and his mother in selling the disputed lot to PBI is an independent civil
action under Article 33 of the Civil Code. As such, it will not operate as
a prejudicial question that will justify the suspension of the criminal
case at bar.15
Turning back to the Makati criminal case, the State moved for the
reconsideration of the adverse decision of the CA, citing the ruling in
G.R. No. 148193, supra, to the effect that the Pasig and Manila civil
cases did not present a prejudicial question that justified the suspension
of the proceedings in the Cavite criminal case, and claiming that under
the ruling in G.R. No. 148193, the Pasig and Makati civil cases did not
raise a prejudicial question that would cause the suspension of the
Makati criminal case.
In his opposition to the State’s motion for reconsideration, Consing
contended that the ruling in G.R. No. 148193 was not binding because
G.R. No. 148193 involved Plus Builders, which was different from
Unicapital, the complainant in the Makati criminal case. He added that
the decision in G.R. No. 148193 did not yet become final and
executory, and could still be reversed at any time, and thus should not
control as a precedent to be relied upon; and that he had acted as an
innocent attorney-in-fact for his mother, and should not be held
personally liable under a contract that had involved property belonging
to his mother as his principal.
On August 18, 2003, the CA amended its decision, reversing itself. It
relied upon the ruling in G.R. No. 148193, and held thusly:
CA-G.R. SP No. 63712 is similar with the case at bench. The
transactions in controversy, the documents involved; the issue of the
respondent’s culpability for the questioned transactions are all identical
158
in all the proceedings; and it deals with the same parties with the
exception of private complainant Unicapital.
However, the Supreme Court, upon review of CA-G.R. SP No. 63712,
People of the Philippines vs. Rafael Jose Consing, Jr. (G.R. No.
148193, January 16, 2003) held that "Civil Case No. 99-95381, for
Damages and attachment on account of alleged fraud committed by
respondent and his mother in selling the disputed lot to Plus Builders,
Inc. is an independent civil action under Article 33 of the Civil Code.
As such, it will not operate as a prejudicial question that will justify the
suspension of the criminal case at bar." In view of the aforementioned
decision of the Supreme Court, We are thus amending Our May 20,
2003 decision.
WHEREFORE, the petitioner’s motion for reconsideration is
GRANTED. The Orders dated November 26, 2001 and March 18, 2002
issued by the respondent Judge are hereby REVERSED and SET
ASIDE. Respondent Judge is hereby ordered to proceed with the
hearing of Criminal Case No. 00-120 with dispatch.
SO ORDERED.16
Consing filed a motion for reconsideration,17 but the CA denied the
motion through the second assailed resolution of December 11, 2003. 18
Hence, this appeal by petition for review on certiorari.
Issue
Petitioner reiterates his contention that the decision in G.R. No. 148193
was not controlling in relation to C.A.-G.R. No. 71252, which involved
Plus Builders, not Unicapital, the complainant in Criminal Case No. 00-
120. He posits that in arriving at its amended decision, the CA did not
consider the pendency of the Makati civil case (Civil Case No. 99-
1418), which raised a prejudicial question, considering that the
resolution of such civil action would include the issue of whether he
had falsified a certificate of title or had willfully defrauded Unicapital,
the resolution of either of which would determine his guilt or innocence
in Criminal Case No. 00-120.
In its comment,19 the Office of the Solicitor General (OSG) counters
that Unicapital brought the Makati civil case as an independent civil
action intended to exact civil liability separately from Criminal Case
No. 00-120 in a manner fully authorized under Section 1(a) and Section
2, Rule 111 of the Rules of Court.20 It argues that the CA correctly took
cognizance of the ruling in G.R. No. 148193, holding in its challenged
amended decision that the Makati civil case, just like the Manila civil
case, was an independent civil action instituted by virtue of Article 33
of the Civil Code; that the Makati civil case did not raise a prejudicial
question that justified the suspension of Criminal Case No. 00-120; and
that as finally settled in G.R. No. 148193, the Pasig civil case did not
also raise any prejudicial question, because the sole issue thereat was
whether Consing, as the mere agent of his mother, had any obligation or
liability toward Unicapital.
In his reply,21 Consing submits that the Pasig civil case that he filed and
Unicapital’s Makati civil case were not intended to delay the resolution
of Criminal Case No. 00-120, nor to pre-empt such resolution; and that
such civil cases could be validly considered determinative of whether a
prejudicial question existed to warrant the suspension of Criminal Case
No. 00-120.
Did the CA err in reversing itself on the issue of the existence of a
prejudicial question that warranted the suspension of the proceedings in
the Makati criminal case?
Ruling
The petition for review on certiorari is absolutely meritless.
Consing has hereby deliberately chosen to ignore the firm holding in
the ruling in G.R. No. 148193 to the effect that the proceedings in
Criminal Case No. 00-120 could not be suspended because the Makati
civil case was an independent civil action, while the Pasig civil case
raised no prejudicial question. That was wrong for him to do
considering that the ruling fully applied to him due to the similarity
between his case with Plus Builders and his case with Unicapital.
A perusal of Unicapital’s complaint in the Makati civil case reveals that
the action was predicated on fraud. This was apparent from the
allegations of Unicapital in its complaint to the effect that Consing and
de la Cruz had acted in a "wanton, fraudulent, oppressive, or
malevolent manner in offering as security and later object of sale, a
property which they do not own, and foisting to the public a spurious
title."22 As such, the action was one that could proceed independently of
Criminal Case No. 00-120 pursuant to Article 33 of the Civil Code,
which states as follows:
Article 33. In cases of defamation, fraud, and physical injuries a civil
action for damages, entirely separate and distinct from the criminal
action, may be brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution, and shall require
only a preponderance of evidence.
It is well settled that a civil action based on defamation, fraud and
physical injuries may be independently instituted pursuant to Article 33
of the Civil Code, and does not operate as a prejudicial question that
will justify the suspension of a criminal case.23 This was precisely the
Court’s thrust in G.R. No. 148193, thus:
Moreover, neither is there a prejudicial question if the civil and the
criminal action can, according to law, proceed independently of each
other. Under Rule 111, Section 3 of the Revised Rules on Criminal
Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the
Civil Code, the independent civil action may be brought by the
offended party. It shall proceed independently of the criminal action
and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same
act or omission charged in the criminal action.
xxxx
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by respondent
and his mother in selling the disputed lot to PBI is an independent civil
action under Article 33 of the Civil Code. As such, it will not operate as
a prejudicial question that will justify the suspension of the criminal
case at bar.24
Contrary to Consing’s stance, it was not improper for the CA to apply
the ruling in G.R. No. 148193 to his case with Unicapital, for, although
the Manila and Makati civil cases involved different complainants (i.e.,
Plus Builders and Unicapital), the civil actions Plus Builders and
Unicapital had separately instituted against him were undeniably of
similar mold, i.e., they were both based on fraud, and were thus covered
by Article 33 of the Civil Code. Clearly, the Makati criminal case could
not be suspended pending the resolution of the Makati civil case that
Unicapital had filed.
As far as the Pasig civil case is concerned, the issue of Consing’s being
a mere agent of his mother who should not be criminally liable for
having so acted due to the property involved having belonged to his
mother as principal has also been settled in G.R. No. 148193, to wit:
In the case at bar, we find no prejudicial question that would justify the
suspension of the proceedings in the criminal case (the Cavite criminal
case). The issue in Civil Case No. SCA 1759 (the Pasig civil case) for
Injunctive Relief is whether or not respondent (Consing) merely acted
159
as an agent of his mother, Cecilia de la Cruz; while in Civil Case No.
99-95381 (the Manila civil case), for Damages and Attachment, the
question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of his
mother in the transaction involving the sale of the questioned lot, he
cannot be adjudged free from criminal liability. An agent or any person
may be held liable for conspiring to falsify public documents. Hence,
the determination of the issue involved in Civil Case No. SCA 1759 for
Injunctive Relief is irrelevant to the guilt or innocence of the
respondent in the criminal case for estafa through falsification of public
document.25 (Words in parentheses supplied; bold underscoring
supplied for emphasis)

WHEREFORE, the Court AFFIRMS the amended decision

promulgated on August 18, 2003; and ORDERS petitioner to pay the
costs of suit.

SO ORDERED.

160
161

G.R. No. 205972
CATERPILLAR, INC., Petitioner
vs.
MANOLO P. SAMSON, Respondent
x-----------------------x
G.R. No. 164352
CATERPILLAR, INC., Petitioner,
vs.
MANOLO P. SAMSON, Respondent.
DECISION
BERSAMIN, J.:
The determination of probable cause to charge a person in court for a
criminal offense is exclusively lodged in the Executive Branch of the
Government, through the Department of Justice. Initially, the
determination is done by the investigating public prosecutor, and on
review by the Secretary of Justice or his duly authorized subordinate.
The courts will respect the determination, unless the same shall be
shown to have been made in grave abuse of discretion amounting to
lack or excess of jurisdiction.
The Cases
Before us are the consolidated cases of G.R. No. 205972 1 and G.R. No.
164352.2
G.R. No. 164352 involves the appeal by petition for review
on certiorari of Caterpillar, Inc. (Caterpillar) to reverse the decision
promulgated on January 21, 20043 by the Court of Appeals (CA) in
CA-G.R. SP No. 75526, and the resolution promulgated on June 30,
2004 denying the motion for reconsideration thereof. 4
G.R. No. 205972 relates to the appeal brought by Caterpillar to assail
the decision and resolution promulgated in CA-G.R. SP No. 102316
respectively on May 8, 20125 and February 12, 2013,6 whereby the CA
affirmed the resolutions of the Department of Justice (DOJ) finding that
there was no probable cause to indict Manolo P. Samson (Samson) for
unfair competition.
Antecedents
Caterpillar is a foreign corporation engaged in the manufacture and
distribution of footwear, clothing and related items, among others. Its
products are known for six core trademarks, namely,
"CATERPILLAR", "CAT" "CATERPILLAR & DESIGN" "CAT AND
DESIGN", "WALKING MACHINES" and "TRACK-TYPE
TRACTOR & DESIGN (Core Marks),7 all of which are alleged as
internationally known. On the other hand, Samson, doing business
under the names and styles of Itti Shoes Corporation, Kolm's
Manufacturing Corporation and Caterpillar Boutique and General
Merchandise, is the proprietor of various retail outlets in the Philippines
selling footwear, bags, clothing, and related items under the trademark
"CATERPILLAR", registered in 1997 under Trademark Registration
No. 64705 issued by the Intellectual Property Office (IPO).8
G.R. No. 164352
On July 26, 2000, upon application of the National Bureau of
Investigation (NBI), the Regional Trial Court (RTC), Branch 56, in
Makati City issued Search Warrants Nos. 00-022 to 00-032, inclusive,
all for unfair competition,9 to search the establishments owned,
controlled and operated by Samson. The implementation of the search
warrants on July 27, 2000 led to the seizure of various products bearing
Caterpillar's Core Marks.
Caterpillar filed against Samson several criminal complaints for unfair
competition in the Department of Justice (DOJ), docketed as LS. Nos.
2000-13 54 to 2000-13 64, inclusive.
Additionally, on July 31, 2000, Caterpillar commenced a civil action
against Samson and his business entities, with the IPO as a nominal
party10 - for Unfair Competition, Damages and Cancellation of
Trademark with Application for Temporary Restraining Order (TRO)
and/or Writ of Preliminary Injunction - docketed as Civil Case No. Q-
00-41446 of the RTC in Quezon City. In said civil action, the RTC
denied Caterpillar's application for the issuance of the TRO on August
17, 2000.
The DOJ, through Senior State Prosecutor Jude R. Romano, issued a
joint resolution dated November 15, 200111recommending that Samson
be criminally charged with unfair competition under Section 168.3
(a),12 in relation to Section 123.l(e),13 Section 131.114 and Section
170,15 all of Republic Act No. 8293, or the Intellectual Property Code
of the Philippines (IP Code).
However, because Samson and his affiliate companies allegedly
continued to sell and distribute products clothed with the general
appearance of its own products, Caterpillar again applied for another set
of search warrants against Samson and his businesses. The RTC,
Branch 172, in Valenzuela City issued Search Warrants Nos. 12-V-
00,16 13-V-00,17 20-V-0018 and 29-V-0019 upon application of the NBI,
by virtue of the implementation of which several goods were seized and
confiscated by the NBI agents.
As a consequence, Caterpillar filed 26 criminal complaints for unfair
competition on January 31, 2001, docketed as LS. Nos. 2001-42 to
2001-67, against Samson and/or the occupants of his affiliate entities
before the DOJ.20 In due course, the DOJ, through State Prosecutor
Zenaida M. Lim, issued a joint resolution dated September 28,
200121recommending the filing of criminal complaints for unfair
competition under Section 168.3(a), in relation to Section 123 .1,
Section 131.1 and Section 170 of the IP Code. Accordingly, six
criminal complaints were filed in the RTC, Branch 256, in Muntinlupa
City, presided by Judge Alberto L. Lerma, docketed as Criminal Cases
Nos. 02-238 to 02-243.
On January 17 and 22, 2002, Samson filed a petitions for review with
the Office of the Secretary of Justice to appeal the joint resolutions in
LS. Nos. 2000-1354 to 2000-136422 and LS. Nos. 2001-042 to 2001-
067.23
On May 30, 2002, Samson filed a Motion to Suspend Arraignment in
Criminal Cases Nos. 02-238 to 243,24 citing the following as grounds:25
I.
THERE EXISTS PREJUDICIAL QUESTIONS PENDING
LITIGATION BEFORE THE REGIONAL TRIAL COURT OF
QUEZON CITY, BRANCH 90, IN CIVIL CASE NO. Q-00-41446
ENTITLED: "CATERPILLAR, INC., ET AL. VS. ITTI SHOES
CORPORATION, ET AL.," THE FINAL RESOLUTIONS OF
WHICH WILL DETERMINE THE OUTCOME OF THE INSTANT
CRIMINAL CASES.
II.
ACCUSED HAS FILED PETITIONS FOR REVIEW WITH THE
DEPARTMENT OF JUSTICE ASSAILING THE RESOLUTIONS OF
THE CHIEF STATE PROSECUTOR WHO CAUSED THE FILING
OF THE INSTANT CASES AND ARE STILL PENDING THEREIN
UP TO THE PRESENT.
162
In the meanwhile, on July 10, 2002, the DOJ, through Secretary
Hernando B. Perez, issued a resolution26 denying Samson's petition for
review in I.S. Nos. 2000-1354 to 2000-1364. Samson's motion for
reconsideration was likewise denied on May 26, 2003.
On September 23, 2002, Presiding Judge Lerma of the RTC granted
Samson's Motion to Suspend Arraignment, and suspended the
arraignment and all other proceedings in Criminal Cases Nos. 02-240 to
02-243 until Civil Case No. Q-00-41446 was finally
resolved,27 holding:
After a careful scrutiny of the case, this Court finds that private
complainant, in Civil Case No. Q-00-41446, seeks for the cancellation
of the trademark "CATERPILLAR" which is registered in the name of
the accused and to prevent the latter from using the said trademark
("CATERPILLAR"), while the issue in the instant case is the alleged
unlawful use by the accused of the trademark "CATERPILLAR" which
is claimed to be owned by the private complainant. From the foregoing,
this Court believes that there exists a prejudicial question since the
determination of who is really the lawful or registered user of the
trademark "CATERPILLAR" will ultimately determine whether or not
the instant criminal action shall proceed. Clearly, the issues raised in
Civil Case No. Q-00-41446 is similar or intimately related to the issue
in the case at bar for if the civil case will be resolved sustaining the
trademark registration of the accused for the trademark
CATERPILLAR, then the latter would have all the authority to
continue the use of the said trademark as a consequence of a valid
registration, and by reason of which there may be no more basis to
proceed with the instant criminal action.28
After the RTC denied its motion for reconsideration 29 on December 5,
2002,30 Caterpillar elevated the matter to the CA by petition
for certiorari on February 14, 2003,31 docketed as C.A.-G.R. SP No.
75526 entitled Caterpillar, Inc. v. Hon. Alberto L. Lerma, in his
capacity as Presiding Judge of Branch 256 of the Regional Trial Court,
Muntinlupa City, and Manolo P. Samson, alleging grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the
RTC in suspending the arraignment and other proceedings in Criminal
Cases Nos. 02-238 to 02-243 on the ground of the existence of an
alleged prejudicial question in Civil Case No. Q-00-41446 then pending
in the RTC in Quezon City whose resolution would determine the
outcome of the criminal cases.
Meanwhile, on January 13, 2003, Acting Justice Secretary Ma.
Merceditas N. Gutierrez reversed and set aside the resolution issued by
State Prosecutor Lim in I.S. No. 2001-042 to 2001-067, and directed
the Chief State Prosecutor to cause the withdrawal of the criminal
informations filed against Samson in court,32 disposing as follows:
ACCORDINGLY, the assailed joint resolution is
hereby REVERSED and SET ASIDE. The Chief State Prosecutor is
directed to forthwith cause the withdrawal of the informations filed in
court against respondent Manolo P. Samson and to report action taken
hereon within ten (10) days from receipts hereof.33
Acting Justice Secretary Gutierrez based her resolution on the order
dated June 26, 2001, whereby the RTC of Valenzuela City, Branch 172,
had quashed the 26 search warrants upon motion of
Samson.34 Consequently, the goods seized and confiscated by virtue of
the quashed search warrants could no longer be admitted in evidence
Correspondingly, Presiding Judge Lerma of the RTC ordered the
withdrawal of Criminal Cases Nos. 02-240 to 02-243 on February 4,
2003.35
Aggrieved, Caterpillar assailed the order of Judge Lerma for the
withdrawal of Criminal Cases Nos. 02-240 to 02-2432003 by petition
for certiorari in the CA on October 16, 2003, docketed as CA-G.R. SP
No. 79937,36 and the CA ultimately granted the petition
for certiorari,37 setting aside the assailed January 13, 2003 resolution of
the Acting Justice Secretary and directing the re-filing of the withdrawn
informations against Samson. The Court ultimately affirmed the CA's
dec ision through the resolution promulgated on October 17, 2005 in
G.R. No. 169199, and ruling that probable cause existed for the re-
filing of the criminal charges for unfair competition under the IP
Code.38
In the assailed January 21, 2004 decision,39 the CA dismissed
Caterpillar's petition for certiorari in CA-G.R. SP No. 75526, viz.:
Petition has no merit.
The mere fact that public respondent denied petitioner's motion for
reconsideration does not justify this petition on the ground of abuse of
discretion. Grave abuse of discretion means such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction,
or, in other words where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility and it must
be so patent and gross as to amount to an evasion of positive duty or to
a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law. (Benito vs. Comelec, 349 SCRA 705).
Petitioner in this case failed to overcome the burden of showing how
public respondent acted with grave abuse of discretion in granting
private respondent's motion and denying his own motion for
reconsideration. What is clear is that public respondent court acted
judiciously. A petition for certiorariunder Rule 65 of the Rules of
Court will prosper only if there is showing of grave abuse of discretion
or an act without or in excess of jurisdiction on the part of respondent
tribunal (Garcia vs. HRET, 312 SCRA 353).
Granting arguendo that public respondent court erred in its ruling, still a
petition for certiorari under Rule 65 cannot be justified. Where the
court has jurisdiction over the subject matter, the orders or decision
upon all questions pertaining to the cause are orders or decisions within
its jurisdiction and however erroneous they may be, they cannot be
corrected by certiorari (De Baron vs. Court of Appeals, 368 SCRA
407).
WHEREFORE, foregoing premises considered, the Petition having no
merit in fact and in law is hereby DENIED DUE COURSE and ordered
DISMISSED. With costs to Petitioners.
SO ORDERED.40
Caterpillar sought the reconsideration of the dismissal, but the CA
denied the motion on June 30, 2004.41
Hence, Caterpillar appealed the CA's decision in C.A.-G.R. SP No.
75526 (G.R. No. 164352).
G .R. No. 205972
In the meanwhile, in August 2002, upon receiving the information that
Samson and his affiliate entities continuously sold and distributed
products bearing Caterpillar's Core Marks without Caterpillar's consent,
the latter requested the assistance of the Regional Intelligence and
Investigation Division of the National Region Public Police (RIID-
NCRPO) for the conduct of an investigation. Subsequently, after the
investigation, the RIID-NCRPO applied for and was granted 16 search
warrants against various outlets owned or operated by Samson in
Mandaluyong, Quezon City, Manila, Caloocan, Makati, Parañaque, Las
Piñas, Pampanga and Cavite. The warrants were served on August 27,
2002,42 and as the result products bearing Caterpillar's Core Marks were
seized and confiscated. Consequently, on the basis of the search
warrants issued by the various courts, Caterpillar again instituted
criminal complaints in the DOJ for violation of Section 168.3(a), in
163
relation to Sections 131.3, 123.l(e) and 170 of the IP Code against
Samson, docketed as LS. Nos. 2002-995 to 2002-997; 2002-999 to
2002-1010; and 2002-1036.
After the conduct of the preliminary investigation, the DOJ, through
State Prosecutor Melvin J.Abad, issued a joint resolution dated August
21, 2003 dismissing the complaint upon finding that there was no
probable cause to charge Samson with unfair competition.43
Caterpillar moved for the reconsideration of the dismissal, but State
Prosecutor Abad denied the motion on June 18, 2004.44
The Secretary of Justice affirmed the dismissal of the complaint
through the resolution issued on September 19, 2005, 45 and denied
Caterpillar's motion for reconsideration on December 20, 2007.
Accordingly, Caterpillar appealed to the CA through a petition for
review under Rule 43, Rules of Court (C.A.-G.R. SP No. 102316).46
On May 8, 2012,47 however, the CA denied due course to Caterpillar's
petition for review, viz.:
WHEREFORE, premises considered, the petition is DENIED DUE
COURSE, and accordingly, DISMISSED.
SO ORDERED.48
The CA opined that an appeal under Rule 43 to assail the resolution by
the Secretary of Justice determining the existence or non-existence of
probable cause was an improper remedy; and that while it could treat an
appeal as a special civil action for certiorari under Rule 65, it could not
do so therein because the allegations of the petition did not sufficiently
show grave abuse of discretion on the part of the Secretary of Justice in
issuing the assailed resolutions.
Caterpillar filed a motion for reconsideration, but the CA denied the
motion for its lack of merit on February 12, 2013.49
Hence, Caterpillar commenced G.R. No. 205972.
Issues
Caterpillar submits that the CA erred as follows:
G.R. No. 164352
A.
THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE
ERROR IN DENYING DUE COURSE TO CATERPILLAR INC.'S
PETITION FOR CERTIORARI.
B.
THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE
ERROR IN NOT HOLDING THAT THE ORDER SUSPENDING
PROCEEDINGS IN CRIMINAL CASES NOS. 02-238 TO 02-243,
ON THE BASIS OF AN ALLEGED PREJUDICIAL QUESTION,
WAS CONTRARY TO LAW AND ESTABLISHED
JURISPRUDENCE.
C.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN NOT HOLDING THAT A CRIMINAL
COMPLAINT FOR UNFAIR COMPETITION CAN PROCEED
INDEPENDENTLY OF, AND SIMULTANEOUS WITH, THE CIVIL
CASE FOR THE SAME.50
Caterpillar posits that the suspension of proceedings in Criminal Cases
Nos. 02-238 to 02-243 was contrary to Rule 111 of the Rules of
Court, Article 33 of the Civil Code on independent civil actions, and
Section 170 of the IP Code, which specifically provides that the
criminal penalties for unfair competition were independent of the civil
and administrative sanctions imposed by law; that the determination of
the lawful owner of the "CATERPILLAR" trademark in Civil Case No.
Q-00-41446 would not be decisive of the guilt of Samson for unfair
competition in Criminal Cases Nos. 02-238 to 02-243 because
registration was not an element of the crime of unfair competition; that
the civil case sought to enforce Samson's civil liability arising from the
IP Code while the criminal cases would enforce Samson's liability
arising from the crime of unfair competition; and that the Court already
ruled in Samson v. Daway51 that Civil Case No. Q-00-41446 was an
independent civil action under Article 33 of the Civil Code and, as such,
could proceed independently of the criminal actions.
In his comment,52 Samson counters that the issues of the lawful and
registered owner of the trademark, the true owner of the goodwill, and
whether "CATERPILLAR" was an internationally well-known mark
are intimately related to the issue of guilt in the criminal actions, the
resolution of which should determine whether or not the criminal
actions for unfair competition could proceed.
G.R. No. 205972
In this appeal, the petitioner interposes that:
THE HONORABLE COURT OF APPEALS ERRED IN
DISMISSING THE PETITIONER'S PETITION FOR REVIEW
SOLELY ON THE GROUND OF AN ALLEGED WRONG
REMEDY, DESPITE PETITIONERS HAVING CLEARLY
ESTABLISHED THAT THE SECRETARY OF JUSTICE ACTED
WITH GRAVE ABUSE OF DISCRETION IN ISSUING THE
RESOLUTIONS DATED 19 SEPTEMBER 2005 AND 20
DECEMBER 2007, AFFIRMING THE FINDINGS OF THE
INVESTIGATING PROSECUTOR THAT NO PROBABLE CAUSE
EXISTS TO CHARGE THE RESPONDENT OF THE CRIME OF
UNFAIR COMPETITION.53
Caterpillar seeks the liberal interpretation of procedural rules in order to
serve the higher interest of substantial justice following the denial by
the CA of its petition for being an incorrect remedy; and insists that it
presented substantial evidence to warrant a finding of probable cause
for unfair competition against Samson.
In sum, the issues to be resolved in these consolidated cases
are: firstly, whether or not the CA committed a reversible error in ruling
that the trial court a quo did not commit grave abuse of discretion in
suspending the criminal proceedings on account of a prejudicial
question; and, secondly, whether or not the CA committed reversible
error in upholding the decision of the Secretary of Justice finding that
there was no probable cause to charge Samson with unfair competition.
Rulings of the Court
G.R. No. 164352
The appeal in G.R. No. 164352 is meritorious.
We note, to begin with, that Civil Case No. Q-00-41446, the civil case
filed by Caterpillar in the RTC in Quezon City, was for unfair
competition, damages and cancellation of trademark, while Criminal
Cases Nos. Q-02-108043-44 were the criminal prosecution of Samson
for unfair competition. A common element of all such cases for unfair
competition - civil and criminal - was fraud. Under Article 33 of
the Civil Code, a civil action entirely separate and distinct from the
criminal action may be brought by the injured party in cases of fraud,
and such civil action shall proceed independently of the criminal
prosecution. In view of its being an independent civil action, Civil Case
164
No. Q-00-41446 did not operate as a prejudicial question that justified
the suspension of the proceedings in Criminal Cases Nos. Q-02-
108043-44.
In fact, this issue has already been raised in relation to the suspension of
the arraignment of Samson in Criminal Cases Nos. Q-02-108043-44
in Samson v. Daway,54 and the Court resolved it against Samson and in
favor of Caterpillar thusly:
Anent the second issue, petitioner failed to substantiate his claim that
there was a prejudicial question. In his petition, he prayed for the
reversal of the March 26, 2003 order which sustained the denial of his
motion to suspend arraignment and other proceedings in Criminal Case
Nos. Q-02-108043-44. For unknown reasons, however, he made no
discussion in support of said prayer in his petition and reply to
comment. Neither did he attach a copy of the complaint in Civil Case
No. Q-00-41446 nor quote the pertinent portion thereof to prove the
existence of a prejudicial question.
At any rate, there is no prejudicial question if the civil and the criminal
action can, according to law, proceed independently of each other.
Under Rule 111, Section 3 of the Revised Rules on Criminal Procedure,
in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code,
the independent civil action may be brought by the offended party. It
shall proceed independently of the criminal action and shall require
only a preponderance of evidence.
In the case at bar, the common element in the acts constituting unfair
competition under Section 168 of R.A. No. 8293 is fraud. Pursuant to
Article 33 of the Civil Code, in cases of defamation, fraud, and physical
injuries, a civil action for damages, entirely separate and distinct from
the criminal action, may be brought by the injured party. Hence, Civil
Case No. Q-00-41446, which as admitted by private respondent also
relate to unfair competition, is an independent civil action under
Article 33 of the Civil Code. As such, it will not operate as a
prejudicial question that will justify the suspension of the criminal
cases at bar.55 (Bold emphasis supplied)
Secondly, a civil action for damages and cancellation of trademark
cannot be considered a prejudicial question by which to suspend the
proceedings in the criminal cases for unfair competition. A prejudicial
question is that which arises in a civil case the resolution of which is a
logical antecedent of the issues to be determined in the criminal case. It
must appear not only that the civil case involves facts upon which the
criminal action is based, but also that the resolution of the issues raised
in the civil action will necessarily be determinative of the criminal
case.56 As stated in Librodo v. Judge Coscolluela, Jr.:57
A prejudicial question is one based on a fact distinct and separate from
the crime but so intimately connected with it that it determines the guilt
or innocence of the accused, and for it to suspend the criminal action, it
must appear not only that said case involves facts intimately related to
those upon which the criminal prosecution would be based but also that
in the resolution of the issue or issues raised in the civil case, the guilt
or innocence of the accused would necessarily be determined. It comes
into play generally in a situation where a civil action and a criminal
action are both pending and there exists in the former an issue
which must be preemptively resolved before the criminal action
may proceed, because howsoever the issue raised in the civil action
is resolved would be determinative juris et de jure of the guilt or
innocence of the accused in the criminal case.58 (Bold underscoring
supplied for emphasis)
The elements of a prejudicial question are provided in Section 7 of Rule
111, Rules of Court, to wit: (a) a previously instituted civil action
involves an issue similar to or intimately related to the issue raised in
the subsequent criminal action, and (b) the resolution of such issue
determines whether or not the criminal action may proceed.59
An examination of the nature of the two kinds of cases involved is
necessary to determine whether a prejudicial question existed.
An action for the cancellation of trademark like Civil Case No. Q-00-
41446 is a remedy available to a person who believes that he is or will
be damaged by the registration of a mark.60 On the other hand, the
criminal actions for unfair competition (Criminal Cases Nos. Q-02-
108043-44) involved the determination of whether or not Samson had
given his goods the general appearance of the goods of Caterpillar, with
the intent to deceive the public or defraud Caterpillar as his
competitor.61 In the suit for the cancellation of trademark, the issue of
lawful registration should necessarily be determined, but registration
was not a consideration necessary in unfair competition.62 Indeed,
unfair competition is committed if the effect of the act is "to pass off to
the public the goods of one man as the goods of another;" 63 it is
independent of registration. As fittingly put in R.F. & Alexander & Co.
v. Ang,64 "one may be declared unfair competitor even if his competing
trade-mark is registered."
Clearly, the determination of the lawful ownership of the trademark in
the civil action was not determinative of whether or not the criminal
actions for unfair competition shall proceed against Samson.
G.R. No. 205972
The petition for review on certiorari in G.R. No. 205972 is denied for
being bereft of merit.1âwphi1
Firstly, Caterpillar assailed the resolution of the Secretary of Justice by
filing a petition for review under Rule 43 of the Rules of Court. Such
resort to the petition for review under Rule 43 was erroneous,65 and the
egregious error warranted the denial of the appeal. The petition for
review under Rule 43 applied to all appeals to the CA from quasi-
judicial agencies or bodies, particularly those listed in Section 1 of Rule
43. However, the Secretary of Justice, in the review of the findings of
probable cause by the investigating public prosecutor, was not
exercising a quasi-judicial function, but performing an executive
function.66
Moreover, the courts could intervene in the determination of probable
cause only through the special civil action for certiorari under Rule 65
of the Rules of Court, not by appeal through the petition for review
under Rule 43. Thus, the CA could not reverse or undo the findings and
conclusions on probable cause by the Secretary of Justice except upon
clear demonstration of grave abuse of discretion amounting to lack or
excess of jurisdiction committed by the Secretary of
Justice.67 Caterpillar did not so demonstrate.
And, secondly, even discounting the technicalities as to consider
Caterpillar's petition for review as one brought under Rule 65, the
recourse must still fail.
Probable cause for the purpose of filing an information in court consists
in such facts and circumstances as would engender a well-founded
belief that a crime has been committed and the accused may probably
be guilty thereof.68The determination of probable cause lies solely
within the sound discretion of the investigating public prosecutor after
the conduct of a preliminary investigation. It is a sound judicial policy
to refrain from interfering with the determination of what constitutes
sufficient and convincing evidence to establish probable cause for the
prosecution of the accused.69 Thus, it is imperative that by the nature of
his office, the public prosecutor cannot be compelled to file a criminal
information in court if he is not convinced of the sufficiency of the
evidence adduced for a finding of probable cause.70 Neither can he be
165
precluded from filing an information if he is convinced of the merits of
the case.
In not finding probable cause to indict Samson for unfair competition,
State Prosecutor Abad as the investigating public prosecutor discharged
the discretion given to him by the law. Specifically, he resolved as
follows:
It appears from the records that respondent started marketing his (class
25) products bearing the trademark Caterpillar as early as 1992. In
1994, respondent caused the registration of the trademark "Caterpillar
With A Triangle Device Beneath The Letter [A]" with the Intellectual
Property Office. Sometime on June 16, 1997, the IPO issued Certificate
of Registration No. 64705 which appears to be valid for twenty (20)
years, or up to June 16, 2017. Upon the strength of this registration,
respondent continued with his business of marketing shoes, slippers,
sandals, boots and similar Class 25 items bearing his registered
trademark "Caterpillar". Under the law, respondent's operative act of
registering his Caterpillar trademark and the concomitant
approval/issuance by the governmental entity concerned, conferred
upon him the exclusive right to use said trademark unless otherwise
declared illegal. There being no evidence to controvert the fact that
respondent's Certificate of Registration No. 64705 covering Caterpillar
trademark was fraudulently or illegally obtained, it necessarily follows
that its subsequent use and/or being passed on to the public militates
malice or fraudulent intent on the part of respondent. Otherwise stated
and from the facts obtaining, presumption of regularity lies, both from
the standpoint of registration and use/passing on of the assailed
Caterpillar products.
Complainant's argument that respondent may still be held liable for
unfair competition by reason of his having passed on five (5) other
Caterpillar products like "Cat", "Caterpillar", "Cat and Design",
"Walking Machines" and "Track-Type Tractor Design" is equally
difficult to sustain. As may be gleaned from the records, respondent has
been engaged in the sale and distribution of Caterpillar products since
1992 leading to the establishment of numerous marketing outlets. As
such, it would be difficult to assail the presumption that respondent has
already established goodwill insofar as his registered Caterpillar
products are concerned. On the other hand, complainant's registration of
the other Caterpillar products appears to have been caused only in 1995.
In this premise, respondent may be considered as prior user, while the
latter, a subsequent one. Jurisprudence dictates that prior user of the
trademark by one, will controvert the claim by a subsequent one. 71
discretion. By way of exception, however, judicial review is permitted
where the respondent in the preliminary investigation clearly
establishes that the public prosecutor committed grave abuse of
discretion, that is, when the public prosecutor has exercised his
discretion in an arbitrary, capricious, whimsical or despotic manner by
reason of passion or personal hostility, patent and gross enough as to
amount to an evasion of a positive duty or virtual refusal to perform a
duty enjoined by law. Moreover, the trial court may ultimately resolve
the existence or nonexistence of probable cause by examining the
records of the preliminary investigation when necessary for the orderly
administration of justice. Although policy considerations call for the
widest latitude of deference to the public prosecutor's findings, the
courts should never shirk from exercising their power, when the
circumstances warrant, to determine whether the public prosecutor's
findings are supported by the facts, and by the law.
Relevantly, grave abuse of discretion means such capricious or
whimsical exercise of judgment that is equivalent to lack of
jurisdiction. The abuse of discretion must be grave, as when the power
is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and it must be so patent and gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty
enjoined, or to act at all, in contemplation of law, as to be equivalent to
having acted without jurisdiction.73 Herein, Caterpillar did not show the
grave abuse of discretion on the part of the Secretary of Justice.
WHEREFORE, the Court GRANTS the petition for review in G.R.
No. 164352; SETS ASIDE the decision promulgated on January 21,
2004 in CA-G.R. SP No. 75526; DIRECTS the Regional Trial Court in
Muntinlupa City to reinstate Criminal Cases Nos. Q-02-108043-44 and
forthwith try and decide them without undue delay; DENIES the
petition for review on certiorari in G.R. No. 205972;
and ORDERS respondent Manolo P. Samson to pay the costs of suit.
SO ORDERED.

We reiterate that the full discretionary authority to determine the

existence of probable cause is lodged in the Executive Branch of the
Government, through the public prosecutor, in the first instance, and the
Secretary of Justice, on review. Such authority is exclusive, and the
courts are prohibited from encroaching on the executive function,
unless there is a clear showing of grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of the public prosecutor or
the Secretary of Justice. As declared in Callo-Claridad v. Esteban:72

A public prosecutor alone determines the sufficiency of evidence that

establishes the probable cause justifying the filing of a criminal
information against the respondent because the determination of
existence of a probable cause is the function of the public prosecutor.
Generally, the public prosecutor is afforded a wide latitude of discretion
in the conduct of a preliminary investigation. Consequently, it is a
sound judicial policy to refrain from interfering in the conduct of
preliminary investigations, and to just leave to the Department of
Justice the ample latitude of discretion in the determination of what
constitutes sufficient evidence to establish probable cause for the
prosecution of supposed offenders. Consistent with this policy, courts
do not reverse the Secretary of Justice's findings and conclusions on the
matter of probable cause except in clear cases of grave abuse of
166

G.R. No. 26795 July 31, 1970
CARMEN QUIMIGUING, Suing through her parents, ANTONIO
QUIMIGUING and JACOBA CABILIN, plaintiffs-appellants,
vs.
FELIX ICAO, defendant-appellee.
Torcuato L. Galon for plaintiffs-appellants.
Godardo Jacinto for defendant-appellee.
REYES, J.B.L., J.:
Appeal on points of law from an order of the Court of First Instance of
Zamboanga del Norte (Judge Onofre Sison Abalos, presiding), in its
Civil Case No. 1590, dismissing a complaint for support and damages,
and another order denying amendment of the same pleading.
The events in the court of origin can be summarized as follows:
Appellant, Carmen Quimiguing, assisted by her parents, sued Felix Icao
in the court below. In her complaint it was averred that the parties were
neighbors in Dapitan City, and had close and confidential relations; that
defendant Icao, although married, succeeded in having carnal
intercourse with plaintiff several times by force and intimidation, and
without her consent; that as a result she became pregnant, despite
efforts and drugs supplied by defendant, and plaintiff had to stop
studying. Hence, she claimed support at P120.00 per month, damages
and attorney's fees.
Duly summoned, defendant Icao moved to dismiss for lack of cause of
action since the complaint did not allege that the child had been born;
and after hearing arguments, the trial judge sustained defendant's
motion and dismissed the complaint.
Thereafter, plaintiff moved to amend the complaint to allege that as a
result of the intercourse, plaintiff had later given birth to a baby girl; but
the court, sustaining defendant's objection, ruled that no amendment
was allowable, since the original complaint averred no cause of action.
Wherefore, the plaintiff appealed directly to this Court.
We find the appealed orders of the court below to be untenable. A
conceived child, although as yet unborn, is given by law a provisional
personality of its own for all purposes favorable to it, as explicitly
provided in Article 40 of the Civil Code of the Philippines. The unborn
child, therefore, has a right to support from its progenitors, particularly
of the defendant-appellee (whose paternity is deemed admitted for the
purpose of the motion to dismiss), even if the said child is only "en
ventre de sa mere;" just as a conceived child, even if as yet unborn,
may receive donations as prescribed by Article 742 of the same Code,
and its being ignored by the parent in his testament may result in
preterition of a forced heir that annuls the institution of the testamentary
heir, even if such child should be born after the death of the testator
Article 854, Civil Code).
ART. 742. Donations made to conceived and unborn children may be
accepted by those persons who would legally represent them if they
were already born.
ART. 854. The preterition or omission of one, some, or all of the
compulsory heirs in the direct line, whether living at the time of the
execution of the will or born after the death of the testator, shall annul
the institution of heir; but the devises and legacies shall be valid insofar
as they are not inofficious.
If the omitted compulsory heirs should die before the testator, the
institution shall be effectual, without prejudice to the right of
'representation.
It is thus clear that the lower court's theory that Article 291 of the Civil
Code declaring that support is an obligation of parents and illegitimate
children "does not contemplate support to children as yet unborn,"
violates Article 40 aforesaid, besides imposing a condition that nowhere
appears in the text of Article 291. It is true that Article 40 prescribing
that "the conceived child shall be considered born for all purposes that
are favorable to it" adds further "provided it be born later with the
conditions specified in the following article" (i.e., that the foetus be
alive at the time it is completely delivered from the mother's womb).
This proviso, however, is not a condition precedent to the right of the
conceived child; for if it were, the first part of Article 40 would become
entirely useless and ineffective. Manresa, in his Commentaries (5th Ed.)
to the corresponding Article 29 of the Spanish Civil Code, clearly
points this out:
Los derechos atribuidos al nasciturus no son simples expectativas, ni
aun en el sentido tecnico que la moderna doctrina da a esta figura
juridica sino que constituyen un caso de los propiamente Ilamados
'derechos en estado de pendenci'; el nacimiento del sujeto en las
condiciones previstas por el art. 30, no determina el nacimiento de
aquellos derechos (que ya existian de antemano), sino que se trata de un
hecho que tiene efectos declarativos. (1 Manresa, Op. cit., page 271)
A second reason for reversing the orders appealed from is that for a
married man to force a woman not his wife to yield to his lust (as
averred in the original complaint in this case) constitutes a clear
violation of the rights of his victim that entitles her to claim
compensation for the damage caused. Says Article 21 of the Civil Code
of the Philippines:
ART. 21. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
The rule of Article 21 is supported by Article 2219 of the same Code:
ART 2219. Moral damages may be recovered in the following and
analogous cases:
(3) Seduction, abduction, rape or other lascivious acts:
xxx xxx xxx
(10) Acts and actions referred to in Articles 21, 26, 27, 28 ....
Thus, independently of the right to Support of the child she was
carrying, plaintiff herself had a cause of action for damages under the
terms of the complaint; and the order dismissing it for failure to state a
cause of action was doubly in error.
WHEREFORE, the orders under appeal are reversed and set aside. Let
the case be remanded to the court of origin for further proceedings
conformable to this decision. Costs against appellee Felix Icao. So
ordered.
167
G.R. No. 182836 October 13, 2009
CONTINENTAL STEEL MANUFACTURING
CORPORATION, Petitioner,
vs.
HON. ACCREDITED VOLUNTARY ARBITRATOR ALLAN S.
MONTAÑO and NAGKAKAISANG MANGGAGAWA NG
CENTRO STEEL CORPORATION-SOLIDARITY OF UNIONS
IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS
(NMCSC-SUPER), Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari, under Rule 45 of the
Rules of Court, assailing the Decision1 dated 27 February 2008 and the
Resolution2 dated 9 May 2008 of the Court of Appeals in CA-G.R. SP
No. 101697, affirming the Resolution3 dated 20 November 2007 of
respondent Accredited Voluntary Arbitrator Atty. Allan S. Montaño
(Montaño) granting bereavement leave and other death benefits to
Rolando P. Hortillano (Hortillano), grounded on the death of his unborn
child.
The antecedent facts of the case are as follows:
Hortillano, an employee of petitioner Continental Steel Manufacturing
Corporation (Continental Steel) and a member of respondent
Nagkakaisang Manggagawa ng Centro Steel Corporation-Solidarity of
Trade Unions in the Philippines for Empowerment and Reforms
(Union) filed on 9 January 2006, a claim for Paternity Leave,
Bereavement Leave and Death and Accident Insurance for dependent,
pursuant to the Collective Bargaining Agreement (CBA) concluded
between Continental and the Union, which reads:
ARTICLE X: LEAVE OF ABSENCE
xxxx
Section 2. BEREAVEMENT LEAVE—The Company agrees to grant a
bereavement leave with pay to any employee in case of death of the
employee’s legitimate dependent (parents, spouse, children, brothers
and sisters) based on the following:
2.1 Within Metro Manila up to Marilao, Bulacan - 7 days
2.2 Provincial/Outside Metro Manila - 11 days
xxxx
ARTICLE XVIII: OTHER BENEFITS
xxxx
Section 4. DEATH AND ACCIDENT INSURANCE—The Company
shall grant death and accidental insurance to the employee or his family
in the following manner:
xxxx
4.3 DEPENDENTS—Eleven Thousand Five Hundred Fifty Pesos
(Php11,550.00) in case of death of the employees legitimate dependents
(parents, spouse, and children). In case the employee is single, this
benefit covers the legitimate parents, brothers and sisters only with
proper legal document to be presented (e.g. death certificate).4
The claim was based on the death of Hortillano’s unborn child.
Hortillano’s wife, Marife V. Hortillano, had a premature delivery on 5
January 2006 while she was in the 38th week of pregnancy. 5 According
to the Certificate of Fetal Death dated 7 January 2006, the female fetus
died during labor due to fetal Anoxia secondary to uteroplacental
insufficiency.6
Continental Steel immediately granted Hortillano’s claim for paternity
leave but denied his claims for bereavement leave and other death
benefits, consisting of the death and accident insurance.7
Seeking the reversal of the denial by Continental Steel of Hortillano’s
claims for bereavement and other death benefits, the Union resorted to
the grievance machinery provided in the CBA. Despite the series of
conferences held, the parties still failed to settle their
dispute,8 prompting the Union to file a Notice to Arbitrate before the
National Conciliation and Mediation Board (NCMB) of the Department
of Labor and Employment (DOLE), National Capital Region
(NCR).9 In a Submission Agreement dated 9 October 2006, the Union
and Continental Steel submitted for voluntary arbitration the sole issue
of whether Hortillano was entitled to bereavement leave and other death
benefits pursuant to Article X, Section 2
and Article XVIII, Section 4.3 of the CBA.10 The parties mutually
chose Atty. Montaño, an Accredited Voluntary Arbitrator, to resolve
said issue.11
When the preliminary conferences again proved futile in amicably
settling the dispute, the parties proceeded to submit their respective
Position Papers, 12 Replies,13 and Rejoinders14 to Atty. Montaño.
The Union argued that Hortillano was entitled to bereavement leave and
other death benefits pursuant to the CBA. The Union maintained that
Article X, Section 2 and Article XVIII, Section 4.3 of the CBA did not
specifically state that the dependent should have first been born alive or
must have acquired juridical personality so that his/her subsequent
death could be covered by the CBA death benefits. The Union cited
cases wherein employees of MKK Steel Corporation (MKK Steel) and
Mayer Steel Pipe Corporation (Mayer Steel), sister companies of
Continental Steel, in similar situations as Hortillano were able to
receive death benefits under similar provisions of their CBAs.
The Union mentioned in particular the case of Steve L. Dugan (Dugan),
an employee of Mayer Steel, whose wife also prematurely delivered a
fetus, which had already died prior to the delivery. Dugan was able to
receive paternity leave, bereavement leave, and voluntary contribution
under the CBA between his union and Mayer Steel.15 Dugan’s child
was only 24 weeks in the womb and died before labor, as opposed to
Hortillano’s child who was already 37-38 weeks in the womb and only
died during labor.
The Union called attention to the fact that MKK Steel and Mayer Steel
are located in the same compound as Continental Steel; and the
representatives of MKK Steel and Mayer Steel who signed the CBA
with their respective employees’ unions were the same as the
representatives of Continental Steel who signed the existing CBA with
the Union.
Finally, the Union invoked Article 1702 of the Civil Code, which
provides that all doubts in labor legislations and labor contracts shall be
construed in favor of the safety of and decent living for the laborer.
On the other hand, Continental Steel posited that the express provision
of the CBA did not contemplate the death of an unborn child, a fetus,
without legal personality. It claimed that there are two elements for the
entitlement to the benefits, namely: (1) death and (2) status as
legitimate dependent, none of which existed in Hortillano’s case.
Continental Steel, relying on Articles 40, 41 and 42 16 of the Civil Code,
contended that only one with civil personality could die. Hence, the
unborn child never died because it never acquired juridical personality.
Proceeding from the same line of thought, Continental Steel reasoned
that a fetus that was dead from the moment of delivery was not a person
168
at all. Hence, the term dependent could not be applied to a fetus that
never acquired juridical personality. A fetus that was delivered dead
could not be considered a dependent, since it never needed any support,
nor did it ever acquire the right to be supported.
Continental Steel maintained that the wording of the CBA was clear
and unambiguous. Since neither of the parties qualified the terms used
in the CBA, the legally accepted definitions thereof were deemed
automatically accepted by both parties. The failure of the Union to have
unborn child included in the definition of dependent, as used in the
CBA – the death of whom would have qualified the parent-employee
for bereavement leave and other death benefits – bound the Union to
the legally accepted definition of the latter term.
Continental Steel, lastly, averred that similar cases involving the
employees of its sister companies, MKK Steel and Mayer Steel,
referred to by the Union, were irrelevant and incompetent evidence,
given the separate and distinct personalities of the companies. Neither
could the Union sustain its claim that the grant of bereavement leave
and other death benefits to the parent-employee for the loss of an
unborn child constituted "company practice."
On 20 November 2007, Atty. Montaño, the appointed Accredited
Voluntary Arbitrator, issued a Resolution17 ruling that Hortillano was
entitled to bereavement leave with pay and death benefits.
Atty. Montaño identified the elements for entitlement to said benefits,
thus:
This Office declares that for the entitlement of the benefit of
bereavement leave with pay by the covered employees as provided
under Article X, Section 2 of the parties’ CBA, three (3) indispensable
elements must be present: (1) there is "death"; (2) such death must be of
employee’s "dependent"; and (3) such dependent must be "legitimate".
On the otherhand, for the entitlement to benefit for death and accident
insurance as provided under Article XVIII, Section 4, paragraph (4.3)
of the parties’ CBA, four (4) indispensable elements must be present:
(a) there is "death"; (b) such death must be of employee’s "dependent";
(c) such dependent must be "legitimate"; and (d) proper legal document
to be presented.18
Atty. Montaño found that there was no dispute that the death of an
employee’s legitimate dependent occurred. The fetus had the right to be
supported by the parents from the very moment he/she was conceived.
The fetus had to rely on another for support; he/she could not have
existed or sustained himself/herself without the power or aid of
someone else, specifically, his/her mother. Therefore, the fetus was
already a dependent, although he/she died during the labor or delivery.
There was also no question that Hortillano and his wife were lawfully
married, making their dependent, unborn child, legitimate.
In the end, Atty. Montaño decreed:
WHEREFORE, premises considered, a resolution is hereby rendered
ORDERING [herein petitioner Continental Steel] to pay Rolando P.
Hortillano the amount of Four Thousand Nine Hundred Thirty-Nine
Pesos (₱4,939.00), representing his bereavement leave pay and the
amount of Eleven Thousand Five Hundred Fifty Pesos (₱11,550.00)
representing death benefits, or a total amount of ₱16,489.00
The complaint against Manuel Sy, however, is ORDERED
DISMISSED for lack of merit.
All other claims are DISMISSED for lack of merit.
Further, parties are hereby ORDERED to faithfully abide with the
herein dispositions.
Aggrieved, Continental Steel filed with the Court of Appeals a Petition
for Review on Certiorari,19 under Section 1, Rule 43 of the Rules of
Court, docketed as CA-G.R. SP No. 101697.
Continental Steel claimed that Atty. Montaño erred in granting
Hortillano’s claims for bereavement leave with pay and other death
benefits because no death of an employee’s dependent had occurred.
The death of a fetus, at whatever stage of pregnancy, was excluded
from the coverage of the CBA since what was contemplated by the
CBA was the death of a legal person, and not that of a fetus, which did
not acquire any juridical personality. Continental Steel pointed out that
its contention was bolstered by the fact that the term death was
qualified by the phrase legitimate dependent. It asserted that the status
of a child could only be determined upon said child’s birth, otherwise,
no such appellation can be had. Hence, the conditions sine qua non for
Hortillano’s entitlement to bereavement leave and other death benefits
under the CBA were lacking.
The Court of Appeals, in its Decision dated 27 February 2008, affirmed
Atty. Montaño’s Resolution dated 20 November 2007. The appellate
court interpreted death to mean as follows:
[Herein petitioner Continental Steel’s] exposition on the legal sense in
which the term "death" is used in the CBA fails to impress the Court,
and the same is irrelevant for ascertaining the purpose, which the grant
of bereavement leave and death benefits thereunder, is intended to
serve. While there is no arguing with [Continental Steel] that the
acquisition of civil personality of a child or fetus is conditioned on
being born alive upon delivery, it does not follow that such event of
premature delivery of a fetus could never be contemplated as a "death"
as to be covered by the CBA provision, undoubtedly an event causing
loss and grief to the affected employee, with whom the dead fetus
stands in a legitimate relation. [Continental Steel] has proposed a
narrow and technical significance to the term "death of a legitimate
dependent" as condition for granting bereavement leave and death
benefits under the CBA. Following [Continental Steel’s] theory, there
can be no experience of "death" to speak of. The Court, however, does
not share this view. A dead fetus simply cannot be equated with
anything less than "loss of human life", especially for the expectant
parents. In this light, bereavement leave and death benefits are meant to
assuage the employee and the latter’s immediate family, extend to them
solace and support, rather than an act conferring legal status or
personality upon the unborn child. [Continental Steel’s] insistence that
the certificate of fetal death is for statistical purposes only sadly misses
this crucial point.20
Accordingly, the fallo of the 27 February 2008 Decision of the Court of
Appeals reads:
WHEREFORE, premises considered, the present petition is hereby
DENIED for lack of merit. The assailed Resolution dated November
20, 2007 of Accredited Voluntary Arbitrator Atty. Allan S. Montaño is
hereby AFFIRMED and UPHELD.
With costs against [herein petitioner Continental Steel].21
In a Resolution22 dated 9 May 2008, the Court of Appeals denied the
Motion for Reconsideration23 of Continental Steel.
Hence, this Petition, in which Continental Steel persistently argues that
the CBA is clear and unambiguous, so that the literal and legal meaning
of death should be applied. Only one with juridical personality can die
and a dead fetus never acquired a juridical personality.
We are not persuaded.
As Atty. Montaño identified, the elements for bereavement leave under
Article X, Section 2 of the CBA are: (1) death; (2) the death must be of
169
a dependent, i.e., parent, spouse, child, brother, or sister, of an married employee; or the parent, brother, or sister of a single employee.
employee; and (3) legitimate relations of the dependent to the The CBA did not provide a qualification for the child dependent, such
employee. The requisites for death and accident insurance under Article that the child must have been born or must have acquired civil
XVIII, Section 4(3) of the CBA are: (1) death; (2) the death must be of personality, as Continental Steel avers. Without such qualification,
a dependent, who could be a parent, spouse, or child of a married then child shall be understood in its more general sense, which includes
employee; or a parent, brother, or sister of a single employee; and (4) the unborn fetus in the mother’s womb.
presentation of the proper legal document to prove such death, e.g.,
death certificate. The term legitimate merely addresses the dependent child’s status in
relation to his/her parents. In Angeles v. Maglaya,27 we have expounded
It is worthy to note that despite the repeated assertion of Continental on who is a legitimate child, viz:
Steel that the provisions of the CBA are clear and unambiguous, its
fundamental argument for denying Hortillano’s claim for bereavement A legitimate child is a product of, and, therefore, implies a valid and
leave and other death benefits rests on the purportedly proper lawful marriage. Remove the element of lawful union and there is
interpretation of the terms "death" and "dependent" as used in the CBA. strictly no legitimate filiation between parents and child. Article 164 of
If the provisions of the CBA are indeed clear and unambiguous, then the Family Code cannot be more emphatic on the matter:
there is no need to resort to the interpretation or construction of the "Children conceived or born during the marriage of the parents are
same. Moreover, Continental Steel itself admitted that neither legitimate." (Emphasis ours.)
management nor the Union sought to define the pertinent terms for
Conversely, in Briones v. Miguel,28 we identified an illegitimate child
bereavement leave and other death benefits during the negotiation of
to be as follows:
the CBA.
The fine distinctions among the various types of illegitimate children
The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil
have been eliminated in the Family Code. Now, there are only two
Code for the legal definition of death is misplaced. Article 40 provides
classes of children -- legitimate (and those who, like the legally
that a conceived child acquires personality only when it is born, and
adopted, have the rights of legitimate children) and illegitimate. All
Article 41 defines when a child is considered born. Article 42 plainly
children conceived and born outside a valid marriage are illegitimate,
states that civil personality is extinguished by death.
unless the law itself gives them legitimate status. (Emphasis ours.)
First, the issue of civil personality is not relevant herein. Articles 40, 41
It is apparent that according to the Family Code and the afore-cited
and 42 of the Civil Code on natural persons, must be applied in relation
jurisprudence, the legitimacy or illegitimacy of a child attaches upon
to Article 37 of the same Code, the very first of the general provisions
his/her conception. In the present case, it was not disputed that
on civil personality, which reads:
Hortillano and his wife were validly married and that their child was
Art. 37. Juridical capacity, which is the fitness to be the subject of legal conceived during said marriage, hence, making said
relations, is inherent in every natural person and is lost only through child legitimate upon her conception.1avvphi1
death. Capacity to act, which is the power to do acts with legal effect, is
Also incontestable is the fact that Hortillano was able to comply with
acquired and may be lost.
the fourth element entitling him to death and accident insurance under
We need not establish civil personality of the unborn child herein since the CBA, i.e., presentation of the death certificate of his unborn child.
his/her juridical capacity and capacity to act as a person are not in issue.
Given the existence of all the requisites for bereavement leave and
It is not a question before us whether the unborn child acquired any
other death benefits under the CBA, Hortillano’s claims for the same
rights or incurred any obligations prior to his/her death that were passed
should have been granted by Continental Steel.
on to or assumed by the child’s parents. The rights to bereavement
leave and other death benefits in the instant case pertain directly to the We emphasize that bereavement leave and other death benefits are
parents of the unborn child upon the latter’s death. granted to an employee to give aid to, and if possible, lessen the grief
of, the said employee and his family who suffered the loss of a loved
Second, Sections 40, 41 and 42 of the Civil Code do not provide at all a
one. It cannot be said that the parents’ grief and sense of loss arising
definition of death. Moreover, while the Civil Code expressly provides
from the death of their unborn child, who, in this case, had a gestational
that civil personality may be extinguished by death, it does not
life of 38-39 weeks but died during delivery, is any less than that of
explicitly state that only those who have acquired juridical personality
parents whose child was born alive but died subsequently.
could die.
Being for the benefit of the employee, CBA provisions on bereavement
And third, death has been defined as the cessation of life. 24 Life is not
leave and other death benefits should be interpreted liberally to give life
synonymous with civil personality. One need not acquire civil
to the intentions thereof. Time and again, the Labor Code is specific in
personality first before he/she could die. Even a child inside the womb
enunciating that in case of doubt in the interpretation of any law or
already has life. No less than the Constitution recognizes the life of the
provision affecting labor, such should be interpreted in favor of
unborn from conception,25 that the State must protect equally with the
labor.29 In the same way, the CBA and CBA provisions should be
life of the mother. If the unborn already has life, then the cessation
interpreted in favor of labor. In Marcopper Mining v. National Labor
thereof even prior to the child being delivered, qualifies as death.
Relations Commission,30 we pronounced:
Likewise, the unborn child can be considered a dependent under the
Finally, petitioner misinterprets the declaration of the Labor Arbiter in
CBA. As Continental Steel itself defines, a dependent is "one who
the assailed decision that "when the pendulum of judgment swings to
relies on another for support; one not able to exist or sustain oneself
and fro and the forces are equal on both sides, the same must be stilled
without the power or aid of someone else." Under said general
in favor of labor." While petitioner acknowledges that all doubts in the
definition,26 even an unborn child is a dependent of its parents.
interpretation of the Labor Code shall be resolved in favor of labor, it
Hortillano’s child could not have reached 38-39 weeks of its gestational
insists that what is involved-here is the amended CBA which is
life without depending upon its mother, Hortillano’s wife, for
essentially a contract between private persons. What petitioner has lost
sustenance. Additionally, it is explicit in the CBA provisions in
sight of is the avowed policy of the State, enshrined in our Constitution,
question that the dependent may be the parent, spouse, or child of a
170
to accord utmost protection and justice to labor, a policy, we are,
likewise, sworn to uphold.

In Philippine Telegraph & Telephone Corporation v. NLRC [183

SCRA 451 (1990)], we categorically stated that:

When conflicting interests of labor and capital are to be weighed on the

scales of social justice, the heavier influence of the latter should be
counter-balanced by sympathy and compassion the law must accord the
underprivileged worker.

Likewise, in Terminal Facilities and Services Corporation v.

NLRC [199 SCRA 265 (1991)], we declared:

Any doubt concerning the rights of labor should be resolved in its favor
pursuant to the social justice policy.

IN VIEW WHEREOF, the Petition is DENIED. The Decision dated 27

February 2008 and Resolution dated 9 May 2008 of the Court of
Appeals in CA-G.R. SP No. 101697, affirming the Resolution dated 20
November 2007 of Accredited Voluntary Arbitrator Atty. Allan S.
Montaño, which granted to Rolando P. Hortillano bereavement leave
pay and other death benefits in the amounts of Four Thousand Nine
Hundred Thirty-Nine Pesos (₱4,939.00) and Eleven Thousand Five
Hundred Fifty Pesos (₱11,550.00), respectively, grounded on the death
of his unborn child, are AFFIRMED. Costs against Continental Steel
Manufacturing Corporation.

SO ORDERED.

171
G.R. No. 203770
MANUELA AZUCENA MAYOR, Petitioner
vs.
EDWIN TIU and DAMIANA CHARITO MARTY, Respondents
DECISION
MENDOZA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court assailing the October 5, 20111 and September 24,
20122 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No.
06256, which dismissed the petition filed by Remedios
Tiu (Remedios) and Manuela Azucena Mayor (Manuela) for procedural
infirmities. The said CA petition challenged the January 20, 2011 3 and
June 10, 20114 Orders of the Regional Trial Court, Branch 6, Tacloban
City (RTC-Br. 6), in Sp. Proc. No. 2008-05-30, a case for Probate of
Last Will and Testament and Issuance of Letters of Testamentary.
The Antecedents:
On May 25, 2008, Rosario Guy-Juco Villasin Casilan (Rosario), the
widow of the late Primo Villasin (Primo), passed away and left a
holographic Last Will and Testament,5 wherein she named her sister,
Remedios Tiu (Remedios), and her niece, Manuela Azucena
Mayor (Manuela), as executors. Immediately thereafter, Remedios and
Manuela filed a petition for the probate of Rosario's holographic
will6 with prayer for the issuance of letters testamentary (probate
proceedings). The petition was raffled to the Regional Trial Court,
Branch 9, Tacloban City (RTC-Br. 9) and docketed as Sp.
Proc. No. 2008-05-30. They averred that Rosario left properties valued
at approximately ₱2.5 million.
On May 29, 2008, respondent Damiana Charito Marty (Marty) claiming
to be the adopted daughter of Rosario, filed a petition for letters of
administration before the RTC, Branch 34, Tacloban City (RTC- Br.
34), docketed as Sp. Proc. No. 2008-05-32, but it was not given due
course because of the probate proceedings. Per records, this dismissal is
subject of a separate proceeding filed by Marty with the CA Cebu City,
docketed as CA-G.R. SP No. 04003.7
On June 12, 2008, in its Order,8 the RTC-Br. 9 found the petition for
probate of will filed by Remedios and Manuela as sufficient in form
and substance and set the case for hearing.
Consequently, Marty filed her Verified Urgent Manifestation and
Motion,9 dated June 23, 2008, stating that Remedios kept the decedent
Rosario a virtual hostage for the past ten (10) years and her family was
financially dependent on her which led to the wastage and disposal of
the properties owned by her and her husband, Primo. Marty averred that
until the alleged will of the decedent could be probated and admitted,
Remedios and her ten (10) children had no standing to either possess or
control the properties comprising the estate of the Villasins. She prayed
for the probate court to: 1) order an immediate inventory of all the
properties subject of the proceedings; 2) direct the tenants of the estate,
namely, Mercury Drug and Chowking, located at Primrose Hotel, to
deposit their rentals with the court; 3) direct Metro bank, P. Burgos
Branch, to freeze the accounts in the name of Rosario, Primrose
Development Corporation (Primrose) or Remedios; and 4) lock up the
Primrose Hotel in order to preserve the property until final disposition
by the court.
On July 8, 2008, Remedios and Manuela filed their
Comment/Opposition10 to the urgent manifestation averring that Marty
was not an adopted child of the Villasins based on a certification issued
by the Office of the Clerk of Court of Tacloban City, attesting that no
record of any adoption proceedings involving Marty existed in their
records. They also argued that the probate court had no jurisdiction over
the properties mistakenly claimed by Marty as part of Rosario's estate
because these properties were actually owned by, and titled in the name
of, Primrose. Anent the prayer to direct the tenants to deposit the rentals
to the probate court, Remedios and Manuela countered that the probate
court had no jurisdiction over properties owned by third persons,
particularly by Primrose, the latter having a separate and distinct
personality from the decedent's estate.
In her Reply,11 dated July 15, 2008, Marty cited an order of the Court of
First Instance of Leyte (CF! Leyte) in SP No. 1239,12 claiming that as
early as March 3, 1981, the veil of corporate entity of Primrose was
pierced on the ground that it was a closed family corporation controlled
by Rosario after Primo's death. Thus, Marty alleged that "piercing" was
proper in the case of Rosario's estate because the incorporation of
Primrose was founded on a fraudulent consideration, having been done
in contemplation of Primo's death.
Further, on July 22, 2008, in her Opposition to the Petition for the
Approval of the Will of the Late Rosario Guy-Juco Villasin
Casilan,13 Marty impugned the authenticity of her holographic will.
Meanwhile, Edwin Tiu (Edwin), a son of Remedios, also filed his
Opposition,14 dated June 13, 2008.
After a protracted exchange of pleadings, the parties submitted their
respective memoranda.
The January 14, 2009 Order
In its January 14, 2009 Order,15 the RTC-Br. 9 granted the motion of
Marty and appointed the OIC Clerk of Court as special administrator of
the Estate. The Probate Court also ordered Mercury Drug and
Chowking to deposit the rental income to the court and Metrobank to
freeze the bank accounts mentioned in the motion of Marty. The
doctrine of piercing the corporate veil was applied in the case
considering that Rosario had no other properties that comprised her
estate other than Primrose. According to the probate court, for the best
interest of whoever would be adjudged as the legal heirs of the Estate, it
was best to preserve the properties from dissipation.
On January 22, 2009, Remedios and Manuela filed their Motion for
Inhibition16 on the ground of their loss of trust and confidence in RTC-
Br. 9 Presiding Judge Rogelio C. Sescon (Judge Sescon) to dispense
justice. Later, they also filed their Motion for Reconsideration Ad
Cautelam,17 dated February 3, 2009, arguing that Rosario's estate
consisted only of shares of stock in Primrose and not the corporation
itself. Thus, the probate court could not order the lessees of the
corporation to remit the rentals to the Estate's administrator. With
regard to the appointment of a special administrator, Remedios and
Manuela insisted that it be recalled. They claimed that if ever there was
a need to appoint one, it should be the two of them because it was the
desire of the decedent in the will subject of the probation proceedings.
In its Order,18 dated March 27, 2009, the RTC-Br. 9 denied the motion
for reconsideration for lack of merit and affirmed its January 14, 2009
Order. The presiding judge, Judge Sescon, also granted the motion for
inhibition and ordered that the records of the case be referred to the
RTC Executive Judge for reraffling. The case was later re-raffled to
RTC-Br.6, Judge Alphinor C. Serrano, presiding judge.
Aggrieved by the denial of their motion for reconsideration, Remedios
and Manuela filed a petition for certiorari with the CA in Cebu City,
docketed as CA-G.R. S.P. No. 04254, assailing the January 14, 2009
and March 27, 2009 Orders of the RTC-Br. 9.19
Ruling of the CA
172
In its October 16, 2009 Decision,20 the CA reversed the assailed orders
of the RTC Br. 9, except as to the appointment of a special
administrator insofar as this relates to properties specifically belonging
to the "Estate." It held that Primrose had a personality separate and
distinct from the estate of the decedent and that the probate court
had no jurisdiction to apply the doctrine of piercing the corporate
veil.
According to the CA, nowhere in the assailed orders of the probate
court was it stated that its determination of the title of the questioned
properties was only for the purpose of determining whether such
properties ought to be included in the inventory. When the probate
court applied the doctrine of "piercing," in effect, it adjudicated with
finality the ownership of the properties in favor of the Estate. The CA
stated that RTC-Br. 9 had no jurisdiction to adjudicate ownership of a
property claimed by another based on adverse title; and that questions
like this must be submitted to a court of general jurisdiction and not to a
probate court.
The CA added that assuming that the probate court's determination on
the issue of ownership was merely intended to be provisional, Marty's
contentions still had no merit. The properties, which she claimed to be
part of the estate of Rosario and over which she claimed co-ownership,
comprised of real properties registered under the Torrens system. As
such, Primrose was considered the owner until the titles to those
properties were nullified in an appropriate ordinary action. The CA
further stated that the RTC erroneously relied on the order issued by the
CFI Leyte in 1981, in the probate proceedings involving the estate of
Primo. Whatever determination the CFI made at the time regarding the
title of the properties was merely provisional, hence, not conclusive as
to the ownership.
By reason of the favorable decision by the CA, Remedios and Manuela
filed their Motion to Partially Revoke the Writ of Execution Enforcing
the January 14, 2009 Order of the Honorable Court and Manifestation
in Compliance with the October 21, 2009 Order (Ad Cautelam),21 dated
October 27, 2009.
In its Order,22 dated November 17, 2009, the RTC-Br. 6 partially
granted the motion as it revoked the power of the special administrator
to oversee the day-to-day operations of Primrose. It also revoked the
order with respect to Mercury Drug and Chowking, reasoning out that
the said establishments dealt with Primrose, which had a personality
distinct and separate from the estate of the decedent. In the said order,
Atty. Blanche A. Salino nominated by oppositors Marty and Edwin,
was appointed special administrator to oversee the day-to-day
operations of the estate. The same order also upheld the January 14,
2009 Order, as to the conduct and inventory of all the properties
comprising the estate.
This order was not questioned or appealed by the parties.
Omnibus Motion
On September 24, 2010, or almost ten (10) months after the November
17, 2009 Order of the probate court was issued, Marty, together with
her new counsel, filed her Omnibus Motion,23 praying for the probate
court to: 1) order Remedios and Manuela to render an accounting of all
the properties and assets comprising the estate of the decedent; 2)
deposit or consign all rental payments or other passive income derived
from the properties comprising the estate; and 3) prohibit the
disbursement of funds comprising the estate of the decedent without
formal motion and approval by the probate court.
Ruling of the RTC-Br. 6
In its January 20, 2011 Order, the RTC-Br. 6 granted Marty's Omnibus
Motion. Although it agreed with the October 16, 2009 CA Decision
reversing the January 14, 2009 Order of the RTC-Br. 9, nonetheless, it
acknowledged the urgency and necessity of appointing a special
administrator. According to the probate court, considering that there
was clear evidence of a significant decrease of Rosario's shares in the
outstanding capital stock of Primrose,24prudence dictated that an
inquiry into the validity of the transfers should be made. A final
determination of this matter would be outside the limited jurisdiction of
the probate court, but it was likewise settled that the power to institute
an action for the recovery of a property claimed to be part of the estate
was normally lodged with the executor or administrator. Thus, the
probate court disposed:
WHEREFORE, for the reasons aforestated, and so as not to render
moot any action that the special administrator, or the regular
administrator upon the latter's qualification and appointment, may deem
appropriate to take on the matter (i.e. Whether or not to institute in the
name of the estate the appropriate action for the recovery of the shares
of stock), this Court hereby GRANTS Oppositor Marty's Omnibus
Motion, dated September 24, 2010, and thus hereby:
1. DIRECTS petitioners, either individually or jointly, to: (a)
RENDER AN ACCOUNTING of all the properties and assets
comprising the estate of the decedent that may have come into their
possession; and, (b) DEPOSIT OR CONSIGN all the rentals
payments or such other passive incomes from the properties and assets
registered in the name of Primrose Development Corporation, including
all income derived from the Primrose Hotel and the lease contracts with
Mercury Drug and Chowking Restaurant, both within fifteen (15) days
from receipt of this Order;
2. DIRECTS the Special Administrator to take possession and charge
of the properties comprising the decedent's estate, specially those
pertaining to the sharesholding of the decedent in Primrose
Development Corporation, to determine whether or not action for the
recovery of the shares of stock supposedly transferred from the
decedent to petitioners Remedios Tiu, Manuela Azucena Mayor should
be instituted in the name of the estate against the said transferees and to
submit a Report on the foregoing matters to this Court, within fifteen
(15) days from receipt of this Order; and,
3. ORDERS that no funds comprising the estate of the decedent shall
be disbursed without formal Motion therefor, with the conformity of the
Special Administrator, duly approved by this Court.
SO ORDERED.25 [Underscoring supplied]
The partial motion for reconsideration of the above order filed by
Remedios and Manuela was denied in the other assailed order of the
RTC-Br. 6, dated June 10, 2011.26
Dissatisfied, Remedios and Manuela availed of the special civil action
of certiorari under Rule 65, and filed a petition before the CA.
Action by the CA
The CA, however, in its October 5, 2011 Resolution,27 dismissed the
same based on the following infirmities: 1) there was no proper proof of
service of a copy of the petition on the respondents which was sent by
registered mail; 2) petitioners failed to indicate on the petition the
material date when the motion for reconsideration was filed; 3) the
copy of the assailed order was not certified true and correct by the
officer having custody of the original copy; and 4) the serial number of
the commission of the notary public, the province-city where he was
commissioned, the office address of the notary public and the roll of
attorney's number were not properly indicated on the verification and
certification of non-forum shopping.
173
Remedios and Manuela moved for reconsideration of the assailed CA
resolution, but to no avail, as the appellate court denied the motion in
its September 24, 2012 Resolution.
Hence, this petition before the Court, filed only by Manuela as
Remedios had also passed away, and anchored on the following
GROUNDS
I.
THE HONORABLE COURT OF APPEALS COMMITTED
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
IT MISAPPLIED SECTION 13, RULE 13 OF THE RULES OF
COURT AND DECLARED THAT THERE WAS NO PROPER
PROOF OF SERVICE BY REGISTERED MAIL.
II.
THE HONORABLE COURT OF APPEALS COMMITTED
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
IT MISAPPLIED JURISPRUDENCE AND RULE 65 AND IT
HELD THAT PETITIONER MAYOR DID NOT COMPLY WITH
THE MATERIAL DATE RULE.
III.
THE HONORABLE COURT OF APPEALS COMMITTED
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
IT DECLARED THAT PETITIONER MAYOR FAILED TO
COMPLY WITH THE REQUIREMENT OF SECTION 1, RULE
65 FOR FAILING TO ATTACH CERTIFIED TRUE COPY OF
THE ORDER OF THE TRIAL COURT.
IV.
THE HONORABLE COURT OF APPEALS COMMITTED
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
IT DECLARED THAT PETITIONER MAYOR DID NOT
COMPLY WITH THE REQUIREMENT OF VERIFICATION
AND CERTIFICATION AGAINST FORUM SHOPPING.
V.
THE HONORABLE COURT OF APPEALS COMMITTED
GROSS AND REVERSIBLE ERROR IN THE APPLICATION
OF LAW AND THE RULES WARRANTING REVIEW WHEN
IT ALLOWED TECHNICALITIES TO BE USED TO DEFEAT
SUBSTANTIAL RIGHT OF THE PARTIES.
VI.
PETITIONERS HA VE GOOD CAUSE AND A MERITORIOUS
CASE AGAINST HEREIN RESPONDENTS AS PARAGRAPH
l(B) OF THE DISPOSITIVE PORTION OF THE FIRST
ASSAILED ORDER SHOULD HA VE BEEN REVERSED
BECAUSE IT OVERTURNS THE DECISION OF THE COURT
OF APPEALS DATED 16 OCTOBER 2009 WHICH HAS LONG
BECOME FINAL AND EXECUTORY.28
Petitioner Manuela argued that:
1) There was actual compliance with Section 13, Rule 13 of the Rules
of Court. The CA petition was accompanied by a notarized affidavit of
service and filing of registered mail. At the time the petition was filed,
this was the best evidence of the service. The other registry receipts for
the other parties were also attached to the petition. Further, the
available registry return card was furnished the CA in the motion for
reconsideration.29
2) The failure of the petition to comply with the rule on a statement of
material dates could be excused because the dates were evident from
the records.30
3) The petitioner went to the RTC of Tacloban to secure certified true
copies of the assailed orders. Only the stamped name of the Clerk of
Court, however, appeared thereon, because the particular branch had no
stamp pad which had the phrase for certification. The branch did not
even have a typewriter in order to affix the phrase on the copies. These
inadequacies could not be attributed to the petitioners.31
4) The lack of information pertaining to the notary public in the
verification and certification against forum-shopping should not
invalidate the same because, again, it was not attributable to the
parties.32
5) Technicalities should never be used to defeat the substantive rights
of a party.33
In its January 23, 2013 Resolution34 the Court ordered the respondents
to file their respective comments. Marty, in her Comment, insisted that
the petitioner failed to comply with the procedural requirements as
stated by the CA.35
In her Reply to Comment,36 petitioner Manuela clarified that the
affidavit of service was executed on August 31, 2011, which was after
the petition was signed by the lawyers and after it was verified by the
petitioner herself. After contesting Marty's arguments on the alleged
procedural infirmities of the petitions with the CA and this Court,
Manuela asserted that the final and executory October 16, 2009
Decision of the CA already held that Primrose had a personality
separate and distinct from the estate of decedent Rosario.
Meanwhile, in his Manifestation,37 dated May 29, 2013, Edwin
affirmed that he and Manuela decided to patch up their differences and
agreed to settle amicably. Accordingly, he manifested that he was
withdrawing from the case pursuant to their agreement.
On June 18, 2014, Manuela filed her Motion for Issuance of Temporary
Restraining Order and Writ of Preliminary Injunction38 on the ground
that a flurry of orders had been issued by the RTC-Br. 6 in the
implementation of the assailed January 20, 2011 Order, such as the
Order,39 dated May 27, 2013, wherein the probate court vaguely
ordered "the inventory of the exact extent of the 'decedent's estate."'
Then another order was issued appointing an auditing firm to conduct
an inventory/audit of the Estate including the rentals and earnings
derived from the lease of Mercury Drug and Chowking Restaurant, as
tenants of Primrose.40 According to petitioner Manuela, although an
inventory of the assets of the decedent was proper, the probate court
ordered an inventory of the assets of Primrose, a separate and distinct
entity. Manuela asserts that it was clearly in error.
In her Supplement to the Motion for Issuance of Temporary Restraining
Order and Writ of Preliminary Injunction,41dated June 17, 2013,
Manuela informed the Court that the inventory and accounting of
Primrose would already commence on June 19, 2013.
Marty filed her Opposition,42 dated July 3, 2013, stating that the
petition of Manuela had been rendered moot and academic as the
probate court had declared her as the sole heir of Rosario and appointed
her administrator of the estate. She argued that an injunctive relief
would work injustice to the estate because of the total assimilation by
petitioner of the shareholdings of the decedent in Primrose and her
share in the corporation's income corresponding to her shareholdings.
174
Finding that the requisites for preliminary injunctive relief were
present,43 the Court issued the TRO44 in favor of Manuela on October
14, 2013. At the outset, the Court was convinced that the rights of
Primrose sought to be protected by the grant of injunctive relief were
material and substantial and the TRO was issued in order to prevent any
irreparable damage to a corporate entity that could arise from the
conduct of an accounting by the court-appointed inventory.
The Court's Ruling
The Court now resolves the subject case by the issuance of a permanent
injunction, as prayed for by petitioner Manuela. This position is
supported by law and jurisprudence, as follows:
First. Artificial persons include (1) a collection or succession of natural
persons forming a corporation; and (2) a collection of property to which
the law attributes the capacity of having rights and duties. This class of
artificial persons is recognized only to a limited extent in our law.
Example is the estate of a bankrupt or deceased person.45From this
pronouncement, it can be gleaned that the estate of the deceased person
is a juridical person separate and distinct from the person of the
decedent and any other corporation. This status of an estate comes
about by operation of law. This is in consonance with the basic tenet
under corporation law that a corporation has a separate personality
distinct from its stockholders and from other corporations to which it
may be connected.46
Second. The doctrine of piercing the corporate veil has no relevant
application in this case. Under this doctrine, the court looks at the
corporation as a mere collection of individuals or an aggregation of
persons undertaking business as a group, disregarding the separate
juridical personality of the corporation unifying the group. Another
formulation of this doctrine is that when two business enterprises are
owned, conducted and controlled by the same parties, both law and
equity will, when necessary to protect the rights of third parties,
disregard the legal fiction that two corporations are distinct entities and
treat them as identical or as one and the same.47 The purpose behind
piercing a corporation's identity is to remove the barrier between the
corporation and the persons comprising it to thwart the fraudulent and
illegal schemes of those who use the corporate personality as a shield
for undertaking certain proscribed activities.48
Here, instead of holding the decedent's interest in the corporation
separately as a stockholder, the situation was reversed. Instead, the
probate court ordered the lessees of the corporation to remit rentals to
the estate's administrator without taking note of the fact that the
decedent was not the absolute owner of Primrose but only an owner of
shares thereof. Mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stocks of a corporation is
not of itself a sufficient reason for disregarding the fiction of separate
corporate personalities.49 Moreover, to disregard the separate juridical
personality of a corporation, the wrongdoing cannot be presumed, but
must be clearly and convincingly established.50
Third. A probate court is not without limits in the determination of the
scope of property covered in probate proceedings. In a litany of cases,
the Court had defined the parameters by which a probate court may
extend its probing arms in the determination of the question of title in
probate proceedings. In Pastor, Jr. vs. Court of Appeals,51 the Court
explained that, as a rule, the question of ownership was an extraneous
matter which the probate court could not resolve with finality. Thus, for
the purpose of determining whether a certain property should, or should
not, be included in the inventory of estate properties, the probate court
may pass upon the title thereto, but such determination is provisional,
not conclusive, and is subject to the final decision in a separate action to
resolve title. It is a well-settled rule that a probate court or one in charge
of proceedings, whether testate or intestate, cannot adjudicate or
determine title to properties claimed to be part of the estate but which
are equally claimed to belong to outside parties. It can only determine
whether they should, or should not, be included in the inventory or list
of properties to be overseen by the administrator. If there is no dispute,
well and good; but if there is, then the parties, the administrator and the
opposing parties have to resort to an ordinary action for a final
determination of the conflicting claims of title because the probate court
cannot do so.52
In this case, respondent Marty argues that the subject properties and the
parcel of land on which these were erected should be included in the
inventory of Rosario's estate. More so, the arrears from the rental of
these properties were later on ordered to be remitted to the
administrator of the estate grounded on the allegation that Rosario had
no other properties other than her interests in Primrose. To the Court's
mind, this holding of the probate court was in utter disregard of the
undisputed fact the subject land is registered under the Torrens system
in the name of Primrose, a third person who may be prejudiced by the
orders of the probate court. In Valera vs. Inserto:53 the Court stated:
xxx, settled is the rule that a Court of First Instance (now Regional Trial
Court), acting as a probate court, exercises but limited jurisdiction, and
thus has no power to take cognizance of and determine the issue of title
to property claimed by a third person adversely to the decedent, unless
the claimant and all the other parties having legal interest in the
property consent, expressly or impliedly, to the submission of the
question to the probate court for adjudgment, or the interests of third
persons are not thereby prejudiced, the reason for the exception being
that the question of whether or not a particular matter should be
resolved by the Court in the exercise of its general jurisdiction or of its
limited jurisdiction as a special court (e.g. probate, land registration,
etc.), is in reality not a jurisdictional but in essence of procedural one,
involving a mode of practice which may be waived.
xxxx
xxx These considerations assume greater cogency where, as here,
the Torrens title to the property is not in the decedent's names but
in others, a situation on which this Court has already had occasion
to rule.54 [Emphasis and underscoring supplied]
Thus, the probate court should have recognized the incontestability
accorded to the Torrens title of Primrose over Marty's arguments of
possible dissipation of properties. In fact, in the given setting, even
evidence purporting to support a claim of ownership has to yield to the
incontestability of a Torrens title, until after the same has been set aside
in the manner indicated in the law itself. In other words, the existence
of a Torrens title may not be discounted as a mere incident in special
proceedings for the settlement of the estate of deceased persons. Put
clearly, if a property covered by Torrens title is involved, "the
presumptive conclusiveness of such title should be given due weight,
and in the absence of strong compelling evidence to the contrary, the
holder thereof should be considered as the owner of the property in
controversy until his title is nullified or modified in an appropriate
ordinary action, particularly, when as in the case at bar, possession of
the property itself is in the persons named in the title."55
Additionally, Presidential Decree (P.D.) No. 152956 proscribes a
collateral attack on a Torrens title:
Sec. 48. Certificate not subject to collateral attack. - A certificate of title
shall not be subject to collateral attack.1âwphi1 It cannot be altered,
modified or cancelled except in a direct proceeding in accordance with
law.
In Cuizon vs. Ramolete,57 the property subject of the controversy was
duly registered under the Torrens system. To this, Court categorically
stated:
175
Having been apprised of the fact that the property in question was in the
possession of third parties and more important, covered by a transfer
certificate of title issued in the name of such third parties, the
respondent court should have denied the motion of the respondent
administrator and excluded the property in question from the
inventory of the property of the estate. It had no authority to
deprive such third persons of their possession and ownership of the
property. 58 xxx [Emphasis and underscoring supplied]

A perusal of the records of this case would show that that no

compelling evidence was ever presented to substantiate the position of
Marty that Rosario and Primrose were one and the same, justifying the
inclusion of the latter's properties in the inventory of the decedent's
properties. This has remained a vacant assertion. At most, what Rosario
owned were shares of stock in Primrose. In turn, this boldly
underscores the fact that Primrose is a separate and distinct personality
from the estate of the decedent. Inasmuch as the real properties
included in the inventory of the estate of Rosario are in the possession
of, and are registered in the name of, Primrose, Marty's claims are
bereft of any logical reason and conclusion to pierce the veil of
corporate fiction.

Fourth. The probate court in this case has not acquired jurisdiction over
Primrose and its properties. Piercing the veil of corporate entity applies
to determination of liability not of jurisdiction; it is basically applied
only to determine established liability. It is not available to confer on
the court a jurisdiction it has not acquired, in the first place, over a party
not impleaded in a case.59 This is so because the doctrine of piercing the
veil of corporate fiction comes to play only during the trial of the case
after the court has already acquired jurisdiction over the corporation.
Hence, before this doctrine can be even applied, based on the evidence
presented, it is imperative that the court must first have jurisdiction over
the corporation.60

Hence, a corporation not impleaded in a suit cannot be subject to the

court's process of piercing the veil of its corporate fiction. Resultantly,
any proceedings taken against the corporation and its properties would
infringe on its right to due process.

In the case at bench, the probate court applied the doctrine of piercing
the corporate veil ratiocinating that Rosario had no other properties that
comprise her estate other than her shares in Primrose. Although the
probate court's intention to protect the decedent's shares of stock in
Primrose from dissipation is laudable, it is still an error to order the
corporation's tenants to remit their rental payments to the estate of
Rosario.

Considering the above disquisition, the Court holds that a permanent

and final injunction is in order in accordance with Section 9, Rule 58 of
the Rules of Court which provides that "[i]f after the trial of the action
it appears that the applicant is entitled to have the act or acts
complained of permanently enjoined, the court shall grant a final
injunction perpetually restraining the party or person enjoined from the
commission or continuance of the act or acts or confirming the
preliminary mandatory injunction." Undoubtedly, Primrose stands to
suffer an irreparable injury from the subject order of the probate court.

WHEREFORE, the petition is GRANTED. The Temporary

Restraining Order, dated June 14, 2013, is hereby
made PERMANENT, effective immediately. The Regional Trial
Court, Branch 6, Tacloban City, is ENJOINED from enforcing and
implementing its January 20, 2011 and June 10, 2011 Orders, insofar as
the corporate properties of Primrose Development Corporation are
concerned, to avert irreparable damage to a corporate entity, separate
and distinct from the Estate of Rosario Guy-Juco Villasin Casilan.

SO ORDERED.

176