A.M. No. RTJ-07-2076               October 12, 2010 a.) A.M. No.

RTJ-07-2076
OFFICE OF THE COURT ADMINISTRATOR, Complainant, On November 27, 1995, Ruperto Pizarro y Bruno (accused) was charged with Violation of Presidential
vs. Decree No. 1866 in an information filed with the RTC, Branch 53, Rosales, Pangasinan and docketed
JUDGE ALBERTO L. LERMA, Respondent. as Criminal Case No. 3639-R.4 Since accused was already detained at the Quezon City Jail due to the
x - - - - - - - - - - - - - - - - - - - - - - -x pendency of another criminal case (Criminal Case No. Q-95-64130-31) filed against him. The court
A.M. No. RTJ-07-2077 ordered that all notices of hearings and proceedings in Criminal Case No. 3639-R be forwarded to the
ATTY. LOURDES A. ONA, Complainant, Jail Warden of the Quezon City Jail.5 Subsequently, in a letter dated March 25, 1998,6 Officer-in-
vs. Charge/City Warden Arnold Buenacosa of the Quezon City Jail informed Judge Teodorico Alfonzo B.
JUDGE ALBERTO L. LERMA, Respondent. Bauzon (Judge Bauzon), RTC of Rosales, Pangasinan, that accused was transferred to the Bureau of
x - - - - - - - - - - - - - - - - - - - - - - -x Corrections in Muntinlupa City on March 21, 1998 in compliance with the commitment order and
A.M. No. RTJ-07-2078 decision in Criminal Case No. Q-95-64130-31 of the RTC, Branch 82, Quezon City.
JOSE MARI L. DUARTE, Complainant, The Supreme Court, in a resolution7 dated June 30, 1998, directed (1) the Clerk of Court of the RTC,
vs. Branch 53, Rosales, Pangasinan, to forward the records of Criminal Case No. 3639-R to the Executive
JUDGE ALBERTO L. LERMA, Respondent. Judge, RTC, Muntinlupa City, for appropriate action; (2) the Executive Judge, RTC, Muntinlupa City,
x - - - - - - - - - - - - - - - - - - - - - - -x to raffle the case among the judges to arraign the accused and consequently take his testimony; and (3)
A.M. No. RTJ-07-2079 the Clerk of Court, RTC, Muntinlupa City, to return the records to the RTC, Branch 53, Rosales,
RET. GENERAL MELITON D. GOYENA, Complainant, Pangasinan, for the continuation of the proceedings.
vs. Pursuant to the Supreme Court resolution, Criminal Case No. 3639-R8 was raffled to RTC, Branch 256,
JUDGE ALBERTO L. LERMA, Respondent. Muntinlupa City, presided by respondent judge. Accused was arraigned on September 29, 1998.
x - - - - - - - - - - - - - - - - - - - - - - -x Thereafter, respondent judge proceeded to receive the evidence for the prosecution. On February 7,
A.M. No. RTJ-07-2080 2003, the prosecution formally offered its exhibits, but the firearm subject of the information was not
OFFICE OF THE COURT ADMINISTRATOR, Complainant, included in the formal offer. On June 27, 2005, the accused, through Atty. Abelardo D. Tomas of the
vs. Public Attorney’s Office (PAO), filed a motion for leave of court to file demurrer to prosecution’s
JUDGE ALBERTO L. LERMA, Respondent. evidence.9 Respondent judge granted the said motion on July 26, 2005.10 On November 8, 2005, Atty.
DECISION Rodney Magbanua of the PAO filed a demurrer to prosecution’s evidence,11 contending that, without
PER CURIAM: the subject firearm, the prosecution failed to prove an essential element of the offense. On February 28,
Five (5) administrative cases were filed with the Office of the Court Administrator (OCA) against 2007, respondent judge issued an order, granting the demurrer to prosecution’s evidence and
Judge Alberto L. Lerma (respondent judge) of the Regional Trial Court (RTC), Branch 256, dismissing the case for insufficiency of evidence. 12
Muntinlupa City, for violating Supreme Court rules, directives, and circulars, for making untruthful In a memorandum13 dated September 24, 2007, the OCA charged respondent judge with exceeding his
statements in his certificates of service, for gross ignorance of the law and/or gross negligence, for authority under the Supreme Court resolution dated June 30, 1998 in A.M. No. 98-6-179-RTC.
delay in rendering an order, for abusing judicial authority and discretion, and for serious irregularity. According to the OCA, the authority given to respondent judge under the resolution was clearly limited
In a memorandum1 dated September 24, 2007, embodying the report and recommendation of the OCA, to the arraignment of the accused and the taking of his testimony; it did not authorize respondent judge
then Court Administrator Christopher O. Lock (Court Administrator Lock) referred to then Chief to decide the merits of the case. The OCA contended that the act of respondent judge constituted
Justice Reynato S. Puno (Chief Justice Puno) the five administrative cases filed against respondent violation of a Supreme Court directive, a less serious offense, under Section 9(4), Rule 140, Revised
judge, to wit: a) Administrative Matter No. 98-6-179-RTC (Re: Request for transfer of Rules of Court.
arraignment/trial of Criminal Case No. 3639-R); b) OCA IPI No. 07-2644-RTJ ([Ret.] General Meliton In his comment dated November 16, 2007, respondent judge asserted that there was neither a conscious
D. Goyena v. Judge Alberto L. Lerma); c) OCA IPI No. 07-2643-RTJ (Jose Mari L. Duarte v. Judge nor a deliberate intent on his part to disobey any directive of the Supreme Court when he granted the
Alberto L. Lerma); d) OCA IPI No. 07-2639-RTJ (Atty. Lourdes A. Ona v. Judge Alberto L. Lerma); demurrer to evidence filed by the accused in Criminal Case No. 3639-R. He claimed that, through
and e) OCA IPI No. 07-2654-RTJ (Office of the Court Administrator v. Judge Alberto L. Lerma). inadvertence, he was not able to recall the limits of the referral made to him, and stressed that he ruled
Per resolution2 of the Supreme Court En Banc dated September 25, 2007, the foregoing cases were on the merits of the case in a way not tainted with fraud, dishonesty, or corruption. He emphasized that
respectively redocketed as regular administrative cases, as follows: A.M. Nos. RTJ-07-2076, RTJ-07- he acted on the demurrer to evidence because of the inadequacy of the evidence for the prosecution and
2079, RTJ-07-2078, RTJ-07-2077, and RTJ-07-2080. because of the failure of the latter to object to the demurrer. He maintained that it would have been
Thereafter, the cases were referred to an Investigating Justice3 of the Court of Appeals (CA) for wrong for him to add to the penalty already being served by the accused when there was no evidence to
investigation and recommendation. warrant the detention of the latter for the unproved offense.14
We shall discuss the cases individually, taking into account their peculiar factual surroundings and the Under Section 9(4), Rule 140, Revised Rules of Court, failure to obey the Court’s resolution is a less
findings and recommendations of the Investigating Justice. serious offense that carries a penalty of suspension from office without salary and other benefits for not
less than one (1) month or more than three (3) months, or a fine of more than ₱10,000.00 but not With the exception of May 17, 2001, during which respondent judge allegedly played nine (9) holes of
exceeding ₱20,000.00. golf, Godofredo stated in his letter that the former played eighteen (18) holes of golf on all the
The Investigating Justice recommends that a fine of ₱15,000.00 be imposed upon respondent, based on aforestated dates.
the following findings: In another letter18 dated September 3, 2007, Hirofumi Hotta (Hirofumi), operations manager of TAT
In criminal actions, it is a fundamental rule that venue is jurisdictional. The place where the crime was Filipinas Golf Club (Tat Filipinas), in answer to an inquiry made by Court Administrator Lock, stated
committed determines not only the venue of the action but is an essential element of jurisdiction. Thus, that respondent judge visited the said golf club and appeared to have played golf there on the following
a court cannot exercise jurisdiction over a person charged with an offense committed outside the dates – all Thursdays – and time:
limited territory. Furthermore, the jurisdiction of a court over a criminal case is determined by the
allegations in the complaint or information.15
Date Time
The demurrer to evidence filed by the accused cited the accusatory portion of the information which
charged him with unlawful possession of a caliber .30 U.S. carbine with two magazines and twenty- April 14, 2005 1:30 P.M.
five (25) rounds of ammunition. The information clearly stated that the accused possessed the carbine,
magazines, and ammunitions in Barangay Cabalaongan Sur, Municipality of Rosales, Province of April 28, 2005 1:30 P.M.
Pangasinan. Had respondent judge exercised a moderate degree of caution before resolving the
August 18, 2005 1:30 P.M.
demurrer to evidence, a mere perusal of the records would have reminded him that his court was only
authorized to arraign the accused, to receive the evidence in the said case, and to return the records of August 25, 2005 1:30 P.M.
the case to the RTC, Branch 53, Rosales, Pangasinan for continuation of the proceedings. In every
case, a judge shall endeavor diligently to ascertain the facts.16 November 17, 2005 1:30 P.M.
Respondent judge was found wanting in the diligence required of him. We agree with the Investigating November 24, 2005 1:30 P.M.
Justice in finding respondent judge guilty of violating a Supreme Court directive, and impose upon him
a fine of ₱15,000.00. December 15, 2005 1:30 P.M.
b.) A.M. No. RTJ-07-2080
In a letter17 dated August 28, 2007, Godofredo R. Galindez, Jr., (Godofredo), president of the Alabang January 26, 2006 1:30 P.M.
Country Club, Inc. (Alabang Country Club), in response to the letter dated August 21, 2007 of Court February 9, 2006 1:30 P.M.
Administrator Lock, stated that respondent judge played golf at the Alabang Country Club on the
following dates and tee-off time: March 2, 2006 1:30 P.M.
March 23, 2006 1:30 P.M.
Date Tee off-time
April 6, 2006 1:30 P.M.
April 8, 2000 12:00 P.M.
April 27, 2006 1:30 P.M.
July 21, 2000 1:08 P.M.
June 15, 2006 1:30 P.M.
August 4, 2000 1:20 P.M.
December 14, 2006 1:30 P.M.
November 28, 2000 10:00 A.M.
May 17, 2001 3:05 P.M. According to the OCA, its records in the Office of the Administrative Services show that respondent
judge did not declare his absences on July 21, 2000, August 4, 2000, March 5, 2002, February 12,
September 29, 2001 12:56 P.M. 2004, and February 28, 2005, during which he reportedly played golf at the Alabang Country Club.
March 5, 2002 1:00 P.M. Further, in a certification19 dated September 5, 2007, Hermogena F. Bayani (Hermogena), Supreme
Court Chief Judicial Staff Officer, Leave Division, OCA, stated that respondent judge did not file any
June 19, 2002 7:12 A.M. application for a leave of absence on all the dates mentioned by Hirofumi in his letter dated September
3, 2007. These constituted violations of Supreme Court Memorandum Order dated November 19,
February 12, 2004 1:35 P.M. 1973, Administrative Circular No. 3-99 dated January 15, 1999, and Administrative Circular No. 5
February 28, 2005 10:41 A.M. dated October 4, 1988.20
The OCA asserted that on the days that respondent judge played golf, he was lost to the judiciary for
half the working/session hours on those days, positing that this is not merely truancy but also
dishonesty and falsification of certificates of service.
Respondent judge, in his comment, countered that contrary to the allegations of the OCA, he only
played golf thrice in 2000, once in 2001, twice in 2002, six (6) times in 2005, and five (5) times in
2006 – a total of eighteen (18) times in six years, or at the average of three (3) times a year. He argued
that his playing golf 18 times in six years, or thrice a year, could not be reasonably characterized as
habitual to the extent that it jeopardized the discharge of his functions as a judge. He alleged that since
he shared his courtroom with the other judges in Muntinlupa, he only played golf on days when no
other place was available for him to carry out his official functions. Likewise, he explained that, in
1996, his physician advised him to exercise more vigorously after he was diagnosed with diabetes and
hypertension. Respondent judge also stressed that he had never missed a day in hearing cases pending
in his sala.21
In the hearing conducted by the Investigating Justice on December 4, 2007, the OCA presented
Godofredo, Hirofumi, and Sheila Aquino as witnesses.
Godofredo testified that the dates and time when respondent judge played golf at the Alabang Country
Club, as mentioned in his letter, are based on the logbook entries made by the starter in the country
club. A starter, explained Godofredo, is a person who records in the logbook the names of the
individuals who play in the golf course. The starter may be the player himself or a member who brings
in guests to play golf.
On cross-examination, Godofredo admitted that he is not the custodian of the logbook; that he is
neither the starter nor the person who wrote the entries in the logbook; and that he does not recognize
in whose handwriting the entries were made.
Hirofumi, the operations manager of TAT Filipinas, testified that Aquino, the front desk receptionist in
the golf club, made the listing of the respective dates and time when respondent judge played at TAT
Filipinas based on the data stored in their office computer.
Aquino, who had been employed by the company for fifteen (15) years, and had been working as its
front desk receptionist for six (6) years, testified that she saw respondent judge sign the registered
member forms at the golf club prior to playing golf.
The Investigating Justice found as insufficient the evidence that the OCA presented to show that
respondent judge played golf at the Alabang Country Club on the dates alleged, but found substantial
evidence that respondent judge played golf at TAT Filipinas on the dates and time indicated in
Hirofumi’s letter dated September 3, 2007.
The testimony of Aquino, along with the certification issued by Hermogena, that respondent judge did
not file any leave of absence on the dates indicated in Hirofumi’s letter, indubitably established that
respondent judge violated Supreme Court Memorandum Order dated November 19, 1973,
Administrative Circular No. 3-99 dated January 15, 1999, and Administrative Circular No. 5 dated
October 4, 1988.
Supreme Court Memorandum Order dated November 19, 1973 provides for the observance by judges,
among other officials and employees in the judiciary, of a five-day forty-hour week schedule which
shall be from 8:00 a.m. to 12:00 p.m. and from 12:30 p.m. to 4:30 p.m. from Mondays to Fridays.
Violation of Supreme Court rules, directives, and circulars, and making untruthful statements in the
certificate of service are considered less serious charges under Section 9, Rule 140 of the Rules of
Court. Under Section 11(B) of Rule 140, these acts may be punished by suspension from office
without salary and other benefits for not less than one (1) month or more than three (3) months, or a
fine of more than ₱10,000.00 but not exceeding ₱20,000.00.
On the basis of the foregoing findings, we adopt the recommendation of the Investigating Justice that,
in this administrative case, a fine of ₱15,000.00 be imposed upon respondent judge.
c.) A.M. No. RTJ-07-2077
On January 24, 1995, the RTC, Branch 142, Makati City, rendered a decision in Civil Case No. 90-
659, entitled Alexander Van Twest v. Gloria A. Anacleto and/or International Corporate Bank,
ordering defendant bank (Interbank) or its successors-in-interest to release in favor of plaintiff
Alexander Van Twest (Van Twest) the entire proceeds of Interbank Foreign Currency Trust Deposit
(FCTD) No. 39156 in the amount of Deutsch Mark (DM) 260,000.00, including accrued interest and
other earnings. The decision also directed defendant Gloria Anacleto to return to plaintiff the sum of
DM 9,777.37 with interest thereon. The court ordered the defendants, jointly and severally, to pay
plaintiff ₱500,000.00 as moral damages, ₱250,000.00 as exemplary damages, ₱200,000.00 as
attorney’s fees, and the costs of suit.22 However, even before the decision was rendered, Van Twest had
disappeared and was believed to have been kidnapped and killed.23
Subsequently, Atty. Ernesto V. Perez (Atty. Perez), representing Van Twest, filed a Motion for
Execution of Decision. In the motion, Atty. Perez informed the RTC of Makati City that, on October
30, 2006, the RTC, Branch 256, Muntinlupa City, with respondent judge presiding, granted the petition
to appoint the former as administrator of the properties or estate of absentee Van Twest in Special
Proceeding No. 97-045, entitled In the Matter of the Petition to Appoint an Administrator for the Estate
of Absentee Alexander Van Twest a.k.a. Eugene Alexander Van West.24 On January 27, 2007, the
RTC Branch 142, Makati City, granted the motion for execution.25
Union Bank of the Philippines (Union Bank) filed a Manifestation and Urgent Ex-Parte Motion dated
May 23, 2007 in Special Proceeding No. 97-045, praying that the exercise by Atty. Perez of powers as
administrator of absentee Van Twest be held in abeyance until the said manifestation and motion is
heard. Because respondent judge was on official leave at the time of the filing of the Manifestation and
Urgent Ex-Parte Motion, Judge Philip A. Aguinaldo, pairing judge of RTC Branch 256, Muntinlupa
City, acted on the same, and, in an order dated May 28, 2007, granted Union Bank’s urgent ex-parte
motion.
Union Bank thereafter filed an Urgent Manifestation and Motion to Recall Writ of
Execution/Garnishment in Civil Case No. 90-659, citing, in support thereof, the order dated May 28,
2007 issued by Judge Aguinaldo in Special Proceeding No. 97-045.
On June 1, 2007, Atty. Perez filed with the Muntinlupa RTC an Omnibus Motion: 1) To Lift or Set
Aside Pairing Judge’s Order of May 28, 2007 for having been issued without jurisdiction, grave abuse
of discretion and/or violation of due process of law; 2) To Cite Union Bank of the Philippines’ counsel
for Indirect Contempt.
At the hearing of the omnibus motion on June 6, 2007, respondent judge ordered Atty. Lourdes A. Ona
(Atty. Ona), counsel for Union Bank, to file her Opposition and/or Comment to the said Motion within
10 days. Atty. Perez was given the same period from receipt of the Opposition and/or Comment to file
his Reply thereto, if necessary, and thereafter, the matter would be deemed submitted for resolution.
On the same day, however, respondent judge issued another order bearing the same date, ruling that the
bank had not shown any legal basis to set aside the court’s decision of October 30, 2006, or to suspend
the Letters of Administration issued to Atty. Perez pursuant thereto. The order then concluded that
Atty. Perez may exercise all the powers granted to him as Administrator of the absentee Van Twest
until further orders of the court.
In a letter dated July 23, 2007, addressed to the OCA, complainant alleged that respondent judge’s
issuance of the second order dated June 6, 2007 was irregular, in light of the following: 1) At the
hearing held on June 6, 2007, the omnibus motion filed by Atty. Perez was deemed submitted for
resolution only after the complainant shall have filed her comment/opposition thereto or until the 10-
day period shall have expired; 2) The issuance of the second order dated June 6, 2007 was secretly
railroaded to give Atty. Perez a ground to oppose Union Bank’s Urgent Manifestation and Motion to
Recall Writ of Execution/Garnishment filed with the RTC, Branch 142, Makati City, in time for its
hearing originally set on June 8, 2007; 3) Even the staff of respondent judge did not become aware of
the second June 6, 2007 order until much later, since respondent judge never furnished complainant
with a copy thereof until the latter made inquiries regarding the same; and 4) The contents of the
second order dated June 6, 2007 contradicted the first order and rendered the pending incident moot
and academic.
Respondent judge, in his comment, denied the charge and argued that the same should be dismissed.
The complainant, according to respondent judge, should instead be meted disciplinary penalties as a
member of the bar.
Notwithstanding the recommendation of the Investigating Justice, the Court finds that the actions of
respondent judge constitute gross negligence and/or gross ignorance of the law.
We have repeatedly held that to warrant a finding of gross ignorance of the law, it must be shown that
the error is "so gross and patent as to produce an inference of bad faith."26 Gross negligence refers to
negligence characterized by want of even slight care, acting or omitting to act in a situation where
there is a duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to
consequences insofar as other persons may be affected. It is the omission of that care which even
inattentive and thoughtless men never fail to take on their own property. In cases involving public
officials, there is gross negligence when a breach of duty is flagrant and palpable.27
In the instant case, the issuance by respondent of divergent orders raises serious questions of
impropriety that taint respondent judge’s credibility, probity, and integrity. Coupled with the
clandestine issuance of the second order — where the Union Bank counsel and even the judge’s own
staff were left completely in the dark — the action of respondent judge gives rise to an inference of bad
faith. Indeed, we have ample reason to believe — as Atty. Ona posits — that the secretly-issued second
order was really intended to give Atty. Perez the ammunition to oppose Union Bank’s Urgent
Manifestation and Motion to Recall Writ of Execution/Garnishment which was to be heard by the RTC
of Makati City. Under the circumstances, the breach committed by respondent can be characterized as
flagrant and palpable.
This action of respondent judge violates Section 8 of Rule 140, and carries the penalty of dismissal
from the service or suspension from office for more than three (3) months but not exceeding six (6)
months, or a fine of ₱20,000.00 but not exceeding ₱40,000.00.
For this violation, we impose upon respondent judge the penalty of dismissal from the service, with
forfeiture of all benefits, except earned leave credits, and perpetual disqualification from
reemployment in the government service, including government-owned and controlled corporations.
d) A.M. No. RTJ-07-2078
Jose Mari L. Duarte (complainant) is one of the defendants in Civil Case No. 2003-433, entitled
"Eugene T. Mateo v. The Board of Governors of Ayala Alabang Village Association: Paolo V.
Castano, Constantino A. Marcaida, Ruben P. Baes, Eric Yutuc, Roberto Santiago, Beatriz "Bettina" H.
Pou, Edilberto Uichanco, Salvador S. Arceo, Jr., Benjamin Narciso, Guy L. Romualdez, and Jose Mari
L. Duarte," for Declaration of the General Membership Meeting and Election of the Ayala Alabang
Village Association (AAVA) as void ab initio, with prayer for the Issuance of a Preliminary Injunction
and/or a Temporary Restraining Order (TRO) and Status Quo Order. Eugene T. Mateo filed the case
on July 29, 2003 with the RTC, Muntinlupa City, and it was eventually raffled to the RTC, Branch
256, Muntinlupa City, presided over by respondent judge.28
On August 15, 2003, defendants Salvador S. Arceo, Jr. (Arceo) and Benjamin Narciso (Narciso) filed
their answer with affirmative defenses and counterclaims, while all the other defendants filed a motion
to dismiss. In moving for the dismissal of the case, all defendants invoked the trial court’s lack of
jurisdiction over the case and plaintiff’s lack of cause of action. On September 2, 2003, plaintiff filed
his opposition to motion to dismiss with motion to declare defendants in default. In an order dated
September 12, 2003, respondent judge denied defendants’ motion to dismiss and plaintiff’s motion to
declare defendants in default, and set for hearing plaintiff’s application for the issuance of a TRO.
Respondent judge eventually denied the prayer of plaintiff for the issuance of a TRO on September 26,
2003.
On November 25, 2003, respondent judge rendered a decision in favor of plaintiff, declaring the
AAVA’s general membership meeting held on June 15, 2003 void ab initio, and ordering that the
status quo of the board’s composition prior to the proceedings of June 15, 2003 be maintained. The
respondent judge also enjoined defendants Arceo, Narciso, Guy L. Romualdez (Romualdez) and Jose
Mari L. Duarte from further exercising the functions of the office they respectively hold. He directed
the holding of another election of the AAVA board, and ordered the defendants to pay jointly and
severally the amount of ₱100,000.00 as and by way of attorney’s fees. The respondent judge dismissed
the defendants’ counterclaim.
The aggrieved complainant, together with all the other defendants, appealed to the CA from the above-
cited decision. On December 10, 2003, plaintiff filed with the RTC a petition to direct defendants to
show cause why they should not be cited and thereafter punished for indirect contempt of court
(petition for indirect contempt) for their alleged defiance of respondent judge’s decision dated
November 25, 2003, as shown by their continued performance of duties as governors of Ayala Alabang
Village, despite receipt of a copy of the said decision.
On July 1, 2004, respondent judge issued an order declaring complainant, Arceo and Romualdez,
guilty of indirect contempt, and ordering each of them to pay a fine in the amount of ₱30,000.00.
Unperturbed, complainant and his co-defendants Arceo and Romualdez moved for reconsideration of
the July 1, 2004 order. On September 24, 2004, respondent judge granted their motion for
reconsideration, and reversed and set aside his order dated July 1, 2004.
On June 29, 2007, the Special Sixteenth Division of the CA issued a resolution, ruling that the lower
court should have dismissed the plaintiff-appellee’s Complaint for Declaration of the General
Membership Meeting and Election of the AAVA as void ab initio with prayer for the Issuance of a
Preliminary Injunction and/or TRO and Status Quo Order because it is the Housing and Land Use
Regulatory Board that has jurisdiction over the dispute.
On August 23, 2007, Mateo filed a complaint with the Supreme Court, contending that respondent
judge did not have the judicial authority to hear and decide the issues involved in Civil Case No. 2003-
433 for want of jurisdiction. According to complainant, this was brought to the attention of respondent
judge, but the latter, being grossly ignorant of existing laws and rules, if not completely insolent of the
same, and with grave abuse of discretion, took cognizance of the case.
In his comment, respondent judge argued that the error he allegedly committed could be corrected by
an available judicial remedy. He maintained that if he erroneously assumed jurisdiction over Civil Case
No. 2003-433, the proper recourse available to complainant was not an administrative complaint, but a
petition for certiorari under Rule 65 of the Rules of Court.
The Investigating Justice recommended that the instant administrative case against respondent judge be
dismissed. This Court takes the opposite view.
It is true that to constitute gross ignorance of the law, it is not enough that the subject decision, order,
or actuation of the judge in the performance of his official duties is contrary to existing law and
jurisprudence but, most importantly, he must be moved by bad faith, fraud, dishonesty, or corruption.29
However, when the law is so elementary — and the matter of jurisdiction is an elementary principle
that judges should be knowledgeable of — not to be aware of it constitutes gross ignorance of the law.
Judges are expected to exhibit more than just cursory acquaintance with statutes and procedural rules.
They are expected to keep abreast of our laws and the changes therein as well as with the latest
decisions of the Supreme Court. They owe it to the public to be legally knowledgeable, for ignorance
of the law is the mainspring of injustice. Judicial competence requires no less. It is a truism that the life
chosen by a judge as a dispenser of justice is demanding. By virtue of the delicate position which he
occupies in society, he is duty bound to be the embodiment of competence and integrity.30
On the matter of the order finding complainant guilty of indirect contempt, we also find the action of
respondent judge sadly wanting. Section 4, Rule 71 of the same Rules provides:
Sec. 4. How proceedings commenced. – Proceedings for indirect contempt may be initiated motu
proprio by the court against which the contempt was committed by an order or any other formal charge
requiring the respondent to show cause why he should not be punished for contempt.
In all other cases, charges for indirect contempt shall be commenced by a verified petition with
supporting particulars and certified true copies of documents or papers involved therein, and upon full
compliance with the requirements for filing initiatory pleadings for civil actions in the court concerned.
If the contempt charges arose out of or are related to a principal action pending in the court, the
petition for contempt shall allege that fact but said petition shall be docketed, heard and
decided separately, unless the court in its discretion orders the consolidation of the contempt charge
and the principal action for joint hearing and decision.31
The Rules are unequivocal. Indirect contempt proceedings may be initiated only in two ways: (1) motu
proprio by the court; or (2) through a verified petition and upon compliance with the requirements for
initiatory pleadings. The procedural requirements are mandatory considering that contempt
proceedings against a person are treated as criminal in nature.32 Conviction cannot be had merely on
the basis of written pleadings.33
The records do not indicate that complainant was afforded an opportunity to rebut the charges against
him. Respondent judge should have conducted a hearing in order to provide complainant the
opportunity to adduce before the court documentary or testimonial evidence in his behalf. The hearing
also allows the court a more thorough evaluation of the circumstances surrounding the case, including
the chance to observe the accused present his side in open court and subject his defense to interrogation
from the complainants or from the court itself.34
It must be remembered that the power to punish for contempt should be used sparingly with caution,
restraint, judiciousness, deliberation, and due regard to the provisions of the law and the constitutional
rights of the individual.35 In this respect, respondent judge failed to measure up to the standards
demanded of member of the judiciary.
As already mentioned above, gross ignorance of the law or procedure is classified as a serious charge
under Section 8(9), Rule 140, Revised Rules of Court, and a respondent found guilty of serious charge
may be punished by: a) dismissal from the service, forfeiture of all or part of the benefits as the Court
may determine, and disqualification from reinstatement or appointment to any public office, including
government-owned or controlled corporations, provided, however, that the forfeiture of benefits shall
in no case include accrued leave credits; b) suspension from office without salary and other benefits for
more than three (3) months but not exceeding six (6) months; or c) a fine of more than ₱20,000.00 but
not exceeding ₱40,000.00.
In this case, we find respondent judge guilty of gross ignorance of the law, and impose upon him a fine
of ₱40,000.00.
e.) A.M. No. RTJ-07-2079
On January 19, 2006, Bennie Cuason (Cuason) was charged before the RTC, Muntinlupa City, with
estafa under Article 315, paragraph 2(a) of the Revised Penal Code, for defrauding Brigadier General
Meliton D. Goyena (Gen. Goyena) (Ret.) by convincing the latter to invest, entrust, and/or deliver the
amount of Twenty Million Pesos (₱20,000,000.00) on the promise that the former would return the
investment with interest, plus two (2) Condominium Certificates of Title over residential units on the
20st floor at Tower B of Diamond Bay Towers Condominium, with a total value of Nine Million Five
Hundred Ninety-Two Thousand Pesos (₱9,592,000.00). Gen. Goyena gave the amount of Twenty
Million Pesos (₱20,000,000.00) to the accused and received two (2) condominium certificates of title
with numbers 6893 and 6894. After verification, complainant found that the condominium units were
non-existent, or had not yet been constructed.
The case was docketed as Criminal Case No. 06-179 and was raffled to RTC, Branch 204, Muntinlupa
City, presided over by Judge Juanita T. Guerrero (Judge Guerrero).
On February 14, 2006, accused Cuason, through counsel, filed with the RTC an entry of appearance
with a plea to determine whether or not probable cause exists for the purpose of issuance of a warrant
of arrest. Complainant, also through counsel, subsequently filed a Motion to deny the application for
judicial determination of probable cause and to cite accused in contempt of this Honorable Court on
the ground of forum shopping. On April 4, 2006, accused Cuason filed his comment and/or opposition
thereto, and on April 10, 2006, accused Cuason filed a supplemental comment and/or opposition to the
motion.
With the designation of RTC, Branch 204, Muntinlupa City, as a special court for drug cases on May
2, 2006, the case was re-raffled to the sala of respondent judge. After hearing the respective arguments
of the parties, respondent judge issued an omnibus order dated September 4, 2006, dismissing Criminal
Case No. 06-179. The pertinent portions of the omnibus order read as follows:
On this first issue, this Court, after a careful scrutiny of the arguments and evidence of both parties,
believes that there was payment already made as to the principal obligation as admitted by the
complainant in his affidavit dated September 20, 2005 (page 3, par. 17) and what is being left is the
payment of interest which, under the premises, is in [the] form of condominium certificates. So also,
while the complainant questions the authenticity of those certificates as well as the existence of [the]
condominium units subject thereof, accused, indubitably, was able to satisfy this Court as to the
authenticity of the questioned certificates and the existence of the units by showing proofs to that
effect.
On September 6, 2006, Gen. Goyena filed with the RTC a very urgent manifestation with motion for
the court to conduct ocular inspection, and on September 22, 2006, he filed an omnibus motion for
reconsideration, ocular inspection and inhibition, anchored on the following grounds: 1) as correctly
found by the Office of the City Prosecutor of Muntinlupa City, the two (2) condominium units used in
partly settling the liabilities of the accused to the private complainant do not exist – a fact that should
have been established by now, if only the court allowed the ocular inspection prayed for; 2) the court
overlooked the pronouncement in the very case it has relied on, that "Allado and Salonga constitute
exceptions to the general rule and may be invoked only if similar circumstances are clearly shown to
exist"; and 3) the order dismissing the case was improperly or irregularly issued.
On September 18, 2006, complainant filed a letter-complaint addressed to then Supreme Court Chief
Justice Artemio Panganiban, charging respondent judge with abuse of judicial authority and discretion,
serious irregularity, and gross ignorance of the law, allegedly shown by the latter’s act of willfully and
knowingly reversing the well-grounded finding of probable cause made by the Office of the City
Prosecutor of Muntinlupa City.
Thereafter, respondent judge issued an order dated October 4, 2006, inhibiting himself from sitting in
Criminal Case No. 06-179, and directing that the records of the case be forwarded to the Office of the
Clerk of Court of the RTC, Muntinlupa City, for appropriate re-raffling. The case was eventually re-
raffled to the RTC, Branch 206, Muntinlupa City, presided over by Judge Patricia Manalastas–de Leon
(Judge Manalastas-De Leon).
In his memorandum dated September 24, 2007, Court Administrator Lock found ample basis to charge
respondent judge with delay in rendering an order and for abuse of judicial discretion and authority
The OCA stated that Criminal Case No. 06-179 was assigned to respondent judge on May 2, 2006, a
fact which the latter did not dispute. More than a month later, or on June 19, 2006, respondent judge
set accused Cuason’s motion to determine whether or not a probable cause exists for the purpose of the
issuance of a warrant of arrest and complainant’s motion to deny application for judicial determination
of probable cause and to cite accused in contempt of this Honorable Court on the ground of forum
shopping for hearing on July 17, 2006. It must be stressed that accused Cuason and complainant filed
their respective motions on February 14, 2006 and on March 22, 2006, or while the case was still
pending in the sala of Judge Guerrero. After hearing the said motions on July 17, 2006, it took another
forty-eight (48) days for respondent judge to issue the omnibus order dated September 4, 2006,
dismissing the case for lack of probable cause.
In his comment dated November 23, 2007, respondent judge insists that the charge filed against him
should be dismissed.1avvphi1
This Court finds that respondent judge’s delay in the determination of probable cause clearly runs
counter to the provisions of Section 6, Rule 112 of the Revised Rules of Criminal Procedure, which
provides:
Sec. 6. When warrant of arrest may issue. – (a) By the Regional Trial Court. - Within ten (10) days
from the filing of the complaint or information, the judge shall personally evaluate the resolution of the
prosecutor and its supporting evidence. He may immediately dismiss the case if the evidence on record
clearly fails to establish probable cause. If he finds probable cause, he shall issue a warrant of arrest, or
a commitment order if the accused has already been arrested pursuant to a warrant issued by the judge
who conducted the preliminary investigation or when the complaint or information was filed pursuant
to Section 7 of this Rules. In case of doubt on the existence of probable cause, the judge may order the
prosecutor to present additional evidence within five (5) days from notice and the issue must be
resolved by the court within thirty (30) days from the filing of the complaint or information.
While respondent judge could not have ascertained the existence of probable cause for the issuance of
an arrest warrant against Cuason within ten (10) days from the filing of the complaint or information –
Criminal Case No. 06-179 having been re-raffled to his sala only on May 2, 2006 – prudence
demanded that respondent judge should have determined the existence of probable cause within ten
(10) days from July 17, 2006, the date he heard the respective arguments of the parties. This
interpretation is in keeping with the provisions of Section 6, Rule 112.
By allowing forty-eight (48) days to lapse before issuing the two-page omnibus order dated September
4, 2006, respondent judge should be held liable for undue delay in rendering an order, which is
classified as a less serious charge under Section 9(1), Rule 140 of the Rules of Court, punishable by
suspension from office without salary and other benefits for not less than one (1) month or more than
three (3) months, or a fine of more than ₱10,000.00 but not exceeding ₱20,000.00.
Furthermore, the Court agrees with the OCA that the respondent judge is guilty of abuse of judicial
discretion and authority.
The information in Criminal Case No. 06-179 clearly accuses Cuason of falsely pretending that he can
return the investment of complainant by paying cash and two (2) condominium units when in fact these
units do not exist or have not yet been constructed. The issue therefore boils down to whether or not
the condominium units exist, and the incontrovertible proof of this are the condominium units
themselves. The logical thing to do would have been to order the conduct of an ocular inspection.
Instead of an ocular inspection, respondent relied on the certificate of registration, the development
permit, the license to sell, the building permit, and the Condominium Certificate of Title ― on the
basis of which the judge ordered the dismissal of the case. It may be that an ocular inspection was
premature at the time the respondent dismissed the case because at that time the case was not yet set
for the presentation of evidence of the parties. Nevertheless, it now appears that the pieces of evidence
relied upon by the respondent do not fully support his conclusion.
Section 4, Rule 128 of the Rules of Court provides that "evidence must have such a relation to the fact
in issue as to induce belief in its existence or non-existence." "Relevancy is, therefore, determinable by
the rules of logic and human experience…Relevant evidence is any class of evidence which has
‘rational probative value’ to the issue in controversy."36 Logic and human experience teach us that the
documents relied upon by respondent do not constitute the best evidence to prove the existence or non-
existence of the condominium units. To repeat, the best evidence would have been adduced by an
ocular inspection of the units themselves.
Judge Lerma should also have exercised caution in determining the existence of probable cause. At the
very least, he should have asked the prosecutor to present additional evidence, in accordance with
Section 6, Rule 112 of the Revised Rules of Criminal Procedure or, in the alternative, to show cause
why the case should not be dismissed instead of precipitately ordering the dismissal of the case. The
circumstances required the exercise of caution considering that the case involved estafa in the
considerable amount of ₱20 Million for which the complainant paid ₱129,970.00 in docket fees before
the Office of the City Prosecutor and later ₱167,114.60 as docket fee for the filing of the Information
before the RTC.
For this particular violation, we find respondent judge guilty and impose upon him a fine of
₱21,000.00.
As an unflattering footnote to these administrative offenses, the OCA, upon the authority of the Chief
Justice, conducted a judicial audit from August 21-30, 2007 of the RTC, Branch 256, Muntinlupa. The
initial result of the audit revealed that Judge Lerma failed to decide 30 civil cases and 11 criminal cases
within the 90-day reglementary period. It also appears that 101 civil cases and 137 criminal cases
remained unacted despite the lapse of a considerable period.
Judge Lerma had previously been sanctioned by this Court. In a resolution dated September 13, 2003
in A.M. No. RTJ-03-1799, entitled Ma. Cristina Olondriz Pertierra v. Judge Alberto L. Lerma, this
Court found him liable for conduct unbecoming a judge and imposed upon him the penalty of
reprimand. In that case, Judge Lerma was found having lunch with a lawyer who has a pending case in
his sala.
The totality of all these findings underscore the fact that respondent judge’s actions served to erode the
people’s faith and confidence in the judiciary. He has been remiss in the fulfillment of the duty
imposed on all members of the bench in order to avoid any impression of impropriety to protect the
image and integrity of the judiciary.
To reiterate, officers of the court have the duty to see to it that justice is dispensed evenly and fairly.
Not only must they be honest and impartial, but they must also appear to be honest and impartial in the
dispensation of justice. Judges should make sure that their acts are circumspect and do not arouse
suspicion in the minds of the public. When they fail to do so, such acts cast doubt upon their integrity
and ultimately on the judiciary in general. 37 "Courts will only succeed in their task and mission if the
judges presiding over them are truly honorable men, competent and independent, honest and
dedicated." 38
Respondent judge failed to live up to the judiciary’s exacting standards, and this Court will not
withhold penalty when called for to uphold the people’s faith in the Judiciary.39
WHEREFORE, premises considered, the Court RULES, as follows:
1) In A.M. No. RTJ-07-2076, Judge Alberto Lerma is found GUILTY of violating a Supreme
Court directive, and we impose upon him a FINE in the total amount of FIFTEEN
THOUSAND PESOS (₱15,000.00);
2) In A.M. No. RTJ-07-2080, Judge Alberto Lerma is FINED in the total amount of FIFTEEN
THOUSAND PESOS (₱15,000.00) for violation of Supreme Court rules, directives, and
circulars, and for making untruthful statements in his certificate of service;
3) In A.M. No. RTJ-07-2077, Judge Alberto Lerma is found GUILTY of gross misconduct
and punished with the penalty of DISMISSAL from the service, with forfeiture of all benefits,
except earned leave credits, with prejudice to reemployment in any government agency or
instrumentality.
4) In A.M. No. RTJ-07-2078, we find Judge Alberto Lerma GUILTY of gross ignorance of
the law, and impose upon him a FINE of FORTY THOUSAND PESOS (₱40,000.00); and
5) In A.M. No. RTJ-07-2079, we find Judge Alberto Lerma GUILTY of grave abuse of
authority and undue delay in rendering an order, and impose upon him a FINE of TWENTY–
ONE THOUSAND PESOS (₱21,000.00).
This Decision is final and immediately executory.
G.R. No. 204289, November 22, 2017
FERNANDO MANCOL, JR., Petitioner, v. DEVELOPMENT BANK OF THE
PHILIPPINES, Respondent.
DECISION
TIJAM, J.:
Assailed in this Petition for Review on Certiorari1 is the Decision2 dated February 22, 2012 and
Resolution3 dated September 27, 2012 of the Court of Appeals (CA), Visayas Station in CA-G.R.
CEB-CV No. 03030, affirming the Orders dated June 13, 2008,4 November 4, 20085 and April 17,
20096 of the Regional Trial Court (RTC) of Calbayog City, Branch 31 in Civil Case No. 923.
Factual Antecedents
Respondent Development Bank of the Philippines (DBP), scheduled an Invitation to Bid for
Negotiated Sale on October 13, 2004 at the Mezzanine Floor, over a residential lot with a two-storey
building (subject property) covered by TCT No. 2041 located at Navarro Street, Calbayog City, and
with Tax Declaration (TD) Nos. 9901006009317 and 9901006004798 with a purchase price of
P1,326,000.9
In line with this, Fernando Mancol, Jr. (petitioner) executed a Special Power of Attorney
(SPA)10 appointing his father, Fernando Mancol, Sr. (Mancol, Sr.), to represent and negotiate, on his
behalf, the sale of the subject property. Pursuant to the SPA, Mancol, Sr. signed the Negotiated Offer
to Purchase11 and Negotiated Sale Rules and Procedures/Disposition of Assets on a First-Come First
Served Basis.12 DBP then issued an Official Receipt (O.R.) No. 344001813 dated October 13, 2004, in
the name of Fernando R. Mancol, Jr., paid by Fernando M. Mancol, Sr., in the amount of P265,200, as
initial payment for the purchase price of the subject property. During the negotiations, DBP officials
allegedly agreed, albeit verbally, to: (1) arrange and effect the transfer of title of the lot in petitioner's
name, including the payment of capital gains tax (CGT); and (2) to get rid of the occupants of the
subject property.14
Petitioner paid the balance in the amount of P1,060,800, as evidenced by O.R. No. 344045115 dated
December 10, 2004. Thereafter, DBP, through its Branch Manager Jorge B. Albarillo, executed a Deed
of Absolute Sale,16 in petitioner's favor.
On December 21, 2004, petitioner made a deposit with DBP for the payment of the CGT and
documentary stamp tax (DST) in the amount of P99,450. DBP acknowledged the deposit and issued
O.R. No. 3440537.17
Sometime in 2006, DBP reneged on its undertaking based on the oral agreement. DBP returned to the
petitioner all the pertinent documents of the sale and issued a Manager's Check (MC) No.
000095647518 in the amount of P99,450.19
In a Letter20 dated February 21, 2006, petitioner through its counsel demanded from DBP to comply
with its verbal undertaking. He returned the MC and all pertinent documents affecting the sale of the
subject property to DBP.
DBP, through its Letter21 dated April 22, 2006, disregarded the subsequent oral agreement and
reminded petitioner that DBP has no obligation to eject the occupants and to cause the transfer of title
of the lot in petitioner's name.
Meanwhile, Mancol, Sr. wrote a Letter22 dated May 15, 2006 to the Bureau of Internal Revenue (BIR)
requesting for a detailed computation of the CGT and DST with penalties and surcharges thereof
affecting the sale of the subject property. The BIR, through its Letter23 dated May 24, 2006 came out
with a detailed computation in the total of P160,700.88.
In a Letter24 dated June 2, 2006, petitioner proposed to DBP that he will facilitate the payment of the
CGT and DST but DBP should shoulder the penalties and surcharges. The proposal, however, was
turned down. As of March 7, 2007, the total amount to be paid which is necessary for the transfer of
the title in petitioner's name ballooned to P183,553.61 and counting.25
On August 24, 2006, petitioner filed a Complaint26 for damages for breach of contract against DBP
before the RTC of Calbayog City, Branch 31. He prayed that DBP be found to have breached its
obligation with petitioner; that DBP be held liable to pay the aggregate amount of P160,700.88 and
surcharges which may be imposed by the BIR at the time of payment; that DBP be ordered to pay
damages and attorney's fees; and that DBP be ordered to return the MC dated February 8, 2006 for
P99,450.
In its Answer with Counter-Claim,27 DBP alleged that the terms of the Deed of Absolute Sale stated no
condition that DBP will work on the document of transfer and to eject the occupants
thereon.28 Assuming that DBP's officials made such a promise, DBP alleged that the same would not be
possible since the petitioner did not give any money to DBP for other expenses in going to and from
Calbayog City. DBP likewise alleged that it is not the bank's policy to work for the registration of the
instrument of sale of properties.29 DBP further claimed that petitioner's unilateral act in issuing a check
to DBP does not constitute as evidence to prove that DBP assumed the responsibility of registering the
instrument of sale. By way of counterclaim, DBP averred that petitioner grossly violated the terms and
conditions of the agreement of sale.30 Petitioner failed to pay, reimburse or assume the financial
obligation consequent to the initiation and filing of the writ of possession by DBP against the
occupants. Petitioner's failure was contrary to his promise and assurance that he will pay. Petitioner did
not comply with the clear and express provisions of the Deed of Absolute Sale and of the rules and
procedures of sale on negotiation. DBP, thus, prayed that the complaint be dismissed for lack of
jurisdiction and that petitioner be ordered to assume the burden of initiating the ejectment suit and to
pay DBP damages, attorney's fees and cost of suit amounting to P200,000.
On February 20, 2007, the RTC issued an Orde31 declaring DBP in default by reason of its counsel's
failure to appear during the pre-trial and to file its pre-trial brief.
Trial ensued.
During the trial, Rodel Villanueva testified32 that he was the one commissioned or ordered by a certain
Atty. Mar De Asis (Atty. De Asis) of DBP, to go to BIR-Catbalogan, and to bring the following
documents: a check worth PhP99,450.00, the amount for the CGT, the title, the TD, and the deed of
sale.33
Mancol, Sr. testified34 that he signed the Negotiated Offer to Purchase and Negotiated Sale Rules and
Procedures/Disposition of Assets on a First-Come First Served Basis on behalf of his son, by virtue of
the SPA.35 He stated that after the execution and delivery of the Deed of Absolute Sale, DBP verbally
agreed to facilitate the transfer of the title, the payment of the CGT, and to cause the vacation of the
occupants of the house and lot. Although he admitted that the verbal agreement contradicted the
negotiated rules and agreement.36 He stated that DBP undertook to get rid of the occupants, when its
lawyer filed an Ex-Parte Motion for Issuance of a Writ of Possession37 dated January 11, 2005, which
is pending in the RTC.38
On April 14, 2008, the RTC Decision39 ruled in favor of the petitioner, and ordered DBP to return to
petitioner the amount of P99,450 deposited to it for payment of the CGT and DST; to pay the
surcharges and/or interests on the CGT and DST as may be determined by the BIR from June 12, 2005
up to the date of payment; and to pay the petitioner attorney's fees in the amount of P15,000. The RTC
likewise dismissed DBP's counterclaim.40
Thereafter, DBP moved for the reconsideration41 of the RTC's Decision. DBP alleged, among others,
that the testimonies of Villanueva and Mancol, Sr. were hearsay because their statements were based
on facts relayed to them by other people and not based on their personal knowledge.
On June 13, 2008, the RTC Order42 granted DBP's motion and dismissed petitioner's complaint.
Petitioner moved for the reconsideration43 of the June 13, 2008 Order. For the first time, petitioner
alleged that through his father, Mancol, Sr., he entered into a contemporaneous verbal agreement with
DBP. He argued that since his father was his attorney-in-fact, then his father had personal knowledge
of all transactions involving the sale of the subject property. The motion, however, was denied in the
RTC Order44 dated November 4, 2008. The RTC affirmed with modification its June 13, 2008 Order,
to read thus:
WHEREFORE, this court finds no reason to disturb its order dated June 13, 2008, subject only to a
modification that [DBP] is directed to return to the [petitioner], the total amount of P99,450.00
deposited to it for the payment of the [CGT] and [DST], with interest of six percent (6%) per
annum from December 21, 2004 until its return to the [petitioner].
SO ORDERED.45
DBP sought reconsideration46 of the RTC Order dated November 4, 2008, which however, was denied
by the RTC in its Order47 dated April 17, 2009. The RTC ruled that DBP has waived its right to
question the return of P99,450 to the petitioner since DBP failed to refute such an issue in the RTC
Decision dated April 14, 2008.
Both petitioner48 and DBP49 appealed the RTC Order dated June 13, 2008 and November 4, 2008,
respectively, with the CA.
On February 22, 2012, the CA in its Decision,50 denied both appeals, the dispositive portion of which
reads, thus:
WHEREFORE, in view of the foregoing premises, the appeals filed in this case are hereby DENIED.
The assailed Orders dated June 13, 2008, November 4, 2008 and April 17, 2009 of the [RTC], Branch
31 of Calbayog City in Civil Case No. 923 are AFFIRMED. Costs to be shouldered equally by both
parties.
SO ORDERED.51
Thereafter, petitioner filed a Motion for Partial Reconsideration, 52 while DBP filed a Motion for
Reconsideration,53 seeking the reversal of the CA Decision dated February 22, 2012. Both motions,
however, were denied in the CA Resolution54 dated September 27, 2012.
Henceforth, only the petitioner filed the instant appeal anchored on the following arguments:
I. THE TESTIMONIES OF [PETITIONER'S] WITNESSES, [VILLANUEVA] AND
[MANCOL, SR.] ARE BASED ON PERSONAL KNOWLEDGE AND NOT
HEARSAY EVIDENCE, AND THAT THEY SUFFICIENTLY ESTABLISHED
THE EXISTENCE AND VALIDITY OF A SUBSEQUENT ORAL AGREEMENT
BETWEEN [PETITIONER] AND DBP TO (1) ARRANGE AND EFFECT THE
TRANSFER OF THE TORRENS TITLE IN THE NAME OF [PETITIONER],
INCLUDING PAYMENT OF [CGT] AND [DSTs], AND (2) TO GET RID OF
THE OCCUPANTS IN THE SUBJECT PROPERTY[;]
II. UNDISPUTED RELEVANT AND MATERIAL EVIDENCE ON RECORD
ESTABLISHED THE EXISTENCE AND VALIDITY OF THE SUBSEQUENT
 ORAL AGREEMENT BETWEEN MANCOL, JR. AND DBP, AND THAT TO
IGNORE THEM IS TO SANCTION VIOLATION OF MANCOL. JR.'S DUE
PROCESS RIGHTS[; AND]
III. [PETITIONER] IS ENTITLED TO THE PAYMENT OF MORAL AND
EXEMPLARY DAMAGES, ATTORNEY'S FEES AND COSTS OF SUIT.55
The petition fails.
The above assignment of errors make it evident that the only issue involved in this appeal is one of
fact: whether or not the testimonies of petitioner's witnesses, Villanueva and Mancol, Sr., should be
given probative value to establish the alleged contemporaneous verbal agreement in the sale
contract, i.e., that DBP bound itself to arrange and effect the transfer of title of the lot in petitioner's
name; and, get rid of the occupants of the subject property.
We answer in the negative.
"The parol evidence rule forbids any addition to, or contradiction of, the terms of a written agreement
by testimony or other evidence purporting to show that different terms were agreed upon by the parties,
varying the purport of the written contract."56
This, however, is merely a general rule. Provided that a party puts in issue in its pleading any of the
exceptions in the second paragraph of Rule 130, Section 957 of the Revised Rules on Evidence, a party
may present evidence to modify, explain or add to the terms of the agreement. Moreover, as with all
possible objections to the admission of evidence, a party's failure to timely object is deemed a waiver,
and parol evidence may then be entertained.58
In the case of Maunlad Savings & Loan Assoc., Inc. v. CA,59 the Court held that:
The rule is that objections to evidence must be made as soon as the grounds therefor become
reasonably apparent. In the case of testimonial evidence, the objection must be made when the
objectionable question is asked or after the answer is given if the objectionable features become
apparent only by reason of such answer, otherwise the objection is waived and such evidence will form
part of the records of the case as competent and complete evidence and all parties are thus amenable to
any favorable or unfavorable effects resulting from the evidence. 60 (Citations omitted)
Here, in order to prove the verbal agreement allegedly made by DBP, petitioner invoked the fourth
exception under the parol evidence rule, i.e., the existence of other terms agreed to by the parties or
their successors-in-interest after the execution of the written agreement, by offering the testimonies of
Villanueva and Mancol, Sr.
The bank, however, failed to make a timely objection against the said testimonies during the trial since
DBP was declared in default. Thus, DBP waived the protection of the parol evidence rule.
This notwithstanding, We stress that the admissibility of the testimonial evidence as an exception to
the parol evidence rule does not necessarily mean that it has weight. Admissibility of evidence should
not be confounded with its probative value.
"The admissibility of evidence depends on its relevance and competence, while the weight of evidence
pertains to evidence already admitted and its tendency to convince and persuade." 61 The admissibility
of a particular item of evidence has to do with whether it meets various tests by which its reliability is
to be determined, so as to be considered with other evidence admitted in the case in arriving at a
decision as to the truth.62 The weight of evidence is not determined mathematically by the numerical
superiority of the witnesses testifying to a given fact, but depends upon its practical effect in inducing
belief on the part of the judge trying the case.63 "Admissibility refers to the question of whether certain
pieces of evidence are to be considered at all, while probative value refers to the question of whether
the admitted evidence proves an issue."64 "Thus, a particular item of evidence may be admissible, but
its evidentiary weight depends on judicial evaluation within the guidelines provided by the rules of
evidence."65
It is a basic rule in evidence that a witness can testify only on the facts that he knows of his own
personal knowledge, i.e., those which are derived from his own perception.66 A witness may not testify
on what he merely learned, read or heard from others because such testimony is considered hearsay
and may not be received as proof of the truth of what he has learned, read or heard. 67 Hearsay evidence
is evidence, not of what the witness knows himself but, of what he has heard from others; it is not only
limited to oral testimony or statements but likewise applies to written statements. 68
The personal knowledge of a witness is a substantive prerequisite for accepting testimonial evidence
that establishes the truth of a disputed fact.69 A witness bereft of personal knowledge of the disputed
fact cannot be called upon for that purpose because his testimony derives its value not from the credit
accorded to him as a witness presently testifying but from the veracity and competency of the
extrajudicial source ofhis information.70
Guided by these precepts, Villanueva's testimony falls within the category of hearsay evidence.
Contrary to petitioner's claim, Villanueva had no personal inkling as to the contemporaneous verbal
agreement between petitioner and DBP. In fact, there was no such verbal agreement. As admitted by
the petitioner, the alleged verbal agreement was entered into between DBP and MancoI, Sr., by virtue
of the SPA. Villanueva has no personal knowledge of such fact. His testimony related only to the fact
that Atty. De Asis ordered him to go to BIR-Catbalogan, and bring the following documents: a check
worth P99,450, the amount for the CGT, title, TD, and the deed of sale. None of Villanueva's acts
would suggest, even remotely, that he personally knew about the verbal agreement.
As correctly pointed out by the CA:
[Villanueva] did not personally witness the perfection of the alleged contemporaneous agreement
between Mancol, Jr. and DBP. Furthermore, he had no personal knowledge of its existence. His
testimony merely touched on the alleged denial by the Revenue Office of the payment of the [CGT] on
the subject property and the subsequent execution of a new deed of conveyance by the DBP. It is clear
then that his testimony did not bolster [petitioner's] allegation to any degree. 71
The same conclusion can be drawn from Mancol, Sr.'s testimony. Although the records show that by
virtue of an SPA executed by the petitioner, Mancol, Sr. signed the Negotiated Offer to Purchase,
including the Negotiated Sale Rules and Procedures/Disposition of Assets on a First Come First Served
Basis, and that he made the initial payment for the sale, there is dearth of evidence to prove that
indeed, he personally entered into a verbal agreement with DBP. Upon being asked what transpired
after the delivery of the Deed of Absolute Sale, Mancol, Sr. simply answered that DBP agreed to
undertake the transfer of title of the lot, and to oust the occupants. There was no mention as to who
actually and personally appeared before DBP or any of its officials in order to forge the alleged verbal do and perform the following:
agreement. Thus:
(DIRECT EXAMINATION by Atty. Elino Chin, counsel for Witness: [Mancol, Sr.]) 1. To represent and negotiate before the DBP Catarman Branch regarding the INVITATION TO BID
FOR NEGOTIATED SALE scheduled on October 13, 2004 at the Mezzanine Floor, the subject
xxxx Residential Lot with two storey building (TCT No. 2041) located at Navarro Street, Calbayog City;
and
ATTY. CHIN
Q After the delivery of this Exh. "H", what transpired? 2. To sign, or execute and receive any paper or document necessary for the above purpose.

A The bank agreed to facilitate the transfer of the title and the payment of the [CGT] to get rid of x x x x.74
the present occupants of the house and lot. There is nothing in the language of the SPA from which We could deduce the intention of petitioner to
authorize Mancol, Sr. to enter into a verbal agreement with DBP. Indeed, it has been held that "[w]here
Q You said that the bank agreed, is that in writing? powers and duties are specified and defined in an instrument, all such powers and duties are limited
A Only verbal. and are confined to those which are specified and defined, and all other powers and duties are
excluded."75 Clearly, the power to enter into a verbal agreement with DBP is conspicuously inexistent
Q That does not contradict the negotiated rules and agreement? in the SPA.
A Yes, but there was a verbal undertaking for them to do what was agreed upon.
To adopt the intent theory advanced by petitioner, in the absence of clear and convincing evidence to
x x x x.72 that effect, would run afoul of the express tenor of the SPA. It would likewise be contrary to "the rule
that a power of attorney must be strictly construed and pursued. The instrument will be held to grant
Additionally, the RTC aptly observed that:
only those powers which are specified therein, and the agent may neither go beyond nor deviate from
[N]owhere in the records would also reveal that the agreement to arrange and effect the transfer of title
the power of attorney."76
over the subject lot was entered into between [DBP] and [Mancol, Sr.], for and on behalf of the
[petitioner].
It is axiomatic that this Court will not review, much less reverse, the factual findings of the CA,
especially where, as in this case, such findings coincide with those of the trial court, since this Court is
x x x The [SPA] authorizes [Mancol, Sr.] to represent the [petitioner] and negotiate before the DBP,
not a trier of facts.
Catarman Branch on the invitation to bid on he sale of the lot covered by TCT No. 2041 scheduled on
October 13, 2004, as well as to sign or execute and receive any paper or document necessary for said
All told, therefore, the Court finds no reason or basis to grant the petition.
purposes. This explains why it was Mancol, Sr. who signed the Negotiated Offer to Purchase and the
Negotiated Sale Rules and Procedure, and who paid to DBP the initial payment of the purchase price
WHEREFORE, the petition is DENIED. The Decision dated February 22, 2012 and Resolution dated
on October 13, 2004 in [petitioner's] behalf. It was not established however whether the subsequent
September 27, 2012 of the Court of Appeals, Visayas Station in CA-G.R. CEB-CV No. 03030
payments and other transactions, including the act of entering into an oral agreement with [DBP] that it
are AFFIRMED.
will effect the transfer of the subject title, were also carried out by Fernando Mancol, Sr. in behalf of
[petitioner].
SO ORDERED.
The [petitioner] fails [sic] to show with whom the [DBP] agreed to arrange and effect the transfer of
the title in his name. Thus, as there is no showing that it was [Mancol, Sr.] who entered into such
agreement with [DBP] or that he was personally present during the perfection of the agreement and
witnessed the same, any statement from the latter as to the circumstances relative to the perfection of
such oral agreement would indeed be hearsay.73
Assuming for argument's sake that Mancol, Sr., on behalf of petitioner, entered into a verbal agreement
with DBP, such agreement would remain unenforceable. Despite petitioner's insistence, the act of
entering into a verbal agreement was not stipulated in the SPA. The authority given to Mancol, Sr. was
limited to representing and negotiating, on petitioner's behalf, the invitation to bid on the sale of the
subject lot, which is specifically worded as follows:
I, FERNANDO R. MANCOL, JR., x x x by these presents do hereby name, constitute and appoint my
father Fernando M. Manco, Sr., as true and lawful attorney-in-fact, for me, in my name, place and to

G.R. No. 186228               March 15, 2010
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
ANTONIO LAUGA Y PINA ALIAS TERIO, Accused-Appellant.
DECISION
PEREZ, J.:
Before Us for final review is the trial court’s conviction of the appellant for the rape of his thirteen-
year old daughter.
Consistent with the ruling of this Court in People v. Cabalquinto,1 the real name and the personal
circumstances of the victim, and any other information tending to establish or compromise her identity,
including those of her immediate family or household members, are not disclosed in this decision.
The Facts
In an Information dated 21 September 2000,2 the appellant was accused of the crime of QUALIFIED
RAPE allegedly committed as follows:
That on or about the 15th day of March 2000, in the evening, at Barangay xxx, municipality of xxx,
province of Bukidnon, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, being the father of AAA with lewd design, with the use of force and intimidation, did
then and there, willfully, unlawfully and criminally have carnal knowledge with his own daughter
AAA, a 13 year[s]old minor against her will.3
On 12 October 2000, appellant entered a plea of not guilty.4 During the pre-trial conference, the
prosecution and the defense stipulated and admitted: (a) the correctness of the findings indicated in the
medical certificate of the physician who examined AAA; (b) that AAA was only thirteen (13) years old
when the alleged offense was committed; and (c) that AAA is the daughter of the appellant.5 On trial,
three (3) witnesses testified for the prosecution, namely: victim AAA; 6 her brother BBB;7 and one
Moises Boy Banting,8 a "bantay bayan" in the barangay. Their testimonies revealed the following:
In the afternoon of 15 March 2000, AAA was left alone at home.9 AAA’s father, the appellant, was
having a drinking spree at the neighbor’s place.10 Her mother decided to leave because when appellant
gets drunk, he has the habit of mauling AAA’s mother.11 Her only brother BBB also went out in the
company of some neighbors.12
At around 10:00 o’clock in the evening, appellant woke AAA up;13 removed his pants, slid inside the
blanket covering AAA and removed her pants and underwear;14 warned her not to shout for help while
threatening her with his fist;15 and told her that he had a knife placed above her head.16 He proceeded to
mash her breast, kiss her repeatedly, and "inserted his penis inside her vagina."17
Soon after, BBB arrived and found AAA crying.18 Appellant claimed he scolded her for staying out
late.19 BBB decided to take AAA with him.20 While on their way to their maternal grandmother’s
house, AAA recounted her harrowing experience with their father.21 Upon reaching their
grandmother’s house, they told their grandmother and uncle of the incident,22 after which, they sought
the assistance of Moises Boy Banting.23
Moises Boy Banting found appellant in his house wearing only his underwear. 24 He invited appellant to
the police station,25 to which appellant obliged. At the police outpost, he admitted to him that he raped
AAA because he was unable to control himself.26
The following day, AAA submitted herself to physical examination. 27 Dra. Josefa Arlita L. Alsula,
Municipal Health Officer of x x x, Bukidnon, issued the Medical Certificate, which reads:
hyperemic vulvae with 4 o’clock & 6 o’clock freshly lacerated hymen; (+) minimal to moderate bloody
discharges 2° to an alleged raping incident28
On the other hand, only appellant testified for the defense. He believed that the charge against him was
ill-motivated because he sometimes physically abuses his wife in front of their children after engaging
in a heated argument,29 and beats the children as a disciplinary measure.30 He went further to narrate
how his day was on the date of the alleged rape.
He alleged that on 15 March 2000, there was no food prepared for him at lunchtime.31 Shortly after,
AAA arrived.32 She answered back when confronted.33 This infuriated him that he kicked her hard on
her buttocks.34
Appellant went back to work and went home again around 3 o’clock in the afternoon. 35 Finding
nobody at home,36 he prepared his dinner and went to sleep.37
Later in the evening, he was awakened by the members of the "Bantay Bayan" headed by Moises Boy
Banting.38 They asked him to go with them to discuss some matters.39 He later learned that he was
under detention because AAA charged him of rape.40
On 8 July 2006, the Regional Trial Court, Branch 9, Malaybalay City, Bukidnon, rendered its
decision41 in Criminal Case No. 10372-0, finding appellant guilty of rape qualified by relationship and
minority, and sentenced him to suffer the penalty of reclusion perpetua. 42 It also ordered him to
indemnify AAA ₱50,000.00 as moral damages, and ₱50,000.00 as civil indemnity with exemplary
damages of ₱25,000.00.43
On 30 September 2008, the decision of the trial court was AFFIRMED with MODIFICATIONS 44 by
the Court of Appeals in CA-G.R. CR HC No. 00456-MIN.45 The appellate court found that appellant is
not eligible for parole and it increased both the civil indemnity and moral damages from ₱50,000.00 to
₱75,000.00.46
On 24 November 2008, the Court of Appeals gave due course to the appellant’s notice of appeal. 47 This
Court required the parties to simultaneously file their respective supplemental briefs, 48 but both
manifested that they will no longer file supplemental pleadings. 49
The lone assignment of error in the appellant’s brief is that, the trial court gravely erred in finding him
guilty as charged despite the failure of the prosecution to establish his guilt beyond reasonable doubt, 50
because: (1) there were inconsistencies in the testimonies of AAA and her brother BBB;51 (2) his
extrajudicial confession before Moises Boy Banting was without the assistance of a counsel, in
violation of his constitutional right;52 and (3) AAA’s accusation was ill-motivated.53
Our Ruling
Appellant contests the admissibility in evidence of his alleged confession with a "bantay bayan" and
the credibility of the witnesses for the prosecution.
Admissibility in Evidence of an Extrajudicial Confession before a "Bantay Bayan"
Appellant argues that even if he, indeed, confessed to Moises Boy Banting, a "bantay bayan," the
confession was inadmissible in evidence because he was not assisted by a lawyer and there was no
valid waiver of such requirement.54
The case of People v. Malngan55 is the authority on the scope of the Miranda doctrine provided for
under Article III, Section 12(1)56 and (3)57 of the Constitution. In Malngan, appellant questioned the
admissibility of her extrajudicial confessions given to the barangay chairman and a neighbor of the
private complainant. This Court distinguished. Thus:
Arguably, the barangay tanods, including the Barangay Chairman, in this particular instance, may be
deemed as law enforcement officer for purposes of applying Article III, Section 12(1) and (3), of the
Constitution. When accused-appellant was brought to the barangay hall in the morning of 2 January
2001, she was already a suspect, actually the only one, in the fire that destroyed several houses x x x.
She was, therefore, already under custodial investigation and the rights guaranteed by x x x [the]
Constitution should have already been observed or applied to her. Accused-appellant’s confession to
Barangay Chairman x x x was made in response to the ‘interrogation’ made by the latter – admittedly
conducted without first informing accused-appellant of her rights under the Constitution or done in the
presence of counsel. For this reason, the confession of accused-appellant, given to Barangay Chairman
x x x, as well as the lighter found x x x in her bag are inadmissible in evidence against her x x
x.1avvphi1
[But such does] not automatically lead to her acquittal. x x x [T]he constitutional safeguards during
custodial investigations do not apply to those not elicited through questioning by the police or their
agents but given in an ordinary manner whereby the accused verbally admits x x x as x x x in the case
at bar when accused-appellant admitted to Mercedita Mendoza, one of the neighbors x x x [of the
private complainant].58 (Emphasis supplied)
Following the rationale behind the ruling in Malngan, this Court needs to ascertain whether or not a
"bantay bayan" may be deemed a law enforcement officer within the contemplation of Article III,
Section 12 of the Constitution.
In People of the Philippines v. Buendia,59 this Court had the occasion to mention the nature of a
"bantay bayan," that is, "a group of male residents living in [the] area organized for the purpose of
keeping peace in their community[,which is] an accredited auxiliary of the x x x PNP."60
Also, it may be worthy to consider that pursuant to Section 1(g) of Executive Order No. 309 issued on
11 November 1987, as amended, a Peace and Order Committee in each barangay shall be organized "to
serve as implementing arm of the City/Municipal Peace and Order Council at the Barangay level." 61
The composition of the Committee includes, among others: (1) the Punong Barangay as Chairman; (2)
the Chairman of the Sangguniang Kabataan; (3) a Member of the Lupon Tagapamayapa; (4) a
Barangay Tanod; and (5) at least three (3) Members of existing Barangay-Based Anti-Crime or
neighborhood Watch Groups or a Non Government Organization Representative well-known in his
community.62
This Court is, therefore, convinced that barangay-based volunteer organizations in the nature of watch
groups, as in the case of the "bantay bayan," are recognized by the local government unit to perform
functions relating to the preservation of peace and order at the barangay level. Thus, without ruling on
the legality of the actions taken by Moises Boy Banting, and the specific scope of duties and
responsibilities delegated to a "bantay bayan," particularly on the authority to conduct a custodial
investigation, any inquiry he makes has the color of a state-related function and objective insofar as the
entitlement of a suspect to his constitutional rights provided for under Article III, Section 12 of the
Constitution, otherwise known as the Miranda Rights, is concerned.
We, therefore, find the extrajudicial confession of appellant, which was taken without a counsel,
inadmissible in evidence.
Be that as it may, We agree with the Court of Appeals that the conviction of the appellant was not
deduced solely from the assailed extrajudicial confession but "from the confluence of evidence
showing his guilt beyond reasonable doubt."63
Credibility of the Witnesses for the Prosecution
Appellant assails the inconsistencies in the testimonies of AAA and her brother BBB. AAA testified
that BBB accompanied her to the house of their grandmother. Thereafter, they, together with her
relatives, proceeded to look for a "bantay bayan." On the other hand, BBB testified that he brought her
sister to the house of their "bantay bayan" after he learned of the incident.
Citing Bartocillo v. Court of Appeals,64 appellant argues that "where the testimonies of two key
witnesses cannot stand together, the inevitable conclusion is that one or both must be telling a lie, and
their story a mere concoction."65
The principle, however, is not applicable in the case at bar. In Bartocillo, the two testimonies could not
simply stand together because:
On one hand, if we are to believe Susan, Orlando could not have possibly seen the hacking incident
since he had accompanied Vicente home. On the other hand, if we are to accept the testimony of
Orlando, then Susan could not have possibly witnessed the hacking incident since she was with
Vicente at that time.
Here, the testimony of AAA does not run contrary to that of BBB. Both testified that they sought the
help of a "bantay bayan." Their respective testimonies differ only as to when the help was sought for,
which this Court could well attribute to the nature of the testimony of BBB, a shortcut version of
AAA’s testimony that dispensed with a detailed account of the incident.
At any rate, the Court of Appeals is correct in holding that the assailed inconsistency is too trivial to
affect the veracity of the testimonies.66 In fact, inconsistencies which refer to minor, trivial or
inconsequential circumstances even strengthen the credibility of the witnesses, as they erase doubts
that such testimonies have been coached or rehearsed. 67
Appellant’s contention that AAA charged him of rape only because she bore grudges against him is
likewise unmeritorious. This Court is not dissuaded from giving full credence to the testimony of a
minor complainant by motives of feuds, resentment or revenge. 68 As correctly pointed out by the Court
of Appeals:
Indeed, mere disciplinary chastisement is not strong enough to make daughters in a Filipino family
invent a charge that would not only bring shame and humiliation upon them and their families but also
bring their fathers into the gallows of death.69 The Supreme Court has repeatedly held that it is
unbelievable for a daughter to charge her own father with rape, exposing herself to the ordeal and
embarrassment of a public trial and subjecting her private parts to examination if such heinous crime
was not in fact committed.70 No person, much less a woman, could attain such height of cruelty to one
who has sired her, and from whom she owes her very existence, and for which she naturally feels
loving and lasting gratefulness.71 Even when consumed with revenge, it takes a certain amount of
psychological depravity for a young woman to concoct a story which would put her own father to jail
for the most of his remaining life and drag the rest of the family including herself to a lifetime of
shame.72 It is highly improbable for [AAA] against whom no proof of sexual perversity or loose
morality has been shown to fake charges much more against her own father. In fact her testimony is
entitled to greater weight since her accusing words were directed against a close relative. 73
Elements of Rape
Having established the credibility of the witnesses for the prosecution, We now examine the
applicability of the Anti-Rape Law of 199774 to the case at bar.
The law provides, in part, that rape is committed, among others, "[b]y a man who shall have carnal
knowledge of a woman" "through force, threat or intimidation."75 The death penalty shall be imposed if
it is committed with aggravating/qualifying circumstances, which include, "[w]hen the victim is under
eighteen (18) years of age and the offender is a parent."76
The consistent and forthright testimony of AAA detailing how she was raped, culminating with the
penetration of appellant’s penis into her vagina, suffices to prove that appellant had carnal knowledge
of her. When a woman states that she has been raped, she says in effect all that is necessary to show
that rape was committed.77 Further, when such testimony corresponds with medical findings, there is
sufficient basis to conclude that the essential requisites of carnal knowledge have been established. 78
The Court of Appeals pointed out that the element of force or intimidation is not essential when the
accused is the father of the victim, inasmuch as his superior moral ascendancy or influence substitutes
for violence and intimidation.79 At any rate, AAA was actually threatened by appellant with his fist and
a knife allegedly placed above AAA’s head.80
It may be added that the self-serving defense of appellant cannot prevail over the positive and
straightforward testimony of AAA. Settled is the rule that, "alibi is an inherently weak defense that is
viewed with suspicion because it is easy to fabricate." 81 "Alibi and denial must be supported by strong
corroborative evidence in order to merit credibility."82 Moreover, for the defense of alibi to prosper, the
accused must establish two elements – (1) he was not at the locus delicti at the time the offense was
committed; and (2) it was physically impossible for him to be at the scene at the time of its
commission.83 Appellant failed in this wise.
Aggravating/Qualifying Circumstances
The presence of the qualifying circumstances of minority and relationship with the offender in the
instant case has likewise been adequately established. Both qualifying circumstances were specifically
alleged in the Information, stipulated on and admitted during the pre-trial conference, and testified to
by both parties in their respective testimonies. Also, such stipulation and admission, as correctly
pointed out by the Court of Appeals, are binding upon this Court because they are judicial admissions
within the contemplation of Section 4, Rule 129 of the Revised Rules of Court. It provides:
Sec. 4. Judicial admissions. - An admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.
Penalty
Finally, in increasing the amount of civil indemnity and damages each from ₱50,000.00 to ₱75,000.00,
the Court of Appeals correctly considered controlling jurisprudence to the effect that where, as here,
the rape is committed with any of the qualifying/aggravating circumstances warranting the imposition
of the death penalty, the victim is entitled to ₱75,000.00 as civil indemnity ex delicto84 and ₱75,000.00
as moral damages.85 However, the award of exemplary damages should have been increased from
₱25,000.00 to ₱30,000.00.86 Also, the penalty of reclusion perpetua in lieu of death was correctly
imposed considering that the imposition of the death penalty upon appellant would have been
appropriate were it not for the enactment of Republic Act No. 9346, or An Act Prohibiting the
Imposition of Death Penalty in the Philippines.87 We further affirm the ruling of the Court of Appeals
on appellant’s non-eligibility for parole. Sec. 3 of Republic Act No. 9346 clearly provides that
"persons convicted of offenses punished with reclusion perpetua, or whose sentences will be reduced
to reclusion perpetua by reason of the law, shall not be eligible for parole."
WHEREFORE, the Decision of the Court of Appeals dated 30 September 2008 in CA-G.R. CR HC
No. 00456-MIN is hereby AFFIRMED. Appellant Antonio Lauga is GUILTY beyond reasonable
doubt of qualified rape, and is hereby sentenced to suffer the penalty of reclusion perpetua without
eligibility for parole and to pay AAA ₱75,000.00 as civil indemnity, ₱75,000.00 as moral damages,
and ₱30,000.00 as exemplary damages.
SO ORDERED.
G.R. No. 160795             June 27, 2008
CORINTHIAN GARDENS ASSOCIATION, INC., petitioner,
vs.
SPOUSES REYNALDO and MARIA LUISA TANJANGCO, and SPOUSES FRANK and
TERESITA CUASO, respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure
seeking the reversal of the Court of Appeals (CA) Decision2 dated January 31, 2003 in CA-G.R. CV
No. 43217, which reversed and set aside the Decision3 of the Regional Trial Court (RTC) of Quezon
City, dated March 30, 1993.
The Antecedents:
Respondents-spouses Reynaldo and Maria Luisa Tanjangco (the Tanjangcos) own Lots 68 and 69
covered by Transfer Certificates of Title (TCT) No. 2422454 and 2829615 respectively, located at
Corinthian Gardens Subdivision, Quezon City, which is managed by petitioner Corinthian Gardens
Association, Inc. (Corinthian). On the other hand, respondents-spouses Frank and Teresita Cuaso (the
Cuasos) own Lot 65 which is adjacent to the Tanjangcos’ lots.
Before the Cuasos constructed their house on Lot 65, a relocation survey was necessary. As Geodetic
Engineer Democrito De Dios (Engr. De Dios), operating under the business name D.M. De Dios
Realty and Surveying, conducted all the previous surveys for the subdivision's developer, Corinthian
referred Engr. De Dios to the Cuasos. Before, during and after the construction of the said house,
Corinthian conducted periodic ocular inspections in order to determine compliance with the approved
plans pursuant to the Manual of Rules and Regulations of Corinthian.6 Unfortunately, after the Cuasos
constructed their house employing the services of C.B. Paraz & Construction Co., Inc. (C.B. Paraz) as
builder, their perimeter fence encroached on the Tanjangcos’ Lot 69 by 87 square meters.
No amicable settlement was reached between the parties. Thus, the Tanjangcos demanded that the
Cuasos demolish the perimeter fence but the latter failed and refused, prompting the Tanjangcos to file
with the RTC a suit against the Cuasos for Recovery of Possession with Damages. 7
Eventually, the Cuasos filed a Third-Party Complaint8 against Corinthian, C.B. Paraz and Engr. De
Dios. The Cuasos ascribed negligence to C.B. Paraz for its failure to ascertain the proper specifications
of their house, and to Engr. De Dios for his failure to undertake an accurate relocation survey, thereby,
exposing them to litigation. The Cuasos also faulted Corinthian for approving their relocation survey
and building plans without verifying their accuracy and in making representations as to Engr. De Dios'
integrity and competence. The Cuasos alleged that had Corinthian exercised diligence in performing its
duty, they would not have been involved in a boundary dispute with the Tanjangcos. Thus, the Cuasos
opined that Corinthian should also be held answerable for any damages that they might incur as a result
of such construction.
On March 30, 1993, the RTC rendered a Decision in favor of the Tanjangcos. It ruled that the Cuasos’
perimeter wall encroached on the land of the Tanjangos by 87 square meters. It, however, ruled that the
Cuasos were builders in good faith, and gave the Tanjangcos the option to sell and the Cuasos the
option to buy the encroaching portion of the land, at a price to be agreed upon by the parties within
sixty (60) days from receipt of the said Decision. In the event that the Cuasos were unable and
unwilling to purchase the said portion, the perimeter wall should be demolished at the latter’s expense.
The RTC also ordered the Cuasos to pay monthly rentals of P2,000.00 commencing from the time of
the filing of the complaint. The RTC likewise held that C.B. Paraz was grossly negligent in not taking
into account the correct boundaries of Cuasos’ lot when it constructed the house. It, thus, ordered C.B.
Paraz to pay moral and exemplary damages as well as attorney’s fees to the Tanjangcos and the
Cuasos. The third-party complaint against Corinthian and Engr. De Dios, on the other hand, was
dismissed for lack of cause of action.
The Tanjangcos filed a Motion for Reconsideration9 of the said RTC Decision which the RTC,
however, denied in its Order10 dated June 28, 1993.
Dissatisfied with the RTC ruling, the Tanjangcos, the Cuasos, and C.B. Paraz all appealed to the CA.
On appeal, the CA reversed and set aside the RTC Decision. It held that the Cuasos acted in bad faith
in land-grabbing the 87 square meter-portion of Lot 69 as of April 5, 1989. Correlatively, the CA
allowed the Tanjangcos to exercise the rights granted under Articles 449, 450, 451 and 549 of the New
Civil Code, which include the right to demand the demolition of the offending perimeter wall after
reimbursing the Cuasos the necessary expenses for the preservation of the encroached area. The
Cuasos were ordered to pay monthly rentals of P10,000.00 for the use, enjoyment and occupancy of
the lot from 1989 up to the time they vacate the property considering the location and category of the
same. They were, likewise, ordered to pay the Tanjangcos P100,000.00, as moral damages, P50,000.00
as exemplary damages, and P150,000.00 as attorney’s fees. The CA also imposed six percent (6%)
interest per annum on all the awards. The Cuasos’ appeal against the Tanjangcos, on the other hand,
was dismissed for lack of merit. On the third-party complaints, Corinthian, C.B. Paraz and Engr. De
Dios were all found negligent in performing their respective duties and so they were ordered to
contribute five percent (5%) each, or a total of fifteen percent (15%) to all judgment sums and amounts
that the Cuasos shall eventually pay under the decision, also with interest of six percent (6%) per
annum.
Only Corinthian filed a Motion for Reconsideration11 of the CA Decision within the 15-day
reglementary period. No motion for reconsideration was filed by the Cuasos, C.B. Paraz and/or Engr.
De Dios.
About six (6) months later, or on August 12, 2003, the Cuasos filed a
Comment/Manifestation12 praying that they be allowed to adopt Corinthian’s Motion for
Reconsideration.
In its Resolution13 dated November 14, 2003, the CA denied Corinthian’s Motion for Reconsideration.
Hence, Corinthian filed the instant Petition for Review on Certiorari assailing the CA Decision and
Resolution, and impleading the Cuasos as one of the respondents being the third-party plaintiffs in the
RTC.
This Court gave due course to Corinthian’s petition and required the parties to submit their respective
memorandum.14 In compliance, the Cuasos submitted their Memorandum15 and Supplement to
Memorandum,16 which were both noted by this Court in its Resolutions dated January 10, 200517 and
February 2, 2005, 18 respectively.
In the meantime, the Tanjangcos moved for partial entry of judgment of the CA Decision which was
granted by the CA in its Resolution19 dated May 26, 2006, directing the issuance of an Entry of
Judgment and a Certification that its Decision dated January 31 2003 has become final and executory
with respect to the Cuasos, C.B. Paraz and Engr. De Dios for their failure to file an appeal assailing the
said Decision before this Court.
The Tanjangcos then moved for the execution of the judgment against the Cuasos, specifically the
demolition of the perimeter fence, 20 which was also granted by the RTC in its Order21 dated December
18, 2006.
Other than the filing of an Opposition22 and a Motion for Reconsideration23 before the RTC, the Cuasos
prayed for the issuance of a temporary restraining order (TRO) and/or preliminary injunction before
this Court to enjoin the demolition of the perimeter fence. They averred that the premature demolition
of the alleged encroaching perimeter wall and other improvements will cause grave and irreparable
damage to them, because what is sought to be demolished is part of their residence. They claimed that
no amount of money will compensate for the damage they stand to suffer should any demolition
subsequently prove to be wrongful. They argued that before any execution can be carried out, it is
necessary to first determine whether or not Corinthian was negligent in approving the building plan
and whether or not it acted in good faith in doing so. Such determination, according to the Cuasos, will
in turn determine whether or not they were in good faith in constructing the house.24
The Tanjangcos opposed the Cuasos' application for TRO. They countered that the only pending matter
with this Court is the appeal by Corinthian; hence, the implementation of the January 31, 2003
Decision of the CA against the Cuasos will not preempt the outcome of the said pending incidents.
Also, any action taken by this Court on Corinthian’s petition would not benefit the Cuasos for they did
not appeal the adverse decision against them. Accordingly, they cannot obtain affirmative relief from
this Court by reason or on account of the appeal taken by Corinthian. The appeal, they added, is
personal to Corinthian. Finally, they argued that the Cuasos are now estopped from questioning the
enforcement of the CA Decision since they issued a manager’s check to pay the money judgment.25
In this Court's Resolution dated July 18, 2007, we denied the Cuasos' application for TRO and/or writ
of preliminary injunction for lack of merit.
The denial was based on sound legal principles. It is axiomatic that to be entitled to the injunctive writ,
one must show that there exists a right to be protected which is directly threatened by the act sought to
be enjoined. Furthermore, there must be a showing that the invasion of the right is material and
substantial, that the right of complainant is clear and unmistakable, and that there is an urgent and
paramount necessity for the writ to issue in order to prevent serious damage. 26
In the Cuasos’ case, their right to injunctive relief had not been clearly and unmistakably demonstrated.
They failed to show proof that there is material and substantial invasion of their right to warrant the
issuance of an injunctive writ. Indeed, the enforcement of the writ of execution, which would demolish
the Cuasos’ perimeter fence, is manifestly prejudicial to their interest. However, they possess no clear
and unmistakable legal right that merits protection through the writ of preliminary injunction. 27 Their
right to maintain the said fence had been declared inferior to the Tanjangcos’ right to the demolition of
the fence, after the CA judgment had become final and executory as to the Cuasos.
It bears stressing that the Cuasos failed to appeal the ruling of the CA. This failure to contest the CA
decision before this Court was fatal to their cause. It had the effect of an admission that they indeed
acted in bad faith, as they accepted the CA ruling. The decision of the CA, therefore, became binding
and final as to them.28 As a matter of fact, the CA already issued a partial entry of judgment against the
Cuasos.
An injunction to stay a final and executory decision is unavailing except only after a showing that facts
and circumstances exist which would render execution unjust or inequitable, or that a change in the
situation of the parties occurred. Here, no such exception exists as shown by the facts earlier narrated. 29
While it is true that this Court noted the Memorandum and Supplemental Memorandum filed by the
Cuasos, such notation was made only insofar as Corinthian made them respondents in this petition.
This Court cannot grant to the Cuasos any affirmative relief as they did not file a petition questioning
the CA ruling. Consequently, the Decision of the CA holding that the Cuasos acted in bad faith and
that the perimeter fence may now be demolished cannot be put in issue by the Cuasos. It is a
fundamental principle that a party who does not appeal, or file a petition for certiorari, is not entitled to
any affirmative relief.30 An appellee who is not an appellant may assign errors in his brief where his
purpose is to maintain the judgment, but he cannot seek modification or reversal of the judgment or
claim affirmative relief unless he has also appealed. 31 This applies to C.B. Paraz and Engr. De Dios
who likewise failed to assail the aforementioned CA Decision.
With this matter put to rest, we now go to the main issues raised by Corinthian, the sole petitioner in
this case, to wit:
a) Whether or not there is legal basis for the Court of Appeals to hold petitioner Corinthian
Gardens Association, Inc. liable to pay 5% of the judgment money to Sps. Tanjangco on
account of the encroachment made by Sps. Cuaso[; and]
b) Whether or not the Court of Appeals has legal basis to increase unilaterally and without
proof the amount prayed for in the Complaint, i.e., P2,000.00, as reasonable compensation for
the use and enjoyment of the portion of the lot encroached upon, to P10,000.00.32
Corinthian claims that the approval of the building plan of the Cuasos was not tainted with negligence
as it did not approve the survey relocation plan but merely the architectural, structural and sanitary
plans for Cuasos' house; that the purpose of the said approval is not to ensure that the house to be
erected on a particular lot is constructed within its boundaries but only to ensure compliance with the
Manual of Rules and Regulations; that while Corinthian conducts actual site inspections, the inspection
and approval of the building plans are limited to "table inspection" only; that the survey relocation plan
was never submitted for Corinthian's approval; that the acceptance of the builder's bond did not make
Corinthian automatically liable for the encroachment and for damages; and that Corinthian approved
the building plan with the good faith and due diligence required under the circumstances. It, thus,
concludes that it cannot be held liable to pay five
percent (5%) of the money judgment to the Tanjangcos on account of the encroachment made by the
Cuasos. Likewise, it finds no legal basis for the CA to unilaterally increase the amount of the adjudged
rent from P2,000.00 to P10,000.00 which was not prayed for by the Tanjangcos in their complaint and
in the absence of evidence adduced by the parties.33
On the other hand, the Tanjangcos stand by the ruling of the CA and opine that Corinthian was
negligent in approving the building plan of the Cuasos. They submit that Corinthian's claim that it
merely conducts "table inspections" of buildings further bolsters their argument that Corinthian was
negligent in conveniently and unilaterally restricting and limiting the coverage of its approval, contrary
to its own Manual of Rules and Regulations; that the acceptance of a builder's bond does not
automatically make Corinthian liable but the same affirms the fact that a homeowner can hold it liable
for the consequences of the approval of a building plan; and that Corinthian, by regularly demanding
and accepting membership dues, must be wary of its responsibility to protect the rights and interests of
its members. Lastly, the Tanjangcos contend that a court can take judicial notice of the general increase
in the rentals of real estate, as in this case, where the CA considered the value of their lot in the "posh-
and-swank" Corinthian Gardens Subdivision and the fact that they were deprived of it for almost two
decades. The Tanjangcos pray that this Court sustain the ruling of the CA.34
The instant case is obviously one for tort, as governed by Article 2176 of the Civil Code, which
provides:
ART. 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.
In every tort case filed under this provision, plaintiff has to prove by a preponderance of evidence: (1)
the damages suffered by the plaintiff; (2) the fault or negligence of the defendant or some other person
for whose act he must respond; and (3) the connection of cause and effect between the fault or
negligence and the damages incurred.35
Undeniably, the perimeter fence of the Cuasos encroached on Lot 69 owned by the Tanjangcos by 87
square meters as duly found by both the RTC and the CA in accordance with the evidence on record.
As a result, the Tanjangcos suffered damage in having been deprived of the use of that portion of their
lot encroached upon. Thus, the primordial issue to be resolved in this case is whether Corinthian was
negligent under the circumstances and, if so, whether such negligence contributed to the injury
suffered by the Tanjangcos.
A negligent act is an inadvertent act; it may be merely carelessly done from a lack of ordinary
prudence and may be one which creates a situation involving an unreasonable risk to another because
of the expectable action of the other, a third person, an animal, or a force of nature. A negligent act is
one from which an ordinary prudent person in the actor's position, in the same or similar
circumstances, would foresee such an appreciable risk of harm to others as to cause him not to do the
act or to do it in a more careful manner.36
The test to determine the existence of negligence in a particular case may be stated as follows: Did the
defendant in committing the alleged negligent act use that reasonable care and caution which an
ordinary person would have used in the same situation? If not, then he is guilty of negligence. The law,
in effect, adopts the standard supplied by the imaginary conduct of the discreet paterfamilias in Roman
law. The existence of negligence in a given case is not determined by reference to the personal
judgment of the actor in the situation before him. The law considers what would be reckless,
blameworthy, or negligent in a man of ordinary intelligence and prudence, and determines liability
according to that standard.37
By this test, we find Corinthian negligent.
While the issue of Corinthian's alleged negligence is factual in character, 38 a review by this Court is
proper because the CA's factual findings differ from those of the RTC's.39 Thus, after a meticulous
review of the evidence on record, we hold that the CA committed no reversible error when it deviated
from the findings of fact of the RTC. The CA's findings and conclusions are substantiated by the
evidence on record and are more in accord with law and reason. Indeed, it is clear that Corinthian
failed to exercise the requisite diligence in insuring that the Cuasos abide by its Manual of Rules and
Regulations, thereby resulting in the encroachment on the Tanjangcos’ property.
We agree with the CA when it aptly held:
Corinthian cannot and should not be allowed to justify or excuse its negligence by claiming
that its approval of the Cuasos’ building plans was only limited to a so-called "table
inspection;" and not actual site measurement. To accept some such postulate is to put a
premium on negligence. Corinthian was not organized solely for the defendants Cuasos. It is
also the subdivision of the plaintiffs-spouses Tanjangcos - and of all others who have their
dwelling units or abodes therein. Pertinently, its Manual of Rules and Regulations stipulates
in Section 3 thereof (under the heading Construction), thus:
A. Rules and Regulations
 No new construction can be started unless the building plans are approved by the
Association and the appropriate Builder’s cash bond and pre-construction fees are
paid. The Association will not allow the entry of construction materials and process
identification cards for workers if the above conditions are not complied with.
Likewise, all renovations, repairs, additions and improvements to a finished house
except electrical wiring, will have to be approved by the Association. Water service
connection of a homeowner who undertakes construction work without prior
approval of the Association will be cut-off in addition to the sanctions previously
mentioned.
It goes without saying that this Manual of Rules and Regulations applies to all - or it does not
apply at all. To borrow a popular expression, what is sauce for the gander is sauce for the
goose - or ought to be. To put it matter-of-factly and bluntly, thus, its so-called "table
inspection" approval of the Cuasos’ building plans is no less of an approval, as approvals
come and go. And since it is an approval tainted with negligence, the necessary and inevitable
consequences which law and justice attach to such negligence must, as a matter of law and
justice, also necessarily attach to Corinthian.
And then again third party defendant-appellee Corinthian Garden required the posting of a
builder’s cash bond (Exh. 5-Corinthian) from the defendants-appellants Cuasos and the third-
party defendant C.B. Paraz Construction to secure the performance of their undertaking.
Surely, Corinthian does not imply that while it may take the benefits from the Builder’s cash
bond, it may, Pilate-like, wash its hands of any responsibility or liability that would or might
arise from the construction or building of the structure for which the cash bond was in the first
place posted. That is not only unjust and immoral, but downright unchristian and iniquitous.
Under the same parity of reasoning, the payment by the appellants-Cuasos to the appellee
Corinthian of pre-construction and membership fees in the Association must necessarily entail
the creation of certain obligations on the part of Corinthian. For duties and responsibilities
always go hand in hand with rights and privileges. That is the law of life - and that is the law
of every civilized society. It is an axiom of equity that he who receives the benefits must share
the burdens.40
By its Manual of Rules and Regulations, it is reasonable to assume that Corinthian, through its
representative, in the approval of building plans, and in the conduct of periodic inspections of on-going
construction projects within the subdivision, is responsible in insuring compliance with the approved
plans, inclusive of the construction of perimeter walls, which in this case is the subject of dispute
between the Tanjangcos and the Cuasos.41 It is not just or equitable to relieve Corinthian of any
liability when, by its very own rules, it imposes its authority over all its members to the end that "no
new construction can be started unless the plans are approved by the Association and the appropriate
cash bond and pre-construction fees are paid." Moreover, Corinthian can impose sanctions for violating
these rules. Thus, the proposition that the inspection is merely a "table inspection" and, therefore,
should exempt Corinthian from liability, is unacceptable. After all, if the supposed inspection is merely
a "table inspection" and the approval granted to every member is a mere formality, then the purpose of
the rules would be defeated. Compliance therewith would not be mandatory, and sanctions imposed for
violations could be disregarded. Corinthian's imprimatur on the construction of the Cuasos' perimeter
wall over the property of the Tanjangcos assured the Cuasos that everything was in order.
In sum, Corinthian’s failure to prevent the encroachment of the Cuasos’ perimeter wall into
Tanjangcos’ property – despite the inspection conducted – constitutes negligence and, at the very least,
contributed to the injury suffered by the Tanjangcos.
On the second issue, our ruling in Spouses Badillo v. Tayag42 is instructive:
Citing Sia v. Court of Appeals [272 SCRA 141, May 5, 1997], petitioners argue that the MTC
may take judicial notice of the reasonable rental or the general price increase of land in order
to determine the amount of rent that may be awarded to them. In that case, however, this
Court relied on the CA's factual findings, which were based on the evidence presented before
the trial court. In determining reasonable rent,
the RTC therein took account of the following factors: 1) the realty assessment of the land, 2)
the increase in realty taxes, and 3) the prevailing rate of rentals in the vicinity. Clearly, the
trial court relied, not on mere judicial notice, but on the evidence presented before it.
Indeed, courts may fix the reasonable amount of rent for the use and occupation of a disputed
property. However, petitioners herein erred in assuming that courts, in determining the
amount of rent, could simply rely on their own appreciation of land values without
considering any evidence. As we have said earlier, a court may fix the reasonable amount of
rent, but it must still base its action on the evidence adduced by the parties.
In Herrera v. Bollos [G.R. No. 138258, January 18, 2002], the trial court awarded rent to the
defendants in a forcible entry case. Reversing the RTC, this Court declared that the reasonable
amount of rent could be determined not by mere judicial notice, but by supporting evidence:
x x x A court cannot take judicial notice of a factual matter in controversy. The court
may take judicial notice of matters of public knowledge, or which are capable of
unquestionable demonstration, or ought to be known to judges because of their
judicial functions. Before taking such judicial notice, the court must "allow the
parties to be heard thereon." Hence, there can be no judicial notice on the rental
value of the premises in question without supporting evidence.
Truly, mere judicial notice is inadequate, because evidence is required for a court to determine the
proper rental value. But contrary to Corinthian's arguments, both the RTC and the CA found that
indeed rent was due the Tanjangcos because they were deprived of possession and use of their
property. This uniform factual finding of the RTC and the CA was based on the evidence presented
below. Moreover, in Spouses Catungal v. Hao,43 we considered the increase in the award of rentals as
reasonable given the particular circumstances of each case. We noted therein that the respondent
denied the petitioners the benefits, including rightful possession, of their property for almost a decade.
Similarly, in the instant case, the Tanjangcos were deprived of possession and use of their property for
more than two decades through no fault of their own. Thus, we find no cogent reason to disturb the
monthly rental fixed by the CA.
All told, the CA committed no reversible error.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED.
Costs against petitioner.
G.R. No. 156052             February 13, 2008
SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO and BONIFACIO
S. TUMBOKON, petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, respondent.
x----------------------x
CHEVRON PHILIPPINES INC., PETRON CORPORATION and PILIPINAS SHELL
PETROLEUM CORPORATION, movants-intervenors.
x----------------------x
DEPARTMENT OF ENERGY, movant-intervenor.
RESOLUTION
CORONA, J.:
After we promulgated our decision in this case on March 7, 2007, Chevron Philippines Inc. (Chevron),
Petron Corporation (Petron) and Pilipinas Shell Petroleum Corporation (Shell) (collectively, the oil
companies) and the Republic of the Philippines, represented by the Department of Energy (DOE), filed
their respective motions for leave to intervene and for reconsideration of the decision.
Chevron1 is engaged in the business of importing, distributing and marketing of petroleum products in
the Philippines while Shell and Petron are engaged in the business of manufacturing, refining and
likewise importing, distributing and marketing of petroleum products in the Philippines. 2 The DOE is a
governmental agency created under Republic Act (RA) No. 76383 and tasked to prepare, integrate,
coordinate, supervise and control all plans, programs, projects and activities of the government relative
to energy exploration, development, utilization, distribution and conservation. 4
The facts are restated briefly as follows:
Petitioners Social Justice Society, Vladimir Alarique T. Cabigao and Bonifacio S. Tumbokon, in an
original petition for mandamus under Rule 65 of the Rules of Court, sought to compel respondent Hon.
Jose L. Atienza, Jr., then mayor of the City of Manila, to enforce Ordinance No. 8027. This ordinance
was enacted by the Sangguniang Panlungsod of Manila on November 20, 2001,5 approved by
respondent Mayor on November 28, 2001,6 and became effective on December 28, 2001 after
publication.7 Sections 1 and 3 thereof state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public
safety, and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining
areas, the land use of [those] portions of land bounded by the Pasig River in the north, PNR
Railroad Track in the east, Beata St. in the south, Palumpong St. in the southwest, and Estero
de Pandacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in the
[n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of
Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F.
Manalo Street, are hereby reclassified from Industrial II to Commercial I.
xxx       xxx       xxx
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the
date of effectivity of this Ordinance within which to cease and desist from the operation of
businesses which are hereby in consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed
the owners and operators of businesses disallowed under the reclassification to cease and desist from
operating their businesses within six months from the date of effectivity of the ordinance. Among the
businesses situated in the area are the so-called "Pandacan Terminals" of the oil companies.
On June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a
memorandum of understanding (MOU)8 with the oil companies. They agreed that "the scaling down of
the Pandacan Terminals [was] the most viable and practicable option." The Sangguniang Panlungsod
ratified the MOU in Resolution No. 97.9 In the same resolution, the Sanggunian declared that the MOU
was effective only for a period of six months starting July 25, 2002.10 Thereafter, on January 30, 2003,
the Sanggunian adopted Resolution No. 1311 extending the validity of Resolution No. 97 to April 30,
2003 and authorizing the mayor of Manila to issue special business permits to the oil companies. 12
This was the factual backdrop presented to the Court which became the basis of our March 7, 2007
decision. We ruled that respondent had the ministerial duty under the Local Government Code (LGC)
to "enforce all laws and ordinances relative to the governance of the city,"13 including Ordinance No.
8027. We also held that we need not resolve the issue of whether the MOU entered into by respondent
with the oil companies and the subsequent resolutions passed by the Sanggunian could amend or repeal
Ordinance No. 8027 since the resolutions which ratified the MOU and made it binding on the City of
Manila expressly gave it full force and effect only until April 30, 2003. We concluded that there was
nothing that legally hindered respondent from enforcing Ordinance No. 8027.
After we rendered our decision on March 7, 2007, the oil companies and DOE sought to intervene and
filed motions for reconsideration in intervention on March 12, 2007 and March 21, 2007 respectively.
On April 11, 2007, we conducted the oral arguments in Baguio City to hear petitioners, respondent and
movants-intervenors oil companies and DOE.
The oil companies called our attention to the fact that on April 25, 2003, Chevron had filed a complaint
against respondent and the City of Manila in the Regional Trial Court (RTC) of Manila, Branch 39, for
the annulment of Ordinance No. 8027 with application for writs of preliminary prohibitory injunction
and preliminary mandatory injunction.14 The case was docketed as civil case no. 03-106377. On the
same day, Shell filed a petition for prohibition and mandamus likewise assailing the validity of
Ordinance No. 8027 and with application for writs of preliminary prohibitory injunction and
preliminary mandatory injunction.15 This was docketed as civil case no. 03-106380. Later on, these two
cases were consolidated and the RTC of Manila, Branch 39 issued an order dated May 19, 2003
granting the applications for writs of preliminary prohibitory injunction and preliminary mandatory
injunction:
WHEREFORE, upon the filing of a total bond of TWO MILLION (Php 2,000,000.00)
PESOS, let a Writ of Preliminary Prohibitory Injunction be issued ordering [respondent] and
the City of Manila, their officers, agents, representatives, successors, and any other persons
assisting or acting in their behalf, during the pendency of the case, to REFRAIN from taking
steps to enforce Ordinance No. 8027, and let a Writ of Preliminary Mandatory Injunction be
issued ordering [respondent] to issue [Chevron and Shell] the necessary Business Permits to
operate at the Pandacan Terminal.16
Petron likewise filed its own petition in the RTC of Manila, Branch 42, also attacking the validity of
Ordinance No. 8027 with prayer for the issuance of a writ of preliminary injunction and/or temporary
restraining order (TRO). This was docketed as civil case no. 03-106379. In an order dated August 4,
2004, the RTC enjoined the parties to maintain the status quo.17
Thereafter, in 2006, the city council of Manila enacted Ordinance No. 8119, also known as the Manila
Comprehensive Land Use Plan and Zoning Ordinance of 2006.18 This was approved by respondent on
June 16, 2006.19
Aggrieved anew, Chevron and Shell filed a complaint in the RTC of Manila, Branch 20, asking for the
nullification of Ordinance No. 8119.20 This was docketed as civil case no. 06-115334. Petron filed its
own complaint on the same causes of action in the RTC of Manila, Branch 41.21 This was docketed as
civil case no. 07-116700.22 The court issued a TRO in favor of Petron, enjoining the City of Manila and
respondent from enforcing Ordinance No. 8119.23
Meanwhile, in civil case no. 03-106379, the parties filed a joint motion to withdraw complaint and
counterclaim on February 20, 2007.24 In an order dated April 23, 2007, the joint motion was granted
and all the claims and counterclaims of the parties were withdrawn. 25
Given these additional pieces of information, the following were submitted as issues for our resolution:
1. whether movants-intervenors should be allowed to intervene in this case; 26
2. whether the following are impediments to the execution of our March 7, 2007 decision:
 (a) Ordinance No. 8119, the enactment and existence of which were not previously
brought by the parties to the attention of the Court and
(b) writs of preliminary prohibitory injunction and preliminary mandatory injunction
and status quo order issued by the RTC of Manila, Branches 39 and 42 and
3. whether the implementation of Ordinance No. 8027 will unduly encroach upon the DOE’s
powers and functions involving energy resources.
During the oral arguments, the parties submitted to this Court’s power to rule on the constitutionality
and validity of Ordinance No. 8027 despite the pendency of consolidated cases involving this issue in
the RTC.27 The importance of settling this controversy as fully and as expeditiously as possible was
emphasized, considering its impact on public interest. Thus, we will also dispose of this issue here. The
parties were after all given ample opportunity to present and argue their respective positions. By so
doing, we will do away with the delays concomitant with litigation and completely adjudicate an issue
which will most likely reach us anyway as the final arbiter of all legal disputes.
Before we resolve these issues, a brief review of the history of the Pandacan Terminals is called for to
put our discussion in the proper context.
History Of The Pandacan Oil Terminals
Pandacan (one of the districts of the City of Manila) is situated along the banks of the Pasig river. At
the turn of the twentieth century, Pandacan was unofficially designated as the industrial center of
Manila. The area, then largely uninhabited, was ideal for various emerging industries as the nearby
river facilitated the transportation of goods and products. In the 1920s, it was classified as an industrial
zone.28 Among its early industrial settlers were the oil companies. Shell established its installation there
on January 30, 1914.29 Caltex (now Chevron) followed suit in 1917 when the company began
marketing its products in the country.30 In 1922, it built a warehouse depot which was later converted
into a key distribution terminal.31 The corporate presence in the Philippines of Esso (Petron’s
predecessor) became more keenly felt when it won a concession to build and operate a refinery in
Bataan in 1957.32 It then went on to operate a state-of-the-art lube oil blending plant in the Pandacan
Terminals where it manufactures lubes and greases.33
On December 8, 1941, the Second World War reached the shores of the Philippine Islands. Although
Manila was declared an open city, the Americans had no interest in welcoming the Japanese. In fact, in
their zealous attempt to fend off the Japanese Imperial Army, the United States Army took control of
the Pandacan Terminals and hastily made plans to destroy the storage facilities to deprive the
advancing Japanese Army of a valuable logistics weapon.34 The U.S. Army burned unused petroleum,
causing a frightening conflagration. Historian Nick Joaquin recounted the events as follows:
After the USAFFE evacuated the City late in December 1941, all army fuel storage dumps
were set on fire. The flames spread, enveloping the City in smoke, setting even the rivers
ablaze, endangering bridges and all riverside buildings. … For one week longer, the "open
city" blazed—a cloud of smoke by day, a pillar of fire by night.35
The fire consequently destroyed the Pandacan Terminals and rendered its network of depots and
service stations inoperative.36
After the war, the oil depots were reconstructed. Pandacan changed as Manila rebuilt itself. The three
major oil companies resumed the operation of their depots.37 But the district was no longer a sparsely
populated industrial zone; it had evolved into a bustling, hodgepodge community. Today, Pandacan
has become a densely populated area inhabited by about 84,000 people, majority of whom are urban
poor who call it home.38 Aside from numerous industrial installations, there are also small businesses,
churches, restaurants, schools, daycare centers and residences situated there. 39 Malacañang Palace, the
official residence of the President of the Philippines and the seat of governmental power, is just two
kilometers away.40 There is a private school near the Petron depot. Along the walls of the Shell facility
are shanties of informal settlers.41 More than 15,000 students are enrolled in elementary and high
schools situated near these facilities.42 A university with a student population of about 25,000 is located
directly across the depot on the banks of the Pasig river.43
The 36-hectare Pandacan Terminals house the oil companies’ distribution terminals and depot
facilities.44 The refineries of Chevron and Shell in Tabangao and Bauan, both in Batangas, respectively,
are connected to the Pandacan Terminals through a 114-kilometer45 underground pipeline system.46
Petron’s refinery in Limay, Bataan, on the other hand, also services the depot.47 The terminals store
fuel and other petroleum products and supply 95% of the fuel requirements of Metro Manila,48 50% of
Luzon’s consumption and 35% nationwide.49 Fuel can also be transported through barges along the
Pasig river or tank trucks via the South Luzon Expressway.
We now discuss the first issue: whether movants-intervenors should be allowed to intervene in this
case.
Intervention Of The Oil Companies And The DOE Should Be Allowed In The Interest of Justice
Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes
a litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected
by such proceedings.50 The pertinent rules are Sections 1 and 2, Rule 19 of the Rules of Court:
SEC. 1. 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.
SEC. 2. Time to intervene. — The motion to intervene may be filed at any time before
rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be
attached to the motion and served on the original parties.
Thus, the following are the requisites for intervention of a non-party:
(1) Legal interest
(a) in the matter in controversy; or
(b) in the success of either of the parties; or
I against both parties; or
(d) person 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;
(2) Intervention will not unduly delay or prejudice the adjudication of rights of original
parties;
(3) Intervenor’s rights may not be fully protected in a separate proceeding51 and
(g)The motion to intervene may be filed at any time before rendition of judgment by the trial
court.
For both the oil companies and DOE, the last requirement is definitely absent. As a rule, intervention is
allowed "before rendition of judgment" as Section 2, Rule 19 expressly provides. Both filed their
separate motions after our decision was promulgated. In Republic of the Philippines v. Gingoyon,52 a
recently decided case which was also an original action filed in this Court, we declared that the
appropriate time to file the motions-in-intervention was before and not after resolution of the case. 53
The Court, however, has recognized exceptions to Section 2, Rule 19 in the interest of substantial
justice:
 The rule on intervention, like all other rules of procedure, is intended to make the powers of
the Court fully and completely available for justice. It is aimed to facilitate a comprehensive
adjudication of rival claims overriding technicalities on the timeliness of the filing thereof. 54
The oil companies assert that they have a legal interest in this case because the implementation of
Ordinance No. 8027 will directly affect their business and property rights.55
[T]he interest which entitles a person to intervene in a suit between other parties 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. Otherwise, if persons
not parties to the action were allowed to intervene, proceedings would become unnecessarily
complicated, expensive and interminable. And this would be against the policy of the law.
The words "an interest in the subject" means a direct interest in the cause of action as pleaded,
one that would put the intervenor in a legal position to litigate a fact alleged in the complaint
without the establishment of which plaintiff could not recover.56
We agree that the oil companies have a direct and immediate interest in the implementation of
Ordinance No. 8027. Their claim is that they will need to spend billions of pesos if they are compelled
to relocate their oil depots out of Manila. Considering that they admitted knowing about this case from
the time of its filing on December 4, 2002, they should have intervened long before our March 7, 2007
decision to protect their interests. But they did not.57 Neither did they offer any worthy explanation to
justify their late intervention.
Be that as it may, although their motion for intervention was not filed on time, we will allow it because
they raised and presented novel issues and arguments that were not considered by the Court in its
March 7, 2007 decision. After all, the allowance or disallowance of a motion to intervene is addressed
to the sound discretion of the court before which the case is pending.58 Considering the compelling
reasons favoring intervention, we do not think that this will unduly delay or prejudice the adjudication
of rights of the original parties. In fact, it will be expedited since their intervention will enable us to
rule on the constitutionality of Ordinance No. 8027 instead of waiting for the RTC’s decision.
The DOE, on the other hand, alleges that its interest in this case is also direct and immediate as
Ordinance No. 8027 encroaches upon its exclusive and national authority over matters affecting the oil
industry. It seeks to intervene in order to represent the interests of the members of the public who stand
to suffer if the Pandacan Terminals’ operations are discontinued. We will tackle the issue of the alleged
encroachment into DOE’s domain later on. Suffice it to say at this point that, for the purpose of hearing
all sides and considering the transcendental importance of this case, we will also allow DOE’s
intervention.
The Injunctive Writs Are Not Impediments To The Enforcement Of Ordinance No. 8027
Under Rule 65, Section 359 of the Rules of Court, a petition for mandamus may be filed 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. According to the oil
companies, respondent did not unlawfully fail or neglect to enforce Ordinance No. 8027 because he
was lawfully prevented from doing so by virtue of the injunctive writs and status quo order issued by
the RTC of Manila, Branches 39 and 42.
First, we note that while Chevron and Shell still have in their favor the writs of preliminary injunction
and preliminary mandatory injunction, the status quo order in favor of Petron is no longer in effect
since the court granted the joint motion of the parties to withdraw the complaint and counterclaim. 60
Second, the original parties failed to inform the Court about these injunctive writs. Respondent (who
was also impleaded as a party in the RTC cases) defends himself by saying that he informed the court
of the pendency of the civil cases and that a TRO was issued by the RTC in the consolidated cases
filed by Chevron and Shell. It is true that had the oil companies only intervened much earlier, the Court
would not have been left in the dark about these facts. Nevertheless, respondent should have updated
the Court, by way of manifestation, on such a relevant matter.
In his memorandum, respondent mentioned the issuance of a TRO. Under Section 5 of Rule 58 of the
Rules of Court, a TRO issued by the RTC is effective only for a period of 20 days. This is why, in our
March 7, 2007 decision, we presumed with certainty that this had already lapsed.61 Respondent also
mentioned the grant of injunctive writs in his rejoinder which the Court, however, expunged for being
a prohibited pleading. The parties and their counsels were clearly remiss in their duties to this Court.
In resolving controversies, courts can only consider facts and issues pleaded by the parties. 62 Courts, as
well as magistrates presiding over them are not omniscient. They can only act on the facts and issues
presented before them in appropriate pleadings. They may not even substitute their own personal
knowledge for evidence. Nor may they take notice of matters except those expressly provided as
subjects of mandatory judicial notice.
We now proceed to the issue of whether the injunctive writs are legal impediments to the enforcement
of Ordinance No. 8027.
Section 3, Rule 58 of the Rules of Court enumerates the grounds for the issuance of a writ of
preliminary injunction:
SEC. 3. Grounds for issuance of preliminary injunction. ― A preliminary injunction may be
granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or nonperformance of the act or acts complained of
during the litigation would probably work injustice to the applicant; or
(g) IThat a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the
judgment ineffectual.
There are two requisites for the issuance of a preliminary injunction: (1) the right to be protected exists
prima facie and (2) the acts sought to be enjoined are violative of that right. It must be proven that the
violation sought to be prevented will cause an irreparable injustice.
The act sought to be restrained here was the enforcement of Ordinance No. 8027. It is a settled rule that
an ordinance enjoys the presumption of validity and, as such, cannot be restrained by injunction.63
Nevertheless, when the validity of the ordinance is assailed, the courts are not precluded from issuing
an injunctive writ against its enforcement. However, we have declared that the issuance of said writ is
proper only when:
... the petitioner assailing the ordinance has made out a case of unconstitutionality strong
enough to overcome, in the mind of the judge, the presumption of validity, in addition to
a showing of a clear legal right to the remedy sought....64 (Emphasis supplied)
Judge Reynaldo G. Ros, in his order dated May 19, 2003, stated his basis for issuing the injunctive
writs:
The Court, in resolving whether or not a Writ of Preliminary Injunction or Preliminary
Mandatory Injunction should be issued, is guided by the following requirements: (1) a clear
legal right of the complainant; (2) a violation of that right; and (3) a permanent and urgent
necessity for the Writ to prevent serious damage. The Court believes that these requisites are
present in these cases.
 There is no doubt that the plaintiff/petitioners have been legitimately operating their business
in the Pandacan Terminal for many years and they have made substantial capital investment
therein. Every year they were issued Business Permits by the City of Manila. Its operations
have not been declared illegal or contrary to law or morals. In fact, because of its vital
importance to the national economy, it was included in the Investment Priorities Plan as
mandated under the "Downstream Oil Industry Deregulation Act of 1988 (R.A. 8479). As a
lawful business, the plaintiff/petitioners have a right, therefore, to continue their operation in
the Pandacan Terminal and the right to protect their investments. This is a clear and
unmistakable right of the plaintiff/petitioners.
The enactment, therefore, of City Ordinance No. 8027 passed by the City Council of Manila
reclassifying the area where the Pandacan Terminal is located from Industrial II to
Commercial I and requiring the plaintiff/petitioners to cease and desist from the operation of
their business has certainly violated the rights of the plaintiff/petitioners to continue their
legitimate business in the Pandacan Terminal and deprived them of their huge investments
they put up therein. Thus, before the Court, therefore, determines whether the Ordinance in
question is valid or not, a Writ of Preliminary Injunction and a Writ of Mandatory Injunction
be issued to prevent serious and irreparable damage to plaintiff/petitioners. 65
Nowhere in the judge’s discussion can we see that, in addition to a showing of a clear legal right
of Chevron and Shell to the remedy sought, he was convinced that they had made out a case of
unconstitutionality or invalidity strong enough to overcome the presumption of validity of the
ordinance. Statutes and ordinances are presumed valid unless and until the courts declare the contrary
in clear and unequivocal terms.66 The mere fact that the ordinance is alleged to be unconstitutional or
invalid will not entitle a party to have its enforcement enjoined.67 The presumption is all in favor of
validity. The reason for this is obvious:
The action of the elected representatives of the people cannot be lightly set aside. The
councilors must, in the very nature of things, be familiar with the necessities of their particular
municipality and with all the facts and circumstances which surround the subject and
necessitate action. The local legislative body, by enacting the ordinance, has in effect given
notice that the regulations are essential to the well being of the people . . . The Judiciary
should not lightly set aside legislative action when there is not a clear invasion of personal or
property rights under the guise of police regulation.68
X—x—x
...[Courts] accord the presumption of constitutionality to legislative enactments, not only
because the legislature is presumed to abide by the Constitution but also because the
judiciary[,] in the determination of actual cases and controversies[,] must reflect the wisdom
and justice of the people as expressed through their representatives in the executive and
legislative departments of the government.69
The oil companies argue that this presumption must be set aside when the invalidity or
unreasonableness appears on the face of the ordinance itself.70 We see no reason to set aside the
presumption. The ordinance, on its face, does not at all appear to be unconstitutional. It reclassified the
subject area from industrial to commercial. Prima facie, this power is within the power of municipal
corporations:
The power of municipal corporations to divide their territory into industrial, commercial and
residential zones is recognized in almost all jurisdictions inasmuch as it is derived from the
police power itself and is exercised for the protection and benefit of their inhabitants.71
X—x—x
There can be no doubt that the City of Manila has the power to divide its territory into
residential and industrial zones, and to prescribe that offensive and unwholesome trades and
occupations are to be established exclusively in the latter zone.
xxx       xxx       xxx
Likewise, it cannot be denied that the City of Manila has the authority, derived from the
police power, of forbidding the appellant to continue the manufacture of toyo in the zone
where it is now situated, which has been declared residential....72
Courts will not invalidate an ordinance unless it clearly appears that it is unconstitutional. There is no
such showing here. Therefore, the injunctive writs issued in the Manila RTC’s May 19, 2003 order had
no leg to stand on.
We are aware that the issuance of these injunctive writs is not being assailed as tainted with grave
abuse of discretion. However, we are confronted with the question of whether these writs issued by a
lower court are impediments to the enforcement of Ordinance No. 8027 (which is the subject of the
mandamus petition). As already discussed, we rule in the negative.
Ordinance No. 8027 Was Not Superseded By Ordinance No. 8119
The March 7, 2007 decision did not take into consideration the passage of Ordinance No. 8119 entitled
"An Ordinance Adopting the Manila Comprehensive Land Use Plan and Zoning Regulations of 2006
and Providing for the Administration, Enforcement and Amendment thereto" which was approved by
respondent on June 16, 2006. The simple reason was that the Court was never informed about this
ordinance.
While courts are required to take judicial notice of the laws enacted by Congress, the rule with respect
to local ordinances is different. Ordinances are not included in the enumeration of matters covered by
mandatory judicial notice under Section 1, Rule 129 of the Rules of Court.73
Although, Section 50 of RA 40974 provides that:
SEC. 50 Judicial notice of ordinances. - All courts sitting in the city shall take judicial notice
of the ordinances passed by the [Sangguniang Panglungsod].
This cannot be taken to mean that this Court, since it has its seat in the City of Manila, should have
taken steps to procure a copy of the ordinance on its own, relieving the party of any duty to inform the
Court about it.
Even where there is a statute that requires a court to take judicial notice of municipal ordinances, a
court is not required to take judicial notice of ordinances that are not before it and to which it does not
have access. The party asking the court to take judicial notice is obligated to supply the court with the
full text of the rules the party desires it to have notice of.75 Counsel should take the initiative in
requesting that a trial court take judicial notice of an ordinance even where a statute requires courts to
take judicial notice of local ordinances.76
The intent of a statute requiring a court to take judicial notice of a local ordinance is to remove any
discretion a court might have in determining whether or not to take notice of an ordinance. Such a
statute does not direct the court to act on its own in obtaining evidence for the record and a party must
make the ordinance available to the court for it to take notice.77
In its defense, respondent claimed that he did not inform the Court about the enactment of Ordinance
No. 8119 because he believed that it was different from Ordinance No. 8027 and that the two were not
inconsistent with each other.78
In the same way that we deem the intervenors’ late intervention in this case unjustified, we find the
failure of respondent, who was an original party here, inexcusable.
The Rule On Judicial Admissions Is Not Applicable Against Respondent
The oil companies assert that respondent judicially admitted that Ordinance No. 8027 was repealed by
Ordinance No. 8119 in civil case no. 03-106379 (where Petron assailed the constitutionality of
Ordinance No. 8027) when the parties in their joint motion to withdraw complaint and counterclaim
stated that "the issue ...has been rendered moot and academic by virtue of the passage of [Ordinance
No. 8119]."79 They contend that such admission worked as an estoppel against the respondent.
Respondent countered that this stipulation simply meant that Petron was recognizing the validity and
legality of Ordinance No. 8027 and that it had conceded the issue of said ordinance’s constitutionality,
opting instead to question the validity of Ordinance No. 8119.80 The oil companies deny this and
further argue that respondent, in his answer in civil case no. 06-115334 (where Chevron and Shell are
asking for the nullification of Ordinance No. 8119), expressly stated that Ordinance No. 8119 replaced
Ordinance No. 8027:81
... Under Ordinance No. 8027, businesses whose uses are not in accord with the
reclassification were given six months to cease [their] operation. Ordinance No. 8119, which
in effect, replaced Ordinance [No.] 8027, merely took note of the time frame provided for in
Ordinance No. 8119.... Ordinance No. 8119 thus provided for an even longer term, that is[,]
seven years;82 (Emphasis supplied)
Rule 129, Section 4 of the Rules of Court provides:
Section 4. Judicial admissions. ― An admission, verbal or written, made by a party in the
course of the proceedings in the same case, does not require proof. The admission may be
contradicted only by showing that it was made through palpable mistake or that no such
admission was made. (Emphasis supplied)
While it is true that a party making a judicial admission cannot subsequently take a position contrary to
or inconsistent with what was pleaded,83 the aforestated rule is not applicable here. Respondent made
the statements regarding the ordinances in civil case nos. 03-106379 and 06-115334 which are not "the
same" as this case before us.84 To constitute a judicial admission, the admission must be made in the
same case in which it is offered.
Hence, respondent is not estopped from claiming that Ordinance No. 8119 did not supersede
Ordinance No. 8027. On the contrary, it is the oil companies which should be considered estopped.
They rely on the argument that Ordinance No. 8119 superseded Ordinance No. 8027 but, at the same
time, also impugn its (8119’s) validity. We frown on the adoption of inconsistent positions and distrust
any attempt at clever positioning under one or the other on the basis of what appears advantageous at
the moment. Parties cannot take vacillating or contrary positions regarding the validity of a statute 85 or
ordinance. Nonetheless, we will look into the merits of the argument of implied repeal.
Ordinance No. 8119 Did Not Impliedly Repeal Ordinance No. 8027
Both the oil companies and DOE argue that Ordinance No. 8119 repealed Ordinance No. 8027. They
assert that although there was no express repeal 86 of Ordinance No. 8027, Ordinance No. 8119
impliedly repealed it.
According to the oil companies, Ordinance No. 8119 reclassified the area covering the Pandacan
Terminals to "High Density Residential/Mixed Use Zone (R-3/MXD)" 87 whereas Ordinance No. 8027
reclassified the same area from Industrial II to Commercial I:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety,
and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land
use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the
east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,] PNR
Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and
Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino
Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from Industrial II to
Commercial I. (Emphasis supplied)
Moreover, Ordinance No. 8119 provides for a phase-out of seven years:
SEC. 72. Existing Non-Conforming Uses and Buildings. - The lawful use of any building,
structure or land at the time of the adoption of this Ordinance may be continued, although
such use does not conform with the provision of the Ordinance, provided:
xxx       xxx       xxx
(g) In case the non-conforming use is an industrial use:
xxx       xxx       xxx
d. The land use classified as non-conforming shall program the phase-out and
relocation of the non-conforming use within seven (7) years from the date of
effectivity of this Ordinance. (Emphasis supplied)
This is opposed to Ordinance No. 8027 which compels affected entities to vacate the area within six
months from the effectivity of the ordinance:
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the
date of effectivity of this Ordinance within which to cease and desist from the operation of
businesses which are hereby in consequence, disallowed.
Ordinance No. 8119 also designated the Pandacan oil depot area as a "Planned Unit
Development/Overlay Zone (O-PUD)":
SEC. 23. Use Regulations in Planned Unit Development/Overlay Zone (O-PUD). – O-PUD
Zones are identified specific sites in the City of Manila wherein the project site is
comprehensively planned as an entity via unitary site plan which permits flexibility in
planning/ design, building siting, complementarily of building types and land uses, usable
open spaces and the preservation of significant natural land features, pursuant to regulations
specified for each particular PUD. Enumerated below are identified PUD:
xxx       xxx       xxx
6. Pandacan Oil Depot Area
xxx       xxx       xxx
Enumerated below are the allowable uses:
1. all uses allowed in all zones where it is located
2. the [Land Use Intensity Control (LUIC)] under which zones are located shall, in all
instances be complied with
3. the validity of the prescribed LUIC shall only be [superseded] by the development controls
and regulations specified for each PUD as provided for each PUD as provided for by the
masterplan of respective PUDs.88 (Emphasis supplied)
Respondent claims that in passing Ordinance No. 8119, the Sanggunian did not intend to repeal
Ordinance No. 8027 but meant instead to carry over 8027’s provisions to 8119 for the purpose of
making Ordinance No. 8027 applicable to the oil companies even after the passage of Ordinance No.
8119.89 He quotes an excerpt from the minutes of the July 27, 2004 session of the Sanggunian during
the first reading of Ordinance No. 8119:
Member GARCIA: Your Honor, iyong patungkol po roon sa oil depot doon sa amin sa Sixth
District sa Pandacan, wala pong nakalagay eith sa ordinansa rito na taliwas o kakaiba roon sa
ordinansang ipinasa noong nakaraang Konseho, iyong Ordinance No. 8027. So kung ano po
ang nandirito sa ordinansa na ipinasa ninyo last time, iyon lang po ang ni-lift eithe at inilagay
eith. At eith eith ordinansang …iyong naipasa ng huling Konseho, niri-classify [ninyo] from
 Industrial II to Commercial C-1 ang area ng Pandacan kung nasaan ang oil depot. So ini-lift
lang po [eithe] iyong definition, density, at saka po yon pong … ng… noong ordinansa ninyo
na siya eith naming inilagay eith, iniba lang po naming iyong title. So wala po kaming
binago na taliwas o nailagay na taliwas doon sa ordinansang ipinasa ninyo, ni-lift lang
po [eithe] from Ordinance No. 8027."90 (Emphasis supplied)
We agree with respondent.
Repeal by implication proceeds on the premise that where a statute of later date clearly reveals the
intention of the legislature to abrogate a prior act on the subject, that intention must be given effect. 91
There are two kinds of implied repeal. The first is: where the provisions in the two acts on the same
subject matter are irreconcilably contradictory, the latter act, to the extent of the conflict, constitutes an
implied repeal of the earlier one.92 The second is: if the later act covers the whole subject of the earlier
one and is clearly intended as a substitute, it will operate to repeal the earlier law. 93 The oil companies
argue that the situation here falls under the first category.
Implied repeals are not favored and will not be so declared unless the intent of the legislators is
manifest.94 As statutes and ordinances are presumed to be passed only after careful deliberation and
with knowledge of all existing ones on the subject, it follows that, in passing a law, the legislature did
not intend to interfere with or abrogate a former law relating to the same subject matter.95 If the intent
to repeal is not clear, the later act should be construed as a continuation of, and not a substitute for, the
earlier act.96
These standards are deeply enshrined in our jurisprudence. We disagree that, in enacting Ordinance
No. 8119, there was any indication of the legislative purpose to repeal Ordinance No. 8027.97 The
excerpt quoted above is proof that there was never such an intent. While it is true that both ordinances
relate to the same subject matter, i.e. classification of the land use of the area where Pandacan oil depot
is located, if there is no intent to repeal the earlier enactment, every effort at reasonable construction
must be made to reconcile the ordinances so that both can be given effect:
The fact that a later enactment may relate to the same subject matter as that of an earlier
statute is not of itself sufficient to cause an implied repeal of the prior act, since the new
statute may merely be cumulative or a continuation of the old one. What is necessary is a
manifest indication of legislative purpose to repeal.98
For the first kind of implied repeal, there must be an irreconcilable conflict between the two
ordinances. There is no conflict between the two ordinances. Ordinance No. 8027 reclassified the
Pandacan area from Industrial II to Commercial I. Ordinance No. 8119, in Section 23, designated it as
a "Planned Unit Development/Overlay Zone (O-PUD)." In its Annex C which defined the zone
boundaries,99 the Pandacan area was shown to be within the "High Density Residential/Mixed Use
Zone (R-3/MXD)." These zone classifications in Ordinance No. 8119 are not inconsistent with the
reclassification of the Pandacan area from Industrial to Commercial in Ordinance No. 8027. The "O-
PUD" classification merely made Pandacan a "project site ... comprehensively planned as an entity via
unitary site plan which permits flexibility in planning/design, building siting, complementarity of
building types and land uses, usable open spaces and the preservation of significant natural land
features...."100 Its classification as "R-3/MXD" means that it should "be used primarily for high-rise
housing/dwelling purposes and limited complementary/supplementary trade, services and business
activities."101 There is no conflict since both ordinances actually have a common objective, i.e., to shift
the zoning classification from industrial to commercial (Ordinance No. 8027) or mixed
residential/commercial (Ordinance No. 8119).
Moreover, it is a well-settled rule in statutory construction that a subsequent general law does not
repeal a prior special law on the same subject unless it clearly appears that the legislature has intended
by the latter general act to modify or repeal the earlier special law. Generalia specialibus non derogant
(a general law does not nullify a specific or special law).102 This is so even if the provisions of the
general law are sufficiently comprehensive to include what was set forth in the special act. 103 The
special act and the general law must stand together, one as the law of the particular subject and the
other as the law of general application.104 The special law must be taken as intended to constitute an
exception to, or a qualification of, the general act or provision.105
The reason for this is that the legislature, in passing a law of special character, considers and
makes special provisions for the particular circumstances dealt with by the special law. This
being so, the legislature, by adopting a general law containing provisions repugnant to those
of the special law and without making any mention of its intention to amend or modify such
special law, cannot be deemed to have intended an amendment, repeal or modification of the
latter.106
Ordinance No. 8027 is a special law107 since it deals specifically with a certain area described therein
(the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law108 as it
covers the entire city of Manila.
The oil companies assert that even if Ordinance No. 8027 is a special law, the existence of an all-
encompassing repealing clause in Ordinance No. 8119 evinces an intent on the part of the Sanggunian
to repeal the earlier ordinance:
Sec. 84. Repealing Clause. – All ordinances, rules, regulations in conflict with the provisions
of this Ordinance are hereby repealed; PROVIDED, That the rights that are vested upon the
effectivity of this Ordinance shall not be impaired.
They cited Hospicio de San Jose de Barili, Cebu City v. Department of Agrarian Reform:109
The presence of such general repealing clause in a later statute clearly indicates the legislative
intent to repeal all prior inconsistent laws on the subject matter, whether the prior law is a
general law or a special law... Without such a clause, a later general law will ordinarily not
repeal a prior special law on the same subject. But with such clause contained in the
subsequent general law, the prior special law will be deemed repealed, as the clause is a clear
legislative intent to bring about that result.110
This ruling in not applicable here. The repealing clause of Ordinance No. 8119 cannot be taken to
indicate the legislative intent to repeal all prior inconsistent laws on the subject matter, including
Ordinance No. 8027, a special enactment, since the aforequoted minutes (an official record of the
discussions in the Sanggunian) actually indicated the clear intent to preserve the provisions of
Ordinance No. 8027.
To summarize, the conflict between the two ordinances is more apparent than real. The two ordinances
can be reconciled. Ordinance No. 8027 is applicable to the area particularly described therein whereas
Ordinance No. 8119 is applicable to the entire City of Manila.
Mandamus Lies To Compel Respondent Mayor To Enforce Ordinance No. 8027
The oil companies insist that mandamus does not lie against respondent in consideration of the
separation of powers of the executive and judiciary.111 This argument is misplaced. Indeed,
[the] Courts will not interfere by mandamus proceedings with the legislative [or executive
departments] of the government in the legitimate exercise of its powers, except to enforce
mere ministerial acts required by law to be performed by some officer thereof. 112
(Emphasis Supplied)
since this is the function of a writ of mandamus, which is the power to compel "the performance of an
act which the law specifically enjoins as a duty resulting from office, trust or station." 113
They also argue that petitioners had a plain, speedy and adequate remedy to compel respondent to
enforce Ordinance No. 8027 which was to seek relief from the President of the Philippines through the
Secretary of the Department of Interior and Local Government (DILG) by virtue of the President’s
power of supervision over local government units. Again, we disagree. A party need not go first to the
DILG in order to compel the enforcement of an ordinance. This suggested process would be
unreasonably long, tedious and consequently injurious to the interests of the local government unit
(LGU) and its constituents whose welfare is sought to be protected. Besides, petitioners’ resort to an
original action for mandamus before this Court is undeniably allowed by the Constitution.114
Ordinance No. 8027 Is Constitutional And Valid
Having ruled that there is no impediment to the enforcement of Ordinance No. 8027, we now proceed
to make a definitive ruling on its constitutionality and validity.
The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be
within the corporate powers of the LGU to enact and be passed according to the procedure prescribed
by law, it must also conform to the following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with
public policy and (6) must not be unreasonable.115
The City of Manila Has The Power To Enact Ordinance No. 8027
Ordinance No. 8027 was passed by the Sangguniang Panlungsod of Manila in the exercise of its police
power. Police power is the plenary power vested in the legislature to make statutes and ordinances to
promote the health, morals, peace, education, good order or safety and general welfare of the people. 116
This power flows from the recognition that salus populi est suprema lex (the welfare of the people is
the supreme law).117 While police power rests primarily with the national legislature, such power may
be delegated.118 Section 16 of the LGC, known as the general welfare clause, encapsulates the
delegated police power to local governments:119
Section 16. General Welfare. ― Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of appropriate and self-
reliant scientific and technological capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants.
LGUs like the City of Manila exercise police power through their respective legislative bodies, in this
case, the Sangguniang Panlungsod or the city council. Specifically, the Sanggunian can enact
ordinances for the general welfare of the city:
Section. 458. – Powers, Duties, Functions and Compensation. – (a) The sangguniang
panglungsod, as the legislative branch of the city, shall enact ordinances, approve resolutions
and appropriate funds for the general welfare of the city and its inhabitants pursuant to
Section 16 of this Code xxxx
This police power was also provided for in RA 409 or the Revised Charter of the City of Manila:
Section 18. Legislative powers. — The [City Council] shall have the following legislative
powers:
xxx       xxx       xxx
(g) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the
furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort,
convenience, and general welfare of the city and its inhabitants, and such others as may be
necessary to carry into effect and discharge the powers and duties conferred by this chapter
xxxx120
Specifically, the Sanggunian has the power to "reclassify land within the jurisdiction of the city."121
The Enactment Of Ordinance No. 8027 Is A Legitimate Exercise Of Police Power
As with the State, local governments may be considered as having properly exercised their police
power only if the following requisites are met: (1) the interests of the public generally, as distinguished
from those of a particular class, require its exercise and (2) the means employed are reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. In short,
there must be a concurrence of a lawful subject and a lawful method.122
Ordinance No. 8027 was enacted "for the purpose of promoting sound urban planning, ensuring health,
public safety and general welfare" 123 of the residents of Manila. The Sanggunian was impelled to take
measures to protect the residents of Manila from catastrophic devastation in case of a terrorist attack on
the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area defined in the
ordinance from industrial to commercial.
The following facts were found by the Committee on Housing, Resettlement and Urban Development
of the City of Manila which recommended the approval of the ordinance:
(1) the depot facilities contained 313.5 million liters of highly flammable and highly volatile products
which include petroleum gas, liquefied petroleum gas, aviation fuel, diesel, gasoline, kerosene and fuel
oil among others;
(2) the depot is open to attack through land, water or air;
(3) it is situated in a densely populated place and near Malacañang Palace and
(4) in case of an explosion or conflagration in the depot, the fire could spread to the neighboring
communities.124
The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of
Manila and not just of a particular class.125 The depot is perceived, rightly or wrongly, as a
representation of western interests which means that it is a terrorist target. As long as it there is such a
target in their midst, the residents of Manila are not safe. It therefore became necessary to remove these
terminals to dissipate the threat. According to respondent:
Such a public need became apparent after the 9/11 incident which showed that what was
perceived to be impossible to happen, to the most powerful country in the world at that, is
actually possible. The destruction of property and the loss of thousands of lives on that fateful
day became the impetus for a public need. In the aftermath of the 9/11 tragedy, the threats of
terrorism continued [such] that it became imperative for governments to take measures to
combat their effects.126
Wide discretion is vested on the legislative authority to determine not only what the interests of the
public require but also what measures are necessary for the protection of such interests. 127 Clearly, the
Sanggunian was in the best position to determine the needs of its constituents.
In the exercise of police power, property rights of individuals may be subjected to restraints and
burdens in order to fulfill the objectives of the government.128 Otherwise stated, the government may
enact legislation that may interfere with personal liberty, property, lawful businesses and occupations
to promote the general welfare.129 However, the interference must be reasonable and not arbitrary. And
to forestall arbitrariness, the methods or means used to protect public health, morals, safety or welfare
must have a reasonable relation to the end in view.130
The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the
area where the depot is situated from industrial to commercial. A zoning ordinance is defined as a local
city or municipal legislation which logically arranges, prescribes, defines and apportions a given
political subdivision into specific land uses as present and future projection of needs. 131 As a result of
the zoning, the continued operation of the businesses of the oil companies in their present location will
no longer be permitted. The power to establish zones for industrial, commercial and residential uses is
derived from the police power itself and is exercised for the protection and benefit of the residents of a
locality.132 Consequently, the enactment of Ordinance No. 8027 is within the power of the
Sangguniang Panlungsod of the City of Manila and any resulting burden on those affected cannot be
said to be unjust:
There can be no doubt that the City of Manila has the power to divide its territory into
residential and industrial zones, and to prescribe that offensive and unwholesome trades and
occupations are to be established exclusively in the latter zone.
"The benefits to be derived by cities adopting such regulations (zoning) may be summarized
as follows: They attract a desirable and assure a permanent citizenship; they foster pride in
and attachment to the city; they promote happiness and contentment; they stabilize the use and
value of property and promote the peace, [tranquility], and good order of the city. We do not
hesitate to say that the attainment of these objects affords a legitimate field for the exercise of
the police power. He who owns property in such a district is not deprived of its use by such
regulations. He may use it for the purposes to which the section in which it is located is
dedicated. That he shall not be permitted to use it to the desecration of the community
constitutes no unreasonable or permanent hardship and results in no unjust burden."
xxx       xxx       xxx
"The 14th Amendment protects the citizen in his right to engage in any lawful business, but it
does not prevent legislation intended to regulate useful occupations which, because of their
nature or location, may prove injurious or offensive to the public."133
We entertain no doubt that Ordinance No. 8027 is a valid police power measure because there is a
concurrence of lawful subject and lawful method.
Ordinance No. 8027 Is Not Unfair, Oppressive Or Confiscatory Which Amounts To Taking
Without Compensation
According to the oil companies, Ordinance No. 8027 is unfair and oppressive as it does not only
regulate but also absolutely prohibits them from conducting operations in the City of Manila.
Respondent counters that this is not accurate since the ordinance merely prohibits the oil companies
from operating their businesses in the Pandacan area.
Indeed, the ordinance expressly delineated in its title and in Section 1 what it pertained to. Therefore,
the oil companies’ contention is not supported by the text of the ordinance. Respondent succinctly
stated that:
The oil companies are not forbidden to do business in the City of Manila. They may still very
well do so, except that their oil storage facilities are no longer allowed in the Pandacan area.
Certainly, there are other places in the City of Manila where they can conduct this specific
kind of business. Ordinance No. 8027 did not render the oil companies illegal. The assailed
ordinance affects the oil companies business only in so far as the Pandacan area is
concerned.134
The oil companies are not prohibited from doing business in other appropriate zones in Manila. The
City of Manila merely exercised its power to regulate the businesses and industries in the zones it
established:
As to the contention that the power to regulate does not include the power to prohibit, it will
be seen that the ordinance copied above does not prohibit the installation of motor engines
within the municipality of Cabanatuan but only within the zone therein fixed. If the municipal
council of Cabanatuan is authorized to establish said zone, it is also authorized to provide
what kind of engines may be installed therein. In banning the installation in said zone of all
engines not excepted in the ordinance, the municipal council of Cabanatuan did no more than
regulate their installation by means of zonification.135
The oil companies aver that the ordinance is unfair and oppressive because they have invested billions
of pesos in the depot.136 Its forced closure will result in huge losses in income and tremendous costs in
constructing new facilities.
Their contention has no merit. In the exercise of police power, there is a limitation on or restriction of
property interests to promote public welfare which involves no compensable taking. Compensation is
necessary only when the state’s power of eminent domain is exercised. In eminent domain, property is
appropriated and applied to some public purpose. Property condemned under the exercise of police
power, on the other hand, is noxious or intended for a noxious or forbidden purpose and, consequently,
is not compensable.137 The restriction imposed to protect lives, public health and safety from danger is
not a taking. It is merely the prohibition or abatement of a noxious use which interferes with
paramount rights of the public.
Property has not only an individual function, insofar as it has to provide for the needs of the owner, but
also a social function insofar as it has to provide for the needs of the other members of society. 138 The
principle is this:
Police power proceeds from the principle that every holder of property, however absolute and
unqualified may be his title, holds it under the implied liability that his use of it shall not be
injurious to the equal enjoyment of others having an equal right to the enjoyment of their
property, nor injurious to the right of the community. Rights of property, like all other social
and conventional rights, are subject to reasonable limitations in their enjoyment as shall
prevent them from being injurious, and to such reasonable restraints and regulations
established by law as the legislature, under the governing and controlling power vested in
them by the constitution, may think necessary and expedient.139
In the regulation of the use of the property, nobody else acquires the use or interest therein, hence there
is no compensable taking.140 In this case, the properties of the oil companies and other businesses
situated in the affected area remain theirs. Only their use is restricted although they can be applied to
other profitable uses permitted in the commercial zone.
Ordinance No. 8027 Is Not Partial And Discriminatory
The oil companies take the position that the ordinance has discriminated against and singled out the
Pandacan Terminals despite the fact that the Pandacan area is congested with buildings and residences
that do not comply with the National Building Code, Fire Code and Health and Sanitation Code.141
This issue should not detain us for long. An ordinance based on reasonable classification does not
violate the constitutional guaranty of the equal protection of the law.142 The requirements for a valid
and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to
the purpose of the law; (3) it must not be limited to existing conditions only and (4) it must apply
equally to all members of the same class.143
The law may treat and regulate one class differently from another class provided there are real and
substantial differences to distinguish one class from another. 144 Here, there is a reasonable
classification. We reiterate that what the ordinance seeks to prevent is a catastrophic devastation that
will result from a terrorist attack. Unlike the depot, the surrounding community is not a high-value
terrorist target. Any damage caused by fire or explosion occurring in those areas would be nothing
compared to the damage caused by a fire or explosion in the depot itself. Accordingly, there is a
substantial distinction. The enactment of the ordinance which provides for the cessation of the
operations of these terminals removes the threat they pose. Therefore it is germane to the purpose of
the ordinance. The classification is not limited to the conditions existing when the ordinance was
enacted but to future conditions as well. Finally, the ordinance is applicable to all businesses and
industries in the area it delineated.
Ordinance No. 8027 is Not Inconsistent With RA 7638 And RA 8479
The oil companies and the DOE assert that Ordinance No. 8027 is unconstitutional because it
contravenes RA 7638 (DOE Act of 1992)145 and RA 8479 (Downstream Oil Industry Deregulation Law
of 1998).146 They argue that through RA 7638, the national legislature declared it a policy of the state
"to ensure a continuous, adequate, and economic supply of energy"147 and created the DOE to
implement this policy. Thus, under Section 5 I, DOE is empowered to "establish and administer
programs for the exploration, transportation, marketing, distribution, utilization, conservation,
stockpiling, and storage of energy resources." Considering that the petroleum products contained in the
Pandacan Terminals are major and critical energy resources, they conclude that their administration,
storage, distribution and transport are of national interest and fall under DOE’s primary and exclusive
jurisdiction.148
They further assert that the terminals are necessary for the delivery of immediate and adequate supply
of oil to its recipients in the most economical way.149 Local legislation such as Ordinance No. 8027
(which effectively calls for the removal of these terminals) allegedly frustrates the state policy of
ensuring a continuous, adequate, and economic supply of energy expressed in RA 7638, a national
law.150 Likewise, the ordinance thwarts the determination of the DOE that the terminals’ operations
should be merely scaled down and not discontinued.151 They insist that this should not be allowed
considering that it has a nationwide economic impact and affects public interest transcending the
territorial jurisdiction of the City of Manila.152
According to them, the DOE’s supervision over the oil industry under RA 7638 was subsequently
underscored by RA 8479, particularly in Section 7 thereof:
SECTION 7. Promotion of Fair Trade Practices. ― The Department of Trade and Industry
(DTI) and DOE shall take all measures to promote fair trade and prevent cartelization,
monopolies, combinations in restraint of trade, and any unfair competition in the Industry as
defined in Article 186 of the Revised Penal Code, and Articles 168 and 169 of Republic Act
No. 8293, otherwise known as the "Intellectual Property Rights Law". The DOE shall
continue to encourage certain practices in the Industry which serve the public interest
and are intended to achieve efficiency and cost reduction, ensure continuous supply of
petroleum products, and enhance environmental protection. These practices may include
borrow-and-loan agreements, rationalized depot and manufacturing operations, hospitality
agreements, joint tanker and pipeline utilization, and joint actions on oil spill control and fire
prevention. (Emphasis supplied)
Respondent counters that DOE’s regulatory power does not preclude LGUs from exercising their
police power.153
Indeed, ordinances should not contravene existing statutes enacted by Congress. The rationale for this
was clearly explained in Magtajas vs. Pryce Properties Corp., Inc.:154
The rationale of the requirement that the ordinances should not contravene a statute is
obvious. Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred on them by Congress as the national
lawmaking body. The delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local government units can undo the
acts of Congress, from which they have derived their power in the first place, and negate by
mere ordinance the mandate of the statute.
"Municipal corporations owe their origin to, and derive their powers and rights wholly from
the legislature. It breathes into them the breath of life, without which they cannot exist. As it
creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some
constitutional limitation on the right, the legislature might, by a single act, and if we can
suppose it capable of so great a folly and so great a wrong, sweep from existence all of the
municipal corporations in the State, and the corporation could not prevent it. We know of no
limitation on the right so far as to the corporation themselves are concerned. They are, so to
phrase it, the mere tenants at will of the legislature."
This basic relationship between the national legislature and the local government units has not
been enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. Without meaning to detract from that policy, we here confirm that Congress
retains control of the local government units although in significantly reduced degree now
than under our previous Constitutions. The power to create still includes the power to destroy.
The power to grant still includes the power to withhold or recall. True, there are certain
notable innovations in the Constitution, like the direct conferment on the local government
units of the power to tax, which cannot now be withdrawn by mere statute. By and large,
however, the national legislature is still the principal of the local government units, which
cannot defy its will or modify or violate it.155
The question now is whether Ordinance No. 8027 contravenes RA 7638 and RA 8479. It does not.
Under Section 5 I of RA 7638, DOE was given the power to "establish and administer programs for the
exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage
of energy resources." On the other hand, under Section 7 of RA 8749, the DOE "shall continue to
encourage certain practices in the Industry which serve the public interest and are intended to achieve
efficiency and cost reduction, ensure continuous supply of petroleum products." Nothing in these
statutes prohibits the City of Manila from enacting ordinances in the exercise of its police power.
The principle of local autonomy is enshrined in and zealously protected under the Constitution. In
Article II, Section 25 thereof, the people expressly adopted the following policy:
Section 25. The State shall ensure the autonomy of local governments.
An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting the
autonomy of LGUs. The LGC was specially promulgated by Congress to ensure the autonomy of local
governments as mandated by the Constitution:
Sec. 2. Declaration of Policy. ― (a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State shall enjoy genuine and meaningful
local autonomy to enable them to attain their fullest development as self-reliant
communities and make them more effective partners in the attainment of national goals.
Toward this end, the State shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities, and resources. The
process of decentralization shall proceed from the National Government to the local
government units. (Emphasis supplied)
We do not see how the laws relied upon by the oil companies and DOE stripped the City of Manila of
its power to enact ordinances in the exercise of its police power and to reclassify the land uses within
its jurisdiction. To guide us, we shall make a brief survey of our decisions where the police power
measure of the LGU clashed with national laws.
In Tan v. Pereña,156 the Court ruled that Ordinance No. 7 enacted by the municipality of Daanbantayan,
Cebu allowing the operation of three cockpits was invalid for violating PD 449 (or the Cockfighting
Law of 1974) which permitted only one cockpit per municipality.
In Batangas CATV, Inc. v. Court of Appeals,157 the Sangguniang Panlungsod of Batangas City enacted
Resolution No. 210 granting Batangas CATV, Inc. a permit to operate a cable television (CATV)
system in Batangas City. The Court held that the LGU did not have the authority to grant franchises to
operate a CATV system because it was the National Telecommunications Commission (NTC) that had
the power under EO Nos. 205 and 436 to regulate CATV operations. EO 205 mandated the NTC to
grant certificates of authority to CATV operators while EO 436 vested on the NTC the power to
regulate and supervise the CATV industry.
In Lina, Jr. v. Paño,158 we held that Kapasiyahan Bilang 508, Taon 1995 of the Sangguniang
Panlalawigan of Laguna could not be used as justification to prohibit lotto in the municipality of San
Pedro, Laguna because lotto was duly authorized by RA 1169, as amended by BP 42. This law granted
a franchise to the Philippine Charity Sweepstakes Office and allowed it to operate lotteries.
In Magtajas v. Pryce Properties Corp., Inc.,159 the Sangguniang Panlungsod of Cagayan de Oro City
passed Ordinance Nos. 3353 and 3375-93 prohibiting the operation of casinos in the city. We ruled that
these ordinances were void for contravening PD 1869 or the charter of the Philippine Amusements and
Gaming Corporation which had the power to operate casinos.
The common dominator of all of these cases is that the national laws were clearly and expressly in
conflict with the ordinances/resolutions of the LGUs. The inconsistencies were so patent that there was
no room for doubt. This is not the case here.
The laws cited merely gave DOE general powers to "establish and administer programs for the
exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage
of energy resources" and "to encourage certain practices in the [oil] industry which serve the public
interest and are intended to achieve efficiency and cost reduction, ensure continuous supply of
petroleum products." These powers can be exercised without emasculating the LGUs of the powers
granted them. When these ambiguous powers are pitted against the unequivocal power of the LGU to
enact police power and zoning ordinances for the general welfare of its constituents, it is not difficult
to rule in favor of the latter. Considering that the powers of the DOE regarding the Pandacan Terminals
are not categorical, the doubt must be resolved in favor of the City of Manila:
SECTION 5. Rules of Interpretation. ― In the interpretation of the provisions of this Code,
the following rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted in its
favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of
powers and of the lower local government unit. Any fair and reasonable doubt as to the
existence of the power shall be interpreted in favor of the local government unit concerned;
xxx       xxx       xxx
(g) IThe general welfare provisions in this Code shall be liberally interpreted to give more
powers to local government units in accelerating economic development and upgrading the
quality of life for the people in the community xxxx
The least we can do to ensure genuine and meaningful local autonomy is not to force an
interpretation that negates powers explicitly granted to local governments. To rule against the
power of LGUs to reclassify areas within their jurisdiction will subvert the principle of local
autonomy guaranteed by the Constitution.160 As we have noted in earlier decisions, our
national officials should not only comply with the constitutional provisions on local autonomy
but should also appreciate the spirit and liberty upon which these provisions are based.161
The DOE Cannot Exercise The Power Of Control Over LGUs
Another reason that militates against the DOE’s assertions is that Section 4 of Article X of the
Constitution confines the President’s power over LGUs to one of general supervision:
SECTION 4. The President of the Philippines shall exercise general supervision over local
governments. Xxxx
Consequently, the Chief Executive or his or her alter egos, cannot exercise the power of control over
them.162 Control and supervision are distinguished as follows:
[Supervision] means overseeing or the power or authority of an officer to see that subordinate
officers perform their duties. If the latter fail or neglect to fulfill them, the former may take
such action or step as prescribed by law to make them perform their duties. Control, on the
other hand, means the power of an officer to alter or modify or nullify or set aside what a
subordinate officer ha[s] done in the performance of his duties and to substitute the judgment
of the former for that of the latter.163
Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body;
it does not include any restraining authority over such body.164 It does not allow the supervisor to annul
the acts of the subordinate.165 Here, what the DOE seeks to do is to set aside an ordinance enacted by
local officials, a power that not even its principal, the President, has. This is because:
Under our present system of government, executive power is vested in the President. The
members of the Cabinet and other executive officials are merely alter egos. As such, they are
subject to the power of control of the President, at whose will and behest they can be removed
from office; or their actions and decisions changed, suspended or reversed. In contrast, the
heads of political subdivisions are elected by the people. Their sovereign powers emanate
from the electorate, to whom they are directly accountable. By constitutional fiat, they are
subject to the President’s supervision only, not control, so long as their acts are exercised
within the sphere of their legitimate powers. By the same token, the President may not
withhold or alter any authority or power given them by the Constitution and the law.166
Thus, the President and his or her alter egos, the department heads, cannot interfere with the activities
of local governments, so long as they act within the scope of their authority. Accordingly, the DOE
cannot substitute its own discretion for the discretion exercised by the sanggunian of the City of
Manila. In local affairs, the wisdom of local officials must prevail as long as they are acting within the
parameters of the Constitution and the law.167
Ordinance No. 8027 Is Not Invalid For Failure To Comply With RA 7924 And EO 72
The oil companies argue that zoning ordinances of LGUs are required to be submitted to the
Metropolitan Manila Development Authority (MMDA) for review and if found to be in compliance
with its metropolitan physical framework plan and regulations, it shall endorse the same to the Housing
and Land Use Regulatory Board (HLURB). Their basis is Section 3 (e) of RA 7924:168
SECTION 3. Scope of MMDA Services. ― Metro-wide services under the jurisdiction of
the MMDA are those services which have metro-wide impact and transcend local political
boundaries or entail huge expenditures such that it would not be viable for said services to be
provided by the individual [LGUs] comprising Metropolitan Manila. These services shall
include:
xxx       xxx       xxx
(g) Urban renewal, zoning, and land use planning, and shelter services which include the
formulation, adoption and implementation of policies, standards, rules and regulations,
 programs and projects to rationalize and optimize urban land use and provide direction to
urban growth and expansion, the rehabilitation and development of slum and blighted areas,
the development of shelter and housing facilities and the provision of necessary social
services thereof. (Emphasis supplied)
Reference was also made to Section 15 of its implementing rules:
Section 15. Linkages with HUDCC, HLURB, NHA, LGUs and Other National Government
Agencies Concerned on Urban Renewal, Zoning and Land Use Planning and Shelter Services.
Within the context of the National Housing and Urban Development Framework, and
pursuant to the national standards, guidelines and regulations formulated by the Housing and
Land Use Regulatory Board [HLURB] on land use planning and zoning, the [MMDA] shall
prepare a metropolitan physical framework plan and regulations which shall complement and
translate the socio-economic development plan for Metro Manila into physical or spatial
terms, and provide the basis for the preparation, review, integration and implementation of
local land use plans and zoning, ordinance of cities and municipalities in the area.
Said framework plan and regulations shall contain, among others, planning and zoning
policies and procedures that shall be observed by local government units in the preparation of
their own plans and ordinances pursuant to Section 447 and 458 of RA 7160, as well as the
identification of sites and projects that are considered to be of national or metropolitan
significance.
Cities and municipalities shall prepare their respective land use plans and zoning
ordinances and submit the same for review and integration by the [MMDA] and
indorsement to HLURB in accordance with Executive Order No. 72 and other pertinent
laws.
In the preparation of a Metropolitan Manila physical framework plan and regulations, the
[MMDA] shall coordinate with the Housing and Urban Development Coordinating Council,
HLURB, the National Housing Authority, Intramuros Administration, and all other agencies
of the national government which are concerned with land use and zoning, urban renewal and
shelter services. (Emphasis supplied)
They also claim that EO 72169 provides that zoning ordinances of cities and municipalities of Metro
Manila are subject to review by the HLURB to ensure compliance with national standards and
guidelines. They cite Section 1, paragraphs I, (e), (f) and (g):
SECTION 1. Plan formulation or updating. ―
xxx       xxx       xxx
(g) Cities and municipalities of Metropolitan Manila shall continue to formulate or
update their respective comprehensive land use plans, in accordance with the land
use planning and zoning standards and guidelines prescribed by the HLURB
pursuant to EO 392, S. of 1990, and other pertinent national policies.
xxx       xxx       xxx
(e) Pursuant to LOI 729, S. of 1978, EO 648, S. of 1981, and RA 7279, the comprehensive
land use plans of provinces, highly urbanized cities and independent component cities shall
be reviewed and ratified by the HLURB to ensure compliance with national standards and
guidelines.
(f) Pursuant to EO 392, S. of 1999, the comprehensive land use plans of cities and
municipalities of Metropolitan Manila shall be reviewed by the HLURB to ensure compliance
with national standards and guidelines.
(g) Said review shall be completed within three (3) months upon receipt thereof otherwise, the
same shall be deemed consistent with law, and, therefore, valid. (Emphasis supplied)
They argue that because Ordinance No. 8027 did not go through this review process, it is invalid.
The argument is flawed.
RA 7942 does not give MMDA the authority to review land use plans and zoning ordinances of cities
and municipalities. This was only found in its implementing rules which made a reference to EO 72.
EO 72 expressly refers to comprehensive land use plans (CLUPs) only. Ordinance No. 8027 is
admittedly not a CLUP nor intended to be one. Instead, it is a very specific ordinance which
reclassified the land use of a defined area in order to prevent the massive effects of a possible terrorist
attack. It is Ordinance No. 8119 which was explicitly formulated as the "Manila [CLUP] and Zoning
Ordinance of 2006." CLUPs are the ordinances which should be submitted to the MMDA for
integration in its metropolitan physical framework plan and approved by the HLURB to ensure that
they conform with national guidelines and policies.
Moreover, even assuming that the MMDA review and HLURB ratification are necessary, the oil
companies did not present any evidence to show that these were not complied with. In accordance with
the presumption of validity in favor of an ordinance, its constitutionality or legality should be upheld in
the absence of proof showing that the procedure prescribed by law was not observed. The burden of
proof is on the oil companies which already had notice that this Court was inclined to dispose of all the
issues in this case. Yet aside from their bare assertion, they did not present any certification from the
MMDA or the HLURB nor did they append these to their pleadings. Clearly, they failed to rebut the
presumption of validity of Ordinance No. 8027.170
Conclusion
Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose
billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally protected
rights, the right to life enjoys precedence over the right to property.171 The reason is obvious: life is
irreplaceable, property is not. When the state or LGU’s exercise of police power clashes with a few
individuals’ right to property, the former should prevail.172
Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without
a doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the
inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the
relocation of the terminals. Their power to chart and control their own destiny and preserve their lives
and safety should not be curtailed by the intervenors’ warnings of doomsday scenarios and threats of
economic disorder if the ordinance is enforced.
Secondary to the legal reasons supporting the immediate implementation of Ordinance No. 8027 are
the policy considerations which drove Manila’s government to come up with such a measure:
... [The] oil companies still were not able to allay the apprehensions of the city regarding the
security threat in the area in general. No specific action plan or security measures were
presented that would prevent a possible large-scale terrorist or malicious attack especially an
attack aimed at Malacañang. The measures that were installed were more directed towards
their internal security and did not include the prevention of an external attack even on a
bilateral level of cooperation between these companies and the police and military.
xxx       xxx       xxx
It is not enough for the city government to be told by these oil companies that they have the
most sophisticated fire-fighting equipments and have invested millions of pesos for these
equipments. The city government wants to be assured that its residents are safe at any time
from these installations, and in the three public hearings and in their position papers, not one
 statement has been said that indeed the absolute safety of the residents from the hazards posed
by these installations is assured.173
We are also putting an end to the oil companies’ determination to prolong their stay in Pandacan
despite the objections of Manila’s residents. As early as October 2001, the oil companies signed a
MOA with the DOE obliging themselves to:
... undertake a comprehensive and comparative study ... [which] shall include the preparation
of a Master Plan, whose aim is to determine the scope and timing of the feasible location of
the Pandacan oil terminals and all associated facilities and infrastructure including
government support essential for the relocation such as the necessary transportation
infrastructure, land and right of way acquisition, resettlement of displaced residents and
environmental and social acceptability which shall be based on mutual benefit of the Parties
and the public.174
Now that they are being compelled to discontinue their operations in the Pandacan Terminals, they
cannot feign unreadiness considering that they had years to prepare for this eventuality.
Just the same, this Court is not about to provoke a crisis by ordering the immediate relocation of the
Pandacan Terminals out of its present site. The enforcement of a decision of this Court, specially one
with far-reaching consequences, should always be within the bounds of reason, in accordance with a
comprehensive and well-coordinated plan, and within a time-frame that complies with the letter and
spirit of our resolution. To this end, the oil companies have no choice but to obey the law.
A Warning To Petitioners’ Counsel
We draw the attention of the parties to a matter of grave concern to the legal profession.
Petitioners and their counsel, Atty. Samson Alcantara, submitted a four-page memorandum that clearly
contained either substance nor research. It is absolutely insulting to this Court.
We have always tended towards judicial leniency, temperance and compassion to those who suffer
from a wrong perception of what the majesty of the law means. But for a member of the bar, an officer
of the court, to file in this Court a memorandum of such unacceptable quality is an entirely different
matter.
It is indicative less of a personal shortcoming or contempt of this Court and more of a lawyer’s sorry
descent from a high sense of duty and responsibility. As a member of the bar and as an officer of the
court, a lawyer ought to be keenly aware that the chief safeguard of the body politic is respect for the
law and its magistrates.
There is nothing more effective than the written word by which counsel can persuade this Court of the
righteousness of his cause. For if truth were self-evident, a memorandum would be completely
unnecessary and superfluous.
The inability of counsel to prepare a memorandum worthy of this Court’s consideration is an ejemplo
malo to the legal profession as it betrays no genuine interest in the cause he claims to espouse. Or did
counsel think he can earn his moment of glory without the hard work and dedication called for by his
petition?
A Final Word
On Wednesday, January 23, 2008, a defective tanker containing 2,000 liters of gasoline and 14,000
liters of diesel exploded in the middle of the street a short distance from the exit gate of the Pandacan
Terminals, causing death, extensive damage and a frightening conflagration in the vicinity of the
incident. Need we say anthing about what will happen if it is the estimated 162 to 211 million liters 175
of petroleum products in the terminal complex which blow up?
WHEREFORE, the motions for leave to intervene of Chevron Philippines Inc., Petron Corporation
and Pilipinas Shell Petroleum Corporation, and the Republic of the Philippines, represented by the
Department of Energy, are hereby GRANTED. Their respective motions for reconsideration are
hereby DENIED. The Regional Trial Court, Manila, Branch 39 is ORDERED to DISMISS the
consolidated cases of Civil Case No. 03-106377 and Civil Case No. 03-106380.
We reiterate our order to respondent Mayor of the City of Manila to enforce Ordinance No. 8027. In
coordination with the appropriate agencies and other parties involved, respondent Mayor is hereby
ordered to oversee the relocation and transfer of the Pandacan Terminals out of its present site.
To ensure the orderly transfer, movement and relocation of assets and personnel, the intervenors
Chevron Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation shall, within a
non-extendible period of ninety (90) days, submit to the Regional Trial Court of Manila, Branch 39,
the comprehensive plan and relocation schedule which have allegedly been prepared. The presiding
judge of Manila RTC, Branch 39 will monitor the strict enforcement of this resolution.
Atty. Samson Alcantara is hereby ordered to explain within five (5) days from notice why he should
not be disciplined for his refusal, or inability, to file a memorandum worthy of the consideration of this
Court.
Treble costs against petitioners’ counsel, Atty. Samson Alcantara.
SO ORDERED.
"G" HOLDINGS, INC., Petitioner, v. NATIONAL MINES AND ALLIED WORKERS UNION
Local 103 (NAMAWU); SHERIFFS RICHARD H. APROSTA and ALBERTO MUNOZ, all
acting Sheriffs; DEPARTMENT OF LABOR AND EMPLOYMENT, Region VI, Bacolod
District Office, Bacolod City, Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing
the October 14, 2003 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 75322.
The Facts
The petitioner, "G" Holdings, Inc. (GHI), is a domestic corporation primarily engaged in the business
of owning and holding shares of stock of different companies.2 It was registered with the Securities and
Exchange Commission on August 3, 1992. Private respondent, National Mines and Allied Workers
Union Local 103 (NAMAWU), was the exclusive bargaining agent of the rank and file employees of
Maricalum Mining Corporation (MMC),3 an entity operating a copper mine and mill complex at
Sipalay, Negros Occidental.4
MMC was incorporated by the Development Bank of the Philippines (DBP) and the Philippine
National Bank (PNB) on October 19, 1984, on account of their foreclosure of Marinduque Mining and
Industrial Corporation's assets. MMC started its commercial operations in August 1985. Later, DBP
and PNB transferred it to the National Government for disposition or privatization because it had
become a non-performing asset.5
On October 2, 1992, pursuant to a Purchase and Sale Agreement6 executed between GHI and Asset
Privatization Trust (APT), the former bought ninety percent (90%) of MMC's shares and financial
claims.7 These financial claims were converted into three Promissory Notes8 issued by MMC in favor
of GHI totaling P500M and secured by mortgages over MMC's properties. The notes, which were
similarly worded except for their amounts, read as follows:
PROMISSORY NOTE
 AMOUNT - [Php186,550,560.00 in the second
Php114,715,360.00 note, and Php248,734,080.00 in the
third note.]
MAKATI, METRO MANILA, PHILIPPINES, October 2, 1992
For Value Received, MARICALUM MINING CORPORATION (MMC) with postal address at 4th
Floor, Manila Memorial Park Bldg., 2283 Pasong Tamo Extension, Makati, Metro Manila, Philippines,
hereby promises to pay "G" HOLDINGS, INC., at its office at Phimco Compound, F. Manalo Street,
Punta, Sta. Ana, Manila, the amount of PESOS ONE HUNDRED FOURTEEN MILLION, SEVEN
HUNDRED FIFTEEN THOUSAND AND THREE HUNDRED SIXTY (Php114,715,360.00)
["PESOS ONE HUNDRED EIGHTY SIX MILLION FIVE HUNDRED FIFTY THOUSAND FIFE
HUNDRED AND SIXTY (Php186,550,560.00)" in the second note, and "PESOS TWO HUNDRED
FORTY EIGHT MILLION, SEVEN HUNDRED THIRTY FOUR THOUSAND AND EIGHTY
(Php248,734,080.00)" in the third note], PHILIPPINE CURRENCY, on or before October 2, 2002.
Interest shall accrue on the amount of this Note at a rate per annum equal to the interest of 90-day
Treasury Bills prevailing on the Friday preceding the maturity date of every calendar quarter.
As collateral security, MMC hereby establishes and constitutes in favor of "G" HOLDINGS, INC., its
successors and/or assigns:
1. A mortgage over certain parcels of land, more particularly listed and described in the Sheriff's
Certificate of Sale dated September 7, 1984 issued by the Ex-Officio Provincial Sheriff of Negros
Occidental, Rolando V. Ramirez, with office at Bacolod City following the auction sale conducted
pursuant to the provisions of Act 3135, a copy of which certificate of sale is hereto attached as Annex
"A" and made an integral part hereof;
2. A chattel mortgage over assets and personal properties more particularly listed and described in the
Sheriff's Certificate of Sale dated September 7, 1984 issued by the Ex-Officio Provincial Sheriff of
Negros Occidental, Rolando V. Ramirez, with office at Bacolod City following the auction conducted
pursuant to the provisions of Act 1508, a copy of which Certificate of Sale is hereto attached as Annex
"B" and made an integral part hereof.
3. Mortgages over assets listed in APT Specific Catalogue GC-031 for MMC, a copy of which
Catalogue is hereby made an integral part hereof by way of reference, as well as assets presently in use
by MMC but which are not listed or included in paragraphs 1 and 2 above and shall include all assets
that may hereinafter be acquired by MMC.
MARICALUM MINING CORPORATION
(Maker)
x x x x9
Upon the signing of the Purchase and Sale Agreement and upon the full satisfaction of the stipulated
down payment, GHI immediately took physical possession of the mine site and its facilities, and took
full control of the management and operation of MMC.10
Almost four years thereafter, or on August 23, 1996, a labor dispute (refusal to bargain collectively and
unfair labor practice) arose between MMC and NAMAWU, with the latter eventually filing with the
National Conciliation and Mediation Board of Bacolod City a notice of strike. 11 Then Labor Secretary,
now Associate Justice of this Court, Leonardo A. Quisumbing, later assumed jurisdiction over the
dispute and ruled in favor of NAMAWU. In his July 30, 1997 Order in OS-AJ-10-96-014 (Quisumbing
Order), Secretary Quisumbing declared that the lay-off (of workers) implemented on May 7, 1996 and
October 7, 1996 was illegal and that MMC committed unfair labor practice. He then ordered the
reinstatement of the laid-off workers, with payment of full backwages and benefits, and directed the
execution of a new collective bargaining agreement (CBA) incorporating the terms and conditions of
the previous CBA providing for an annual increase in the workers' daily wage.12 In two separate
cases─G.R. NOS. 133519 and 138996─filed with this Court, we sustained the validity of the
Quisumbing Order, which became final and executory on January 26, 2000.13
On May 11, 2001, then Acting Department of Labor and Employment (DOLE) Secretary, now also an
Associate Justice of this Court, Arturo D. Brion, on motion of NAMAWU, directed the issuance of a
partial writ of execution (Brion Writ), and ordered the DOLE sheriffs to proceed to the MMC premises
for the execution of the same.14 Much later, in 2006, this Court, in G.R. NOS. 157696-97, entitled
Maricalum Mining Corporation v. Brion and NAMAWU,15 affirmed the propriety of the issuance of
the Brion Writ.
The Brion Writ was not fully satisfied because MMC's resident manager resisted its enforcement. 16 On
motion of NAMAWU, then DOLE Secretary Patricia A. Sto. Tomas ordered the issuance of the July
18, 2002 Alias Writ of Execution and Break-Open Order (Sto. Tomas Writ).17 On October 11, 2002,
the respondent acting sheriffs, the members of the union, and several armed men implemented the Sto.
Tomas Writ, and levied on the properties of MMC located at its compound in Sipalay, Negros
Occidental.18
On October 14, 2002, GHI filed with the Regional Trial Court (RTC) of Kabankalan City, Negros
Occidental, Special Civil Action (SCA) No. 1127 for Contempt with Prayer for the Issuance of a
Temporary Restraining Order (TRO) and Writ of Preliminary Injunction and to Nullify the Sheriff's
Levy on Properties.19 GHI contended that the levied properties were the subject of a Deed of Real
Estate and Chattel Mortgage, dated September 5, 199620 executed by MMC in favor of GHI to secure
the aforesaid P550M promissory notes; that this deed was registered on February 24, 2000;21 and that
the mortgaged properties were already extrajudicially foreclosed in July 2001 and sold to GHI as the
highest bidder on December 3, 2001, as evidenced by the Certificate of Sale dated December 4, 2001.22
The trial court issued ex parte a TRO effective for 72 hours, and set the hearing on the application for a
writ of injunction.23 On October 17, 2002, the trial court ordered the issuance of a Writ of Injunction
(issued on October 18, 2002)24 enjoining the DOLE sheriffs from further enforcing the Sto. Tomas
Writ and from conducting any public sale of the levied-on properties, subject to GHI's posting of
a P5M bond.25
Resolving, among others, NAMAWU's separate motions for the reconsideration of the injunction order
and for the dismissal of the case, the RTC issued its December 4, 2002 Omnibus Order, 26 the
dispositive portion of which reads:
WHEREFORE, premises considered, respondent NAMAWU Local 103's Motion for Reconsideration
dated October 23, 2002 for the reconsideration of the Order of this Court directing the issuance of Writ
of Injunction prayed for by petitioner and the Order dated October 18, 2002 approving petitioner's
Injunction Bond in the amount of P5,000,000.00 is hereby DENIED.
Respondent's Motion to Dismiss as embodied in its Opposition to Extension of Temporary Restraining
Order and Issuance of Writ of Preliminary Injunction with Motion to Dismiss and Suspend Period to
File Answer dated October 15, 2002 is likewise DENIED.
Petitioner's Urgent Motion for the return of the levied firearms is GRANTED. Pursuant thereto,
respondent sheriffs are ordered to return the levied firearms and handguns to the petitioner provided
the latter puts [up] a bond in the amount of P332,200.00.
Respondent's lawyer, Atty. Jose Lapak, is strictly warned not to resort again to disrespectful and
contemptuous language in his pleadings, otherwise, the same shall be dealt with accordingly.
SO ORDERED.27
Aggrieved, NAMAWU filed with the CA a petition for certiorari under Rule 65, assailing the October
17, 18 and December 4, 2002 orders of the RTC.28
After due proceedings, on October 14, 2003, the appellate court rendered a Decision setting aside the
RTC issuances and directing the immediate execution of the Sto. Tomas Writ. The CA ruled, among
others, that the circumstances surrounding the execution of the September 5, 1996 Deed of Real Estate
and Chattel Mortgage yielded the conclusion that the deed was sham, fictitious and fraudulent; that it
was executed two weeks after the labor dispute arose in 1996, but surprisingly, it was registered only
on February 24, 2000, immediately after the Court affirmed with finality the Quisumbing Order. The
CA also found that the certificates of title to MMC's real properties did not contain any annotation of a
mortgage lien, and, suspiciously, GHI did not intervene in the long drawn-out labor proceedings to
protect its right as a mortgagee of virtually all the properties of MMC.29
The CA further ruled that the subsequent foreclosure of the mortgage was irregular, effected precisely
to prevent the satisfaction of the judgment against MMC. It noted that the foreclosure proceedings
were initiated in July 2001, shortly after the issuance of the Brion Writ; and, more importantly, the
basis for the extrajudicial foreclosure was not the failure of MMC to pay the mortgage debt, but its
failure "to satisfy any money judgment against it rendered by a court or tribunal of competent
jurisdiction, in favor of any person, firm or entity, without any legal ground or reason." 30 Further, the
CA pierced the veil of corporate fiction of the two corporations.31 The dispositive portion of the
appellate court's decision reads:
WHEREFORE, in view of the foregoing considerations, the petition is GRANTED. The October 17,
2002 and the December 4, 2002 Order of the RTC, Branch 61 of Kabankalan City, Negros Occidental
are hereby ANNULLED and SET ASIDE for having been issued in excess or without authority. The
Writ of Preliminary Injunction issued by the said court is lifted, and the DOLE Sheriff is directed to
immediately enforce the Writ of Execution issued by the Department of Labor and Employment in the
case "In re: Labor Dispute in Maricalum Mining Corporation" docketed as OS-AJ-10-96-01 (NCMB-
RB6-08-96).32
The Issues
Dissatisfied, GHI elevated the case to this Court via the instant Petition for Review on Certiorari,
raising the following issues:
I Decision in Republic of the Philippines, through its trustee, the Asset Privatization Trust v. "G"
WHETHER OR NOT GHI IS A PARTY TO THE LABOR DISPUTE BETWEEN NAMAWU AND
MMC.
II
WHETHER OR NOT, ASSUMING ARGUENDO THAT THE PERTINENT DECISION OR ORDER
IN THE SAID LABOR DISPUTE BETWEEN MMC AND NAMAWU MAY BE ENFORCED
AGAINST GHI, THERE IS ALREADY A FINAL DEETERMINATION BY THE SUPREME
COURT OF THE RIGHTS OF THE PARTIES IN SAID LABOR DISPUTE CONSIDERING THE
PENDENCY OF G.R. NOS. 157696-97.
III
WHETHER OR NOT GHI IS THE ABSOLUTE OWNER OF THE PROPERTIES UNLAWFULLY
GARNISHED BY RESPONDENTS SHERIFFS.
IV
WHETHER OR NOT THE HONORABLE HENRY D. ARLES CORRECTLY ISSUED A WRIT OF
INJUNCTION AGAINST THE UNLAWFUL EXECUTIOIN ON GHI'S PROPERTIES.
V cases to determine whether or not the case pending is a moot one or whether or not a previous ruling is
WHETHER OR NOT THE VALIDITY OF THE DEED OF REAL AND CHATTEL MORTGAGE
OVER THE SUBJECT PROPERTIES BETWEEN MMC AND GHI MAY BE COLLATERALLY
ATTACKED.
VI
WHETHER OR NOT, ASSUMING ARGUENDO THAT THE VALIDITY OF THE SAID REAL
AND CHATTEL MORTGAGE MAY BE COLLATERALLY ATTACKED, THE SAID
MORTGAGE IS SHAM, FICTITIOUS AND FRAUDULENT.
VII
WHETHER OR NOT GHI IS A DISTINCT AND SEPARATE CORPORATE ENTITY FROM
MMC.
VIII
WHETHER OR NOT GHI CAN BE PREVENTED THROUGH THE ISSUANCE OF A
RESTRAINING ORDER OR INJUNCTION FROM TAKING POSSESSION OR BE
DISPOSSESSED OF ASSETS PURCHASED BY IT FROM APT.33
Stripped of non-essentials, the core issue is whether, given the factual circumstances obtaining, the
RTC properly issued the writ of injunction to prevent the enforcement of the Sto. Tomas Writ. The
resolution of this principal issue, however, will necessitate a ruling on the following key and
interrelated questions:
1. Whether the mortgage of the MMC's properties to GHI was a sham;
2. Whether there was an effective levy by the DOLE upon the MMC's real and personal properties; and
3. Whether it was proper for the CA to pierce the veil of corporate fiction between MMC and GHI.
Our Ruling
Before we delve into an extended discussion of the foregoing issues, it is essential to take judicial
cognizance of cases intimately linked to the present controversy which had earlier been elevated to and
decided by this Court.
Judicial Notice.
Judicial notice must be taken by this Court of its Decision in Maricalum Mining Corporation v. Hon.
Arturo D. Brion and NAMAWU,34 in which we upheld the right of herein private respondent,
NAMAWU, to its labor claims. Upon the same principle of judicial notice, we acknowledge our
Holdings, Inc.,35 in which GHI was recognized as the rightful purchaser of the shares of stocks of
MMC, and thus, entitled to the delivery of the company notes accompanying the said purchase. These
company notes, consisting of three (3) Promissory Notes, were part of the documents executed in 1992
in the privatization sale of MMC by the Asset Privatization Trust (APT) to GHI. Each of these notes
uniformly contains stipulations "establishing and constituting in favor of GHI" mortgages over MMC's
real and personal properties. The stipulations were subsequently formalized in a separate document
denominated Deed of Real Estate and Chattel Mortgage on September 5, 1996. Thereafter, the Deed
was registered on February 4, 2000.36
We find both decisions critically relevant to the instant dispute. In fact, they should have guided the
courts below in the disposition of the controversy at their respective levels. To repeat, these decisions
respectively confirm the right of NAMAWU to its labor claims37 and affirm the right of GHI to its
financial and mortgage claims over the real and personal properties of MMC, as will be explained
below. The assailed CA decision apparently failed to consider the impact of these two decisions on the
case at bar. Thus, we find it timely to reiterate that: "courts have also taken judicial notice of previous
applicable to the case under consideration."38
However, the CA correctly assessed that the authority of the lower court to issue the challenged writ of
injunction depends on the validity of the third party's (GHI's) claim of ownership over the property
subject of the writ of execution issued by the labor department. Accordingly, the main inquiry
addressed by the CA decision was whether GHI could be treated as a third party or a stranger to the
labor dispute, whose properties were beyond the reach of the Writ of Execution dated December 18,
2001.39
In this light, all the more does it become imperative to take judicial notice of the two cases aforesaid,
as they provide the necessary perspective to determine whether GHI is such a party with a valid
ownership claim over the properties subject of the writ of execution. In Juaban v. Espina,40 we held that
"in some instances, courts have also taken judicial notice of proceedings in other cases that are closely
connected to the matter in controversy. These cases may be so closely interwoven, or so clearly
interdependent, as to invoke a rule of judicial notice." The two cases that we have taken judicial notice
of are of such character, and our review of the instant case cannot stray from the findings and
conclusions therein.
Having recognized these crucial Court rulings, situating the facts in proper perspective, we now
proceed to resolve the questions identified above.
The mortgage was not a sham.
Republic etc., v. "G" Holdings, Inc. acknowledged the existence of the Purchase and Sale Agreement
between the APT and the GHI, and recounts the facts attendant to that transaction, as follows:
The series of negotiations between the petitioner Republic of the Philippines, through the APT as its
trustee, and "G" Holdings culminated in the execution of a purchase and sale agreement on October 2,
1992. Under the agreement, the Republic undertook to sell and deliver 90% of the entire issued and
outstanding shares of MMC, as well as its company notes, to "G" Holdings in consideration of the
purchase price of P673,161,280. It also provided for a down payment of P98,704,000 with the balance
divided into four tranches payable in installment over a period of ten years." 41
The "company notes" mentioned therein were actually the very same three (3) Promissory Notes
amounting to P550M, issued by MMC in favor of GHI. As already adverted to above, these notes
uniformly contained stipulations "establishing and constituting" mortgages over MMC's real and
personal properties.
It may be remembered that APT acquired the MMC from the PNB and the DBP. Then, in compliance
with its mandate to privatize government assets, APT sold the aforesaid MMC shares and notes to
GHI. To repeat, this Court has recognized this Purchase and Sale Agreement in Republic, etc., v. "G"
Holdings, Inc.
The participation of the Government, through APT, in this transaction is significant. Because the
Government had actively negotiated and, eventually, executed the agreement, then the transaction is
imbued with an aura of official authority, giving rise to the presumption of regularity in its execution.
This presumption would cover all related transactional acts and documents needed to consummate the
privatization sale, inclusive of the Promissory Notes. It is obvious, then, that the Government, through
APT, consented to the "establishment and constitution" of the mortgages on the assets of MMC in
favor of GHI, as provided in the notes. Accordingly, the notes (and the stipulations therein) enjoy the
benefit of the same presumption of regularity accorded to government actions. Given the Government
consent thereto, and clothed with the presumption of regularity, the mortgages cannot be characterized
as sham, fictitious or fraudulent.
Indeed, as mentioned above, the three (3) Promissory Notes, executed on October 2, 1992, "established
and constituted" in favor of GHI the following mortgages:
1. A mortgage over certain parcels of land, more particularly listed and described in the Sheriff's
Certificate of Sale dated September 7, 1984 issued by the Ex-Officio Provincial Sheriff of Negros
Occidental, Rolando V. Ramirez, with office at Bacolod City following the auction sale conducted
pursuant to the provisions of Act 3135, a copy of which certificate of sale is hereto attached as Annex
"A" and made an integral part hereof;
2. A chattel mortgage over assets and personal properties more particularly listed and described in the
Sheriff's Certificate of Sale dated September 7, 1984 issued by the Ex-Officio Provincial Sheriff of
Negros Occidental, Rolando V. Ramirez, with office at Bacolod City following the auction conducted
pursuant to the provision of Act 1508, a copy of which Certificate of Sale is hereto attached as Annex
"B" and made an integral part hereof.
3. Mortgages over assets listed in APT Specific catalogue GC-031 for MMC, a copy of which
Catalogue is hereby made an integral part hereof by way of reference, as well as assets presently in use
by MMC but which are not listed or included in paragraphs 1 and 2 above and shall include all assets
that may hereinafter be acquired by MMC.42
It is difficult to conceive that these mortgages, already existing in 1992, almost four (4) years before
NAMAWU filed its notice of strike, were a "fictitious" arrangement intended to defraud NAMAWU.
After all, they were agreed upon long before the seeds of the labor dispute germinated.
While it is true that the Deed of Real Estate and Chattel Mortgage was executed only on September 5,
1996, it is beyond cavil that this formal document of mortgage was merely a derivative of the original
mortgage stipulations contained in the Promissory Notes of October 2, 1992. The execution of this
Deed in 1996 does not detract from, but instead reinforces, the manifest intention of the parties to
"establish and constitute" the mortgages on MMC's real and personal properties.
Apparently, the move to execute a formal document denominated as the Deed of Real Estate and
Chattel Mortgage came about after the decision of the RTC of Manila in Civil Case No. 95-76132
became final in mid-1996. This conclusion surfaces when we consider the genesis of Civil Case No.
95-76132 and subsequent incidents thereto, as narrated in Republic, etc. v. "G" Holdings, Inc., viz:
Subsequently, a disagreement on the matter of when installment payments should commence arose
between the parties. The Republic claimed that it should be on the seventh month from the signing of
the agreement while "G" Holdings insisted that it should begin seven months after the fulfillment of the
closing conditions.
Unable to settle the issue, "G" Holdings filed a complaint for specific performance and damages with
the Regional Trial Court of Manila, Branch 49, against the Republic to compel it to close the sale in
accordance with the purchase and sale agreement. The complaint was docketed as Civil Case No. 95-
76132.
During the pre-trial, the respective counsels of the parties manifested that the issue involved in the case
was one of law and submitted the case for decision. On June 11, 1996, the trial court rendered its
decision. It ruled in favor of "G" Holdings and held:
"In line with the foregoing, this Court having been convinced that the Purchase and Sale Agreement is
indeed subject to the final closing conditions prescribed by Stipulation No. 5.02 and conformably to
Rule 39, Section 10 of the Rules of Court, accordingly orders that the Asset Privatization Trust
execute the corresponding Document of Transfer of the subject shares and financial notes and
cause the actual delivery of subject shares and notes to "G" Holdings, Inc., within a period of
thirty (30) days from receipt of this Decision, and after "G" Holdings Inc., shall have paid in full the
entire balance, at its present value of P241,702,122.86, computed pursuant to the prepayment
provisions of the Agreement. Plaintiff shall pay the balance simultaneously with the delivery of the
Deed of Transfer and actual delivery of the shares and notes.
SO ORDERED."
The Solicitor General filed a notice of appeal on behalf of the Republic on June 28, 1996. Contrary to
the rules of procedure, however, the notice of appeal was filed with the Court of Appeals (CA), not
with the trial court which rendered the judgment appealed from.
No other judicial remedy was resorted to until July 2, 1999 when the Republic, through the APT, filed
a petition for annulment of judgment with the CA. It claimed that the decision should be annulled on
the ground of abuse of discretion amounting to lack of jurisdiction on the part of the trial court. x x x
Finding that the grounds necessary for the annulment of judgment were inexistent, the appellate court
dismissed the petition. x x x x43
With the RTC decision having become final owing to the failure of the Republic to perfect an appeal, it
may have become necessary to execute the Deed of Real Estate and Chattel Mortgage on September 5,
1996, in order to enforce the trial court's decision of June 11, 1996. This appears to be the most
plausible explanation for the execution of the Deed of Real Estate and Chattel Mortgage only in
September 1996. Even as the parties had already validly constituted the mortgages in 1992, as
explicitly provided in the Promissory Notes, a specific deed of mortgage in a separate document may
have been deemed necessary for registration purposes. Obviously, this explanation is more logical and
more sensible than the strained conjecture that the mortgage was executed on September 5, 1996 only
for the purpose of defrauding NAMAWU.
It is undeniable that the Deed of Real Estate and Chattel Mortgage was formally documented two
weeks after NAMAWU filed its notice of strike against MMC on August 23, 1996. However, this fact
alone cannot give rise to an adverse inference for two reasons. First, as discussed above, the mortgages
had already been "established and constituted" as early as October 2, 1992 in the Promissory Notes,
showing the clear intent of the parties to impose a lien upon MMC's properties. Second, the mere filing
of a notice of strike by NAMAWU did not, as yet, vest in NAMAWU any definitive right that could be
prejudiced by the execution of the mortgage deed.
The fact that MMC's obligation to GHI is not reflected in the former's financial statements─a
circumstance made capital of by NAMAWU in order to cast doubt on the validity of the mortgage
deed─is of no moment. By itself, it does not provide a sufficient basis to invalidate this public
document. To say otherwise, and to invalidate the mortgage deed on this pretext, would furnish MMC
a convenient excuse to absolve itself of its mortgage obligations by adopting the simple strategy of not
including the obligations in its financial statements. It would ignore our ruling in Republic, etc. v. "G"
Holdings, Inc., which obliged APT to deliver the MMC shares and financial notes to GHI. Besides, the
failure of the mortgagor to record in its financial statements its loan obligations is surely not an
essential element for the validity of mortgage agreements, nor will it independently affect the right of
the mortgagee to foreclose.
Contrary to the CA decision, Tanongon v. Samson44 is not "on all fours" with the instant case. There
are material differences between the two cases. At issue in Tanongon was a third-party claim arising
from a Deed of Absolute Sale executed between Olizon and Tanongon on July 29, 1997, after the
NLRC decision became final and executory on April 29, 1997. In the case at bar, what is involved is a
loan with mortgage agreement executed on October 2, 1992, well ahead of the union's notice of strike
on August 23, 1996. No presumption of regularity inheres in the deed of sale in Tanongon, while the
participation of APT in this case clothes the transaction in 1992 with such a presumption that has not
been successfully rebutted. In Tanongon, the conduct of a full-blown trial led to the finding─duly
supported by evidence─that the voluntary sale of the assets of the judgment debtor was made in bad
faith. Here, no trial was held, owing to the motion to dismiss filed by NAMAWU, and the CA failed to
consider the factual findings made by this Court in Republic, etc. v. "G" Holdings, Inc. Furthermore,
in Tanongon, the claimant did not exercise his option to file a separate action in court, thus allowing
the NLRC Sheriff to levy on execution and to determine the rights of third-party claimants. 45 In this
case, a separate action was filed in the regular courts by GHI, the third-party claimant. Finally, the
questioned transaction in Tanongon was a plain, voluntary transfer in the form of a sale executed by
the judgment debtor in favor of a dubious third-party, resulting in the inability of the judgment creditor
to satisfy the judgment. On the other hand, this case involves an involuntary transfer (foreclosure of
mortgage) arising from a loan obligation that well-existed long before the commencement of the labor
claims of the private respondent.
Three other circumstances have been put forward by the CA to support its conclusion that the
mortgage contract is a sham. First, the CA considered it highly suspect that the Deed of Real Estate
and Chattel Mortgage was registered only on February 4, 2000, "three years after its execution, and
almost one month after the Supreme Court rendered its decision in the labor dispute."46 Equally
suspicious, as far as the CA is concerned, is the fact that the mortgages were foreclosed on July 31,
2001, after the DOLE had already issued a Partial Writ of Execution on May 9, 2001.47 To the
appellate court, the timing of the registration of the mortgage deed was too coincidental, while the date
of the foreclosure signified that it was "effected precisely to prevent the satisfaction of the judgment
awards."48 Furthermore, the CA found that the mortgage deed itself was executed without any
consideration, because at the time of its execution, all the assets of MMC had already been transferred
to GHI.49
These circumstances provided the CA with sufficient justification to apply Article 1387 of the Civil
Code on presumed fraudulent transactions, and to declare that the mortgage deed was void for being
simulated and fictitious.50
We do not agree. We find this Court's ruling in MR Holdings, Ltd. v. Sheriff Bajar51 pertinent and
instructive:
Article 1387 of the Civil Code of the Philippines provides:
"Art. 1387. All contracts by virtue of which the debtor alienates property by gratuitous title are
presumed to have been entered into in fraud of creditors, when the donor did not reserve sufficient
property to pay all debts contracted before the donation.
Alienations by onerous title are also presumed fraudulent when made by persons against whom some
judgment has been rendered in any instance or some writ of attachment has been issued. The decision
or attachment need not refer to the property alienated, and need not have been obtained by the party
seeking rescission.
In addition to these presumptions, the design to defraud creditors may be proved in any other manner
recognized by law and of evidence."
This article presumes the existence of fraud made by a debtor. Thus, in the absence of satisfactory
evidence to the contrary, an alienation of a property will be held fraudulent if it is made after a
judgment has been rendered against the debtor making the alienation. This presumption of fraud is not
conclusive and may be rebutted by satisfactory and convincing evidence. All that is necessary is to
establish affirmatively that the conveyance is made in good faith and for a sufficient and valuable
consideration.
The "Assignment Agreement" and the "Deed of Assignment" were executed for valuable
considerations. Patent from the "Assignment Agreement" is the fact that petitioner assumed the
payment of US$18,453,450.12 to ADB in satisfaction of Marcopper's remaining debt as of March 20,
1997. Solidbank cannot deny this fact considering that a substantial portion of the said payment, in the
sum of US$13,886,791.06, was remitted in favor of the Bank of Nova Scotia, its major stockholder.
The facts of the case so far show that the assignment contracts were executed in good faith. The
execution of the "Assignment Agreement" on March 20, 1997 and the "Deed of Assignment" on
December 8,1997 is not the alpha of this case. While the execution of these assignment contracts
almost coincided with the rendition on May 7, 1997 of the Partial Judgment in Civil Case No. 96-
80083 by the Manila RTC, however, there was no intention on the part of petitioner to defeat
Solidbank's claim. It bears reiterating that as early as November 4, 1992, Placer Dome had already
bound itself under a "Support and Standby Credit Agreement" to provide Marcopper with cash flow
support for the payment to ADB of its obligations. When Marcopper ceased operations on account of
disastrous mine tailings spill into the Boac River and ADB pressed for payment of the loan, Placer
Dome agreed to have its subsidiary, herein petitioner, pay ADB the amount of US$18,453,450.12.
Thereupon, ADB and Marcopper executed, respectively, in favor of petitioner an "Assignment
Agreement" and a "Deed of Assignment." Obviously, the assignment contracts were connected with
transactions that happened long before the rendition in 1997 of the Partial Judgment in Civil
Case No. 96-80083 by the Manila RTC. Those contracts cannot be viewed in isolation. If we may
add, it is highly inconceivable that ADB, a reputable international financial organization, will connive
with Marcopper to feign or simulate a contract in 1992 just to defraud Solidbank for its claim four
years thereafter. And it is equally incredible for petitioner to be paying the huge sum of
US$18,453,450.12 to ADB only for the purpose of defrauding Solidbank of the sum
of P52,970,756.89.
It is said that the test as to whether or not a conveyance is fraudulent is ― does it prejudice the rights
of creditors? We cannot see how Solidbank's right was prejudiced by the assignment contracts
considering that substantially all of Marcopper's properties were already covered by the registered
"Deed of Real Estate and Chattel Mortgage" executed by Marcopper in favor of ADB as early as
November 11, 1992. As such, Solidbank cannot assert a better right than ADB, the latter being a
preferred creditor. It is basic that mortgaged properties answer primarily for the mortgaged
credit, not for the judgment credit of the mortgagor's unsecured creditor. Considering that
petitioner assumed Marcopper's debt to ADB, it follows that Solidbank's right as judgment creditor
over the subject properties must give way to that of the former.52
From this ruling in MR Holdings, we can draw parallel conclusions. The execution of the subsequent
Deed of Real Estate and Chattel Mortgage on September 5, 1996 was simply the formal documentation
of what had already been agreed in the seminal transaction (the Purchase and Sale Agreement) between
APT and GHI. It should not be viewed in isolation, apart from the original agreement of October 2,
1992. And it cannot be denied that this original agreement was supported by an adequate consideration.
The APT was even ordered by the court to deliver the shares and financial notes of MMC in exchange
for the payments that GHI had made.
It was also about this time, in 1996, that NAMAWU filed a notice of strike to protest non-payment of
its rightful labor claims.53 But, as already mentioned, the outcome of that labor dispute was yet
unascertainable at that time, and NAMAWU could only have hoped for, or speculated about, a
favorable ruling. To paraphrase MR Holdings, we cannot see how NAMAWU's right was prejudiced
by the Deed of Real Estate and Chattel Mortgage, or by its delayed registration, when substantially all
of the properties of MMC were already mortgaged to GHI as early as October 2, 1992. Given this
reality, the Court of Appeals had no basis to conclude that this Deed of Real Estate and Chattel
Mortgage, by reason of its late registration, was a simulated or fictitious contract.
The importance of registration and its binding effect is stated in Section 51 of the Property Registration
Decree or Presidential Decree (P.D.) No. 1529,54 which reads:
SECTION 51. Conveyance and other dealings by registered owner. An owner of registered land may
convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He
may use such forms, deeds, mortgages, leases or other voluntary instrument as are sufficient in law.
But no deed, mortgage, lease or other voluntary instrument, except a will purporting to convey or
effect registered land, shall take effect as a conveyance or bind the land, but shall operate only as a
contract between the parties and as evidence of authority to the Registry of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the registration shall be made in the Office of the
Register of Deeds for the province or the city where the land lies.55
Under the Torrens system, registration is the operative act which gives validity to the transfer or
creates a lien upon the land. Further, entrenched in our jurisdiction is the doctrine that registration in a
public registry creates constructive notice to the whole world.56 Thus, Section 51 of Act No. 496, as
amended by Section 52 of P.D. No. 1529, provides:
SECTION 52. Constructive notice upon registration. Every conveyance, mortgage, lease, lien,
attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or
entered in the Office of the Register of Deeds for the province or city where the land to which it relates
lies, be constructive notice to all persons from the time of such registering, filing or entering.
But, there is nothing in Act No. 496, as amended by P.D. No. 1529, that imposes a period within which
to register annotations of "conveyance, mortgage, lease, lien, attachment, order, judgment, instrument
or entry affecting registered land." If liens were not so registered, then it "shall operate only as a
contract between the parties and as evidence of authority to the Registry of Deeds to make
registration." If registered, it "shall be the operative act to convey or affect the land insofar as third
persons are concerned." The mere lapse of time from the execution of the mortgage document to the
moment of its registration does not affect the rights of a mortgagee.
Neither will the circumstance of GHI's foreclosure of MMC's properties on July 31, 2001, or after the
DOLE had already issued a Partial Writ of Execution on May 9, 2001 against MMC, support the
conclusion of the CA that GHI's act of foreclosing on MMC's properties was "effected to prevent
satisfaction of the judgment award." GHI's mortgage rights, constituted in 1992, antedated the Partial
Writ of Execution by nearly ten (10) years. GHI's resort to foreclosure was a legitimate enforcement of
a right to liquidate a bona fide debt. It was a reasonable option open to a mortgagee which, not being a
party to the labor dispute between NAMAWU and MMC, stood to suffer a loss if it did not avail itself
of the remedy of foreclosure.
The well-settled rule is that a mortgage lien is inseparable from the property mortgaged. 57 While it is
true that GHI's foreclosure of MMC's mortgaged properties may have had the "effect to prevent
satisfaction of the judgment award against the specific mortgaged property that first answers for a
mortgage obligation ahead of any subsequent creditors," that same foreclosure does not necessarily
translate to having been "effected to prevent satisfaction of the judgment award" against MMC.
Likewise, we note the narration of subsequent facts contained in the Comment of the Office of the
Solicitor General. Therein, it is alleged that after the Partial Writ of Execution was issued on May 9,
2001, a motion for reconsideration was filed by MMC; that the denial of the motion was appealed to
the CA; that when the appeal was dismissed by the CA on January 24, 2002, it eventually became the
subject of a review petition before this Court, docketed as G.R. No. 157696; and that G.R. No. 157696
was decided by this Court only on February 9, 2006.
This chronology of subsequent events shows that February 9, 2006 would have been the earliest date
for the unimpeded enforcement of the Partial Writ of Execution, as it was only then that this Court
resolved the issue. This happened four and a half years after July 31, 2001, the date when GHI
foreclosed on the mortgaged properties. Thus, it is not accurate to say that the foreclosure made on July
31, 2001 was "effected [only] to prevent satisfaction of the judgment award."
We also observe the error in the CA's finding that the 1996 Deed of Real Estate and Chattel Mortgage
was not supported by any consideration since at the time the deed was executed, "all the real and
personal property of MMC had already been transferred in the hands of G Holdings."58 It should be
remembered that the Purchase and Sale Agreement between GHI and APT involved large amounts
(P550M) and even spawned a subsequent court action (Civil Case No. 95-76132, RTC of Manila). Yet,
nowhere in the Agreement or in the RTC decision is there any mention of real and personal properties
of MMC being included in the sale to GHI in 1992. These properties simply served as mortgaged
collateral for the 1992 Promissory Notes.59 The Purchase and Sale Agreement and the Promissory
Notes themselves are the best evidence that there was ample consideration for the mortgage.
Thus, we must reject the conclusion of the CA that the Deed of Real Estate and Chattel Mortgage
executed in 1996 was a simulated transaction.
On the issue of whether there had been an effective levy upon the properties of GHI.
The well-settled principle is that the rights of a mortgage creditor over the mortgaged properties are
superior to those of a subsequent attaching creditor. In Cabral v. Evangelista,60 this Court declared
that:
Defendants-appellants purchase of the mortgaged chattels at the public sheriff's sale and the delivery of
the chattels to them with a certificate of sale did not give them a superior right to the chattels as against
plaintiffs-mortgagees. Rule 39, Section 22 of the old Rules of Court (now Rule 39, Section 25 of the
Revised Rules), cited by appellants precisely provides that "the sale conveys to the purchaser all the
right which the debtor had in such property on the day the execution or attachment was levied." It has
long been settled by this Court that "The right of those who so acquire said properties should not and
can not be superior to that of the creditor who has in his favor an instrument of mortgage executed with
the formalities of the law, in good faith, and without the least indication of fraud. This is all the more
true in the present case, because, when the plaintiff purchased the automobile in question on August
22, 1933, he knew, or at least, it is presumed that he knew, by the mere fact that the instrument of
mortgage, Exhibit 2, was registered in the office of the register of deeds of Manila, that said
automobile was subject to a mortgage lien. In purchasing it, with full knowledge that such
circumstances existed, it should be presumed that he did so, very much willing to respect the lien
existing thereon, since he should not have expected that with the purchase, he would acquire a better
right than that which the vendor then had." In another case between two mortgagees, we held that "As
between the first and second mortgagees, therefore, the second mortgagee has at most only the right to
redeem, and even when the second mortgagee goes through the formality of an extrajudicial
foreclosure, the purchaser acquires no more than the right of redemption from the first mortgagee." The
superiority of the mortgagee's lien over that of a subsequent judgment creditor is now expressly
provided in Rule 39, Section 16 of the Revised Rules of Court, which states with regard to the effect of
levy on execution as to third persons that "The levy on execution shall create a lien in favor of the
judgment creditor over the right, title and interest of the judgment debtor in such property at the time of
the levy, subject to liens or encumbrances then existing."
Even in the matter of possession, mortgagees over chattel have superior, preferential and paramount
rights thereto, and the mortgagor has mere rights of redemption.61
Similar rules apply to cases of mortgaged real properties that are registered. Since the properties were
already mortgaged to GHI, the only interest remaining in the mortgagor was its right to redeem said
properties from the mortgage. The right of redemption was the only leviable or attachable property
right of the mortgagor in the mortgaged real properties. We have held that -
The main issue in this case is the nature of the lien of a judgment creditor, like the petitioner, who has
levied an attachment on the judgment debtor's (CMI) real properties which had been mortgaged to a
consortium of banks and were subsequently sold to a third party, Top Rate.
xxx
The sheriff's levy on CMI's properties, under the writ of attachment obtained by the petitioner, was
actually a levy on the interest only of the judgment debtor CMI on those properties. Since the
properties were already mortgaged to the consortium of banks, the only interest remaining in the
mortgagor CMI was its right to redeem said properties from the mortgage. The right of redemption was
the only leviable or attachable property right of CMI in the mortgaged real properties. The sheriff
could not have attached the properties themselves, for they had already been conveyed to the
consortium of banks by mortgage (defined as a "conditional sale"), so his levy must be understood to
have attached only the mortgagor's remaining interest in the mortgaged property - the right to redeem it
from the mortgage.62
xxx
There appears in the record a factual contradiction relating to whether the foreclosure by GHI on July
13, 200163 over some of the contested properties came ahead of the levy thereon, or the reverse.
NAMAWU claims that the levy on two trucks was effected on June 22, 2001,64 which GHI disputes as
a misstatement because the levy was attempted on July 18, 2002, and not 200165 What is undisputed
though is that the mortgage of GHI was registered on February 4, 2000,66 well ahead of any levy by
NAMAWU. Prior registration of a lien creates a preference, as the act of registration is the operative
act that conveys and affects the land,67 even against subsequent judgment creditors, such as respondent
herein. Its registration of the mortgage was not intended to defraud NAMAWU of its judgment claims,
since even the courts were already judicially aware of its existence since 1992. Thus, at that moment in
time, with the registration of the mortgage, either NAMAWU had no properties of MMC to attach
because the same had been previously foreclosed by GHI as mortgagee thereof; or by virtue of the
DOLE's levy to enforce NAMAWU's claims, the latter's rights are subject to the notice of the
foreclosure on the subject properties by a prior mortgagee's right. GHI's mortgage right had already
been registered by then, and "it is basic that mortgaged properties answer primarily for the mortgaged
credit, not for the judgment credit of the mortgagor's unsecured creditor." 68
On the issue of piercing the veil of corporate fiction.
The CA found that:
"Ordinarily, the interlocking of directors and officers in two different corporations is not a conclusive
indication that the corporations are one and the same for purposes of applying the doctrine of piercing
the veil of corporate fiction. However, when the legal fiction of the separate corporate personality is
abused, such as when the same is used for fraudulent or wrongful ends, the courts have not hesitated to
pierce the corporate veil (Francisco v. Mejia, 362 SCRA 738). In the case at bar, the Deed of Real
Estate and Chattel Mortgage was entered into between MMC and G Holdings for the purpose of
evading the satisfaction of the legitimate claims of the petitioner against MMC. The notion of separate
personality is clearly being utilized by the two corporations to perpetuate the violation of a positive
legal duty arising from a final judgment to the prejudice of the petitioner's right."69
Settled jurisprudence70 has it that -
"(A) corporation, upon coming into existence, is invested by law with a personality separate and
distinct from those persons composing it as well as from any other legal entity to which it may be
related. By this attribute, a stockholder may not, generally, be made to answer for acts or liabilities of
the said corporation, and vice versa. This separate and distinct personality is, however, merely a fiction
created by law for convenience and to promote the ends of justice. For this reason, it may not be used
or invoked for ends subversive to the policy and purpose behind its creation or which could not have
been intended by law to which it owes its being. This is particularly true when the fiction is used to
defeat public convenience, justify wrong, protect fraud, defend crime, confuse legitimate legal or
judicial issues, perpetrate deception or otherwise circumvent the law. This is likewise true where the
corporate entity is being used as an alter ego, adjunct, or business conduit for the sole benefit of the
stockholders or of another corporate entity. In all these cases, the notion of corporate entity will be
pierced or disregarded with reference to the particular transaction involved.
Given this jurisprudential principle and the factual circumstances obtaining in this case, we now ask:
Was the CA correct in piercing the veil of corporate identity of GHI and MMC?cralawred
In our disquisition above, we have shown that the CA's finding that there was a "simulated mortgage"
between GHI and MMC to justify a wrong or protect a fraud has struggled vainly to find a foothold
when confronted with the ruling of this Court in Republic v. "G" Holdings, Inc.
The negotiations between the GHI and the Government - -through APT, dating back to 1992 -
-culminating in the Purchase and Sale Agreement, cannot be depicted as a contrived transaction. In
fact, in the said Republic, etc., v. "G" Holdings, Inc., this Court adjudged that GHI was entitled to its
rightful claims─ not just to the shares of MMC itself, or just to the financial notes that already
contained the mortgage clauses over MMCs disputed assets, but also to the delivery of those
instruments. Certainly, we cannot impute to this Court's findings on the case any badge of fraud. Thus,
we reject the CA's conclusion that it was right to pierce the veil of corporate fiction, because the
foregoing circumstances belie such an inference. Furthermore, we cannot ascribe to the Government,
or the APT in particular, any undue motive to participate in a transaction designed to perpetrate fraud.
Accordingly, we consider the CA interpretation unwarranted.
We also cannot agree that the presumption of fraud in Article 1387 of the Civil Code relative to
property conveyances, when there was already a judgment rendered or a writ of attachment issued,
authorizes piercing the veil of corporate identity in this case. We find that Article 1387 finds less
application to an involuntary alienation such as the foreclosure of mortgage made before any final
judgment of a court. We thus hold that when the alienation is involuntary, and the foreclosure is not
fraudulent because the mortgage deed has been previously executed in accordance with formalities of
law, and the foreclosure is resorted to in order to liquidate a bona fide debt, it is not the alienation by
onerous title contemplated in Article 1387 of the Civil Code wherein fraud is presumed.
Since the factual antecedents of this case do not warrant a finding that the mortgage and loan
agreements between MMC and GHI were simulated, then their separate personalities must be
recognized. To pierce the veil of corporate fiction would require that their personalities as creditor and
debtor be conjoined, resulting in a merger of the personalities of the creditor (GHI) and the debtor
(MMC) in one person, such that the debt of one to the other is thereby extinguished. But the debt
embodied in the 1992 Financial Notes has been established, and even made subject of court litigation
(Civil Case No. 95-76132, RTC Manila). This can only mean that GHI and MMC have separate
corporate personalities.
Neither was MMC used merely as an alter ego, adjunct, or business conduit for the sole benefit of GHI,
to justify piercing the former's veil of corporate fiction so that the latter could be held liable to claims
of third-party judgment creditors, like NAMAWU. In this regard, we find American jurisprudence
persuasive. In a decision by the Supreme Court of New York71 bearing upon similar facts, the Court
denied piercing the veil of corporate fiction to favor a judgment creditor who sued the parent
corporation of the debtor, alleging fraudulent corporate asset-shifting effected after a prior final
judgment. Under a factual background largely resembling this case at bar, viz:
In this action, plaintiffs seek to recover the balance due under judgments they obtained against Lake
George Ventures Inc. (hereinafter LGV), a subsidiary of defendant that was formed to develop the Top
O' the World resort community overlooking Lake George, by piercing the corporate veil or upon the
theory that LGV's transfer of certain assets constituted fraudulent transfers under the Debtor and
Creditor Law. We previously upheld Supreme Court's denial of defendant's motion for summary
judgment dismissing the complaint (252 A.D.2d 609, 675 N.Y.S.2d 234) and the matter proceeded to a
nonjury trial. Supreme Court thereafter rendered judgment in favor of defendant upon its findings that,
although defendant dominated LGV, it did not use that domination to commit a fraud or wrong on
plaintiffs. Plaintiffs appealed.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The trial evidence showed that LGV was incorporated in November 1985. Defendant's principal,
Francesco Galesi, initially held 90% of the stock and all of the stock was ultimately transferred to
defendant. Initial project funding was provided through a $2.5 million loan from Chemical Bank,
secured by defendant's guarantee of repayment of the loan and completion of the project. The loan
proceeds were utilized to purchase the real property upon which the project was to be established.
Chemical Bank thereafter loaned an additional $3.5 million to LGV, again guaranteed by defendant,
and the two loans were consolidated into a first mortgage loan of $6 million. In 1989, the loan was
modified by splitting the loan into a $1.9 term note on which defendant was primary obligor and a $4.1
million project note on which LGV was the obligor and defendant was a guarantor.
Due to LGV's lack of success in marketing the project's townhouses and in order to protect itself
from the exercise of Chemical Bank's enforcement remedies, defendant was forced to make
monthly installments of principal and interest on LGV's behalf. Ultimately, defendant purchased the
project note from Chemical Bank for $3.1 million, paid the $1.5 million balance on the term note and
took an assignment of the first mortgage on the project's realty. After LGV failed to make payments on
the indebtedness over the course of the succeeding two years, defendant brought an action to foreclose
its mortgage. Ultimately, defendant obtained a judgment of foreclosure and sale in the amount of
$6,070,246.50. Defendant bid in the property at the foreclosure sale and thereafter obtained a
deficiency judgment in the amount of $3,070,246.50.
Following the foreclosure sale, LGV transferred to defendant all of the shares of Top of the World
Water Company, a separate entity that had been organized to construct and operate the water supply
and delivery system for the project, in exchange for a $950,000 reduction in the deficiency judgment.
the U.S. Supreme Court of New York held'
Based on the foregoing, and accepting that defendant exercised complete domination and control over
LGV, we are at a loss as to how plaintiffs perceive themselves to have been inequitably affected by
defendant's foreclosure action against LGV, by LGV's divestiture of the water company stock or the
sports complex property, or by defendant's transfer to LGV of a third party's uncollectible note,
accomplished solely for tax purposes. It is undisputed that LGV was, and for some period of time had
been, unable to meet its obligations and, at the time of the foreclosure sale, liens against its property
exceeded the value of its assets by several million dollars, even including the water company and
sports complex at the values plaintiffs would assign to them. In fact, even if plaintiffs' analysis were
utilized to eliminate the entire $3 million deficiency judgment, the fact remains that subordinate
mortgages totaling nearly an additional $2 million have priority over plaintiffs' judgments.
As properly concluded by Supreme Court, absent a finding of any inequitable consequence to
plaintiffs, both causes of action pleaded in the amended complaint must fail. Fundamentally, a party
seeking to pierce the corporate veil must show complete domination and control of the subsidiary by
the parent and also that such domination was used to commit a fraud or wrong against the plaintiff that
resulted in the plaintiff's injury ( 252 A.D.2d 609, 610, 675 N.Y.S.2d 234, supra; see, Matter of Morris
v. New York State Dept. of Taxation & Fin., 82 N.Y.2d 135, 141, 603 N.Y.S.2d 807, 623 N.E.2d
1157). Notably, "[e]vidence of domination alone does not suffice without an additional showing that it
led to inequity, fraud or malfeasance" (TNS Holdings v. MKI Sec. Corp., 92 N.Y.2d 335, 339, 680
N.Y.S.2d 891, 703 N.E.2d 749).
xxx
In reaching that conclusion, we specifically reject a number of plaintiffs' assertions, including the
entirely erroneous claims that our determination on the prior appeal (252 A.D.2d 609, 675 N.Y.S.2d
234, supra) set forth a "roadmap" for the proof required at trial and mandated a verdict in favor of
plaintiffs upon their production of evidence that supported the decision's "listed facts". To the contrary,
our decision was predicated upon the existence of such evidence, absent which we would have granted
summary judgment in favor of defendant. We are equally unpersuaded by plaintiffs' continued reliance
upon defendant's December 1991 unilateral conversion of its intercompany loans with LGV from debt
to equity, which constituted nothing more than a "bookkeeping transaction" and had no apparent effect
on LGV's obligations to defendant or defendant's right to foreclose on its mortgage.72
This doctrine is good law under Philippine jurisdiction.
In Concept Builders, Inc. v. National Labor Relations Commission,73 we laid down the test in
determining the applicability of the doctrine of piercing the veil of corporate fiction, to wit:
1. Control, not mere majority or complete control, but complete domination, not only of finances but of
policy and business practice in respect to the transaction attacked so that the corporate entity as to this
transaction had at the time no separate mind, will or existence of its own.
2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the
violation of a statutory or other positive legal duty, or dishonest and, unjust act in contravention of
plaintiffs legal rights; and,
3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss
complained of.
xxx
Time and again, we have reiterated that mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stock of a corporation is not, by itself, a sufficient ground
for disregarding a separate corporate personality.74 It is basic that a corporation has a personality
separate and distinct from that composing it as well as from that of any other legal entity to which it
may be related. Clear and convincing evidence is needed to pierce the veil of corporate fiction.75
In this case, the mere interlocking of directors and officers does not warrant piercing the separate
corporate personalities of MMC and GHI. Not only must there be a showing that there was majority or
complete control, but complete domination, not only of finances but of policy and business practice in
respect to the transaction attacked, so that the corporate entity as to this transaction had at the time no
separate mind, will or existence of its own. The mortgage deed transaction attacked as a basis for
piercing the corporate veil was a transaction that was an offshoot, a derivative, of the mortgages earlier
constituted in the Promissory Notes dated October 2, 1992. But these Promissory Notes with mortgage
were executed by GHI with APT in the name of MMC, in a full privatization process. It appears that if
there was any control or domination exercised over MMC, it was APT, not GHI, that wielded it.
Neither can we conclude that the constitution of the loan nearly four (4) years prior to NAMAWU's
notice of strike could have been the proximate cause of the injury of NAMAWU for having been
deprived of MMC's corporate assets.
On the propriety of injunction to prevent execution by the NLRC on the properties of third-party
claimants
It is settled that a Regional Trial Court can validly issue a Temporary Restraining Order (TRO) and,
later, a writ of preliminary injunction to prevent enforcement of a writ of execution issued by a labor
tribunal on the basis of a third-party's claim of ownership over the properties levied upon.76 While, as a
rule, no temporary or permanent injunction or restraining order in any case involving or growing out of
a labor dispute shall be issued by any court - -where the writ of execution issued by a labor tribunal is
sought to be enforced upon the property of a stranger to the labor dispute, even upon a mere prima
facie showing of ownership of such claimant - -a separate action for injunctive relief against such levy
may be maintained in court, since said action neither involves nor grows out of a labor dispute insofar
as the third party is concerned.77 Instructively, National Mines and Allied Workers' Union v. Vera78
Petitioners' reliance on the provision of Art. 254 of the New Labor Code (herein earlier quoted) which
prohibits injunctions or restraining orders in any case involving or growing out of a 'labor dispute' is
not well-taken. This has no application to the case at bar. Civil Case No. 2749 is one which neither
"involves" nor "grows out" of a labor dispute. What 'involves' or 'grows out' of a labor dispute is the
NLRC case between petitioners and the judgment debtor, Philippine Iron Mines. The private
respondents are not parties to the said NLRC case. Civil Case No. 2749 does not put in issue either the
fact or validity of the proceeding in theNLRC case nor the decision therein rendered, much less the
writ of execution issued thereunder. It does not seek to enjoin the execution of the decision against the
properties of the judgment debtor. What is sought to be tried in Civil Case No. 2749 is whether the
NLRC's decision and writ of execution, above mentioned, shall be permitted to be satisfied against
properties of private respondents, and not of the judgment debtor named in the NLRC decision and
writ of execution. Such a recourse is allowed under the provisions of Section 17, Rule 39 of the Rules
of Court.
To sustain petitioners' theory will inevitably lead to disastrous consequences and lend judicial
imprimatur to deprivation of property without due process of law. Simply because a writ of execution
was issued by the NLRC does not authorize the sheriff implementing the same to levy on anybody's
property. To deny the victim of the wrongful levy, the recourse such as that availed of by the herein
private respondents, under the pretext that no court of general jurisdiction can interfere with the writ of
execution issued in a labor dispute, will be sanctioning a greater evil than that sought to be avoided by
the Labor Code provision in question. Certainly, that could not have been the intendment of the law
creating the NLRC. For well-settled is the rule that the power of a court to execute its judgment
extends only over properties unquestionably belonging to the judgment debtor."
Likewise, since the third-party claimant is not one of the parties to the action, he cannot, strictly
speaking, appeal from the order denying his claim, but he should file a separate reivindicatory action
against the execution creditor or the purchaser of the property after the sale at public auction, or a
complaint for damages against the bond filed by the judgment creditor in favor of the sheriff. 79
A separate civil action for recovery of ownership of the property would not constitute interference with
the powers or processes of the labor tribunal which rendered the judgment to execute upon the levied
properties. The property levied upon being that of a stranger is not subject to levy. Thus, a separate
action for recovery, upon a claim and prima facie showing of ownership by the petitioner, cannot be
considered as interference.80
Upon the findings and conclusions we have reached above, petitioner is situated squarely as such third-
party claimant. The questioned restraining order of the lower court, as well as the order granting
preliminary injunction, does not constitute interference with the powers or processes of the labor
department. The registration of the mortgage document operated as notice to all on the matter of the
mortgagee's prior claims. Official proceedings relative to the foreclosure of the subject properties
constituted a prima facie showing of ownership of such claimant to support the issuance of injunctive
reliefs.
As correctly held by the lower court:
The subject incidents for TRO and/or Writ of Injunction were summarily heard and in resolving the
same, the Court believes, that the petitioner has a clear and unmistakable right over the levied
properties. The existence of the subject Deed of Real Estate and Chattel Mortgage, the fact that
petitioner initiated a foreclosure of said properties before the Clerk of Court and Ex-Officio Sheriff,
RTC Branch 61, Kabankalan City on July 13, 2001, the fact that said Ex-Officio Sheriff and the Clerk
of Court issue a Notice of Foreclosure, Possession and Control over said mortgaged properties on July
19, 2001 and the fact that a Sheriff's Certificate of Sale was issued on December 3, 2001 are the basis
of its conclusion. Unless said mortgage contract is annulled or declared null and void, the presumption
of regularity of transaction must be considered and said document must be looked [upon] as valid.
Notably, the Office of the Solicitor General also aptly observed that when the respondent maintained
that the Deed of Real Estate and Chattel mortgage was entered into in fraud of creditors, it thereby
admitted that the mortgage was not void, but merely rescissible under Article 1381(3) of the Civil
Code; and, therefore, an independent action is needed to rescind the contract of mortgage. 81 We,
however, hold that such an independent action cannot now be maintained, because the mortgage has
been previously recognized to exist, with a valid consideration, in Republic, etc., v. "G" Holdings, Inc.
A final word
The Court notes that the case filed with the lower court involves a principal action for injunction to
prohibit execution over properties belonging to a third party not impleaded in the legal dispute between
NAMAWU and MMC. We have observed, however, that the lower court and the CA failed to take
judicial notice of, or to consider, our Decisions in Republic, etc., v. "G" Holdings, Inc., and Maricalum
Mining Corporation v. Brion and NAMAWU, in which we respectively recognized the entitlement of
GHI to the shares and the company notes of MMC (under the Purchase and Sale Agreement), and the
rights of NAMAWU to its labor claims. At this stage, therefore, neither the lower court nor the CA,
nor even this Court, can depart from our findings in those two cases because of the doctrine of stare
decisis.
From our discussion above, we now rule that the trial court, in issuing the questioned orders, did not
commit grave abuse of discretion, because its issuance was amply supported by factual and legal bases.
We are not unmindful, however, of the fact that the labor claims of NAMAWU, acknowledged by this
Court in Maricalum, still awaits final execution. As success fades from NAMAWU's efforts to execute
on the properties of MMC, which were validly foreclosed by GHI, we see that NAMAWU always had,
and may still have, ample supplemental remedies found in Rule 39 of the Rules of Court in order to
protect its rights against MMC. These include the examination of the judgment obligor when judgment
is unsatisfied,82 the examination of the obligors of judgment obligors,83 or even the resort to
receivership.84 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
While, theoretically, this case is not ended by this decision, since the lower court is still to try the case
filed with it and decide it on the merits, the matter of whether the mortgage and foreclosure of the
assets that are the subject of said foreclosure is ended herein, for the third and final time. So also is the
consequential issue of the separate and distinct personalities of GHI and MMC. Having resolved these
principal issues with certainty, we find no more need to remand the case to the lower court, only for the
purpose of resolving again the matter of whether GHI owns the properties that were the subject of the
latter's foreclosure.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals dated October 14,
2003 is SET ASIDE. The Omnibus Order dated December 4, 2002 of the Regional Trial Court, Branch
61 of Kabankalan City, Negros Occidental is AFFIRMED. No costs.
SO ORDERED.
G.R. No. 177809               October 16, 2009
SPOUSES OMAR and MOSHIERA LATIP, Petitioners,
vs.
ROSALIE PALAÑA CHUA, Respondent.
DECISION
NACHURA, J.:
Challenged in this petition for review on certiorari is the Court of Appeals (CA) Decision in CA-G.R.
SP No. 89300:1 (1) reversing the decision of the Regional Trial Court (RTC), Branch 274, Parañaque
City in Civil Case No. 04-0052;2 and (2) reinstating and affirming in toto the decision of the
Metropolitan Trial Court (MeTC), Branch 78, of the same city in Civil Case No. 2001-315.3
First, we sift through the varying facts found by the different lower courts.
The facts parleyed by the MeTC show that respondent Rosalie Chua (Rosalie) is the owner of
Roferxane Building, a commercial building, located at No. 158 Quirino Avenue corner Redemptorist
Road, Barangay Baclaran, Parañaque City.
On July 6, 2001, Rosalie filed a complaint for unlawful detainer plus damages against petitioners,
Spouses Omar and Moshiera Latip (Spouses Latip). Rosalie attached to the complaint a contract of
lease over two cubicles in Roferxane Bldg., signed by Rosalie, as lessor, and by Spouses Latip, as
lessees thereof.1 a vv p h ! 1
The contract of lease reads:
CONTRACT OF LEASE
KNOW ALL MEN BY THESE PRESENTS:
This Contract of Lease is entered into by and between:
ROSALIE PALAÑA CHUA, Filipino, of legal age, married with office at 2/F JOFERXAN Building,
F.B. Harrison St., Brgy. Baclaran, Parañaque City, and hereinafter referred to as the LESSOR,
- and -
OMAR LATIEF marriage to MOSHIERA LATIEF, also both Filipino, of legal age with address at
24 Anahan St. RGV Homes Parañaque City, and hereinafter referred to as the LESSEES.
WITNESSETH
1. That the LESSOR is the owner of the commercial building erected at the lot of the Toribio G. Reyes
Realty, Inc. situated at 158 Quirino Ave. corner Redemptorist Road, Barangay Baclaran in Parañaque
Ctiy;
2. That LESSOR hereby leases two (2) cubicles located at the 1st & 2nd Floor, of said building with an
area of 56 square meters under the following terms and conditions, to wit:
a. That the monthly rental of the two (2) cubicles in PESOS, SIXTY THOUSAND
(₱60,000.00), Philippine Currency. However, due to unstable power of the peso
LESSEES agrees to a yearly increase of ten (10%) percent of the monthly rental;
b. That any rental in-arrears shall be paid before the expiration of the contract to the
LESSOR;
c. That LESSEES agree to pay their own water and electric consumptions in the said
premises;
d. That the LESSEES shall not sub-let or make any alteration in the cubicles without
a written permission from the LESSOR. Provided, however, that at the termination
 of the Contract, the lessee shall return the two cubicles in its original conditions at PTR # 374145-1/11/99/-Mla.
their expenses; IBP # 00262-Life Member4
e. That the LESSEES agree to keep the cubicles in a safe and sanitary conditions,
and shall not keep any kinds of flammable or combustible materials.
f. That in case the LESSEES fail to pay the monthly rental every time it falls due or A year after the commencement of the lease and with Spouses Latip already occupying the leased
violate any of the above conditions shall be enough ground to terminate this Contract cubicles, Rosalie, through counsel, sent the spouses a letter demanding payment of back rentals and
of Lease. Provided, further, that, if the LESSEES pre-terminate this Contract they should they fail to do so, to vacate the leased cubicles. When Spouses Latip did not heed Rosalie’s
shall pay the rentals for the unused month or period by way of liquidated damages in demand, she instituted the aforesaid complaint.
favor of the LESSOR. In their Answer, Spouses Latip refuted Rosalie’s claims. They averred that the lease of the two (2)
3. That this Contract of Lease is for six (6) yrs. only starting from December _____, 1999 or up to cubicles had already been paid in full as evidenced by receipts showing payment to Rosalie of the total
December ______, 2005. amount of ₱2,570,000.00. The three (3) receipts, in Rosalie’s handwriting, read:
IN WITNESS WHEREOF, the parties have hereunto affixed their hands this ___th day of December, 1. I received the amount of ₱2,000,000.00 (two million pesos) from [O]mar Latip &
1999 at City of Manila, Philippines. Moshi[e]ra Latip for the payment of 2 cubicles located at 158 Quirino Ave. corner
Redemptorist Rd.[,] Baclaran P[arañ]aque City. ROFERLAND5 Bldg. with the terms
(sgd.) (sgd.) 6 yrs. Contract.
ROSALIE PALAÑA-CHUA MOSHIERA LATIEF
LESSOR LESSEE ₱2,000,000.00 (sgd.)
CHECK # 3767924 ____________________
(sgd.) FAR EAST BANK Rosalie Chua
OMAR LATIEF
LESSEE
SIGNED IN THE PRESENCE OF: (sgd.)
____________________
Ferdinand Chua
(sgd.) (sgd.)
1. Daisy C. Ramos 2. Ferdinand C. Chua
2. Received cash
₱500,000.00
Republic of the Philippines) From Moshiera Latip
City of Manila)s.s.
ACKNOWLEDGMENT
BEFORE ME, a Notary Public for and in the City of Manila personally appeared the following (sgd.)
persons: Rosalie Chua
12/10/99
Rosalie P. Chua with CTC No. 05769706 at Parañaque City on 2/1/99; Moshiera Latief with CTC No. ____________________
12885654 at Parañaque City on 11/11/99; Omar Latief with CTC No. 12885653 Parañaque City on Received by
Nov. 11, 1999.
known to me and to me known to be the same persons who executed this instrument consisting of two 3. Received cash
(2) pages duly signed by them and the two (2) instrumental witnesses and acknowledged to me that the ₱70,000.00 from
same is their free and voluntarily acts and deeds. Moshiera Latip
IN FAITH AND TESTIMONY WHEREOF, I have hereunto affixed my hand and Notarial Seal this
____th day of December, 1999 at the City of Manila, Philippines. (sgd.)
12-11-99 ____________________
Doc. No. _____ ATTY. CALIXTRO B. Received by:6
Page No. _____ RAMOS
Book No. LXV NOTARY PUBLIC Spouses Latip asseverated that sometime in October 1999, Rosalie offered for sale lease rights over
Series of 1999 Until December 31, 2000 two (2) cubicles in Roferxane Bldg. Having in mind the brisk sale of goods during the Christmas
season, they readily accepted Rosalie’s offer to purchase lease rights in Roferxane Bldg., which was
still under construction at the time. According to Spouses Latip, the immediate payment of
₱2,570,000.00 would be used to finish construction of the building giving them first priority in the
occupation of the finished cubicles.
Thereafter, in December 1999, as soon as two (2) cubicles were finished, Spouses Latip occupied them
without waiting for the completion of five (5) other stalls. Spouses Latip averred that the contract of
lease they signed had been novated by their purchase of lease rights of the subject cubicles. Thus, they
were surprised to receive a demand letter from Rosalie’s counsel and the subsequent filing of a
complaint against them.
The MeTC ruled in favor of Rosalie, viz.:
WHEREFORE, premises considered, the [Spouses Latip] and all persons claiming rights under them
are hereby ordered to VACATE the property subject of this case located at the 1st and 2nd floors of a
Roferxane Building situated at No. 158 Quirino Avenue corner Redemptorist Road, Barangay
Baclaran, Parañaque City. The [Spouses Latip] are also ordered to PAY [Rosalie] the amount of
SEVEN HUNDRED TWENTY THOUSAND PESOS (₱720,000.00) as rent arrearages for the period
of December 1999 to December 2000 and thereafter to PAY [Rosalie] the amount of SEVENTY TWO
THOUSAND PESOS (₱72,000.00) per month from January 2001 to December 2002, plus ten percent
(10%) increase for each and every succeeding years thereafter as stipulated in paragraph 2(a) of the
Contract of Lease x x x, until the [Spouses Latip] have completely vacated the leased premises subject
of this lease. Finally[,] the [Spouses Latip] are hereby ordered to PAY [Rosalie] the amount of
TWENTY THOUSAND PESOS (₱20,000.00) as attorney’s fees and TWO THOUSAND PESOS
(₱2,000.00) per [Rosalie’s] appearance in Court as appearance fee and to PAY the cost of this suit.
[Spouses Latip’s] counterclaim is hereby DISMISSED for lack of merit.
SO ORDERED.7
In stark contrast, the RTC reversed the MeTC and ruled in favor of Spouses Latip. The RTC did not
give credence to the contract of lease, ruling that it was not notarized and, in all other substantial
aspects, incomplete. Further on this point, the RTC noted that the contract of lease lacked: (1) the
signature of Ferdinand Chua, Rosalie’s husband; (2) the signatures of Spouses Latip on the first page
thereof; (3) the specific dates for the term of the contract which only stated that the lease is for "six (6)
y[ea]rs only starting from December 1999 or up to December 2005"; (4) the exact date of execution of
the document, albeit the month of December and year 1999 are indicated therein; and (5) the provision
for payment of deposit or advance rental which is supposedly uncommon in big commercial lease
contracts.
The RTC believed the claim of Spouses Latip that the contract of lease was modified and
supplemented; and the entire lease rentals for the two (2) cubicles for six (6) years had already been
paid by Spouses Latip in the amount of ₱2,570,000.00. As to Rosalie’s claim that her receipt of
₱2,570,000.00 was simply goodwill payment by prospective lessees to their lessor, and not payment
for the purchase of lease rights, the RTC shot this down and pointed out that, apart from her bare
allegations, Rosalie did not adduce evidence to substantiate this claim. On the whole, the RTC declared
an existent lease between the parties for a period of six (6) years, and already fully paid for by Spouses
Latip. Thus, Spouses Latip could not be ejected from the leased premises until expiration of the lease
period.
The RTC disposed of the appeal, viz.:
WHEREFORE, all the foregoing considered, the appealed decision of the [MeTC] dated January 13,
2004 is reversed as judgment is hereby rendered for the [Spouses Latip] and against [Rosalie], ordering
the latter to pay the former –
(1) the sum of PhP1,000,000.00 as moral damages;
(2) the sum of PhP500,000.00 as exemplary damages;
(3) the sum of PhP250,000.00 plus PhP3,000.00 per court appearance as and for attorney’s
fees; and
(4) costs of suit.
SO ORDERED.8
In yet another turn of events, the CA, as previously mentioned, reversed the RTC and reinstated the
decision of the MeTC. The CA ruled that the contract of lease, albeit lacking the signature of
Ferdinand and not notarized, remained a complete and valid contract. As the MeTC had, the CA
likewise found that the alleged defects in the contract of lease did not render the contract ineffective.
On the issue of whether the amount of ₱2,570,000.00 merely constituted payment of goodwill money,
the CA took judicial notice of this common practice in the area of Baclaran, especially around the
Redemptorist Church. According to the appellate court, this judicial notice was bolstered by the Joint
Sworn Declaration of the stallholders at Roferxane Bldg. that they all had paid goodwill money to
Rosalie prior to occupying the stalls thereat. Thus, ruling on Rosalie’s appeal, the CA disposed of the
case:
WHEREFORE, in view of the foregoing, the Petition for Review is hereby GRANTED. The assailed
decision of RTC Parañaque City Branch 274 dated September 24, 2004 is hereby REVERSED and
SET ASIDE, and the January 13, 2004 decision of the MeTC is REINSTATED and AFFIRMED en
toto.
SO ORDERED.9
Not surprisingly, Spouses Latip filed the present appeal.
The singular issue for our resolution is whether Spouses Latip should be ejected from the leased
cubicles.
As previously adverted to, the CA, in ruling for Rosalie and upholding the ejectment of Spouses Latip,
took judicial notice of the alleged practice of prospective lessees in the Baclaran area to pay goodwill
money to the lessor.
We disagree.
Sections 1 and 2 of Rule 129 of the Rules of Court declare when the taking of judicial notice is
mandatory or discretionary on the courts, thus:
SECTION 1. Judicial notice, when mandatory. – A court shall take judicial notice, without the
introduction of evidence, of the existence and territorial extent of states, their political history, forms of
government and symbols of nationality, the law of nations, the admiralty and maritime courts of the
world and their seals, the political constitution and history of the Philippines, the official acts of the
legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of
time, and the geographical divisions.
SEC. 2. Judicial notice, when discretionary. – A court may take judicial notice of matters which are of
public knowledge, or are capable of unquestionable demonstration or ought to be known to judges
because of their judicial functions.
On this point, State Prosecutors v. Muro10 is instructive:
I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The power to take
judicial notice is to be exercised by courts with caution; care must be taken that the requisite notoriety
exists; and every reasonable doubt on the subject should be promptly resolved in the negative.
Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one
of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or
uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal
guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it
can be said that judicial notice is limited to facts evidenced by public records and facts of general
notoriety.
To say that a court will take judicial notice of a fact is merely another way of saying that the usual
form of evidence will be dispensed with if knowledge of the fact can be otherwise acquired. This is
because the court assumes that the matter is so notorious that it will not be disputed. But judicial notice
is not judicial knowledge. The mere personal knowledge of the judge is not the judicial knowledge of
the court, and he is not authorized to make his individual knowledge of a fact, not generally or
professionally known, the basis of his action. Judicial cognizance is taken only of those matters which
are "commonly" known.
Things of "common knowledge," of which courts take judicial notice, may be matters coming to the
knowledge of men generally in the course of the ordinary experiences of life, or they may be matters
which are generally accepted by mankind as true and are capable of ready and unquestioned
demonstration. Thus, facts which are universally known, and which may be found in encyclopedias,
dictionaries or other publications, are judicially noticed, provided they are of such universal notoriety
and so generally understood that they may be regarded as forming part of the common knowledge of
every person.11
We reiterated the requisite of notoriety for the taking of judicial notice in the recent case of Expertravel
& Tours, Inc. v. Court of Appeals,12 which cited State Prosecutors:
Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one
of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or
uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal
guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it
can be said that judicial notice is limited to facts evidenced by public records and facts of general
notoriety. Moreover, a judicially noticed fact must be one not subject to a reasonable dispute in that it
is either: (1) generally known within the territorial jurisdiction of the trial court; or (2) capable of
accurate and ready determination by resorting to sources whose accuracy cannot reasonably be
questionable.
Things of "common knowledge," of which courts take judicial notice, may be matters coming to the
knowledge of men generally in the course of the ordinary experiences of life, or they may be matters
which are generally accepted by mankind as true and are capable of ready and unquestioned
demonstration. Thus, facts which are universally known, and which may be found in encyclopedias,
dictionaries or other publications, are judicially noticed, provided, they are such of universal notoriety
and so generally understood that they may be regarded as forming part of the common knowledge of
every person. As the common knowledge of man ranges far and wide, a wide variety of particular facts
have been judicially noticed as being matters of common knowledge. But a court cannot take judicial
notice of any fact which, in part, is dependent on the existence or non-existence of a fact of which the
court has no constructive knowledge.1avvphi1
From the foregoing provisions of law and our holdings thereon, it is apparent that the matter which the
appellate court took judicial notice of does not meet the requisite of notoriety. To begin with, only the
CA took judicial notice of this supposed practice to pay goodwill money to the lessor in the Baclaran
area. Neither the MeTC nor the RTC, with the former even ruling in favor of Rosalie, found that the
practice was of "common knowledge" or notoriously known.
We note that the RTC specifically ruled that Rosalie, apart from her bare allegation, adduced no
evidence to prove her claim that the amount of ₱2,570,000.00 simply constituted the payment of
goodwill money. Subsequently, Rosalie attached an annex to her petition for review before the CA,
containing a joint declaration under oath by other stallholders in Roferxane Bldg. that they had paid
goodwill money to Rosalie as their lessor. On this score, we emphasize that the reason why our rules
on evidence provide for matters that need not be proved under Rule 129, specifically on judicial notice,
is to dispense with the taking of the usual form of evidence on a certain matter so notoriously known, it
will not be disputed by the parties.
However, in this case, the requisite of notoriety is belied by the necessity of attaching documentary
evidence, i.e., the Joint Affidavit of the stallholders, to Rosalie’s appeal before the CA. In short, the
alleged practice still had to be proven by Rosalie; contravening the title itself of Rule 129 of the Rules
of Court – What need not be proved.
Apparently, only that particular division of the CA had knowledge of the practice to pay goodwill
money in the Baclaran area. As was held in State Prosecutors, justices and judges alike ought to be
reminded that the power to take judicial notice must be exercised with caution and every reasonable
doubt on the subject should be ample reason for the claim of judicial notice to be promptly resolved in
the negative.
Ultimately, on the issue of whether Spouses Latip ought to be ejected from the leased cubicles, what
remains in evidence is the documentary evidence signed by both parties – the contract of lease and the
receipts evidencing payment of ₱2,570,000.00.
We need not be unduly detained by the issue of which documents were executed first or if there was a
novation of the contract of lease. As had been found by the RTC, the lease contract and the receipts for
the amount of ₱2,570,000.00 can be reconciled or harmonized. The RTC declared:
Definitely, the parties entered into a lease agreement over two (2) cubicles of the 1st and 2nd floors of
Roferxane (Roferland) Building, a commercial building located at 158 Quirino Avenue, corner
Redemptorist Road, Baclaran, Parañaque City and belonging to [Rosalie]. The lease agreement is for a
term of six (6) years commencing in December 1999 up to December 2005. This agreement was
embodied in a Contract of Lease x x x. The terms of this lease contract, however, are modified or
supplemented by another agreement between the parties executed and or entered into in or about the
time of execution of the lease contract, which exact date of execution of the latter is unclear. 13
We agree with the RTC’s holding only up to that point. There exists a lease agreement between the
parties as set forth in the contract of lease which is a complete document. It need not be signed by
Ferdinand Chua as he likewise did not sign the other two receipts for ₱500,000.00 and ₱70,000.00,
respectively, which contained only the signature of Rosalie. Besides, it is undisputed that Rosalie owns
and leases the stalls in Roferxane Bldg.; thus, doing away with the need for her husband’s consent. The
findings of the three lower courts concur on this fact.
The contract of lease has a period of six (6) years commencing in December 1999. This fact is again
buttressed by Spouses Latip’s admission that they occupied the property forthwith in December 1999,
bearing in mind the brisk sales during the holiday season.
On the conflicting interpretations by the lower courts of the receipts amounting to ₱2,570,000.00, we
hold that the practice of payment of goodwill money in the Baclaran area is an inadequate subject of
judicial notice. Neither was Rosalie able to provide sufficient evidence that, apart from the belatedly
submitted Joint Affidavit of the stallholders of Roferxane Bldg., the said amount was simply for the
payment of goodwill money, and not payment for advance rentals by Spouses Latip.
In interpreting the evidence before us, we are guided by the Civil Code provisions on interpretation of
contracts, to wit:
Art. 1371. In order to judge the intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered.
Art. 1372. However general the terms of a contract may be, they shall not be understood to effect. Further, two receipts were subsequently executed pointing to the obvious fact that the
comprehend things that are distinct and cases that are different from those which the parties intended to ₱2,000,000.00 is not for full payment of rentals. Thus, since the contract of lease remained operative,
agree. we find that Rosalie’s receipt of the monies should be considered as advanced rentals on the leased
Art. 1373. If some stipulation of any contract should admit of several meanings, it shall be understood cubicles. This conclusion is bolstered by the fact that Rosalie demanded payment of the lease rentals
as bearing that import which is most adequate to render it effectual. only in 2000, a full year after the commencement of the lease.
The RTC was already on the right track when it declared that the receipts for ₱2,570,000.00 modified Finally, we note that the lease ended in 2005. Consequently, Spouses Latip can be ejected from the
or supplemented the contract of lease. However, it made a quantum leap when it ruled that the amount leased premises. They are liable to Rosalie for unpaid rentals on the lease of the two (2) cubicles in
was payment for rentals of the two (2) cubicles for the entire six-year period. We cannot subscribe to accordance with the stipulations on rentals in the Contract of Lease. However, the amount of
this finding. To obviate confusion and for clarity, the contents of the receipts, already set forth above, ₱2,570,000.00, covering advance rentals, must be deducted from this liability of Spouses Latip to
are again reproduced: Rosalie.
1. I received the amount of ₱2,000,000.00 (two million pesos) from [O]mar Latip & WHEREFORE, premises considered, the petition is hereby GRANTED. The decision of the Court of
Moshi[e]ra Latip for the payment of 2 cubicles located at 158 Quirino Ave. corner Appeals in CA-G.R. SP No. 89300 is REVERSED. The petitioners, spouses Omar and Moshiera Latip,
Redemptorist Rd.[,] Baclaran P[arañ]que City. ROFERLAND Bldg. with the terms 6 yrs. are liable to respondent Rosalie Chua for unpaid rentals minus the amount of ₱2,570,000.00 already
Contract. received by her as advance rentals. No costs.
SO ORDERED.
₱2,000,000.00 (sgd.)
CHECK # 3767924 ____________________ BANGKO SENTRAL NG PILIPINAS, Petitioner, v. FELICIANO P. LEGASPI, Respondent.
FAR EAST BANK Rosalie Chua DECISION
PERALTA, J.:
Before this Court is the Petition for Review on Certiorari1 under Rule 45, dated March 13, 2013, of
(sgd.) petitioner Bangko Sentral ng Pilipinas (BSP), seeking to reverse and set aside the Decision2 dated
____________________ August 15, 2012 and Resolution3 dated February 18, 2013, both of the Court of Appeals (CA) that
Ferdinand Chua reversed the Order4 dated January 20, 2009 of the Regional Trial Court (RTC), Branch 20, Malolos
City, Bulacan regarding a complaint for annulment of title, revocation of certificate and damages (with
application for TRO/writ of preliminary injunction) filed by petitioner BSP against Secretary Jose L.
2. Received cash
Atienza, Jr., Luningning G. De Leon, Engr. Ramon C. Angelo, Jr., Ex-Mayor Matilde A. Legaspi and
₱500,000.00
respondent Feliciano P. Legaspi, the incumbent Mayor of Norzagaray, Bulacan at the time of the filing
From Moshiera Latip
of the said complaint.

(sgd.) The facts follow.

Rosalie Chua
12/10/99
____________________ Petitioner BSP filed a Complaint for annulment of title, revocation of certificate and damages (with
Received by application for TRO/writ of preliminary injunction) against Secretary Jose L. Atienza, Jr., Luningning
G. De Leon, Engr. Ramon C. Angelo, Jr., Ex-Mayor Matilde A. Legaspi and respondent Feliciano P.
3. Received cash Legaspi before the RTC of Malolos, Bulacan. Respondent, together with his fellow defendants, filed
₱70,000.00 from their Answer to the complaint. Thereafter, the RTC, on May 13, 2008, issued an Order mandating the
Moshiera Latip issuance of preliminary injunction, enjoining defendants Engr. Ramon C. Angelo, Jr. and petitioner
Feliciano P. Legaspi, and persons acting for and in their behalf, from pursuing the construction,
(sgd.) development and/or operation of a dumpsite or landfill in Barangay San Mateo, Norzagaray, Bulacan,
12-11-99 ____________________ in an area allegedly covered by OCT No. P858/Free Patent No. 257917, the property subject of the
Received by:14 complaint.

There is nothing on the receipts and on record that the payment and receipt of ₱2,570,000.00 referred
to full payment of rentals for the whole period of the lease. All three receipts state Rosalie’s receipt of
cash in varying amounts. The first receipt for ₱2,000,000.00 did state payment for two (2) cubicles, but
this cannot mean full payment of rentals for the entire lease period when there are no words to that
Herein respondent Legaspi filed a Motion to Dismiss dated August 15, 2008 alleging that the RTC did
not acquire jurisdiction over the person of the petitioner BSP because the suit is unauthorized by
petitioner BSP itself and that the counsel representing petitioner BSP is not authorized and thus cannot
bind the same petitioner. Respondent Legaspi also alleged that the RTC did not acquire jurisdiction
over the subject matter of the action because the complaint is prima facie void and that an illegal
representation produces no legal effect. In addition, respondent Legaspi asserted that the complaint was
initiated without the authority of the Monetary Board and that the complaint was not prepared and
signed by the Office of the Solicitor General (OSG), the statutory counsel of government agencies.
In opposing the Motion to Dismiss, petitioner BSP argued that the complaint was filed pursuant to
Monetary Board Resolution No. 8865, dated June 17, 2004, and that the complaint was verified by
Geraldine Alag, Director of Asset Management of the BSP, who stated that she was authorized by
Monetary Board Resolutions No. 805 dated June 17, 2008 and 1005 dated July 29, 2005. Petitioner
BSP further claimed that it is not precluded from being represented by a private counsel of its own
choice.
After respondent Legaspi filed a Reply, to which petitioner BSP filed a Rejoinder, and against which,
respondent Legaspi filed a Rejoinder, the RTC rendered its Order denying respondent Legaspi's motion
to dismiss.
In denying the Motion to Dismiss, the RTC ruled that it had acquired jurisdiction over the person of the
petitioner when the latter filed with the court the Complaint dated April 10, 2008. Furthermore, the
RTC adjudged that in suits involving the BSP, the Monetary Board may authorize the Governor to
represent it personally or through counsel, even a private counsel, and the authority to represent the
BSP may be delegated to any other officer thereof. It took into account the feet that the BSP's
complaint dated April 10, 2008 was verified by Geraldine C. Alag, an officer of the BSP being the
Director of its Asset Management Department and the Secretary's Certificate issued by Silvina Q.
Mamaril-Roxas, Officer-in-Charge, Office of the Secretary of BSP's Monetary Board attesting to
Monetary Board Resolution No. 900, adopted and passed on July 18, 2008 containing the Board's
approval of the recommendation of the Asset Management Department (AMD) to engage the services
of Ongkiko Kalaw Manhit and Acorda Law Offices (OKMA Law).
Respondent Legaspi filed a motion for reconsideration, adding as its argument that the RTC failed to
acquire jurisdiction over the action because the complaint, a real action, failed to allege the assessed
value of the subject property. As an opposition to respondent Legaspi's additional contention, petitioner
BSP claimed that since the subject property contains an area of 4,838,736 square meters, it is
unthinkable that said property would have an assessed value of less than P20,000.00 which is within
the jurisdiction of the Municipal Trial Courts. Petitioner BSP further stated that a tax declaration
showing the assessed value of P28,538,900.00 and latest zonal value of P145,162,080.00 was attached
to the complaint.
The RTC, in its Order dated April 3, 2009, denied respondent Legaspi's motion for reconsideration.
Hence, respondent Legaspi elevated the case to the CA via a petition for certiorari under Rule 65 of
the Rules of Court. The CA, in its assailed Decision, dated August 15, 2012, granted respondent
Legaspi's petition. The dispositive portion of the said decision reads as follows:
chanRoblesvirtualLawlibrary
WHEREFORE, the petition is GRANTED. The assailed January 20, 2009 and April 03, 2009 Orders
are SET ASIDE and the complaint of BSP is hereby DISMISSED.
SO ORDERED.5ChanRoblesVirtualawlibrary
Petitioner BSP moved for reconsideration, but the CA, in its Resolution dated February 18, 2013,
denied the same motion. Hence, the present petition with the following grounds relied upon:
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I.
The Regional Trial Court of Malolos City has exclusive original jurisdiction over the subject matter of
Civil Case No. 209-M-2008.
II.
BSP lawfully engaged the services of [the] undersigned counsel.6ChanRoblesVirtualawlibrary
The principle that it is well settled that Rule 45 of the Rules of Court which provides that only
questions of law shall be raised in an appeal by certiorari under Rule 45 of the Rules of Court before
this Court admits of certain exceptions,7 namely: (1) when the findings are grounded entirely on
speculations, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or
impossible; (3) when there is a grave abuse of discretion; (4) when the judgment is based on
misappreciation of facts; (5) when the findings of fact are conflicting; (6) when in making its findings,
the same are contrary to the admissions of both appellant and appellee; (7) when the findings are
contrary to those of the trial court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondent; and (10) when the findings of fact
are premised on the supposed absence of evidence and contradicted by the evidence on record. 8 Under
the present case, the RTC and the CA have different findings of fact, hence, there is a need for this
Court to address the issues raised by petitioner BSP.
The petition is meritorious.
Under Batas Pambansa Bilang 129, as amended by Republic Act No. 7691, the RTC has exclusive
original jurisdiction over civil actions which involve title to possession of real property, or any interest
therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos
(P20,000.00).9 Petitioner BSP insists that the property involved has an assessed value of more than
P20,000.00, as shown in a Tax Declaration attached to the complaint. Incidentally, the complaint,10 on
its face, is devoid of any amount that would confer jurisdiction over the RTC.
The non-inclusion on the face of the complaint of the amount of the property, however, is not fatal
because attached in the complaint is a tax declaration (Annex "N" in the complaint) of the property in
question showing that it has an assessed value of P215,320.00. It must be emphasized that annexes to a
complaint are deemed part of, and should be considered together with the complaint.11 In Fluor Daniel,
Inc.-Philippines v. E.B. Villarosa and Partners Co., Ltd.,12 this Court ruled that in determining the
sufficiency of a cause of action, the courts should also consider the attachments to the complaint, thus:
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We have ruled that a complaint should not be dismissed for insufficiency of cause of action if it
appears clearly from the complaint and its attachments that the plaintiff is entitled to relief. The
converse is also true. The complaint may be dismissed for lack of cause of action if it is obvious from
the complaint and its annexes that the plaintiff is not entitled to any
relief.13ChanRoblesVirtualawlibrary
Hence, being an annex to BSP's complaint, the tax declaration showing the assessed value of the
property is deemed a part of the complaint and should be considered together with it in determining
that the RTC has exclusive original jurisdiction.
In connection therewith, the RTC, therefore, committed no error in taking judicial notice of the
assessed value of the subject property. A court will take judicial notice of its own acts and records in
the same case, of facts established in prior proceedings in the same case, of the authenticity of its own
records of another case between the same parties, of the files of related cases in the same court, and of
public records on file in the same court.14 Since a copy of the tax declaration, which is a public record,
was attached to the complaint, the same document is already considered as on file with the court, thus,
the court can now take judicial notice of such.
In holding that the courts cannot take judicial notice of the assessed or market value of the land, the
CA cited this Court's ruling in Quinagoran v. Court of Appeals.15 This Court's ruling though
in Quinagoran is inapplicable in this case because in the former, the complaint does not allege that the
assessed value of the land in question is more than P20,000.00 and that there was no tax declaration
nor any other document showing the assessed value of the property attached to the complaint. Thus,
in Quinagoran, the assessed value of the land was not on record before the trial court, unlike in the
present case.
Moreover, considering that the area of the subject land is four million eight hundred thirty-eight
thousand seven hundred and thirty-six (4,838,736) square meters, the RTC acted properly when it took
judicial notice of the total area of the property involved and the prevailing assessed value of the titled
property, and it would also be at the height of absurdity if the assessed value of the property with such
an area is less than P20,000.00.
Anent the issue of the legal representation of petitioner BSP, the CA ruled that the BSP, being a
government-owned and controlled corporation, should have been represented by the Office of the
Solicitor General (OSG) or the Office of the Government Corporate Counsel (OGCC) and not a private
law firm or private counsel, as in this case.
Under Republic Act No. 7653, or the New Central Bank Act, the BSP Governor is authorized to
represent the Bangko Sentral, either personally or through counsel, including private counsel, as may
be authorized by the Monetary Board, in any legal proceedings, action or specialized legal
studies.16 Under the same law, the BSP Governor may also delegate his power to represent the BSP to
other officers upon his own responsibility.
As aptly found by the RTC, petitioner BSP was able to justify its being represented by a private
counsel, thus:
chanRoblesvirtualLawlibrary
BSP's complaint dated April 10, 2008 was verified by Geraldine C. Alag, an officer of the BSP being
the Director of its Asset Management Department. It has been explained that this was authorized by the
Monetary Board, as per Resolution No. 865 dated June 17, 2004, which reads:
chanRoblesvirtualLawlibrary
To approve delegation of authority to the Director, Asset Management Department (AMD), or in his
absence, the Officer-in-Charge, AMD to sign all documents, contracts, agreements and affidavits
relating to the consolidation of ownership, lease, cancellation of decision, redemption and sale of
acquired assets, and all documents to be filed in court upon clearance by the Office of the General
Counsel and Legal Services x x x.
Also submitted to this Court is the Secretary's Certificate issued by Silvina Q. Mamaril-Roxas, Officer-
in-Charge, Office of the Secretary of BSP's Monetary Board attesting to Monetary Board Resolution
No. 900, adopted and passed on July 18, 2008, which reads:
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3. At the regular meeting of the MB on 18 July 2008, the MB adopted and passed MB Resolution No.
900, to wit:
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The Board approved the recommendation of the Asset Management Department (AMD) to engage the
services of Ongkiko Kalaw Manhit and Acorda Law Offices (OKMA Law) as follows:
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1. To act as counsel for the Bangko Sentral ng Pilipinas (BSP) in a complaint to be filed against the
Department of Environment and Natural Resources (DENR) Secretary, et al., before the Regional Trial
Court, Malolos, Bulacan, involving a BSP-acquired property covered by Transfer Certificate of Title
No. 48694 P(M) with a total area of 483.87 hectares in Norzagaray, Bulacan, and under the terms and
conditions of the service engagement and the fees as shown in Annex G of the memorandum of Ms.
Geraldine C. Alag, Director, AMB, dated 8 July 2008; and
2. To act as true and lawful attorney-in-fact of the BSP, with full power and authority, as follows:
chanRoblesvirtualLawlibrary
a. To represent the BSP in the pre-trial conference and trial of the case;
b. To negotiate, conclude, enter into and execute a compromise or amicable settlement of the case,
under such terms and conditions as an attorney-in-fact may deem just and reasonable;
c. To agree on the simplification of issues;
d. To file and/or amend the necessary pleadings;
x x x.
Thus, the filing of the instant suit and the engagement of the services of counsel are duly authorized.
It is significant to note that neither the Governor or General Counsel nor the Monetary Board of BSP
has come out to disown the authority given for the filing of the instant suit and for the engagement of
the services of BSP's counsel of record in this case.17ChanRoblesVirtualawlibrary
Therefore, as discussed above, in cases involving the BSP, the Monetary Board may authorize the BSP
Governor to represent it personally or through a counsel, even a private counsel, and the authority to
represent the BSP may be delegated to any of its officers.chanrobleslaw
WHEREFORE, the Petition for Review on Certiorari under Rule 45 dated March 13, 2013 of
petitioner Bangko Sentral ng Pilipinas is GRANTED. Consequently, the Decision dated August 15,
2012 and Resolution dated February 18, 2013 of the Court of Appeals are REVERSED and SET
ASIDE and the Orders dated January 20, 2009 and April 3, 2009 of the Regional Trial Court, Branch
20, Malolos City, Bulacan, are AFFIRMED.

Let this case, therefore, be REMANDED to the trial court for the continuation of its proceedings.
SO ORDERED.cralawlawlibrary
LAND BANK OFTHE PHILIPPINES, Petitioner, v. HONEYCOMB FARMS CORPORATION,
Respondent.
DECISION
BRION, J.:
Before us is a petition for review on certiorari,1ςrνll filed by the petitioner Land Bank of the
Philippines (LBP), assailing the Court of Appeals' (CAs) Amended Decision 2ςrνll and
Resolution3ςrνll in C.A.-G.R. CV No. 69661. The CA amended Decision reinstated with
modification the Judgment4of the Regional Trial Court (RTC) of Masbate, Masbate, Branch 48, acting
as a Special Agrarian Cow1 (SAC) in Special Civil Case No. 4637 for Determination and Payment of
Just Compensation under Republic Act No. (RA) 6657.
The Factual Antecedents
Respondent Honeycomb Farms Corporation (HFC) was the registered owner of a parcel of agricultural
land under Transfer Certificate of Title No. T-2550, with an area of 29.0966 hectares, situated in
"Curvada, Caintagan, Masbate."5ςrνll Through a letter dated February 5, 1988, HFC voluntarily
offered its land to the Department of Agrarian Reform (DAR) for coverage under RA 6657, the
Comprehensive Agrarian Reform Law of 1988 (CARL), for P581,932.00 or at P20,000.00 per
hectare.6ςrνll Pursuant to the rules and regulations governing the CARL, the government, through the
DAR and the LBP, determined an acquirable and compensable area of 27.5871 hectares, while 1.5095
hectares were excluded for being hilly and underdeveloped. 7ςrνll
Subsequently, the LBP, as the agency with the authority to determine land valuation and compensation
under the CARL, and using the guidelines set forth in DAR Administrative Order No. 6, series of
1992,8ςrνll fixed the value of the land in the amount of P165,739.44 and sent a Notice of Valuation
to HFC.9ςrνll
HFC rejected the LBPs valuation and it filed, on January 15, 1996,10a petition with the DAR
Adjudication Board (DARAB) for a summary administrative determination of just compensation. In its
petition, HFC claimed that the just compensation for the land should be in the amount of P25,000.00
per hectare, considering its location and productivity, or for an aggregate amount of
P725,000.00.11ςrνll
While the DARAB proceedings were still pending, HFC filed a Complaint for Determination and
Payment of Just Compensation with the RTC, praying for a just compensation of P725,000.00, plus
attorneys fees of ten percent (10%) of the just compensation.12ςrνll HFC justified the direct filing
with the SAC by what it saw as unreasonable delay or official inaction. HFC claimed that the DARAB
disregarded Section 16 of RA 6657 which mandates that the "DAR shall decide the case within thirty
(30) days after it is submitted for decision."13ςrνll The LBP meanwhile countered that HFCs petition
was "premature and lacks a cause of action for failure to exhaust administrative remedies." 14ςrνll
Meanwhile, on May 14, 1998, the DARAB issued a Decision15ςrνll affirming the LBPs valuation.
The dispositive portion states:chanroblesvirtuallawlibrary
WHEREFORE, conformably to the foregoing consideration, this Board hereby AFFIRMS the
valuation of P165,739.44 fixed by the Land Bank of the Philippines on the subject 27.5871-hectare
agricultural landholding.
The Petition dated October 7, 1995 for determination and payment of Just Compensation filed by the
landowner with this forum is hereby DENIED or ordered dismissed without prejudice for want of
jurisdiction over the same on the part of this forum.16ςrνll
The RTC Decision
On July 27, 2000, the RTC rendered a Judgment17ςrνll whose dispositive portion reads:
WHEREFORE, judgment is hereby rendered by:
1.) Fixing the just compensation of the parcel of land owned by plaintiff Honeycomb Farms Corp.
under TCT No. T-2550 which is covered by agrarian reform for an area of 27.5871 hectares at
P931,109.20 subject to the lien for the docket fee of the amount in excess of P725,000.00 as pleaded
for by herein plaintiff in its complaint;
2.) Ordering the defendants to pay jointly and severally the plaintiff an attorneys fee equivalent to 10%
of the total just compensation.18ςrνll
Owing to the parties conflicting valuations, the SAC made its own valuation and briefly concluded
that:chanroblesvirtuallawlibrary
A judicious evaluation of the evidence on record shows that the subject area is sporadically planted to
(sic) coconut and corn as is not fully develop (sic) when the government conducted its ocular
inspection and thereafter took over possession of the same although majority of it is a fertile grass land
and undisputedly deemed suitable to agriculture. However, the parcel of land under consideration is
located in the side of the road. It is likewise of judicial notice that it is situated near the commercial
district of Curvada, Cataingan, Masbate. In the light of the foregoing premises, the Court is of the
opinion and so holds that the just compensation for the land of herein plaintiff corporation under TCT
No. T-2550 covered by agrarian reform is P32,000.00 per hectare or P882,787.20 for the area of
27.58571 hectares plus consequential damages at the same value (P32,000.00) per hectare for the
remaining 1.5095 hectares of the plaintiffs property left and rendered useless by the compulsory
coverage or for the total sum of P931,109.20.19ςrνll (emphasis ours)
Both parties appealed to the CA.
HFC argued that the RTC erred in its determination of just compensation; the amount of P931,109.20
is not supported by the evidence on record while its presented evidence correctly shows that the market
value of the land at the time of taking was P113,000.00 per hectare.20ςrνll
The LBP raised the threshold issue of whether the SAC had jurisdiction to hear HFCs complaint
because of the pending DARAB proceedings, emphasizing that the completion of the administrative
proceedings before the DARAB is a condition precedent for the filing of a complaint for the
determination of just compensation before the SAC. The LBP also argued that the RTC committed a
serious error when it took judicial notice of the propertys roadside location, its proximity to a
commercial district, its incomplete development as coconut and corn land, and its condition as
grassland, to determine just compensation; thereby, it effectively eschewed the formula for fixing just
compensation, provided under DAR Administrative Order No. 6, series of 1992.21ςrνll Lastly, the
LBP questioned the award of consequential damages and attorneys fees for lack of legal and factual
basis.22ςrνll
The CA Decision
The CA, in its January 28, 2004 Decision, reversed the RTC Judgment and dismissed HFCs complaint
for failure to exhaust administrative remedies that Section 16(f) of RA 6657 requires. The CA ruled
that the LBP "made a procedural shortcut" when it filed the complaint with the SAC without waiting
for the DARABs decision.23ςrνll
On the LBPs motion for reconsideration (to which a copy of the May 14, 1998 DARAB Decision was
attached),24ςrνll the CA, in its Amended Decision of September 16, 2004, proceeded to decide the
case on the merits and recalled its January 28, 2004 Decision. The dispositive portion of the Amended
Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing, Our January 28, 2004 Decision is hereby RECALLED and
SET ASIDE and a new one entered. The assailed decision of the Regional Trial Court of Masbate,
Branch 48 in Civil Case No. 4637 is hereby REINSTATED with MODIFICATION that the award of
attorneys fees in favor of herein plaintiff-appellant is hereby deleted. No costs.25ςrνll
The CA ruled that in expropriation proceedings, the just compensation to which the owner of the
condemned property is entitled to is the market value. It noted that in order to arrive at the proper
market value, several factors such as the current value of like properties, their actual or potential uses
and their size, shape and location must be considered. The CA thus concluded that the valuation made
by the RTC was based on the evidence on record since the latter considered the sketch plan of the
property, the testimonies of the witnesses and the field reports of both parties. In addition, the CA also
deleted the award of attorneys fees for lack of factual and legal basis.26ςrνll
The Petition
The LBPs petition for review on certiorari raised the following errors:chanroblesvirtuallawlibrary
First, the CA erred in reinstating the decision of the SAC since it had no jurisdiction to hear HFCs
complaint while the DARAB proceedings were pending. It stressed that the SAC could not acquire
jurisdiction over the complaint since the DARAB continued to retain jurisdiction over the
determination of just compensation.
Second, the CA failed to dismiss the complaint on the ground of non-exhaustion of administrative
remedies and forum shopping on the part of HFC. It notes that the HFCs complaint was premature and
violative of the forum shopping prohibition since the complaint was filed with the SAC despite the
pendency of the DARAB proceedings.
Lastly, the CA erred when it failed to apply the "basic formula" for determining just compensation
prescribed by DAR Administrative Order No. 6, series of 1992, as amended by DAR Administrative
Order No. 11, series of 1994. It emphasizes that by adopting the values fixed by the SAC, the CAs
determination is contrary to: (1) Section 17 of RA 6657 and (2) the rulings of the Court bearing on the
determination of just compensation, in particular, Land Bank of the Philippines v. Sps. Banal 27ςrνll
where the Court categorically held that the formula prescribed by the DAR in Administrative Order
No. 6, series of 1992, shall be used in the valuation of the land.28ςrνll
HFC prays for the dismissal of the LBPs petition on the following grounds:chanroblesvirtuallawlibrary
First, it submits that the pendency of the DARAB proceedings has no bearing on the jurisdiction of the
SAC since Section 57 of RA 6657 provides that the SAC has original and exclusive jurisdiction over
petitions for the determination of just compensation. Conformably with the dictates of Section 57,
litigants can file a case for the determination of just compensation without the necessity of a DARAB
determination. Second, it argues that jurisprudence allows resort to judicial intervention without
completing administrative remedies when there has been unreasonable delay or official inaction, as in
this case, on the part of the administrative agency. Third, for the same reason, it contends that it cannot
be charged with forum shopping. Finally, it argues that strict adherence to the formula prescribed by
DAR Administrative Order No. 6, series of 1992, as amended by DAR Administrative Order No. 5,
series of 1994, unduly "ties the hands of the SAC" in the determination of just compensation. 29ςrνll
The Courts Ruling
We find the LBPs petition meritorious.
The SAC properly acquired jurisdiction
over HFCs complaint for the determination
of just compensation despite the pendency
of the DARAB proceedings
At the core of the LBPs lack of jurisdiction theory is the premise that SAC could not acquire
jurisdiction over the complaint since the DARAB continued to retain jurisdiction over the matter of
determination of just compensation.
The premise is erroneous because the DARAB does not "exercise concurrent jurisdiction with the SAC
in just compensation cases. The determination of just compensation is judicial in nature." 30ςrνll
"The original and exclusive jurisdiction of the SAC xxx is not a novel issue"31ςrνll and is in
fact,well-settled. In Republic of the Philippines v. CA,32ςrνll we first ruled that it would subvert the
original and exclusive jurisdiction of the RTC for the DAR to vest original jurisdiction in
compensation cases in administrative officials and make the RTC an appellate court for the review of
administrative decisions, viz:chanroblesvirtuallawlibrary
Thus, under the law, the Land Bank of the Philippines is charged with the initial responsibility of
determining the value of lands placed under land reform and the compensation to be paid for their
taking. Through notice sent to the landowner pursuant to 16(a) of R.A. No. 6657, the DAR makes an
offer. In case the landowner rejects the offer, a summary administrative proceeding is held and
afterward the provincial (PARAD), the regional (RARAD) or the central (DARAB) adjudicator as the
case may be, depending on the value of the land, fixes the price to be paid for the land. If the
landowner does not agree to the price fixed, he may bring the matter to the RTC acting as Special
Agrarian Court. This in essence is the procedure for the determination of compensation cases under
R.A. No. 6657. In accordance with it, the private respondents case was properly brought by it in the
RTC, and it was error for the latter court to have dismissed the case. In the terminology of 57, the
RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for
the determination of just compensation to landowners." It would subvert this "original and exclusive"
jurisdiction of the RTC for the DAR to vest original jurisdiction in compensation cases in
administrative officials and make the RTC an appellate court for the review of administrative
decisions.33ςrνll (citations omitted)
In the recent case of Land Bank of the Philippines v. Belista,34ςrνll we extensively discussed the
reasons why the SAC can properly assume jurisdiction over petitions for the determination of just
compensation despite the pendency of administrative proceedings, thus:
Sections 50 and 57 of RA No. 6657 provide:chanroblesvirtuallawlibrary
Section 50. Quasi-judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all
matters involving the implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural
Resources (DENR) x x x
Section 57. Special Jurisdiction. The Special Agrarian Court shall have original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners, and the
prosecution of all criminal offenses under this Act. x x x
The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within
thirty (30) days from submission of the case for decision.
Clearly, under Section 50, DAR has primary jurisdiction to determine and adjudicate agrarian reform
matters and exclusive original jurisdiction over all matters involving the implementation of agrarian
reform, except those falling under the exclusive jurisdiction of the DA and the DENR. Further
exception to the DARs original and exclusive jurisdiction are all petitions for the determination of just
compensation to landowners and the prosecution of all criminal offenses under RA No. 6657, which
are within the jurisdiction of the RTC sitting as a Special Agrarian Court. Thus, jurisdiction on just
compensation cases for the taking of lands under RA No. 6657 is vested in the courts.
In Republic v. CA G.R. No. 122256, October 30, 1996, 263 SCRA 758, the Court
explained:chanroblesvirtuallawlibrary
Thus, Special Agrarian Courts, which are Regional Trial Courts, are given original and exclusive
jurisdiction over two categories of cases, to wit: (1) "all petitions for the determination of just
compensation to landowners" and (2) "the prosecution of all criminal offenses under R.A. No. 6657."
The provisions of 50 must be construed in harmony with this provision by considering cases involving
the determination of just compensation and criminal cases for violations of R.A. No. 6657 as excepted
from the plenitude of power conferred on the DAR. Indeed, there is a reason for this distinction. The
DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain
(for such are takings under R.A. No. 6657) and over criminal cases. Thus, in EPZA v. Dulay and
Sumulong v. Guerrero - we held that the valuation of property in eminent domain is essentially a
judicial function which cannot be vested in administrative agencies, while in Scotys Department Store
v. Micaller, we struck down a law granting the then Court of Industrial Relations jurisdiction to try
criminal cases for violations of the Industrial Peace Act.
In a number of cases, the Court has upheld the original and exclusive jurisdiction of the RTC, sitting as
SAC, over all petitions for determination of just compensation to landowners in accordance with
Section 57 of RA No. 6657. In Land Bank of the Philippines v. Wycoco G.R. Nos. 140160 and
146733, January 13, 2004, 419 SCRA 67, the Court upheld the RTCs jurisdiction over Wycocos
petition for determination of just compensation even where no summary administrative proceedings
was held before the DARAB which has primary jurisdiction over the determination of land valuation.
The Court held:chanroblesvirtuallawlibrary
In Land Bank of the Philippines v. Court of Appeals, the landowner filed an action for determination of
just compensation without waiting for the completion of DARABs re-evaluation of the land. This,
notwithstanding, the Court held that the trial court properly acquired jurisdiction because of its
exclusive and original jurisdiction over determination of just compensation, thus
It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners." This "original
and exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative
officials original jurisdiction in compensation cases and make the RTC an appellate court for the
review of administrative decisions. Thus, although the new rules speak of directly appealing the
decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the
original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such
jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into an appellate
jurisdiction would be contrary to Sec. 57 and, therefore, would be void. Thus, direct resort to the SAC
Special Agrarian Court by private respondent is valid.
xxx
In Land Bank of the Philippines v. Natividad G.R. No. 127198, May 16, 2005, 458 SCRA 441,
wherein Land Bank questioned the alleged failure of private respondents to seek reconsideration of the
DARs valuation, but instead filed a petition to fix just compensation with the RTC, the Court
said:chanroblesvirtuallawlibrary
At any rate, in Philippine Veterans Bank v. CA, we held that there is nothing contradictory between the
DARs primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original
jurisdiction over all matters involving the implementation of agrarian reform, which includes the
determination of questions of just compensation, and the original and exclusive jurisdiction of regional
trial courts over all petitions for the determination of just compensation. The first refers to
administrative proceedings, while the second refers to judicial proceedings.
In accordance with settled principles of administrative law, primary jurisdiction is vested in the DAR
to determine in a preliminary manner the just compensation for the lands taken under the agrarian
reform program, but such determination is subject to challenge before the courts. The resolution of just
compensation cases for the taking of lands under agrarian reform is, after all, essentially a judicial
function.
Thus, the trial court did not err in taking cognizance of the case as the determination of just
compensation is a function addressed to the courts of justice.
In Land Bank of the Philippines v. Celada [G.R. No. 164876, January 23, 2006, 479 SCRA 495ςrνll ,
where the issue was whether the SAC erred in assuming jurisdiction over respondents petition for
determination of just compensation despite the pendency of the administrative proceedings before the
DARAB, the Court stated that:chanroblesvirtuallawlibrary
It would be well to emphasize that the taking of property under RA No. 6657 is an exercise of the
power of eminent domain by the State. The valuation of property or determination of just
compensation in eminent domain proceedings is essentially a judicial function which is vested with the
courts and not with administrative agencies. Consequently, the SAC properly took cognizance of
respondents petition for determination of just compensation. 35ςrνll (Italicization supplied; citations
omitted)
Similarly, in Land Bank of the Philippines v. Court of Appeals,36ςrνll whose factual circumstances
mirror that of the present case, we pointedly ruled that the SAC acquired jurisdiction over the action
for the determination of just compensation even during the pendency of the DARAB proceedings, for
the following reason:chanroblesvirtuallawlibrary
It is clear from Sec. 57 x x x that the RTC, sitting as a Special Agrarian Court, has "original and
exclusive jurisdiction over all petitions for the determination of just compensation to landowners." This
"original and excusive" jurisdiction of the RTC would be undermined if the DAR would vest in
administrative officials original jurisdiction in compensation cases and make the RTC an appellate
court for the review of administrative decisions. Thus, although the new rules speak of directly
appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from
Sec. 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort
to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into
an appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort
to the SAC by private respondent is valid.37ςrνll (emphasis ours)
To reiterate, the taking of property under RA 6657 is an exercise of the States power of eminent
domain. "The valuation of property or determination of just compensation in eminent domain
proceedings is essentially a judicial function which is vested with the courts and not with
administrative agencies."38ςrνll Specifically, "when the parties cannot agree on the amount of just
compensation, only the exercise of judicial power can settle the dispute with binding effect on the
winning and losing parties."39ςrνll
Thus, in the present case, HFC correctly filed a petition for the determination of just compensation
with the SAC, which has the original and exclusive jurisdiction in just compensation cases under RA
6657. The DARABs valuation, being preliminary in nature, could not have attained finality, as only the
courts can resolve the issue of just compensation. Consequently, the SAC properly took cognizance of
HFCs petition for determination of just compensation.
We also find no merit in the LBPs argument that the HFC failed to exhaust administrative remedies
when it directly filed a petition for the determination of just compensation with the SAC even before
the DARAB case could be resolved. In Land Bank of the Phils. v. Wycoco,40ςrνll we held that the
doctrine of exhaustion of administrative remedies does not apply when the issue has been rendered
moot and academic.41ςrνll In the present case, the issue is now moot considering that the valuation
made by the LBP had long been affirmed in toto by the DARAB in its May 14, 1998 Decision.
HFC is not guilty of forum shopping
We do not agree with the LBPs view that HFC committed forum shopping.
Forum shopping is the act of litigants who repetitively avail themselves of multiple judicial remedies in
different fora, simultaneously or successively, all substantially founded on the same transactions and
the same essential facts and circumstances; and raising substantially similar issues either pending in or
already resolved adversely by some other court; or for the purpose of increasing their chances of
obtaining a favorable decision, if not in one court, then in another. The rationale against forum-
shopping is that a party should not be allowed to pursue simultaneous remedies in two different courts,
for to do so would constitute abuse of court processes which tends to degrade the administration of
justice, wreaks havoc upon orderly judicial procedure, and adds to the congestion of the heavily
burdened dockets of the courts.42ςrνll
To determine whether a party violated the rule against forum shopping, the most important factor to
ask is whether the elements of litis pendentia are present, or whether a final judgment in one case will
amount to res judicata in another; otherwise stated, the test for determining forum shopping is whether,
in the two (or more) cases pending, there is identity of parties, rights or causes of action, and reliefs
sought.43ςrνll
In Yu v. Lim,44ςrνll we enumerated the requisites of forum shopping, as follows:
Forum shopping exists when the elements of litis pendentia are present or where a final judgment in
one case will amount to res judicata in another. Litis pendentia requires the concurrence of the
following requisites: (1) identity of parties, or at least such parties as those representing the same
interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded
on the same facts; and (3) identity with respect to the two preceding particulars in the two cases, such
that any judgment that may be rendered in the pending case, regardless of which party is successful,
would amount to res judicata in the other case.
In the present case, HFC did not commit forum shopping because the third element of litis pendentia is
lacking. As previously mentioned, the DARABs land valuation is only preliminary and is not, by any
means, final and conclusive upon the landowner or any other interested party. The courts, in this case,
the SAC, will still have to review with finality the determination, in the exercise of what is admittedly
a judicial function.45ςrνll Thus, it becomes clear that there is no identity between the two cases such
that a judgment by the DARAB, regardless of which party is successful, would amount to res judicata
in the case before the SAC.
It has been held that "what is essential in determining the existence of forum-shopping is the vexation
caused the courts and litigants by a party who asks different courts and/or administrative agencies to
rule on similar or related causes and/or grant the same or substantially similar reliefs, in the process
creating the possibility of conflicting decisions being rendered upon the same issues." 46ςrνll In the
present case, the evil sought to be prevented by the prohibition on forum shopping, i.e., the possibility
of conflicting decisions, is lacking since the DARAB determination is merely preliminary and is not
binding on the parties; such determination is subject to challenge before the courts. The law, in fact,
allows the landowner to file a case for the determination of just compensation with the SAC without
the necessity of first filing the same with the DARAB. Based on these considerations, it is clear that
the HFC cannot be charged with forum shopping.
To determine just compensation, the SAC
must take into consideration the factors
prescribed by Section 17 of RA 6657 and is
obliged to apply the DAR formula
The CA, in affirming the SACs valuation and disregarding that of the LBP, briefly
held:chanroblesvirtuallawlibrary
In the instant case, the trial court based its valuation of the property at P32,000.00 per hectare on the
evidence submitted by the parties, such as the sketch plan of the property, the testimonies of witnesses,
and the field investigation reports of both parties. Hence, herein litigants cannot claim that the
valuation made by the court was not based on the evidence on record. 47ςrνll
The LBP maintains that the SAC committed serious error when it failed to apply the "basic formula"
for determining just compensation, prescribed by DAR Administrative Order No. 6, series of 1992, as
amended by DAR Administrative Order No. 11, series of 1994. It emphasizes that by adopting the
values fixed by the SAC, the CAs determination is contrary to Section 17 of RA 6657 and the
applicable rulings of the Court bearing on the determination of just compensation, which require that
the basic formula prescribed by the DAR shall be used in the valuation of the land.
We agree with the LBP. In Land Bank of the Philippines v. Honeycomb Farms Corporation,48ςrνll a
recent case with substantially the same factual antecedents and the same respondent company, we
categorically ruled that the CA and the RTC grievously erred when they disregarded the formula laid
down by the DAR, and chose instead to come up with their own basis for the valuation of the land in
question, viz.:chanroblesvirtuallawlibrary
That it is the RTC, sitting as a SAC, which has the power to determine just compensation for parcels of
land acquired by the State, pursuant to the agrarian reform program, is made clear in Section 57 of RA
6657, which reads:chanroblesvirtuallawlibrary
Section 57. Special Jurisdiction. - The Special Agrarian Courts shall have original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners, and the
prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings
before the Special Agrarian Courts unless modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within
thirty (30) days from submission of the case for decision.
To guide the RTC in this function, Section 17 of RA 6657 enumerates the factors that have to be taken
into consideration to accurately determine just compensation. This provision
states:chanroblesvirtuallawlibrary
Section 17. Determination of Just Compensation. In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment made by government assessors, shall
be considered. The social and economic benefits contributed by the farmers and the farm workers and
by the Government to the property, as well as the non-payment of taxes or loans secured from any
government financing institution on the said land, shall be considered as additional factors to determine
its valuation.
In Land Bank of the Philippines v. Sps. Banal, we recognized that the DAR, as the administrative
agency tasked with the implementation of the agrarian reform program, already came up with a
formula to determine just compensation which incorporated the factors enumerated in Section 17 of
RA 6657. We said:chanroblesvirtuallawlibrary
These factors enumerated in Section 17 have been translated into a basic formula in DAR
Administrative Order No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series
of 1994, issued pursuant to the DAR's rule-making power to carry out the object and purposes of R.A.
6657, as amended.
In Landbank of the Philippines v. Celada, we emphasized the duty of the RTC to apply the formula
provided in the applicable DAR AO to determine just compensation, stating
that:chanroblesvirtuallawlibrary
While the RTC is required to consider the acquisition cost of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration and
the assessments made by the government assessors to determine just compensation, it is equally true
that these factors have been translated into a basic formula by the DAR pursuant to its rule-making
power under Section 49 of R.A. No. 6657. As the government agency principally tasked to implement
the agrarian reform program, it is the DAR's duty to issue rules and regulations to carry out the object
of the law. The DAR Administrative Orderprecisely "filled in the details" of Section 17, R.A. No. 6657
by providing a basic formula by which the factors mentioned therein may be taken into account. The
RTCwas at no liberty to disregard the formula which was devised to implement the said provision.
It is elementary that rules and regulations issued by administrative bodies to interpret the law which
they are entrusted to enforce, have the force of law, and are entitled to great respect. Administrative
issuances partake of the nature of a statute and have in their favor a presumption of legality. As such,
courts cannot ignore administrative issuances especially when, as in this case, its validity was not put
in issue. Unless an administrative order is declared invalid, courts have no option but to apply the
same.
We reiterated the mandatory application of the formula in the applicable DAR administrative
regulations in Land Bank of the Philippines v. Lim, Land Bank of the Philippines v. Heirs of Eleuterio
Cruz, and Land Bank of the Philippines v. Barrido. In Barrido, we were explicit in stating
that:chanroblesvirtuallawlibrary
While the determination of just compensation is essentially a judicial function vested in the RTC acting
as a Special Agrarian Court, the judge cannot abuse his discretion by not taking into full consideration
the factors specifically identified by law and implementing rules. Special Agrarian Courts are not at
liberty to disregard the formula laid down in DAR A.O. No. 5, series of 1998, because unless an
administrative order is declared invalid, courts have no option but to apply it. The courts cannot ignore,
without violating the agrarian law, the formula provided by the DAR for the determination of just
compensation.
These rulings plainly impose on the RTC the duty to apply the formula laid down in the pertinent DAR
administrative regulations to determine just compensation. Clearly, the CA and the RTC acted with
grievous error when they disregarded the formula laid down by the DAR, and chose instead to come up
with their own basis for the valuation of the subject land. [Italicization supplied; emphases ours]
As the law now stands, it is clear that the SAC is duty bound to take into consideration the factors fixed
by Section 17 of RA 6657 and apply the basic formula prescribed and laid down in the pertinent
administrative regulations, in this case, DAR Administrative Order No. 6, series of 1992, as amended
by DAR Administrative Order No. 11, series of 1994, to determine just compensation. In the present
case, we thus find no difficulty in concluding that the CA and the RTC, acting as a SAC, seriously
erred when they effectively eschewed the basic formula prescribed by the DAR regulations and chose
instead to come up with their own basis for the valuation of the land in question.
The SAC cannot take judicial notice of the
nature of land in question without the
requisite hearing
Separately from disregarding the basic formula prescribed by the DAR, it has also not escaped our
notice that the SAC also erred in concluding that the subject land consisting of 29.0966 hectares is
commercial in nature, after taking judicial notice that it is "situated near the commercial district of
Curvada, Cataingan, Masbate."49ςrνll In Land Bank of the Philippines v.
Honeycomb Farms Corporation,50ςrνll we categorically ruled that the parties must be given the
opportunity to present evidence on the nature of the property before the court a quo can take judicial
notice of the commercial nature of a portion of the subject landholding,
thus:chanroblesvirtuallawlibrary
While the lower court is not precluded from taking judicial notice of certain facts, it must exercise this
right within the clear boundary provided by Section 3, Rule 129 of the Rules of Court, which
provides:chanroblesvirtuallawlibrary
Section 3. Judicial notice, when hearing necessary.
During the trial, the court, on its own initiative, or on request of a party, may announce its intention to
take judicial notice of any matter and allow the parties to be heard thereon.
After the trial, and before judgment or on appeal, the proper court, on its own initiative, or on request
of a party, may take judicial notice of any matter and allow the parties to be heard thereon if such
matter is decisive of a material issue in the case.
The classification of the land is obviously essential to the valuation of the subject property, which is
the very issue in the present case. The parties should thus have been given the opportunity to present
evidence on the nature of the property before the lower court took judicial notice of the commercial
nature of a portion of the subject landholdings. As we said in Land Bank of the Phils. v. Wycoco 464
Phil. 83, 97-98 (2004):chanroblesvirtuallawlibrary
The power to take judicial notice is to be exercised by courts with caution especially where the case
involves a vast tract of land. Care must be taken that the requisite notoriety exists; and every
reasonable doubt on the subject should be promptly resolved in the negative. To say that a court will
take judicial notice of a fact is merely another way of saying that the usual form of evidence will be
dispensed with if knowledge of the fact can be otherwise acquired. This is because the court assumes
that the matter is so notorious that it will not be disputed. But judicial notice is not judicial knowledge.
The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is not
authorized to make his individual knowledge of a fact, not generally or professionally known, the basis
of his action. [Italicization supplied]
The present case must be remanded to the
court of origin for the determination of just
compensation in accordance Section 17 of
RA 6657 and applicable DAR regulations
In Land Bank of the Philippines v. Sps. Banal,51ςrνll we remanded the case to the SAC for further
reception of evidence because the trial court based its valuation upon a different formula and did not
conduct any hearing for the reception of evidence.52ςrνll
The mandatory application of the aforementioned guidelines in determining just compensation has
been reiterated recently in Land Bank of the Philippines v. Lim, 53ςrνll
Land Bank of the Philippines v. Heirs of Eleuterio Cruz,54ςrνll and Land Bank qf the Philippines v.
Honeycomb Farms Corporation,55ςrνll where we also ordered the remand of the cases to the SAC for
the determination of just compensation, strictly in accordance with the applicable DAR
regulations.56ςrνll
As we are not a trier of facts, we thus find that a remand of this case is necessary in order for the SAC
to determine just compensation, strictly in accordance with Section 17 of RA 6657 and applicable
DAR regulations, in particular, DAR Administrative Order No. 6, series of 1992, as amended by DAR
Administrative Order No. 11, series of 1994.ςηαοblενιrυαllαωlιbrαr
WHEREFORE, premises considered, the petition Is hereby GRANTED. The assailed Amended
Decision dated September 16, 2004 and Resolution dated November 25, 2004 of the Court of Appeals
in C.A.-G.R. CV No. 69661 are REVERSED and SET ASIDE. Special Civil Case No. 4637 is
REMANDED to the Regional Trial Court of Masbate, Masbate, Branch 48, for the determination of
just compensation, based on Section 17 of Republic Act No. 6657 and the applicable administrative
orders of the Department of Agrarian Reform.
No pronouncement as to costs.ςrαlαωlιbrαr
SO ORDERED.
G.R. No. 171406               April 4, 2011
ASIAN TERMINALS, INC., Petitioner,
vs.
MALAYAN INSURANCE, CO., INC., Respondent.
DECISION
DEL CASTILLO, J.:
Once the insurer pays the insured, equity demands reimbursement as no one should benefit at the
expense of another.
This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the July 14, 2005
Decision2 and the February 14, 2006 Resolution3 of the Court of Appeals (CA) in CA G.R. CV No.
61798.
Factual Antecedents
On November 14, 1995, Shandong Weifang Soda Ash Plant shipped on board the vessel MV "Jinlian
I" 60,000 plastic bags of soda ash dense (each bag weighing 50 kilograms) from China to Manila.4 The
shipment, with an invoice value of US$456,000.00, was insured with respondent Malayan Insurance
Company, Inc. under Marine Risk Note No. RN-0001-21430, and covered by a Bill of Lading issued
by Tianjin Navigation Company with Philippine Banking Corporation as the consignee and Chemphil
Albright and Wilson Corporation as the notify party.5
On November 21, 1995, upon arrival of the vessel at Pier 9, South Harbor, Manila,6 the stevedores of
petitioner Asian Terminals, Inc., a duly registered domestic corporation engaged in providing arrastre
and stevedoring services,7 unloaded the 60,000 bags of soda ash dense from the vessel and brought
them to the open storage area of petitioner for temporary storage and safekeeping, pending clearance
from the Bureau of Customs and delivery to the consignee.8 When the unloading of the bags was
completed on November 28, 1995, 2,702 bags were found to be in bad order condition.9
On November 29, 1995, the stevedores of petitioner began loading the bags in the trucks of MEC
Customs Brokerage for transport and delivery to the consignee.10 On December 28, 1995, after all the
bags were unloaded in the warehouses of the consignee, a total of 2,881 bags were in bad order
condition due to spillage, caking, and hardening of the contents.11
On April 19, 1996, respondent, as insurer, paid the value of the lost/ damaged cargoes to the consignee
in the amount of ₱643,600.25.12
Ruling of the Regional Trial Court
On November 20, 1996, respondent, as subrogee of the consignee, filed before the Regional Trial
Court (RTC) of Manila, Branch 35, a Complaint13 for damages against petitioner, the shipper Inchcape
Shipping Services, and the cargo broker MEC Customs Brokerage.14
After the filing of the Answers,15 trial ensued.
On June 26, 1998, the RTC rendered a Decision16 finding petitioner liable for the damage/loss
sustained by the shipment but absolving the other defendants. The RTC found that the proximate cause
of the damage/loss was the negligence of petitioner’s stevedores who handled the unloading of the
cargoes from the vessel.17 The RTC emphasized that despite the admonitions of Marine Cargo
Surveyors Edgar Liceralde and Redentor Antonio not to use steel hooks in retrieving and picking-up
the bags, petitioner’s stevedores continued to use such tools, which pierced the bags and caused the
spillage.18 The RTC, thus, ruled that petitioner, as employer, is liable for the acts and omissions of its
stevedores under Articles 217619 and 2180 paragraph (4)20 of the Civil Code.21 Hence, the dispositive
portion of the Decision reads:
WHEREFORE, judgment is rendered ordering defendant Asian Terminal, Inc. to pay plaintiff Malayan
Insurance Company, Inc. the sum of ₱643,600.25 plus interest thereon at legal rate computed from
November 20, 1996, the date the Complaint was filed, until the principal obligation is fully paid, and
the costs.
The complaint of the plaintiff against defendants Inchcape Shipping Services and MEC Customs
Brokerage, and the counterclaims of said defendants against the plaintiff are dismissed.
SO ORDERED.22
Ruling of the Court of Appeals
Aggrieved, petitioner appealed23 to the CA but the appeal was denied. In its July 14, 2005 Decision, the
CA agreed with the RTC that the damage/loss was caused by the negligence of petitioner’s stevedores
in handling and storing the subject shipment.24 The CA likewise rejected petitioner’s assertion that it
received the subject shipment in bad order condition as this was belied by Marine Cargo Surveyors
Redentor Antonio and Edgar Liceralde, who both testified that the actual counting of bad order bags
was done only after all the bags were unloaded from the vessel and that the Turn Over Survey of Bad
Order Cargoes (TOSBOC) upon which petitioner anchors its defense was prepared only on November
28, 1995 or after the unloading of the bags was completed.25 Thus, the CA disposed of the appeal as
follows:
WHEREFORE, premises considered, the appeal is DENIED. The assailed Decision dated June 26,
1998 of the Regional Trial Court of Manila, Branch 35, in Civil Case No. 96-80945 is
hereby AFFIRMED in all respects.
SO ORDERED.26
Petitioner moved for reconsideration27 but the CA denied the same in a Resolution28 dated February 14,
2006 for lack of merit.
Issues
Hence, the present recourse, petitioner contending that:
1. RESPONDENT-INSURER IS NOT ENTITLED TO THE RELIEF GRANTED AS IT
FAILED TO ESTABLISH ITS CAUSE OF ACTION AGAINST HEREIN PETITIONER
SINCE, AS THE ALLEGED SUBROGEE, IT NEVER PRESENTED ANY VALID,
EXISTING, ENFORCEABLE INSURANCE POLICY OR ANY COPY THEREOF IN
COURT.
2. THE HONORABLE COURT OF APPEALS ERRED WHEN IT OVERLOOKED THE
FACT THAT THE TOSBOC & RESBOC WERE ADOPTED AS COMMON EXHIBITS
BY BOTH PETITIONER AND RESPONDENT.
3. CONTRARY TO TESTIMONIAL EVIDENCE ON RECORD, VARIOUS
DOCUMENTATIONS WOULD POINT TO THE VESSEL’S LIABILITY AS THERE IS,
IN THIS INSTANT CASE, AN OVERWHELMING DOCUMENTARY EVIDENCE TO
 PROVE THAT THE DAMAGE IN QUESTION WERE SUSTAINED WHEN THE
SHIPMENT WAS IN THE CUSTODY OF THE VESSEL.
4. THE HONORABLE COURT OF APPEALS ERRED WHEN IT ADJUDGED HEREIN
DEFENDANT LIABLE DUE TO [THE] FACT THAT THE TURN OVER SURVEY OF
BAD ORDER CARGOES (TOSBOC) WAS PREPARED ONLY AFTER THE
COMPLETION OF THE DISCHARGING OPERATIONS OR ON NOVEMBER 28, 1995.
THUS, CONCLUDING THAT DAMAGE TO THE CARGOES WAS DUE TO THE
IMPROPER HANDLING THEREOF BY ATI STEVEDORES.
5. THE HONORABLE COURT OF APPEALS ERRED IN NOT TAKING JUDICIAL
NOTICE OF THE CONTRACT FOR CARGO HANDLING SERVICES BETWEEN PPA
AND ATI AND APPLYING THE PERTINENT PROVISIONS THEREOF AS REGARDS
ATI’S LIABILITY.29
In sum, the issues are: (1) whether the non-presentation of the insurance contract or policy is
fatal to respondent’s cause of action; (2) whether the proximate cause of the damage/loss to
the shipment was the negligence of petitioner’s stevedores; and (3) whether the court can take
judicial notice of the Management Contract between petitioner and the Philippine Ports
Authority (PPA) in determining petitioner’s liability.
Petitioner’s Arguments
Petitioner contends that respondent has no cause of action because it failed to present the insurance
contract or policy covering the subject shipment.30 Petitioner argues that the Subrogation Receipt
presented by respondent is not sufficient to prove that the subject shipment was insured and that
respondent was validly subrogated to the rights of the consignee.31 Thus, petitioner submits that
without proof of a valid subrogation, respondent is not entitled to any reimbursement.32
Petitioner likewise puts in issue the finding of the RTC, which was affirmed by the CA, that the
proximate cause of the damage/loss to the shipment was the negligence of petitioner’s
stevedores.33 Petitioner avers that such finding is contrary to the documentary evidence, i.e., the
TOSBOC, the Request for Bad Order Survey (RESBOC) and the Report of Survey. 34 According to
petitioner, these documents prove that it received the subject shipment in bad order condition and that
no additional damage was sustained by the subject shipment under its custody.35 Petitioner asserts that
although the TOSBOC was prepared only after all the bags were unloaded by petitioner’s stevedores,
this does not mean that the damage/loss was caused by its stevedores. 36
Petitioner also claims that the amount of damages should not be more than ₱5,000.00, pursuant to its
Management Contract for cargo handling services with the PPA.37 Petitioner contends that the CA
should have taken judicial notice of the said contract since it is an official act of an executive
department subject to judicial cognizance. 38
Respondent’s Arguments
Respondent, on the other hand, argues that the non-presentation of the insurance contract or policy was
not raised in the trial court. Thus, it cannot be raised for the first time on appeal. 39 Respondent likewise
contends that under prevailing jurisprudence, presentation of the insurance policy is not
indispensable.40 Moreover, with or without the insurance contract or policy, respondent claims that it
should be allowed to recover under Article 123641 of the Civil Code.42 Respondent further avers that
"the right of subrogation has its roots in equity - it is designed to promote and to accomplish justice and
is the mode which equity adopts to compel the ultimate payment of a debt by one who in justice, equity
and good conscience ought to pay."43
Respondent likewise maintains that the RTC and the CA correctly found that the damage/loss
sustained by the subject shipment was caused by the negligent acts of petitioner’s stevedores. 44 Such
factual findings of the RTC, affirmed by the CA, are conclusive and should no longer be disturbed.45 In
fact, under Section 146 of Rule 45 of the Rules of Court, only questions of law may be raised in a
petition for review on certiorari.47
As to the Management Contract for cargo handling services, respondent contends that this is outside
the operation of judicial notice.48 And even if it is not, petitioner’s liability cannot be limited by it since
it is a contract of adhesion.49
Our Ruling
The petition is bereft of merit.
Non-presentation of the insurance contract or policy is not fatal in the instant case
Petitioner claims that respondent’s non-presentation of the insurance contract or policy between the
respondent and the consignee is fatal to its cause of action.
We do not agree.
First of all, this was never raised as an issue before the RTC. In fact, it is not among the issues agreed
upon by the parties to be resolved during the pre-trial.50 As we have said, "the determination of issues
during the pre-trial conference bars the consideration of other questions, whether during trial or on
appeal."51 Thus, "[t]he parties must disclose during pre-trial all issues they intend to raise during the
trial, except those involving privileged or impeaching matters. x x x The basis of the rule is simple.
Petitioners are bound by the delimitation of the issues during the pre-trial because they themselves
agreed to the same."52
Neither was this issue raised on appeal.53 Basic is the rule that "issues or grounds not raised below
cannot be resolved on review by the Supreme Court, for to allow the parties to raise new issues is
antithetical to the sporting idea of fair play, justice and due process." 54
Besides, non-presentation of the insurance contract or policy is not
necessarily fatal.55 In Delsan Transport Lines, Inc. v. Court of Appeals,56 we ruled that:
Anent the second issue, it is our view and so hold that the presentation in evidence of the marine
insurance policy is not indispensable in this case before the insurer may recover from the common
carrier the insured value of the lost cargo in the exercise of its subrogatory right. The subrogation
receipt, by itself, is sufficient to establish not only the relationship of herein private respondent as
insurer and Caltex, as the assured shipper of the lost cargo of industrial fuel oil, but also the amount
paid to settle the insurance claim. The right of subrogation accrues simply upon payment by the
insurance company of the insurance claim.
The presentation of the insurance policy was necessary in the case of Home Insurance Corporation v.
CA (a case cited by petitioner) because the shipment therein (hydraulic engines) passed through
several stages with different parties involved in each stage. First, from the shipper to the port of
departure; second, from the port of departure to the M/S Oriental Statesman; third, from the M/S
Oriental Statesman to the M/S Pacific Conveyor; fourth, from the M/S Pacific Conveyor to the port of
arrival; fifth, from the port of arrival to the arrastre operator; sixth, from the arrastre operator to the
hauler, Mabuhay Brokerage Co., Inc. (private respondent therein); and lastly, from the hauler to the
consignee. We emphasized in that case that in the absence of proof of stipulations to the contrary, the
hauler can be liable only for any damage that occurred from the time it received the cargo until it
finally delivered it to the consignee. Ordinarily, it cannot be held responsible for the handling of the
cargo before it actually received it. The insurance contract, which was not presented in evidence in that
case would have indicated the scope of the insurer’s liability, if any, since no evidence was adduced
indicating at what stage in the handling process the damage to the cargo was sustained. 57 (Emphasis
supplied.)
In International Container Terminal Services, Inc. v. FGU Insurance Corporation,58 we used the same
line of reasoning in upholding the Decision of the CA finding the arrastre contractor liable for the lost
shipment despite the failure of the insurance company to offer in evidence the insurance contract or
policy. We explained:
Indeed, jurisprudence has it that the marine insurance policy needs to be presented in evidence before
the trial court or even belatedly before the appellate court. In Malayan Insurance Co., Inc. v. Regis
Brokerage Corp., the Court stated that the presentation of the marine insurance policy was necessary,
as the issues raised therein arose from the very existence of an insurance contract between Malayan
Insurance and its consignee, ABB Koppel, even prior to the loss of the shipment. In Wallem
Philippines Shipping, Inc. v. Prudential Guarantee and Assurance, Inc., the Court ruled that the
insurance contract must be presented in evidence in order to determine the extent of the coverage. This
was also the ruling of the Court in Home Insurance Corporation v. Court of Appeals.
However, as in every general rule, there are admitted exceptions. In Delsan Transport Lines, Inc. v.
Court of Appeals, the Court stated that the presentation of the insurance policy was not fatal because
the loss of the cargo undoubtedly occurred while on board the petitioner’s vessel, unlike in Home
Insurance in which the cargo passed through several stages with different parties and it could not be
determined when the damage to the cargo occurred, such that the insurer should be liable for it.
As in Delsan, there is no doubt that the loss of the cargo in the present case occurred while in
petitioner’s custody. Moreover, there is no issue as regards the provisions of Marine Open Policy No.
MOP-12763, such that the presentation of the contract itself is necessary for perusal, not to mention
that its existence was already admitted by petitioner in open court. And even though it was not offered
in evidence, it still can be considered by the court as long as they have been properly identified by
testimony duly recorded and they have themselves been incorporated in the records of the case. 59
Similarly, in this case, the presentation of the insurance contract or policy was not necessary. Although
petitioner objected to the admission of the Subrogation Receipt in its Comment to respondent’s formal
offer of evidence on the ground that respondent failed to present the insurance contract or policy, 60 a
perusal of petitioner’s Answer61 and Pre-Trial Brief62 shows that petitioner never questioned
respondent’s right to subrogation, nor did it dispute the coverage of the insurance contract or policy.
Since there was no issue regarding the validity of the insurance contract or policy, or any provision
thereof, respondent had no reason to present the insurance contract or policy as evidence during the
trial.
Factual findings of the CA, affirming the RTC, are conclusive and binding
Petitioner’s attempt to absolve itself from liability must likewise fail.
Only questions of law are allowed in petitions for review on certiorari under Rule 45 of the Rules of
Court. Thus, it is not our duty "to review, examine, and evaluate or weigh all over again the probative
value of the evidence presented,"63 especially where the findings of both the trial court and the
appellate court coincide on the matter.64 As we have often said, factual findings of the CA affirming
those of the RTC are conclusive and binding, except in the following cases: "(1) when the inference
made is manifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3)
when the findings are grounded entirely on speculations, surmises or conjectures; (4) when the
judgment of the [CA] is based on misapprehension of facts; (5) when the [CA], in making its findings,
went beyond the issues of the case and the same is contrary to the admissions of both appellant and
appellee; (6) when the findings of fact are conclusions without citation of specific evidence on which
they are based; (7) when the [CA] manifestly overlooked certain relevant facts not disputed by the
parties and which, if properly considered, would justify a different conclusion; and (8) when the
findings of fact of the [CA] are premised on the absence of evidence and are contradicted by the
evidence on record."65 None of these are availing in the present case.
Both the RTC and the CA found the negligence of petitioner’s stevedores to be the proximate cause of
the damage/loss to the shipment. In disregarding the contention of petitioner that such finding is
contrary to the documentary evidence, the CA had this to say:
ATI, however, contends that the finding of the trial court was contrary to the documentary evidence of
record, particularly, the Turn Over Survey of Bad Order Cargoes dated November 28, 1995, which was
executed prior to the turn-over of the cargo by the carrier to the arrastre operator ATI, and which
showed that the shipment already contained 2,702 damaged bags.
We are not persuaded.
Contrary to ATI’s assertion, witness Redentor Antonio, marine cargo surveyor of Inchcape for the
vessel Jinlian I which arrived on November 21, 1995 and up to completion of discharging on
November 28, 1995, testified that it was only after all the bags were unloaded from the vessel that
the actual counting of bad order bags was made, thus:
xxxx
The above testimony of Redentor Antonio was corroborated by Edgar Liceralde, marine cargo
surveyor connected with SMS Average Surveyors and Adjusters, Inc., the company requested by
consignee Chemphil Albright and Wilson Corporation to provide superintendence, report the condition
and determine the final outturn of quantity/weight of the subject shipment. x x x
xxxx
Defendant-appellant ATI, for its part, presented its claim officer as witness who testified that a survey
was conducted by the shipping company and ATI before the shipment was turned over to the
possession of ATI and that the Turn Over Survey of Bad Order Cargoes was prepared by ATI’s Bad
Order (BO) Inspector.
Considering that the shipment arrived on November 21, 1998 and the unloading operation
commenced on said date and was completed on November 26, 1998, while the Turn Over Survey
of Bad Order Cargoes, reflecting a figure of 2,702 damaged bags, was prepared and signed on
November 28, 1998 by ATI’s BO Inspector and co-signed by a representative of the shipping
company, the trial court’s finding that the damage to the cargoes was due to the improper
handling thereof by ATI’s stevedores cannot be said to be without substantial support from the
records.
We thus see no cogent reason to depart from the ruling of the trial court that ATI should be made liable
for the 2,702 bags of damaged shipment. Needless to state, it is hornbook doctrine that the assessment
of witnesses and their testimonies is a matter best undertaken by the trial court, which had the
opportunity to observe the demeanor, conduct or attitude of the witnesses. The findings of the trial
court on this point are accorded great respect and will not be reversed on appeal, unless it overlooked
substantial facts and circumstances which, if considered, would materially affect the result of the case.
We also find ATI liable for the additional 179 damaged bags discovered upon delivery of the shipment
at the consignee’s warehouse in Pasig. The final Report of Survey executed by SMS Average
Surveyors & Adjusters, Inc., and independent surveyor hired by the consignee, shows that the subject
shipment incurred a total of 2881 damaged bags.
The Report states that the withdrawal and delivery of the shipment took about ninety-five (95) trips
from November 29, 1995 to December 28, 1995 and it was upon completion of the delivery to
consignee’s warehouse where the final count of 2881 damaged bags was made. The damage consisted
of torn/bad order condition of the bags due to spillages and caked/hardened portions.
We agree with the trial court that the damage to the shipment was caused by the negligence of ATI’s
stevedores and for which ATI is liable under Articles 2180 and 2176 of the Civil Code. The proximate
cause of the damage (i.e., torn bags, spillage of contents and caked/hardened portions of the contents)
was the improper handling of the cargoes by ATI’s stevedores, x x x
xxxx
ATI has not satisfactorily rebutted plaintiff-appellee’s evidence on the negligence of ATI’s stevedores
in the handling and safekeeping of the cargoes. x x x
xxxx
We find no reason to disagree with the trial court’s conclusion. Indeed, from the nature of the [damage]
caused to the shipment, i.e., torn bags, spillage of contents and hardened or caked portions of the
contents, it is not difficult to see that the damage caused was due to the negligence of ATI’s stevedores
who used steel hooks to retrieve the bags from the higher portions of the piles thereby piercing the
bags and spilling their contents, and who piled the bags in the open storage area of ATI with
insufficient cover thereby exposing them to the elements and [causing] the contents to cake or harden. 66
Clearly, the finding of negligence on the part of petitioner’s stevedores is supported by both
testimonial and documentary evidence. Hence, we see no reason to disturb the same.
Judicial notice does not apply
Finally, petitioner implores us to take judicial notice of Section 7.01,67 Article VII of the Management
Contract for cargo handling services it entered with the PPA, which limits petitioner’s liability to
₱5,000.00 per package.
Unfortunately for the petitioner, it cannot avail of judicial notice.
Sections 1 and 2 of Rule 129 of the Rules of Court provide that:
SECTION 1. Judicial notice, when mandatory. — A court shall take judicial notice, without the
introduction of evidence, of the existence and territorial extent of states, their political history, forms of
government and symbols of nationality, the law of nations, the admiralty and maritime courts of the
world and their seals, the political constitution and history of the Philippines, the official acts of the
legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of
time, and the geographical divisions.1avvphi1
SEC. 2. Judicial notice, when discretionary. — A court may take judicial notice of matters which are of
public knowledge, or are capable of unquestionable demonstration or ought to be known to judges
because of their judicial functions.
The Management Contract entered into by petitioner and the PPA is clearly not among the matters
which the courts can take judicial notice of. It cannot be considered an official act of the executive
department. The PPA, which was created by virtue of Presidential Decree No. 857, as amended, 68 is a
government-owned and controlled corporation in charge of administering the ports in the
country.69 Obviously, the PPA was only performing a proprietary function when it entered into a
Management Contract with petitioner. As such, judicial notice cannot be applied.
WHEREFORE, the petition is hereby DENIED. The assailed July 14, 2005 Decision and the February
14, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 61798 are hereby AFFIRMED.
SO ORDERED.
B.E. SAN DIEGO, INC., Petitioner,
vs.
COURT OF APPEALS and JOVITA MATIAS, Respondents.
DECISION
BRION, J.:
Petitioner B. E. San Diego, Inc. (B.E. San Diego) filed before the Court a petition for review on
certiorari1 assailing the September 25, 2002 decision2 of the Court of Appeals (CA) in CA-G.R. CV
No. 50213. The CA decision reversed the June 22, 1995 decision3 of the Regional Trial Court (RTC) of
Malabon, Branch 74, in Civil Case No. 1421-MN.4 The RTC in turn granted the complaint for recovery
of possession5 instituted by B. E. San Diego against private respondent Jovita Matias (Matias).
THE FACTS
B.E. San Diego alleged that it is the registered owner of a parcel of land (subject property) located in
Hernandez Street, Catmon, Malabon, covered by Transfer Certificate of Title (TCT) No. T-134756 of
the Register of Deeds of Caloocan, and delineated as Lot No. 3, Block No. 13, with an area of 228
square meters. B. E. San Diego claimed that Matias has been occupying the subject property for over a
year without its authority or consent. As both its oral and written demands to vacate were left
unheeded, B. E. San Diego filed a complaint for the recovery of possession of the subject property
against Matias on March 15, 1990 before the RTC.6
In her answer to the complaint, Matias alleged that she and her family have been living on the subject
property since the 1950s on the basis of a written permit issued by the local government of Malabon in
1954.7 Matias stated that she and her family have introduced substantial improvements on the subject
property and have been regularly paying realty taxes thereon. She further claimed that she is a
legitimate beneficiary of Presidential Decree (PD) No. 15178 and PD No. 2016,9 which classified the
subject property as part of the Urban Land Reform Zone (ULRZ) and an Area for Priority
Development (APD).
More importantly, she questioned B. E. San Diego’s claim over the subject property by pointing out
that the title relied on by B. E. San Diego (TCT No. T-134756) covers a property located in Barrio
Tinajeros, Malabon, while the subject property is actually located in Barrio Catmon, Malabon. Matias
thus claimed that the property she is occupying in Barrio Catmon is different from the property that B.
E. San Diego seeks to recover in the possessory action before the RTC.10
The RTC found no issue as to the identity of the property, ruling that the property covered by B. E. San
Diego’s TCT No. T-134756, located in Barrio Tinajeros, is the same property being occupied by
Matias, located in Barrio Catmon. The RTC took judicial notice of the fact that Barrio Catmon was
previously part of Barrio Tinajeros. It found that the Approved Subdivision Plan and tax declarations
showed that the subject property is located in Barrio Catmon, Malabon. The RTC thus declared that B.
E. San Diego sufficiently proved its right to recover possession of the subject property on the basis of
its TCT No. T-134756. As opposed to B. E. San Diego’s clear right, it found Matias’ claimed of
possession over the subject property as a long-time occupant and as a beneficiary of PD Nos. 1517 and
2016 unfounded.11
On appeal, the CA disagreed with the RTC’s findings. It considered the discrepancy in the location
significant and declared that this should have prompted the RTC to require an expert witness from the
concerned government agency to explain the matter. Since it was undisputed that Matias was in actual
possession of the subject property at the time of the filing of the complaint, the CA declared that her
possession should have been upheld under Article 538 of the Civil Code.12 The CA also upheld Matias’
possession based on PD Nos. 1517 and 2016. 13
As its motion for reconsideration of the CA’s judgment was denied, 14 B. E. San Diego filed the present
petition for review on certiorari under Rule 45 of the Rules of Court.
THE PETITION FOR REVIEW ON CERTIORARI
B. E. San Diego contends that the CA erred in reversing the RTC’s finding on the sole basis of a
discrepancy, which it claims has been explained and controverted by the evidence it presented. It
assails the CA decision for failing to consider the following evidence which adequately show that the
property covered by its TCT No. T-134756 is the same property occupied by Matias:
a. TCT No. T-134756 issued in the name of B. E. San Diego, covering a property delineated
as Lot No. 3, Block No. 13;
b. Approved Subdivision Plan showing Lot No. 3, Block No. 3 is situated in Barrio Catmon,
Malabon;
c. Tax Declaration No. B-005-00296 issued in the name of B. E. San Diego, referring to a
property covered by TCT No. T-134756;
d. Testimonial evidence of B. E. San Diego’s witness that the property described in TCT No.
T-134756 is the same property occupied by Matias; and
e. Judicial notice taken by the RTC of Malabon, based on public and common knowledge, that
Barrio Catmon was previously part of Barrio Tinajeros, Malabon.
B. E. San Diego also alleges that Matias is estopped from alleging that the property she is occupying is
different from the property covered by its TCT No. T-134756. Matias previously moved to dismiss its
complaint for recovery of possession of the subject property (accion publiciana), raising res judicata as
ground.15 She alleged that the accion publiciana16 is barred by the judgment in an earlier ejectment
case,17 as both involved the same parties, the same subject matter, and the same cause of action. The
ejectment case involved a parcel of land covered by TCT No. T-134756, located at Hernandez Street,
Barrio Catmon, Malabon; Matias never questioned the identity and location of the property in that
case.18 B. E. San Diego thus contends that Matias, by raising the ground of res judicata, has impliedly
admitted there is no difference in the subject matter of the two actions and, thus, could no longer
question the identity and location of the subject property.
In controverting B. E. San Diego’s petition, Matias relies on the same points that the CA discussed in
its decision.
THE COURT’S RULING
The Court finds the petition meritorious.
From the errors raised in the petition, what emerges as a primary issue is the identity of the subject
matter of the case – whether the subject property that Matias occupies is the same as the property
covered by B. E. San Diego’s title. Our reading of the records discloses that the two are one and the
same.
B. E. San Diego’s TCT No. T-134756 refers to a property located in Barrio Tinajeros, Malabon, but
the subject property sought to be recovered from Matias is in Barrio Catmon, Malabon. In ruling for
Matias, the CA declared that this discrepancy should have been explained by an expert witness, which
B. E. San Diego failed to present.
The Court, however, does not find the testimony of an expert witness necessary to explain the
discrepancy. The RTC declared that the discrepancy arose from the fact that Barrio Catmon was
previously part of Barrio Tinajeros. The RTC has authority to declare so because this is a matter
subject of mandatory judicial notice. Section 1 of Rule 129 of the Rules of Court19 includes
geographical divisions as among matters that courts should take judicial notice of. Given that Barrio
Tinajeros is adjacent to Barrio Catmon,20 we find it likely that, indeed, the two barrios previously
formed one geographical unit.
Even without considering judicial notice of the geographical divisions within a political unit, sufficient
evidence exists supporting the RTC’s finding that the subject property B. E. San Diego seeks to
recover is the Barrio Catmon property in Matias’ possession. TCT No. T-134756 identifies a property
in Barrio Tinajeros as Lot No. 3, Block No. 13. Although B. E. San Diego’s tax declaration refers to a
property in Barrio Catmon, it nevertheless identifies it also as Lot No. 3, Block No. 13, covered by the
same TCT No. T-134756. Indeed, both title and the tax declaration share the same boundaries to
identify the property. With this evidence, the trial court judge can very well ascertain the facts to
resolve the discrepancy, and dispense with the need for the testimony of an expert witness.21
Additionally, we agree with B. E. San Diego that Matias can no longer question the identity of the
property it seeks to recover when she invoked res judicata as ground to dismiss the accion publiciana
that is the root of the present petition. An allegation of res judicata necessarily constitutes an admission
that the subject matter of the pending suit (the accion publiciana) is the same as that in a previous one
(the ejectment case).22 That Matias never raised the discrepancy in the location stated in B.E. San
Diego’s title and the actual location of the subject property in the ejectment suit bars her now from
raising the same. Thus, the issue of identity of the subject matter of the case has been settled by
Matias’ admission and negates the defenses she raised against B. E. San Diego’s complaint.
We then proceed to resolve the core issue of the accion publiciana –who between the parties is entitled
possession of the subject property. Notably, the judgment in the ejectment suit that B. E. San Diego
previously filed against Matias is not determinative of this issue and will not prejudice B. E. San
Diego’s claim.23 While there may be identity of parties and subject matter, there is no identity of cause
of action between the two cases; an action for ejectment and accion publiciana, though both referring
to the issue of possession, differ in the following manner:
First, forcible entry should be filed within one year from the unlawful dispossession of the real
property, while accion publiciana is filed a year after the unlawful dispossession of the real property.
Second, forcible entry is concerned with the issue of the right to the physical possession of the real
property; in accion publiciana, what is subject of litigation is the better right to possession over the real
property. Third, an action for forcible entry is filed in the municipal trial court and is a summary
action, while accion publiciana is a plenary action in the RTC.24
B. E. San Diego anchors it right to possess based on its ownership of the subject property, as evidenced
by its title. Matias, on the other hand, relies on (1) the 1954 permit she secured from the local
government of Malabon, (2) the Miscellaneous Sales Application, (3) the tax declarations and realty
tax payments she made annually beginning 1974, (4) her standing as beneficiary of PD Nos. 1517 and
2016, and (5) her long possession of the subject property since 1954 up to the present. Unfortunately
for Matias, her evidence does not establish a better right of possession over B. E. San Diego’s
ownership.
The settled doctrine in property law is that no title to register land in derogation of that of the registered
owner shall be acquired by prescription or adverse possession.25 Even if the possession is coupled with
payment of realty taxes, we cannot apply in Matias’ case the rule that these acts combined constitute
proof of the possessor’s claim of title.26 Despite her claim of possession since 1954, Matias began
paying realty taxes on the subject property only in 1974 – when B. E. San Diego filed an ejectment
case against her husband/predecessor, Pedro Matias.27 Considering these circumstances, we find
Matias’ payment of realty taxes suspect.1avvphi1
Matias cannot rely on the Miscellaneous Sales Application and the local government permit issued in
her favor; neither establishes a clear right in favor of Matias over the subject property. A sales
application, in the absence of approval by the Bureau of Lands or the issuance of a sales patent,
remains simply as an application that does not vest title in the applicant. 28 The local government permit
contained only a statement of the local executive that the case between the local government and B. E.
San Diego was decided by a trial court in favor of the former.29
The CA erroneously upheld Matias’ claim of possession based on PD Nos. 1517 and 2016. Matias is
not a qualified beneficiary of these laws. The tenants/occupants who have a right not to be evicted
from urban lands "does not include those whose presence on the land is merely tolerated and without
the benefit of contract, those who enter the land by force or deceit, or those whose possession is under
litigation." 30 At the time of PD 1517’s enactment, there was already a pending ejectment suit between
B. E. San Diego and Pedro Matias over the subject property. "Occupants of the land whose presence
therein is devoid of any legal authority, or those whose contracts of lease were already terminated or
had already expired, or whose possession is under litigation, are not considered ‘tenants’ under the [PD
Nos. 1517]."31 The RTC correctly ruled that Matias cannot be considered a legitimate tenant who can
avail the benefits of these laws no matter how long her possession of the subject property was.
WHEREFORE, we GRANT the petition for review on certiorari, and REVERSE the September 25,
2002 decision and May 20, 2003 resolution of the Court of Appeals in CA-G.R. CV No. 50213. The
June 22, 1995 decision of the Regional Trial Court of Malabon in Civil Case No. 1421-MN is
REINSTATED. Costs against the respondent.
SO ORDERED.
G.R. No. 182356               December 4, 2013
DRA, LEILA A DELA LLANO, Petitioner,
vs.
REBECCA BIONG, doing business under the name and style of Pongkay Trading, Respondent.
DECISION
BRION, J.:
Very case essentially turns on two basic questions: questions of fact and questions of law. Questions of
fact are the parties and their counsel to respond to, based on what supporting facts the legal questions
require; the court can only draw conclusion from the facts or evidence adduced. When the facts are
lacking because of the deficiency of presented evidence, then the court can only draw one conclusion:
that the cause must fail for lack of evidentiary support.
The present case is one such case as Dra. Leila A dela Llana’s(petitioner) petition for review on
certorari1 challenging the February 11, 2008 Decision2 and the March 31, 2008 resolution3 of the Court
of Appeals (CA) in CA-G.R. CV No. 89163.
The Factual Antecedents
On March 30, 2000, at around 11:00 p.m., Juan dela Llana was driving a 1997 Toyota Corolla car
along North Avenue, Quezon City.4
His sister, Dra. dela Llana, was seated at the front passenger seat while a certain Calimlim was at the
backseat.5
Juan stopped the car across the Veterans Memorial Hospital when the signal light turned red. A few
seconds after the car halted, a dump truck containing gravel and sand suddenly rammed the car’s rear
end, violently pushing the car forward. Due to the impact, the car’s rear end collapsed and its rear
windshield was shattered. Glass splinters flew, puncturing Dra. dela Llana. Apart from these minor
wounds, Dra. dela Llana did not appear to have suffered from any other visible physical injuries.6
The traffic investigation report dated March 30, 2000 identified the truck driver as Joel Primero. It
stated that Joel was recklessly imprudent in driving the truck.7
Joel later revealed that his employer was respondent Rebecca Biong, doing business under the name
and style of "Pongkay Trading" and was engaged in a gravel and sand business.8
In the first week of May 2000, Dra. dela Llana began to feel mild to moderate pain on the left side of
her neck and shoulder. The pain became more intense as days passed by. Her injury became more
severe. Her health deteriorated to the extent that she could no longer move her left arm. On June 9,
2000, she consulted with Dr. Rosalinda Milla, a rehabilitation medicine specialist, to examine her
condition. Dr. Milla told her that she suffered from a whiplash injury, an injury caused by the
compression of the nerve running to her left arm and hand. Dr. Milla required her to undergo physical
therapy to alleviate her condition. Dra. dela Llana’s condition did not improve despite three months of
extensive physical therapy.9
She then consulted other doctors, namely, Drs. Willie Lopez, Leonor Cabral-Lim and Eric Flores, in
search for a cure. Dr. Flores, a neuro-surgeon, finally suggested that she undergo a cervical spine
surgery to release the compression of her nerve. On October 19, 2000, Dr. Flores operated on her spine
and neck, between the C5 and the C6 vertebrae.10
The operation released the impingement of the nerve, but incapacitated Dra. dela Llana from the
practice of her profession since June 2000 despite the surgery.11
Dra. dela Llana, on October 16, 2000, demanded from Rebecca compensation for her injuries, but
Rebecca refused to pay.12
Thus, on May 8, 2001, Dra. dela Llana sued Rebecca for damages before the Regional Trial Court of
Quezon City (RTC). She alleged that she lost the mobility of her arm as a result of the vehicular
accident and claimed ₱150,000.00 for her medical expenses (as of the filing of the complaint) and an
average monthly income of ₱30,000.00 since June 2000. She further prayed for actual, moral, and
exemplary damages as well as attorney’s fees.13
In defense, Rebecca maintained that Dra. dela Llana had no cause of action against her as no
reasonable relation existed between the vehicular accident and Dra. dela Llana’s injury. She pointed
out that Dra. dela Llana’s illness became manifest one month and one week from the date of the
vehicular accident. As a counterclaim, she demanded the payment of attorney’s fees and costs of the
suit.14
At the trial, Dra. dela Llana presented herself as an ordinary witness 15 and Joel as a hostile witness.16
Dra. dela Llana reiterated that she lost the mobility of her arm because of the vehicular accident. To
prove her claim, she identified and authenticated a medical certificate dated November 20, 2000 issued
by Dr. Milla. The medical certificate stated that Dra. dela Llana suffered from a whiplash injury. It also
chronicled her clinical history and physical examinations.17
Meanwhile, Joel testified that his truck hit the car because the truck’s brakes got stuck. 18
In defense, Rebecca testified that Dra. dela Llana was physically fit and strong when they met several
days after the vehicular accident. She also asserted that she observed the diligence of a good father of a
family in the selection and supervision of Joel. She pointed out that she required Joel to submit a
certification of good moral character as well as barangay, police, and NBI clearances prior to his
employment. She also stressed that she only hired Primero after he successfully passed the driving
skills test conducted by Alberto Marcelo, a licensed driver-mechanic. 19
Alberto also took the witness stand. He testified that he checked the truck in the morning of March 30,
2000. He affirmed that the truck was in good condition prior to the vehicular accident. He opined that
the cause of the vehicular accident was a damaged compressor. According to him, the absence of air
inside the tank damaged the compressor.20
RTC Ruling
The RTC ruled in favor of Dra. dela Llana and held that the proximate cause of Dra. dela Llana’s
whiplash injury to be Joel’s reckless driving.21
It found that a whiplash injury is an injury caused by the sudden jerking of the spine in the neck area. It
pointed out that the massive damage the car suffered only meant that the truck was over-speeding. It
maintained that Joel should have driven at a slower pace because road visibility diminishes at night. He
should have blown his horn and warned the car that his brake was stuck and could have prevented the
collision by swerving the truck off the road. It also concluded that Joel was probably sleeping when the
collision occurred as Joel had been driving for fifteen hours on that fateful day. The RTC further
declared that Joel’s negligence gave rise to the presumption that Rebecca did not exercise the diligence
of a good father of a family in Joel's selection and supervision of Joel. Rebecca was vicariously liable
because she was the employer and she personally chose him to drive the truck. On the day of the
collision, she ordered him to deliver gravel and sand to Muñoz Market, Quezon City. The Court
concluded that the three elements necessary to establish Rebecca’s liability were present: (1) that the
employee was chosen by the employer, personally or through another; (2) that the services were to be
rendered in accordance with orders which the employer had the authority to give at all times; and (3)
that the illicit act of the employee was on the occasion or by reason of the functions entrusted to him.
The RTC thus awarded Dra. dela Llana the amounts of ₱570,000.00 as actual damages, ₱250,000.00 as
moral damages, and the cost of the suit.22
CA Ruling
In a decision dated February 11, 2008, the CA reversed the RTC ruling. It held that Dra. dela Llana
failed to establish a reasonable connection between the vehicular accident and her whiplash injury by
preponderance of evidence. Citing Nutrimix Feeds Corp. v. Court of Appeals,23 it declared that courts
will not hesitate to rule in favor of the other party if there is no evidence or the evidence is too slight to
warrant an inference establishing the fact in issue. It noted that the interval between the date of the
collision and the date when Dra. dela Llana began to suffer the symptoms of her illness was lengthy. It
concluded that this interval raised doubts on whether Joel’s reckless driving and the resulting collision
in fact caused Dra. dela Llana’s injury. It also declared that courts cannot take judicial notice that
vehicular accidents cause whiplash injuries. It observed that Dra. dela Llana did not immediately visit a
hospital to check if she sustained internal injuries after the accident. Moreover, her failure to present
expert witnesses was fatal to her claim. It also gave no weight to the medical certificate. The medical
certificate did not explain how and why the vehicular accident caused the injury.24
The Petition
Dra. dela Llana points out in her petition before this Court that Nutrimix is inapplicable in the present
case. She stresses that Nutrimix involved the application of Article 1561 and 1566 of the Civil Code,
provisions governing hidden defects. Furthermore, there was absolutely no evidence in Nutrimix that
showed that poisonous animal feeds were sold to the respondents in that case. As opposed to the
respondents in Nutrimix, Dra. dela Llana asserts that she has established by preponderance of evidence
that Joel’s egligent act was the proximate cause of her whiplash injury. First, pictures of her damaged
car show that the collision was strong. She posits that it can be reasonably inferred from these pictures
that the massive impact resulted in her whiplash injury. Second, Dr. Milla categorically stated in the
medical certificate that Dra. dela Llana suffered from whiplash injury. Third, her testimony that the
vehicular accident caused the injury is credible because she was a surgeon.
Dra. dela Llana further asserts that the medical certificate has probative value. Citing several cases, she
posits that an uncorroborated medical certificate is credible if uncontroverted. 25
She points out that expert opinion is unnecessary if the opinion merely relates to matters of common
knowledge. She maintains that a judge is qualified as an expert to determine the causation between
Joel’s reckless driving and her whiplash injury. Trial judges are aware of the fact that whiplash injuries
are common in vehicular collisions.
The Respondent’s Position
In her Comment,26 Rebecca points out that Dra. dela Llana raises a factual issue which is beyond the
scope of a petition for review on certiorari under Rule 45 of the Rules of Court. She maintains that the
CA’s findings of fact are final and conclusive. Moreover, she stresses that Dra. dela Llana’s arguments
are not substantial to merit this Court’s consideration.
The Issue
The sole issue for our consideration in this case is whether Joel’s reckless driving is the proximate
cause of Dra. dela Llana’s whiplash injury.
Our Ruling We find the petition unmeritorious.
The Supreme Court may review questions of fact in a petition for review on certiorari when the
findings of fact by the lower courts are conflicting
The issue before us involves a question of fact and this Court is not a trier of facts. As a general rule,
the CA’s findings of fact are final and conclusive and this Court will not review them on appeal. It is
not the function of this Court to examine, review or evaluate the evidence in a petition for review
on certiorari under Rule 45 of the Rules of Court. We can only review the presented evidence, by way
of exception, when the conflict exists in findings of the RTC and the CA.27
We see this exceptional situation here and thus accordingly examine the relevant evidence presented
before the trial court.
Dra. dela Llana failed to establish her case by preponderance of evidence
Article 2176 of the Civil Code provides that "[w]hoever 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 a quasi-delict." Under this provision, the
elements necessary to establish a quasi-delict case are:
(1) damages to the plaintiff;
(2) negligence, by act or omission, of the defendant or by some person for whose acts the
defendant must respond, was guilty; and
(3) the connection of cause and effect between such negligence and the damages.28
These elements show that the source of obligation in a quasi-delict case is the breach or omission of
mutual duties that civilized society imposes upon its members, or which arise from non-contractual
relations of certain members of society to others.29
Based on these requisites, Dra. dela Llana must first establish by preponderance of evidence the three
elements of quasi-delict before we determine Rebecca’s liability as Joel’s employer.
She should show the chain of causation between Joel’s reckless driving and her whiplash injury.
Only after she has laid this foundation can the presumption - that Rebecca did not exercise the
diligence of a good father of a family in the selection and supervision of Joel - arise. 30
Once negligence, the damages and the proximate causation are established, this Court can then proceed
with the application and the interpretation of the fifth paragraph of Article 2180 of the Civil Code. 31
Under Article 2176 of the Civil Code, in relation with the fifth paragraph of Article 2180, "an action
predicated on an employee’s act or omission may be instituted against the employer who is held liable
for the negligent act or omission committed by his employee." 32
The rationale for these graduated levels of analyses is that it is essentially the wrongful or negligent act
or omission itself which creates the vinculum juris in extra-contractual obligations.33
In civil cases, a party who alleges a fact has the burden of proving it.
He who alleges has the burden of proving his allegation by preponderance of evidence or greater
weight of credible evidence.34
The reason for this rule is that bare allegations, unsubstantiated by evidence, are not equivalent to
proof.
In short, mere allegations are not evidence.35
In the present case, the burden of proving the proximate causation between Joel’s negligence and Dra.
dela Llana’s whiplash injury rests on Dra. dela Llana. She must establish by preponderance of evidence
that Joel’s negligence, in its natural and continuous sequence, unbroken by any efficient intervening
cause, produced her whiplash injury, and without which her whiplash injury would not have
occurred.36
Notably, Dra. dela Llana anchors her claim mainly on three pieces of evidence:
(1) the pictures of her damaged car,
(2) the medical certificate dated November 20, 2000, and
(3) her testimonial evidence. However, none of these pieces of evidence show the causal
relation between the vehicular accident and the whiplash injury. In other words,
Dra. dela Llana, during trial, did not adduce the factum probans or the evidentiary facts by which the
factum probandum or the ultimate fact can be established, as fully discussed below.37
A.
The pictures of the damaged
car only demonstrate the
impact of the collision
Dra. dela Llana contends that the pictures of the damaged car show that the massive impact of the
collision caused her whiplash injury. We are not persuaded by this bare claim. Her insistence that these
pictures show the causation grossly belies common logic. These pictures indeed demonstrate the
impact of the collision. However, it is a far-fetched assumption that the whiplash injury can also be
inferred from these pictures.
B.
The medical certificate cannot be
considered because it was
not admitted in evidence
Furthermore, the medical certificate, marked as Exhibit "H" during trial, should not be considered in
resolving this case for the reason that it was not admitted in evidence by the RTC in an order dated
September 23, 2004.38
Thus, the CA erred in even considering this documentary evidence in its resolution of the case. It is a
basic rule that evidence which has not been admitted cannot be validly considered by the courts in
arriving at their judgments.
However, even if we consider the medical certificate in the disposition of this case, the medical
certificate has no probative value for being hearsay. It is a basic rule that evidence, whether oral or
documentary, is hearsay if its probative value is not based on the personal knowledge of the witness
but on the knowledge of another person who is not on the witness stand.39
Hearsay evidence, whether objected to or not, cannot be given credence 40 except in very unusual
circumstance that is not found in the present case. Furthermore, admissibility of evidence should not be
equated with weight of evidence. The admissibility of evidence depends on its relevance and
competence, while the weight of evidence pertains to evidence already admitted and its tendency to
convince and persuade. Thus, a particular item of evidence may be admissible, but its evidentiary
weight depends on judicial evaluation within the guidelines provided by the Rules of Court.41
During trial, Dra. dela Llana testified:
"Q: Did your physician tell you, more or less, what was the reason why you were feeling that pain in
your left arm?
A: Well, I got a certificate from her and in that certificate, she stated that my condition was due to a
compression of the nerve, which supplied my left arm and my left hand.
Court: By the way, what is the name of this physician, Dra.?
Witness: Her name is Dra. Rosalinda Milla. She is a Rehabilitation Medicine Specialist. Atty.
Yusingco: You mentioned that this Dra. Rosalinda Milla made or issued a medical certificate. What
relation does this medical certificate, marked as Exhibit H have to do with that certificate, you said was
made by Dra. Milla?
Witness: This is the medical certificate that Dra. Milla made out for me.
Atty. Yusingco: Your Honor, this has been marked as Exhibit H.
Atty. Yusingco: What other medical services were done on you, Dra. dela Llana, as a result of that
feeling, that pain that you felt in your left arm?
Witness: Well, aside from the medications and physical therapy, a re-evaluation of my condition after
three months indicated that I needed surgery.
Atty. Yusingco: Did you undergo this surgery?
Witness: So, on October 19, I underwent surgery on my neck, on my spine.
Atty. Yusingco: And, what was the result of that surgical operation?
Witness: Well, the operation was to relieve the compression on my nerve, which did not resolve by the
extensive and prolonged physical therapy that I underwent for more than three months."42(emphasis
ours)
Evidently, it was Dr. Milla who had personal knowledge of the contents of the medical
certificate.1âwphi1 However, she was not presented to testify in court and was not even able to
identify and affirm the contents of the medical certificate. Furthermore, Rebecca was deprived of the
opportunity to cross-examine Dr. Milla on the accuracy and veracity of her findings. We also point out
in this respect that the medical certificate nonetheless did not explain the chain of causation in fact
between Joel’s reckless driving and Dra. dela Llana’s whiplash injury. It did not categorically state that
the whiplash injury was a result of the vehicular accident. A perusal of the medical certificate shows
that it only attested to her medical condition, i.e., that she was suffering from whiplash injury.
However, the medical certificate failed to substantially relate the vehicular accident to Dra. dela
Llana’s whiplash injury. Rather, the medical certificate only chronicled her medical history and
physical examinations.
C.
Dra. dela Llana’s opinion that
Joel’s negligence caused her
whiplash injury has no probative value
Interestingly, the present case is peculiar in the sense that Dra. dela Llana, as the plaintiff in this quasi-
delict case, was the lone physician-witness during trial. Significantly, she merely testified as an
ordinary witness before the trial court. Dra. dela Llana essentially claimed in her testimony that Joel’s
reckless driving caused her whiplash injury. Despite the fact that Dra. dela Llana is a physician and
even assuming that she is an expert in neurology, we cannot give weight to her opinion that Joel’s
reckless driving caused her whiplash injury without violating the rules on evidence. Under the Rules of
Court, there is a substantial difference between an ordinary witness and an expert witness. The opinion
of an ordinary witness may be received in evidence regarding:
(a) the identity of a person about whom he has adequate knowledge;
(b) a handwriting with which he has sufficient familiarity; and
(c) the mental sanity of a person with whom he is sufficiently
acquainted.1âwphi1 Furthermore, the witness may also testify on his impressions of the
emotion, behavior, condition or appearance of a person.43
On the other hand, the opinion of an expert witness may be received in evidence on a matter requiring
special knowledge, skill, experience or training which he shown to possess.44
However, courts do not immediately accord probative value to an admitted expert testimony, much less
to an unobjected ordinary testimony respecting special knowledge. The reason is that the probative
value of an expert testimony does not lie in a simple exposition of the expert's opinion. Rather, its
weight lies in the assistance that the expert witness may afford the courts by demonstrating the facts
which serve as a basis for his opinion and the reasons on which the logic of his conclusions is
founded.45
In the present case, Dra. dela Llana’s medical opinion cannot be given probative value for the reason
that she was not presented as an expert witness. As an ordinary witness, she was not competent to
testify on the nature, and the cause and effects of whiplash injury. Furthermore, we emphasize that
Dra. dela Llana, during trial, nonetheless did not provide a medical explanation on the nature as well as
the cause and effects of whiplash injury in her testimony.
The Supreme Court cannot take
judicial notice that vehicular
accidents cause whiplash injuries.
Indeed, a perusal of the pieces of evidence presented by the parties before the trial court shows
that Dra. Dela Llana did not present any testimonial or documentary evidence that directly shows
the causal relation between the vehicular accident and Dra. Dela Llana’s injury. Her claim that
Joel’s negligence causes her whiplash injury was not established because of the deficiency of the
presented evidence during trial. We point out in this respect that courts cannot take judicial notice that
vehicular ccidents cause whiplash injuries. This proportion is not public knowledge, or is capable of
unquestionable demonstration, or ought to be known to judges because of their judicial functions.46 We
have no expertise in the field of medicine. Justices and judges are only tasked to apply and interpret the
law on the basis of the parties’ pieces of evidence and their corresponding legal arguments.
In sum, Dra. dela Llana miserably failed to establish her cause by preponderance of evidence. While
we commiserate with her, our solemn duty to independently and impartially assess the merits of the
case binds us to rule against Dra. dela Llana’s favor. Her claim, unsupported by prepondernace of
evidence, is merely a bare assertion and has no leg to stand on.
WHEREFORE, presmises considered, the assailed Decision dated February 11, 2008 and Resolution
dated March 31, 2008 of the Court of Appeals are hereby AFFIRMED and the petition is hereby
DENIED for lack of merit.
SO ORDERED.
G.R. No. 161589, November 24, 2014 - PENTA PACIFIC REALTY CORPORATION, Petitioner, v.
LEY CONSTRUCTION AND DEVELOPMENT CORPORATION, Respondents.
FIRST DIVISION
G.R. No. 161589, November 24, 2014
PENTA PACIFIC REALTY CORPORATION, Petitioner, v. LEY CONSTRUCTION AND
DEVELOPMENT CORPORATION, Respondents.
DECISION
BERSAMIN, J.:
Jurisdiction over the subject matter of an action is determined from the allegations of the initiatory
pleading.
The Case
Under review is the decision promulgated on October 9, 2003,1 whereby the Court of Appeals (CA)
affirmed the judgment rendered on June 10, 2002 by the Regional Trial Court (RTC), Branch 58, in
Makati City2 nullifying for lack of jurisdiction the decision rendered on January 12, 2000 by the
Metropolitan Trial Court (MeTC), Branch 64, in Makati City.3
Antecedents
The petitioner owned the 25th floor of the Pacific Star Building located in Makati City with an area of
1,068.67 square meters. The respondent leased 444.03 square meters of the premises (subject property)
through the petitioner’s authorized agent, Century Properties Management, Inc. (Century Properties).
Under the terms of the contract of lease dated January 31, 1997, the petitioner gave the respondent
possession of the subject property under a stipulation to the effect that in case of the respondent’s
default in its monthly rentals, the petitioner could immediately repossess the subject property.
On March 19, 1997, the respondent expressed the intention to purchase the entire 1,068.67 square
meters, including the subject property. The parties executed a contract to sell, denominated as a
reservation agreement, in which they set the purchase price at US$3,420,540.00, with the following
terms of payment: 20% down payment equivalent of US$684,108.00 payable within eight months; and
US$85,513.00/monthly for eight months with interest of 9.75%, commencing on the 6th month. The
80% balance was to be paid in 13 installments beginning on March 1, 1997 until March 1, 1998. The
reservation agreement contained the following cancellation or forfeiture
provision, viz:chanroblesvirtuallawlibrary
Any failure on [the respondent’s] part to pay the full downpayment, or deliver the post-dated checks or
pay the monthly amortization on the due date, shall entitle [the petitioner], at its option, to impose a
penalty interest at the rate of three percent (3%) per month on the outstanding balance or to cancel this
agreement without need of any court action and to forfeit, in its favor, any reservation deposits or
payments already made on the unit, without prior notice.4
After paying US$538,735.00, the respondent stopped paying the stipulated monthly amortizations. An
exchange of letters ensued between Janet C. Ley, President of the respondent, or Efren Yap, Assistant
to the President of the respondent, on one hand, and Jose B.E. Antonio, Vice-Chairman of the
petitioner, and the petitioner’s counsel, Atty. Reynaldo Dizon, on the other.
In the September 23, 1997 letter,5 the respondent asked the petitioner to modify the terms of the
reservation agreement to allow it to purchase only the subject property. In the February 5, 1998
letter,6 the petitioner’s counsel reminded the respondent of its US$961,546.50 liability to the petitioner
under the terms of the reservation agreement. In another letter dated February 5, 1998,7 the petitioner’s
counsel informed the respondent of its failure to pay its amortizations since August 1997, and
demanded the payment of US$961,564.50.
Through its letter of February 17, 1998,8 the respondent submitted the following proposals, namely: (1)
that the US$538,735.00 paid under the reservation agreement be applied as rental payments for the use
and occupation of the subject property in the period from March 1997 to February 28, 1998; (2) that
the balance of US$417,355.45 after deducting the rental payments from March 1997 to February 28,
1998 should be returned to it; and (3) that the respondent be allowed to lease the subject property
beginning March 1998.
The petitioner, through its counsel’s letter of March 9, 1998,9 rejected the respondent’s proposals, and
demanded the payment of US$3,310,568.00, representing the respondent’s unpaid balance (as of
March 2, 1998) under the reservation agreement. The petitioner further evinced its intention to cancel
the contract to sell, and to charge the respondent for the rentals of the subject property corresponding
to the period from August 1997 to March 1998, during which no amortization payments were made.
In the letter dated February 4, 1999,10 the petitioner’s counsel informed the respondent of the
cancellation of the reservation agreement and the forfeiture of the respondent’s payments; and
demanded that respondent pay the rentals of P9,782,226.50 and vacate the subject property.
In its letter of May 25, 1999,11 the petitioner’s counsel wrote to the respondent
thuswise:chanroblesvirtuallawlibrary
We write in behalf of our client, Penta Pacific Realty Corporation, regarding the Reservation
Agreement and/or sale between you and our client over the latter’s unit located at the 25th Floor,
Pacific Star Building, Sen. Gil Puyat Avenue corner Makati Avenue, Makati City.
We regret to inform you that in view of your continued refusal and/or failure to pay to our client the
balance of the agreed-upon purchase price of the office unit you are currently occupying, our client is
constrained to make a notarial cancellation of the Reservation Agreement and/or sale of the above-
mentioned unit and to forfeit the payments you made in favor of our client.
In this connection, there is no more valid reason for you to continue occupying the subject premises.
Hence, final and formal demand is hereby made upon you to peacefully and quietly vacate the same
within ten (10) days from receipt hereof. Otherwise, we shall be constrained to file the appropriate
legal action to protect our client’s interests.
Lastly, we would like to inform you that our client will also be constrained to charge you the amount
of P9,782,226.50 corresponding to reasonable rentals and other charges as of January 22, 1999.
Trusting that you are guided accordingly.
On July 9, 1999, the petitioner filed the complaint for ejectment in the MeTC following the
respondent’s failure to comply with the demands to pay and vacate.
The respondent resisted the complaint,12 arguing that the contract of lease dated January 31, 1997 had
been simulated or, in the alternative, had been repealed, negated, extinguished and/or novated by the
reservation agreement; that the petitioner had failed to observe its undertaking to allow the respondent
to collect rentals from the other lessees of the subject property; that the petitioner had unjustifiably
refused to renegotiate or to amend the reservation agreement; and that the petitioner had violated the
rule on non-forum shopping considering the pendency of another case between the parties in Branch 57
of the RTC in Makati City.13
Decision of the MeTC
On January 12, 2000, the MeTC, ruling in favor of the petitioner, found that the respondent’s lawful
possession of the property had been by virtue of the contract of lease, but had become unlawful when
the respondent had failed to comply with its obligation to pay the monthly rentals for the subject
property; and that, in any event, the reservation agreement proved that the petitioner had held the better
right to possess the subject property as the owner thereof. The MeTC
disposed:chanroblesvirtuallawlibrary
WHEREFORE, judgment is rendered ordering defendant Ley Construction and Development
Corporation and all persons claiming rights under it to vacate and surrender the possession of the
Property to the plaintiff; to pay the sum of P32,456,953.06 representing unpaid rentals and other
charges as of June 23, 1999; the further amount of P443,741.38 starting July, 1999, and the same
amount every month thereafter as reasonable compensation for the continued and illegal use and
occupancy of the Property, until finally restituted to the plaintiff; the sum of P100,000.00 for as (sic)
attorney’s fees plus cost of suit.14
The respondent appealed to the RTC.
In the meantime, on November 6, 2001, the respondent turned over the possession of the leased
premises to the petitioner.
Judgment of the RTC
On June 10, 2002, the RTC rendered its judgment nullifying the MeTC’s decision on the ground of
lack of jurisdiction, holding that the appropriate action was either accion publiciana or accion
reivindicatoria over which the MeTC had no jurisdiction. It found that the basis of recovery of
possession by the petitioner was the respondent’s failure to pay the amortizations arising from the
violations of the reservation agreement; that the complaint did not specifically aver facts constitutive of
unlawful detainer, i.e., it did not show how entry had been effected and how the dispossession had
started; and that the requirement of formal demand had not been complied with by the petitioner.
Decision of the CA
The petitioner appealed to the CA.
By its decision promulgated on October 9, 2003, the CA affirmed the judgment of the RTC,15 declaring
that the respondent’s possession was not by virtue of the contract of lease but pursuant to the
reservation agreement, which was more of a “contract of sale.”16 It concluded that the petitioner’s
action was not unlawful detainer, but another kind of action for the recovery of possession.17
Not in agreement with the decision of the CA, the petitioner filed the present petition.
Issue
The decisive question is whether the complaint was for unlawful detainer, or accion publiciana,
or accion reivindicatoria.
The petitioner submits that the MeTC had jurisdiction because its complaint made out a clear case of
unlawful detainer, emphasizing that the basis of the complaint was the failure of the respondent to pay
the stipulated monthly rentals under the revived contract of lease; that even if the cause of action was
upon the nonpayment of the purchase price under the reservation agreement, the MeTC still had
jurisdiction over the action because an unlawful detainer case could also arise from a vendor-vendee
relationship; and that, accordingly, the nonpayment of rentals or of the purchase price sufficiently
established its better right to possess the subject property.
In contrast, the respondent maintains that it had not violated any existing contract of lease with the
petitioner because the contract of lease dated January 31, 1997 was based on the agreement between
the respondent and Century Properties; that it had entered into the possession of the subject property as
the buyer-owner pursuant to the reservation agreement; and that the recovery of possession should
have been by accion publiciana or accion reivindicatoria, not unlawful detainer.
Ruling
The appeal has merit.
1.
Kinds of Possessory Actions
There are three kinds of real actions affecting title to or possession of real property, or interest therein,
namely: accion de reivindicacion, accion publiciana and accion interdictal. The first seeks the
recovery of ownership as well as possession of realty.18 The second proposes to recover the right to
possess and is a plenary action in an ordinary civil proceeding.19 The third refers to the recovery of
physical or actual possession only (through a special civil action either for forcible entry or unlawful
detainer).
If the dispossession is not alleged to take place by any of the means provided by Section 1,20 Rule
70, Rules of Court, or, if the dispossession allegedly took place by any of such means but the action is
not brought within one year from deprivation of possession, the action is properly a plenary action
of accion publiciana or accion de reivindicacion. The explanation is simply that the disturbance of the
peace and quiet of the local community due to the dispossession did not materialize; hence, the
possessor thus deprived has no need for the summary proceeding of accion interdictal under Rule 70.
The Municipal Trial Court (MTC) has exclusive original jurisdiction over accion interdictal. Until
April 15, 1994, the MTC had no original jurisdiction over the other possessory actions. By such date,
its jurisdiction was expanded to vest it with exclusive original jurisdiction over the other possessory
actions of accion publiciana and accion de reivindicacion where the assessed value of the realty
involved did not exceed P20,000.00, or, if the realty involved was in Metro Manila, such value did not
exceed P50,000.00. The expansion of jurisdiction was by virtue of the amendment by Section 1 of
Republic Act No. 769121 to make Section 19 of Batas Pambansa Blg. 129 pertinently provide
thusly:chanroblesvirtuallawlibrary
Section 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive original
jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein,
where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for
civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except
actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts;
xxxx
Section 3 of Republic Act No. 7691 similarly revised Section 33 of Batas Pambansa Blg. 129 (the
provision defining the exclusive original jurisdiction of the MTC over civil actions) to make the latter
provision state, pertinently, thus:chanroblesvirtuallawlibrary
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in Civil Cases. — Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real
property, or any interest therein where the assessed value of the property or interest therein does not
exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed
value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever
kind, attorney's fees, litigation expenses and costs: Provided, That in cases of land not declared for
taxation purposes, the value of such property shall be determined by the assessed value of the adjacent
lots.
xxxx
As can be seen, the amendments have made the assessed value of the property whose possession or
ownership is in issue, or the assessed value of the adjacent lots if the disputed land is not declared for
taxation purposes determinative of jurisdiction. The allegation of the assessed value of the realty must
be found in the complaint, if the action (other than forcible entry or unlawful detainer) involves title to
or possession of the realty, including quieting of title of the realty. If the assessed value is not found in
the complaint, the action should be dismissed for lack of jurisdiction because the trial court is not
thereby afforded the means of determining from the allegations of the basic pleading whether
jurisdiction over the subject matter of the action pertains to it or to another court. Courts cannot take
judicial notice of the assessed or market value of the realty. 22
2.
MeTC had jurisdiction over the complaint of the petitioner
The settled rule is that the nature of the action as appearing from the averments in the complaint or
other initiatory pleading determines the jurisdiction of a court; hence, such averments and the character
of the relief sought are to be consulted.23 The court must interpret and apply the law on jurisdiction in
relation to the averments of ultimate facts in the complaint or other initiatory pleading regardless of
whether or not the plaintiff or petitioner is entitled to recover upon all or some of the claims asserted
therein.24 The reliefs to which the plaintiff or petitioner is entitled based on the facts averred, although
not the reliefs demanded, determine the nature of the action.25 The defense contained in the answer of
the defendant is generally not determinant.26
Is this present action one for unlawful detainer?
A suit for unlawful detainer is premised on Section 1, Rule 70, 1997 Rules of Civil Procedure, of
which there are two kinds, namely: (1) that filed against a tenant, and (2) that brought against a vendee
or vendor, or other person unlawfully withholding possession of any land or building after the
expiration or termination of the right to hold possession by virtue of any contract, express or implied.

“In an action for forcible entry or unlawful detainer, the main issue is possession de facto,
independently of any claim of ownership or possession de jure that either party may set forth in his
pleading.”27 The plaintiff must prove that it was in prior physical possession of the premises until it
was deprived thereof by the defendant.28 The principal issue must be possession de facto, or actual
possession, and ownership is merely ancillary to such issue. The summary character of the proceedings
is designed to quicken the determination of possession de facto in the interest of preserving the peace
of the community, but the summary proceedings may not be proper to resolve ownership of the
property. Consequently, any issue on ownership arising in forcible entry or unlawful detainer is
resolved only provisionally for the purpose of determining the principal issue of possession.29 On the
other hand, regardless of the actual condition of the title to the property and whatever may be the
character of the plaintiff’s prior possession, if it has in its favor priority in time, it has the security that
entitles it to remain on the property until it is lawfully ejected through an accion publiciana or accion
reivindicatoria by another having a better right.30
In unlawful detainer, the complaint must allege the cause of action according to the manner set forth in
Section 1, Rule 70 of the Rules of Court, to wit:chanroblesvirtuallawlibrary
Section 1. Who may institute proceedings, and when. – Subject to the provisions of the next succeeding
section, a person deprived of the possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any
land or building is unlawfully withheld after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any
such lessor, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful
deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against
the person or persons unlawfully withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession, together with damages and costs.
(Emphasis supplied)
The complaint must further allege the plaintiff’s compliance with the jurisdictional requirement of
demand as prescribed by Section 2, Rule 70 of the Rules of Court, viz:chanroblesvirtuallawlibrary
Section 2. Lessor to proceed against lessee only after demand. — Unless otherwise stipulated, such
action by the lessor shall be commenced only after demand to pay or comply with the conditions of the
lease and to vacate is made upon the lessee, or by serving written notice of such demand upon the
person found on the premises, or by posting such notice on the premises if no person be found thereon,
and the lessee fails to comply therewith after fifteen (15) days in the case of land or five (5) days in the
case of buildings.
For the action to come under the exclusive original jurisdiction of the MTC, therefore, the complaint
must allege that: (a) the defendant originally had lawful possession of the property, either by virtue of
a contract or by tolerance of the plaintiff; (b) the defendant’s possession of the property eventually
became illegal or unlawful upon notice by the plaintiff to the defendant of the expiration or the
termination of the defendant’s right of possession; (c) the defendant thereafter remained in possession
of the property and thereby deprived the plaintiff the enjoyment thereof; and (d) the plaintiff instituted
the action within one year from the unlawful deprivation or withholding of possession.31
The complaint herein sufficiently alleged all the foregoing requisites for unlawful detainer, to
wit:chanroblesvirtuallawlibrary
xxxx
3. On January 31, 1997, the defendant and the plaintiff’s authorized agent, Century Properties
Management Inc. (CPMI), a corporation duly organized and existing under and by virtue of the laws of
the x x x Philippines x x x entered into a Contract of Lease whereby the latter leased from the former a
portion of the 25th Floor of the PSB (hereinafter referred to as the PROPERTY). x x x.
4. On March 19, 1997, the defendant decided to purchase from the plaintiff the 25th Floor of the PSB
by virtue of a Reservation Agreement of the same date. x x x.
5. However, on August 1997, the defendant started to default in its amortization payments on the
above-mentioned purchase. x x x.
xxxx
8. Sometime in March 1999, the defendant requested from the plaintiff and CPMI that the Reservation
Agreement be cancelled and in lieu thereof, the above-mentioned Contract of Lease be revived. The
plaintiff and CPMI acceded to such request x x x.
9. However, contrary to the express provisions of the Contract of Lease, the defendant failed to pay to
the plaintiff the rentals for the use of the PROPERTY when they fell due.
10. x x x the plaintiff also formally made a notarial cancellation of the aforementioned purchase and
demanded that defendant peacefully vacate the PROPERTY. x x x.
11. However, despite such demand, the defendant has failed and/or refused and continues to refuse and
fail to peacefully vacate the PROPERTY. x x x.32
As earlier shown, the final letter dated May 25, 1999 of the petitioner’s counsel demanded that the
respondent vacate the subject property,33 to wit:chanroblesvirtuallawlibrary
In this connection, there is no more valid reason for you to continue occupying the subject premises.
Hence, final and formal demand is hereby made upon you to peacefully and quietly vacate the same
within ten (10) days from receipt hereof. Otherwise, we shall be constrained to file the appropriate
legal action to protect our client’s interests.
Lastly, we would like to inform you that our client will also be constrained to charge you the amount
of P9,782,226.50 corresponding to reasonable rentals and other charges as of January 22, 1999.
After the demand went unheeded, the petitioner initiated this suit in the MeTC on July 9, 1999, well
within the one-year period from the date of the last demand.
The aforequoted allegations of the complaint made out a case of unlawful detainer, vesting the MeTC
with exclusive original jurisdiction over the complaint. As alleged therein, the cause of action of the
petitioner was to recover possession of the subject property from the respondent upon the latter’s
failure to comply with the former’s demand to vacate the subject property after the latter’s right to
remain thereon terminated by virtue of the demand to vacate. Indeed, the possession of the latter,
although lawful at its commencement, became unlawful upon its non-compliance with the former’s
demand to vacate.

The jurisdiction of the MeTC was not ousted by the fact that what was ultimately proved as to how
entry by the respondent had been made or when the dispossession had started might have departed
from that alleged in the complaint. As earlier stated, jurisdiction over the subject matter was
determined from the allegations of the complaint, which clearly set forth a cause of action for unlawful
detainer.34
The MeTC correctly exercised its authority in finding for the petitioner as the plaintiff. In unlawful
detainer, the possession was originally lawful but became unlawful by the expiration or termination of
the right to possess; hence, the issue of rightful possession is decisive for, in the action, the defendant
is in actual possession and the plaintiff’s cause of action is the termination of the defendant’s right to
continue in possession.35
A defendant’s claim of possession de jure or his averment of ownership does not render the ejectment
suit either accion publiciana or accion reivindicatoria. The suit remains an accion interdictal, a
summary proceeding that can proceed independently of any claim of ownership.36 Even when the
question of possession cannot be resolved without deciding the issue of ownership, the issue of
ownership is to be resolved only to determine the issue of possession.37
WHEREFORE, we REVERSE and SET ASIDE the decision promulgated on October 9, 2003 by
the Court of Appeals affirming the decision rendered on June 10, 2002 by the Regional Trial Court of
Makati City, Branch 58; REINSTATE the decision rendered on January 12, 2000 by the Metropolitan
Trial Court, Branch 64, of Makati City; and ORDER the respondent to pay the costs of suit.
SO ORDERED.
Judicial Admissions
G.R. No. 156052             February 13, 2008
SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO and BONIFACIO
S. TUMBOKON, petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, respondent.
x----------------------x
CHEVRON PHILIPPINES INC., PETRON CORPORATION and PILIPINAS SHELL
PETROLEUM CORPORATION, movants-intervenors.
x----------------------x
DEPARTMENT OF ENERGY, movant-intervenor.
RESOLUTION
CORONA, J.:
After we promulgated our decision in this case on March 7, 2007, Chevron Philippines Inc. (Chevron),
Petron Corporation (Petron) and Pilipinas Shell Petroleum Corporation (Shell) (collectively, the oil
companies) and the Republic of the Philippines, represented by the Department of Energy (DOE), filed
their respective motions for leave to intervene and for reconsideration of the decision.
Chevron1 is engaged in the business of importing, distributing and marketing of petroleum products in
the Philippines while Shell and Petron are engaged in the business of manufacturing, refining and
likewise importing, distributing and marketing of petroleum products in the Philippines. 2 The DOE is a
governmental agency created under Republic Act (RA) No. 76383 and tasked to prepare, integrate,
coordinate, supervise and control all plans, programs, projects and activities of the government relative
to energy exploration, development, utilization, distribution and conservation. 4
The facts are restated briefly as follows:
Petitioners Social Justice Society, Vladimir Alarique T. Cabigao and Bonifacio S. Tumbokon, in an
original petition for mandamus under Rule 65 of the Rules of Court, sought to compel respondent Hon.
Jose L. Atienza, Jr., then mayor of the City of Manila, to enforce Ordinance No. 8027. This ordinance
was enacted by the Sangguniang Panlungsod of Manila on November 20, 2001,5 approved by
respondent Mayor on November 28, 2001,6 and became effective on December 28, 2001 after
publication.7 Sections 1 and 3 thereof state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public
safety, and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining
areas, the land use of [those] portions of land bounded by the Pasig River in the north, PNR
Railroad Track in the east, Beata St. in the south, Palumpong St. in the southwest, and Estero
de Pandacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in the
[n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of
Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F.
Manalo Street, are hereby reclassified from Industrial II to Commercial I.
xxx       xxx       xxx
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the
date of effectivity of this Ordinance within which to cease and desist from the operation of
businesses which are hereby in consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed
the owners and operators of businesses disallowed under the reclassification to cease and desist from
operating their businesses within six months from the date of effectivity of the ordinance. Among the
businesses situated in the area are the so-called "Pandacan Terminals" of the oil companies.
On June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a
memorandum of understanding (MOU)8 with the oil companies. They agreed that "the scaling down of
the Pandacan Terminals [was] the most viable and practicable option." The Sangguniang
Panlungsod ratified the MOU in Resolution No. 97.9 In the same resolution, the Sanggunian declared
that the MOU was effective only for a period of six months starting July 25, 2002.10 Thereafter, on
January 30, 2003, the Sanggunian adopted Resolution No. 1311 extending the validity of Resolution
No. 97 to April 30, 2003 and authorizing the mayor of Manila to issue special business permits to the
oil companies.12
This was the factual backdrop presented to the Court which became the basis of our March 7, 2007
decision. We ruled that respondent had the ministerial duty under the Local Government Code (LGC)
to "enforce all laws and ordinances relative to the governance of the city,"13 including Ordinance No.
8027. We also held that we need not resolve the issue of whether the MOU entered into by respondent
with the oil companies and the subsequent resolutions passed by the Sanggunian could amend or repeal
Ordinance No. 8027 since the resolutions which ratified the MOU and made it binding on the City of
Manila expressly gave it full force and effect only until April 30, 2003. We concluded that there was
nothing that legally hindered respondent from enforcing Ordinance No. 8027.
After we rendered our decision on March 7, 2007, the oil companies and DOE sought to intervene and
filed motions for reconsideration in intervention on March 12, 2007 and March 21, 2007 respectively.
On April 11, 2007, we conducted the oral arguments in Baguio City to hear petitioners, respondent and
movants-intervenors oil companies and DOE.
The oil companies called our attention to the fact that on April 25, 2003, Chevron had filed a complaint
against respondent and the City of Manila in the Regional Trial Court (RTC) of Manila, Branch 39, for
the annulment of Ordinance No. 8027 with application for writs of preliminary prohibitory injunction
and preliminary mandatory injunction.14 The case was docketed as civil case no. 03-106377. On the
same day, Shell filed a petition for prohibition and mandamus likewise assailing the validity of
Ordinance No. 8027 and with application for writs of preliminary prohibitory injunction and
preliminary mandatory injunction.15 This was docketed as civil case no. 03-106380. Later on, these two
cases were consolidated and the RTC of Manila, Branch 39 issued an order dated May 19, 2003
granting the applications for writs of preliminary prohibitory injunction and preliminary mandatory
injunction:
WHEREFORE, upon the filing of a total bond of TWO MILLION (Php 2,000,000.00)
PESOS, let a Writ of Preliminary Prohibitory Injunction be issued ordering [respondent] and
the City of Manila, their officers, agents, representatives, successors, and any other persons
assisting or acting in their behalf, during the pendency of the case, to REFRAIN from taking
steps to enforce Ordinance No. 8027, and let a Writ of Preliminary Mandatory Injunction be
issued ordering [respondent] to issue [Chevron and Shell] the necessary Business Permits to
operate at the Pandacan Terminal.16
Petron likewise filed its own petition in the RTC of Manila, Branch 42, also attacking the validity of
Ordinance No. 8027 with prayer for the issuance of a writ of preliminary injunction and/or temporary
restraining order (TRO). This was docketed as civil case no. 03-106379. In an order dated August 4,
2004, the RTC enjoined the parties to maintain the status quo.17
Thereafter, in 2006, the city council of Manila enacted Ordinance No. 8119, also known as the Manila
Comprehensive Land Use Plan and Zoning Ordinance of 2006.18 This was approved by respondent on
June 16, 2006.19
Aggrieved anew, Chevron and Shell filed a complaint in the RTC of Manila, Branch 20, asking for the
nullification of Ordinance No. 8119.20 This was docketed as civil case no. 06-115334. Petron filed its
own complaint on the same causes of action in the RTC of Manila, Branch 41.21 This was docketed as
civil case no. 07-116700.22 The court issued a TRO in favor of Petron, enjoining the City of Manila and
respondent from enforcing Ordinance No. 8119.23
Meanwhile, in civil case no. 03-106379, the parties filed a joint motion to withdraw complaint and
counterclaim on February 20, 2007.24 In an order dated April 23, 2007, the joint motion was granted
and all the claims and counterclaims of the parties were withdrawn.25
Given these additional pieces of information, the following were submitted as issues for our resolution:
1. whether movants-intervenors should be allowed to intervene in this case; 26
2. whether the following are impediments to the execution of our March 7, 2007 decision:
(a) Ordinance No. 8119, the enactment and existence of which were not previously
brought by the parties to the attention of the Court and
(b) writs of preliminary prohibitory injunction and preliminary mandatory injunction
and status quo order issued by the RTC of Manila, Branches 39 and 42 and
3. whether the implementation of Ordinance No. 8027 will unduly encroach upon the DOE’s
powers and functions involving energy resources.
During the oral arguments, the parties submitted to this Court’s power to rule on the constitutionality
and validity of Ordinance No. 8027 despite the pendency of consolidated cases involving this issue in
the RTC.27 The importance of settling this controversy as fully and as expeditiously as possible was
emphasized, considering its impact on public interest. Thus, we will also dispose of this issue here. The
parties were after all given ample opportunity to present and argue their respective positions. By so
doing, we will do away with the delays concomitant with litigation and completely adjudicate an issue
which will most likely reach us anyway as the final arbiter of all legal disputes.
Before we resolve these issues, a brief review of the history of the Pandacan Terminals is called for to
put our discussion in the proper context.
History Of The Pandacan Oil Terminals
Pandacan (one of the districts of the City of Manila) is situated along the banks of the Pasig river. At
the turn of the twentieth century, Pandacan was unofficially designated as the industrial center of
Manila. The area, then largely uninhabited, was ideal for various emerging industries as the nearby
river facilitated the transportation of goods and products. In the 1920s, it was classified as an industrial
zone.28 Among its early industrial settlers were the oil companies. Shell established its installation there
on January 30, 1914.29 Caltex (now Chevron) followed suit in 1917 when the company began
marketing its products in the country.30 In 1922, it built a warehouse depot which was later converted
into a key distribution terminal.31 The corporate presence in the Philippines of Esso (Petron’s
predecessor) became more keenly felt when it won a concession to build and operate a refinery in
Bataan in 1957.32 It then went on to operate a state-of-the-art lube oil blending plant in the Pandacan
Terminals where it manufactures lubes and greases.33
On December 8, 1941, the Second World War reached the shores of the Philippine Islands. Although
Manila was declared an open city, the Americans had no interest in welcoming the Japanese. In fact, in
their zealous attempt to fend off the Japanese Imperial Army, the United States Army took control of
the Pandacan Terminals and hastily made plans to destroy the storage facilities to deprive the
advancing Japanese Army of a valuable logistics weapon.34 The U.S. Army burned unused petroleum,
causing a frightening conflagration. Historian Nick Joaquin recounted the events as follows:
After the USAFFE evacuated the City late in December 1941, all army fuel storage dumps
were set on fire. The flames spread, enveloping the City in smoke, setting even the rivers
ablaze, endangering bridges and all riverside buildings. … For one week longer, the "open
city" blazed—a cloud of smoke by day, a pillar of fire by night.35
The fire consequently destroyed the Pandacan Terminals and rendered its network of depots and
service stations inoperative.36
After the war, the oil depots were reconstructed. Pandacan changed as Manila rebuilt itself. The three
major oil companies resumed the operation of their depots.37 But the district was no longer a sparsely
populated industrial zone; it had evolved into a bustling, hodgepodge community. Today, Pandacan
has become a densely populated area inhabited by about 84,000 people, majority of whom are urban
poor who call it home.38 Aside from numerous industrial installations, there are also small businesses,
churches, restaurants, schools, daycare centers and residences situated there. 39 Malacañang Palace, the
official residence of the President of the Philippines and the seat of governmental power, is just two
kilometers away.40 There is a private school near the Petron depot. Along the walls of the Shell facility
are shanties of informal settlers.41 More than 15,000 students are enrolled in elementary and high
schools situated near these facilities.42 A university with a student population of about 25,000 is located
directly across the depot on the banks of the Pasig river.43
The 36-hectare Pandacan Terminals house the oil companies’ distribution terminals and depot
facilities.44 The refineries of Chevron and Shell in Tabangao and Bauan, both in Batangas, respectively,
are connected to the Pandacan Terminals through a 114-kilometer45 underground pipeline
system.46 Petron’s refinery in Limay, Bataan, on the other hand, also services the depot.47 The terminals
store fuel and other petroleum products and supply 95% of the fuel requirements of Metro
Manila,48 50% of Luzon’s consumption and 35% nationwide.49 Fuel can also be transported through
barges along the Pasig river or tank trucks via the South Luzon Expressway.
We now discuss the first issue: whether movants-intervenors should be allowed to intervene in this
case.
Intervention Of The Oil Companies And The DOE Should Be Allowed In The Interest of Justice
Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes
a litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected
by such proceedings.50 The pertinent rules are Sections 1 and 2, Rule 19 of the Rules of Court:
SEC. 1. 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.
SEC. 2. Time to intervene. — The motion to intervene may be filed at any time before
rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be
attached to the motion and served on the original parties.
Thus, the following are the requisites for intervention of a non-party:
(1) Legal interest
(a) in the matter in controversy; or
(b) in the success of either of the parties; or
I against both parties; or
(d) person 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;
(2) Intervention will not unduly delay or prejudice the adjudication of rights of original
parties;
(3) Intervenor’s rights may not be fully protected in a separate proceeding51 and
(g)The motion to intervene may be filed at any time before rendition of judgment by the trial
court.
For both the oil companies and DOE, the last requirement is definitely absent. As a rule, intervention is
allowed "before rendition of judgment" as Section 2, Rule 19 expressly provides. Both filed their
separate motions after our decision was promulgated. In Republic of the Philippines v. Gingoyon,52 a
recently decided case which was also an original action filed in this Court, we declared that the
appropriate time to file the motions-in-intervention was before and not after resolution of the case. 53
The Court, however, has recognized exceptions to Section 2, Rule 19 in the interest of substantial
justice:
The rule on intervention, like all other rules of procedure, is intended to make the powers of
the Court fully and completely available for justice. It is aimed to facilitate a comprehensive
adjudication of rival claims overriding technicalities on the timeliness of the filing thereof. 54
The oil companies assert that they have a legal interest in this case because the implementation of
Ordinance No. 8027 will directly affect their business and property rights.55
[T]he interest which entitles a person to intervene in a suit between other parties 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. Otherwise, if persons
not parties to the action were allowed to intervene, proceedings would become unnecessarily
complicated, expensive and interminable. And this would be against the policy of the law.
The words "an interest in the subject" means a direct interest in the cause of action as pleaded,
one that would put the intervenor in a legal position to litigate a fact alleged in the complaint
without the establishment of which plaintiff could not recover. 56
We agree that the oil companies have a direct and immediate interest in the implementation of
Ordinance No. 8027. Their claim is that they will need to spend billions of pesos if they are compelled
to relocate their oil depots out of Manila. Considering that they admitted knowing about this case from
the time of its filing on December 4, 2002, they should have intervened long before our March 7, 2007
decision to protect their interests. But they did not.57 Neither did they offer any worthy explanation to
justify their late intervention.
Be that as it may, although their motion for intervention was not filed on time, we will allow it because
they raised and presented novel issues and arguments that were not considered by the Court in its
March 7, 2007 decision. After all, the allowance or disallowance of a motion to intervene is addressed
to the sound discretion of the court before which the case is pending.58 Considering the compelling
reasons favoring intervention, we do not think that this will unduly delay or prejudice the adjudication
of rights of the original parties. In fact, it will be expedited since their intervention will enable us to
rule on the constitutionality of Ordinance No. 8027 instead of waiting for the RTC’s decision.
The DOE, on the other hand, alleges that its interest in this case is also direct and immediate as
Ordinance No. 8027 encroaches upon its exclusive and national authority over matters affecting the oil
industry. It seeks to intervene in order to represent the interests of the members of the public who stand
to suffer if the Pandacan Terminals’ operations are discontinued. We will tackle the issue of the alleged
encroachment into DOE’s domain later on. Suffice it to say at this point that, for the purpose of hearing
all sides and considering the transcendental importance of this case, we will also allow DOE’s
intervention.
The Injunctive Writs Are Not Impediments To The Enforcement Of Ordinance No. 8027
Under Rule 65, Section 359 of the Rules of Court, a petition for mandamus may be filed 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. According to the oil
companies, respondent did not unlawfully fail or neglect to enforce Ordinance No. 8027 because he
was lawfully prevented from doing so by virtue of the injunctive writs and status quo order issued by
the RTC of Manila, Branches 39 and 42.
First, we note that while Chevron and Shell still have in their favor the writs of preliminary injunction
and preliminary mandatory injunction, the status quo order in favor of Petron is no longer in effect
since the court granted the joint motion of the parties to withdraw the complaint and counterclaim. 60
Second, the original parties failed to inform the Court about these injunctive writs. Respondent (who
was also impleaded as a party in the RTC cases) defends himself by saying that he informed the court
of the pendency of the civil cases and that a TRO was issued by the RTC in the consolidated cases
filed by Chevron and Shell. It is true that had the oil companies only intervened much earlier, the Court
would not have been left in the dark about these facts. Nevertheless, respondent should have updated
the Court, by way of manifestation, on such a relevant matter.
In his memorandum, respondent mentioned the issuance of a TRO. Under Section 5 of Rule 58 of the
Rules of Court, a TRO issued by the RTC is effective only for a period of 20 days. This is why, in our
March 7, 2007 decision, we presumed with certainty that this had already lapsed.61 Respondent also
mentioned the grant of injunctive writs in his rejoinder which the Court, however, expunged for being
a prohibited pleading. The parties and their counsels were clearly remiss in their duties to this Court.
In resolving controversies, courts can only consider facts and issues pleaded by the parties. 62 Courts, as
well as magistrates presiding over them are not omniscient. They can only act on the facts and issues
presented before them in appropriate pleadings. They may not even substitute their own personal
knowledge for evidence. Nor may they take notice of matters except those expressly provided as
subjects of mandatory judicial notice.
We now proceed to the issue of whether the injunctive writs are legal impediments to the enforcement
of Ordinance No. 8027.
Section 3, Rule 58 of the Rules of Court enumerates the grounds for the issuance of a writ of
preliminary injunction:
SEC. 3. Grounds for issuance of preliminary injunction. ― A preliminary injunction may be
granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or nonperformance of the act or acts complained of
during the litigation would probably work injustice to the applicant; or
(g) IThat a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the
judgment ineffectual.
There are two requisites for the issuance of a preliminary injunction: (1) the right to be protected
exists prima facie and (2) the acts sought to be enjoined are violative of that right. It must be proven
that the violation sought to be prevented will cause an irreparable injustice.
The act sought to be restrained here was the enforcement of Ordinance No. 8027. It is a settled rule that
an ordinance enjoys the presumption of validity and, as such, cannot be restrained by
injunction.63 Nevertheless, when the validity of the ordinance is assailed, the courts are not precluded
from issuing an injunctive writ against its enforcement. However, we have declared that the issuance of
said writ is proper only when:
... the petitioner assailing the ordinance has made out a case of unconstitutionality strong
enough to overcome, in the mind of the judge, the presumption of validity, in addition to
a showing of a clear legal right to the remedy sought....64 (Emphasis supplied)
Judge Reynaldo G. Ros, in his order dated May 19, 2003, stated his basis for issuing the injunctive
writs:
The Court, in resolving whether or not a Writ of Preliminary Injunction or Preliminary
Mandatory Injunction should be issued, is guided by the following requirements: (1) a clear
legal right of the complainant; (2) a violation of that right; and (3) a permanent and urgent
necessity for the Writ to prevent serious damage. The Court believes that these requisites are
present in these cases.
There is no doubt that the plaintiff/petitioners have been legitimately operating their business
in the Pandacan Terminal for many years and they have made substantial capital investment
therein. Every year they were issued Business Permits by the City of Manila. Its operations
have not been declared illegal or contrary to law or morals. In fact, because of its vital
importance to the national economy, it was included in the Investment Priorities Plan as
mandated under the "Downstream Oil Industry Deregulation Act of 1988 (R.A. 8479). As a
lawful business, the plaintiff/petitioners have a right, therefore, to continue their operation in
the Pandacan Terminal and the right to protect their investments. This is a clear and
unmistakable right of the plaintiff/petitioners.
The enactment, therefore, of City Ordinance No. 8027 passed by the City Council of Manila
reclassifying the area where the Pandacan Terminal is located from Industrial II to
Commercial I and requiring the plaintiff/petitioners to cease and desist from the operation of
their business has certainly violated the rights of the plaintiff/petitioners to continue their
legitimate business in the Pandacan Terminal and deprived them of their huge investments
they put up therein. Thus, before the Court, therefore, determines whether the Ordinance in
question is valid or not, a Writ of Preliminary Injunction and a Writ of Mandatory Injunction
be issued to prevent serious and irreparable damage to plaintiff/petitioners. 65
Nowhere in the judge’s discussion can we see that, in addition to a showing of a clear legal right
of Chevron and Shell to the remedy sought, he was convinced that they had made out a case of
unconstitutionality or invalidity strong enough to overcome the presumption of validity of the
ordinance. Statutes and ordinances are presumed valid unless and until the courts declare the contrary
in clear and unequivocal terms.66 The mere fact that the ordinance is alleged to be unconstitutional or
invalid will not entitle a party to have its enforcement enjoined.67 The presumption is all in favor of
validity. The reason for this is obvious:
The action of the elected representatives of the people cannot be lightly set aside. The
councilors must, in the very nature of things, be familiar with the necessities of their particular
municipality and with all the facts and circumstances which surround the subject and
necessitate action. The local legislative body, by enacting the ordinance, has in effect given
notice that the regulations are essential to the well being of the people . . . The Judiciary
should not lightly set aside legislative action when there is not a clear invasion of personal or
property rights under the guise of police regulation.68
X—x—x
...[Courts] accord the presumption of constitutionality to legislative enactments, not only
because the legislature is presumed to abide by the Constitution but also because the
judiciary[,] in the determination of actual cases and controversies[,] must reflect the wisdom
and justice of the people as expressed through their representatives in the executive and
legislative departments of the government.69
The oil companies argue that this presumption must be set aside when the invalidity or
unreasonableness appears on the face of the ordinance itself.70 We see no reason to set aside the
presumption. The ordinance, on its face, does not at all appear to be unconstitutional. It reclassified the
subject area from industrial to commercial. Prima facie, this power is within the power of municipal
corporations:
The power of municipal corporations to divide their territory into industrial, commercial and
residential zones is recognized in almost all jurisdictions inasmuch as it is derived from the
police power itself and is exercised for the protection and benefit of their inhabitants.71
X—x—x
There can be no doubt that the City of Manila has the power to divide its territory into
residential and industrial zones, and to prescribe that offensive and unwholesome trades and
occupations are to be established exclusively in the latter zone.
xxx       xxx       xxx
Likewise, it cannot be denied that the City of Manila has the authority, derived from the
police power, of forbidding the appellant to continue the manufacture of toyo in the zone
where it is now situated, which has been declared residential....72
Courts will not invalidate an ordinance unless it clearly appears that it is unconstitutional. There is no
such showing here. Therefore, the injunctive writs issued in the Manila RTC’s May 19, 2003 order had
no leg to stand on.
We are aware that the issuance of these injunctive writs is not being assailed as tainted with grave
abuse of discretion. However, we are confronted with the question of whether these writs issued by a
lower court are impediments to the enforcement of Ordinance No. 8027 (which is the subject of
the mandamus petition). As already discussed, we rule in the negative.
Ordinance No. 8027 Was Not Superseded By Ordinance No. 8119
The March 7, 2007 decision did not take into consideration the passage of Ordinance No. 8119 entitled
"An Ordinance Adopting the Manila Comprehensive Land Use Plan and Zoning Regulations of 2006
and Providing for the Administration, Enforcement and Amendment thereto" which was approved by
respondent on June 16, 2006. The simple reason was that the Court was never informed about this
ordinance.
While courts are required to take judicial notice of the laws enacted by Congress, the rule with respect
to local ordinances is different. Ordinances are not included in the enumeration of matters covered by
mandatory judicial notice under Section 1, Rule 129 of the Rules of Court.73
Although, Section 50 of RA 40974 provides that:
SEC. 50 Judicial notice of ordinances. - All courts sitting in the city shall take judicial notice
of the ordinances passed by the [Sangguniang Panglungsod].
This cannot be taken to mean that this Court, since it has its seat in the City of Manila, should have
taken steps to procure a copy of the ordinance on its own, relieving the party of any duty to inform the
Court about it.
Even where there is a statute that requires a court to take judicial notice of municipal ordinances, a
court is not required to take judicial notice of ordinances that are not before it and to which it does not
have access. The party asking the court to take judicial notice is obligated to supply the court with the
full text of the rules the party desires it to have notice of.75 Counsel should take the initiative in
requesting that a trial court take judicial notice of an ordinance even where a statute requires courts to
take judicial notice of local ordinances.76
The intent of a statute requiring a court to take judicial notice of a local ordinance is to remove any
discretion a court might have in determining whether or not to take notice of an ordinance. Such a
statute does not direct the court to act on its own in obtaining evidence for the record and a party must
make the ordinance available to the court for it to take notice.77
In its defense, respondent claimed that he did not inform the Court about the enactment of Ordinance
No. 8119 because he believed that it was different from Ordinance No. 8027 and that the two were not
inconsistent with each other.78
In the same way that we deem the intervenors’ late intervention in this case unjustified, we find the
failure of respondent, who was an original party here, inexcusable.
The Rule On Judicial Admissions Is Not Applicable Against Respondent
The oil companies assert that respondent judicially admitted that Ordinance No. 8027 was repealed by
Ordinance No. 8119 in civil case no. 03-106379 (where Petron assailed the constitutionality of
Ordinance No. 8027) when the parties in their joint motion to withdraw complaint and counterclaim
stated that "the issue ...has been rendered moot and academic by virtue of the passage of [Ordinance
No. 8119]."79 They contend that such admission worked as an estoppel against the respondent.
Respondent countered that this stipulation simply meant that Petron was recognizing the validity and
legality of Ordinance No. 8027 and that it had conceded the issue of said ordinance’s constitutionality,
opting instead to question the validity of Ordinance No. 8119.80 The oil companies deny this and
further argue that respondent, in his answer in civil case no. 06-115334 (where Chevron and Shell are
asking for the nullification of Ordinance No. 8119), expressly stated that Ordinance No. 8119 replaced
Ordinance No. 8027:81
... Under Ordinance No. 8027, businesses whose uses are not in accord with the
reclassification were given six months to cease [their] operation. Ordinance No. 8119, which
in effect, replaced Ordinance [No.] 8027, merely took note of the time frame provided for in
Ordinance No. 8119.... Ordinance No. 8119 thus provided for an even longer term, that is[,]
seven years;82 (Emphasis supplied)
Rule 129, Section 4 of the Rules of Court provides:
Section 4. Judicial admissions. ― An admission, verbal or written, made by a party in the
course of the proceedings in the same case, does not require proof. The admission may be
contradicted only by showing that it was made through palpable mistake or that no such
admission was made. (Emphasis supplied)
While it is true that a party making a judicial admission cannot subsequently take a position contrary to
or inconsistent with what was pleaded,83 the aforestated rule is not applicable here. Respondent made
the statements regarding the ordinances in civil case nos. 03-106379 and 06-115334 which are not "the
same" as this case before us.84 To constitute a judicial admission, the admission must be made in the
same case in which it is offered.
Hence, respondent is not estopped from claiming that Ordinance No. 8119 did not supersede
Ordinance No. 8027. On the contrary, it is the oil companies which should be considered estopped.
They rely on the argument that Ordinance No. 8119 superseded Ordinance No. 8027 but, at the same
time, also impugn its (8119’s) validity. We frown on the adoption of inconsistent positions and distrust
any attempt at clever positioning under one or the other on the basis of what appears advantageous at
the moment. Parties cannot take vacillating or contrary positions regarding the validity of a statute 85 or
ordinance. Nonetheless, we will look into the merits of the argument of implied repeal.
Ordinance No. 8119 Did Not Impliedly Repeal Ordinance No. 8027
Both the oil companies and DOE argue that Ordinance No. 8119 repealed Ordinance No. 8027. They
assert that although there was no express repeal 86 of Ordinance No. 8027, Ordinance No. 8119
impliedly repealed it.
According to the oil companies, Ordinance No. 8119 reclassified the area covering the Pandacan
Terminals to "High Density Residential/Mixed Use Zone (R-3/MXD)" 87 whereas Ordinance No. 8027
reclassified the same area from Industrial II to Commercial I:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety,
and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land
use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the
east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,] PNR
Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and
Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino
Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from Industrial II to
Commercial I. (Emphasis supplied)
Moreover, Ordinance No. 8119 provides for a phase-out of seven years:
SEC. 72. Existing Non-Conforming Uses and Buildings. - The lawful use of any building,
structure or land at the time of the adoption of this Ordinance may be continued, although
such use does not conform with the provision of the Ordinance, provided:
xxx       xxx       xxx
(g) In case the non-conforming use is an industrial use:
 xxx       xxx       xxx
d. The land use classified as non-conforming shall program the phase-out and
relocation of the non-conforming use within seven (7) years from the date of
effectivity of this Ordinance. (Emphasis supplied)
This is opposed to Ordinance No. 8027 which compels affected entities to vacate the area within six
months from the effectivity of the ordinance:
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no
longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the
date of effectivity of this Ordinance within which to cease and desist from the operation of
businesses which are hereby in consequence, disallowed.
Ordinance No. 8119 also designated the Pandacan oil depot area as a "Planned Unit
Development/Overlay Zone (O-PUD)":
SEC. 23. Use Regulations in Planned Unit Development/Overlay Zone (O-PUD). – O-PUD
Zones are identified specific sites in the City of Manila wherein the project site is
comprehensively planned as an entity via unitary site plan which permits flexibility in
planning/ design, building siting, complementarily of building types and land uses, usable
open spaces and the preservation of significant natural land features, pursuant to regulations
specified for each particular PUD. Enumerated below are identified PUD:
xxx       xxx       xxx
6. Pandacan Oil Depot Area
xxx       xxx       xxx
Enumerated below are the allowable uses:
1. all uses allowed in all zones where it is located
2. the [Land Use Intensity Control (LUIC)] under which zones are located shall, in all
instances be complied with
3. the validity of the prescribed LUIC shall only be [superseded] by the development controls
and regulations specified for each PUD as provided for each PUD as provided for by the
masterplan of respective PUDs.88 (Emphasis supplied)
Respondent claims that in passing Ordinance No. 8119, the Sanggunian did not intend to repeal
Ordinance No. 8027 but meant instead to carry over 8027’s provisions to 8119 for the purpose of
making Ordinance No. 8027 applicable to the oil companies even after the passage of Ordinance No.
8119.89 He quotes an excerpt from the minutes of the July 27, 2004 session of the Sanggunian during
the first reading of Ordinance No. 8119:
Member GARCIA: Your Honor, iyong patungkol po roon sa oil depot doon sa amin sa Sixth
District sa Pandacan, wala pong nakalagay eith sa ordinansa rito na taliwas o kakaiba roon sa
ordinansang ipinasa noong nakaraang Konseho, iyong Ordinance No. 8027. So kung ano po
ang nandirito sa ordinansa na ipinasa ninyo last time, iyon lang po ang ni-lift eithe at inilagay
eith. At eith eith ordinansang …iyong naipasa ng huling Konseho, niri-classify [ninyo] from
Industrial II to Commercial C-1 ang area ng Pandacan kung nasaan ang oil depot. So ini-lift
lang po [eithe] iyong definition, density, at saka po yon pong … ng… noong ordinansa ninyo
na siya eith naming inilagay eith, iniba lang po naming iyong title. So wala po kaming
binago na taliwas o nailagay na taliwas doon sa ordinansang ipinasa ninyo, ni-lift lang
po [eithe] from Ordinance No. 8027."90 (Emphasis supplied)
We agree with respondent.
Repeal by implication proceeds on the premise that where a statute of later date clearly reveals the
intention of the legislature to abrogate a prior act on the subject, that intention must be given effect. 91
There are two kinds of implied repeal. The first is: where the provisions in the two acts on the same
subject matter are irreconcilably contradictory, the latter act, to the extent of the conflict, constitutes an
implied repeal of the earlier one.92 The second is: if the later act covers the whole subject of the earlier
one and is clearly intended as a substitute, it will operate to repeal the earlier law. 93 The oil companies
argue that the situation here falls under the first category.
Implied repeals are not favored and will not be so declared unless the intent of the legislators is
manifest.94 As statutes and ordinances are presumed to be passed only after careful deliberation and
with knowledge of all existing ones on the subject, it follows that, in passing a law, the legislature did
not intend to interfere with or abrogate a former law relating to the same subject matter. 95 If the intent
to repeal is not clear, the later act should be construed as a continuation of, and not a substitute for, the
earlier act.96
These standards are deeply enshrined in our jurisprudence. We disagree that, in enacting Ordinance
No. 8119, there was any indication of the legislative purpose to repeal Ordinance No. 8027.97 The
excerpt quoted above is proof that there was never such an intent. While it is true that both ordinances
relate to the same subject matter, i.e. classification of the land use of the area where Pandacan oil depot
is located, if there is no intent to repeal the earlier enactment, every effort at reasonable construction
must be made to reconcile the ordinances so that both can be given effect:
The fact that a later enactment may relate to the same subject matter as that of an earlier
statute is not of itself sufficient to cause an implied repeal of the prior act, since the new
statute may merely be cumulative or a continuation of the old one. What is necessary is a
manifest indication of legislative purpose to repeal.98
For the first kind of implied repeal, there must be an irreconcilable conflict between the two
ordinances. There is no conflict between the two ordinances. Ordinance No. 8027 reclassified the
Pandacan area from Industrial II to Commercial I. Ordinance No. 8119, in Section 23, designated it as
a "Planned Unit Development/Overlay Zone (O-PUD)." In its Annex C which defined the zone
boundaries,99 the Pandacan area was shown to be within the "High Density Residential/Mixed Use
Zone (R-3/MXD)." These zone classifications in Ordinance No. 8119 are not inconsistent with the
reclassification of the Pandacan area from Industrial to Commercial in Ordinance No. 8027. The "O-
PUD" classification merely made Pandacan a "project site ... comprehensively planned as an entity via
unitary site plan which permits flexibility in planning/design, building siting, complementarity of
building types and land uses, usable open spaces and the preservation of significant natural land
features...."100 Its classification as "R-3/MXD" means that it should "be used primarily for high-rise
housing/dwelling purposes and limited complementary/supplementary trade, services and business
activities."101 There is no conflict since both ordinances actually have a common objective, i.e., to shift
the zoning classification from industrial to commercial (Ordinance No. 8027) or mixed
residential/commercial (Ordinance No. 8119).
Moreover, it is a well-settled rule in statutory construction that a subsequent general law does not
repeal a prior special law on the same subject unless it clearly appears that the legislature has intended
by the latter general act to modify or repeal the earlier special law. Generalia specialibus non
derogant (a general law does not nullify a specific or special law).102 This is so even if the provisions of
the general law are sufficiently comprehensive to include what was set forth in the special act. 103 The
special act and the general law must stand together, one as the law of the particular subject and the
other as the law of general application.104 The special law must be taken as intended to constitute an
exception to, or a qualification of, the general act or provision.105
The reason for this is that the legislature, in passing a law of special character, considers and
makes special provisions for the particular circumstances dealt with by the special law. This
 being so, the legislature, by adopting a general law containing provisions repugnant to those
of the special law and without making any mention of its intention to amend or modify such
special law, cannot be deemed to have intended an amendment, repeal or modification of the
latter.106
Ordinance No. 8027 is a special law107 since it deals specifically with a certain area described therein
(the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law108 as it
covers the entire city of Manila.
The oil companies assert that even if Ordinance No. 8027 is a special law, the existence of an all-
encompassing repealing clause in Ordinance No. 8119 evinces an intent on the part of
the Sanggunian to repeal the earlier ordinance:
Sec. 84. Repealing Clause. – All ordinances, rules, regulations in conflict with the provisions
of this Ordinance are hereby repealed; PROVIDED, That the rights that are vested upon the
effectivity of this Ordinance shall not be impaired.
They cited Hospicio de San Jose de Barili, Cebu City v. Department of Agrarian Reform:109
The presence of such general repealing clause in a later statute clearly indicates the legislative
intent to repeal all prior inconsistent laws on the subject matter, whether the prior law is a
general law or a special law... Without such a clause, a later general law will ordinarily not
repeal a prior special law on the same subject. But with such clause contained in the
subsequent general law, the prior special law will be deemed repealed, as the clause is a clear
legislative intent to bring about that result.110
This ruling in not applicable here. The repealing clause of Ordinance No. 8119 cannot be taken to
indicate the legislative intent to repeal all prior inconsistent laws on the subject matter, including
Ordinance No. 8027, a special enactment, since the aforequoted minutes (an official record of the
discussions in the Sanggunian) actually indicated the clear intent to preserve the provisions of
Ordinance No. 8027.
To summarize, the conflict between the two ordinances is more apparent than real. The two ordinances
can be reconciled. Ordinance No. 8027 is applicable to the area particularly described therein whereas
Ordinance No. 8119 is applicable to the entire City of Manila.
Mandamus Lies To Compel Respondent Mayor To Enforce Ordinance No. 8027
The oil companies insist that mandamus does not lie against respondent in consideration of the
separation of powers of the executive and judiciary.111 This argument is misplaced. Indeed,
[the] Courts will not interfere by mandamus proceedings with the legislative [or executive
departments] of the government in the legitimate exercise of its powers, except to enforce
mere ministerial acts required by law to be performed by some officer
thereof.112 (Emphasis Supplied)
since this is the function of a writ of mandamus, which is the power to compel "the performance of an
act which the law specifically enjoins as a duty resulting from office, trust or station." 113
They also argue that petitioners had a plain, speedy and adequate remedy to compel respondent to
enforce Ordinance No. 8027 which was to seek relief from the President of the Philippines through the
Secretary of the Department of Interior and Local Government (DILG) by virtue of the President’s
power of supervision over local government units. Again, we disagree. A party need not go first to the
DILG in order to compel the enforcement of an ordinance. This suggested process would be
unreasonably long, tedious and consequently injurious to the interests of the local government unit
(LGU) and its constituents whose welfare is sought to be protected. Besides, petitioners’ resort to an
original action for mandamus before this Court is undeniably allowed by the Constitution.114
Ordinance No. 8027 Is Constitutional And Valid
Having ruled that there is no impediment to the enforcement of Ordinance No. 8027, we now proceed
to make a definitive ruling on its constitutionality and validity.
The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be
within the corporate powers of the LGU to enact and be passed according to the procedure prescribed
by law, it must also conform to the following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with
public policy and (6) must not be unreasonable.115
The City of Manila Has The Power To Enact Ordinance No. 8027
Ordinance No. 8027 was passed by the Sangguniang Panlungsod of Manila in the exercise of its police
power. Police power is the plenary power vested in the legislature to make statutes and ordinances to
promote the health, morals, peace, education, good order or safety and general welfare of the
people.116 This power flows from the recognition that salus populi est suprema lex (the welfare of the
people is the supreme law).117 While police power rests primarily with the national legislature, such
power may be delegated.118 Section 16 of the LGC, known as the general welfare clause, encapsulates
the delegated police power to local governments:119
Section 16. General Welfare. ― Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of appropriate and self-
reliant scientific and technological capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment among their residents, maintain peace
and order, and preserve the comfort and convenience of their inhabitants.
LGUs like the City of Manila exercise police power through their respective legislative bodies, in this
case, the Sangguniang Panlungsod or the city council. Specifically, the Sanggunian can enact
ordinances for the general welfare of the city:
Section. 458. – Powers, Duties, Functions and Compensation. – (a) The sangguniang
panglungsod, as the legislative branch of the city, shall enact ordinances, approve resolutions
and appropriate funds for the general welfare of the city and its inhabitants pursuant to
Section 16 of this Code xxxx
This police power was also provided for in RA 409 or the Revised Charter of the City of Manila:
Section 18. Legislative powers. — The [City Council] shall have the following legislative
powers:
xxx       xxx       xxx
(g) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the
furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort,
convenience, and general welfare of the city and its inhabitants, and such others as may be
necessary to carry into effect and discharge the powers and duties conferred by this chapter
xxxx120
Specifically, the Sanggunian has the power to "reclassify land within the jurisdiction of the city."121
The Enactment Of Ordinance No. 8027 Is A Legitimate Exercise Of Police Power
As with the State, local governments may be considered as having properly exercised their police
power only if the following requisites are met: (1) the interests of the public generally, as distinguished
from those of a particular class, require its exercise and (2) the means employed are reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. In short,
there must be a concurrence of a lawful subject and a lawful method.122
Ordinance No. 8027 was enacted "for the purpose of promoting sound urban planning, ensuring health,
public safety and general welfare"123 of the residents of Manila. The Sanggunian was impelled to take
measures to protect the residents of Manila from catastrophic devastation in case of a terrorist attack on
the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area defined in the
ordinance from industrial to commercial.
The following facts were found by the Committee on Housing, Resettlement and Urban Development
of the City of Manila which recommended the approval of the ordinance:
(1) the depot facilities contained 313.5 million liters of highly flammable and highly volatile products
which include petroleum gas, liquefied petroleum gas, aviation fuel, diesel, gasoline, kerosene and fuel
oil among others;
(2) the depot is open to attack through land, water or air;
(3) it is situated in a densely populated place and near Malacañang Palace and
(4) in case of an explosion or conflagration in the depot, the fire could spread to the neighboring
communities.124
The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of
Manila and not just of a particular class.125 The depot is perceived, rightly or wrongly, as a
representation of western interests which means that it is a terrorist target. As long as it there is such a
target in their midst, the residents of Manila are not safe. It therefore became necessary to remove these
terminals to dissipate the threat. According to respondent:
Such a public need became apparent after the 9/11 incident which showed that what was
perceived to be impossible to happen, to the most powerful country in the world at that, is
actually possible. The destruction of property and the loss of thousands of lives on that fateful
day became the impetus for a public need. In the aftermath of the 9/11 tragedy, the threats of
terrorism continued [such] that it became imperative for governments to take measures to
combat their effects.126
Wide discretion is vested on the legislative authority to determine not only what the interests of the
public require but also what measures are necessary for the protection of such interests. 127 Clearly,
the Sanggunian was in the best position to determine the needs of its constituents.
In the exercise of police power, property rights of individuals may be subjected to restraints and
burdens in order to fulfill the objectives of the government.128 Otherwise stated, the government may
enact legislation that may interfere with personal liberty, property, lawful businesses and occupations
to promote the general welfare.129 However, the interference must be reasonable and not arbitrary. And
to forestall arbitrariness, the methods or means used to protect public health, morals, safety or welfare
must have a reasonable relation to the end in view.130
The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the
area where the depot is situated from industrial to commercial. A zoning ordinance is defined as a local
city or municipal legislation which logically arranges, prescribes, defines and apportions a given
political subdivision into specific land uses as present and future projection of needs. 131 As a result of
the zoning, the continued operation of the businesses of the oil companies in their present location will
no longer be permitted. The power to establish zones for industrial, commercial and residential uses is
derived from the police power itself and is exercised for the protection and benefit of the residents of a
locality.132 Consequently, the enactment of Ordinance No. 8027 is within the power of
the Sangguniang Panlungsod of the City of Manila and any resulting burden on those affected cannot
be said to be unjust:
There can be no doubt that the City of Manila has the power to divide its territory into
residential and industrial zones, and to prescribe that offensive and unwholesome trades and
occupations are to be established exclusively in the latter zone.
"The benefits to be derived by cities adopting such regulations (zoning) may be summarized
as follows: They attract a desirable and assure a permanent citizenship; they foster pride in
and attachment to the city; they promote happiness and contentment; they stabilize the use and
value of property and promote the peace, [tranquility], and good order of the city. We do not
hesitate to say that the attainment of these objects affords a legitimate field for the exercise of
the police power. He who owns property in such a district is not deprived of its use by such
regulations. He may use it for the purposes to which the section in which it is located is
dedicated. That he shall not be permitted to use it to the desecration of the community
constitutes no unreasonable or permanent hardship and results in no unjust burden."
xxx       xxx       xxx
"The 14th Amendment protects the citizen in his right to engage in any lawful business, but it
does not prevent legislation intended to regulate useful occupations which, because of their
nature or location, may prove injurious or offensive to the public."133
We entertain no doubt that Ordinance No. 8027 is a valid police power measure because there is a
concurrence of lawful subject and lawful method.
Ordinance No. 8027 Is Not Unfair, Oppressive Or Confiscatory Which Amounts To Taking
Without Compensation
According to the oil companies, Ordinance No. 8027 is unfair and oppressive as it does not only
regulate but also absolutely prohibits them from conducting operations in the City of Manila.
Respondent counters that this is not accurate since the ordinance merely prohibits the oil companies
from operating their businesses in the Pandacan area.
Indeed, the ordinance expressly delineated in its title and in Section 1 what it pertained to. Therefore,
the oil companies’ contention is not supported by the text of the ordinance. Respondent succinctly
stated that:
The oil companies are not forbidden to do business in the City of Manila. They may still very
well do so, except that their oil storage facilities are no longer allowed in the Pandacan area.
Certainly, there are other places in the City of Manila where they can conduct this specific
kind of business. Ordinance No. 8027 did not render the oil companies illegal. The assailed
ordinance affects the oil companies business only in so far as the Pandacan area is
concerned.134
The oil companies are not prohibited from doing business in other appropriate zones in Manila. The
City of Manila merely exercised its power to regulate the businesses and industries in the zones it
established:
As to the contention that the power to regulate does not include the power to prohibit, it will
be seen that the ordinance copied above does not prohibit the installation of motor engines
within the municipality of Cabanatuan but only within the zone therein fixed. If the municipal
council of Cabanatuan is authorized to establish said zone, it is also authorized to provide
what kind of engines may be installed therein. In banning the installation in said zone of all
engines not excepted in the ordinance, the municipal council of Cabanatuan did no more than
regulate their installation by means of zonification.135
The oil companies aver that the ordinance is unfair and oppressive because they have invested billions
of pesos in the depot.136 Its forced closure will result in huge losses in income and tremendous costs in
constructing new facilities.
Their contention has no merit. In the exercise of police power, there is a limitation on or restriction of
property interests to promote public welfare which involves no compensable taking. Compensation is
necessary only when the state’s power of eminent domain is exercised. In eminent domain, property is
appropriated and applied to some public purpose. Property condemned under the exercise of police
power, on the other hand, is noxious or intended for a noxious or forbidden purpose and, consequently,
is not compensable.137 The restriction imposed to protect lives, public health and safety from danger is
not a taking. It is merely the prohibition or abatement of a noxious use which interferes with
paramount rights of the public.
Property has not only an individual function, insofar as it has to provide for the needs of the owner, but
also a social function insofar as it has to provide for the needs of the other members of society.138 The
principle is this:
Police power proceeds from the principle that every holder of property, however absolute and
unqualified may be his title, holds it under the implied liability that his use of it shall not be
injurious to the equal enjoyment of others having an equal right to the enjoyment of their
property, nor injurious to the right of the community. Rights of property, like all other social
and conventional rights, are subject to reasonable limitations in their enjoyment as shall
prevent them from being injurious, and to such reasonable restraints and regulations
established by law as the legislature, under the governing and controlling power vested in
them by the constitution, may think necessary and expedient.139
In the regulation of the use of the property, nobody else acquires the use or interest therein, hence there
is no compensable taking.140 In this case, the properties of the oil companies and other businesses
situated in the affected area remain theirs. Only their use is restricted although they can be applied to
other profitable uses permitted in the commercial zone.
Ordinance No. 8027 Is Not Partial And Discriminatory
The oil companies take the position that the ordinance has discriminated against and singled out the
Pandacan Terminals despite the fact that the Pandacan area is congested with buildings and residences
that do not comply with the National Building Code, Fire Code and Health and Sanitation Code.141
This issue should not detain us for long. An ordinance based on reasonable classification does not
violate the constitutional guaranty of the equal protection of the law.142 The requirements for a valid
and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to
the purpose of the law; (3) it must not be limited to existing conditions only and (4) it must apply
equally to all members of the same class.143
The law may treat and regulate one class differently from another class provided there are real and
substantial differences to distinguish one class from another.144 Here, there is a reasonable
classification. We reiterate that what the ordinance seeks to prevent is a catastrophic devastation that
will result from a terrorist attack. Unlike the depot, the surrounding community is not a high-value
terrorist target. Any damage caused by fire or explosion occurring in those areas would be nothing
compared to the damage caused by a fire or explosion in the depot itself. Accordingly, there is a
substantial distinction. The enactment of the ordinance which provides for the cessation of the
operations of these terminals removes the threat they pose. Therefore it is germane to the purpose of
the ordinance. The classification is not limited to the conditions existing when the ordinance was
enacted but to future conditions as well. Finally, the ordinance is applicable to all businesses and
industries in the area it delineated.
Ordinance No. 8027 is Not Inconsistent With RA 7638 And RA 8479
The oil companies and the DOE assert that Ordinance No. 8027 is unconstitutional because it
contravenes RA 7638 (DOE Act of 1992)145 and RA 8479 (Downstream Oil Industry Deregulation Law
of 1998).146 They argue that through RA 7638, the national legislature declared it a policy of the state
"to ensure a continuous, adequate, and economic supply of energy"147 and created the DOE to
implement this policy. Thus, under Section 5 I, DOE is empowered to "establish and administer
programs for the exploration, transportation, marketing, distribution, utilization, conservation,
stockpiling, and storage of energy resources." Considering that the petroleum products contained in the
Pandacan Terminals are major and critical energy resources, they conclude that their administration,
storage, distribution and transport are of national interest and fall under DOE’s primary and exclusive
jurisdiction.148
They further assert that the terminals are necessary for the delivery of immediate and adequate supply
of oil to its recipients in the most economical way.149 Local legislation such as Ordinance No. 8027
(which effectively calls for the removal of these terminals) allegedly frustrates the state policy of
ensuring a continuous, adequate, and economic supply of energy expressed in RA 7638, a national
law.150 Likewise, the ordinance thwarts the determination of the DOE that the terminals’ operations
should be merely scaled down and not discontinued.151 They insist that this should not be allowed
considering that it has a nationwide economic impact and affects public interest transcending the
territorial jurisdiction of the City of Manila.152
According to them, the DOE’s supervision over the oil industry under RA 7638 was subsequently
underscored by RA 8479, particularly in Section 7 thereof:
SECTION 7. Promotion of Fair Trade Practices. ― The Department of Trade and Industry
(DTI) and DOE shall take all measures to promote fair trade and prevent cartelization,
monopolies, combinations in restraint of trade, and any unfair competition in the Industry as
defined in Article 186 of the Revised Penal Code, and Articles 168 and 169 of Republic Act
No. 8293, otherwise known as the "Intellectual Property Rights Law". The DOE
shall continue to encourage certain practices in the Industry which serve the public
interest and are intended to achieve efficiency and cost reduction, ensure continuous
supply of petroleum products, and enhance environmental protection. These practices may
include borrow-and-loan agreements, rationalized depot and manufacturing operations,
hospitality agreements, joint tanker and pipeline utilization, and joint actions on oil spill
control and fire prevention. (Emphasis supplied)
Respondent counters that DOE’s regulatory power does not preclude LGUs from exercising their
police power.153
Indeed, ordinances should not contravene existing statutes enacted by Congress. The rationale for this
was clearly explained in Magtajas vs. Pryce Properties Corp., Inc.:154
The rationale of the requirement that the ordinances should not contravene a statute is
obvious. Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred on them by Congress as the national
lawmaking body. The delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local government units can undo the
acts of Congress, from which they have derived their power in the first place, and negate by
mere ordinance the mandate of the statute.
"Municipal corporations owe their origin to, and derive their powers and rights wholly from
the legislature. It breathes into them the breath of life, without which they cannot exist. As it
creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some
 constitutional limitation on the right, the legislature might, by a single act, and if we can
suppose it capable of so great a folly and so great a wrong, sweep from existence all of the
municipal corporations in the State, and the corporation could not prevent it. We know of no
limitation on the right so far as to the corporation themselves are concerned. They are, so to
phrase it, the mere tenants at will of the legislature."
This basic relationship between the national legislature and the local government units has not
been enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. Without meaning to detract from that policy, we here confirm that Congress
retains control of the local government units although in significantly reduced degree now
than under our previous Constitutions. The power to create still includes the power to destroy.
The power to grant still includes the power to withhold or recall. True, there are certain
notable innovations in the Constitution, like the direct conferment on the local government
units of the power to tax, which cannot now be withdrawn by mere statute. By and large,
however, the national legislature is still the principal of the local government units, which
cannot defy its will or modify or violate it.155
The question now is whether Ordinance No. 8027 contravenes RA 7638 and RA 8479. It does not.
Under Section 5 I of RA 7638, DOE was given the power to "establish and administer programs for the
exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage
of energy resources." On the other hand, under Section 7 of RA 8749, the DOE "shall continue to
encourage certain practices in the Industry which serve the public interest and are intended to achieve
efficiency and cost reduction, ensure continuous supply of petroleum products." Nothing in these
statutes prohibits the City of Manila from enacting ordinances in the exercise of its police power.
The principle of local autonomy is enshrined in and zealously protected under the Constitution. In
Article II, Section 25 thereof, the people expressly adopted the following policy:
Section 25. The State shall ensure the autonomy of local governments.
An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting the
autonomy of LGUs. The LGC was specially promulgated by Congress to ensure the autonomy of local
governments as mandated by the Constitution:
Sec. 2. Declaration of Policy. ― (a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State shall enjoy genuine and meaningful
local autonomy to enable them to attain their fullest development as self-reliant
communities and make them more effective partners in the attainment of national
goals. Toward this end, the State shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities, and resources. The
process of decentralization shall proceed from the National Government to the local
government units. (Emphasis supplied)
We do not see how the laws relied upon by the oil companies and DOE stripped the City of Manila of
its power to enact ordinances in the exercise of its police power and to reclassify the land uses within
its jurisdiction. To guide us, we shall make a brief survey of our decisions where the police power
measure of the LGU clashed with national laws.
In Tan v. Pereña,156 the Court ruled that Ordinance No. 7 enacted by the municipality of Daanbantayan,
Cebu allowing the operation of three cockpits was invalid for violating PD 449 (or the Cockfighting
Law of 1974) which permitted only one cockpit per municipality.
In Batangas CATV, Inc. v. Court of Appeals,157 the Sangguniang Panlungsod of Batangas City enacted
Resolution No. 210 granting Batangas CATV, Inc. a permit to operate a cable television (CATV)
system in Batangas City. The Court held that the LGU did not have the authority to grant franchises to
operate a CATV system because it was the National Telecommunications Commission (NTC) that had
the power under EO Nos. 205 and 436 to regulate CATV operations. EO 205 mandated the NTC to
grant certificates of authority to CATV operators while EO 436 vested on the NTC the power to
regulate and supervise the CATV industry.
In Lina, Jr. v. Paño,158 we held that Kapasiyahan Bilang 508, Taon 1995 of the Sangguniang
Panlalawigan of Laguna could not be used as justification to prohibit lotto in the municipality of San
Pedro, Laguna because lotto was duly authorized by RA 1169, as amended by BP 42. This law granted
a franchise to the Philippine Charity Sweepstakes Office and allowed it to operate lotteries.
In Magtajas v. Pryce Properties Corp., Inc.,159 the Sangguniang Panlungsod of Cagayan de Oro City
passed Ordinance Nos. 3353 and 3375-93 prohibiting the operation of casinos in the city. We ruled that
these ordinances were void for contravening PD 1869 or the charter of the Philippine Amusements and
Gaming Corporation which had the power to operate casinos.
The common dominator of all of these cases is that the national laws were clearly and expressly in
conflict with the ordinances/resolutions of the LGUs. The inconsistencies were so patent that there was
no room for doubt. This is not the case here.
The laws cited merely gave DOE general powers to "establish and administer programs for the
exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage
of energy resources" and "to encourage certain practices in the [oil] industry which serve the public
interest and are intended to achieve efficiency and cost reduction, ensure continuous supply of
petroleum products." These powers can be exercised without emasculating the LGUs of the powers
granted them. When these ambiguous powers are pitted against the unequivocal power of the LGU to
enact police power and zoning ordinances for the general welfare of its constituents, it is not difficult
to rule in favor of the latter. Considering that the powers of the DOE regarding the Pandacan Terminals
are not categorical, the doubt must be resolved in favor of the City of Manila:
SECTION 5. Rules of Interpretation. ― In the interpretation of the provisions of this Code,
the following rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted in its
favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of
powers and of the lower local government unit. Any fair and reasonable doubt as to the
existence of the power shall be interpreted in favor of the local government unit concerned;
xxx       xxx       xxx
(g) IThe general welfare provisions in this Code shall be liberally interpreted to give more
powers to local government units in accelerating economic development and upgrading the
quality of life for the people in the community xxxx
The least we can do to ensure genuine and meaningful local autonomy is not to force an
interpretation that negates powers explicitly granted to local governments. To rule against the
power of LGUs to reclassify areas within their jurisdiction will subvert the principle of local
autonomy guaranteed by the Constitution.160 As we have noted in earlier decisions, our
national officials should not only comply with the constitutional provisions on local autonomy
but should also appreciate the spirit and liberty upon which these provisions are based.161
The DOE Cannot Exercise The Power Of Control Over LGUs
Another reason that militates against the DOE’s assertions is that Section 4 of Article X of the
Constitution confines the President’s power over LGUs to one of general supervision:
SECTION 4. The President of the Philippines shall exercise general supervision over local
governments. Xxxx
Consequently, the Chief Executive or his or her alter egos, cannot exercise the power of control over
them.162 Control and supervision are distinguished as follows:
[Supervision] means overseeing or the power or authority of an officer to see that subordinate
officers perform their duties. If the latter fail or neglect to fulfill them, the former may take
such action or step as prescribed by law to make them perform their duties. Control, on the
other hand, means the power of an officer to alter or modify or nullify or set aside what a
subordinate officer ha[s] done in the performance of his duties and to substitute the judgment
of the former for that of the latter.163
Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body;
it does not include any restraining authority over such body.164 It does not allow the supervisor to annul
the acts of the subordinate.165 Here, what the DOE seeks to do is to set aside an ordinance enacted by
local officials, a power that not even its principal, the President, has. This is because:
Under our present system of government, executive power is vested in the President. The
members of the Cabinet and other executive officials are merely alter egos. As such, they are
subject to the power of control of the President, at whose will and behest they can be removed
from office; or their actions and decisions changed, suspended or reversed. In contrast, the
heads of political subdivisions are elected by the people. Their sovereign powers emanate
from the electorate, to whom they are directly accountable. By constitutional fiat, they are
subject to the President’s supervision only, not control, so long as their acts are exercised
within the sphere of their legitimate powers. By the same token, the President may not
withhold or alter any authority or power given them by the Constitution and the law.166
Thus, the President and his or her alter egos, the department heads, cannot interfere with the activities
of local governments, so long as they act within the scope of their authority. Accordingly, the DOE
cannot substitute its own discretion for the discretion exercised by the sanggunian of the City of
Manila. In local affairs, the wisdom of local officials must prevail as long as they are acting within the
parameters of the Constitution and the law.167
Ordinance No. 8027 Is Not Invalid For Failure To Comply With RA 7924 And EO 72
The oil companies argue that zoning ordinances of LGUs are required to be submitted to the
Metropolitan Manila Development Authority (MMDA) for review and if found to be in compliance
with its metropolitan physical framework plan and regulations, it shall endorse the same to the Housing
and Land Use Regulatory Board (HLURB). Their basis is Section 3 (e) of RA 7924:168
SECTION 3. Scope of MMDA Services. ― Metro-wide services under the jurisdiction of
the MMDA are those services which have metro-wide impact and transcend local political
boundaries or entail huge expenditures such that it would not be viable for said services to be
provided by the individual [LGUs] comprising Metropolitan Manila. These services shall
include:
xxx       xxx       xxx
(g) Urban renewal, zoning, and land use planning, and shelter services which include the
formulation, adoption and implementation of policies, standards, rules and regulations,
programs and projects to rationalize and optimize urban land use and provide direction to
urban growth and expansion, the rehabilitation and development of slum and blighted areas,
the development of shelter and housing facilities and the provision of necessary social
services thereof. (Emphasis supplied)
Reference was also made to Section 15 of its implementing rules:
Section 15. Linkages with HUDCC, HLURB, NHA, LGUs and Other National Government
Agencies Concerned on Urban Renewal, Zoning and Land Use Planning and Shelter Services.
Within the context of the National Housing and Urban Development Framework, and
pursuant to the national standards, guidelines and regulations formulated by the Housing and
Land Use Regulatory Board [HLURB] on land use planning and zoning, the [MMDA] shall
prepare a metropolitan physical framework plan and regulations which shall complement and
translate the socio-economic development plan for Metro Manila into physical or spatial
terms, and provide the basis for the preparation, review, integration and implementation of
local land use plans and zoning, ordinance of cities and municipalities in the area.
Said framework plan and regulations shall contain, among others, planning and zoning
policies and procedures that shall be observed by local government units in the preparation of
their own plans and ordinances pursuant to Section 447 and 458 of RA 7160, as well as the
identification of sites and projects that are considered to be of national or metropolitan
significance.
Cities and municipalities shall prepare their respective land use plans and zoning
ordinances and submit the same for review and integration by the [MMDA] and
indorsement to HLURB in accordance with Executive Order No. 72 and other pertinent
laws.
In the preparation of a Metropolitan Manila physical framework plan and regulations, the
[MMDA] shall coordinate with the Housing and Urban Development Coordinating Council,
HLURB, the National Housing Authority, Intramuros Administration, and all other agencies
of the national government which are concerned with land use and zoning, urban renewal and
shelter services. (Emphasis supplied)
They also claim that EO 72169 provides that zoning ordinances of cities and municipalities of Metro
Manila are subject to review by the HLURB to ensure compliance with national standards and
guidelines. They cite Section 1, paragraphs I, (e), (f) and (g):
SECTION 1. Plan formulation or updating. ―
xxx       xxx       xxx
(g) Cities and municipalities of Metropolitan Manila shall continue to formulate or
update their respective comprehensive land use plans, in accordance with the land
use planning and zoning standards and guidelines prescribed by the HLURB
pursuant to EO 392, S. of 1990, and other pertinent national policies.
xxx       xxx       xxx
(e) Pursuant to LOI 729, S. of 1978, EO 648, S. of 1981, and RA 7279, the comprehensive
land use plans of provinces, highly urbanized cities and independent component cities shall
be reviewed and ratified by the HLURB to ensure compliance with national standards and
guidelines.
(f) Pursuant to EO 392, S. of 1999, the comprehensive land use plans of cities and
municipalities of Metropolitan Manila shall be reviewed by the HLURB to ensure compliance
with national standards and guidelines.
(g) Said review shall be completed within three (3) months upon receipt thereof otherwise, the
same shall be deemed consistent with law, and, therefore, valid. (Emphasis supplied)
They argue that because Ordinance No. 8027 did not go through this review process, it is invalid.
The argument is flawed.
RA 7942 does not give MMDA the authority to review land use plans and zoning ordinances of cities
and municipalities. This was only found in its implementing rules which made a reference to EO 72.
EO 72 expressly refers to comprehensive land use plans (CLUPs) only. Ordinance No. 8027 is
admittedly not a CLUP nor intended to be one. Instead, it is a very specific ordinance which
reclassified the land use of a defined area in order to prevent the massive effects of a possible terrorist
attack. It is Ordinance No. 8119 which was explicitly formulated as the "Manila [CLUP] and Zoning
Ordinance of 2006." CLUPs are the ordinances which should be submitted to the MMDA for
integration in its metropolitan physical framework plan and approved by the HLURB to ensure that
they conform with national guidelines and policies.
Moreover, even assuming that the MMDA review and HLURB ratification are necessary, the oil
companies did not present any evidence to show that these were not complied with. In accordance with
the presumption of validity in favor of an ordinance, its constitutionality or legality should be upheld in
the absence of proof showing that the procedure prescribed by law was not observed. The burden of
proof is on the oil companies which already had notice that this Court was inclined to dispose of all the
issues in this case. Yet aside from their bare assertion, they did not present any certification from the
MMDA or the HLURB nor did they append these to their pleadings. Clearly, they failed to rebut the
presumption of validity of Ordinance No. 8027.170
Conclusion
Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose
billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally protected
rights, the right to life enjoys precedence over the right to property.171 The reason is obvious: life is
irreplaceable, property is not. When the state or LGU’s exercise of police power clashes with a few
individuals’ right to property, the former should prevail.172
Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without
a doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the
inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the
relocation of the terminals. Their power to chart and control their own destiny and preserve their lives
and safety should not be curtailed by the intervenors’ warnings of doomsday scenarios and threats of
economic disorder if the ordinance is enforced.
Secondary to the legal reasons supporting the immediate implementation of Ordinance No. 8027 are
the policy considerations which drove Manila’s government to come up with such a measure:
... [The] oil companies still were not able to allay the apprehensions of the city regarding the
security threat in the area in general. No specific action plan or security measures were
presented that would prevent a possible large-scale terrorist or malicious attack especially an
attack aimed at Malacañang. The measures that were installed were more directed towards
their internal security and did not include the prevention of an external attack even on a
bilateral level of cooperation between these companies and the police and military.
xxx       xxx       xxx
It is not enough for the city government to be told by these oil companies that they have the
most sophisticated fire-fighting equipments and have invested millions of pesos for these
equipments. The city government wants to be assured that its residents are safe at any time
from these installations, and in the three public hearings and in their position papers, not one
statement has been said that indeed the absolute safety of the residents from the hazards posed
by these installations is assured.173
We are also putting an end to the oil companies’ determination to prolong their stay in Pandacan
despite the objections of Manila’s residents. As early as October 2001, the oil companies signed a
MOA with the DOE obliging themselves to:
... undertake a comprehensive and comparative study ... [which] shall include the preparation
of a Master Plan, whose aim is to determine the scope and timing of the feasible location of
the Pandacan oil terminals and all associated facilities and infrastructure including
government support essential for the relocation such as the necessary transportation
infrastructure, land and right of way acquisition, resettlement of displaced residents and
environmental and social acceptability which shall be based on mutual benefit of the Parties
and the public.174
Now that they are being compelled to discontinue their operations in the Pandacan Terminals, they
cannot feign unreadiness considering that they had years to prepare for this eventuality.
Just the same, this Court is not about to provoke a crisis by ordering the immediate relocation of the
Pandacan Terminals out of its present site. The enforcement of a decision of this Court, specially one
with far-reaching consequences, should always be within the bounds of reason, in accordance with a
comprehensive and well-coordinated plan, and within a time-frame that complies with the letter and
spirit of our resolution. To this end, the oil companies have no choice but to obey the law.
A Warning To Petitioners’ Counsel
We draw the attention of the parties to a matter of grave concern to the legal profession.
Petitioners and their counsel, Atty. Samson Alcantara, submitted a four-page memorandum that clearly
contained either substance nor research. It is absolutely insulting to this Court.
We have always tended towards judicial leniency, temperance and compassion to those who suffer
from a wrong perception of what the majesty of the law means. But for a member of the bar, an officer
of the court, to file in this Court a memorandum of such unacceptable quality is an entirely different
matter.
It is indicative less of a personal shortcoming or contempt of this Court and more of a lawyer’s sorry
descent from a high sense of duty and responsibility. As a member of the bar and as an officer of the
court, a lawyer ought to be keenly aware that the chief safeguard of the body politic is respect for the
law and its magistrates.
There is nothing more effective than the written word by which counsel can persuade this Court of the
righteousness of his cause. For if truth were self-evident, a memorandum would be completely
unnecessary and superfluous.
The inability of counsel to prepare a memorandum worthy of this Court’s consideration is an ejemplo
malo to the legal profession as it betrays no genuine interest in the cause he claims to espouse. Or did
counsel think he can earn his moment of glory without the hard work and dedication called for by his
petition?
A Final Word
On Wednesday, January 23, 2008, a defective tanker containing 2,000 liters of gasoline and 14,000
liters of diesel exploded in the middle of the street a short distance from the exit gate of the Pandacan
Terminals, causing death, extensive damage and a frightening conflagration in the vicinity of the
incident. Need we say anthing about what will happen if it is the estimated 162 to 211 million
liters175 of petroleum products in the terminal complex which blow up?
WHEREFORE, the motions for leave to intervene of Chevron Philippines Inc., Petron Corporation
and Pilipinas Shell Petroleum Corporation, and the Republic of the Philippines, represented by the
Department of Energy, are hereby GRANTED. Their respective motions for reconsideration are
hereby DENIED. The Regional Trial Court, Manila, Branch 39 is ORDERED to DISMISS the
consolidated cases of Civil Case No. 03-106377 and Civil Case No. 03-106380.
We reiterate our order to respondent Mayor of the City of Manila to enforce Ordinance No. 8027. In
coordination with the appropriate agencies and other parties involved, respondent Mayor is hereby
ordered to oversee the relocation and transfer of the Pandacan Terminals out of its present site.
To ensure the orderly transfer, movement and relocation of assets and personnel, the intervenors
Chevron Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation shall, within a
non-extendible period of ninety (90) days, submit to the Regional Trial Court of Manila, Branch 39,
the comprehensive plan and relocation schedule which have allegedly been prepared. The presiding
judge of Manila RTC, Branch 39 will monitor the strict enforcement of this resolution.
Atty. Samson Alcantara is hereby ordered to explain within five (5) days from notice why he should
not be disciplined for his refusal, or inability, to file a memorandum worthy of the consideration of this
Court.
Treble costs against petitioners’ counsel, Atty. Samson Alcantara.
SO ORDERED.
Sgd.
JESUS CUENCO, Petitioner, v. TALISAY TOURIST SPORTS COMPLEX, INCORPORATED
AND MATIAS B. AZNAR III, Respondents.
DECISION
NACHURA, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing
the Decision dated April 18, 2005 and the Resolution dated August 15, 2006 of the Court of Appeals
(CA) in CA-G.R. CV No. 65773.
The Facts
The antecedent facts of the case are as follows:
On May 25, 1992, petitioner leased from respondents for a period of two (2) years, from May 8, 1992
to May 8, 1994, the Talisay Tourist Sports Complex, to be operated as a cockpit. The lease was
extended for another four (4) years, or until May 8, 1998.
Under the Contract of Lease,1 it was stipulated that petitioner shall, like a good father of the family,
maintain in good condition the furniture, chattels and all other equipment and shall, at all times, keep
the leased premises clean and sanitary. For this purpose, petitioner would allow the respondent's
building supervisor or his authorized representative to make a regular spot inspection of the leased
premises to see to it that these stipulations are strictly implemented. 2 Any damage caused to the
furniture, chattels, equipment and parts of the leased premises shall be the responsibility of petitioner
to repair and compensate.3 Furthermore, petitioner would give a deposit equivalent to six (6) months
rental to answer for whatever damages may be caused to the premises during the period of the lease. 4
Upon expiration of the contract, respondent company conducted a public bidding for the lease of the
property. Petitioner participated in the bidding. The lease was eventually awarded to another bidder,
Mr. Rex Cuaqui Salud.5 Thereafter, petitioner wrote four (4) demand letters to respondents.
The first letter, dated June 8, 1998, reads:
Dear Mr. Aznar:
I was so disheartened that after going through with the supposed public bidding, haggling with the
terms and conditions of a new lease agreement and after full compliance of ALL your requirements
and the handshakes signifying the clinching of the deal, the contract was awarded to another party.
Though I believe I deserve a renewal, I had to accept your decision with a heavy heart.
It is now my desire to be released quickly from whatever liability or responsibility under our previous
contract. Repair works on some damaged portions were already done. Based on our contract, par. 5
thereof, it is my understanding that I am answerable to all damages caused to furnitures (sic),
chattels and other equipments and minor parts of the leased premises. Once cleared, I want the
return of my deposit of P500,000.00.
Kindly send your inspector to determine by actual ocular inspection if the restoration work is to your
satisfaction.
Very truly yours,
JESUS C. CUENCO [signed]6
Obviously, the letter was not answered, because on June 17, 1998 petitioner found it necessary to write
respondents a second letter reiterating his request for the return of the deposit. The second demand
letter reads:
Dear Mr. Aznar:
It has been more than a week since my letter dated 8 June 1998 requesting the return of my deposit
of P500,000.00. I would assume your representative had already conducted an ocular inspection and
you were satisfied on the restoration works made on the premises. As I ve stated in my said letter, I
want to be released as soon as possible.
I need to know immediately if I still have other things to comply with as pre-condition for the release
of the deposit. As far as I know, I have already done my part.
Very truly yours,
JESUS C. CUENCO [signed]7
With still no response from respondents, petitioner, on August 14, 1998, sent a third demand letter
which read:
Dear Mr. Aznar:
I am surprised by the unreasonable delay in the release of my deposit of P500,000.00 in spite of my
full compliance as to repair works on minor damage to the premises during my term as lessee. Twice I
requested in writing for the immediate release of my deposit but until now it remains unheeded.
And the so-called "inventory" which your lawyer Atty. Algoso8 promised to give has not been
given. Frankly, I am doubtful of the accuracy of said inventory, if any, considering the full blast
major renovation now being conducted on the complex by the new concessionaire. I think it's
about time we close the last chapter of the book, in a manner of speaking, so we can proceed in our
separate distinct ways.
I reiterate my request to please release right now my deposit of P500,000.00.
Very truly yours,
JESUS C. CUENCO [signed]9
Finally, on August 18, 1998, petitioner, thru his counsel, wrote respondents a final demand letter as
follows:
Dear Mr. Aznar:
For ignoring the two letters of my client Mr. Jesus C. Cuenco, dated June 8 and 17, 1998 regarding his
request for the return of his deposit in the sum of P500, 000.00, he has decided to endorse the matter to
this office for appropriate action.
It appears that when Mr. Cuenco leased the cockpit complex he was required to put up a deposit to
answer for damages that may be caused to furnitures (sic), chattels and other equipments and minor
repairs on the leased premises. When the lease expired and he failed to get a renewal, Mr. Cuenco
in fulfillment of his obligation under the contract caused the repair of minor damage to the
premises after which your attention was invited to get your reaction to the restoration work. And
since he did not receive any objection, it can be safely premised that the restoration was to the
lessor's satisfaction.
Mr. Cuenco informed me that the new concessionaire has undertaken a full blast major renovation of
the complex. Under this condition and in the absence of an accurate inventory conducted in the
presence of both parties, it would be doubly difficult, if not impossible, to charge Mr. Cuenco of any
violation of his undertaking especially as to deficiency in the furnitures (sic), chattels and other
equipments in the premises.
In view of all the foregoing, it is consequently demanded that you return to Mr. Cuenco the aforesaid
sum of P500,000.00 within THREE (3) DAYS from notice hereof; otherwise, he may be constrained to
seek judicial relief for the return of the deposit plus interest, damages and attorney's fees.
Your compliance is enjoined.
Very truly yours, At my instance:
FEDERICO C. CABILAO (signed) JESUS C. CUENCO (signed)
Counsel for Mr. Jesus C. Cuenco10
As all of his demand letters remained unheeded, on October 21, 1998, petitioner filed a Complaint 11 for
sum of money, damages and attorney's fees. He maintained that respondents acted in bad faith in
withholding the amount of the deposit without any justifiable reason. 12
In their Answer,13 respondents countered that petitioner caused physical damage to some portions of
the leased premises and the cost of repair and replacement of materials amounted to more
than P500,000.00.14 They also averred that respondent Matias B. Aznar III (Aznar) cannot be sued
personally under the contract of lease since a corporation has a separate and distinct personality from
its officers and stockholders, and there was no allegation that Aznar, who is the President of the
corporation, signed the contract in his personal capacity.15
On March 8, 1999, the RTC issued a Pre-trial Order, 16 the pertinent portions of which reads:
The following facts were admitted by the [respondents]:
1. There is no inventory of damages up to this time;
2. [Petitioner] deposited the amount of P500,000.00;
3. [Petitioner] sends (sic) several letters of demand to [respondents] but said letters were not answered.
4. There was a renovation of the Talisay Tourist Sports Complex with a qualification that the
renovation is only 10% of the whole amount.
The main issues in this case are as follows:
1. Whether or not [petitioner] is entitled to the return of the deposit of P500,000.00, with interest;
2. Whether or not some portions of the complex sustained physical damage during the operation of the
same by the [petitioner].17
On May 24, 1999, the RTC issued an Order18 admitting the exhibits of petitioner, consisting of the
contract of lease dated May 4, 1994 and the four (4) demand letters.
On July 29, 1999, an Order19 was issued by the same court formally admitting the respondents'
following exhibits: the lease contract, inventory of the leased property as of June 4, 1998, inventory of
the sports complex dated June 24, 1995, ocular inspection report dated January 15, 1998 and various
receipts mostly in the name of Southwestern University incurred in different months of 1998.
On August 11, 1999, the RTC rendered a Decision20 in favor of petitioner, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered in favor of [petitioner] and against the [respondents],
directing the latter jointly and severally to return to [petitioner] the sum of P500,000.00, representing
the deposit mentioned in the Complaint, plus 3% interest per month from August 18, 1998 until full
payment thereof.
The latter are, likewise, directed to pay [petitioner] the sum of P15,000.00 as and for litigation
expenses.
With costs against the [respondents].
SO ORDERED.21
The RTC ratiocinated that respondents' failure to reply to the letters of petitioner raises a presumption
that petitioner has complied with his end of the contract. The lower court gave credence to the
testimony of respondents' witness, Ateniso Coronado (Coronado), the property custodian of the
respondents, that the sports complex was repaired and renovated by the new lessee. The court also
considered the admission of respondents' counsel during the pre-trial that no inventory of the property
was conducted on the leased premises. The RTC debunked the inventory presented by the respondents
during trial as a mere afterthought to bolster their claim against petitioner.22
Respondents appealed. On April 18, 2005, the CA rendered a Decision23 reversing and setting aside the
decision of the RTC. The fallo of the CA decision reads:
WHEREFORE, with the foregoing, the Decision of the Regional Trial Court, Branch 13, Cebu City,
dated August 11, 1999, is REVERSED and SET ASIDE, and a new one entered finding this case in
favor of defendants-appellants Talisay Tourists Sports Complex and Matias Aznar III. Consequently,
Civil Case No. CEB-22847 for sum of money, damages, and attorney's fees involving herein parties, as
well as all other claims and counterclaims are hereby DISMISSED for lack of factual and legal basis.
No pronouncement as to costs.
SO ORDERED.24
The CA ruled in favor of respondents on the basis of: (1) Coronado's testimony that petitioner
continued to hold cockfights two months after the expiration of the lease contract which was not
refuted by petitioner; (2) the summary of repairs made on the property showing that respondents spent
the amount of P573,710.17 immediately prior to the expiration of the lease contract and shortly
thereafter; and (3) the new lessor incurred expenses amounting to over P3 million when he shouldered
the rest of the repair and renovation of the subject property.25
Hence, the instant petition.
The Issues
Petitioner raised the following issues for resolution of the Court: (1) whether a judicial admission is
conclusive and binding upon a party making the admission; and (2) whether such judicial admission
was properly rejected by the CA.26
On the other hand, respondents posed the following: (1) whether the findings of the CA that the
cockpit sustained damage during the period of the lease was rendered not in accord with law or with
the applicable decisions of the Court; (2) whether the CA committed an error of law in ruling that
petitioner is not entitled for the return of the deposit.27
The ultimate question we must resolve is whether petitioner is entitled to the return of the amount
deposited.
The Ruling of the Court
We rule in the affirmative. Respondents failed to present sufficient proof to warrant the retention of the
full amount of the deposit given by petitioner.
The Supreme Court is not a trier of facts, and as a rule, does not weigh anew the evidence presented by
the parties. However, the instant case is one of the exceptions to the rule because of the conflicting
decisions of the RTC and the CA based on contradictory factual findings. Thus, we have reviewed the
records in order to arrive at a judicious resolution of the case at bench.
Petitioner questions the CA's finding that there was damage caused the premises while the lease was
still in force. Such finding could only have been based on alleged inventory of the property conducted
by the respondents. Petitioner takes exception to this evidence because of the earlier judicial admission
made by respondents' counsel that no inventory was conducted and, accordingly, any evidence adduced
by the respondents contrary to or inconsistent with the judicial admission should be rejected.
Indeed, at the pre-trial conference, respondents' counsel made an admission that no inventory was
made on the leased premises, at least up to that time. This admission was confirmed in the Pre-Trial
Order issued by the trial court on March 8, 1999 after the lease expired on May 8, 1998.
Yet, on July 1, 1999, respondents' witness Coronado testified, as follows:
ATTY. VASQUEZ:
Q Why do you know the defendants?cralawred
A Because Talisay Sports Complex is owned by Aznar Brothers Realty Corporation of which I am
employed as (sic) in charge of the realty department.
Q How about Matias Aznar III, the defendant here?cralawred
A He is the Chairman of the Board.
Q Board of what?cralawred
A Of the Aznar Brothers Realty Corporation.
Q Is he the Chairman of Talisay Tourist Sports Complex?cralawred
A Yes, sir.
Q You said that you are in charge of the realty department, what is your function with respect to
the properties of Talisay Tourist and Sports Complex?cralawred
A I am the in-charge of the administration and overseeing of the complex owned by Talisay Sports
Complex.
Q When you said that you are in charge of the administration and overseeing of the complex, what
does it includes (sic)?cralawred
A It includes collection of rentals of complex and routine inspection to determine that there are missing
or damage of (sic) the properties.
Q How long have you been employed with the Aznar Brothers Realty Company?cralawred
A 25 years.
xxx
Q In your earlier testimony, you said that part of your function is to conduct routine inspection
of the complex. Now, was there a routine inspection conducted during the period of the lease
contract between plaintiff and the defendant?cralawred
A Yes, we conducted inspection sometime in January 1998.
Q For what purpose was that inspection?cralawred
A The purpose is to determine if there are damage sustained by the complex.
Q And what was the result of the inspection.
A There were missing and destroyed fixtures and physical damage sustained by the complex.
xxx
COURT
xxx
Q W[h]y did you not take photographs of the damage sustained by the complex?cralawred
A We did not take pictures, Your Honor, because in fact their personnel were in our presence (sic)
during the inspection, they were accompanied by us, because we can not conduct inspection without
the presence of the personnel of Jesus Cuenco, Your Honor, the lessee.
Q Did the personnel of Jesus Cuenco sign any paper acknowledging receipt of any report?cralawred
A There was no refusal, but we did not initiate to let them sign and confirm.
COURT
Q So, we have to rely on your testimony?cralawred
A Yes, sir.28
Obviously, it was on Coronado's testimony, as well as on the documentary evidence29 of an alleged
property inventory conducted on June 4, 1998, that the CA based its conclusion that the amount of
damage sustained by the leased premises while in the possession of petitioner exceeded the amount of
petitioner's deposit. This contradicts the judicial admission made by respondents' counsel which should
have been binding on the respondents.
Section 4, Rule 129 of the Rules of Court provides:
SEC. 4. Judicial admissions. ' An admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by a
showing that it was made through palpable mistake or that no such admission was made.
A party may make judicial admissions in (1) the pleadings, (2) during the trial, by verbal or written
manifestations or stipulations, or (3) in other stages of the judicial proceeding. 30 The stipulation of facts
at the pre-trial of a case constitutes judicial admissions. The veracity of judicial admissions require no
further proof and may be controverted only upon a clear showing that the admissions were made
through palpable mistake or that no admissions were made. Thus, the admissions of parties during the
pre-trial, as embodied in the pre-trial order, are binding and conclusive upon them.
Respondents did not deny the admission made by their counsel, neither did they claim that the same
was made through palpable mistake. As such, the stipulation of facts is incontrovertible and may be
relied upon by the courts. The pre-trial forms part of the proceedings and matters dealt therein may not
be brushed aside in the process of decision-making. Otherwise, the real essence of compulsory pre-trial
would be rendered inconsequential and worthless.31 Furthermore, an act performed by counsel within
the scope of a "general or implied authority" is regarded as an act of the client which renders
respondents in estoppel. By estoppel is meant that an admission or representation is conclusive upon
the person making it and cannot be denied or disproved as against the person relying thereon. 32
Thus, respondents are bound by the admissions made by their counsel at the pre-trial. Accordingly, the
CA committed an error when it gave ample evidentiary weight to respondents' evidence contradictory
to the judicial admission.
The appellate court's findings that the damage in the premises exceeded the amount of the deposit is
further sought to be justified, thus:
Verily, a perusal of the summary of repairs amounting to P573,710.17 claimed to have been made by
appellants over the property at about that time immediately prior to the expiration of the lease contract
and shortly thereafter, would show that the repairs pertained to repairs on the drainage, sewage,
immediate premises and structure of the complex. We find the same highly credible and meritorious
considering that as earlier admitted by appellee, the repairs he made were minor and were confined
only to certain portions of the complex, although substantial repairs were done on the cockhouses only,
and that said repairs were done because of a coming big time derby and not to satisfy the provisions of
the lease contract. Also, by implication, appellee is stating that the new lessor incurred expenses
amounting to over P3 million when he shouldered the rest of the repair and renovation of the complex
after the term of lease of appellee.33
Yet, upon perusal of the receipts presented by respondents, we found that majority of the receipts are
under the name of Southwestern University. In their Memorandum,34 respondents aver that
Southwestern University and respondent corporation are sister companies. 35 Even if true, this matter is
of no consequence because respondent company and Southwestern University have distinct and
separate legal personalities, and Southwestern University is not a party to this case. Thus, we cannot
just accept respondents' argument that the receipts paid in the name of Southwestern University should
be credited to respondent company. In any event, they were not able to prove that those receipts were
in fact used for the repair or maintenance of the respondents' complex.
Furthermore, respondents are not entitled the full amount of the deposit because the repair and
renovation of the sports complex after the expiration of petitioner's lease were undertaken not by
respondents but by the new lessee. This can be gleaned from Coronado's testimony on cross-
examination, viz.:
Q You do not know. Mr. Witness, is it not a fact that the new lessee was Wacky Salud?cralawred
A Yes, sir.
Q And that was sometime of July or August of 1998?cralawred
A They were about to conduct three months repair of the complex?cralawred
Q So, Mr. Wacky Salud conducted, did you say repair or renovation? Is it renovation or repair?
cralawred
A There was a renovation and repair.
Q Renovation including repair?cralawred
A Yes, sir.
COURT
Q In other words, after the expiration of the contract of Mr. Cuenco, Wacky Salud took over?cralawred
A Yes, he took over that repair and renovation were no longer included in this presentation, that is at
his own expense.
Q Precisely. In other words, some repairs were made by Mr. Salud and not by Aznar Brothers Realty?
cralawred
A Yes, sir.36
Finally, the Court observes that the inventories presented by respondents were not countersigned by
petitioner or were they presented to the latter prior to the filing of the case in the RTC. Thus, we are
more inclined to agree with the trial court that the "inventory was made as an afterthought,"37 in a vain
attempt of the respondents to establish their case.
However, Coronado's testimony that petitioner extended the operation of the sports complex for a
period of two months after the expiration of the lease without the respondents' authority and without
the payment of rentals, remains unrebutted. Enlightening is the following testimony:
Q I observed here in No. 16 of your summary, two months arrears rentals, June to July, how come?
The contract was supposed to expire May 1998?cralawred
A Yes, because it had happened on this extension of the lease because they are still occupying until
July after the expiration of the contract.
COURT
Q You mean to say that they still use the complex for the purpose for which it was intended, which is
for cockfighting?cralawred
WITNESS
A Yes, they are still doing their usual operation.
ATTY. VASQUEZ
Q You mean to say that there were still cockfighting held in the complex even after May 1998?
cralawred
A Yes, sir.38
This two (2) months over-stay of petitioner in the leased premises should be charged against the
deposit. Because there was no renewal of the lease contract, it is understood that the continued use of
the premises is on a monthly basis with the rental in the amount previously agreed upon by the parties,
in accordance with Articles 167039 and 168740 of the Civil Code.
In the Contract of Lease of petitioner and respondent company, it was agreed that the rental to be paid
shall be the following:
WHEREAS, the FIRST PARTY is the owner of the Talisay Tourist Sports Complex, Inc. located at
Tabunok, Talisay, Cebu;
WHEREAS, the SECOND PARTY has expressed his desire to lease said complex (cockpit) and the
FIRST PARTY have agreed to lease/let the same to the SECOND PARTY subject to the following
term and condition, to wit:
1. In consideration of this lease, the SECOND PARTY agrees to pay the FIRST PARTY a lump sum
of ONE MILLION PESOS (P1,000,000.00) representing advance rental for the first year, the same to
be paid on May 8, 1994. Thereafter, the rental shall be as follows:
Second year - P1,050,000.00 or P87,500.00/month
Third year - 1,100,000.00 or P91,666.67/month
Fourth year - 1,175,000.00 or P97,916.67/month41
Thus, by way of rental for the two-month overstay, the amount of P195,833.34 should be deducted
from the amount of deposit paid by petitioner to respondent company.
As to petitioner's claim of interest of three percent (3%) per month on the amount due him, the same is
without legal basis. We note that no amount of interest was previously agreed upon by the parties in
the contract of lease.
Under Article 2213 of the Civil Code, "interest cannot be recovered upon unliquidated claims or
damages, except when the demand can be established with reasonable certainty." In the instant case,
the claim of petitioner is unliquidated or cannot be established with reasonable certainty upon his filing
of the case in the RTC. This is because of the contending claims of the parties, specifically, the claim
of petitioner for the return of the P500,000.00 deposit vis-a-vis the claim of respondents on the arrears
in rentals and on the damage to the premises. It is only now that the amount that should be returned is
ascertained, i.e., P500,000.00 less the two-months arrears in rentals amounting to P195,833.34, the
sum of which will earn
interest at the legal rate of six percent (6%) per annum42 from the time the case was filed in the RTC on
October 21, 1998.43 Upon finality of this decision, the rate of interest shall be twelve percent (12%) per
annum from such finality until full satisfaction. The foregoing interest rate is based on the guidelines
set by the Court in Eastern Shipping Lines v. CA, viz.:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-
delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII
on "Damages" of the Civil Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages,
the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default,
i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the
Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest, however, shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. Accordingly, where the demand is established
with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at
the time the demand is made, the interest shall begin to run only from the date of the judgment of the
court is made (at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount
of finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of
legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum
from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to
a forbearance of credit.44
Concerning the solidary liability of respondents, we hold that respondent Matias Aznar III is not
solidarily liable with respondent company. His function as the President of the company does not make
him personally liable for the obligations of the latter. A corporation, being a juridical entity, may act
only through its directors, officers and employees. Obligations incurred by them while acting as
corporate agents, are not their personal liability but the direct accountability of the corporation they
represent.45
WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals is
hereby REVERSED AND SET ASIDE. The Decision of the RTC in Civil Case No. CEB-22847 is
hereby REINSTATED with the following modifications:
(1) Talisay Sports Complex, Inc. is solely liable to return the amount of the deposit after deducting the
amount of the two-months arrears in rentals; andcralawlibrary
(2) The rate of legal interest to be paid is SIX PERCENT (6%) on the amount due computed from
October 21, 1998, and TWELVE PERCENT (12%) interest, thereon upon finality of this decision until
full payment thereof.
SO ORDERED.
G.R. No. 157594 : March 9, 2010
TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC., Petitioner, v. COMMISSIONER OF
INTERNAL REVENUE, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
In this Petition for Review on Certiorari1cЃa under Rule 45 of the Rules of Court, petitioner Toshiba
Information Equipment (Philippines), Inc. (Toshiba) seeks the reversal and setting aside of (1) the
Decision2cЃa dated August 29, 2002 of the Court of Appeals in CA-G.R. SP No. 63047, which found
that Toshiba was not entitled to the credit/refund of its unutilized input Value-Added Tax (VAT)
payments attributable to its export sales, because it was a tax-exempt entity and its export sales were
VAT-exempt transactions; and (2) the Resolution3cЃa dated February 19, 2003 of the appellate court in
the same case, which denied the Motion for Reconsideration of Toshiba. The herein assailed judgment
of the Court of Appeals reversed and set aside the Decision4cЃa dated October 16, 2000 of the Court of
Tax Appeals (CTA) in CTA Case No. 5762 granting the claim for credit/refund of Toshiba in the
amount of P1,385,282.08.chanroblesvirtua|awlibary
Toshiba is a domestic corporation principally engaged in the business of manufacturing and exporting
of electric machinery, equipment systems, accessories, parts, components, materials and goods of all
kinds, including those relating to office automation and information technology and all types of
computer hardware and software, such as but not limited to HDD-CD-ROM and personal computer
printed circuit board.5cЃa It is registered with the Philippine Economic Zone Authority (PEZA) as an
Economic Zone (ECOZONE) export enterprise in the Laguna Technopark, Inc., as evidenced by
Certificate of Registration No. 95-99 dated September 27, 1995.6cЃa It is also registered with Regional
District Office No. 57 of the Bureau of Internal Revenue (BIR) in San Pedro, Laguna, as a VAT-
taxpayer with Taxpayer Identification No. (TIN) 004-739-137.7cЃa
In its VAT returns for the first and second quarters of 1997,8cЃa filed on April 14, 1997 and July 21,
1997, respectively, Toshiba declared input VAT payments on its domestic purchases of taxable goods
and services in the aggregate sum of P3,875,139.65,9cЃa with no zero-rated sales. Toshiba
subsequently submitted to the BIR on July 23, 1997 its amended VAT returns for the first and second
quarters of 1997,10cЃa reporting the same amount of input VAT payments but, this time, with zero-
rated sales totaling P7,494,677,000.00.11cЃa
On March 30, 1999, Toshiba filed with the One-Stop Shop Inter-Agency Tax Credit and Duty
Drawback Center of the Department of Finance (DOF One-Stop Shop) two separate applications for
tax credit/refund12cЃa of its unutilized input VAT payments for the first half of 1997 in the total
amount of P3,685,446.73.13cЃa
The next day, on March 31, 1999, Toshiba likewise filed with the CTA a Petition for Review 14cЃa to
toll the running of the two-year prescriptive period under Section 230 of the Tax Code of 1977,15cЃa as
amended.16cЃa In said Petition, docketed as CTA Case No. 5762, Toshiba prayed that
A]fter due hearing, judgment be rendered ordering [herein respondent Commissioner of Internal
Revenue (CIR)] to refund or issue to [Toshiba] a tax refund/tax credit certificate in the amount of
P3,875,139.65 representing unutilized input taxes paid on its purchase of taxable goods and services
for the period January 1 to June 30, 1997.17cЃa
The Commissioner of Internal Revenue (CIR) opposed the claim for tax refund/credit of Toshiba,
setting up the following special and affirmative defenses in his Answer18cЃa
cralaw5. [Toshibas] alleged claim for refund/tax credit is subject to administrative routinary
investigation/examination by [CIRs] Bureau;
6. [Toshiba] failed miserably to show that the total amount of P3,875,139.65 claimed as VAT input
taxes, were erroneously or illegally collected, or that the same are properly documented;
7. Taxes paid and collected are presumed to have been made in accordance with law; hence, not
refundable;
8. In an action for tax refund, the burden is on the taxpayer to establish its right to refund, and failure to
sustain the burden is fatal to the claim for refund;
9. It is incumbent upon [Toshiba] to show that it has complied with the provisions of Section 204 in
relation to Section 229 of the Tax Code;
10. Well-established is the rule that claims for refund/tax credit are construed in strictissimi
juris against the taxpayer as it partakes the nature of exemption from tax.19cЃa
cralawUpon being advised by the CTA,20cЃa Toshiba and the CIR filed a Joint Stipulation of Facts and
Issues,21cЃa wherein the opposing parties "agreed and admitted" that
cralaw1. [Toshiba] is a duly registered value-added tax entity in accordance with Section 107 of the
Tax Code, as amended.chanroblesvirtua|awlibary
2. [Toshiba] is subject to zero percent (0%) value-added tax on its export sales in accordance with then
Section 100(a)(2)(A) of the Tax Code, as amended.chanroblesvirtua|awlibary
3. [Toshiba] filed its quarterly VAT returns for the first two quarters of 1997 within the legally
prescribed period.chanroblesvirtua|awlibary
xxxx
7. [Toshiba] is subject to zero percent (0%) value-added tax on its export sales.chanroblesvirtua| unutilized input taxes paid by [Toshiba] on its purchases of taxable goods and services for the period
awlibary January 1 to June 30, 1997.24cЃa
8. [Toshiba] has duly filed the instant Petition for Review within the two-year prescriptive period Both Toshiba and the CIR sought reconsideration of the foregoing CTA Decision.chanroblesvirtua|
prescribed by then Section 230 of the Tax Code.22cЃa awlibary
cralawIn the same pleading, Toshiba and the CIR jointly submitted the following issues for Toshiba asserted in its Motion for Reconsideration25cЃa that it had presented proper substantiation for
determination by the CTA the P1,887,545.65 input VAT disallowed by the CTA.chanroblesvirtua|awlibary
Whether or not [Toshiba] has incurred input taxes in the amount of P3,875,139.65 for the period The CIR, on the other hand, argued in his Motion for Reconsideration26cЃa that Toshiba was not
January 1 to June 30, 1997 which are directly attributable to its export sales[.] entitled to the credit/refund of its input VAT payments because as a PEZA-registered ECOZONE
Whether or not the input taxes incurred by [Toshiba] for the period January 1 to June 30, 1997 have export enterprise, Toshiba was not subject to VAT. The CIR invoked the following statutory and
not been carried over to the succeeding quarters[.] regulatory provisions
Whether or not input taxes incurred by [Toshiba] for the first two quarters of 1997 have not been offset Section 24 of Republic Act No. 791627cЃa
against any output tax[.] SECTION 24. Exemption from Taxes Under the National Internal Revenue Code. Any provision of
Whether or not input taxes incurred by [Toshiba] for the first two quarters of 1997 are properly existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national, shall
substantiated by official receipts and invoices.23cЃa be imposed on business establishments operating within the ECOZONE. In lieu of paying taxes, five
During the trial before the CTA, Toshiba presented documentary evidence in support of its claim for percent (5%) of the gross income earned by all businesses and enterprises within the ECOZONE shall
tax credit/refund, while the CIR did not present any evidence at all.chanroblesvirtua|awlibary be remitted to the national government. x x x.chanroblesvirtua|awlibary
With both parties waiving the right to submit their respective memoranda, the CTA rendered its Section 103(q) of the Tax Code of 1977, as amended
Decision in CTA Case No. 5762 on October 16, 2000 favoring Toshiba. According to the CTA, the Sec. 103. Exempt transactions. The following shall be exempt from the value-added tax:
CIR himself admitted that the export sales of Toshiba were subject to zero percent (0%) VAT based on xxxx
Section 100(a)(2)(A)(i) of the Tax Code of 1977, as amended. Toshiba could then claim tax credit or (q) Transactions which are exempt under special laws, except those granted under Presidential Decree
refund of input VAT paid on its purchases of goods, properties, or services, directly attributable to such Nos. 66, 529, 972, 1491, and 1950, and non-electric cooperatives under Republic Act No. 6938, or
zero-rated sales, in accordance with Section 4.102-2 of Revenue Regulations No. 7-95. The CTA, international agreements to which the Philippines is a signatory.chanroblesvirtua|awlibary
though, reduced the amount to be credited or refunded to Toshiba to P1,385,292.02.chanroblesvirtua| Section 4.103-1 of Revenue Regulations No. 7-95
awlibary SEC. 4.103-1. Exemptions. (A) In general. An exemption means that the sale of goods or properties
The dispositive portion of the October 16, 2000 Decision of the CTA fully reads and/or services and the use or lease of properties is not subject to VAT (output tax) and the seller is not
cralawWHEREFORE, [Toshibas] claim for refund of unutilized input VAT payments is hereby allowed any tax credit on VAT (input tax) previously paid.chanroblesvirtua|awlibary
GRANTED but in a reduced amount of P1,385,282.08 computed as follows: The person making the exempt sale of goods, properties or services shall not bill any output tax to his
customers because the said transaction is not subject to VAT. On the other hand, a VAT-registered
purchaser of VAT-exempt goods, properties or services which are exempt from VAT is not entitled to
1st Quarter 2nd Quarter Total
any input tax on such purchase despite the issuance of a VAT invoice or receipt.chanroblesvirtua|
Amount of claimed input taxes filed awlibary
with the DOF One Stop Shop Center P3,268,682.34 P416,764.39 P3,685,446.73 The CIR contended that under Section 24 of Republic Act No. 7916, a special law, all businesses and
establishments within the ECOZONE were to remit to the government five percent (5%) of their gross
Less: 1) Input taxes not properly income earned within the zone, in lieu of all taxes, including VAT. This placed Toshiba within the
supported by VAT invoices and ambit of Section 103(q) of the Tax Code of 1977, as amended, which exempted from VAT the
official receipts transactions that were exempted under special laws. Following Section 4.103-1(A) of Revenue
a. Per SGVs verification Regulations No. 7-95, the VAT-exemption of Toshiba meant that its sale of goods was not subject to
(Exh. I) P 242,491.45 P154,391.13 P 396,882.58 output VAT and Toshiba as seller was not allowed any tax credit on the input VAT it had previously
paid.chanroblesvirtua|awlibary
b. Per this courts further verification
On January 17, 2001, the CTA issued a Resolution28cЃa denying both Motions for Reconsideration of
(Annex A) P1,852,437.65 P 35,108.00 P1,887,545.65
Toshiba and the CIR.chanroblesvirtua|awlibary
P189,499.13 P2,300,164.65
The CTA took note that the pieces of evidence referred to by Toshiba in its Motion for Reconsideration
Amount Refundable P1,158,016.82 P227,265.26 P1,385,282.08 were insufficient substantiation, being mere schedules of input VAT payments it had purportedly paid
for the first and second quarters of 1997. While the CTA gives credence to the report of its
commissioned certified public accountant (CPA), it does not render its decision based on the findings
cralawRespondent Commissioner of Internal Revenue is ORDERED to REFUND to [Toshiba] or in of the said CPA alone. The CTA has its own CPA and the tax court itself conducts an
the alternative, ISSUE a TAX CREDIT CERTIFICATE in the amount of P1,385,282.08 representing
investigation/examination of the documents presented. The CTA stood by its earlier disallowance of
the amount of P1,887,545.65 as tax credit/refund because it was not supported by VAT invoices and/or
official receipts.chanroblesvirtua|awlibary
The CTA refused to consider the argument that Toshiba was not entitled to a tax credit/refund under
Section 24 of Republic Act No. 7916 because it was only raised by the CIR for the first time in his
Motion for Reconsideration. Also, contrary to the assertions of the CIR, the CTA held that Section 23,
and not Section 24, of Republic Act No. 7916, applied to Toshiba. According to Section 23 of
Republic Act No. 7916
SECTION 23. Fiscal Incentives. Business establishments operating within the ECOZONES shall be
entitled to the fiscal incentives as provided for under Presidential Decree No. 66, the law creating the
Export Processing Zone Authority, or those provided under Book VI of Executive Order No. 226,
otherwise known as the Omnibus Investment Code of 1987.chanroblesvirtua|awlibary
Furthermore, tax credits for exporters using local materials as inputs shall enjoy the benefits provided
for in the Export Development Act of 1994.chanroblesvirtua|awlibary
Among the fiscal incentives granted to PEZA-registered enterprises by the Omnibus Investments Code
of 1987 was the income tax holiday, to wit
Art. 39. Incentives to Registered Enterprises. All registered enterprises shall be granted the following
incentives to the extent engaged in a preferred area of investment:
cralaw(a) Income Tax Holiday.
cralaw(1) For six (6) years from commercial operation for pioneer firms and four (4) years for non-
pioneer firms, new registered firms shall be fully exempt from income taxes levied by the national
government. Subject to such guidelines as may be prescribed by the Board, the income tax exemption
will be extended for another year in each of the following cases:
cralaw(i) The project meets the prescribed ratio of capital equipment to number of workers set by the
Board;
(ii) Utilization of indigenous raw materials at rates set by the Board;
(iii) The net foreign exchange savings or earnings amount to at least US$500,000.00 annually during
the first three (3) years of operation.
cralawThe preceding paragraph notwithstanding, no registered pioneer firm may avail of this incentive
for a period exceeding eight (8) years.chanroblesvirtua|awlibary
(2) For a period of three (3) years from commercial operation, registered expanding firms shall be
entitled to an exemption from income taxes levied by the National Government proportionate to their
expansion under such terms and conditions as the Board may determine: Provided, however, That
during the period within which this incentive is availed of by the expanding firm it shall not be entitled
to additional deduction for incremental labor expense.chanroblesvirtua|awlibary
(3) The provision of Article 7(14) notwithstanding, registered firms shall not be entitled to any
extension of this incentive.
cralawThe CTA pointed out that Toshiba availed itself of the income tax holiday under the Omnibus
Investments Code of 1987, so Toshiba was exempt only from income tax but not from other taxes such
as VAT. As a result, Toshiba was liable for output VAT on its export sales, but at zero percent (0%)
rate, and entitled to the credit/refund of the input VAT paid on its purchases of goods and services
relative to such zero-rated export sales.chanroblesvirtua|awlibary
Unsatisfied, the CIR filed a Petition for Review29cЃa with the Court of Appeals, docketed as CA-G.R.
SP No. 63047.chanroblesvirtua|awlibary
In its Decision dated August 29, 2002, the Court of Appeals granted the appeal of the CIR, and
reversed and set aside the Decision dated October 16, 2000 and the Resolution dated January 17, 2001
of the CTA. The appellate court ruled that Toshiba was not entitled to the refund of its alleged unused
input VAT payments because it was a tax-exempt entity under Section 24 of Republic Act No. 7916.
As a PEZA-registered corporation, Toshiba was liable for remitting to the national government the five
percent (5%) preferential rate on its gross income earned within the ECOZONE, in lieu of all other
national and local taxes, including VAT.chanroblesvirtua|awlibary
The Court of Appeals further adjudged that the export sales of Toshiba were VAT-exempt, not zero-
rated, transactions. The appellate court found that the Answer filed by the CIR in CTA Case No. 5762
did not contain any admission that the export sales of Toshiba were zero-rated transactions under
Section 100(a)(2)(A) of the Tax Code of 1977, as amended. At the least, what was admitted by the CIR
in said Answer was that the Tax Code provisions cited in the Petition for Review of Toshiba in CTA
Case No. 5762 were correct. As to the Joint Stipulation of Facts and Issues filed by the parties in CTA
Case No. 5762, which stated that Toshiba was subject to zero percent (0%) VAT on its export sales,
the appellate court declared that the CIR signed the said pleading through palpable mistake. This
palpable mistake in the stipulation of facts should not be taken against the CIR, for to do otherwise
would result in suppressing the truth through falsehood. In addition, the State could not be put in
estoppel by the mistakes or errors of its officials or agents.chanroblesvirtua|awlibary
Given that Toshiba was a tax-exempt entity under Republic Act No. 7916, a special law, the Court of
Appeals concluded that the export sales of Toshiba were VAT-exempt transactions under Section
109(q) of the Tax Code of 1997, formerly Section 103(q) of the Tax Code of 1977. Therefore, Toshiba
could not claim refund of its input VAT payments on its domestic purchases of goods and
services.chanroblesvirtua|awlibary
The Court of Appeals decreed at the end of its August 29, 2002 Decision
WHEREFORE, premises considered, the appealed decision of the Court of Tax Appeals in CTA Case
No. 5762, is hereby REVERSED and SET ASIDE, and a new one is hereby rendered finding
[Toshiba], being a tax exempt entity under R.A. No. 7916, not entitled to refund the VAT payments
made in its domestic purchases of goods and services.30cЃa
Toshiba filed a Motion for Reconsideration31cЃa of the aforementioned Decision, anchored on the
following arguments: (a) the CIR never raised as an issue before the CTA that Toshiba was tax-exempt
under Section 24 of Republic Act No. 7916; (b) Section 24 of Republic Act No. 7916, subjecting the
gross income earned by a PEZA-registered enterprise within the ECOZONE to a preferential rate of
five percent (5%), in lieu of all taxes, did not apply to Toshiba, which availed itself of the income tax
holiday under Section 23 of the same statute; (c) the conclusion of the CTA that the export sales of
Toshiba were zero-rated was supported by substantial evidence, other than the admission of the CIR in
the Joint Stipulation of Facts and Issues; and (d) the judgment of the CTA granting the refund of the
input VAT payments was supported by substantial evidence and should not have been set aside by the
Court of Appeals.chanroblesvirtua|awlibary
In a Resolution dated February 19, 2003, the Court of Appeals denied the Motion for Reconsideration
of Toshiba since the arguments presented therein were mere reiterations of those already passed upon
and found to be without merit by the appellate court in its earlier Decision. The Court of Appeals,
however, mentioned that it was incorrect for Toshiba to say that the issue of the applicability of
Section 24 of Republic Act No. 7916 was only raised for the first time on appeal before the appellate
court. The said issue was adequately raised by the CIR in his Motion for Reconsideration before the
CTA, and was even ruled upon by the tax court.
Hence, Toshiba filed the instant Petition for Review with the following assignment of errors
cralaw5.1 THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT
[TOSHIBA], BEING A PEZA-REGISTERED ENTERPRISE, IS EXEMPT FROM VAT UNDER
SECTION 24 OF R.A. 7916, AND FURTHER HOLDING THAT [TOSHIBAS] EXPORT SALES
ARE EXEMPT TRANSACTIONS UNDER SECTION 109 OF THE TAX CODE.chanroblesvirtua|
awlibary
5.2 THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO DISMISS
OUTRIGHT AND GAVE DUE COURSE TO [CIRS] PETITION NOTWITHSTANDING [CIRS]
FAILURE TO ADEQUATELY RAISE IN ISSUE DURING THE TRIAL IN THE COURT OF TAX
APPEALS THE APPLICABILITY OF SECTION 24 OF R.A. 7916 TO [TOSHIBAS] CLAIM FOR
REFUND.chanroblesvirtua|awlibary
5.3 THE HONORABLE COURT OF APPEALS ERRED WHEN [IT] RULED THAT THE COURT
OF TAX APPEALS FINDINGS, WITH REGARD [TOSHIBAS] EXPORT SALES BEING ZERO
RATED SALES FOR VAT PURPOSES, WERE BASED MERELY ON THE ADMISSIONS MADE
BY [CIRS] COUNSEL AND NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.chanroblesvirtua|
awlibary
5.4 THE HONORABLE COURT OF APPEALS ERRED WHEN IT REVERSED THE DECISION
OF THE COURT OF TAX APPEALS GRANTING [TOSHIBAS] CLAIM FOR REFUND[;] 32cЃa
and the following prayer
WHEREFORE, premises considered, Petitioner TOSHIBA INFORMATION EQUIPMENT (PHILS.),
INC. most respectfully prays that the decision and resolution of the Honorable Court of Appeals,
reversing the decision of the CTA in CTA Case No. 5762, be set aside and further prays that a new one
be rendered AFFIRMING AND UPHOLDING the Decision of the CTA promulgated on October 16,
2000 in CTA Case No. 5762.chanroblesvirtua|awlibary
Other reliefs, which the Honorable Court may deem just and equitable under the circumstances, are
likewise prayed for.33cЃa
The Petition is impressed with merit.
The CIR did not timely raise before the CTA the issues on the VAT-exemptions of Toshiba and its
export sales.chanroblesvirtua|awlibary
Upon the failure of the CIR to timely plead and prove before the CTA the defenses or objections that
Toshiba was VAT-exempt under Section 24 of Republic Act No. 7916, and that its export sales were
VAT-exempt transactions under Section 103(q) of the Tax Code of 1977, as amended, the CIR is
deemed to have waived the same.chanroblesvirtua|awlibary
During the pendency of CTA Case No. 5762, the proceedings before the CTA were governed by the
Rules of the Court of Tax Appeals,34cЃa while the Rules of Court were applied suppletorily.35cЃa
Rule 9, Section 1 of the Rules of Court provides:
SECTION 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings
or the evidence on record that the court has no jurisdiction over the subject matter, that there is another
action pending between the same parties for the same cause, or that the action is barred by a prior
judgment or by statute of limitations, the court shall dismiss the claim.chanroblesvirtua|awlibary
The CIR did not argue straight away in his Answer in CTA Case No. 5762 that Toshiba had no right to
the credit/refund of its input VAT payments because the latter was VAT-exempt and its export sales
were VAT-exempt transactions. The Pre-Trial Brief36cЃa of the CIR was equally bereft of such
allegations or arguments. The CIR passed up the opportunity to prove the supposed VAT-exemptions
of Toshiba and its export sales when the CIR chose not to present any evidence at all during the trial
before the CTA.37cЃa He missed another opportunity to present the said issues before the CTA when
he waived the submission of a Memorandum.38cЃa The CIR had waited until the CTA already rendered
its Decision dated October 16, 2000 in CTA Case No. 5762, which granted the claim for credit/refund
of Toshiba, before asserting in his Motion for Reconsideration that Toshiba was VAT-exempt and its
export sales were VAT-exempt transactions.chanroblesvirtua|awlibary
The CIR did not offer any explanation as to why he did not argue the VAT-exemptions of Toshiba and
its export sales before and during the trial held by the CTA, only doing so in his Motion for
Reconsideration of the adverse CTA judgment. Surely, said defenses or objections were already
available to the CIR when the CIR filed his Answer to the Petition for Review of Toshiba in CTA Case
No. 5762.chanroblesvirtua|awlibary
It is axiomatic in pleadings and practice that no new issue in a case can be raised in a pleading which
by due diligence could have been raised in previous pleadings.39cЃa The Court cannot simply grant the
plea of the CIR that the procedural rules be relaxed based on the general averment of the interest of
substantive justice. It should not be forgotten that the first and fundamental concern of the rules of
procedure is to secure a just determination of every action.40cЃa Procedural rules are designed to
facilitate the adjudication of cases. Courts and litigants alike are enjoined to abide strictly by the rules.
While in certain instances, the Court allows a relaxation in the application of the rules, it never intends
to forge a weapon for erring litigants to violate the rules with impunity. The liberal interpretation and
application of rules apply only in proper cases of demonstrable merit and under justifiable causes and
circumstances. While it is true that litigation is not a game of technicalities, it is equally true that every
case must be prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy
administration of justice. Party litigants and their counsel are well advised to abide by, rather than
flaunt, procedural rules for these rules illumine the path of the law and rationalize the pursuit of
justice.41cЃa
The CIR judicially admitted that Toshiba was VAT-registered and its export sales were subject to VAT
at zero percent (0%) rate.chanroblesvirtua|awlibary
More importantly, the arguments of the CIR that Toshiba was VAT-exempt and the latters export sales
were VAT-exempt transactions are inconsistent with the explicit admissions of the CIR in the Joint
Stipulation of Facts and Issues (Joint Stipulation) that Toshiba was a registered VAT entity and that it
was subject to zero percent (0%) VAT on its export sales.chanroblesvirtua|awlibary
The Joint Stipulation was executed and submitted by Toshiba and the CIR upon being advised to do so
by the CTA at the end of the pre-trial conference held on June 23, 1999.42cЃa The approval of the Joint
Stipulation by the CTA, in its Resolution43cЃa dated July 12, 1999, marked the culmination of the pre-
trial process in CTA Case No. 5762.chanroblesvirtua|awlibary
Pre-trial is an answer to the clarion call for the speedy disposition of cases. Although it was
discretionary under the 1940 Rules of Court, it was made mandatory under the 1964 Rules and the
subsequent amendments in 1997. It has been hailed as "the most important procedural innovation in
Anglo-Saxon justice in the nineteenth century."44cЃa
The nature and purpose of a pre-trial have been laid down in Rule 18, Section 2 of the Rules of Court:
SECTION 2. Nature and purpose. The pre-trial is mandatory. The court shall consider:
cralaw(a) The possibility of an amicable settlement or of a submission to alternative modes of dispute
resolution;
(b) The simplification of the issues;
(c) The necessity or desirability of amendments to the pleadings;
(d) The possibility of obtaining stipulations or admissions of facts and of documents to avoid
unnecessary proof;
(e) The limitation of the number of witnesses;
(f) The advisability of a preliminary reference of issues to a commissioner;
(g) The propriety of rendering judgment on the pleadings, or summary judgment, or of dismissing the
action should a valid ground therefor be found to exist;
(h) The advisability or necessity of suspending the proceedings; and
(i) Such other matters as may aid in the prompt disposition of the action. (Emphasis ours.)
cralawThe admission having been made in a stipulation of facts at pre-trial by the parties, it must be
treated as a judicial admission.45cЃa Under Section 4, Rule 129 of the Rules of Court, a judicial
admission requires no proof. The admission may be contradicted only by a showing that it was made
through palpable mistake or that no such admission was made. The Court cannot lightly set aside a
judicial admission especially when the opposing party relied upon the same and accordingly dispensed
with further proof of the fact already admitted. An admission made by a party in the course of the
proceedings does not require proof.46cЃa
In the instant case, among the facts expressly admitted by the CIR and Toshiba in their CTA-approved
Joint Stipulation are that Toshiba "is a duly registered value-added tax entity in accordance with
Section 107 of the Tax Code, as amended[,]"47cЃa that "is subject to zero percent (0%) value-added tax
on its export sales in accordance with then Section 100(a)(2)(A) of the Tax Code, as
amended."48cЃa The CIR was bound by these admissions, which he could not eventually contradict in
his Motion for Reconsideration of the CTA Decision dated October 16, 2000, by arguing that Toshiba
was actually a VAT-exempt entity and its export sales were VAT-exempt transactions. Obviously,
Toshiba could not have been subject to VAT and exempt from VAT at the same time. Similarly, the
export sales of Toshiba could not have been subject to zero percent (0%) VAT and exempt from VAT
as well.chanroblesvirtua|awlibary
The CIR cannot escape the binding effect of his judicial admissions.chanroblesvirtua|awlibary
The Court disagrees with the Court of Appeals when it ruled in its Decision dated August 29, 2002 that
the CIR could not be bound by his admissions in the Joint Stipulation because (1) the said admissions
were "made through palpable mistake"49cЃa which, if countenanced, "would result in falsehood,
unfairness and injustice";50cЃa and (2) the State could not be put in estoppel by the mistakes of its
officials or agents. This ruling of the Court of Appeals is rooted in its conclusion that a "palpable
mistake" had been committed by the CIR in the signing of the Joint Stipulation. However, this Court
finds no evidence of the commission of a mistake, much more, of a palpable one.chanroblesvirtua|
awlibary
The CIR does not deny that his counsel, Atty. Joselito F. Biazon, Revenue Attorney II of the BIR,
signed the Joint Stipulation, together with the counsel of Toshiba, Atty. Patricia B. Bisda. Considering
the presumption of regularity in the performance of official duty,51cЃa Atty. Biazon is presumed to
have read, studied, and understood the contents of the Joint Stipulation before he signed the same. It
rests on the CIR to present evidence to the contrary.chanroblesvirtua|awlibary
Yet, the Court observes that the CIR himself never alleged in his Motion for Reconsideration of the
CTA Decision dated October 16, 2000, nor in his Petition for Review before the Court of Appeals, that
Atty. Biazon committed a mistake in signing the Joint Stipulation. Since the CIR did not make such an
allegation, neither did he present any proof in support thereof. The CIR began to aver the existence of a
palpable mistake only after the Court of Appeals made such a declaration in its Decision dated August
29, 2002.chanroblesvirtua|awlibary
Despite the absence of allegation and evidence by the CIR, the Court of Appeals, on its own,
concluded that the admissions of the CIR in the Joint Stipulation were due to a palpable mistake based
on the following deduction
Scrutinizing the Answer filed by [the CIR], we rule that the Joint Stipulation of Facts and Issues signed
by [the CIR] was made through palpable mistake. Quoting paragraph 4 of its Answer, [the CIR] states:
"4. He ADMITS the allegations contained in paragraph 5 of the petition only insofar as the cited
provisions of Tax Code is concerned, but SPECIFICALLY DENIES the rest of the allegations therein
for being mere opinions, arguments or gratuitous assertions on the part of [Toshiba] and/or because
they are mere erroneous conclusions or interpretations of the quoted law involved, the truth of the
matter being those stated hereunder
x x x xcra|aw"
And paragraph 5 of the petition for review filed by [Toshiba] before the CTA states:
"5. Petitioner is subject to zero percent (0%) value-added tax on its export sales in accordance with
then Section 100(a)(2)(A) of the Tax Code x x x.chanroblesvirtua|awlibary
x x x xcra|aw"
As we see it, nothing in said Answer did [the CIR] admit that the export sales of [Toshiba] were indeed
zero-rated transactions. At the least, what was admitted only by [the CIR] concerning paragraph 4 of
his Answer, is the fact that the provisions of the Tax Code, as cited by [Toshiba] in its petition for
review filed before the CTA were correct.52cЃa
The Court of Appeals provided no explanation as to why the admissions of the CIR in his Answer in
CTA Case No. 5762 deserved more weight and credence than those he made in the Joint Stipulation.
The appellate court failed to appreciate that the CIR, through counsel, Atty. Biazon, also signed the
Joint Stipulation; and that absent evidence to the contrary, Atty. Biazon is presumed to have signed the
Joint Stipulation willingly and knowingly, in the regular performance of his official duties.
Additionally, the Joint Stipulation53cЃa of Toshiba and the CIR was a more recent pleading than the
Answer54cЃa of the CIR. It was submitted by the parties after the pre-trial conference held by the CTA,
and subsequently approved by the tax court. If there was any discrepancy between the admissions of
the CIR in his Answer and in the Joint Stipulation, the more logical and reasonable explanation would
be that the CIR changed his mind or conceded some points to Toshiba during the pre-trial conference
which immediately preceded the execution of the Joint Stipulation. To automatically construe that the
discrepancy was the result of a palpable mistake is a wide leap which this Court is not prepared to take
without substantial basis.chanroblesvirtua|awlibary
The judicial admissions of the CIR in the Joint Stipulation are not intrinsically false, wrong, or illegal,
and are consistent with the ruling on the VAT treatment of PEZA-registered enterprises in the previous
Toshiba case.chanroblesvirtua|awlibary
There is no basis for believing that to bind the CIR to his judicial admissions in the Joint Stipulation
that Toshiba was a VAT-registered entity and its export sales were zero-rated VAT transactions would
result in "falsehood, unfairness and injustice." The judicial admissions of the CIR are not intrinsically
false, wrong, or illegal. On the contrary, they are consistent with the ruling of this Court in a previous
case involving the same parties, Commissioner of Internal Revenue v. Toshiba Information Equipment
(Phils.) Inc.55cЃa (Toshiba case), explaining the VAT treatment of PEZA-registered
enterprises.chanroblesvirtua|awlibary
In the Toshiba case, Toshiba sought the refund of its unutilized input VAT on its purchase of capital
goods and services for the first and second quarters of 1996, based on Section 106(b) of the Tax Code
of 1977, as amended.56cЃa In the Petition at bar, Toshiba is claiming refund of its unutilized input VAT
on its local purchase of goods and services which are attributable to its export sales for the first and
second quarters of 1997, pursuant to Section 106(a), in relation to Section 100(a)(1)(A)(i) of the Tax
Code of 1977, as amended, which read
SEC. 106. Refunds or tax credits of creditable input tax. (a) Any VAT-registered person, whose sales
are zero-rated or effectively zero-rated, may, within two (2) years after the close of the taxable quarter
when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input
tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax
has not been applied against output tax: Provided, however, That in the case of zero-rated sales under
Section 100(a)(2)(A)(i),(ii) and (b) and Section 102(b)(1) and (2), the acceptable foreign currency
exchange proceeds thereof has been duly accounted for in accordance with the regulations of the
Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated
or effectively zero-rated sale and also in taxable or exempt sale of goods or properties of services, and
the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of
the transactions, it shall be allocated proportionately on the basis of the volume sales.chanroblesvirtua|
awlibary
SEC. 100. Value-added tax on sale of goods or properties. (a) Rate and base of tax. x x x
cralawx x x x
(2) The following sales by VAT-registered persons shall be subject to 0%:
(A) Export sales. The term "export sales" means:
(i) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any
shipping arrangement that may be agreed upon which may influence or determine the transfer of
ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in
goods or services, and accounted for in accordance with the rules and regulations of the Bangko
Sentral ng Pilipnas (BSP).
cralawDespite the difference in the legal bases for the claims for credit/refund in the Toshiba case and
the case at bar, the CIR raised the very same defense or objection in both that Toshiba and its
transactions were VAT-exempt. Hence, the ruling of the Court in the former case is relevant to the
present case.chanroblesvirtua|awlibary
At the outset, the Court establishes that there is a basic distinction in the VAT-exemption of a person
and the VAT-exemption of a transaction
It would seem that petitioner CIR failed to differentiate between VAT-exempt transactions from VAT-
exempt entities. In the case of Commissioner of Internal Revenue v. Seagate Technology (Philippines),
this Court already made such distinction
An exempt transaction, on the one hand, involves goods or services which, by their nature, are
specifically listed in and expressly exempted from the VAT under the Tax Code, without regard to the
tax status VAT-exempt or not of the party to the transaction
An exempt party, on the other hand, is a person or entity granted VAT exemption under the Tax Code,
a special law or an international agreement to which the Philippines is a signatory, and by virtue of
which its taxable transactions become exempt from VAT x x x.57cЃa
In effect, the CIR is opposing the claim for credit/refund of input VAT of Toshiba on two grounds: (1)
that Toshiba was a VAT-exempt entity; and (2) that its export sales were VAT-exempt
transactions.chanroblesvirtua|awlibary
It is now a settled rule that based on the Cross Border Doctrine, PEZA-registered enterprises, such as
Toshiba, are VAT-exempt and no VAT can be passed on to them. The Court explained in the Toshiba
case that
PEZA-registered enterprise, which would necessarily be located within ECOZONES, are VAT-exempt
entities, not because of Section 24 of Rep. Act No. 7916, as amended, which imposes the five percent
(5%) preferential tax rate on gross income of PEZA-registered enterprises, in lieu of all taxes; but,
rather, because of Section 8 of the same statute which establishes the fiction that ECOZONES are
foreign territory.chanroblesvirtua|awlibary
xxxx
The Philippine VAT system adheres to the Cross Border Doctrine, according to which, no VAT shall
be imposed to form part of the cost of goods destined for consumption outside of the territorial border
of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign
country must be free of VAT; while, those destined for use or consumption within the Philippines shall
be imposed with ten percent (10%) VAT.chanroblesvirtua|awlibary
Applying said doctrine to the sale of goods, properties, and services to and from the ECOZONES, the
BIR issued Revenue Memorandum Circular (RMC) No. 74-99, on 15 October 1999. Of particular
interest to the present Petition is Section 3 thereof, which reads
SECTION 3. Tax Treatment of Sales Made by a VAT Registered Supplier from the Customs Territory,
to a PEZA Registered Enterprise.
cralaw(1) If the Buyer is a PEZA registered enterprise which is subject to the 5% special tax regime, in
lieu of all taxes, except real property tax, pursuant to R.A. No. 7916, as amended:
cralaw(a) Sale of goods (i.e., merchandise). This shall be treated as indirect export hence, considered
subject to zero percent (0%) VAT, pursuant to Sec. 106(A)(2)(a)(5), NIRC and Sec. 23 of R.A. No.
7916, in relation to ART. 77(2) of the Omnibus Investments Code.chanroblesvirtua|awlibary
(b) Sale of service. This shall be treated subject to zero percent (0%) VAT under the "cross border
doctrine" of the VAT System, pursuant to VAT Ruling No. 032-98 dated Nov. 5, 1998.
cralaw(2) If Buyer is a PEZA registered enterprise which is not embraced by the 5% special tax
regime, hence, subject to taxes under the NIRC, e.g., Service Establishments which are subject to taxes
under the NIRC rather than the 5% special tax regime:
cralaw(a) Sale of goods (i.e., merchandise). This shall be treated as indirect export hence, considered
subject to zero percent (0%) VAT, pursuant to Sec. 106(A)(2)(a)(5), NIRC and Sec. 23 of R.A. No.
7916 in relation to ART. 77(2) of the Omnibus Investments Code.chanroblesvirtua|awlibary
(b) Sale of Service. This shall be treated subject to zero percent (0%) VAT under the "cross border
doctrine" of the VAT System, pursuant to VAT Ruling No. 032-98 dated Nov. 5, 1998.
cralaw(3) In the final analysis, any sale of goods, property or services made by a VAT registered
supplier from the Customs Territory to any registered enterprise operating in the ecozone, regardless of
the class or type of the latters PEZA registration, is actually qualified and thus legally entitled to the
zero percent (0%) VAT. Accordingly, all sales of goods or property to such enterprise made by a VAT
registered supplier from the Customs Territory shall be treated subject to 0% VAT, pursuant to Sec.
106(A)(2)(a)(5), NIRC, in relation to ART. 77(2) of the Omnibus Investments Code, while all sales of
services to the said enterprises, made by VAT registered suppliers from the Customs Territory, shall be
treated effectively subject to the 0% VAT, pursuant to Section 108(B)(3), NIRC, in relation to the
provisions of R.A. No. 7916 and the "Cross Border Doctrine" of the VAT system.
cralawThis Circular shall serve as a sufficient basis to entitle such supplier of goods, property or
services to the benefit of the zero percent (0%) VAT for sales made to the aforementioned ECOZONE
enterprises and shall serve as sufficient compliance to the requirement for prior approval of zero-rating
imposed by Revenue Regulations No. 7-95 effective as of the date of the issuance of this
Circular.chanroblesvirtua|awlibary
Indubitably, no output VAT may be passed on to an ECOZONE enterprise since it is a VAT-exempt
entity. x x x.58cЃa
The Court, nevertheless, noted in the Toshiba case that the rule which considers any sale by a supplier
from the Customs Territory to a PEZA-registered enterprise as export sale, which should not be
burdened by output VAT, was only clearly established on October 15, 1999, upon the issuance by the
BIR of RMC No. 74-99. Prior to October 15, 1999, whether a PEZA-registered enterprise was exempt
or subject to VAT depended on the type of fiscal incentives availed of by the said enterprise. 59cЃa The
old rule, then followed by the BIR, and recognized and affirmed by the CTA, the Court of Appeals,
and this Court, was described as follows
According to the old rule, Section 23 of Rep. Act No. 7916, as amended, gives the PEZA-registered
enterprise the option to choose between two sets of fiscal incentives: (a) The five percent (5%)
preferential tax rate on its gross income under Rep. Act No. 7916, as amended; and (b) the income tax
holiday provided under Executive Order No. 226, otherwise known as the Omnibus Investment Code
of 1987, as amended.chanroblesvirtua|awlibary
The five percent (5%) preferential tax rate on gross income under Rep. Act No. 7916, as amended, is in
lieu of all taxes. Except for real property taxes, no other national or local tax may be imposed on a
PEZA-registered enterprise availing of this particular fiscal incentive, not even an indirect tax like
VAT.chanroblesvirtua|awlibary
Alternatively, Book VI of Exec. Order No. 226, as amended, grants income tax holiday to registered
pioneer and non-pioneer enterprises for six-year and four-year periods, respectively. Those availing of
this incentive are exempt only from income tax, but shall be subject to all other taxes, including the ten
percent (10%) VAT.chanroblesvirtua|awlibary
This old rule clearly did not take into consideration the Cross Border Doctrine essential to the VAT
system or the fiction of the ECOZONE as a foreign territory. It relied totally on the choice of fiscal
incentives of the PEZA-registered enterprise. Again, for emphasis, the old VAT rule for PEZA-
registered enterprises was based on their choice of fiscal incentives: (1) If the PEZA-registered
enterprise chose the five percent (5%) preferential tax on its gross income, in lieu of all taxes, as
provided by Rep. Act No. 7916, as amended, then it would be VAT-exempt; (2) If the PEZA-
registered enterprise availed of the income tax holiday under Exec. Order No. 226, as amended, it shall
be subject to VAT at ten percent (10%). Such distinction was abolished by RMC No. 74-99, which
categorically declared that all sales of goods, properties, and services made by a VAT-registered
supplier from the Customs Territory to an ECOZONE enterprise shall be subject to VAT, at zero
percent (0%) rate, regardless of the latters type or class of PEZA registration; and, thus, affirming the
nature of a PEZA-registered or an ECOZONE enterprise as a VAT-exempt entity.60cЃa
To recall, Toshiba is herein claiming the refund of unutilized input VAT payments on its local
purchases of goods and services attributable to its export sales for the first and second quarters of 1997.
Such export sales took place before October 15, 1999, when the old rule on the VAT treatment of
PEZA-registered enterprises still applied. Under this old rule, it was not only possible, but even
acceptable, for Toshiba, availing itself of the income tax holiday option under Section 23 of Republic
Act No. 7916, in relation to Section 39 of the Omnibus Investments Code of 1987, to be subject to
VAT, both indirectly (as purchaser to whom the seller shifts the VAT burden) and directly (as seller
whose sales were subject to VAT, either at ten percent [10%] or zero percent [0%]).chanroblesvirtua|
awlibary
A VAT-registered seller of goods and/or services who made zero-rated sales can claim tax credit or
refund of the input VAT paid on its purchases of goods, properties, or services relative to such zero-
rated sales, in accordance with Section 4.102-2 of Revenue Regulations No. 7-95, which provides
Sec. 4.102-2. Zero-rating. (a) In general. - A zero-rated sale by a VAT-registered person, which is a
taxable transaction for VAT purposes, shall not result in any output tax. However, the input tax on his
purchases of goods, properties or services related to such zero-rated sale shall be available as tax credit
or refund in accordance with these regulations.chanroblesvirtua|awlibary
The BIR, as late as July 15, 2003, when it issued RMC No. 42-2003, accepted applications for
credit/refund of input VAT on purchases prior to RMC No. 74-99, filed by PEZA-registered
enterprises which availed themselves of the income tax holiday. The BIR answered Question Q-5(1) of
RMC No. 42-2003 in this wise
Q-5: Under Revenue Memorandum Circular (RMC) No. 74-99, purchases by PEZA-registered firms
automatically qualify as zero-rated without seeking prior approval from the BIR effective October
1999.
cralaw1) Will the OSS-DOF Center still accept applications from PEZA-registered claimants who
were allegedly billed VAT by their suppliers before and during the effectivity of the RMC by issuing
VAT invoices/receipts?
xxxx
cralawA-5(1): If the PEZA-registered enterprise is paying the 5% preferential tax in lieu of all other
taxes, the said PEZA-registered taxpayer cannot claim TCC or refund for the VAT paid on purchases.
However, if the taxpayer is availing of the income tax holiday, it can claim VAT credit provided:
cralawa. The taxpayer-claimant is VAT-registered;
b. Purchases are evidenced by VAT invoices or receipts, whichever is applicable, with shifted VAT to
the purchaser prior to the implementation of RMC No. 74-99; and
c. The supplier issues a sworn statement under penalties of perjury that it shifted the VAT and declared
the sales to the PEZA-registered purchaser as taxable sales in its VAT returns.
cralawFor invoices/receipts issued upon the effectivity of RMC No. 74-99, the claims for input VAT
by PEZA-registered companies, regardless of the type or class of PEZA-registration, should be denied.
(Emphases ours.)
Consequently, the CIR cannot herein insist that all PEZA-registered enterprises are VAT-exempt in
every instance. RMC No. 42-2003 contains an express acknowledgement by the BIR that prior to RMC
No. 74-99, there were PEZA-registered enterprises liable for VAT and entitled to credit/refund of input
VAT paid under certain conditions.chanroblesvirtua|awlibary
This Court already rejected in the Toshiba case the argument that sale transactions of a PEZA-
registered enterprise were VAT-exempt under Section 103(q) of the Tax Code of 1977, as amended,
ratiocinating that
Section 103(q) of the Tax Code of 1977, as amended, relied upon by petitioner CIR, relates to VAT-
exempt transactions. These are transactions exempted from VAT by special laws or international
agreements to which the Philippines is a signatory. Since such transactions are not subject to VAT, the
sellers cannot pass on any output VAT to the purchasers of goods, properties, or services, and they
may not claim tax credit/refund of the input VAT they had paid thereon.chanroblesvirtua|awlibary
Section 103(q) of the Tax Code of 1977, as amended, cannot apply to transactions of respondent
Toshiba because although the said section recognizes that transactions covered by special laws may be
exempt from VAT, the very same section provides that those falling under Presidential Decree No. 66
are not. Presidential Decree No. 66, creating the Export Processing Zone Authority (EPZA), is the
precursor of Rep. Act No. 7916, as amended, under which the EPZA evolved into the PEZA.
Consequently, the exception of Presidential Decree No. 66 from Section 103(q) of the Tax Code of
1977, as amended, extends likewise to Rep. Act No. 7916, as amended.61cЃa (Emphasis ours.)
In light of the judicial admissions of Toshiba, the CTA correctly confined itself to the other factual
issues submitted for resolution by the parties.chanroblesvirtua|awlibary
In accord with the admitted facts that Toshiba was a VAT-registered entity and that its export sales
were zero-rated transactions the stated issues in the Joint Stipulation were limited to other factual
matters, particularly, on the compliance by Toshiba with the rest of the requirements for credit/refund
of input VAT on zero-rated transactions. Thus, during trial, Toshiba concentrated on presenting
evidence to establish that it incurred P3,875,139.65 of input VAT for the first and second quarters of
1997 which were directly attributable to its export sales; that said amount of input VAT were not
carried over to the succeeding quarters; that said amount of input VAT has not been applied or offset
against any output VAT liability; and that said amount of input VAT was properly substantiated by
official receipts and invoices.chanroblesvirtua|awlibary
After what truly appears to be an exhaustive review of the evidence presented by Toshiba, the CTA
made the following findings
cralaw(1) The amended quarterly VAT returns of Toshiba for 1997 showed that it made no other sales,
except zero-rated export sales, for the entire year, in the sum of P2,083,305,000.00 for the first quarter
and P5,411,372,000.00 for the second quarter. That being the case, all input VAT allegedly incurred by
Toshiba for the first two quarters of 1997, in the amount of P3,875,139.65, was directly attributable to
its zero-rated sales for the same period.chanroblesvirtua|awlibary
(2) Toshiba did carry-over the P3,875,139.65 input VAT it reportedly incurred during the first two
quarters of 1997 to succeeding quarters, until the first quarter of 1999. Despite the carry-over of the
subject input VAT of P3,875,139.65, the claim of Toshiba was not affected because it later on
deducted the said amount as "VAT Refund/TCC Claimed" from its total available input VAT
of P6,841,468.17 for the first quarter of 1999.chanroblesvirtua|awlibary
(3) Still, the CTA could not allow the credit/refund of the total input VAT of P3,875,139.65 being
claimed by Toshiba because not all of said amount was actually incurred by the company and duly
substantiated by invoices and official receipts. From the P3,875,139.65 claim, the CTA deducted the
amounts of (a) P189,692.92, which was in excess of the P3,685,446.23 input VAT Toshiba originally
claimed in its application for credit/refund filed with the DOF One-Stop Shop; (b) P396,882.58, which
SGV & Co., the commissioned CPA, disallowed for being improperly substantiated, i.e., supported
only by provisional acknowledgement receipts, or by documents other than official receipts, or not
supported by TIN or TIN VAT or by any document at all; (c) P1,887,545.65, which the CTA itself
verified as not being substantiated in accordance with Section 4.104-562cЃa of Revenue Regulations
No. 7-95, in relation to Sections 10863cЃa and 23864cЃa of the Tax Code of 1977, as amended; and
(d) P15,736.42, which Toshiba already applied to its output VAT liability for the fourth quarter of
1998.chanroblesvirtua|awlibary
(4) Ultimately, Toshiba was entitled to the credit/refund of unutilized input VAT payments attributable
to its zero-rated sales in the amounts of P1,158,016.82 and P227,265.26, for the first and second
quarters of 1997, respectively, or in the total amount of P1,385,282.08.
cralawSince the aforementioned findings of fact of the CTA are borne by substantial evidence on
record, unrefuted by the CIR, and untouched by the Court of Appeals, they are given utmost respect by
this Court.chanroblesvirtua|awlibary
The Court will not lightly set aside the conclusions reached by the CTA which, by the very nature of
its functions, is dedicated exclusively to the resolution of tax problems and has accordingly developed
an expertise on the subject unless there has been an abuse or improvident exercise of authority.65cЃa In
Barcelon, Roxas Securities, Inc. (now known as UBP Securities, Inc.) v. Commissioner of Internal
Revenue,66cЃa this Court more explicitly pronounced
Jurisprudence has consistently shown that this Court accords the findings of fact by the CTA with the
highest respect. In Sea-Land Service Inc. v. Court of Appeals G.R. No. 122605, 30 April 2001, 357
SCRA 441, 445-446], this Court recognizes that the Court of Tax Appeals, which by the very nature of
its function is dedicated exclusively to the consideration of tax problems, has necessarily developed an
expertise on the subject, and its conclusions will not be overturned unless there has been an abuse or
improvident exercise of authority. Such findings can only be disturbed on appeal if they are not
supported by substantial evidence or there is a showing of gross error or abuse on the part of the Tax
Court. In the absence of any clear and convincing proof to the contrary, this Court must presume that
the CTA rendered a decision which is valid in every respect.chanroblesvirtua|awlibary
WHEREFORE, the assailed Decision dated August 29, 2002 and the Resolution dated February 19,
2003 of the Court of Appeals in CA-G.R. SP No. 63047 are REVERSED and SET ASIDE, and the
Decision dated October 16, 2000 of the Court of Tax Appeals in CTA Case No. 5762 is
REINSTATED. Respondent Commissioner of Internal Revenue is ORDERED to REFUND or, in the
alternative, to ISSUE a TAX CREDIT CERTIFICATE in favor of petitioner Toshiba Information
Equipment (Phils.), Inc. in the amount of P1,385,282.08, representing the latters unutilized input VAT
payments for the first and second quarters of 1997. No pronouncement as to costs.
SO ORDERED.
G.R. No. 218902, October 17, 2016
HELEN EDITH LEE TAN, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
PEREZ, J.:
Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court are the
Decision1 and the Resolution2 dated 7 November 2013 and 30 June 2015, respectively, of the
Sandiganbayan in Criminal Case No. 25674. The questioned Decision found herein petitioner Helen
Edith Lee Tan (Tan), President/Proprietor of International Builders Corporation (IBC), 3 together with
her co-accused therein, namely: Rene Mondejar (Mondejar), Municipal Mayor; Francisco Tolentino
(Tolentino), Sangguniang Bayan Secretary; Ildefonso Espejo (Espejo), Sangguniang Bayan Member;
Margarita Gumapas (Gumapas), Sangguniang Bayan Member; Manuel Piolo (Piolo), Sangguniang
Bayan Member; and Roberto Velasco (Velasco), Sangguniang Bayan Member; all of Maasin, Iloilo
City, guilty beyond reasonable doubt of Violation of Section 3(e) of Republic Act (R.A.) No. 3019,4 as
amended. Each of them was meted with the penalty of imprisonment of six (6) years and one (1)
month, as minimum, to 10 years, as maximum, as well as perpetual disqualification to hold public
office.5 The questioned Resolution, on the other hand, denied for lack of merit the separate Motions for
Reconsideration of petitioner and Mondejar, as well as the joint Motion for Reconsideration of
Tolentino, Gumapas, Velasco and Espejo.6
The antecedents of this case are:cralawlawlibrary
To protect Barangay Naslo in Maasin, Iloilo City, from the dangers posed by the Tigum River, which
usually overflows during the rainy season, its Sangguniang Barangay enacted on 16 June 1996
Resolution No. 97 requesting the IBC to rechannel the path of the Tigum River and, after the temporary
river control is replenished, to extract whatever surplus of sand and gravel supply, as payment for its
services.8 A day after, or on 17 June 1996, the Municipal Development Council (MDC) of Maasin,
Iloilo City, adopted a similar resolution, i.e., Resolution No. 9,9 also requesting the IBC to perform the
rechanneling of the Tigum River path because it has the necessary equipment for that kind of work, as
well as the Department of Environment and Natural Resources (DENR) to issue the Environmental
Clearance Certificate (ECC) in connection with the implementation of the project.10 With these in
view, the Sangguniang Bayan of Maasin, Iloilo City, enacted on 21 June 1996 the questioned (1)
Resolution No. 30-A11 strongly endorsing the resolutions of Barangay Naslo and MDC; and (2)
Resolution No. 30-B12 authorizing Mondejar to exercise his emergency powers to negotiate with the
IBC for the rechanneling of the Tigum River path.13
On 27 June 1996, pursuant to the aforesaid Sangguniang Bayan resolutions, the Municipality of
Maasin, Iloilo City, through Mondejar, entered into a Memorandum of Agreement (MOA)14 with the
IBC, through petitioner Tan, for the rechanneling of the Tigum River path. Per the said MOA, the
parties agreed that the IBC will do the rechanneling for no monetary considerations whatsoever, except
that it can get the surplus supply of sand and gravel taken out therefrom after the necessary dike has
been established, as what has been provided for in the alleged Resolution No. 30-A, on account of
financial constraints since the municipality has already exhausted all its resources due to a series of
calamities.15
Soon thereafter, Criminal Complaints for Falsification under Article 171 of the Revised Penal Code
(RPC) and for Violation of Section 3(e) of R.A. 3019 were filed before the Office of the Ombudsman-
Visayas (OMB-Visayas) against the local officials involved in the project of rechanneling the Tigum
River path, including petitioner Tan.16 The case was docketed as OMB-VIS-CRIM-98-0372.
The alleged Falsification was committed by Mondejar, Arnaldo Partisala (Partisala), 17 Tolentino,
Espejo, Gumapas, Piolo, and Velasco when they made it appear in the Minutes of the Regular Session
of the Sangguniang Bayan of Maasin, Iloilo City, held on 21 June 1996, that Resolution No. 30-A and
Resolution No. 30-B were deliberated, approved and/or enacted by the Sangguniang Bayan on the said
date. Allegedly, no such resolutions were passed and/or enacted by the said body on that date. It was
argued that this was done to give Mondejar legal basis or authority to enter into a MOA with the IBC,
through petitioner Tan, for the supposed rechanneling of the Tigum River path. In reality, however,
such MOA is a grant of an authority for the IBC to engage into massive quarrying activities in the area
even without the required permit. As the argument ran, all the local officials involved in the project of
rechanneling the Tigum River path, in conspiracy with petitioner Tan, indubitably committed also a
Violation of Section 3(e) of R.A. 3019 inasmuch as they gave unwarranted benefits, advantage and
displayed manifest partiality in favor of the IBC. They entered into a contract that is grossly
disadvantageous to the government, particularly to the Municipality of Maasin, Iloilo City, as it has
been deprived of the revenues, which could have been collected from the IBC out of the hauling
activities of the latter for sand and gravel if there was no such MOA. 18
On 31 May 1999, the OMB-Visayas, through Special Prosecution Officer II Raul V. Cristoria, issued a
Resolution19 recommending the (1) dismissal of the charge against the local officials involved in the
project of rechanneling the Tigum River path, except for Mondejar, Partisala, Tolentino, Espejo,
Gumapas, Piolo and Velasco, for insufficiency of evidence; (2) filing of separate Informations for
Falsification under Article 171 of the RPC and for Violation of Section 3(e) of R.A. 3019 against the
afore-named public officials before the Sandiganbayan; and (3) inclusion of petitioner Tan as one of
the accused in the Information for Violation of Section 3(e) of R.A. 3019.20
Upon review, the OMB, through Graft Investigation Officer II Julita M. Calderon, issued a
Memorandum dated 16 September 199921 approving the Resolution dated 31 May 1999 of the OMB-
Visayas, thus, approving the filing of the Informations against the mentioned individuals. The said
OMB Memorandum was later approved by the Acting Ombudsman Margarito P. Gervacio, Jr. on 17
September 1999.22
Accordingly, two separate Informations were filed against Mondejar, Partisala, Tolentino, Espejo,
Gumapas, Piolo and Velasco, before the Sandiganbayan, to wit: (1) for Violation of Section 3(e) of
R.A. 3019 docketed as Criminal Case No. 25674, 23where petitioner Tan was included as one of
the accused; and (2) for Falsification under Article 171 of the RPC docketed as Criminal Case No.
25675.24
The Information docketed as Criminal Case No. 25674 charging Mondejar, Partisala, Tolentino,
Espejo, Gumapas, Piolo, Velasco and petitioner Tan with Violation of Section 3(e) of R.A. 3019, by
giving the latter unwarranted benefits, advantage and preference, to the damage and prejudice of the
government, reads:chanRoblesvirtualLawlibrary
That on or about the 27th day of June 1996, and for sometime prior or subsequent thereto, in the
Municipality of Maasin, Province of Iloilo, Philippines and within the jurisdiction of this Honorable
Court, above-named accused [Mondejar, Partisala, Tolentino, Espejo, Gumapas, Piolo and Velasco],
public officers, having been duly elected, appointed and qualified to such public positions above-
mentioned, in such capacity and committing the offense in relation to Office, and while in the
performance of their official functions, conniving, confederating and mutually helping with each
other and with [herein petitioner Tan], a private individual and President/Proprietor of [IBC]
Iloilo City with deliberate intent, with manifest partiality and evident bad faith, did then and
there willfully, unlawfully and feloniously make it appear that Resolution No. 30-B, series of
1996, was validly enacted by the Sangguniang Bayan of Maasin, Iloilo, authorizing Mayor
[Mondejar] to exercise his emergency powers as in fact accused [Mondejar], entered into a
[MOA] with [petitioner Tan] of IBC authorizing the said IBC to engage in massive quarrying in
the guise of rechan[n]eling the Tigum River in Maasin, Iloilo, thus accused in the performance of
their official functions had given unwarranted benefits, advantage and preference to [petitioner
Tan] and themselves, to the damage and prejudice of the government, particularly the Municipality of
Maasin.
CONTRARY TO LAW.25 (Emphasis and italics supplied)
chanrobleslaw
Criminal Case No. 25674 and Criminal Case No. 2567526 were eventually consolidated.
Upon arraignment, petitioner Tan and her co-accused in Criminal Case No. 25674, except for Partisala,
who still remains at large, pleaded NOT GUILTY to the charge.27 The parties then entered into a Joint
Stipulation of Facts, which states, among others:chanRoblesvirtualLawlibrary
1. That at the time material in the Information, accused were public officials holding
the following official positions in the government:cralawlawlibrary
a. [MONDEJAR] - Municipal Mayor, Maasin, Iloilo;
b. [TOLENTINO] - S. B. Member, Maasin, Iloilo;
c. [ESPEJO] - S. B. Member, Maasin, Iloilo;
d. [GUMAPAS] - S. B. Member, Maasin, Iloilo;
e. [PIOLO] - S. B. Member, Maasin, Iloilo;
f. [VELASCO] - S. B. Member, Maasin, Iloilo;ChanRoblesVirtualawlibrary
While [herein petitioner Tan] was the President of [IBC].
2. That on 27 June 1996 a [MOA] was entered into between the Municipality of
Maasin, Iloilo represented by Mayor [Mondejar] as the First Party and [IBC]
 represented by [petitioner Tan] as the Second Party, for the Rechanneling of the
Tigum River path at Barangay Naslo, Maasin, Iloilo.
3. That Resolution No. 9 Series of 1996 was passed by Barangay Naslo, Maasin, Iloilo,
relative to the rechanneling of the Tigum River Path at Barangay Naslo.
4. That Resolution No. 9 was also passed by the Members of the [MDC] of Maasin,
Iloilo endorsing the rechanneling of the said River Path.28 (Emphasis and
underscoring supplied.)
xxx         xxx         xxx
chanrobleslaw
Thereafter, the Sandiganbayan jointly tried Criminal Case No. 25674 and Criminal Case No. 25675.
The prosecution presented eight witnesses, namely, Jose S. Navarra (Navarra), 29 Imelda Maderada
(Maderada),30 Soledad R. Sucaldito (Sucaldito),31 Rogelio T. Trinidad (Trinidad),32 Elisa L. Trojillo
(Trojillo),33 Darell A. Cabanero (Cabanero),34 Dr. Vicente Albacete (Dr. Albacete)35 and Ernie Jesus
Lee Malaga (Malaga).36 All together, their testimonies tend to establish that (1) the accused public
officials falsified the Minutes of the Regular Session of the Sangguniang Bayan of Maasin, Iloilo City,
held on 21 June 1996 by making it appear that the body enacted on that date Resolution No. 30-A and
Resolution No. 30-B, which resolutions led to the signing of the MOA between Mondejar and
petitioner Tan for the alleged rechanneling of the Tigum River path; and (2) the quarrying activities of
petitioner Tan's IBC at the Tigum River in the guise of rechanneling the same.37
After the prosecution's formal offer of documentary evidence was admitted by the Sandiganbayan in its
Order dated 23 May 2006 over the objection of petitioner Tan and her co-accused,38 the latter
separately filed Demurrers to Evidence (with prior leave of court), which were denied in a Resolution
dated 16 March 2007. They moved for its reconsideration but it was again denied in a Resolution dated
22 January 2008.39
Petitioner Tan and her co-accused then proceeded in presenting themselves as witnesses, together with
Rolando B. Sison (Sison),40 Engineer Juan Rentoy, Jr. (Engr. Rentoy, Jr.)41 and Abner Tudela
(Tudela).42 Their testimonies as a whole tend to prove, among others, that (1) the old flood control
system of Barangay Naslo, Maasin, Iloilo City, was almost destroyed by the previous typhoons that hit
the community; thus, there is a great need to construct or build another flood control system and, that
is, the rechanneling of the Tigum River path since that river always inundated Barangay Naslo during
the rainy season; (2) resolutions were passed by both the Sangguniang Barangay of Barangay Naslo
and the MDC requesting the IBC to do the rechanneling since the latter has the necessary equipment
for that kind of work; (3) the resolutions of Sangguniang Barangay of Barangay Naslo and the MDC
were endorsed by the Sangguniang Bayan of Maasin, Iloilo City, via Resolution No. 30-A; and
Resolution No. 30-B authorized Mondejar to exercise his emergency powers to negotiate with the IBC
for the rechanneling of the Tigum River path, which resolutions were validly enacted by the body on
21 June 1996; (4) pursuant thereto, the Municipality of Maasin, Iloilo City, through Mondejar, and the
IBC, through petitioner Tan, entered into a MOA for the rechanneling of the Tigum River path; and (5)
the IBC was able to rechannel the Tigum River path.43
Petitioner Tan and her co-accused subsequently made a formal offer of evidence, which was admitted
by the Sandiganbayan in its Order dated 13 January 2011 despite the objection of the prosecution.44
Thereafter, the prosecution presented Shirlito A. Reyes (Reyes)45 and Sucaldito as rebuttal witnesses.
On 20 July 2012, the prosecution submitted its supplemental offer of evidence, which the
Sandiganbayan admitted in its Order dated 21 September 2012 over the objection of petitioner Tan. 46
Once the parties submitted their respective Memoranda, the Sandiganbayan accordingly rendered a
joint Decision on 7 November 2013 in Criminal Case No. 25674 and in Criminal Case No. 25675,
which dispositive portion reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Court hereby rules as follows:cralawlawlibrary
1. In Criminal Case No. 25674, the Court finds the accused [MONDEJAR], [TOLENTINO],
[ESPEJO], [GUMAPAS], [PIOLO], [VELASCO] and [HEREIN PETITIONER TAN] GUILTY
beyond reasonable doubt of the offense of [Violation of Section 3 (e) of [RA 3019], as amended, and
sentences each of them to suffer an indeterminate penalty of six (6) years and one (1) month[,] as
minimum[,] to ten (10) years[,] as maximum; and to suffer perpetual disqualification from public
office. Insofar as [PARTISALA] is concerned, since he is still at large up to the present, let the case be
ARCHIVED and let an alias warrant of arrest issue against him.
2. In Criminal Case No. 25675, the Court finds the accused [MONDEJAR], [TOLENTINO],
[ESPEJO], [GUMAPAS], [PIOLO] and [VELASCO] GUILTY beyond reasonable doubt of
Falsification defined under Article 171 of the [RPC] and sentences each of them to suffer the penalty
of imprisonment of six (6) months [and] one (1) day of prision correccional[,] as minimumf,] to eight
(8) years and one (1) day ofprision mayor[,] as maximum in the absence of any mitigating and
aggravating circumstance in accordance with the provisions of the Indeterminate Sentence Law; to pay
a fine of Five Thousand Pesos ([P]5,000.00); and to further suffer temporary absolute disqualification
and that of perpetual special disqualification from the right of suffrage. Insofar as [PARTISALA] is
concerned, since he is still at large up to the present, let the case be ARCHIVED and let an alias
warrant of arrest issue against him.47 (Emphasis partly in the original and partly supplied; italics
supplied)
In arriving at such conclusion (in Criminal Case No. 25674), the Sandiganbayan elucidated,
thus:chanRoblesvirtualLawlibrary
To be convicted of [Violation of Section 3 (e) of [RA 3019], the prosecution must prove the
following:cralawlawlibrary
1) The accused must be a public officer discharging administrative, judicial or official
functions;ChanRoblesVirtualawlibrary
2) He must have acted with manifest partiality, evident bad faith or inexcusable negligence; and
3) That his action caused any undue injury to any party, including the government, or giving any
private party unwarranted benefits, advantage or preference in the discharge of his functions.
chanrobleslaw
The first element has been established as the accused public officials have stipulated on their public
functions. [Herein petitioner Tan], on the other hand, is charged in conspiracy with the public
officials.
The second element is likewise present x x x It was established by the prosecution that the SB never
passed Resolution No. 30-B authorizing accused Mondejar to exercise his emergency powers and for
him to carry out emergency measures relative to the rechanneling of the Tigum River. This means that
accused Mondejar did not have the authority to enter into a MOA with the IBC for the rechanneling of
the Tigum River. Knowing this, the accused public officials falsified Exh. "F" [Minutes of the 21 June
1996 Sangguniang Bayan Session] thereby making it appear that the SB gave such authority to accused
Mondejar. This act was done in evident bad faith as they deliberately covered-up an illegal act thus
justifying the extraction of sand and gravel by the IBC at the Tigum River. Without such act by the
accused, IBC would not have any right to haul any and all "excess" sand and gravel from the said site x
xx
As to third element, it was shown by the prosecution that the only way for the IBC to legally extract
sand and gravel from the Tigum River was if it could secure a quarrying permit from the provincial
government of Iloilo. This is stated clearly in Provincial Ordinance No. 11 of the Sangguniang
Panlalawigan of Iloilo dated [14 August 1995] x x x
The municipality of Maasin, through its Mayor and the SB, did not have the authority to issue
quarrying permit. What the accused were able to accomplish through the MOA was to allow IBC to
engage in quarrying activities without having to go through the trouble of securing a quarrying permit
on the justification that IBC was performing a service for the townspeople by constructing a temporary
dike and by rechanneling the Tigum River and that the extraction of sand and gravel as its
compensation for services rendered.
In effect, the accused public officers and the IBC owner [petitioner] Tan effectively bypassed the
provincial government and circumvented the requirement for a quarrying permit, with all its conditions
and limitations. By so doing, the accused gave unwarranted favor or unwarranted benefit to [petitioner]
Tan, the owner of the IBC, in the exercise of their official functions x x x
x x x Worse the MOA did not put in necessary safeguards to prevent any abuses by the IBC. It did not
require the municipality to supervise the construction of the dike and the rechanneling of the river nor
did it require monitoring of the sand and gravel being extracted by the IBC thereby giving IBC
unfettered discretion in its implementation of the MOA and allowing indiscriminate quarrying in the
area.48
chanrobleslaw
Aggrieved, petitioner Tan moved for its reconsideration49 but it was denied for lack of merit in the
questioned Resolution dated 30 June 2015.
The Sandiganbayan held that:chanRoblesvirtualLawlibrary
Contrary to [herein petitioner] Tan's argument, the prosecution has proven her complicity by her act
of signing the MOA ostensibly dated 28 June 1996 but was actually executed sometime after
September 1997 which act indicates a common purpose to make it appear that accused
Mondejar had the authority to enter into said MOA with [petitioner] Tan's IBC. While such
finding had not been expressly stated in the assailed Decision, such is necessarily implied from
the finding that the falsified Minutes was executed only sometime in 1997.
x x x x         x x x x         x x x x
The Information states that unwarranted benefit was given [petitioner] Tan by the act of the accused
public officers in making it appear that Resolution No. 30-B series of 1996 was passed authorizing
accused Mondejar to exercise his emergency powers and that, in fact, Mondejar did enter into a MOA
with [petitioner] Tan of IBC authorizing it to engage in massive quarrying in the guise of rechanneling
the Tigum River. These are the ultimate facts that go into the sufficiency of the Information and which
the prosecution had proven beyond reasonable doubt. The discussion by the Court that the acts of the
accused had the effect of circumventing the rules on securing a quarry permit and that the MOA
unduly benefited [petitioner] Tan's IBC are mere details that go into the whys and the hows of the
authority granted [petitioner] Tan's IBC. Verily, an Information only needs to state the ultimate facts
constituting the offense, not the finer details of why and how the illegal acts alleged amounted to
undue injury or damage or unwarranted benefit.50 (Emphasis supplied.)
chanrobleslaw
Hence, this Petition by petitioner Tan raising the following grounds: (1) the Sandiganbayan Decision is
void on its face for non-compliance with Section 14, Article VTII of the Constitution; (2) the
Information in Criminal Case No. 25674, in regard petitioner Tan, is void as it does not conform to the
OMB-Visayas Resolution finding no probable cause to charge the latter with Falsification of
Resolution No. 30-B of the Sangguniang Bayan of Maasin, Iloilo City; (3) the Information does not
allege an offense constitutive of violation of Section 3(e) of R.A. 3019 with regard to petitioner Tan
who is a private individual; (4) The Sandiganbayan Decision imputes to the accused public officials in
Criminal Case No. 25674, including petitioner Tan, the grant of unwarranted benefits to the IBC as the
latter was able to quarry in the Tigum River without any permit from the provincial government of
Iloilo, which fact is not alleged in the Information, much less supported by any evidence, thus, in
violation of petitioner Tan's constitutional right to be informed of the nature and cause of the
accusations against her, making the entire proceedings void; (5) the Sandiganbayan Decision violated
petitioner Tan's right to due process and even the fundamental rules of evidence as it appreciated the
evidence presented in Criminal Case No. 25675 (for Falsification) in convicting the latter in Criminal
Case No. 25674 (for Violation of Section 3(e) of R.A. 3019) even though such evidence was never
offered in the latter case; (6) both the Sandiganbayan Decision and Resolution contain no finding of
the commission of any act by petitioner Tan, either by herself or in conspiracy with her co-accused in
Criminal Case No. 25674, that established beyond reasonable doubt the violation of each and every
element of the offense punishable under Section 3(e) of R.A. 3019 in relation to Section 4(b) of the
same law; and (7) the Sandiganbayan Decision and Resolution were rendered in violation of the
Constitution, thus, merits reversal and the petitioner deserves an acquittal. 51
With the foregoing arguments, the main issue to be resolved in the present recourse is whether the
Sandiganbayan erred in finding petitioner Tan guilty beyond reasonable doubt of Violation of Section
3(e) of R.A. 3019 in conspiracy with the accused public officials of Maasin, Iloilo City.
The Petition is meritorious.
Section 3(e) of R.A. 3019, under which petitioner Tan is charged,
provides:chanRoblesvirtualLawlibrary
Section 3. Corrupt practices of public officers. In addition to acts or omissions of public officers
already penalized by existing law, the following shall constitute corrupt practices of any public officer
and are hereby declared to be unlawful:chanRoblesvirtualLawlibrary
xxxx
(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 offices or government corporations charged with the grant of
licenses or permits or other concessions.
chanrobleslaw
In Rivera v. People,52 this Court held that to justify an indictment under this section;, the existence of
the following elements must be established: (1) the accused must be a public officer discharging
administrative, judicial or official functions; (2) that the accused must have acted with manifest
partiality, evident bad faith or gross inexcusable negligence; and (3) the action of the accused caused
undue injury to any party, including the government, or gave any private party unwarranted benefits,
advantage or preference in the discharge of the functions of the accused.53
There are two ways by which a public official violates Section 3(e) of R.A. 3019 in the performance of
his functions, to wit: (1) by causing undue injury to any party, including the Government; or (2) by
giving any private party any unwarranted benefit, advantage or preference. The accused may be
charged under either mode or both. The disjunctive term "or" connotes that either act qualifies as a
violation of Section 3(e) of R.A. 3019.54
Private persons, when acting in conspiracy with public officers, may be indicted and, if found guilty,
held liable for the pertinent offenses under Section 3 of R.A. 3019, including (e) thereof. This is in
consonance with the avowed policy of the anti-graft law to repress certain acts of public officers and
private persons alike constituting graft or corrupt practices act or which may lead thereto.55
Thus, for a private person to be charged with and convicted of Violation of certain offenses under
Section 3 of R.A. 3019, which in this case (e), it must be satisfactorily proven that he/she has acted in
conspiracy with the public officers in committing the offense; otherwise, he/she cannot be so charged
and convicted thereof.
In conspiracy, the act of one is the act of all; thus, it is never presumed. Like the physical acts
constituting the crime itself, the elements of conspiracy must be proven beyond reasonable doubt.56 To
establish conspiracy, direct proof of an agreement concerning the commission of a felony and the
decision to commit it is not necessary. It may be inferred from the acts of the accused before, during or
after the commission of the crime which, when taken together, would be enough to reveal a community
of criminal design, as the proof of conspiracy is frequently made by evidence of a chain of
circumstances.57While direct proof is not essential to establish conspiracy, it must be established
by positive and conclusive evidence. And conviction must be founded on facts, not on mere
inferences and presumptions.58
In this case, petitioner Tan was charged with and convicted of Violation of Section 3(e) of R.A. 3019
because of the alleged conspiracy between her and her co-accused public officials of Maasin, Iloilo
City, in committing the said offense. But, a perusal of the Sandiganbayan Decision showed no instance
how petitioner Tan could have conspired with her co-accused public officials. Petitioner Tan, thus,
raised this point in her Motion for Reconsideration. The Sandiganbayan, however, in disposing the
same, simply stated:chanRoblesvirtualLawlibrary
x x x the prosecution has proven her complicity by her act of signing the MOA ostensibly dated
28 June 1996 but was actually executed sometime after September 1997 which act indicates a
common purpose to make it appear that accused Mondejar had the authority to enter into said
MOA with [petitioner] Tan's IBC. While such finding had not been expressly stated in the assailed
Decision, such is necessarily implied from the finding that the falsified Minutes was executed only
sometime in 1997.
chanrobleslaw
It can be gleaned from the aforesaid Sandiganbayan disposition that their only basis in declaring that
the MOA was actually executed sometime after September 1997 was their finding that the falsified
Minutes of the Regular Session of the Sangguniang Bayan of Maasin, Iloilo City, was executed only
sometime in 1997. To the mind of this Court, this is a patently erroneous conclusion.
There was no iota of evidence ever presented by the prosecution in Criminal Case No. 25674 that
would prove that the MOA entered into between Mondejar and petitioner Tan was actually executed on
a date other than 27 January 1996. There was also nothing on the face of the MOA that would show
any irregularity in its execution. To note, the MOA signed by petitioner Tan dated 27 June 1996 was
duly notarized on 28 June 1996. Section 30 of Rule 132 of the Rules of Criminal Procedure
provides:chanRoblesvirtualLawlibrary
SECTION 30. Proof of notarial document. - Every instrument duly acknowledged or proved and
certified as provided by law, may be presented in evidence without further proof, the certificate of
acknowledgement being prima facie evidence of the execution of the instrument or document
involved. (Italics supplied)
chanrobleslaw
The notarization of a document carries considerable legal effect. Notarization of a private document
converts such document into a public one, and renders it admissible in court without further
proof of its authenticity.59 With that notarial act, the MOA became a public document. As such, it is a
perfect evidence of the fact which gives rise to its execution and of its date so long as the act which the
officer witnessed and certified to or the date written by him is not shown to be false. 60 To overcome the
presumption, the rules require not just a preponderance of evidence, but evidence that is "clear and
convincing" as to exclude all reasonable controversy as to the falsity of the certificate. In the absence
of such proof, the document must be upheld.61
Further, in the parties' Joint Stipulation of Facts before the Sandiganbayan, one of facts they agreed on
was:chanRoblesvirtualLawlibrary
2. That on 27 June 1996 a Memorandum of Agreement was entered into between the
Municipality of Maasin, Iloilo represented by Mayor Rene Mondejar as the First
Party, International Builders Corporation (IBC) represented by Helen Edith Lee Tan
as the Second Party, for the Rechanneling of the Tigum River path at Barangay
Naslo, Maasin, Iloilo.
As the aforesaid Joint Stipulation of Facts was reduced into writing and signed by the parties and their
counsels, thus, they are bound by it and the same becomes judicial admissions of the facts stipulated. 62
Section 4, Rule 129 of the Rules of Court states:chanRoblesvirtualLawlibrary
Section 4. Judicial Admissions. An admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by
showing that, it was made through palpable mistake or that no such admission was made.
chanrobleslaw
A party may make judicial admissions in (a) the pleadings, (b) during the trial, either by verbal or
written manifestations or stipulations, or (c) in other stages of the judicial proceeding. It is well-
settled that judicial admissions cannot be contradicted by the admitter who is the party himself and
binds the person who makes the same, and absent any showing that this was made thru palpable
mistake, as in this case, no amount of rationalization can offset it.63 Also, in Republic of the Philippines
v. D Guzman64 citing Alfelor v. Halasan,65 this Court held that "a party who judicially admits a fact
cannot later challenge that fact as judicial admissions are a waiver of proof; production of evidence
is dispensed with. A judicial admission also removes an admitted fact from the field of
controversy."
With the foregoing, the Sandiganbayan is precluded from ruling that the MOA was actually executed
sometime in September 1997 as it would run counter to the stipulated fact of the parties that it was
entered into on 27 June 1996, which stipulation was not shown to have been made through palpable
mistake.
Having established that the MOA was entered into on 27 June 1996 and not in September 1997 as what
the Sandiganbayan would make it appear, petitioner Tan's act of signing the same did not in anyway
prove that she had conspired with her co-accused public officials in committing the offense charged.
To repeat, there is nothing in the MOA that would apprise petitioner Tan of any irregularity or
illegality that led to its execution. More so, the prosecution did not even present evidence in Criminal
Case No. 25674 to prove that petitioner Tan (1) has knowledge that Resolution No. 30-B was a product
of a falsified document, i.e., Minutes of the Regular Session of the Sangguniang Bayan of Maasin,
Iloilo City, and that Mondejar has no authority to enter into a MOA with her; and that (2) despite
knowledge thereof, still entered into a MOA with Mondejar. It also bears stressing that none of those
who testified for the prosecution ever linked petitioner Tan to the alleged falsification committed by
the accused public officials of Maasin, Iloilo City. In fact, petitioner Tan was not among those charged
with Falsification.
Since petitioner Tan's conviction was based on the presence of conspiracy, which the prosecution was
not able to prove beyond reasonable doubt, her conviction of the offense charged must be reversed.
WHEREFORE, premises considered, the present Petition is hereby GRANTED. The Sandiganbayan
Decision and Resolution dated 7 November 2013 and 30 June 2015, respectively, in Criminal Case No.
25674 insofar as petitioner Tan is concerned are hereby REVERSED and SET ASIDE. Accordingly,
petitioner Tan is ACQUITTED from the charge of Violation of Section 3(e) of Republic Act No.
3019.
SO ORDERED.ChanRoblesVirtualawlibrary
G.R. No. 200401, January 17, 2018
METRO RAIL TRANSIT DEVELOPMENT CORPORATION, Petitioner, v. GAMMON
PHILIPPINES, INC., Respondent.
DECISION
LEONEN, J.:
This resolves a Petition for Review on Certiorari1 assailing the Court of Appeals October 14, 2011
Decision2 and January 25, 2012 Resolution3 in CA-GR. SP No. 98569. The assailed Decision affirmed
the Construction Industry Arbitration Commission (CIAC) Decision,4 which awarded Gammon
Philippines, Inc. (Gammon) its monetary claims for lost profits and reimbursements for engineering
services, design work, and site de-watering and clean up, due to breach of contract.5 The assailed
Resolution denied Metro Rail Transit Development Corporation's (MRT) Motion for Reconsideration. 6
This case involves MRT's MRT-3 North Triangle Description Project (Project), covering 54 hectares
of land, out of which 16 hectares were allotted for a commercial center. Half of the commercial center
would be used for a podium structure (Podium), which was meant to provide the structure for the
Project's Leasable Retail Development and to serve as the maintenance depot of the rail transit system. 7
Parsons Interpro JV (Parsons) was the Management Team authorized to oversee the construction’s
execution.8
On April 30, 1997, Gammon received from Parsons an invitation to bid for the complete concrete
works of the Podium. The scope of the work involved supplying the necessary materials, labor, plants,
tools, equipment, facilities, supervision, and services for the construction of Level 1 to Level 4 of the
Podium. 9
On May 30, 1997, Gammon submitted three (3) separate bids and several clarifications on certain
provisions of the Instruction to Bidders and the General Conditions of Contract. 10
Gammon won the bid. On August 27, 1997, Parsons issued a Letter of Award and Notice to Proceed
(First Notice to Proceed) to Gammon.11 It was accompanied by the formal contract documents. The
First Notice to Proceed stated:
We are pleased to inform [you] that you have been awarded the work on the construction of the
Podium Structure for the MRT-3 EDSA-North Triangle Development Project. The formal contract
document, which is the product of a series of discussions and negotiation[,] is herewith attached for
your signature.
The Work includes the furnishing of labor, supervision, materials, plant, equipment and other facilities
and appurtenances necessary to perform all the works in accordance with contract document, approved
drawings, specifications and your over-all Breakdown of Lump Sum Bid (marked Exhibit ''A")
amounting to ONE BILLION FOUR HUNDRED ONE MILLION SIX HUNDRED
SEVENTY[-]TWO THOUSAND NINETY[-] FIVE PESOS (P1,401,672,095.00). It is understood that
due to the existing squatters in the Area, the work shall be divided in two (2) separate geographical
areas designated as Phase I and Phase II - but shall be treated as one contract and still totaling to
P1,401,672,095.00. Further, this award is predicated on the commitments contained in the attached
comfort letter (marked Exhibit "B") issued by Gammon Construction Limited, your associate company
overseas and receipt of the duly signed letter from the Chief Executive of Gammon Construction
Limited that is expected within seven days from the date hereof.
....
You may, therefore, proceed with the work at Phase I starting seven (7) days from receipt of this
Notice or from the time that Site is dewatered and cleaned up, whichever is the later. It is further
understood that Gammon agrees to continue Phase II at the price stated above and the starting time
thereof will depend on the completion by others of the footings in time to allow construction of the
superstructure in accordance with Gammon's Tender Programme dated 13 August 1997.
....
Please signify your concurrence by signing the appropriate space below and in the accompanying
contract documents and return to Parsons-Interpro the originals. We will send to you a complete set of
documents as soon as it is signed by the Owner.12
In a Letter dated September 2, 1997 (First Letter), Gammon signed and returned the First Notice to
Proceed without the contract documents.13 The First Letter stated:
MRT 3 North Triangle Development
Superstructure Contract
Letter of Award/Notice to Proceed
We return herewith the original copy of the above[-]mentioned letter which we have countersigned
dated 28 August '97. (Please note that Mr. Salagdo's signature is missing).
The contract documentation submitted under cover of your letter is being reviewed now, and should be
signed and returned to you tomorrow. The Letter of Comfort has now been signed by the Chief
Executive of Gammon Construction Ltd., and is being returned this week.
We confirm that we mobilised resources to site on Friday, 29 August '97 to pump out floodwater.
Cleaning up of mud and debris will follow on this week.
During this mobilisation phase, our Site Manager is Mr. Ferdinand Fabro who we introduced to you
during the Preconstruction meeting last Thursday, 28 August '97.
We enclose herewith a copy of our Mobilisation Programme dated 1 September '97 (4 x A3 sheets)
which includes Design activities, Mobilisation activities, initial Construction activities, key plant and
formwork items.
Our Design Team have now relocated to our office in Makati, and are continuing with preparation of
shop drawings of all slabs.
We will submit a project organisation chart shortly but in the meantime, we confirm that the following
senior [Gammon Philippines, Inc.] staff are now allocated to the project:
....
As soon as layout of temporary facilities has been agreed with you, establishment will commence in
the very limited space allocated ...
We have today received ... drawings marked "For Construction", and unless we hear from you to the
contrary, we will proceed to procure materials for, plan and construct walls and columns based on
these drawings. However, please note that the 3 sheets of construction notes have not been issued. We
therefore request issue of these drawings. In addition, there are fifteen 'Requests for Information'
(RFIs) which were forwarded to you yesterday - these cover queries which affect both design of slabs
and construction of walls, columns and beams. In particular, we urgently need instructions to clarify
the reinforcement specification generally, and connectors/splicing of column reinforcement.
Finally, our Performance Bond and Advance Payment Bond are being prepared now - we hope to
submit these by end of this week.14
In a Letter dated September 3, 1997 (Second Letter), Gammon transmitted to Parsons a signed Letter
of Comfort to guarantee its obligations in the Project.15
However, in a Letter dated September 8, 1997, MRT wrote Gammon that it would need one (1) or two
(2) weeks before it could issue the latter the Formal Notice to Proceed: 16
Re: Contract for LRT3 North Triangle Podium Structure
Gentlemen:
Due to current developments in the Philippines' foreign exchange rate and the concomitant soaring
interest rates, Metro Rail Transit Development Corp. (MRTDC) will need a week or two to estimate
the possible effects and repercussions on the above[-]mentioned project before MRTDC, through the
Chairman of the Board, will issue the formal Notice to proceed to your company. When these possible
effects and repercussions are analysed and decided upon by our Board, hopefully within the week, we
shall notify you at once.17
On September 9, 1997, Gammon transmitted the contract documents to Parsons. 18
In a facsimile transmission sent on the same day, Parsons directed Gammon "to hold any further
mobilization activities."19
In a Letter dated September 10, 1997, Gammon stated:
''A NOTICE OF AWARD & NOTICE TO PROCEED addressed to Gammon Philippines Inc. (GPI)
was issued by your Project Managers, Parsons Interpro JV dated 27th August 1997 and has been
signed, accepted and an original returned to them by our authorised people, therefore a contract exists
between MTRDC and GPI.
The formal contract document has been issued to us for final review and has been signed and returned
to your Project Managers.
In accordance with the NOA & NTP Gammon Construction Ltd. have provided you with the required
letter of guarantee in respect of fulfillment by GCL of GPI's obligations under the Contract in the event
of GPI's insolvency.
By the [Notice of Award] & [Notice to Proceed] [Gammon] were (sic) required to proceed with the
work starting seven days from receipt of that Notice and it was agreed we would commence
dewatering of the flooded site and clean up immediately, under a Change Order, and that the
construction period would run from the date of achieving the clean up of the site. It was anticipated
that these clean up works would take 11 days.
We are therefore bound by these commitments."20
On September 11, 1997, Gammon sent Parsons a facsimile to confirm if all requirements in the
contract documents were temporarily suspended pending the clarification of the scope and
programming of the Project.21
In a facsimile transmission dated September 12, 1997, Parsons confirmed "the temporary suspension of
all [the] requirements under the contract except the re-design of the project floor slabs and the site de-
watering and clean up."22
Thereafter, MRT decided to downscale the Podium's construction and to proceed with the Project's
conceptual redesign.23
Upon Parson's request order, Gammon studied and discussed with MRT the best option to phase the
work.24
On November 7, 1997, Gammon presented to MRT the sequencing and phasing of the work.25
MRT decided to adopt Gammon's reccomendation to construct the Podium up to Level 2 only. 26
Due to these revisions on the scope of work, MRT also decided to re design the Level 2 slab, which it
perceived would be exposed to more load stresses from prolonged exposure to elements and the weight
of heavy construction equipment. MRT asked Gammon to re-design.27
On February 18, 1998, Parsons issued Gammon a Notice of Award and Notice to Proceed (Second
Notice to Proceed) for the engineering services based on the redesigned plan. 28 The Second Notice to
Proceed stated:
This Notice to Proceed is for the work to be rolled-in into a Lump Sum Contract. In the event that this
contract will not be finalized in the near future, any and all expenses that are necessary and directly
incurred by you in connection therewith shall be reimbursed based on actual cost plus a negotiated
fee.29
Gammon signed the Second Notice to Proceed on March 11, 1998 with qualification:
The Contractor refers to the Notice of Award and Notice to Proceed dated 27 August 1997, and
understands that this Notice to Proceed effectively lifts the suspension of work notified in MRTDC
letter dated 8 September 1997, in respect of the design activities only for all of the Level 2 slab and
that part of the Level 3 slab over the Depot Maintenance Shop and office area . . . ; and that the
existing Notice of Award dated 27 August 1997 is still valid.30
On March 3, 1998, Gammon submitted to Parsons a Revised Lump Sum Price Proposal of
P1,044,055,102.0031 for the construction of the Podium up to Level 2, including the design of the floor
slab at Level 2.32 At this time, Gammon had already started its engineering services pursuant to the
Second Notice to Proceed.33
In its Letter dated March 6, 1998, Gammon sent Parsons a breakdown of the Revised Extra Contract
Expenses it allegedly incurred in connection with the works' suspension amounting to
P17,241,505.16. 34
In its Letter dated March 11, 1998, Gammon notified Parsons of its revised Breakdown of Lump Sum
Price worth P1,062,986,607.00.35
On April 2, 1998, MRT issued in favor of Gammon another Notice of Award and Notice to Proceed
(Third Notice to Proceed).36
In its Letter dated April 8, 1998, Gammon acknowledged receipt of the Third Notice to Proceed and
requested clarification of certain items.37
On April 22, 1998, Parsons wrote Gammon, stating that "since the building ha[d] been revised . . .
structural changes [would] be needed and quantities may change."38
On April 29, 1998, Gammon wrote Parsons, confirming its readiness to start mobilization and
requesting clarification of "urgent issues requiring resolution."39
In its Letter dated May 7, 1998, Parsons informed Gammon that MRT was temporarily rescinding the
Third Notice to Proceed, noting that it remained unaccepted by Gammon.40
On June 11, 1998, Gammon received from Parsons the Contract for the Construction and Development
of the Superstructure, MRT-3 North Triangle - Amended Notice to Proceed dated June 10, 1998
(Fourth Notice to Proceed).41
The terms of the Fourth Notice to Proceed were different from those of the First and the Third Notices
to Proceed. The Fourth Notice to Proceed also expressly cancelled the First and Third Notices to
Proceed.42
On June 19, 1998, Gammon qualifiedly accepted the Fourth Notice to Proceed.43
MRT treated Gammon's qualified acceptance as a new offer. In a Letter dated June 22, 1998, MRT
rejected Gammon's qualified acceptance and informed Gammon that the contract would be awarded
instead to Filsystems if Gammon would not accept the Fourth Notice to Proceed within five (5) days. 44
In a Letter dated July 8, 1998, Gammon wrote MRT, acknowledging the latter's intent to grant the
Fourth Notice to Proceed to another party despite having granted the First Notice to Proceed to
Gammon. Thus, it notified MRT of its claims for reimbursement for costs, losses, charges, damages,
and expenses it had incurred due to the rapid mobilization program in response to MRT's additional
work instructions, suspension order, ongoing discussions, and the consequences of its award to another
party.45
In a Letter dated July 15, 1998, MRT expressed its disagreement with Gammon and its amenability to
discussing claims for reimbursement.46
In a Letter dated July 23, 1998, Gammon notified Parsons of its claim for payment of all costs,
damages, and expenses due to MRT's suspension order and the consequences of its award of the
contract to another party.47
In a Letter dated August 7, 1998, MRT informed Gammon that it was willing to reimburse Gammon
for its cost in participating in the bid amounting to about 5% of Gammon's total claim of more or less
P121,000,000.00.48
In a Letter dated August 11, 1998, Gammon replied that MRT's offer was not enough to cover the
expenses it had incurred for the Project and that it was willing to send MRT additional information
necessary for the evaluation of its claims.49
In a Letter dated August 24, 1998, Parsons requested Gammon for additional supporting documents to
its claims.50
Gammon wrote several communications to MRT to follow up on its evaluation request.51
On July 1, 1999, Gammon filed a Notice of Claim before CIAC against MRT.52
On August 18, 1999, CIAC issued an Order directing MRT to file its Answer and submit the names of
its nominees to the Arbitral Tribunal.53
MRT filed a Motion to Dismiss, arguing that CIAC had no jurisdiction to arbitrate the dispute. This
Motion was denied and this matter was elevated to this Court.54 In Gammon v. Metro Rail Transit
Development Corporation,55 this Court held that CIAC had jurisdiction over the case.56
Thus, on October 19, 2006, MRT filed its Answer with Compulsory Counterclaim,57 paragraph 77 of
which read:
77. To begin with, MRTDC is willing to pay GAMMON the total amount of P5,493,639.27
representing the sum of P4,821,261.91 and P672,377.36, which comprise GAMMON's claim for cost
of the engineering and design services and site de-watering and clean-up works, respectively. 58
On November 2, 2006, the Arbital Tribunal was formed. On December 11, 2006, a preliminary
conference was set to finalize the Terms of Reference, which would regulate the conduct of the
proceedings. The parties agreed that they would simultaneously submit their witnesses' affidavits on
January 19, 2007.59
On March 27, 2007, CIAC ruled:60
WHEREFORE, judgment is hereby rendered and AWARD is made on the monetary claims of
Claimant as follows:
P4,821,261.9 for Engineering services design work
672,377.36 for site de-watering and clean up
   
P5,493,639.27 Total claim under issue #1
   
P53,149,330.35 as a reasonable estimate of the profit it had lost by reason of Respondent's breach of
contract in awarding the construction to a different contractor.
   
P58,642,969.62 - TOTAL DUE THE CLAIMANT
SO ORDERED.61
MRT assailed the CIAC Decision before the Court of Appeals. However, the Court of Appeals
affirmed the CIAC Decision:
WHEREFORE, premises considered, the instant petition IS DENIED. The assailed order of the CIAC
dated March 8, 2007 is AFFIRMED.62
Thus, MRT filed the instant Petition for Review.63 It argues that Gammon was not entitled to CIAC's
award considering that there is no perfected contract between MRT and Gammon64 and that Gammon's
claim for lost profits was based only on an unsubstantiated and self-serving assertion of its
employee.65 Additionally, it contends that the claim for reimbursements for engineering services,
design work, site de-watering, and clean-up was not supported by official receipts. It also avers that it
is not estopped from contradicting its alleged judicial admission of liability for reimbursements in the
amount of P5,493,639.27,66 and further states that it is entitled to attorney's fees. 67
Gammon filed its Comment,68 insisting that there is a perfected contract between them.69 It argues that
this Court determined the perfection of the contract in Gammon v. Metro Rail Transit Development
Corporation,70 and thus, the doctrine of the law of the case applies. 71 Gammon asserts that its claim for
lost profits was sufficiently substantiated72 and that it has proven its entitlement to the
reimbursements.73 It avers that damages may be proved not only by official receipts, but also through
other documentary evidence, such as invoices and debit notes.74
Gammon further claims that MRT is bound by its implied admission of its liability for the
reimbursements in its Answer with Compulsory Counterclaim. It points out that MRT mentioned the
exact amount it was willing to pay and that it did not state that it would pay only the proved
amount.75 It argues that MRT is raising factual issues and that CIAC's factual findings on the existence
of the contract and the amount of damages ought to be respected.76
In its Reply,77 MRT argues that the doctrine of the law of the case does not apply as the issue
in Gammon was CIAC's jurisdiction and not the existence of the contract.78 It reiterates that no contract
was perfected because MRT withdrew its offer to Gammon before Gammon returned the contract
documents.79 Thus, Gammon's acceptance only came after the offer had been withdrawn and nothing
that could have been accepted remained.80
MRT reasons that the loss of profits was not proven with a reasonable degree of certainty because
Gammon's witness is not an expert witness.81 Moreover, it emphasizes that the finding in National
Housing Authority v. First Limited Construction Corporation82 of 10% profit as the standard practice
in the construction industry is merely obiter dictum, and thus, cannot operate as a precedent for
construction-related cases.83
MRT further claims that invoices and debit memos are not sufficient proof of payment to entitle
Gammon to reimbursements because an invoice is a mere detailed statement of the items and their
prices and charges, while a debit memo is only an advice to the receiver of an outstanding debt.84
MRT avers that the alleged admission in its Answer with Compulsory Counterclaim should be
construed as extending only to those "supported by official receipts." 85 It reiterates that "[j]udicial
admissions cannot supplant the requirements of law ... that actual or compensatory damages ... must be
duly proven."86 Moreover, MRT asserts that its offer to pay is not an admission of liability but only "an
attempt to settle the issue and avoid litigation." 87 It argues that the exact amount of P5,493,639.27 was
mentioned in the Answer with Compulsory Counterclaim as it was the amount claimed by Gammon,
which MRT offered to pay, if proven.88
It further asserts that the findings of CIAC and of the Court of Appeals are all contrary to evidence on
record or are premised on speculation, surmises, and conjectures, and thus, are serious errors of law
properly re-examinable by this Court.89
For this Court's resolution are the following issues:
First, whether or not there is a perfected contract between petitioner Metro Rail Transit Development
Corporation and respondent Gammon Philippines, Inc.;
Second, whether the doctrine of the law of the case in Gammon v. Metro Rail Transit Development
Corporation90 applies;
Third, whether or not petitioner Metro Rail Transit Development Corporation is bound by its allegation
in its Answer with Compulsory Counterclaim that it was "willing to pay GAMMON the total amount
of P5,493,639.27 representing the sum of P4,821,261.91 and P672,377.36, which comprise
GAMMON's claim for cost of the engineering and design services and site de-watering and clean-up
works, respectively";91 and
Finally, whether or not respondent Gammon Philippines, Inc.'s claims for actual damages,
reimbursement of amounts, and lost profits were sufficiently proven.
This Court denies the Petition.
CIAC was created under Executive Order No. 100892 to establish an arbitral machinery that will settle
expeditiously problems arising from, or connected with, contracts in the construction industry.93
Its jurisdiction includes construction disputes between or among parties to an arbitration agreement, or
those who are otherwise bound by the latter, directly or by reference.94 Thus, any project owner,
contractor, subcontractor, fabricator, or project manager of a construction project who is bound by an
arbitration agreement in a construction contract is under CIAC's jurisdiction in case of any dispute. 95
CIAC is a quasi-judicial body exercising quasi-judicial powers.
A quasi-judicial agency is a government body, not part of the judiciary or the legislative branch, which
adjudicates disputes and creates rules which affect private parties' rights.96 It is created by an enabling
statute, and thus, its existence continues beyond the resolution of a dispute and is independent from the
will of the parties. Its powers are limited to those expressly granted or necessarily implied in the
enabling law.97
Quasi-judicial or administrative adjudicatory power has been defined as the power: "(1) to hear and
determine questions of fact to which legislative policy is to apply, and (2) to decide in accordance with
the standards laid down by the law itself in enforcing and administering the same law."98
Arbitration under a quasi-judicial body is similar to commercial arbitration in that its factual findings
are generally accorded respect and finality.
However, commercial arbitration is conducted by ad-hoc bodies created by stipulation of parties for the
purpose of settling disputes concerning their private or proprietary interests. In general, the findings in
commercial arbitration are respected to uphold the autonomy of arbitral awards. 99
On the other hand, quasi-judicial agencies were created for a speedier resolution of controversies on
matters of state interest that require specialized knowledge and expertise. 100
CIAC exercises quasi-judicial powers over arbitration disputes concerning construction contracts.
Thus, its findings are accorded respect because it comes with the presumption that CIAC is technically
proficient in efficiently and speedily resolving conflicts in the construction industry.
Thus, under the Construction Industry Arbitration Law, arbitral awards are binding and shall be final
and unappealable, except on pure questions of law:
Section 19. Finality of Awards. — The arbitral award shall be binding upon the parties. It shall be final
and inappealable except on questions of law which shall be appealable to the Supreme Court.
Initially, CIAC decisions are appealable only to this Court. However, when the Rules of Court were
enacted, appeals from CIAC decisions became appealable to the Court of Appeals under Rule 43:101
Section 1. Scope. — This Rule shall apply to appeals from judgments or final orders of the Court of
Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-
judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil
Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission,
Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics
Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification
Administration, Energy Regulatory Board, National Telecommunications Commission, Department of
Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees
Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic
Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and
voluntary arbitrators authorized by law.
Section 2. Cases Not Covered. — This Rule shall not apply to judgments or final orders issued under
the Labor Code of the Philippines.
While Rule 43 petitions may pertain to questions of fact, questions of law, or both questions of law and
fact, it has been established that factual findings of CIAC may not be reviewed on appeal. 102 In CE
Construction v. Araneta,103 this Court explained that appeals from CIAC may only raise questions of
law:
This is not to say that factual findings of CIAC arbitral tribunals may now be assailed before the Court
of Appeals. Section 3's statement "whether the appeal involves questions of fact, of law, or mixed
questions of fact and law" merely recognizes variances in the disparate modes of appeal that Rule 43
standardizes: that there were those that enabled questions of fact, there were those that enabled
questions of law, and there were those that enabled mixed questions fact and law. Rule 43 emphasizes
that though there may have been variances, all appeals under its scope are to be brought before the
Court of Appeals. However, in keeping with the Construction Industry Arbitration Law, any appeal
from CIAC Arbitral Tribunals must remain limited to questions of law.
Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc. explained the wisdom underlying the
limitation of appeals to pure questions of law:
Section 19 makes it crystal clear that questions of fact cannot be raised in proceedings before the
Supreme Court — which is not a trier of facts — in respect of an arbitral award rendered under the
aegis of the CIAC. Consideration of the animating purpose of voluntary arbitration in general, and
arbitration under the aegis of the CIAC in particular, requires us to apply rigorously the above principle
embodied in Section 19 that the Arbitral Tribunal's findings of fact shall be final and unappealable.
Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which
are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral
award issued after proceedings where both parties had the opportunity to be heard. The basic objective
is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the
formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially
litigation which goes through the entire hierarchy of courts. [The Construction Industry Arbitration
Law] created an arbitration facility to which the construction industry in the Philippines can have
recourse. The [Construction Industry Arbitration Law] was enacted to encourage the early and
expeditious settlement of disputes in the construction industry, a public policy the implementation of
which is necessary and important for the realization of national development goals.
Consistent with this restrictive approach, this Court is duty-bound to be extremely watchful and to
ensure that an appeal does not become an ingenious means for undermining the integrity of arbitration
or for conveniently setting aside the conclusions arbitral processes make. An appeal is not an artifice
for the parties to undermine the process they voluntarily elected to engage in. To prevent this Court
from being a party to such perversion, this Court's primordial inclination must be to uphold the factual
findings of arbitral tribunals:
Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in
any other area for that matter, the Court will not assist one or the other or even both parties in any
effort to subvert or defeat that objective for their private purposes. The Court will not review the
factual findings of an arbitral tribunal upon the artful allegation that such body had "misapprehended
the facts" and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly
disguised they might be as "legal questions." The parties here had recourse to arbitration and chose the
arbitrators themselves; they must have had confidence in such arbitrators. The Court will not,
therefore, permit the parties to relitigate before it the issues of facts previously presented and argued
before the Arbitral Tribunal, save only where a very clear showing is made that, in reaching its factual
conclusions, the Arbitral Tribunal committed an error so egregious and hurtful to one party as to
constitute a grave abuse of discretion resulting in lack or loss of jurisdiction. Prototypical examples
would be factual conclusions of the Tribunal which resulted in deprivation of one or the other party of
a fair opportunity to present its position before the Arbitral Tribunal, and an award obtained through
fraud or the corruption of arbitrators. Any other, more relaxed, rule would result in setting at naught
the basic objective of a voluntary arbitration and would reduce arbitration to a largely inutile
institution.
Thus, even as exceptions to the highly restrictive nature of appeals may be contemplated, these
exceptions are only on the narrowest of grounds. Factual findings of CIAC arbitral tribunals may be
revisited not merely because arbitral tribunals may have erred, not even on the already exceptional
grounds traditionally available in Rule 45 Petitions. Rather, factual findings may be reviewed only in
cases where the CIAC arbitral tribunals conducted their affairs in a haphazard, immodest manner that
the most basic integrity of the arbitral process was imperiled. 104 (Emphasis in the original, citations
omitted)
Thus, CIAC's factual findings on construction disputes are final, conclusive, and not reviewable by this
Court on appeal. The only exceptions are when:
(1) [T]he award was procured by corruption, fraud or other undue means; (2) there was evident
partiality or corruption of the arbitrators or of any of them; (3) the arbitrators were guilty of
misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear
evidence pertinent and material to the controversy; (4) one or more of the arbitrators were disqualified
to act as such under section nine of Republic Act No. 876 and willfully refrained from disclosing such
disqualifications or of any other misbehavior by which the rights of any party have been materially
prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual,
final and definite award upon the subject matter submitted to them was not made. 105 (Citation omitted)
Necessarily, before petitioner may raise any question of fact, it must prove that the above
circumstances exist in the case at bar.
I
This Court rules that there is a perfected contract between MRT and Gammon.
MRT argues that there was no perfected contract between the parties as Gammon only accepted MRT's
offer after MRT had already revoked it.106 MRT claims that it withdrew its offer to Gammon in its
September 8, 1997 Letter, when it suspended the Project to review the foreign exchange rates and
interest rates.107 It emphasizes that while Gammon had already then returned the First Notice to
Proceed, it did not return the contract documents until September 12, 1997.108 By then, MRT had
already withdrawn the First Notice to Proceed, and the parties were already renegotiating the contract's
cause and object.109
On the other hand, Gammon maintains that there was a perfected contract between the parties. It insists
that MRT did not withdraw or modify its offer before Gammon signed and returned the First Notice to
Proceed and the contract documents. It claims that the contract was not cancelled and was only
temporarily and partially suspended, and this did not affect its perfection. 110
The Court of Appeals affirmed CIAC 's finding that the contract was perfected when the contract
documents were returned to MRT on September 9, 1997. It found that the contract was merely
suspended and not terminated when MRT was studying the effects of the foreign exchange rates and
interests on the Project.111 Moreover, it noted that MRT found it necessary to expressly cancel the First
Notice to Proceed, implying that a contract was perfected. 112
This Court rules that there is a perfected contract between the parties. Article 1305 of the Civil Code
states:
Article 1305. A contract is a meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service.
Article 1315. Contracts are 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.
The requisites of a valid contract are provided for in Article 1318 of the Civil Code:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
A contract is perfected when both parties have consented to the object and cause of the contract. There
is consent when the offer of one party is absolutely accepted by the other party. 113 The acceptance of
the other party may be express or implied.114 However, the offering party may impose the time, place,
and manner of acceptance by the other party, and the other party must comply.115
Thus, there are three (3) stages in a contract: negotiation, perfection, and consummation.
Negotiation refers to the time the parties signify interest in the contract up until the time the parties
agree on its terms and conditions. The perfection of the contract occurs when there is a meeting of the
minds of the parties such that there is a concurrence of offer and acceptance, and all the essential
elements of the contract—consent, object and cause—are present. The consummation of the contract
covers the period when the parties perform their obligations in the contract until it is finished or
extinguished.116
To determine when the contract was perfected, the acceptance of the offer must be unqualified,
unconditional, and made known to the offeror.117 Before knowing of the acceptance, the offeror may
withdraw the offer.118 Moreover, if the offeror imposes the manner of acceptance to be done by the
offerree, the offerree must accept it in that manner for the contract to be binding.119 If the offeree
accepts the offer in a different manner, it is not effective, but constitutes a counter-offer, which the
offeror may accept or reject.120 Thus, in Malbarosa v. Court of Appeals:121
Under Article 1319 of the New Civil Code, the consent by a party is manifested by the meeting of the
offer and the acceptance upon the thing and the cause which are to constitute the contract. An offer
may be reached at any time until it is accepted. An offer that is not accepted does not give rise to a
consent. The contract does not come into existence. To produce a contract, there must be acceptance of
the offer which may be express or implied but must not qualify the terms of the offer. The acceptance
must be absolute, unconditional and without variance of any sort from the offer.
The acceptance of an offer must be made known to the offeror. Unless the offeror knows of the
acceptance, there is no meeting of the minds of the parties, no real concurrence of offer and
acceptance. The offeror may withdraw its offer and revoke the same before acceptance thereof by the
offeree. The contract is perfected only from the time an acceptance of an offer is made known to the
offeror. If an offeror prescribes the exclusive manner in which acceptance of his offer shall be
indicated by the offeree, an acceptance of the offer in the manner prescribed will bind the offeror. On
the other hand, an attempt on the part of the offeree to accept the offer in a different manner does not
bind the offeror as the absence of the meeting of the minds on the altered type of acceptance. An offer
made inter praesentes must be accepted immediately. If the parties intended that there should be an
express acceptance, the contract will be perfected only upon knowledge by the offeror of the express
acceptance by the offeree of the offer. An acceptance which is not made in the manner prescribed by
the offeror is not effective but constitutes a counter-offer which the offeror may accept or reject. The
contract is not perfected if the offeror revokes or withdraws its offer and the revocation or withdrawal
of the offeror is the first to reach the offeree. The acceptance by the offeree of the offer after
knowledge of the revocation or withdrawal of the offer is inefficacious. The termination of the contract
when the negotiations of the parties terminate and the offer and acceptance concur, is largely a
question of fact to be determined by the trial court.122 (Citations omitted)
In bidding contracts, this Court has ruled that the award of the contract to the bidder is an acceptance
of the bidder's offer. Its effect is to perfect a contract between the bidder and the contractor upon notice
of the award to the bidder.123 Thus, in Valencia v. Rehabilitation Finance Corp.:124
With respect to the first argument, it is worthy of notice that the proposal submitted by petitioner
consisted of several items, among which are: (a) one for P389,980, for the "complete construction of
the office building" in question, ... ; (b) another for P358,480, for the "complete construction of the
office building only", . .. ; (c) a third one for P18,900, for the "electrical installations only", . . . ; and
(d) a fourth item for P12,600, for the "plumbing installations only" ...
Each one of these items was complete in itself, and, as such, it was distinct, separate and independent
from the other items. The award in favor of petitioner herein, implied, therefore, neither a
modification of his offer nor a partial acceptance thereof It was an unqualified acceptance of the
fourth item of his bid, which item constituted a complete offer or proposal on the part of petitioner
herein. The effect of said acceptance was to perfect a contract, upon notice of the award to petitioner
herein.125 (Emphasis supplied)
Likewise, in Central Bank of the Philippines v. Court of Appeals:126
As We see it then, contrary to the contention of the Bank, the provision it is citing may not be
considered as determinative of the perfection of the contract here in question. Said provision only
means that as regards the violation of any particular term or condition to be contained in the formal
contract, the corresponding action therefor cannot arise until after the writing has been fully executed.
Thus, after the Proposal of respondent was accepted by the Bank thru its telegram and letter both
dated December 10, 1965 and respondent in turn accepted the award by its letter of December 15,
1965, both parties became bound to proceed with the subsequent steps needed to formalize and
consummate their agreement. Failure on the part of either of them to do so, entitles the other to
compensation for the resulting damages. To such effect was the ruling of this Court in Valencia vs.
RFC 103 Phil. 444. We held therein that the award of a contract to a bidder constitutes an acceptance
of said bidder's proposal and that "the effect of said acceptance was to perfect a contract, upon notice
of the award to (the bidder)" . .. We further held therein that the bidder's "failure to (sign the
corresponding contract) did not relieve him of the obligation arising from the unqualified acceptance
of his offer. Much less did it affect the existence of a contract between him and respondent" . . .
It is neither just nor equitable that Valencia should be construed to have sanctioned a one-sided view of
the perfection of contracts in the sense that the acceptance of a bid by a duly authorized official of a
government-owned corporation, financially and otherwise autonomous both from the National
Government and the Bureau of Public Works, insofar as its construction contracts are concerned, binds
only the bidder and not the corporation until the formal execution of the corresponding written
contract.127 (Emphasis supplied)
Thus, the award of a contract to a bidder perfects the contract. 128 Failure to sign the physical contract
does not affect the contract's existence or the obligations arising from it. 129
Applying this principle to the case at bar, this Court finds that there is a perfected contract between the
parties. MRT has already awarded the contract to Gammon, and Gammon's acceptance of the award
was communicated to MRT before MRT rescinded the contract.
The Invitation to Bid issued to Gammon stated that MRT "will select the Bidder that [MRT] judges to
be the most suitable, most qualified, most responsible and responsive, and with the most attractive
Price and will enter into earnest negotiations to finalize and execute the Contract."130
On May 30, 1997, Gammon tendered its bids.131
In a Letter dated July 14, 1997, Gammon submitted another offer to MRT in response to the latter's
invitation to submit a final offer considering the fluctuation in foreign exchange rates and an odd-and-
even vehicle restriction plan.132
Parsons thereafter issued the First Notice to Proceed, 133 which stated:
We are pleased to inform [you] that you have been awarded the work on the construction of the
Podium Structure for the MRT-3 EDSA North Triangle Development Project. The formal contract
document, which is the product of a series of discussions and negotiation is herewith attached for your
signature.
The Work includes the furnishing of labor, supervision, materials, plant, equipment and other facilities
and appurtenances necessary to perform all the works in accordance with contract document, approved
drawings, specifications and your over-all Breakdown of Lump Sum Bid (marked Exhibit "A")
amounting to ONE BILLION FOUR HUNDRED ONE MILLION SIX HUNDRED
SEVENTY[-]TWO THOUSAND NINETY[-]FIVE PESOS (P1,401,672,095.00). It is understood that
due to the existing squatters in the Area, the work shall be dvided in two (2) separate geographical
areas designated as Phase I and Phase II - but shall be treated as one contract and still totalling to
P1,401,672,095.00. Further, this award is predicated on the commitments contained in the attached
comfort letter (marked Exhibit "B'') issued by Gammon Construction Limited, your associate company
overseas and receipt of the duly signed letter from the Chief Executive of Gammon Construction
Limited that is expected within seven days from the date hereof.
....
You may, therefore, proceed with the work at Phase I starting seven (7) days from receipt of this
Notice or from the time that Site is dewatered and cleaned up, whichever is later. It is further
understood that Gammon agrees to continue Phase II at the price stated above and the starting time
thereof will depend on the completion by others of the footings in time to allow construction of the
superstructure in accordance with Gammon's Tender Programme dated 13 August 1997.
....
Please signify your concurrence by signing the appropriate space below and in the accompanying
contract documents and return to Parsons-Interpro the originals. We will send to you a complete set
of documents as soon as it is signed by the Owner.134 (Emphasis supplied)
In its First Letter, Gammon signed and returned the First Notice to Proceed to signify its consent to its
prestations.135
In its Second Letter, Gammon transmitted to Parsons the signed Letter of Comfort to guarantee its
obligations in the Project.136
On September 9, 1997, Gammon returned to Parsons the contract documents.137
MRT argues that the return of the contract documents occurred after it had already revoked its offer,
i.e., after it sent its September 8, 1997 Letter, which stated:
Re: Contract for LRT3 North Triangle Podium Structure
Gentlemen:
Due to current developments in the Philippines' foreign exchange rate and the concomitant soaring
interest rates, Metro Rail Transit Development Corp. (MRTDC) will need a week or two to estimate
the possible effects and repercussions on the above[-]mentioned project before MRTDC, through the
Chairman of the Board, will issue the formal Notice to proceed to your company. When these possible
effects and repercussions are analysed and decided upon by our Board, hopefully within the week, we
shall notify you at once.138
However, MRT had already accepted the offered bid of Gammon and had made known to Gammon its
acceptance when it awarded the contract and issued it the First Notice to Proceed on August 27, 1997.
The First Notice to Proceed clearly laid out the object and the cause of the contract. In exchange for
P1,401,672,095.00, Gammon was to furnish "labor, supervision, materials, plant, equipment and other
facilities and appurtenances necessary to perform all the works in accordance with [its bid]."139
This acceptance is also manifested in the First Notice to Proceed when it authorized Gammon to
proceed with the work seven (7) days from its receipt or from the time the site is de-watered and
cleaned up.
Thus, Gammon's receipt of the First Notice to Proceed constitutes the acceptance that is necessary to
perfect the contract.
The First Notice to Proceed stated that the award "is predicated on the commitments contained in the ...
comfort letter ... issued by Gammon Construction Limited," Gammon's associate company
overseas.140 It also required that Gammon signify its concurrence by signing and returning the First
Notice to Proceed and the accompanying contract documents. 141
Assuming that this constitutes a counter-offer from MRT, this Court rules that Gammon sufficiently
complied with these requirements such that the perfection of the contract cannot be affected. Gammon
returned the signed First Notice to Proceed on September 2, 1997. It transmitted to Parsons the signed
Letter of Comfort to guarantee its obligations in the Project on September 3, 1997.142 The signed
contract documents were returned on September 9, 1997.143
Gammon manifested its unqualified acceptance of the First Notice to Proceed on September 2, 1997 in
its First Letter:
MRT 3 North Triangle Development
Superstructure Contract
Letter of Award/Notice to Proceed
We return herewith the original copy of the above mentioned letter which we have countersigned dated
28 August '97. (Please note that Mr. Salagdo 's signature is missing).
The contract documentation submitted under cover of your letter is being reviewed now, and should be
signed and returned to you tomorrow. The Letter of Comfort has now been signed by the Chief
Executive of Gammon Construction Ltd., and is being returned this week.
We confirm that we mobilised resources to site on Friday, 29 August '97 to pump out floodwater.
Cleaning up of mud and debris will follow on this week.
During this mobilisation phase, our Site Manager is Mr. Ferdinand Fabro who we introduced to you
during the Preconstruction Meeting last Thursday, 28 August '97.
We enclose herewith a copy of our Mobilisation programme dated 1 September '97 (4 x A3 sheets)
which includes Design activities, Mobilisation activities, initial Construction activities, key plant and
formwork items.
Our Design Team have now relocated to our office in Makati, and are continuing with preparation of
shop drawings of all slabs.
We will submit a project organisation chart shortly but in the meantime, we confirm that the following
senior [Gammon Philippines, Inc.] staff are now allocated to the project:
....
As soon as layout of temporary facilities has been agreed with you, establishment will commence in
the very limited space allocated ...
We have today received ... drawings marked "For Construction", and unless we hear from you to the
contrary, we will proceed to procure materials for, plan and construct walls and columns based on
these drawings. However, please note that the 3 sheets of construction notes have not been issued. We
therefore request issue of these drawings. In addition, there are fifteen 'Requests for Information'
(RFIs) which were forwarded to you yesterday these cover queries which affect both design of slabs
and construction of walls, columns and beams. In particular, we urgently need instructions to clarify
the reinforcement specification generally, and connectors/splicing of column reinforcement.
Finally, our Performance Bond and Advance Payment Bond are being prepared now - we hope to
submit these by the end of the week.144
This First Letter shows that Gammon fully consented to the contents and accepted the prestations of
the First Notice to Proceed. Gammon's acceptance is also manifested in its undertakings to mobilize
resources, to prepare the Performance and Advance Payment Bonds, and to procure materials
necessary for the Project. All that remained was the formality of returning the contract documents and
the Letter of Comfort, which eventually was complied with by Gammon. Thus, there is already mutual
consent on the object of the contract and its consideration, and an absolute acceptance of the offer.
In any case, this Court has ruled that the meeting of the minds need not always be put in writing, and
the fact that the documents have not yet been signed or notarized does not mean that the contract has
not been perfected.145 A binding contract may exist even if the signatures have not yet been affixed
because acceptance may be express or implied.146
Thus, the parties have become bound to consummate the contract such that the failure by one party to
comply with its obligations under the contract entitles the other party to damages. Clearly, Gammon
was expected to comply with the award when it signified its concurrence. Thus, it is not just or
equitable for the perfection of the contract to be one (1)-sided such that the contract only binds
Gammon but not MRT just because the contract documents were not yet returned before MRT
suspended the contract.147
Moreover, this Court rules that MRT did not revoke its offer when it temporarily suspended the First
Notice to Proceed.
MRT's September 8, 1997 Letter stated, thus:
Due to current developments in the Philippines' foreign exchange rate and the concomitant soaring
interest rates, Metro Rail Transit Development Corp. (MRTDC) will need a week or two to estimate
the possible effects and repercussions on the above[-]mentioned project before MRTDC, through the
Chairman of the Board, will issue the formal Notice to Proceed to your company. When these possible
effects and repercussions are analysed and decided upon by our Board, hopefully within the week, we
shall notify you at once.148
Thereafter, Parsons directed Gammon to hold any further mobilization activities in a facsimile
transmission dated September 9, 1997. 149
On September 11, 1997, Gammon sent Parsons a facsimile to confirm if all requirements in the
contract documents were temporarily suspended pending the clarification of the scope and
programming of the Project.150
In a facsimile transmission dated September 12, 1997, Parsons confirmed "the temporary suspension of
all the requirements under the contract except the re-design of the project floor slabs and the site de
watering and clean up":151
With reference to your fax of September 11, 1997 this will confirm the temporary suspension of all
requirements under the terms of the contract until such time as clarification of scope has been received
from the owner. The only exception to this suspension is the re-design of the project[']s floor slabs and
the site de-watering and clean up.152 (Emphasis supplied)
The wording of these communications indicates that the contract is still binding though on hold.
Gammon was informed that the contract was temporarily suspended. When a contract is suspended
temporarily, it provisionally ceases to be operative until the occurrence of a condition or situation that
warrants the lifting of the suspension of the contract.153
It is different from a cancellation of a contract which terminates the contract such that it does not
become operative again.
The usage of the words "temporary suspension" is clear. It is a settled rule that when the words in a
contract are clear and leave no doubt on the parties' intentions, the literal meaning shall
control.154 Thus, the above communications cannot be interpreted to mean that the contract has been
cancelled or rescinded.
This is bolstered by MRT's express cancellation of the contract on June 10, 1998 in its Fourth Notice to
Proceed:
This notice formally cancels documents referred to as Notice of Award, Notice to Proceed issued on
August 27, 1997, which was received by [Gammon Philippines, Inc.] on August 28, 1997 and April 2,
1998, which was received by [Gammon Philippines, Inc.] on April 8, 1998.155
It can be implied that prior to the Fourth Notice to Proceed, the First and Third Notices to Proceed
were not cancelled and were still valid and subsisting.
Furthermore, MRT's Second Notice to Proceed issued on February 18, 1998 for engineering services
based on the redesigned plan was signed by Gammon on March 11, 1998 with a qualification:156
The Contractor refers to the 'Notice of Award' and 'Notice to Proceed' dated 27 August 1997, and
understands that this 'Notice to Proceed' effectively lifts the suspension of work notified in Metro Rail
Transit Development Corporation letter dated 8 September 1997, in respect of the design activities
only for all of the Level 2 slab and that part of the Level 3 slab over the Depot Maintenance Shop and
office area . . . ; and that the existing 'Notice of Award' dated 27 August 1997 is still valid.157 (Emphasis
supplied)
MRT did not contest Gammon's notice of receipt of the First Notice to Proceed, expressing that it was
still valid and was not cancelled.
Additionally, when the parties were discussing the change of plans, MRT did not mention that no
contract was executed between them. Instead, it sought to modify its terms and conditions. Thus,
Gammon was made to believe that the First Notice to Proceed was in force and effect, albeit
temporarily suspended.
Given these circumstances, it cannot be said that no contract was perfected between the parties.
II
The parties argue on the application of Gammon v. Metro Rail Transit Development Corporation158 on
the contract's perfection.
MRT claims that this Court's ruling in Gammon did not determine that a contract was perfected as to
warrant the application of the doctrine of the law of the case.159 It argues that the issue in Gammon was
CIAC's jurisdiction over the Notice of Claim, not the existence of the contract. 160 MRT insists that the
ruling was limited only to the preliminary question of whether or not there is an arbitration agreement
between the parties to give CIAC jurisdiction over the dispute.161 It was a preliminary finding
supported by limited evidence and not the result of an actual trial.162
However, Gammon claims that Gammon already determined that there is a perfected contract, and
thus, the doctrine of the law of the case applies. It insists that without the perfected contract, which
contains the provision for arbitration, CIAC would not have acquired jurisdiction over the case. This is
shown in that the existence of a contract between the parties was not an issue submitted by the parties
in the arbitration proceedings. Thus, CIAC could not have ruled on it.163
The Court of Appeals affirmed that there was a perfected contract because MRT alleged
in Gammon that the contract was novated or abandoned. It found that this was an implied admission
that the contract was perfected considering that there was nothing to novate or abandon if there had
been no perfected contract. The perfection of the contract was further confirmed by this Court's ruling
in Gammon that the contract was merely modified.164
In Gammon v. Metro Rail Transit Development Corporation,165 this Court held:
Although there is considerable disagreement concerning the foregoing facts, specifically whether
Gammon undertook certain works on the Project and whether a re-bidding for the downgraded podium
structure was indeed conducted, the Court does not need to make its own factual findings before it can
resolve the main question of whether the CIAC's jurisdiction was properly invoked. The resolution of
this question necessarily involves a two-pronged analysis, first, of the requisites for invoking the
jurisdiction of the CIAC, and second, of the scope of arbitrable issues covered by CIAC's jurisdiction.
EO 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising from or
connected with construction contracts entered into by parties that have agreed to submit their dispute to
voluntary arbitration . . .
....
In this case, the parties submitted themselves to the jurisdiction of the CIAC by virtue of the arbitration
clause in the [General Conditions of Contract], which provides:
....
MRTDC, however, contends that the contract between the parties was novated by subsequent [Notices
of Award]/[Notices to Proceed] which changed the design of the podium structure and reduced the
contract price.
We do not agree. Novation is defined as the extinguishment of an obligation by the substitution or
change of the obligation by a subsequent one which terminates the first, either by changing the object
or principal conditions; substituting the person of the debtor; or subrogating a third person in the rights
of the creditor. In order tha[t] an obligation may be extinguished by another which substitutes the
same, it is imperative that it be so declared in unequivocal terms, or that the old and the new
obligations be on every point incompatible with each other.
Novation cannot be presumed. The animus novandi, whether partial or total, must appear by the
express agreement of the parties, or by their acts that are too clear and unequivocal to be mistaken.
Further, novation may either be extinctive or modificatory. It is extinctive when an old obligation is
terminated by the creation of a new one that takes the place of the former. It is merely modificatory
when the old obligation subsists to the extent that it remains compatible with the amendatory
agreement.
We have carefully gone over the records of this case and are convinced that the redesign of the podium
structure and the reduction in the contract price merely modified the contract. These modifications
were even anticipated by the [General Conditions of Contract] as it expressly states that changes may
be made on the works without invalidating the contract, thus:
....
By these terms, the parties evidently agreed that should changes need to be made on the Project plans,
such changes shall not annul or extinguish the contract. Thus, it can fairly be concluded that the
revisions in the design of the Project and the reduction of the contract price were intended to merely
modify the agreement and not to supplant the same.
Parenthetically, while the [Notices of Award]/[Notices to Proceed] adverted to the execution of a
formal contract for the Project, no such formal contract appears to have been executed. Instead, the
[Notices of Award]/[Notices to Proceed] issued by MRTDC in favor of Gammon denominated the
agreement as "Contract No. 4.251.001 for the Construction and Development of the Superstructure
MRT 3 North Triangle'' and consistently referred to the [General Conditions of Contract] as one of the
controlling documents with regard to the transaction.
In fact, as mentioned by the CIAC in its assailed Order dated August 18, 1999, the [Notice of
Award]/[Notice to Proceed] dated June 10, 1998 makes reference to the [General Conditions of
Contract]. The June 10, 1998 [Notice of Award]/[Notice to Proceed] states:
A formal contract for the Work is in process and will be available for signature as soon as possible.
Pending the execution of the contract, the General conditions, and the Drawings and Specifications
included with the Bid Documents (as originally issued and only as applicable to the current scope of
work), all of which are incorporated herein by this reference, shall apply in this Notice ...
A similar reference to the [General Conditions of Contract] appears in the April 2, 1998 [Notice of
Award]/[Notice to Proceed]. Thus, even granting that, as the Court of Appeals ruled, the August 27,
1997 [Notice of Award]/[Notice to Proceed] had been novated by the April 2, 1998 [Notice of Award]/
[Notice to Proceed] and that, in turn, the latter was rescinded by MRTDC, the arbitration clause in the
[General Conditions of Contract] remained in force.
At any rate, the termination of the contract prior to a demand for arbitration will generally have no
effect on such demand, provided that the dispute in question either arose out of the terms of the
contract or arose when a broad contractual arbitration clause was still in effect. The Court of Appeals,
therefore, erred in ruling that there must be a subsisting contract before the jurisdiction of the CIAC
may properly be invoked. The jurisdiction of the CIAC is not over the contract but the disputes which
arose therefrom, or are connected thereto, whether such disputes arose before or after the completion
of the contract, or after the abandonment or breach thereof.
It may even be added that issues regarding the rescission or termination of a construction contract are
themselves considered arbitrable issues under Sec. 2, Art. IV of the Rules of Procedure Governing
Construction Arbitration, the Rules which were in force at the time the present controversy arose. . . .
This brings us to the question of whether the dispute in this case falls within the scope of the arbitration
clause.
....
The arbitration clause in the [General Conditions of Contract] submits to the jurisdiction of the CIAC
all disputes, claims or questions subject to arbitration under the contract. The language employed in the
arbitration clause is such as to indicate the intent to include all controversies that may arise from the
agreement as determined by the CIAC Rules. It is broad enough to encompass all issues save only
those which EO 1008 itself excludes, i.e., employer-employee relationship issues. Under these Rules,
the amount of damages and penalties is a general category of arbitrable issues under which Gammon's
claims may fall.166 (Emphasis supplied, citations omitted)
This Court rules that the doctrine of the law of the case applies in this case.
There is a distinction between the agreement to arbitrate and the contract which may be the subject
matter of the dispute between the parties. While the agreement to arbitrate may be in the same subject
matter contract, it is a separate agreement in itself.
Under the Construction Industry Arbitration Law, CIAC acquires jurisdiction when the parties agree to
submit the matter to voluntary arbitration.
Section 4. Jurisdiction. — The CIAC shall have original and exclusive jurisdiction over disputes
arising from, or connected with, contracts entered into by parties involved in construction in the
Philippines, whether the dispute arises before or after the completion of the contract, or after the
abandonment or breach thereof. These disputes may involve government or private contracts. For the
Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary
arbitration.
The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials
and workmanship; violation of the terms of agreement; interpretation and/or application of contractual
time and delays; maintenance and defects; payment, default of employer or contractor and changes in
contract cost.
Excluded from the coverage of this law are disputes arising from employer-employee relationships
which shall continue to be covered by the Labor Code of the Philippines. (Emphasis supplied)
In Ormoc Sugarcane Planters' Association, Inc. v. Court of Appeals,167 this Court discussed that "an
agreement to arbitrate is a contract" in itself:
Except where a compulsory arbitration is provided by statute, the first step toward the settlement of a
difference by arbitration is the entry by the parties into a valid agreement to arbitrate. An agreement to
arbitrate is a contract, the relation of the parties is contractual, and the rights and liabilities of the
parties are controlled by the law of contracts. In an agreement for arbitration, the ordinary elements of
a valid contract must appear, including an agreement to arbitrate some specific thing, and an agreement
to abide by the award, either in express language or by implication. (Citation omitted)
Thus, in Gammon v. Metro Rail Transit Development Corporation,168 this Court ruled that CIAC
does not have jurisdiction over construction contracts. Rather, it has jurisdiction over
the dispute arising from or connected to construction contracts, such that it still acquires jurisdiction
even if the contract has been breached, abandoned, terminated, or rescinded.169
On the basis of this ruling, this Court concluded that CIAC has jurisdiction over the dispute between
MRT and Gammon. Their contract need not be valid or in force before CIAC may arbitrate the matter,
so long as there is an agreement to arbitrate.
Thus, the agreement to arbitrate is separate from the construction contract entered into by parties.
Nonetheless, the doctrine of the law of the case applies in the case at bar. While Gammon did not
expressly state that the contract was perfected, it concluded that both the construction contract and the
arbitration contract existed between the parties.
The doctrine of the law of the case applies when in a particular case, an appeal to a court of last resort
has resulted in a determination of a question of law. The determined issue will be deemed to be the law
of the case such that it will govern a case through all its subsequent stages. 170 Thus, after ruling on the
legal issue and remanding the case to a lower court for further proceedings, the determined legal issue
can no longer be passed upon and determined differently in another appeal in the same case.
In Presidential Decree No. 1271 Committee v. De Guzman:171
The doctrine of the "law of the case" provides that questions of law previously determined by a court
will generally govern a case through all its subsequent stages where "the determination has already
been made on a prior appeal to a court of last resort." In People v. Olarte:
Suffice it to say that our ruling in Case L-13027, rendered on the first appeal, constitutes the law of the
case, and, even if erroneous, it may no longer be disturbed or modified since it has become final long
ago. A subsequent reinterpretation of the law may be applied to new cases but certainly not to an old
one finally and conclusively determined.
'Law of the case' has been defined as the opinion delivered on a former appeal. More specifically, it
means that whatever is once irrevocably established as the controlling legal rule of decision between
the same parties in the same case continues to be the law of the case, whether correct on general
principles or not, so long as the facts on which such decision was predicated continue to be the facts of
the case before the court.
As a general rule a decision on a prior appeal of the same case is held to be the law of the case whether
that decision is right or wrong, the remedy of the party being to seek a rehearing.
....
It is thus clear that posterior changes in the doctrine of this Court [cannot] retroactively be applied to
nullify a prior final ruling in the same proceeding where the prior adjudication was had, whether the
case should be civil or criminal in nature.
If an appellate court has determined a legal issue and has remanded it to the lower court for further
proceedings, another appeal in that same case should no longer differently determine the legal issue
previously passed upon. Similar to res judicata, it is a refusal to reopen what has already been
decided.172 (Citations omitted)
The legal issue determined in Gammon is the jurisdiction of CIAC. However, this determination was
arrived at after this Court found that the parties entered into a construction contract with an agreement
to arbitrate.
This is indicated when Gammon determined that there is no novation of the contract between MRT
and Gammon as to deprive CIAC of jurisdiction. It ruled that there is merely a modification, not an
annulment or extinguishment, of the contract; thus:
We have carefully gone over the records of this case and are convinced that the redesign of the podium
structure and the reduction in the contract price merely modified the contract.
These modifications were even anticipated by the [General Conditions of Contract] as it expressly
states that changes may be made on the works without invalidating the contract, thus:
....
By these terms, the parties evidently agreed that should changes need to be made on the Project plans,
such changes shall not annul or extinguish the contract. Thus, it can fairly be concluded that the
revisions in the design of the Project and the reduction of the contract price were intended to merely
modify the agreement and not to supplant the same.173 (Emphasis supplied)
While this Court's determination on the perfection of the contract is not categorical and its finding that
the CIAC's jurisdiction is not over the contract but rather over the disputes that arise from it, the
existence of a contract, albeit terminated or rescinded, is still contemplated:
At any rate, the termination of the contract prior to a demand for arbitration will generally have no
effect on such demand, provided that the dispute in question either arose out of the terms of the
contract or arose when a broad contractual arbitration clause was still in effect. The Court of Appeals,
therefore, erred in ruling that there must be a subsisting contract before the jurisdiction of the CIAC
may properly be invoked. The jurisdiction of the CIAC is not over the contract but the disputes which
arose therefrom, or are connected thereto, whether such disputes arose before or after the completion
of the contract, or after the abandonment or breach thereof.
It may even be added that issues regarding the rescission or termination of a construction contract are
themselves considered arbitrable issues under Sec. 2, Art. IV of the Rules of Procedure Governing
Construction Arbitration, the Rules which were in force at the time the present controversy
arose. . . . 174 (Emphasis supplied, citations omitted)
Thus, the doctrine of the law of the case applies. The current appeal can no longer bring the existence
of the contract into issue.
III
MRT seeks to question the award of lost profits and reimbursements in favor of Gammon.
As to the reimbursement award for engineering services, design work, site de-watering, and clean-up,
CIAC awarded the reimbursement claims on account of MRT's allegation in paragraph 77 of its
Answer with Compulsory Counterclaim, thus:
77. To begin with, MRTDC is willing to pay GAMMON the total amount of P5,493,639.27
representing the sum of P4,821,261.91 and P672,377.36, which comprise GAMMON's claim for cost
of the engineering and design services and site de-watering and clean-up works, respectively. 175
CIAC ruled that as MRT had already admitted its liability for the claims, it was bound by this
admission.176 This finding was also affirmed by the Court of Appeals, which ruled that there was no
showing that the admission was made by palpable mistake. It also noted that MRT did not amend its
Answer.177
MRT argues that while it expressed its willingness to pay Gammon the reimbursements, it only applies
to those supported by official receipts.178 Gammon was allegedly aware that it had to substantiate its
claims, as proven by its inclusion of the reimbursement amount in the issues to be resolved by CIAC in
the Terms of Reference and its presentation of proof for its claims.179 MRT also insists that its judicial
admission is not conclusive because an answer is a mere statement of fact that the filing party is
expected to prove; it is not evidence.180 The trial court is still given leeway to consider evidence
especially when the parties agreed to submit the issue for the court's resolution.181
MRT avers that judicial admissions cannot supplant the requirement that actual damages must be duly
proven. It further asserts that an offer to pay is not an admission of liability under Rule 130, Section 27
of the Rules of Court. The admission was made only as an attempt to settle the issue and to avoid
litigation. It explains that the exact amount of P5,493,639.27 was mentioned in the Answer with
Compulsory Counterclaim because it was the amount Gammon was claiming and which MRT offered
to pay, if proven.182
On the other hand, Gammon claims that MRT is bound by its allegation in its Answer with
Compulsory Counterclaim. It argues that MRT failed to show that its admission was made by palpable
mistake.183 MRT even mentioned the exact amount it was willing to pay. It did not state that it would
pay only the amount proved or present any evidence to contradict its admission.184 Gammon asserts
that although the amount was included as an issue in the Terms of Reference, this only meant that
MRT can present contrary evidence without needing to prove that the admissions were made through
palpable mistake.185
This Court rules that MRT is bound by its judicial admission.
Rule 129, Section 4 of the Revised Rules of Court provides:
Section 4. Judicial admissions. An admission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.
Judicial admissions may be made by a party in his or her pleadings, during the trial, through verbal or
written manifestations, or in other stages of the judicial proceeding. 186 They are binding such that no
matter how much the party rationalizes it, the party making the admission cannot contradict himself or
herself unless it is shown that the admission was made through a palpable mistake. 187
In this case, MRT alleges that it is willing to pay Gammon the total amount of P5,493,639.27, which
comprises the latter's claim for cost of engineering and design services, and de-watering and clean-up
works.188
MRT's allegation was not qualified. It neither stated that Gammon must first present proof of its claims
for the cost of engineering and design services, and of de-watering and clean-up works nor amended
the Answer with Compulsory Counterclaim to either correct this allegation or to qualify that Gammon
must first present official receipts. Thus, CIAC correctly held that MRT is bound by this admission and
is estopped from denying its representation.
IV.A
MRT is likewise asserting that the evidence presented by Gammon to prove its entitlement to actual
damages is not sufficient.
Actual damages are provided for under Article 2199 of the Civil Code:
Article 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation
only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to
as actual or compensatory damages.
Actual damages constitute compensation for sustained measurable losses.189 It must be proven "with a
reasonable degree of certainty, premised upon competent proof or the best evidence obtainable." 190 It is
never presumed or based on personal knowledge of the court.191
In International Container Terminal Services, Inc. v. Chua:192
"Actual damages are compensation for an injury that will put the injured party in the position where it
was before the injury. They pertain to such injuries or losses that are actually sustained and susceptible
of measurement.... Basic is the rule that to recover actual damages, not only must the amount of
loss be capable of proof; it must also be actually proven with a reasonable degree of certainty,
premised upon competent proof or the best evidence obtainable."
....
This Court has, time and again, emphasized that actual damages cannot be presumed and courts, in
making an award, must point out specific facts which could afford a basis for measuring whatever
compensatory or actual damages are borne. An award of actual damages is "dependent upon competent
proof of the damages suffered and the actual amount thereof. The award must be based on the evidence
presented, not on the personal knowledge of the court; and certainly not on flimsy, remote, speculative
and unsubstantial proof." 193 (Emphasis in the original, citations omitted)
Although official receipts are the best evidence of payment, this Court has acknowledged that actual
damages may be proved by other forms of documentary evidence, including invoices.
In MCC Industrial Sales Corporation v. Ssangayong Corporation,194 this Court did not award actual
damages because the claimant failed to substantiate its claims with official receipts. 195
In G.Q. Garments, Inc. v. Miranda,196 this Court held that an allegation of a witness must be supported
by receipts or other documentary proofs to prove the claim of actual damages.197
In Gonzales v. Camarines Sur II Electric Cooperative, Inc.,198 this Court noted that petitioners did not
back up its claims of actual damages by documentary proof such as a receipt or an invoice. 199
For lost profits, Article 2200 of the Civil Code provides:
Article 2200. Indemnification for damages shall comprehend not only the value of the loss suffered,
but also that of the profits which the obligee failed to obtain.
This Court has ruled that the award of unrealized profits cannot be based on the sole testimony of the
party claiming it. In Producers Bank of the Philippines v. Court of Appeals:200
In the case at bar, actual damages in the form of unrealized profits were awarded on the basis of the
sole testimony of private respondent Salvador Chua, to wit:
....
However, other than the testimony of Salvador Chua, private respondents failed to present
documentary evidence which is necessary to substantiate their claim for actual or compensatory
damages. In order to recover this kind of damages, the injured party must prove his case, thus:
When the existence of a loss is established, absolute certainty as to its amount is not required. The
benefit to be derived from a contract which one of the parties has absolutely failed to perform is of
necessity to some extent, a matter of speculation, but the injured party is not to be denied for that
reason alone. He must produce the best evidence of which his case is susceptible and if that evidence
warrants the inference that he has been damaged by the loss of profits which he might with reasonable
certainty have anticipated but for the defendant's wrongful act, he is entitled to recover. (Cerreno vs.
Tan Chuco, 28 Phil. 312 [1914] quoted in Central Bank of the Philippines vs. Court of Appeals, 63
SCRA 431 [1975])
Applying the foregoing test to the instant case, the Court finds the evidence of private respondents
•insufficient to be considered within the purview of "best evidence." The bare assertion of private
respondent Salvador Chua that he lost an average of P18,000.00 per month is inadequate if not
speculative and should be admitted with extreme caution especially because it is not supported by
independent evidence. Private respondents could have presented such evidence as reports on the
average actual profits earned by their gasoline business, their financial statements, and other evidence
of profitability which could aid the court in arriving with reasonable certainty at the amount of profits
which private respondents failed to earn. Private respondents did not even present any instrument or
deed evidencing their claim that they have transferred their right to operate their gasoline station to
their relatives. We cannot, therefore, sustain the award of P18,000.00 a month as unrealized profits
commencing from October 16, 1984 because this amount is not amply justified by the evidence on
record.201
IV.B
As to the reimbursement award for engineering services, design work, site de-watering, and clean-up,
MRT argues that it was not supported by sufficient documentary evidence as only 2% of the claims
have official receipts.202 It argues that invoice, debit notes, and summaries are not proof of payment.
An invoice is a mere detailed statement of the items, price, and charges of the things invoiced 203 while
a debit memo is merely an advice to the receiver of an outstanding debt.204
Gammon nonetheless insists that it was able to prove its entitlement to the reimbursements. 205 It avers
that official receipts are not the only documentary evidence to prove the claim of damages. Invoices
and debit notes are allowed. Debit notes do not require an official receipt as additional
documentation.206
The Court of Appeals found that there are sufficient bases for the award of Gammon's reimbursement
claims.207 It ruled that MRT failed to prove that the evidence was insufficient and that Gammon's
computations were erroneous.208 It found that Gammon provided the best available documentary
evidence, through invoices, debit notes, and official receipts.209
IV.C
MRT likewise questions the award of lost profits in favor of Gammon.
Gammon presented evidence of its claim for lost profits by presenting as witness Francisco Delos
Santos (Delos Santos), the Planning and Estimating Engineer of Gammon since 1996. He was
responsible for the preparation of proposals, "negotiations, mobilization, and meetings with and among
the parties involved in the Project."210
Delos Santos testified that "the average competitive percentage of profit in the construction industry, in
Gammon's experience, [was] 5% and [that] the Net Cost Estimate was properly set at
P65,194,050.93."211
CIAC granted the award of lost profits based on Delos Santos' testimony.212 The Court of Appeals
affirmed this finding and found that the award for lost profits was not grounded on pure speculation as
"documentary evidence is not absolutely necessary ... to prove a claim for lost profit."213 It found that
Delos Santos was competent to testify on the matter.214 In any case, it ruled that CIAC shall act without
regard to technicalities or legal forms, in accordance with justice and equity and the merits of the
case.215 It also noted CIAC's finding that this Court upheld as reasonable 18% as expected profit
estimate.216
MRT contests this finding and argues that Delos Santos is not an expert witness. 217 It claims that Delos
Santos' testimony was not sufficient because there is no proof of his experience, and his functions
consist only of preparing project proposals, negotiations, mobilization, and meetings with and among
the parties in the Project.218 It holds that Delos Santos' testimony was bare, insufficient, self-serving,
and unsubstantiated by independent evidence, like audited financial statements or other reports on past
projects.219
MRT also avers that the 5% lost profits should not be based on the last net estimate of the contract cost
because it must be based on the contract price agreed upon. It argues that basing it on the revised scope
of work and a greatly increased foreign exchange rate would unjustly enrich Gammon.220
On the other hand, Gammon insists that its claim for lost profits was sufficiently substantiated. It
asserts that there need not be absolute certainty in its amount to be able to recover lost profits. 221 It
argues that "lost profits cannot be denied in a construction contract on the ground of business
uncertainty."222 It also holds that loss of profits can be proven on the basis of experience and the
industry standard by which it can be calculated, if there is any.223
Gammon asserts that MRT did not refute the 5% amount given by Delos Santos or quantify how much
Gammon is actually entitled to. It notes that MRT presented no evidence contrary to what was testified
and that this Court has accepted. 10% profit as the standard industry practice in the construction
business.224
This Court affirms the findings of CIAC and of the Court of Appeals.
MRT is raising questions of fact. Questions of fact are not proper in a Petition for Review under Rule
45. This Court can no longer entertain factual issues, unless there are compelling and cogent reasons,
as when the findings were ''drawn from a vacuum or arbitrarily reached, or are grounded entirely on
speculation or conjectures, are conflicting or are premised on the supposed evidence and contradicted
by the evidence on record or when the inference made is manifestly mistaken or absurd." 225
The findings of fact in the case at bar was arrived at by CIAC, a quasi-judicial body, the jurisdiction of
which is confined to construction disputes. "[F]indings of fact of administrative agencies and quasi-
judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters,
are generally accorded not only respect, but finality when affirmed by the Court of Appeals." 226
Moreover, arbitration proceedings are not bound by the technical rules of evidence in judicial
proceedings. Arbitrators are to ascertain the facts in each case by all reasonable means without regard
to technicalities of law or procedure. 227
Thus, under Section 13.5 of the CIAC Revised Rules of Procedure Governing Construction
Arbitration:
Section 13.5 Evidence. — The parties may offer such evidence as they desire and shall produce such
additional documents and witnesses as the Arbitral Tribunal may deem necessary to clear
understanding of facts issues for a judicious determination of the dispute(s). The Arbitral Tribunal shall
act according to justice and equity and merits of the case, without regard to technicalities or legal
forms and need not be bound by any technical rule of evidence. Evidence shall be taken in the presence
of the Arbitral Tribunal and all of the parties, except where any of the parties is absent, or has waived
his right to be present.
13.5.1 Order to produce documentary evidence. Upon motion of either or both of the parties, or
on its own initiative, the Arbitral Tribunal may direct any person, board, body, tribunal, or
 government office, agency or instrumentality, or corporation to produce real or
documentary evidences necessary for the proper adjudication of the issues.
   
13.5.2 Order to give testimony. The Arbitral Tribunal may, likewise, direct any person to give
testimony at any proceedings for arbitration.

Thus, the findings of fact of CIAC are binding, respected, and final. They are not reviewable by this
Court, especially when affirmed by the Court of Appeals.228 "A review of the CIAC's findings of fact
would have had the effect of 'setting at naught the basic objective of a voluntary arbitration and would
reduce arbitration to a largely inutile institution."'229
The only exceptions subject to this rule were laid out in Uniwide Sales Realty and Resources Corp. v.
Titan-Ikeda Construction and Development Corporation:230
As a rule, findings of fact of administrative agencies and quasi-judicial bodies, which have acquired
expertise because their jurisdiction is confined to specific matters, are generally accorded not only
respect, but also finality, especially when affirmed by the Court of Appeals. In particular, factual
findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal.
This rule, however admits of certain exceptions. SUN BROTHERS APPLIANCES, INC., Plaintiff-Appellee, v. DAMASO P. PEREZ, Defendant-
In David v. Construction Industry and Arbitration Commission, we ruled that, as exceptions, factual Appellant.
findings of construction arbitrators may be reviewed by this Court when the petitioner proves
affirmatively that: (1) the award was procured by corruption, fraud or other undue means; (2) there was Dominador A. Alafriz for Plaintiff-Appellee.
evident partiality or corruption of the arbitrators or of any of them; (3) the arbitrators were guilty of
misconduct in refusing to hear evidence pertinent and material to the controversy; (4) one or more of Roberto P. Halili & Associates, for Defendant-Appellant.
the arbitrators were disqualified to act as such under Section nine of Republic Act No. 876 and
willfully refrained from disclosing such disqualifications or of any other misbehavior by which the
rights of any party have been materially prejudiced; or (5) the arbitrators exceeded their powers, or so SYLLABUS
imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to
them was not made.
Other recognized exceptions are as follows: (1) when there is a very clear showing of grave abuse of 1. OBLIGATIONS AND CONTRACTS; CONDITIONAL SALE OF PERSONAL PROPERTY;
discretion resulting in lack or loss of jurisdiction as when a party was deprived of a fair opportunity to STIPULATION MAKING BUYER LIABLE FOR LOSS OF DESTRUCTION OF THING SOLD
present its position before the Arbitral Tribunal or when an award is obtained through fraud or the DUE TO FORTUITOUS EVENT, VALID. — Plaintiff and defendant executed a conditional sale of
corruption of arbitrators, (2) when the findings of the Court of Appeals are contrary to those of the an air-conditioner, which contained the stipulation that title thereto would vest in the buyer only upon
CIAC, and (3) when a party is deprived of administrative due process.231 (Citations omitted) full payment of the entire account and only upon complete performance of all the other conditions
However, petitioner failed to prove that any of these exceptions are present in the case at bar. Thus, specified in the contract, and that if the property be lost, damaged or destroyed for any cause, the buyer
this Court will no longer disturb CIAC's factual findings, which were affirmed by the Court of would suffer the loss, or repair the damage. After the air-conditioner had been installed at plaintiff’s
Appeals. residence, it was destroyed by fire. Held: The agreement making the buyer responsible for any loss
WHEREFORE, the petition is DENIED. The Court of Appeals October 14, 2011 Decision and whatsoever, fortuitous or otherwise, even if title to the property remains in the vendor, is neither
January 25, 2012 Resolution in CA-G.R. SP No. 98569 are hereby AFFIRMED. contrary to law, nor to morals or public policy. On the contrary it is based on a sound public policy,
SO ORDERED. according to the weight of authority (47 Am. Jur. pp. 81-82). Defendant must pay plaintiff the balance
of the price of the air-conditioner, including interest and attorney’s fees.

DECISION
 LABRADOR, J.:
This is an action brought by the plaintiff to recover from defendant the sum of P1,404.00, the price of
one Admiral Air Conditioner, Slim Style, Model 100-23-1 .P., Serial No. 2978828, delivered to the
defendant by the plaintiff under a conditional sale agreement entered into by and between them on
December 6, 1958, in the City of Manila, plus stipulated interest of 12% from January 6, 1959 until the
same is fully paid, together with P200 as attorney’s fees, and costs. Defendant answered that the air-
conditioner in question was delivered to him and installed in the office of the defendant located at
Gardiner street, Lucena, Quezon on December 14, 1959 but that said air-conditioner was totally
destroyed by fire which occurred in the morning of December 28, 1968 at 2 o’clock. Defendant further
claimed that the machine was destroyed by force majeure, not by the defendant’s fault and/or
negligence and, therefore, he is not liable under the conditional sale, Annex "A", which the parties,
plaintiff and defendant, had executed.
At the trial of the case the parties entered into a stipulation of facts, the most important provisions of
which are as follows:jgc:chanrobles.com.ph
"1. That defendant admits that on December 6, 1958, he entered into a Conditional Sale Agreement
with plaintiff, copy of which contract is attached to the complaint as Annex "A" ;
"2. That pursuant to the terms and conditions provided in the said Conditional Sale Agreement, the
plaintiff delivered to the defendant (1) Admiral Air Conditioner Slim Style, Model 100-23-1 HP, Serial
No. 2978828 with the contract price of P1,678.00 and that said Air Conditioner was received by the
defendant;
"3. That defendant made a down payment of P274.00 on December 6, 1958, pursuant to the terms and
conditions of the Conditional Sale Agreement; and Air Conditioner was installed by the plaintiff, thru
its representative, at Lucena, Quezon;
"4. That said Air Conditioner was burned on December 27, 1958, on or about 2:00 o’clock in the
morning, however, defendant will present evidence to show that the Air Conditioner subject of the
complaint herein was burned where it was installed by the plaintiff;
"5. That defendant, after making down payment of P274.00 to the plaintiff, did not pay any of the
monthly installments of P78.00 thereafter, leaving a balance of P1,404.00 in favor of the plaintiff;
"6. That after defendant presents evidence to prove that the Air Conditioner was burned where it was
installed by the plaintiff, to the satisfaction of this Honorable Court; the parties agree to leave to this
Honorable Court the resolution of the issue whether loss by fire extinguishes the obligation of the
defendant to pay to the plaintiff the subsequent installments of the initial payment;"
The Court of First Instance before which the action was brought rendered judgment condemning the
defendant to pay the plaintiff the amount demanded in the complaint, including interest and attorney’s
fees. The defendant has appealed the case directly to Us as involving only a question of law.
The conditional sale executed by the plaintiff and defendant contained the following
stipulation:jgc:chanrobles.com.ph
"2. Title to said property shall vest in the Buyer only upon full payment of the entire account, as herein
provided, and only upon complete performance of all the other conditions herein specified;
"3. The Buyer shall keep said property in good condition and properly protected against the elements,
at his/its address abovestated, and undertakes that if said property or any part thereof be lost, damaged,
or destroyed for any cause, he shall suffer such loss, or repair such damage, it being distinctly
understood and agreed that said property remains at Buyer’s risk after delivery;"
The court below declared that as the buyer would be liable in case of loss for any cause, such buyer
assumed liability even in case of loss by fortuitous event; so it rendered judgment declaring defendant
liable for the sum demanded together with interest and attorney’s fees.
In this Court on appeal defendant-appellant argues that inasmuch as the title to the property sold shall
vest in the buyer only upon full payment of the price, the loss of the air conditioner should be for the
exclusive account of the vendor; that the phrase "for any cause" used in paragraph 2 of the agreement
may not be interpreted to include a fortuitous event absolutely beyond the control of the appellant; and
that although Article 1174 of the new Civil Code recognizes the exception on fortuitous event when
the parties to a contract expressly so stipulate, the phrase "for any cause" used in the contract did not
indicate any intention of the parties that the loss of the unit due to fortuitous event is to be included
within the responsibility of the vendor.
In answer to the arguments above set forth the appellee argues that the stipulation in the contract of
sale whereby the buyer shall be liable for any loss, damage or destruction for any cause, is not contrary
to law, morals or public policy and is specifically authorized to be stipulated upon between the parties
by Article 1174 of the Civil Code; that the risk of loss was expressly stipulated to be undertaken by the
buyer, even if the title to the property sold remained, also by stipulation, in the vendor; that the term
"any cause" used in the agreement includes a fortuitous event, and an express stipulation making the
vendee responsible in such case is valid.
We believe that the agreement making the buyer responsible for any loss whatever, fortuitous or
otherwise, whatsoever even if the title to the property remains in the vendor, is neither contrary to law,
nor to morals or public policy. We have held such stipulation to be legal in the case of Government v.
Amechazurra, 10 Phil. 637 (Tolentino, Commentaries on the Civil Code, Vol. IV, p. 120), and declare
it to be based on a sound public policy in conditional sales according to American decisions.
"The weight of authority supports the rule that where goods are sold and delivered to the vendee under
an agreement that the title is to remain in the vendor until payment, the loss or destruction of the
property while in the possession of the vendee before payment, without his fault, does not relieve him
from the obligation to pay the price, and he, therefore, suffers the loss. In accord with this rule are the
provisions of the Uniform Sales Act and the Uniform Conditional Sales Act. There are several bases
for this rule. First is the absolute and unconditional nature of the vendee’s promise to pay for the
goods. The promise is nowise dependent upon the transfer of the absolute title. Second is the fact that
the vendor has fully performed his contract and has nothing further to do except receive payment, and
the vendee received what he bargained for when he obtained the right of possession and use of the
goods and the right to acquire title upon making full payment of the price. A third basis advanced for
the rule is the policy of providing an incentive to care properly for the goods, they being exclusively
under the control and dominion of the vendee." (47 Am. Jur., pp. 81-82).
We, therefore, agree with the trial court that the loss by fire or fortuitous event was expressly agreed in
the contract to be borne by the buyer and this express agreement is not contrary to law but sanctioned
by it as well as by the demands of sound public policy. The judgment of the court below is affirmed,
with costs against defendant-appellant.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and
Makalintal, JJ., concur.
Padilla, J., did not take part.
G.R. Nos. L-27860 and L-27896 March 29, 1974
PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, Administrator of the Testate Estate
of Charles Newton Hodges (Sp. Proc. No. 1672 of the Court of First Instance of Iloilo), petitioner,
vs.
THE HONORABLE VENICIO ESCOLIN, Presiding Judge of the Court of First Instance of
Iloilo, Branch II, and AVELINA A. MAGNO, respondents.
G.R. Nos. L-27936 & L-27937 March 29, 1974
TESTATE ESTATE OF THE LATE LINNIE JANE HODGES (Sp. Proc. No. 1307). TESTATE
ESTATE OF THE LATE CHARLES NEWTON HODGES (Sp. Proc. No. 1672). PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK, administrator-appellant,
vs.
LORENZO CARLES, JOSE PABLICO, ALFREDO CATEDRAL, SALVADOR GUZMAN,
BELCESAR CAUSING, FLORENIA BARRIDO, PURIFICACION CORONADO, GRACIANO
LUCERO, ARITEO THOMAS JAMIR, MELQUIADES BATISANAN, PEPITO IYULORES,
ESPERIDION PARTISALA, WINIFREDO ESPADA, ROSARIO ALINGASA, ADELFA
PREMAYLON, SANTIAGO PACAONSIS, and AVELINA A. MAGNO, the last as
Administratrix in Sp. Proc. No. 1307, appellees, WESTERN INSTITUTE OF TECHNOLOGY,
INC., movant-appellee.
San Juan, Africa, Gonzales and San Agustin for Philippine Commercial and Industrial Bank.
Manglapus Law Office, Antonio Law Office and Rizal R. Quimpo for private respondents and
appellees Avelina A. Magno, etc., et al.
BARREDO, J.:p
Certiorari and prohibition with preliminary injunction; certiorari to "declare all acts of the respondent
court in the Testate Estate of Linnie Jane Hodges (Sp. Proc. No. 1307 of the Court of First Instance of
Iloilo) subsequent to the order of December 14, 1957 as null and void for having been issued without
jurisdiction"; prohibition to enjoin the respondent court from allowing, tolerating, sanctioning, or
abetting private respondent Avelina A. Magno to perform or do any acts of administration, such as
those enumerated in the petition, and from exercising any authority or power as Regular Administratrix
of above-named Testate Estate, by entertaining manifestations, motion and pleadings filed by her and
acting on them, and also to enjoin said court from allowing said private respondent to interfere, meddle
or take part in any manner in the administration of the Testate Estate of Charles Newton Hodges (Sp.
Proc. No. 1672 of the same court and branch); with prayer for preliminary injunction, which was
issued by this Court on August 8, 1967 upon a bond of P5,000; the petition being particularly directed
against the orders of the respondent court of October 12, 1966 denying petitioner's motion of April 22,
1966 and its order of July 18, 1967 denying the motion for reconsideration of said order.
Related to and involving basically the same main issue as the foregoing petition, thirty-three (33)
appeals from different orders of the same respondent court approving or otherwise sanctioning the acts
of administration of the respondent Magno on behalf of the testate Estate of Mrs. Hodges.
THE FACTS
On May 23, 1957, Linnie Jane Hodges died in Iloilo City leaving a will executed on November 22,
1952 pertinently providing as follows:
FIRST: I direct that all my just debts and funeral expenses be first paid out of my
estate.
SECOND: I give, devise and bequeath all of the rest, residue and remainder of my
estate, both personal and real, wherever situated, or located, to my beloved husband,
Charles Newton Hodges, to have and to hold unto him, my said husband, during his
natural lifetime.
THIRD: I desire, direct and provide that my husband, Charles Newton Hodges, shall
have the right to manage, control, use and enjoy said estate during his lifetime, and
he is hereby given the right to make any changes in the physical properties of said
estate, by sale or any part thereof which he may think best, and the purchase of any
other or additional property as he may think best; to execute conveyances with or
without general or special warranty, conveying in fee simple or for any other term or
time, any property which he may deem proper to dispose of; to lease any of the real
property for oil, gas and/or other minerals, and all such deeds or leases shall pass the
absolute fee simple title to the interest so conveyed in such property as he may elect
to sell. All rents, emoluments and income from said estate shall belong to him, and
he is further authorized to use any part of the principal of said estate as he may need
or desire. It is provided herein, however, that he shall not sell or otherwise dispose of
any of the improved property now owned by us located at, in or near the City of
Lubbock, Texas, but he shall have the full right to lease, manage and enjoy the same
during his lifetime, above provided. He shall have the right to subdivide any farm
land and sell lots therein. and may sell unimproved town lots.
FOURTH: At the death of my said husband, Charles Newton Hodges, I give, devise
and bequeath all of the rest, residue and remainder of my estate, both real and
personal, wherever situated or located, to be equally divided among my brothers and
sisters, share and share alike, namely:
Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Saddie Rascoe, Era
Roman and Nimroy Higdon.
FIFTH: In case of the death of any of my brothers and/or sisters named in item
Fourth, above, prior to the death of my husband, Charles Newton Hodges, then it is
my will and bequest that the heirs of such deceased brother or sister shall take jointly
the share which would have gone to such brother or sister had she or he survived.
SIXTH: I nominate and appoint my said husband, Charles Newton Hodges, to be
executor of this, my last will and testament, and direct that no bond or other security
be required of him as such executor.
 SEVENTH: It is my will and bequest that no action be had in the probate court, in
the administration of my estate, other than that necessary to prove and record this
will and to return an inventory and appraisement of my estate and list of claims. (Pp.
2-4, Petition.)
This will was subsequently probated in aforementioned Special Proceedings No. 1307 of respondent
court on June 28, 1957, with the widower Charles Newton Hodges being appointed as Executor,
pursuant to the provisions thereof.
Previously, on May 27, 1957, the said widower (hereafter to be referred to as Hodges) had been
appointed Special Administrator, in which capacity he filed a motion on the same date as follows:
URGENT EX-PARTE MOTION TO ALLOW OR AUTHORIZE PETITIONER TO
CONTINUE THE BUSINESS IN WHICH HE WAS ENGAGED AND TO PERFORM
ACTS WHICH HE HAD BEEN DOING WHILE DECEASED WAS LIVING
Come petitioner in the above-entitled special proceedings, thru his undersigned attorneys, to the Hon.
Court, most respectfully states:
1. — That Linnie Jane Hodges died leaving her last will and testament, a copy of
which is attached to the petition for probate of the same.
2. — That in said last will and testament herein petitioner Charles Newton Hodges is
directed to have the right to manage, control use and enjoy the estate of deceased
Linnie Jane Hodges, in the same way, a provision was placed in paragraph two, the
following: "I give, devise and bequeath all of the rest, residue and remainder of my
estate, to my beloved husband, Charles Newton Hodges, to have and (to) hold unto
him, my said husband, during his natural lifetime."
3. — That during the lifetime of Linnie Jane Hodges, herein petitioner was engaged
in the business of buying and selling personal and real properties, and do such acts
which petitioner may think best.
4. — That deceased Linnie Jane Hodges died leaving no descendants or ascendants,
except brothers and sisters and herein petitioner as executor surviving spouse, to
inherit the properties of the decedent.
5. — That the present motion is submitted in order not to paralyze the business of
petitioner and the deceased, especially in the purchase and sale of properties. That
proper accounting will be had also in all these transactions.
WHEREFORE, it is most respectfully prayed that, petitioner C. N. Hodges (Charles
Newton Hodges) be allowed or authorized to continue the business in which he was
engaged and to perform acts which he had been doing while deceased Linnie Jane
Hodges was living.
City of Iloilo, May 27, 1957. (Annex "D", Petition.)
which the respondent court immediately granted in the following order:
It appearing in the urgent ex-parte motion filed by petitioner C. N. Hodges, that the
business in which said petitioner and the deceased were engaged will be paralyzed,
unless and until the Executor is named and appointed by the Court, the said
petitioner is allowed or authorized to continue the business in which he was engaged
and to perform acts which he had been doing while the deceased was living.
SO ORDERED.
City of Iloilo May 27, 1957. (Annex "E", Petition.)
Under date of December 11, 1957, Hodges filed as such Executor another motion thus:
MOTION TO APPROVE ALL SALES, CONVEYANCES, LEASES,
MORTGAGES THAT THE EXECUTOR HAD MADE FURTHER AND
SUBSEQUENT TRANSACTIONS WHICH THE EXECUTOR MAY DO IN
ACCORDANCE WITH THE LAST WISH OF THE DECEASED LINNIE JANE
HODGES.
Comes the Executor in the above-entitled proceedings, thru his undersigned attorney,
to the Hon. Court, most respectfully states:
1. — That according to the last will and testament of the deceased Linnie Jane
Hodges, the executor as the surviving spouse and legatee named in the will of the
deceased; has the right to dispose of all the properties left by the deceased, portion of
which is quoted as follows:
Second: I give, devise and bequeath all of the rest, residue and remainder of my
estate, both personal and real, wherever situated, or located, to my beloved husband,
Charles Newton Hodges, to have and to hold unto him, my said husband, during his
natural lifetime.
Third: I desire, direct and provide that my husband, Charles Newton Hodges, shall
have the right to manage, control, use and enjoy said estate during his lifetime, and
he is hereby given the right to make any changes in the physical properties of said
estate, by sale or any part thereof which he may think best, and the purchase of any
other or additional property as he may think best; to execute conveyances with or
without general or special warranty, conveying in fee simple or for any other term or
time, any property which he may deem proper to dispose of; to lease any of the real
property for oil, gas and/or other minerals, and all such deeds or leases shall pass the
absolute fee simple title to the interest so conveyed in such property as he may elect
to sell. All rents, emoluments and income from said estate shall belong to him, and
he is further authorized to use any part of the principal of said estate as he may need
or desire. ...
2. — That herein Executor, is not only part owner of the properties left as conjugal,
but also, the successor to all the properties left by the deceased Linnie Jane Hodges.
That during the lifetime of herein Executor, as Legatee has the right to sell, convey,
lease or dispose of the properties in the Philippines. That inasmuch as C.N. Hodges
was and is engaged in the buy and sell of real and personal properties, even before
the death of Linnie Jane Hodges, a motion to authorize said C.N. Hodges was filed in
Court, to allow him to continue in the business of buy and sell, which motion was
favorably granted by the Honorable Court.
3. — That since the death of Linnie Jane Hodges, Mr. C.N. Hodges had been buying
and selling real and personal properties, in accordance with the wishes of the late
Linnie Jane Hodges.
4. — That the Register of Deeds for Iloilo, had required of late the herein Executor to
have all the sales, leases, conveyances or mortgages made by him, approved by the
Hon. Court.
5. — That it is respectfully requested, all the sales, conveyances leases and
mortgages executed by the Executor, be approved by the Hon. Court. and subsequent
sales conveyances, leases and mortgages in compliances with the wishes of the late
Linnie Jane Hodges, and within the scope of the terms of the last will and testament,
also be approved;
 6. — That the Executor is under obligation to submit his yearly accounts, and the
properties conveyed can also be accounted for, especially the amounts received.
WHEREFORE, it is most respectfully prayed that, all the sales, conveyances, leases,
and mortgages executed by the Executor, be approved by the Hon. Court, and also
the subsequent sales, conveyances, leases, and mortgages in consonance with the
wishes of the deceased contained in her last will and testament, be with authorization
and approval of the Hon. Court.
City of Iloilo, December 11, 1967.
(Annex "G", Petition.)
which again was promptly granted by the respondent court on December 14, 1957 as follows:
ORDER
As prayed for by Attorney Gellada, counsel for the Executor for the reasons stated in
his motion dated December 11, 1957, which the Court considers well taken all the
sales, conveyances, leases and mortgages of all properties left by the deceased Linnie
Jane Hodges executed by the Executor Charles N. Hodges are hereby APPROVED.
The said Executor is further authorized to execute subsequent sales, conveyances,
leases and mortgages of the properties left by the said deceased Linnie Jane Hodges
in consonance with the wishes conveyed in the last will and testament of the latter.
So ordered.
Iloilo City. December 14, 1957.
(Annex "H", Petition.)
On April 14, 1959, in submitting his first statement of account as Executor for approval, Hodges
alleged:
Pursuant to the provisions of the Rules of Court, herein executor of the deceased,
renders the following account of his administration covering the period from January
1, 1958 to December 31, 1958, which account may be found in detail in the
individual income tax return filed for the estate of deceased Linnie Jane Hodges, to
wit:
That a certified public accountant has examined the statement of net worth of the
estate of Linnie Jane Hodges, the assets and liabilities, as well as the income and
expenses, copy of which is hereto attached and made integral part of this statement
of account as Annex "A".
IN VIEW OF THE FOREGOING, it is most respectfully prayed that, the statement
of net worth of the estate of Linnie Jane Hodges, the assets and liabilities, income
and expenses as shown in the individual income tax return for the estate of the
deceased and marked as Annex "A", be approved by the Honorable Court, as
substantial compliance with the requirements of the Rules of Court.
That no person interested in the Philippines of the time and place of examining the
herein accounts be given notice, as herein executor is the only devisee or legatee of
the deceased, in accordance with the last will and testament already probated by the
Honorable court.
City of Iloilo April 14, 1959.
(Annex "I", Petition.)
The respondent court approved this statement of account on April 21, 1959 in its order worded thus:
Upon petition of Atty. Gellada, in representation of the Executor, the statement of net
worth of the estate of Linnie Jane Hodges, assets and liabilities, income and expenses
as shown in the individual income tax return for the estate of the deceased and
marked as Annex "A" is approved.
SO ORDERED.
City of Iloilo April 21, 1959.
(Annex "J", Petition.)
His accounts for the periods January 1, 1959 to December 31, 1959 and January 1, 1960 to December
31, 1960 were submitted likewise accompanied by allegations identical mutatis mutandis to those of
April 14, 1959, quoted above; and the respective orders approving the same, dated July 30, 1960 and
May 2, 1961, were substantially identical to the above-quoted order of April 21, 1959. In connection
with the statements of account just mentioned, the following assertions related thereto made by
respondent-appellee Magno in her brief do not appear from all indications discernible in the record to
be disputable:
Under date of April 14, 1959, C.N. Hodges filed his first "Account by the Executor"
of the estate of Linnie Jane Hodges. In the "Statement of Networth of Mr. C.N.
Hodges and the Estate of Linnie Jane Hodges" as of December 31, 1958 annexed
thereto, C.N. Hodges reported that the combined conjugal estate earned a net income
of P328,402.62, divided evenly between him and the estate of Linnie Jane Hodges.
Pursuant to this, he filed an "individual income tax return" for calendar year 1958 on
the estate of Linnie Jane Hodges reporting, under oath, the said estate as having
earned income of P164,201.31, exactly one-half of the net income of his combined
personal assets and that of the estate of Linnie Jane Hodges. (p. 91, Appellee's Brief.)
xxx xxx xxx
Under date of July 21, 1960, C.N. Hodges filed his second "Annual Statement of
Account by the Executor" of the estate of Linnie Jane Hodges. In the "Statement of
Networth of Mr. C.N. Hodges and the Estate of Linnie Jane Hodges" as of December
31, 1959 annexed thereto, C.N. Hodges reported that the combined conjugal estate
earned a net income of P270,623.32, divided evenly between him and the estate of
Linnie Jane Hodges. Pursuant to this, he filed an "individual income tax return" for
calendar year 1959 on the estate of Linnie Jane Hodges reporting, under oath, the
said estate as having earned income of P135,311.66, exactly one-half of the net
income of his combined personal assets and that of the estate of Linnie Jane Hodges.
(pp. 91-92. Appellee's Brief.)
xxx xxx xxx
Under date of April 20, 1961, C.N. Hodges filed his third "Annual Statement of
Account by the Executor for the Year 1960" of the estate of Linnie Jane Hodges. In
the "Statement of Net Worth of Mr. C.N. Hodges and the Estate of Linnie Jane
Hodges" as of December 31, 1960 annexed thereto, C.N. Hodges reported that the
combined conjugal estate earned a net income of P314,857.94, divided evenly
between him and the estate of Linnie Jane Hodges. Pursuant to this, he filed an
"individual income tax return" for calendar year 1960 on the estate of Linnie Jane
Hodges reporting, under oath, the said estate as having earned income of
P157,428.97, exactly one-half of the net income of his combined personal assets and
that of the estate of Linnie Jane Hodges. (Pp. 92-93, Appellee's Brief.)
Likewise the following:
In the petition for probate that he (Hodges) filed, he listed the seven brothers and
sisters of Linnie Jane as her "heirs" (see p. 2, Green ROA). The order of the court
 admitting the will to probate unfortunately omitted one of the heirs, Roy Higdon (see
p. 14, Green ROA). Immediately, C.N. Hodges filed a verified motion to have Roy
Higdon's name included as an heir, stating that he wanted to straighten the records
"in order the heirs of deceased Roy Higdon may not think or believe they were
omitted, and that they were really and are interested in the estate of deceased Linnie
Jane Hodges. .
As an executor, he was bound to file tax returns for the estate he was administering
under American law. He did file such as estate tax return on August 8, 1958. In
Schedule "M" of such return, he answered "Yes" to the question as to whether he
was contemplating "renouncing the will". On the question as to what property
interests passed to him as the surviving spouse, he answered:
"None, except for purposes of administering the Estate, paying
debts, taxes and other legal charges. It is the intention of the
surviving husband of deceased to distribute the remaining property
and interests of the deceased in their Community estate to the
devisees and legatees named in the will when the debts, liabilities,
taxes and expenses of administration are finally determined and
paid."
Again, on August 9, 1962, barely four months before his death, he executed an
"affidavit" wherein he ratified and confirmed all that he stated in Schedule "M" of
his estate tax returns as to his having renounced what was given him by his wife's
will.1
As appointed executor, C.N. Hodges filed an "Inventory" dated May 12, 1958. He
listed all the assets of his conjugal partnership with Linnie Jane Hodges on a separate
balance sheet and then stated expressly that her estate which has come into his
possession as executor was "one-half of all the items" listed in said balance sheet.
(Pp. 89-90, Appellee's Brief.)
Parenthetically, it may be stated, at this juncture, that We are taking pains to quote wholly or at least,
extensively from some of the pleadings and orders whenever We feel that it is necessary to do so for a
more comprehensive and clearer view of the important and decisive issues raised by the parties and a
more accurate appraisal of their respective positions in regard thereto.
The records of these cases do not show that anything else was done in the above-mentioned Special
Proceedings No. 1307 until December 26, 1962, when on account of the death of Hodges the day
before, the same lawyer, Atty. Leon P. Gellada, who had been previously acting as counsel for Hodges
in his capacity as Executor of his wife's estate, and as such had filed the aforequoted motions and
manifestations, filed the following:
URGENT EX-PARTE MOTION FOR THE APPOINTMENT OF A
SPECIAL ADMINISTRATRIX
COMES the undersigned attorney for the Executor in the above-entitled proceedings,
to the Honorable Court, most respectfully states:
1. That in accordance with the Last Will and Testament of Linnie Jane Hodges
(deceased), her husband, Charles Newton Hodges was to act as Executor, and in fact,
in an order issued by this Hon. Court dated June 28, 1957, the said Charles Newton
Hodges was appointed Executor and had performed the duties as such.
2. That last December 22, 1962, the said Charles Newton Hodges was stricken ill,
and brought to the Iloilo Mission Hospital for treatment, but unfortunately, he died
on December 25, 1962, as shown by a copy of the death certificate hereto attached
and marked as Annex "A".
3. That in accordance with the provisions of the last will and testament of Linnie
Jane Hodges, whatever real and personal properties that may remain at the death of
her husband Charles Newton Hodges, the said properties shall be equally divided
among their heirs. That there are real and personal properties left by Charles Newton
Hodges, which need to be administered and taken care of.
4. That the estate of deceased Linnie Jane Hodges, as well as that of Charles Newton
Hodges, have not as yet been determined or ascertained, and there is necessity for the
appointment of a general administrator to liquidate and distribute the residue of the
estate to the heirs and legatees of both spouses. That in accordance with the
provisions of Section 2 of Rule 75 of the Rules of Court, the conjugal partnership of
Linnie Jane Hodges and Charles Newton Hodges shall be liquidated in the testate
proceedings of the wife.
5. That the undersigned counsel, has perfect personal knowledge of the existence of
the last will and testament of Charles Newton Hodges, with similar provisions as that
contained in the last will and testament of Linnie Jane Hodges. However, said last
will and testament of Charles Newton Hodges is kept inside the vault or iron safe in
his office, and will be presented in due time before this honorable Court.
6. That in the meantime, it is imperative and indispensable that, an Administratrix be
appointed for the estate of Linnie Jane Hodges and a Special Administratrix for the
estate of Charles Newton Hodges, to perform the duties required by law, to
administer, collect, and take charge of the goods, chattels, rights, credits, and estate
of both spouses, Charles Newton Hodges and Linnie Jane Hodges, as provided for in
Section 1 and 2, Rule 81 of the Rules of Court.
7. That there is delay in granting letters testamentary or of administration, because
the last will and testament of deceased, Charles Newton Hodges, is still kept in his
safe or vault, and in the meantime, unless an administratrix (and,) at the same time, a
Special Administratrix is appointed, the estate of both spouses are in danger of being
lost, damaged or go to waste.
8. That the most trusted employee of both spouses Linnie Jane Hodges and C.N.
Hodges, who had been employed for around thirty (30) years, in the person of Miss
Avelina Magno, (should) be appointed Administratrix of the estate of Linnie Jane
Hodges and at the same time Special Administratrix of the estate of Charles Newton
Hodges. That the said Miss Avelina Magno is of legal age, a resident of the
Philippines, the most fit, competent, trustworthy and well-qualified person to serve
the duties of Administratrix and Special Administratrix and is willing to act as such.
9. That Miss Avelina Magno is also willing to file bond in such sum which the Hon.
Court believes reasonable.
WHEREFORE, in view of all the foregoing, it is most respectfully prayed that, Miss
AVELINA A. MAGNO be immediately appointed Administratrix of the estate of
Linnie Jane Hodges and as Special Administratrix of the estate of Charles Newton
Hodges, with powers and duties provided for by law. That the Honorable Court fix
the reasonable bond of P1,000.00 to be filed by Avelina A. Magno.
(Annex "O", Petition.)
which respondent court readily acted on in its order of even date thus: .
 For the reasons alleged in the Urgent Ex-parte Motion filed by counsel for the
Executor dated December 25, 1962, which the Court finds meritorious, Miss
AVELINA A. MAGNO, is hereby appointed Administratrix of the estate of Linnie
Jane Hodges and as Special Administratrix of the estate of Charles Newton Hodges,
in the latter case, because the last will of said Charles Newton Hodges is still kept in
his vault or iron safe and that the real and personal properties of both spouses may be
lost, damaged or go to waste, unless a Special Administratrix is appointed.
Miss Avelina A. Magno is required to file bond in the sum of FIVE THOUSAND
PESOS (P5,000.00), and after having done so, let letters of Administration be issued
to her." (Annex "P", Petition.)
On December 29, 1962, however, upon urgent ex-parte petition of respondent
Magno herself, thru Atty. Gellada, Harold, R. Davies, "a representative of the heirs
of deceased Charles Newton Hodges (who had) arrived from the United States of
America to help in the administration of the estate of said deceased" was appointed
as Co-Special Administrator of the estate of Hodges, (pp. 29-33, Yellow - Record on
Appeal) only to be replaced as such co-special administrator on January 22, 1963 by
Joe Hodges, who, according to the motion of the same attorney, is "the nephew of
the deceased (who had) arrived from the United States with instructions from the
other heirs of the deceased to administer the properties or estate of Charles Newton
Hodges in the Philippines, (Pp. 47-50, id.)
Meanwhile, under date of January 9, 1963, the same Atty. Gellada filed in Special Proceedings 1672 a
petition for the probate of the will of Hodges,2 with a prayer for the issuance of letters of administration
to the same Joe Hodges, albeit the motion was followed on February 22, 1963 by a separate one asking
that Atty. Fernando Mirasol be appointed as his co-administrator. On the same date this latter motion
was filed, the court issued the corresponding order of probate and letters of administration to Joe
Hodges and Atty. Mirasol, as prayed for.
At this juncture, again, it may also be explained that just as, in her will, Mrs. Hodges bequeathed her
whole estate to her husband "to have and to hold unto him, my said husband, during his natural
lifetime", she, at the same time or in like manner, provided that "at the death of my said husband — I
give devise and bequeath all of the rest, residue and remainder of my estate, both real and personal,
wherever situated or located, to be equally divided among my brothers and sisters, share and share
alike —". Accordingly, it became incumbent upon Hodges, as executor of his wife's will, to duly
liquidate the conjugal partnership, half of which constituted her estate, in order that upon the
eventuality of his death, "the rest, residue and remainder" thereof could be determined and
correspondingly distributed or divided among her brothers and sisters. And it was precisely because no
such liquidation was done, furthermore, there is the issue of whether the distribution of her estate
should be governed by the laws of the Philippines or those of Texas, of which State she was a national,
and, what is more, as already stated, Hodges made official and sworn statements or manifestations
indicating that as far as he was concerned no "property interests passed to him as surviving spouse —
"except for purposes of administering the estate, paying debts, taxes and other legal charges" and it was
the intention of the surviving husband of the deceased to distribute the remaining property and interests
of the deceased in their Community Estate to the devisees and legatees named in the will when the
debts, liabilities, taxes and expenses of administration are finally determined and paid", that the
incidents and controversies now before Us for resolution arose. As may be observed, the situation that
ensued upon the death of Hodges became rather unusual and so, quite understandably, the lower court's
actuations presently under review are apparently wanting in consistency and seemingly lack proper
orientation.
Thus, We cannot discern clearly from the record before Us the precise perspective from which the trial
court proceeded in issuing its questioned orders. And, regretably, none of the lengthy briefs submitted
by the parties is of valuable assistance in clearing up the matter.
To begin with, We gather from the two records on appeal filed by petitioner, as appellant in the
appealed cases, one with green cover and the other with a yellow cover, that at the outset, a sort of
modus operandi had been agreed upon by the parties under which the respective administrators of the
two estates were supposed to act conjointly, but since no copy of the said agreement can be found in
the record before Us, We have no way of knowing when exactly such agreement was entered into and
under what specific terms. And while reference is made to said modus operandi in the order of
September 11, 1964, on pages 205-206 of the Green Record on Appeal, reading thus:
The present incident is to hear the side of administratrix, Miss Avelina A. Magno, in
answer to the charges contained in the motion filed by Atty. Cesar Tirol on
September 3, 1964. In answer to the said charges, Miss Avelina A. Magno, through
her counsel, Atty. Rizal Quimpo, filed a written manifestation.
After reading the manifestation here of Atty. Quimpo, for and in behalf of the
administratrix, Miss Avelina A. Magno, the Court finds that everything that
happened before September 3, 1964, which was resolved on September 8, 1964, to
the satisfaction of parties, was simply due to a misunderstanding between the
representative of the Philippine Commercial and Industrial Bank and Miss Magno
and in order to restore the harmonious relations between the parties, the Court
ordered the parties to remain in status quo as to their modus operandi before
September 1, 1964, until after the Court can have a meeting with all the parties and
their counsels on October 3, as formerly agreed upon between counsels, Attys.
Ozaeta, Gibbs and Ozaeta, Attys. Tirol and Tirol and Atty. Rizal Quimpo.
In the meantime, the prayers of Atty. Quimpo as stated in his manifestation shall not
be resolved by this Court until October 3, 1964.
SO ORDERED.
there is nothing in the record indicating whatever happened to it afterwards, except that again,
reference thereto was made in the appealed order of October 27, 1965, on pages 292-295 of the Green
Record on Appeal, as follows:
On record is an urgent motion to allow PCIB to open all doors and locks in the
Hodges Office at 206-208 Guanco Street, Iloilo City, to take immediate and
exclusive possession thereof and to place its own locks and keys for security
purposes of the PCIB dated October 27, 1965 thru Atty. Cesar Tirol. It is alleged in
said urgent motion that Administratrix Magno of the testate estate of Linnie Jane
Hodges refused to open the Hodges Office at 206-208 Guanco Street, Iloilo City
where PCIB holds office and therefore PCIB is suffering great moral damage and
prejudice as a result of said act. It is prayed that an order be issued authorizing it
(PCIB) to open all doors and locks in the said office, to take immediate and exclusive
possession thereof and place thereon its own locks and keys for security purposes;
instructing the clerk of court or any available deputy to witness and supervise the
opening of all doors and locks and taking possession of the PCIB.
A written opposition has been filed by Administratrix Magno of even date (Oct. 27)
thru counsel Rizal Quimpo stating therein that she was compelled to close the office
 for the reason that the PCIB failed to comply with the order of this Court signed by
Judge Anacleto I. Bellosillo dated September 11, 1964 to the effect that both estates
should remain in status quo to their modus operandi as of September 1, 1964.
To arrive at a happy solution of the dispute and in order not to interrupt the operation
of the office of both estates, the Court aside from the reasons stated in the urgent
motion and opposition heard the verbal arguments of Atty. Cesar Tirol for the PCIB
and Atty. Rizal Quimpo for Administratix Magno.
After due consideration, the Court hereby orders Magno to open all doors and locks
in the Hodges Office at 206-208 Guanco Street, Iloilo City in the presence of the
PCIB or its duly authorized representative and deputy clerk of court Albis of this
branch not later than 7:30 tomorrow morning October 28, 1965 in order that the
office of said estates could operate for business.
Pursuant to the order of this Court thru Judge Bellosillo dated September 11, 1964, it
is hereby ordered:
(a) That all cash collections should be deposited in the joint account of the estates of
Linnie Jane Hodges and estates of C.N. Hodges;
(b) That whatever cash collections that had been deposited in the account of either of
the estates should be withdrawn and since then deposited in the joint account of the
estate of Linnie Jane Hodges and the estate of C.N. Hodges;
(c) That the PCIB should countersign the check in the amount of P250 in favor of
Administratrix Avelina A. Magno as her compensation as administratrix of the
Linnie Jane Hodges estate chargeable to the testate estate of Linnie Jane Hodges
only;
(d) That Administratrix Magno is hereby directed to allow the PCIB to inspect
whatever records, documents and papers she may have in her possession in the same
manner that Administrator PCIB is also directed to allow Administratrix Magno to
inspect whatever records, documents and papers it may have in its possession;
(e) That the accountant of the estate of Linnie Jane Hodges shall have access to all
records of the transactions of both estates for the protection of the estate of Linnie
Jane Hodges; and in like manner the accountant or any authorized representative of
the estate of C.N. Hodges shall have access to the records of transactions of the
Linnie Jane Hodges estate for the protection of the estate of C.N. Hodges.
Once the estates' office shall have been opened by Administratrix Magno in the
presence of the PCIB or its duly authorized representative and deputy clerk Albis or
his duly authorized representative, both estates or any of the estates should not close
it without previous consent and authority from this court.
SO ORDERED.
As may be noted, in this order, the respondent court required that all collections from the properties in
the name of Hodges should be deposited in a joint account of the two estates, which indicates that
seemingly the so-called modus operandi was no longer operative, but again there is nothing to show
when this situation started.
Likewise, in paragraph 3 of the petitioner's motion of September 14, 1964, on pages 188-201 of the
Green Record on Appeal, (also found on pp. 83-91 of the Yellow Record on Appeal) it is alleged that:
3. On January 24, 1964 virtually all of the heirs of C.N. Hodges, Joe Hodges and
Fernando P. Mirasol acting as the two co-administrators of the estate of C.N.
Hodges, Avelina A. Magno acting as the administratrix of the estate of Linnie Jane
Hodges and Messrs. William Brown and Ardell Young acting for all of the Higdon
family who claim to be the sole beneficiaries of the estate of Linnie Jane Hodges and
various legal counsel representing the aforementioned parties entered into an
amicable agreement, which was approved by this Honorable Court, wherein the
parties thereto agreed that certain sums of money were to be paid in settlement of
different claims against the two estates and that the assets (to the extent they existed)
of both estates would be administered jointly by the PCIB as administrator of the
estate of C.N. Hodges and Avelina A. Magno as administratrix of the estate of Linnie
Jane Hodges, subject, however, to the aforesaid October 5, 1963 Motion, namely, the
PCIB's claim to exclusive possession and ownership of one hundred percent (100%)
(or, in the alternative, seventy-five percent (75%) of all assets owned by C.N.
Hodges or Linnie Jane Hodges situated in the Philippines. On February 1, 1964 (pp.
934-935, CFI Rec., S.P. No. 1672) this Honorable Court amended its order of
January 24, 1964 but in no way changed its recognition of the afore-described basic
demand by the PCIB as administrator of the estate of C.N. Hodges to one hundred
percent (100%) of the assets claimed by both estates.
but no copy of the mentioned agreement of joint administration of the two estates exists in the record,
and so, We are not informed as to what exactly are the terms of the same which could be relevant in
the resolution of the issues herein.
On the other hand, the appealed order of November 3, 1965, on pages 313-320 of the Green Record on
Appeal, authorized payment by respondent Magno of, inter alia, her own fees as administratrix, the
attorney's fees of her lawyers, etc., as follows:
Administratrix Magno thru Attys. Raul S. Manglapus and Rizal. R. Quimpo filed a
Manifestation and Urgent Motion dated June 10, 1964 asking for the approval of the
Agreement dated June 6, 1964 which Agreement is for the purpose of retaining their
services to protect and defend the interest of the said Administratrix in these
proceedings and the same has been signed by and bears the express conformity of the
attorney-in-fact of the late Linnie Jane Hodges, Mr. James L. Sullivan. It is further
prayed that the Administratrix of the Testate Estate of Linnie Jane Hodges be
directed to pay the retailers fee of said lawyers, said fees made chargeable as
expenses for the administration of the estate of Linnie Jane Hodges (pp. 1641-1642,
Vol. V, Sp. 1307).
An opposition has been filed by the Administrator PCIB thru Atty. Herminio Ozaeta
dated July 11, 1964, on the ground that payment of the retainers fee of Attys.
Manglapus and Quimpo as prayed for in said Manifestation and Urgent Motion is
prejudicial to the 100% claim of the estate of C. N. Hodges; employment of Attys.
Manglapus and Quimpo is premature and/or unnecessary; Attys. Quimpo and
Manglapus are representing conflicting interests and the estate of Linnie Jane
Hodges should be closed and terminated (pp. 1679-1684, Vol, V, Sp. 1307).
Atty. Leon P. Gellada filed a memorandum dated July 28, 1964 asking that the
Manifestation and Urgent Motion filed by Attys. Manglapus and Quimpo be denied
because no evidence has been presented in support thereof. Atty. Manglapus filed a
reply to the opposition of counsel for the Administrator of the C. N. Hodges estate
wherein it is claimed that expenses of administration include reasonable counsel or
attorney's fees for services to the executor or administrator. As a matter of fact the
fee agreement dated February 27, 1964 between the PCIB and the law firm of
Ozaeta, Gibbs & Ozaeta as its counsel (Pp. 1280-1284, Vol. V, Sp. 1307) which
stipulates the fees for said law firm has been approved by the Court in its order dated
March 31, 1964. If payment of the fees of the lawyers for the administratrix of the
estate of Linnie Jane Hodges will cause prejudice to the estate of C. N. Hodges, in
like manner the very agreement which provides for the payment of attorney's fees to
the counsel for the PCIB will also be prejudicial to the estate of Linnie Jane Hodges
(pp. 1801-1814, Vol. V, Sp. 1307).
Atty. Herminio Ozaeta filed a rejoinder dated August 10, 1964 to the reply to the
opposition to the Manifestation and Urgent Motion alleging principally that the
estates of Linnie Jane Hodges and C. N. Hodges are not similarly situated for the
reason that C. N. Hodges is an heir of Linnie Jane Hodges whereas the latter is not an
heir of the former for the reason that Linnie Jane Hodges predeceased C. N. Hodges
(pp. 1839-1848, Vol. V, Sp. 1307); that Attys. Manglapus and Quimpo formally
entered their appearance in behalf of Administratrix of the estate of Linnie Jane
Hodges on June 10, 1964 (pp. 1639-1640, Vol. V, Sp. 1307).
Atty. Manglapus filed a manifestation dated December 18, 1964 stating therein that
Judge Bellosillo issued an order requiring the parties to submit memorandum in
support of their respective contentions. It is prayed in this manifestation that the
Manifestation and Urgent Motion dated June 10, 1964 be resolved (pp. 6435-6439,
Vol. VII, Sp. 1307).
Atty. Roman Mabanta, Jr. for the PCIB filed a counter- manifestation dated January
5, 1965 asking that after the consideration by the court of all allegations and
arguments and pleadings of the PCIB in connection therewith (1) said manifestation
and urgent motion of Attys. Manglapus and Quimpo be denied (pp. 6442-6453, Vol.
VII, Sp. 1307). Judge Querubin issued an order dated January 4, 1965 approving the
motion dated June 10, 1964 of the attorneys for the administratrix of the estate of
Linnie Jane Hodges and agreement annexed to said motion. The said order further
states: "The Administratrix of the estate of Linnie Jane Hodges is authorized to issue
or sign whatever check or checks may be necessary for the above purpose and the
administrator of the estate of C. N. Hodges is ordered to countersign the same. (pp.
6518-6523, Vol VII, Sp. 1307).
Atty. Roman Mabanta, Jr. for the PCIB filed a manifestation and motion dated
January 13, 1965 asking that the order of January 4, 1965 which was issued by Judge
Querubin be declared null and void and to enjoin the clerk of court and the
administratrix and administrator in these special proceedings from all proceedings
and action to enforce or comply with the provision of the aforesaid order of January
4, 1965. In support of said manifestation and motion it is alleged that the order of
January 4, 1965 is null and void because the said order was never delivered to the
deputy clerk Albis of Branch V (the sala of Judge Querubin) and the alleged order
was found in the drawer of the late Judge Querubin in his office when said drawer
was opened on January 13, 1965 after the death of Judge Querubin by Perfecto
Querubin, Jr., the son of the judge and in the presence of Executive Judge Rovira and
deputy clerk Albis (Sec. 1, Rule 36, New Civil Code) (Pp. 6600-6606, Vol. VIII, Sp.
1307).
Atty. Roman Mabanta, Jr. for the PCIB filed a motion for reconsideration dated
February 23, 1965 asking that the order dated January 4, 1964 be reversed on the
ground that:
1. Attorneys retained must render services to the estate not to the personal heir;
2. If services are rendered to both, fees should be pro-rated between them;
3. Attorneys retained should not represent conflicting interests; to the prejudice of
the other heirs not represented by said attorneys;
4. Fees must be commensurate to the actual services rendered to the estate;
5. There must be assets in the estate to pay for said fees (Pp. 6625-6636, Vol. VIII,
Sp. 1307).
Atty. Quimpo for Administratrix Magno of the estate of Linnie Jane Hodges filed a
motion to submit dated July 15, 1965 asking that the manifestation and urgent
motion dated June 10, 1964 filed by Attys. Manglapus and Quimpo and other
incidents directly appertaining thereto be considered submitted for consideration and
approval (pp. 6759-6765, Vol. VIII, Sp. 1307).
Considering the arguments and reasons in support to the pleadings of both the
Administratrix and the PCIB, and of Atty. Gellada, hereinbefore mentioned, the
Court believes that the order of January 4, 1965 is null and void for the reason that
the said order has not been filed with deputy clerk Albis of this court (Branch V)
during the lifetime of Judge Querubin who signed the said order. However, the said
manifestation and urgent motion dated June 10, 1964 is being treated and considered
in this instant order. It is worthy to note that in the motion dated January 24, 1964
(Pp. 1149- 1163, Vol. V, Sp. 1307) which has been filed by Atty. Gellada and his
associates and Atty. Gibbs and other lawyers in addition to the stipulated fees for
actual services rendered. However, the fee agreement dated February 27, 1964,
between the Administrator of the estate of C. N. Hodges and Atty. Gibbs which
provides for retainer fee of P4,000 monthly in addition to specific fees for actual
appearances, reimbursement for expenditures and contingent fees has also been
approved by the Court and said lawyers have already been paid. (pp. 1273-1279,
Vol. V, Sp. Proc. 1307 pp. 1372-1373, Vol. V, Sp. Proc. 1307).
WHEREFORE, the order dated January 4, 1965 is hereby declared null and void.
The manifestation and motion dated June 10, 1964 which was filed by the attorneys
for the administratrix of the testate estate of Linnie Jane Hodges is granted and the
agreement annexed thereto is hereby approved.
The administratrix of the estate of Linnie Jane Hodges is hereby directed to be
needed to implement the approval of the agreement annexed to the motion and the
administrator of the estate of C. N. Hodges is directed to countersign the said check
or checks as the case may be.
SO ORDERED.
thereby implying somehow that the court assumed the existence of independent but simultaneous
administrations.
Be that as it may, again, it appears that on August 6, 1965, the court, acting on a motion of petitioner
for the approval of deeds of sale executed by it as administrator of the estate of Hodges, issued the
following order, also on appeal herein:
Acting upon the motion for approval of deeds of sale for registered land of the PCIB,
Administrator of the Testate Estate of C. N. Hodges in Sp. Proc. 1672 (Vol. VII, pp.
 2244-2245), dated July 16, 1965, filed by Atty. Cesar T. Tirol in representation of
the law firms of Ozaeta, Gibbs and Ozaeta and Tirol and Tirol and the opposition
thereto of Atty. Rizal R. Quimpo (Vol. VIII, pp. 6811-6813) dated July 22, 1965 and
considering the allegations and reasons therein stated, the court believes that the
deeds of sale should be signed jointly by the PCIB, Administrator of the Testate
Estate of C. N. Hodges and Avelina A. Magno, Administratrix of the Testate Estate
of Linnie Jane Hodges and to this effect the PCIB should take the necessary steps so
that Administratrix Avelina A. Magno could sign the deeds of sale.
SO ORDERED. (p. 248, Green Record on Appeal.)
Notably this order required that even the deeds executed by petitioner, as administrator of the Estate of
Hodges, involving properties registered in his name, should be co-signed by respondent Magno.3 And
this was not an isolated instance.
In her brief as appellee, respondent Magno states:
After the lower court had authorized appellee Avelina A. Magno to execute final
deeds of sale pursuant to contracts to sell executed by C. N. Hodges on February 20,
1963 (pp. 45-46, Green ROA), motions for the approval of final deeds of sale (signed
by appellee Avelina A. Magno and the administrator of the estate of C. N. Hodges,
first Joe Hodges, then Atty. Fernando Mirasol and later the appellant) were approved
by the lower court upon petition of appellee Magno's counsel, Atty. Leon P. Gellada,
on the basis of section 8 of Rule 89 of the Revised Rules of Court. Subsequently, the
appellant, after it had taken over the bulk of the assets of the two estates, started
presenting these motions itself. The first such attempt was a "Motion for Approval of
Deeds of Sale for Registered Land and Cancellations of Mortgages" dated July 21,
1964 filed by Atty. Cesar T. Tirol, counsel for the appellant, thereto annexing two (2)
final deeds of sale and two (2) cancellations of mortgages signed by appellee Avelina
A. Magno and D. R. Paulino, Assistant Vice-President and Manager of the appellant
(CFI Record, Sp. Proc. No. 1307, Vol. V, pp. 1694-1701). This motion was approved
by the lower court on July 27, 1964. It was followed by another motion dated August
4, 1964 for the approval of one final deed of sale again signed by appellee Avelina
A. Magno and D. R. Paulino (CFI Record, Sp. Proc. No. 1307. Vol. V, pp. 1825-
1828), which was again approved by the lower court on August 7, 1964. The gates
having been opened, a flood ensued: the appellant subsequently filed similar motions
for the approval of a multitude of deeds of sales and cancellations of mortgages
signed by both the appellee Avelina A. Magno and the appellant.
A random check of the records of Special Proceeding No. 1307 alone will show Atty.
Cesar T. Tirol as having presented for court approval deeds of sale of real properties
signed by both appellee Avelina A. Magno and D. R. Paulino in the following
numbers: (a) motion dated September 21, 1964 — 6 deeds of sale; (b) motion dated
November 4, 1964 — 1 deed of sale; (c) motion dated December 1, 1964 — 4 deeds
of sale; (d) motion dated February 3, 1965 — 8 deeds of sale; (f) motion dated May
7, 1965 — 9 deeds of sale. In view of the very extensive landholdings of the Hodges
spouses and the many motions filed concerning deeds of sale of real properties
executed by C. N. Hodges the lower court has had to constitute special separate
expedientes in Special Proceedings Nos. 1307 and 1672 to include mere motions for
the approval of deeds of sale of the conjugal properties of the Hodges spouses.
As an example, from among the very many, under date of February 3, 1965, Atty.
Cesar T. Tirol, as counsel for the appellant, filed "Motion for Approval of Deeds of
Sale for Registered Land and Cancellations of Mortgages" (CFI Record, Sp. Proc.
No. 1307, Vol. VIII, pp. 6570-6596) the allegations of which read:
"1. In his lifetime, the late C. N. Hodges executed "Contracts to Sell" real property,
and the prospective buyers under said contracts have already paid the price and
complied with the terms and conditions thereof;
"2. In the course of administration of both estates, mortgage debtors have already
paid their debts secured by chattel mortgages in favor of the late C. N. Hodges, and
are now entitled to release therefrom;
"3. There are attached hereto documents executed jointly by the Administratrix in
Sp. Proc. No. 1307 and the Administrator in Sp. Proc. No. 1672, consisting of deeds
of sale in favor —
Fernando Cano, Bacolod City, Occ. Negros
Fe Magbanua, Iloilo City
Policarpio M. Pareno, La Paz, Iloilo City
Rosario T. Libre, Jaro, Iloilo City
Federico B. Torres, Iloilo City
Reynaldo T. Lataquin, La Paz, Iloilo City
Anatolio T. Viray, Iloilo City
Benjamin Rolando, Jaro, Iloilo City
and cancellations of mortgages in favor of —
Pablo Manzano, Oton, Iloilo
Ricardo M. Diana, Dao, San Jose, Antique
Simplicio Tingson, Iloilo City
Amado Magbanua, Pototan, Iloilo
Roselia M. Baes, Bolo, Roxas City
William Bayani, Rizal Estanzuela, Iloilo City
Elpidio Villarete, Molo, Iloilo City
Norma T. Ruiz, Jaro, Iloilo City
"4. That the approval of the aforesaid documents will not reduce
the assets of the estates so as to prevent any creditor from receiving
his full debt or diminish his dividend."
And the prayer of this motion is indeed very revealing:
"WHEREFORE, it is respectfully prayed that, under Rule 89, Section 8 of the Rules
of Court, this honorable court approve the aforesaid deeds of sale and cancellations
of mortgages." (Pp. 113-117, Appellee's Brief.)
None of these assertions is denied in Petitioner's reply brief.
Further indicating lack of concrete perspective or orientation on the part of the respondent court and its
hesitancy to clear up matters promptly, in its other appealed order of November 23, 1965, on pages
334-335 of the Green Record on Appeal, said respondent court allowed the movant Ricardo Salas,
President of appellee Western Institute of Technology (successor of Panay Educational Institutions,
Inc.), one of the parties with whom Hodges had contracts that are in question in the appeals herein, to
pay petitioner, as Administrator of the estate of Hodges and/or respondent Magno, as Administrator of
the estate of Mrs. Hodges, thus:
 Considering that in both cases there is as yet no judicial declaration of heirs nor
distribution of properties to whomsoever are entitled thereto, the Court believes that
payment to both the administrator of the testate estate of C. N. Hodges and the
administratrix of the testate estate of Linnie Jane Hodges or to either one of the two
estates is proper and legal.
WHEREFORE, movant Ricardo T. Salas can pay to both estates or either of them.
SO ORDERED.
(Pp. 334-335, Green Record on Appeal.)
On the other hand, as stated earlier, there were instances when respondent Magno was given authority
to act alone. For instance, in the other appealed order of December 19, 1964, on page 221 of the Green
Record on Appeal, the respondent court approved payments made by her of overtime pay to some
employees of the court who had helped in gathering and preparing copies of parts of the records in
both estates as follows:
Considering that the expenses subject of the motion to approve payment of overtime
pay dated December 10, 1964, are reasonable and are believed by this Court to be a
proper charge of administration chargeable to the testate estate of the late Linnie Jane
Hodges, the said expenses are hereby APPROVED and to be charged against the
testate estate of the late Linnie Jane Hodges. The administrator of the testate estate of
the late Charles Newton Hodges is hereby ordered to countersign the check or checks
necessary to pay the said overtime pay as shown by the bills marked Annex "A", "B"
and "C" of the motion.
SO ORDERED.
(Pp. 221-222, Green Record on Appeal.)
Likewise, the respondent court approved deeds of sale executed by respondent Magno alone, as
Administratrix of the estate of Mrs. Hodges, covering properties in the name of Hodges, pursuant to
"contracts to sell" executed by Hodges, irrespective of whether they were executed by him before or
after the death of his wife. The orders of this nature which are also on appeal herein are the following:
1. Order of March 30, 1966, on p. 137 of the Green Record on Appeal, approving the deed of sale
executed by respondent Magno in favor of appellee Lorenzo Carles on February 24, 1966, pursuant to
a "contract to sell" signed by Hodges on June 17, 1958, after the death of his wife, which contract
petitioner claims was cancelled by it for failure of Carles to pay the installments due on January 7,
1965.
2. Order of April 5, 1966, on pp. 139-140, id., approving the deed of sale executed by respondent
Magno in favor of appellee Salvador Guzman on February 28, 1966 pursuant to a "contract to sell"
signed by Hodges on September 13, 1960, after the death of his wife, which contract petitioner claims
it cancelled on March 3, 1965 in view of failure of said appellee to pay the installments on time.
3. Order of April 20, 1966, on pp. 167-168, id., approving the deed of sale executed by respondent
Magno in favor of appellee Purificacion Coronado on March 28, 1966 pursuant to a "contract to sell"
signed by Hodges on August 14, 1961, after the death of his wife.
4. Order of April 20, 1966, on pp. 168-169, id., approving the deed of sale executed by respondent
Magno in favor of appellee Florenia Barrido on March 28, 1966, pursuant to a "contract to sell" signed
by Hodges on February 21, 1958, after the death of his wife.
5. Order of June 7, 1966, on pp. 184-185, id., approving the deed of sale executed by respondent
Magno in favor of appellee Belcezar Causing on May 2, 1966, pursuant to a "contract to sell" signed
by Hodges on February 10, 1959, after the death of his wife.
6. Order of June 21, 1966, on pp. 211-212, id., approving the deed of sale executed by respondent
Magno in favor of appellee Artheo Thomas Jamir on June 3, 1966, pursuant to a "contract to sell"
signed by Hodges on May 26, 1961, after the death of his wife.
7. Order of June 21, 1966, on pp. 212-213, id., approving the deed of sale executed by respondent
Magno in favor of appellees Graciano Lucero and Melquiades Batisanan on June 6 and June 3, 1966,
respectively, pursuant to "contracts to sell" signed by Hodges on June 9, 1959 and November 27, 1961,
respectively, after the death of his wife.
8. Order of December 2, 1966, on pp. 303-304, id., approving the deed of sale executed by respondent
Magno in favor of appellees Espiridion Partisala, Winifredo Espada and Rosario Alingasa on
September 6, 1966, August 17, 1966 and August 3, 1966, respectively, pursuant to "contracts to sell"
signed by Hodges on April 20, 1960, April 18, 1960 and August 25, 1958, respectively, that is, after
the death of his wife.
9. Order of April 5, 1966, on pp. 137-138, id., approving the deed of sale executed by respondent
Magno in favor of appellee Alfredo Catedral on March 2, 1966, pursuant to a "contract to sell" signed
by Hodges on May 29, 1954, before the death of his wife, which contract petitioner claims it had
cancelled on February 16, 1966 for failure of appellee Catedral to pay the installments due on time.
10. Order of April 5, 1966, on pp. 138-139, id., approving the deed of sale executed by respondent
Magno in favor of appellee Jose Pablico on March 7, 1966, pursuant to a "contract to sell" signed by
Hodges on March 7, 1950, after the death of his wife, which contract petitioner claims it had cancelled
on June 29, 1960, for failure of appellee Pablico to pay the installments due on time.
11. Order of December 2, 1966, on pp. 303-304, id., insofar as it approved the deed of sale executed by
respondent Magno in favor of appellee Pepito Iyulores on September 6, 1966, pursuant to a "contract
to sell" signed by Hodges on February 5, 1951, before the death of his wife.
12. Order of January 3, 1967, on pp. 335-336, id., approving three deeds of sale executed by
respondent Magno, one in favor of appellees Santiago Pacaonsis and two in favor of appellee Adelfa
Premaylon on December 5, 1966 and November 3, 1966, respectively, pursuant to separate "promises
to sell" signed respectively by Hodges on May 26, 1955 and January 30, 1954, before the death of his
wife, and October 31, 1959, after her death.
In like manner, there were also instances when respondent court approved deeds of sale executed by
petitioner alone and without the concurrence of respondent Magno, and such approvals have not been
the subject of any appeal. No less than petitioner points this out on pages 149-150 of its brief as
appellant thus:
The points of fact and law pertaining to the two abovecited assignments of error have
already been discussed previously. In the first abovecited error, the order alluded to
was general, and as already explained before, it was, as admitted by the lower court
itself, superseded by the particular orders approving specific final deeds of sale
executed by the appellee, Avelina A. Magno, which are subject of this appeal, as
well as the particular orders approving specific final deeds of sale executed by the
appellant, Philippine Commercial and Industrial Bank, which were never appealed
by the appellee, Avelina A. Magno, nor by any party for that matter, and which are
now therefore final.
Now, simultaneously with the foregoing incidents, others of more fundamental and all embracing
significance developed. On October 5, 1963, over the signature of Atty. Allison J. Gibbs in
representation of the law firm of Ozaeta, Gibbs & Ozaeta, as counsel for the co-administrators Joe
Hodges and Fernando P. Mirasol, the following self-explanatory motion was filed:
 URGENT MOTION FOR AN ACCOUNTING AND DELIVERY TO
ADMINISTRATION OF THE ESTATE OF C. N. HODGES OF
ALL OF THE ASSETS OF THE CONJUGAL PARTNERSHIP OF
THE DECEASED LINNIE JANE HODGES AND C N. HODGES
EXISTING AS OF MAY 23, 1957 PLUS ALL THE RENTS,
EMOLUMENTS AND INCOME THEREFROM.
COMES NOW the co-administrator of the estate of C. N. Hodges, Joe Hodges,
through his undersigned attorneys in the above-entitled proceedings, and to this
Honorable Court respectfully alleges:
(1) On May 23, 1957 Linnie Jane Hodges died in Iloilo City.
(2) On June 28, 1957 this Honorable Court admitted to probate the Last Will and
Testament of the deceased Linnie Jane Hodges executed November 22, 1952 and
appointed C. N. Hodges as Executor of the estate of Linnie Jane Hodges (pp. 24-25,
Rec. Sp. Proc. 1307).
(3) On July 1, 1957 this Honorable Court issued Letters Testamentary to C. N.
Hodges in the Estate of Linnie Jane Hodges (p. 30, Rec. Sp. Proc. 1307).
(4) On December 14, 1957 this Honorable Court, on the basis of the following
allegations in a Motion dated December 11, 1957 filed by Leon P. Gellada as
attorney for the executor C. N. Hodges:
"That herein Executor, (is) not only part owner of the properties
left as conjugal, but also, the successor to all the properties left by
the deceased Linnie Jane Hodges."
(p. 44, Rec. Sp. Proc. 1307; emphasis supplied.)
issued the following order:
"As prayed for by Attorney Gellada, counsel for the Executory, for
the reasons stated in his motion dated December 11, 1957 which
the court considers well taken, all the sales, conveyances, leases
and mortgages of all properties left by the deceased Linnie Jane
Hodges are hereby APPROVED. The said executor is further
authorized to execute subsequent sales, conveyances, leases and
mortgages of the properties left by the said deceased Linnie Jane
Hodges in consonance with the wishes contained in the last will
and testament of the latter."
(p. 46, Rec. Sp. Proc. 1307; emphasis supplied.)
(5) On April 21, 1959 this Honorable Court approved the inventory and accounting
submitted by C. N. Hodges through his counsel Leon P. Gellada on April 14, 1959
wherein he alleged among other things
"That no person interested in the Philippines of the time and place
of examining the herein account, be given notice, as herein
executor is the only devisee or legatee of the deceased, in
accordance with the last will and testament already probated by
the Honorable Court."
(pp. 77-78, Rec. Sp. Proc. 1307; emphasis supplied.).
(6) On July 30, 1960 this Honorable Court approved the "Annual Statement of
Account" submitted by C. N. Hodges through his counsel Leon P. Gellada on July
21, 1960 wherein he alleged among other things:
"That no person interested in the Philippines of the time and place
of examining the herein account, be given notice as herein
executor is the only devisee or legatee of the deceased Linnie Jane
Hodges, in accordance with the last will and testament of the
deceased, already probated by this Honorable Court."
(pp. 81-82. Rec. Sp. Proc. 1307; emphasis supplied.)
(7) On May 2, 1961 this Honorable court approved the "Annual Statement of
Account By The Executor for the Year 1960" submitted through Leon P. Gellada on
April 20, 1961 wherein he alleged:
That no person interested in the Philippines be given notice, of the
time and place of examining the herein account, as herein
Executor is the only devisee or legatee of the deceased Linnie Jane
Hodges, in accordance with the last will and testament of the
deceased, already probated by this Honorable Court.
(pp. 90-91. Rec. Sp. Proc. 1307; emphasis supplied.)
(8) On December 25, 1962, C.N. Hodges died.
(9) On December 25, 1962, on the Urgent Ex-parte Motion of Leon P. Gellada filed
only in Special Proceeding No. 1307, this Honorable Court appointed Avelina A.
Magno
"Administratrix of the estate of Linnie Jane Hodges and as Special Administratrix of
the estate of Charles Newton Hodges, in the latter case, because the last will of said
Charles Newton Hodges is still kept in his vault or iron safe and that the real and
personal properties of both spouses may be lost, damaged or go to waste, unless a
Special Administratrix is appointed."
(p. 100. Rec. Sp. Proc. 1307)
(10) On December 26, 1962 Letters of Administration were issued to Avelina Magno
pursuant to this Honorable Court's aforesaid Order of December 25, 1962
"With full authority to take possession of all the property of said
deceased in any province or provinces in which it may be situated
and to perform all other acts necessary for the preservation of said
property, said Administratrix and/or Special Administratrix having
filed a bond satisfactory to the Court."
(p. 102, Rec. Sp. Proc. 1307)
(11) On January 22, 1963 this Honorable Court on petition of Leon P. Gellada of
January 21, 1963 issued Letters of Administration to:
(a) Avelina A. Magno as Administratrix of the estate of Linnie Jane Hodges;
(b) Avelina A. Magno as Special Administratrix of the Estate of Charles Newton
Hodges; and
(c) Joe Hodges as Co-Special Administrator of the Estate of Charles Newton
Hodges.
(p. 43, Rec. Sp. Proc. 1307)
(12) On February 20, 1963 this Honorable Court on the basis of a motion filed by
Leon P. Gellada as legal counsel on February 16, 1963 for Avelina A. Magno acting
as Administratrix of the Estate of Charles Newton Hodges (pp. 114-116, Sp. Proc.
1307) issued the following order:
 "... se autoriza a aquella (Avelina A. Magno) a firmar escrituras de
venta definitiva de propiedades cubiertas por contratos para
vender, firmados, en vida, por el finado Charles Newton Hodges,
cada vez que el precio estipulado en cada contrato este totalmente
pagado. Se autoriza igualmente a la misma a firmar escrituras de
cancelacion de hipoteca tanto de bienes reales como personales
cada vez que la consideracion de cada hipoteca este totalmente
pagada.
"Cada una de dichas escrituras que se otorguen debe ser sometida
para la aprobacion de este Juzgado."
(p. 117, Sp. Proc. 1307).
[Par 1 (c), Reply to Motion For Removal of Joe Hodges]
(13) On September l6, 1963 Leon P. Gellada, acting as attorney for Avelina A.
Magno as Administratrix of the estate of Linnie Jane Hodges, alleges:
3. — That since January, 1963, both estates of Linnie Jane Hodges
and Charles Newton Hodges have been receiving in full, payments
for those "contracts to sell" entered into by C. N. Hodges during
his lifetime, and the purchasers have been demanding the
execution of definite deeds of sale in their favor.
4. — That hereto attached are thirteen (13) copies deeds of sale
executed by the Administratrix and by the co-administrator
(Fernando P. Mirasol) of the estate of Linnie Jane Hodges and
Charles Newton Hodges respectively, in compliance with the terms
and conditions of the respective "contracts to sell" executed by the
parties thereto."
(14) The properties involved in the aforesaid motion of September 16, 1963 are all
registered in the name of the deceased C. N. Hodges.
(15) Avelina A. Magno, it is alleged on information and belief, has been advertising
in the newspaper in Iloilo thusly:
For Sale
Testate Estate of Linnie Jane Hodges and Charles Newton Hodges.
All Real Estate or Personal Property will be sold on First Come First Served Basis.
Avel
ina
A.
Mag
no
Adm
inist
ratri
x PLUS ALL OF THE RENTS, EMOLUMENTS AND INCOME
(16) Avelina A. Magno, it is alleged on information and belief, has paid and still is
paying sums of money to sundry persons.
(17) Joe Hodges through the undersigned attorneys manifested during the hearings
before this Honorable Court on September 5 and 6, 1963 that the estate of C. N.
Hodges was claiming all of the assets belonging to the deceased spouses Linnie Jane
Hodges and C. N. Hodges situated in Philippines because of the aforesaid election by
C. N. Hodges wherein he claimed and took possession as sole owner of all of said
assets during the administration of the estate of Linnie Jane Hodges on the ground
that he was the sole devisee and legatee under her Last Will and Testament.
(18) Avelina A. Magno has submitted no inventory and accounting of her
administration as Administratrix of the estate of Linnie Jane Hodges and Special
Administratrix of the estate of C. N. Hodges. However, from manifestations made by
Avelina A. Magno and her legal counsel, Leon P. Gellada, there is no question she
will claim that at least fifty per cent (50%) of the conjugal assets of the deceased
spouses and the rents, emoluments and income therefrom belong to the Higdon
family who are named in paragraphs Fourth and Fifth of the Will of Linnie Jane
Hodges (p. 5, Rec. Sp. Proc. 1307).
WHEREFORE, premises considered, movant respectfully prays that this Honorable
Court, after due hearing, order:
(1) Avelina A. Magno to submit an inventory and accounting of all of the funds,
properties and assets of any character belonging to the deceased Linnie Jane Hodges
and C. N. Hodges which have come into her possession, with full details of what she
has done with them;
(2) Avelina A. Magno to turn over and deliver to the Administrator of the estate of C.
N. Hodges all of the funds, properties and assets of any character remaining in her
possession;
(3) Pending this Honorable Court's adjudication of the aforesaid issues, Avelina A.
Magno to stop, unless she first secures the conformity of Joe Hodges (or his duly
authorized representative, such as the undersigned attorneys) as the Co-administrator
and attorney-in-fact of a majority of the beneficiaries of the estate of C. N. Hodges:
(a) Advertising the sale and the sale of the properties of the estates:
(b) Employing personnel and paying them any compensation.
(4) Such other relief as this Honorable Court may deem just and equitable in the
premises. (Annex "T", Petition.)
Almost a year thereafter, or on September 14, 1964, after the co-administrators Joe Hodges and
Fernando P. Mirasol were replaced by herein petitioner Philippine Commercial and Industrial Bank as
sole administrator, pursuant to an agreement of all the heirs of Hodges approved by the court, and
because the above motion of October 5, 1963 had not yet been heard due to the absence from the
country of Atty. Gibbs, petitioner filed the following:
MANIFESTATION AND MOTION, INCLUDING MOTION TO
SET FOR HEARING AND RESOLVE "URGENT MOTION FOR
AN ACCOUNTING AND DELIVERY TO ADMINISTRATORS OF
THE ESTATE OF C. N. HODGES OF ALL THE ASSETS OF THE
CONJUGAL PARTNERSHIP OF THE DECEASED LINNIE JANE
HODGES AND C. N. HODGES EXISTING AS OF MAY 23, 1957
THEREFROM OF OCTOBER 5, 1963.
COMES NOW Philippine Commercial and Industrial Bank (hereinafter referred to as
PCIB), the administrator of the estate of C. N. Hodges, deceased, in Special
Proceedings No. 1672, through its undersigned counsel, and to this Honorable Court
respectfully alleges that:
1. On October 5, 1963, Joe Hodges acting as the co-administrator of the estate of C.
N. Hodges filed, through the undersigned attorneys, an "Urgent Motion For An
Accounting and Delivery To Administrator of the Estate of C. N. Hodges of all Of
The Assets Of The Conjugal Partnership of The Deceased Linnie Jane Hodges and
C. N. Hodges Existing as Of May, 23, 1957 Plus All Of The Rents, Emoluments and
Income Therefrom" (pp. 536-542, CFI Rec. S. P. No. 1672).
2. On January 24, 1964 this Honorable Court, on the basis of an amicable agreement
entered into on January 23, 1964 by the two co-administrators of the estate of C. N.
Hodges and virtually all of the heirs of C. N. Hodges (p. 912, CFI Rec., S. P. No.
1672), resolved the dispute over who should act as administrator of the estate of C.
N. Hodges by appointing the PCIB as administrator of the estate of C. N. Hodges
(pp. 905-906, CFI Rec. S. P. No. 1672) and issuing letters of administration to the
PCIB.
3. On January 24, 1964 virtually all of the heirs of C. N. Hodges, Joe Hodges and
Fernando P. Mirasol acting as the two co-administrators of the estate of C. N.
Hodges, Avelina A. Magno acting as the administratrix of the estate of Linnie Jane
Hodges, and Messrs. William Brown and Ardel Young Acting for all of the Higdon
family who claim to be the sole beneficiaries of the estate of Linnie Jane Hodges and
various legal counsel representing the aforenamed parties entered into an amicable
agreement, which was approved by this Honorable Court, wherein the parties thereto
agreed that certain sums of money were to be paid in settlement of different claims
against the two estates and that the assets (to the extent they existed)of both estates
would be administrated jointly by the PCIB as administrator of the estate of C. N.
Hodges and Avelina A. Magno as administratrix of the estate of Linnie Jane Hodges,
subject, however, to the aforesaid October 5, 1963 Motion, namely, the PCIB's claim
to exclusive possession and ownership of one-hundred percent (10017,) (or, in the
alternative, seventy-five percent [75%] of all assets owned by C. N. Hodges or
Linnie Jane Hodges situated in the Philippines. On February 1, 1964 (pp. 934-935,
CFI Rec., S. P. No. 1672) this Honorable Court amended its order of January 24,
1964 but in no way changes its recognition of the aforedescribed basic demand by
the PCIB as administrator of the estate of C. N. Hodges to one hundred percent
(100%) of the assets claimed by both estates.
4. On February 15, 1964 the PCIB filed a "Motion to Resolve" the aforesaid Motion
of October 5, 1963. This Honorable Court set for hearing on June 11, 1964 the
Motion of October 5, 1963.
5. On June 11, 1964, because the undersigned Allison J. Gibbs was absent in the
United States, this Honorable Court ordered the indefinite postponement of the
hearing of the Motion of October 5, 1963.
6. Since its appointment as administrator of the estate of C. N. Hodges the PCIB has
not been able to properly carry out its duties and obligations as administrator of the
estate of C. N. Hodges because of the following acts, among others, of Avelina A.
Magno and those who claim to act for her as administratrix of the estate of Linnie
Jane Hodges:
(a) Avelina A. Magno illegally acts as if she is in exclusive control
of all of the assets in the Philippines of both estates including those
claimed by the estate of C. N. Hodges as evidenced in part by her
locking the premises at 206-208 Guanco Street, Iloilo City on
August 31, 1964 and refusing to reopen same until ordered to do so
by this Honorable Court on September 7, 1964.
(b) Avelina A. Magno illegally acts as though she alone may
decide how the assets of the estate of C.N. Hodges should be
administered, who the PCIB shall employ and how much they may
be paid as evidenced in party by her refusal to sign checks issued
by the PCIB payable to the undersigned counsel pursuant to their
fee agreement approved by this Honorable Court in its order dated
March 31, 1964.
(c) Avelina A. Magno illegally gives access to and turns over
possession of the records and assets of the estate of C.N. Hodges to
the attorney-in-fact of the Higdon Family, Mr. James L. Sullivan,
as evidenced in part by the cashing of his personal checks.
(d) Avelina A. Magno illegally refuses to execute checks prepared
by the PCIB drawn to pay expenses of the estate of C. N. Hodges
as evidenced in part by the check drawn to reimburse the PCIB's
advance of P48,445.50 to pay the 1964 income taxes reported due
and payable by the estate of C.N. Hodges.
7. Under and pursuant to the orders of this Honorable Court, particularly those of
January 24 and February 1, 1964, and the mandate contained in its Letters of
Administration issued on January 24, 1964 to the PCIB, it has
"full authority to take possession of all the
property of the deceased C. N. Hodges
"and to perform all other acts necessary for the preservation of said
property." (p. 914, CFI Rec., S.P. No. 1672.)
8. As administrator of the estate of C. N. Hodges, the PCIB claims the right to the
immediate exclusive possession and control of all of the properties, accounts
receivables, court cases, bank accounts and other assets, including the documentary
records evidencing same, which existed in the Philippines on the date of C. N.
Hodges' death, December 25, 1962, and were in his possession and registered in his
name alone. The PCIB knows of no assets in the Philippines registered in the name
of Linnie Jane Hodges, the estate of Linnie Jane Hodges, or, C. N. Hodges, Executor
of the Estate of Linnie Jane Hodges on December 25, 1962. All of the assets of
which the PCIB has knowledge are either registered in the name of C. N. Hodges,
alone or were derived therefrom since his death on December 25, 1962.
9. The PCIB as the current administrator of the estate of C. N. Hodges, deceased,
succeeded to all of the rights of the previously duly appointed administrators of the
estate of C. N. Hodges, to wit:
(a) On December 25, 1962, date of C. N. Hodges' death, this
Honorable Court appointed Miss Avelina A. Magno
simultaneously as:
(i) Administratrix of the estate of Linnie Jane Hodges (p. 102, CFI
Rec., S.P. No. 1307) to replace the deceased C. N. Hodges who on
May 28, 1957 was appointed Special Administrator (p. 13. CFI
 Rec. S.P. No. 1307) and on July 1, 1957 Executor of the estate of
Linnie Jane Hodges (p. 30, CFI Rec., S. P. No. 1307).
(ii) Special Administratrix of the estate of C. N. Hodges (p. 102,
CFI Rec., S.P. No. 1307).
(b) On December 29, 1962 this Honorable Court appointed Harold
K. Davies as co-special administrator of the estate of C.N. Hodges
along with Avelina A. Magno (pp. 108-111, CFI Rec., S. P. No.
1307).
(c) On January 22, 1963, with the conformity of Avelina A.
Magno, Harold K. Davies resigned in favor of Joe Hodges (pp. 35-
36, CFI Rec., S.P. No. 1672) who thereupon was appointed on
January 22, 1963 by this Honorable Court as special co-
administrator of the estate of C.N. Hodges (pp. 38-40 & 43, CFI
Rec. S.P. No. 1672) along with Miss Magno who at that time was
still acting as special co-administratrix of the estate of C. N.
Hodges.
(d) On February 22, 1963, without objection on the part of Avelina
A. Magno, this Honorable Court appointed Joe Hodges and
Fernando P. Mirasol as co-administrators of the estate of C.N.
Hodges (pp. 76-78, 81 & 85, CFI Rec., S.P. No. 1672).
10. Miss Avelina A. Magno, pursuant to the orders of this Honorable Court of
December 25, 1962, took possession of all Philippine Assets now claimed by the two
estates. Legally, Miss Magno could take possession of the assets registered in the
name of C. N. Hodges alone only in her capacity as Special Administratrix of the
Estate of C.N. Hodges. With the appointment by this Honorable Court on February
22, 1963 of Joe Hodges and Fernando P. Mirasol as the co-administrators of the
estate of C.N. Hodges, they legally were entitled to take over from Miss Magno the
full and exclusive possession of all of the assets of the estate of C.N. Hodges. With
the appointment on January 24, 1964 of the PCIB as the sole administrator of the
estate of C.N. Hodges in substitution of Joe Hodges and Fernando P. Mirasol, the
PCIB legally became the only party entitled to the sole and exclusive possession of
all of the assets of the estate of C. N. Hodges.
11. The PCIB's predecessors submitted their accounting and this Honorable Court
approved same, to wit:
(a) The accounting of Harold K. Davies dated January 18, 1963
(pp. 16-33, CFI Rec. S.P. No. 1672); which shows or its face the:
(i) Conformity of Avelina A. Magno acting as "Administratrix of
the Estate of Linnie Jane Hodges and Special Administratrix of the
Estate of C. N. Hodges";
(ii) Conformity of Leslie Echols, a Texas lawyer acting for the
heirs of C.N. Hodges; and
(iii) Conformity of William Brown, a Texas lawyer acting for the
Higdon family who claim to be the only heirs of Linnie Jane
Hodges (pp. 18, 25-33, CFI Rec., S. P. No. 1672).
Note: This accounting was approved by this Honorable Court on January 22, 1963
(p. 34, CFI Rec., S. P. No. 1672).
(b) The accounting of Joe Hodges and Fernando P. Mirasol as of
January 23, 1964, filed February 24, 1964 (pp. 990-1000, CFI Rec.
S.P. No. 1672 and pp. 1806-1848, CFI Rec. S.P. No. 1307).
Note: This accounting was approved by this Honorable Court on March 3, 1964.
(c) The PCIB and its undersigned lawyers are aware of no report or
accounting submitted by Avelina A. Magno of her acts as
administratrix of the estate of Linnie Jane Hodges or special
administratrix of the estate of C.N. Hodges, unless it is the
accounting of Harold K. Davies as special co-administrator of the
estate of C.N. Hodges dated January 18, 1963 to which Miss
Magno manifested her conformity (supra).
12. In the aforesaid agreement of January 24, 1964, Miss Avelina A. Magno agreed to receive
P10,000.00
"for her services as administratrix of the estate of Linnie Jane
Hodges"
and in addition she agreed to be employed, starting February 1, 1964, at
"a monthly salary of P500.00 for her services as an employee of
both estates."
24 ems.
13. Under the aforesaid agreement of January 24, 1964 and the orders of this
Honorable Court of same date, the PCIB as administrator of the estate of C. N.
Hodges is entitled to the exclusive possession of all records, properties and assets in
the name of C. N. Hodges as of the date of his death on December 25, 1962 which
were in the possession of the deceased C. N. Hodges on that date and which then
passed to the possession of Miss Magno in her capacity as Special Co-Administratrix
of the estate of C. N. Hodges or the possession of Joe Hodges or Fernando P. Mirasol
as co-administrators of the estate of C. N. Hodges.
14. Because of Miss Magno's refusal to comply with the reasonable request of PCIB
concerning the assets of the estate of C. N. Hodges, the PCIB dismissed Miss Magno
as an employee of the estate of C. N. Hodges effective August 31, 1964. On
September 1, 1964 Miss Magno locked the premises at 206-208 Guanco Street and
denied the PCIB access thereto. Upon the Urgent Motion of the PCIB dated
September 3, 1964, this Honorable Court on September 7, 1964 ordered Miss Magno
to reopen the aforesaid premises at 206-208 Guanco Street and permit the PCIB
access thereto no later than September 8, 1964.
15. The PCIB pursuant to the aforesaid orders of this Honorable Court is again in
physical possession of all of the assets of the estate of C. N. Hodges. However, the
PCIB is not in exclusive control of the aforesaid records, properties and assets
because Miss Magno continues to assert the claims hereinabove outlined in
paragraph 6, continues to use her own locks to the doors of the aforesaid premises at
206-208 Guanco Street, Iloilo City and continues to deny the PCIB its right to know
the combinations to the doors of the vault and safes situated within the premises at
206-208 Guanco Street despite the fact that said combinations were known to only C.
N. Hodges during his lifetime.
16. The Philippine estate and inheritance taxes assessed the estate of Linnie Jane
Hodges were assessed and paid on the basis that C. N. Hodges is the sole beneficiary
 of the assets of the estate of Linnie Jane Hodges situated in the Philippines. Avelina
A. Magno and her legal counsel at no time have questioned the validity of the
aforesaid assessment and the payment of the corresponding Philippine death taxes.
17. Nothing further remains to be done in the estate of Linnie Jane Hodges except to
resolve the aforesaid Motion of October 5, 1963 and grant the PCIB the exclusive
possession and control of all of the records, properties and assets of the estate of C.
N. Hodges.
18. Such assets as may have existed of the estate of Linnie Jane Hodges were ordered
by this Honorable Court in special Proceedings No. 1307 to be turned over and
delivered to C. N. Hodges alone. He in fact took possession of them before his death
and asserted and exercised the right of exclusive ownership over the said assets as
the sole beneficiary of the estate of Linnie Jane Hodges.
WHEREFORE, premises considered, the PCIB respectfully petitions that this
Honorable court:
(1) Set the Motion of October 5, 1963 for hearing at the earliest possible date with
notice to all interested parties;
(2) Order Avelina A. Magno to submit an inventory and accounting as
Administratrix of the Estate of Linnie Jane Hodges and Co-Administratrix of the
Estate of C. N. Hodges of all of the funds, properties and assets of any character
belonging to the deceased Linnie Jane Hodges and C. N. Hodges which have come
into her possession, with full details of what she has done with them;
(3) Order Avelina A. Magno to turn over and deliver to the PCIB as administrator of
the estate of C. N. Hodges all of the funds, properties and assets of any character
remaining in her possession;
(4) Pending this Honorable Court's adjudication of the aforesaid issues, order
Avelina A. Magno and her representatives to stop interferring with the administration
of the estate of C. N. Hodges by the PCIB and its duly authorized representatives;
(5) Enjoin Avelina A. Magno from working in the premises at 206-208 Guanco
Street, Iloilo City as an employee of the estate of C. N. Hodges and approve her
dismissal as such by the PCIB effective August 31, 1964;
(6) Enjoin James L. Sullivan, Attorneys Manglapus and Quimpo and others allegedly
representing Miss Magno from entering the premises at 206-208 Guanco Street,
Iloilo City or any other properties of C. N. Hodges without the express permission of
the PCIB;
(7) Order such other relief as this Honorable Court finds just and equitable in the
premises. (Annex "U" Petition.)
On January 8, 1965, petitioner also filed a motion for "Official Declaration of Heirs of Linnie Jane
Hodges Estate" alleging:
COMES NOW Philippine Commercial and Industrial Bank (hereinafter referred to as PCIB), as
administrator of the estate of the late C. N. Hodges, through the undersigned counsel, and to this
Honorable Court respectfully alleges that:
1. During their marriage, spouses Charles Newton Hodges and Linnie Jane Hodges,
American citizens originally from the State of Texas, U.S.A., acquired and
accumulated considerable assets and properties in the Philippines and in the States of
Texas and Oklahoma, United States of America. All said properties constituted their
conjugal estate.
2. Although Texas was the domicile of origin of the Hodges spouses, this Honorable
Court, in its orders dated March 31 and December 12, 1964 (CFI Record, Sp. Proc.
No. 1307, pp. ----; Sp. Proc. No. 1672, p. ----), conclusively found and categorically
ruled that said spouses had lived and worked for more than 50 years in Iloilo City
and had, therefore, acquired a domicile of choice in said city, which they retained
until the time of their respective deaths.
3. On November 22, 1952, Linnie Jane Hodges executed in the City of Iloilo her Last
Will and Testament, a copy of which is hereto attached as Annex "A". The bequests
in said will pertinent to the present issue are the second, third, and fourth provisions,
which we quote in full hereunder.
SECOND: I give, devise and bequeath all of the rest, residue and
remainder of my estate, both personal and real, wherever situated,
or located, to my husband, Charles Newton Hodges, to have and to
hold unto him, my said husband during his natural lifetime.
THIRD: I desire, direct and provide that my husband, Charles
Newton Hodges, shall have the right to manage, control, use and
enjoy said estate during his lifetime, and he is hereby given the
right to make any changes in the physical properties of said estate
by sale of any part thereof which he think best, and the purchase of
any other or additional property as he may think best; to execute
conveyances with or without general or special warranty,
conveying in fee simple or for any other term or time, any property
which he may deem proper to dispose of; to lease any of the real
property for oil, gas and/or other minerals, and all such deeds or
leases shall pass the absolute fee simple title to the interest so
conveyed in such property as he may elect to sell. All rents,
emoluments and income from said estate shall belong to him, and
he is further authorized to use any part of the principal of said
estate as he may need or desire. It is provided herein, however, that
he shall not sell or otherwise dispose of any of the improved
property now owned by us located at, in or near the City of
Lubbock, Texas, but he shall have the full right to lease, manage
and enjoy the same during his lifetime, as above provided. He shall
have the right to sub-divide any farmland and sell lots therein, and
may sell unimproved town lots.
FOURTH: At the death of my said husband, Charles Newton
Hodges, I give, devise and bequeath all of the rest, residue and
remainder of my estate both real and personal, wherever situated or
located, to be equally divided among my brothers and sisters, share
and share alike, namely:
"Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Sadie
Rascoe, Era Boman and Nimray Higdon."
4. On November 14, 1953, C. N. Hodges executed in the City of Iloilo his Last Will
and Testament, a copy of which is hereto attached as Annex "B ". In said Will, C. N.
Hodges designated his wife, Linnie Jane Hodges, as his beneficiary using the
identical language she used in the second and third provisos of her Will, supra.
5. On May 23, 1957 Linnie Jane Hodges died in Iloilo City, predeceasing her
husband by more than five (5) years. At the time of her death, she had no forced or
compulsory heir, except her husband, C. N. Hodges. She was survived also by
various brothers and sisters mentioned in her Will (supra), which, for convenience,
we shall refer to as the HIGDONS.
6. On June 28, 1957, this Honorable Court admitted to probate the Last Will and
Testament of the deceased Linnie Jane Hodges (Annex "A"), and appointed C. N.
Hodges as executor of her estate without bond. (CFI Record, Sp. Proc. No. 1307, pp.
24-25). On July 1, 1957, this Honorable Court issued letters testamentary to C. N.
Hodges in the estate of Linnie Jane Hodges. (CFI Record, Sp. Proc. No. 1307, p. 30.)
7. The Will of Linnie Jane Hodges, with respect to the order of succession, the
amount of successional rights, and the intrinsic of its testamentary provisions, should
be governed by Philippine laws because:
(a) The testatrix, Linnie Jane Hodges, intended Philippine laws to
govern her Will;
(b) Article 16 of the Civil Code provides that "the national law of
the person whose succession is under consideration, whatever may
be the nature of the property and regardless of the country wherein
said property may be found", shall prevail. However, the Conflict
of Law of Texas, which is the "national law" of the testatrix,
Linnie Jane Hodges, provide that the domiciliary law (Philippine
law — see paragraph 2, supra) should govern the testamentary
dispositions and successional rights over movables (personal
properties), and the law of the situs of the property (also Philippine
law as to properties located in the Philippines) with regards
immovable (real properties). Thus applying the "Renvoi Doctrine",
as approved and applied by our Supreme Court in the case of "In
The Matter Of The Testate Estate of Eduard E. Christensen", G.R.
No.
L-16749, promulgated January 31, 1963, Philippine law should
apply to the Will of Linnie Jane Hodges and to the successional
rights to her estate insofar as her movable and immovable assets in
the Philippines are concerned. We shall not, at this stage, discuss
what law should govern the assets of Linnie Jane Hodges located
in Oklahoma and Texas, because the only assets in issue in this
motion are those within the jurisdiction of this motion Court in the
two above-captioned Special Proceedings.
8. Under Philippine and Texas law, the conjugal or community estate of spouses
shall, upon dissolution, be divided equally between them. Thus, upon the death of
Linnie Jane Hodges on May 23, 1957, one-half (1/2) of the entirety of the assets of
the Hodges spouses constituting their conjugal estate pertained automatically to
Charles Newton Hodges, not by way of inheritance, but in his own right as partner
in the conjugal partnership. The other one-half (1/2) portion of the conjugal estate
constituted the estate of Linnie Jane Hodges. This is the only portion of the conjugal
estate capable of inheritance by her heirs.
9. This one-half (1/2) portion of the conjugal assets pertaining to Linnie Jane Hodges
cannot, under a clear and specific provision of her Will, be enhanced or increased by
income, earnings, rents, or emoluments accruing after her death on May 23, 1957.
Linnie Jane Hodges' Will provides that "all rents, emoluments and income from said
estate shall belong to him (C. N. Hodges) and he is further authorized to use any
part of the principal of said estate as he may need or desire." (Paragraph 3, Annex
"A".) Thus, by specific provision of Linnie Jane Hodges' Will, "all rents,
emoluments and income" must be credited to the one-half (1/2) portion of the
conjugal estate pertaining to C. N. Hodges. Clearly, therefore, the estate of Linnie
Jane Hodges, capable of inheritance by her heirs, consisted exclusively of no more
than one-half (1/2) of the conjugal estate, computed as of the time of her death on
May 23, 1957.
10. Articles 900, 995 and 1001 of the New Civil Code provide that the surviving
spouse of a deceased leaving no ascendants or descendants is entitled, as a matter of
right and by way of irrevocable legitime, to at least one-half (1/2) of the estate of the
deceased, and no testamentary disposition by the deceased can legally and validly
affect this right of the surviving spouse. In fact, her husband is entitled to said one-
half (1/2) portion of her estate by way of legitime. (Article 886, Civil Code.) Clearly,
therefore, immediately upon the death of Linnie Jane Hodges, C. N. Hodges was the
owner of at least three-fourths (3/4) or seventy-five (75%) percent of all of the
conjugal assets of the spouses, (1/2 or 50% by way of conjugal partnership share and
1/4 or 25% by way of inheritance and legitime) plus all "rents, emoluments and
income" accruing to said conjugal estate from the moment of Linnie Jane Hodges'
death (see paragraph 9, supra).
11. The late Linnie Jane Hodges designated her husband C.N. Hodges as her sole and
exclusive heir with full authority to do what he pleased, as exclusive heir and owner
of all the assets constituting her estate, except only with regards certain properties
"owned by us, located at, in or near the City of Lubbock, Texas". Thus, even without
relying on our laws of succession and legitime, which we have cited above, C. N.
Hodges, by specific testamentary designation of his wife, was entitled to the entirely
to his wife's estate in the Philippines.
12. Article 777 of the New Civil Code provides that "the rights of the successor are
transmitted from the death of the decedent". Thus, title to the estate of Linnie Jane
Hodges was transmitted to C. N. Hodges immediately upon her death on May 23,
1957. For the convenience of this Honorable Court, we attached hereto as Annex "C"
a graph of how the conjugal estate of the spouses Hodges should be divided in
accordance with Philippine law and the Will of Linnie Jane Hodges.
13. In his capacity as sole heir and successor to the estate of Linnie Jane Hodges as
above-stated, C. N. Hodges, shortly after the death of Linnie Jane Hodges,
appropriated to himself the entirety of her estate. He operated all the assets, engaged
in business and performed all acts in connection with the entirety of the conjugal
estate, in his own name alone, just as he had been operating, engaging and doing
while the late Linnie Jane Hodges was still alive. Upon his death on December 25,
1962, therefore, all said conjugal assets were in his sole possession and control, and
registered in his name alone, not as executor, but as exclusive owner of all said
assets.
14. All these acts of C. N. Hodges were authorized and sanctioned expressly and
impliedly by various orders of this Honorable Court, as follows:
(a) In an Order dated May 27, 1957, this Honorable Court ruled that C. N. Hodges
"is allowed or authorized to continue the business in which he was engaged, and to
perform acts which he had been doing while the deceased was living." (CFI Record,
Sp. Proc. No. 1307, p. 11.)
(b) On December 14, 1957, this Honorable Court, on the basis of the following fact,
alleged in the verified Motion dated December 11, 1957 filed by Leon P. Gellada as
attorney for the executor C. N. Hodges:
That herein Executor, (is) not only part owner of the properties left as conjugal, but
also, the successor to all the properties left by the deceased Linnie Jane Hodges.'
(CFI Record, Sp. Proc. No. 1307, p. 44; emphasis supplied.)
issued the following order:
"As prayed for by Attorney Gellada, counsel for the Executor, for the reasons stated
in his motion dated December 11, 1957, which the Court considers well taken, all the
sales, conveyances, leases and mortgages of all the properties left by the deceased
Linnie Jane Hodges executed by the Executor, Charles Newton Hodges are hereby
APPROVED. The said Executor is further authorized to execute subsequent sales,
conveyances, leases and mortgages of the properties left by the said deceased Linnie
Jane Hodges in consonance with the wishes contained in the last will and testament
of the latter." (CFI Record. Sp. Proc. No. 1307, p. 46; emphasis supplied.)
24 ems
(c) On April 21, 1959, this Honorable Court approved the verified inventory and
accounting submitted by C. N. Hodges through his counsel Leon P. Gellada on April
14, 1959 wherein he alleged among other things,
"That no person interested in the Philippines of the time and place
of examining the herein account, be given notice, as herein
executor is the only devisee or legatee of the deceased, in
accordance with the last will and testament already probated by
the Honorable Court." (CFI Record, Sp. Proc. No. 1307, pp. 77-
78; emphasis supplied.)
(d) On July 20, 1960, this Honorable Court approved the verified "Annual Statement
of Account" submitted by C. N. Hodges through his counsel Leon P. Gellada on July
21, 1960 wherein he alleged, among other things.
"That no person interested in the Philippines of the time and place
of examining the herein account, be given notice as herein
executor is the only devisee or legatee of the deceased Linnie Jane
Hodges, in accordance with the last will and testament ofthe
deceased, already probated by this Honorable Court." (CFI Record,
Sp. Proc. No. 1307, pp. 81-82; emphasis supplied.)
(e) On May 2, 1961, this Honorable Court approved the verified "Annual Statement
of Account By The Executor For the Year 1960" submitted through Leon P. Gellada
on April 20, 1961 wherein he alleged:
"That no person interested in the Philippines be given notice, ofthe time and place of
examining the herein account, as herein executor is the only devisee or legatee of the
deceased Linnie Jane Hodges, in accordance with the last will and testament ofthe
deceased, already probated by this Honorable Court." (CFI Record, Sp. Proc. No.
1307, pp. 90-91; emphasis supplied.)
15. Since C. N. Hodges was the sole and exclusive heir of Linnie Jane Hodges, not
only by law, but in accordance with the dispositions of her will, there was, in fact, no
need to liquidate the conjugal estate of the spouses. The entirely of said conjugal
estate pertained to him exclusively, therefore this Honorable Court sanctioned and
authorized, as above-stated, C. N. Hodges to manage, operate and control all the
conjugal assets as owner.
16. By expressly authorizing C. N. Hodges to act as he did in connection with the
estate of his wife, this Honorable Court has (1) declared C. N. Hodges as the sole
heir of the estate of Linnie Jane Hodges, and (2) delivered and distributed her estate
to C. N. Hodges as sole heir in accordance with the terms and conditions of her Will.
Thus, although the "estate of Linnie Jane Hodges" still exists as a legal and juridical
personality, it had no assets or properties located in the Philippines registered in its
name whatsoever at the time of the death of C. N. Hodges on December 25, 1962.
17. The Will of Linnie Jane Hodges (Annex "A"), fourth paragraph, provides as
follows:
"At the death of my said husband, Charles Newton Hodges, I give,
devise and bequeath all of the rest, residue and remainder of my
estate both real and personal, wherever situated or located, to be
equally divided among my brothers and sisters, share and share
alike, namely:
"Esta Higdon, Emma Howell, Leonard Higdon,
Roy Higdon, Sadie Rascoe, Era Boman and
Nimray Higdon."
Because of the facts hereinabove set out there is no "rest, residue and remainder", at
least to the extent of the Philippine assets, which remains to vest in the HIGDONS,
assuming this proviso in Linnie Jane Hodges' Will is valid and binding against the
estate of C. N. Hodges.
18. Any claims by the HIGDONS under the above-quoted provision of Linnie Jane
Hodges' Will is without merit because said provision is void and invalid at least as to
the Philippine assets. It should not, in anyway, affect the rights of the estate of C. N.
Hodges or his heirs to the properties, which C. N. Hodges acquired by way of
inheritance from his wife Linnie Jane Hodges upon her death.
(a) In spite of the above-mentioned provision in the Will of Linnie
Jane Hodges, C. N. Hodges acquired, not merely a usufructuary
right, but absolute title and ownership to her estate. In a recent case
involving a very similar testamentary provision, the Supreme Court
held that the heir first designated acquired full ownership of the
property bequeathed by the will, not mere usufructuary rights.
(Consolacion Florentino de Crisologo, et al., vs. Manuel Singson,
G. R. No. L-13876, February 28, 1962.)
(b) Article 864, 872 and 886 of the New Civil Code clearly provide
that no charge, condition or substitution whatsoever upon the
legitime can be imposed by a testator. Thus, under the provisions
of Articles 900, 995 and 1001 of the New Civil Code, the legitime
 of a surviving spouse is 1/2 of the estate of the deceased spouse.
Consequently, the above-mentioned provision in the Will of Linnie
Jane Hodges is clearly invalid insofar as the legitime of C. N.
Hodges was concerned, which consisted of 1/2 of the 1/2 portion
of the conjugal estate, or 1/4 of the entire conjugal estate of the
deceased.
(c) There are generally only two kinds of substitution provided for
and authorized by our Civil Code (Articles 857-870), namely,
(1) simple or common substitution, sometimes referred to
as vulgar substitution (Article 859), and (2) fideicommissary
substitution (Article 863). All other substitutions are merely
variations of these. The substitution provided for by paragraph four
of the Will of Linnie Jane Hodges is not fideicommissary
substitution, because there is clearly no obligation on the part of C.
N. Hodges as the first heir designated, to preserve the properties
for the substitute heirs. (Consolacion Florentino de Crisologo et al.
vs. Manuel Singson, G. R. No.
L-13876.) At most, it is a vulgar or simple substitution. However,
in order that a vulgar or simple substitution can be valid, three
alternative conditions must be present, namely, that the first
designated heir (1) should die before the testator; or (2) should not
wish to accept the inheritance; or (3) should be incapacitated to do
so. None of these conditions apply to C. N. Hodges, and, therefore,
the substitution provided for by the above-quoted provision of the
Will is not authorized by the Code, and, therefore, it is void.
Manresa, commenting on these kisses of substitution, meaningfully
stated that: "... cuando el testador instituyeun primer heredero, y
por fallecimiento de este nombra otro u otros, ha de entenderse que
estas segundas designaciones solo han de llegar a tener efectividad
en el caso de que el primer instituido muera antes que el testador,
fuera o no esta su verdadera intencion. ...". (6 Manresa, 7 a ed.,
pag. 175.) In other words, when another heir is designated to
inherit upon the death of a first heir, the second designation can
have effect only in case the first instituted heir dies before the
testator, whether or not that was the true intention of said testator.
Since C. N. Hodges did not die before Linnie Jane Hodges, the
provision for substitution contained in Linnie Jane Hodges' Willis
void.
(d) In view of the invalidity of the provision for substitution in the
Will, C. N. Hodges' inheritance to the entirety of the Linnie Jane
Hodges estate is irrevocable and final.
19. Be that as it may, at the time of C. N. Hodges' death, the entirety of the conjugal
estate appeared and was registered in him exclusively as owner. Thus, the
presumption is that all said assets constituted his estate. Therefore —
(a) If the HIGDONS wish to enforce their dubious rights as substituted heirs to 1/4 of
the conjugal estate (the other 1/4 is covered by the legitime of C. N. Hodges which
can not be affected by any testamentary disposition), their remedy, if any, is to file
their claim against the estate of C. N. Hodges, which should be entitled at the present
time to full custody and control of all the conjugal estate of the spouses.
(b) The present proceedings, in which two estates exist under separate
administration, where the administratrix of the Linnie Jane Hodges estate exercises
an officious right to object and intervene in matters affecting exclusively the C. N.
Hodges estate, is anomalous.
WHEREFORE, it is most respectfully prayed that after trial and reception of
evidence, this Honorable Court declare:
1. That the estate of Linnie Jane Hodges was and is composed exclusively of one-
half (1/2) share in the conjugal estate of the spouses Hodges, computed as of the date
of her death on May 23, 1957;
2. That the other half of the conjugal estate pertained exclusively to C. N. Hodges as
his share as partner in the conjugal partnership;
3. That all "rents, emoluments and income" of the conjugal estate accruing after
Linnie Jane Hodges' death pertains to C. N. Hodges;
4. That C. N. Hodges was the sole and exclusive heir of the estate of Linnie Jane
Hodges;
5. That, therefore, the entire conjugal estate of the spouses located in the Philippines,
plus all the "rents, emoluments and income" above-mentioned, now constitutes the
estate of C. N. Hodges, capable of distribution to his heirs upon termination of
Special Proceedings No. 1672;
6. That PCIB, as administrator of the estate of C. N. Hodges, is entitled to full and
exclusive custody, control and management of all said properties; and
7. That Avelina A. Magno, as administratrix of the estate of Linnie Jane Hodges, as
well as the HIGDONS, has no right to intervene or participate in the administration
of the C. N. Hodges estate.
PCIB further prays for such and other relief as may be deemed just and equitable in
the premises."
(Record, pp. 265-277)
Before all of these motions of petitioner could be resolved, however, on December 21, 1965, private
respondent Magno filed her own "Motion for the Official Declaration of Heirs of the Estate of Linnie
Jane Hodges" as follows:
COMES NOW the Administratrix of the Estate of Linnie Jane Hodges and, through
undersigned counsel, unto this Honorable Court most respectfully states and
manifests:
1. That the spouses Charles Newton Hodges and Linnie Jane Hodges were American
citizens who died at the City of Iloilo after having amassed and accumulated
extensive properties in the Philippines;
2. That on November 22, 1952, Linnie Jane Hodges executed a last will and
testament (the original of this will now forms part of the records of these proceedings
as Exhibit "C" and appears as Sp. Proc. No. 1307, Folio I, pp. 17-18);
3. That on May 23, 1957, Linnie Jane Hodges died at the City of Iloilo at the time
survived by her husband, Charles Newton Hodges, and several relatives named in her
last will and testament;
4. That on June 28, 1957, a petition therefor having been priorly filed and duly heard,
this Honorable Court issued an order admitting to probate the last will and testament
of Linnie Jane Hodges (Sp. Proc. No. 1307, Folio I, pp. 24-25, 26-28);
5. That the required notice to creditors and to all others who may have any claims
against the decedent, Linnie Jane Hodges has already been printed, published and
posted (Sp. Proc. No. 1307, Folio I. pp. 34-40) and the reglamentary period for filing
such claims has long ago lapsed and expired without any claims having been asserted
against the estate of Linnie Jane Hodges, approved by the
Administrator/Administratrix of the said estate, nor ratified by this Honorable Court;
6. That the last will and testament of Linnie Jane Hodges already admitted to probate
contains an institution of heirs in the following words:
"SECOND: I give, devise and bequeath all of the rest, residue and
remainder of my estate, both personal and real, wherever situated
or located, to my beloved husband, Charles Newton Hodges to
have and to hold unto him, my said husband, during his natural
lifetime.
THIRD: I desire, direct and provide that my husband, Charles
Newton Hodges, shall have the right to manage, control, use and
enjoy said estate during his lifetime, and, he is hereby given the
right to make any changes in the physical properties of said estate,
by sale of any part thereof which he may think best, and the
purchase of any other or additional property as he may think best;
to execute conveyances with or without general or special
warranty, conveying in fee simple or for any other term or time,
any property which he may deem proper to dispose of; to lease any
of the real property for oil, gas and/or other minerals, and all such
deeds or leases shall pass the absolute fee simple title to the
interest so conveyed in such property as he elect to sell. All rents,
emoluments and income from said estate shall belong to him, and
he is further authorized to use any part of the principal of said
estate as he may need or desire. It is provided herein, however, that
he shall not sell or otherwise dispose of any of the improved
property now owned by us located at, in or near the City of
Lubbock Texas, but he shall have the full right to lease, manage
and enjoy the same during his lifetime, above provided. He shall
have the right to subdivide any farm land and sell lots therein, and
may sell unimproved town lots.
FOURTH: At the death of my said husband, Charles Newton
Hodges, I give, devise and bequeath all of the rest, residue and
remainder of my estate, both real and personal, wherever situated
or located, to be equally divided among my brothers and sisters,
share and share alike, namely:
Esta Higdon, Emma Howell, Leonard Higdon, Roy Higdon, Sadie
Rascoe, Era Boman and Nimroy Higdon.
FIFTH: In case of the death of any of my brothers and/or sisters
named in item Fourth, above, prior to the death of my husband,
Charles Newton Hodges, then it is my will and bequest that the
heirs of such deceased brother or sister shall take jointly the share
which would have gone to such brother or sister had she or he
survived."
7. That under the provisions of the last will and testament already above-quoted,
Linnie Jane Hodges gave a life-estate or a usufruct over all her estate to her husband,
Charles Newton Hodges, and a vested remainder-estate or the naked title over the
same estate to her relatives named therein;
8. That after the death of Linnie Jane Hodges and after the admission to probate of
her last will and testament, but during the lifetime of Charles Newton Hodges, the
said Charles Newton Hodges with full and complete knowledge of the life-estate or
usufruct conferred upon him by the will since he was then acting as Administrator of
the estate and later as Executor of the will of Linnie Jane Hodges, unequivocably and
clearly through oral and written declarations and sworn public statements,
renounced, disclaimed and repudiated his life-estate and usufruct over the estate of
Linnie Jane Hodges;
9. That, accordingly, the only heirs left to receive the estate of Linnie Jane Hodges
pursuant to her last will and testament, are her named brothers and sisters, or their
heirs, to wit: Esta Higdon, Emma Howell, Leonard Higdon, Aline Higdon and David
Higdon, the latter two being the wife and son respectively of the deceased Roy
Higdon, Sadie Rascoe Era Boman and Nimroy Higdon, all of legal ages, American
citizens, with residence at the State of Texas, United States of America;
10. That at the time of the death of Linnie Jane Hodges on May 23, 1957, she was
the co-owner (together with her husband Charles Newton Hodges) of an undivided
one-half interest in their conjugal properties existing as of that date, May 23, 1957,
which properties are now being administered sometimes jointly and sometimes
separately by the Administratrix of the estate of Linnie Jane Hodges and/or the
Administrator of the estate of C. N. Hodges but all of which are under the control
and supervision of this Honorable Court;
11. That because there was no separation or segregation of the interests of husband
and wife in the combined conjugal estate, as there has been no such separation or
segregation up to the present, both interests have continually earned exactly the same
amount of "rents, emoluments and income", the entire estate having been continually
devoted to the business of the spouses as if they were alive;
12. That the one-half interest of Linnie Jane Hodges in the combined conjugal estate
was earning "rents, emoluments and income" until her death on May 23, 1957, when
it ceased to be saddled with any more charges or expenditures which are purely
personal to her in nature, and her estate kept on earning such "rents, emoluments and
income" by virtue of their having been expressly renounced, disclaimed and
repudiated by Charles Newton Hodges to whom they were bequeathed for life under
the last will and testament of Linnie Jane Hodges;
13. That, on the other hand, the one-half interest of Charles Newton Hodges in the
combined conjugal estate existing as of May 23, 1957, while it may have earned
exactly the same amount of "rents, emoluments and income" as that of the share
pertaining to Linnie Jane Hodges, continued to be burdened by charges,
 expenditures, and other dispositions which are purely personal to him in nature, until
the death of Charles Newton Hodges himself on December 25, 1962;
14. That of all the assets of the combined conjugal estate of Linnie Jane Hodges and
Charles Newton Hodges as they exist today, the estate of Linnie Jane Hodges is
clearly entitled to a portion more than fifty percent (50%) as compared to the portion
to which the estate of Charles Newton Hodges may be entitled, which portions can
be exactly determined by the following manner:
a. An inventory must be made of the assets of the combined
conjugal estate as they existed on the death of Linnie Jane Hodges
on May 23, 1957 — one-half of these assets belong to the estate of
Linnie Jane Hodges;
b. An accounting must be made of the "rents, emoluments and
income" of all these assets — again one-half of these belong to the
estate of Linnie Jane Hodges;
c. Adjustments must be made, after making a deduction of charges,
disbursements and other dispositions made by Charles Newton
Hodges personally and for his own personal account from May 23,
1957 up to December 25, 1962, as well as other charges,
disbursements and other dispositions made for him and in his
behalf since December 25, 1962 up to the present;
15. That there remains no other matter for disposition now insofar as the estate of
Linnie Jane Hodges is concerned but to complete the liquidation of her estate,
segregate them from the conjugal estate, and distribute them to her heirs pursuant to
her last will and testament.
WHEREFORE, premises considered, it is most respectfully moved and prayed that
this Honorable Court, after a hearing on the factual matters raised by this motion,
issue an order:
a. Declaring the following persons, to wit: Esta Higdon, Emma Howell, Leonard
Higdon, Aline Higdon, David Higdon, Sadie Rascoe, Era Boman and Nimroy
Higdon, as the sole heirs under the last will and testament of Linnie Jane Hodges and
as the only persons entitled to her estate;
b. Determining the exact value of the estate of Linnie Jane Hodges in accordance
with the system enunciated in paragraph 14 of this motion;
c. After such determination ordering its segregation from the combined conjugal
estate and its delivery to the Administratrix of the estate of Linnie Jane Hodges for
distribution to the heirs to whom they properly belong and appertain.
(Green Record on Appeal, pp. 382-391)
whereupon, instead of further pressing on its motion of January 8, 1965 aforequoted, as it had been
doing before, petitioner withdrew the said motion and in addition to opposing the above motion of
respondent Magno, filed a motion on April 22, 1966 alleging in part that:
1. That it has received from the counsel for the administratrix of the supposed estate
of Linnie Jane Hodges a notice to set her "Motion for Official Declaration of Heirs of
the Estate of Linnie Jane Hodges";
2. That before the aforesaid motion could be heard, there are matters pending before
this Honorable Court, such as:
a. The examination already ordered by this Honorable Court of
documents relating to the allegation of Avelina Magno that Charles
Newton Hodges "through ... written declarations and sworn public
statements, renounced, disclaimed and repudiated life-estate and
usufruct over the estate of Linnie Jane Hodges';
b. That "Urgent Motion for An Accounting and Delivery to the
Estate of C. N. Hodges of All the Assets of the Conjugal
Partnership of the Deceased Linnie Jane Hodges and C. N. Hodges
Existing as of May 23, 1957 Plus All the Rents, Emoluments and
Income Therefrom";
c. Various motions to resolve the aforesaid motion;
d. Manifestation of September 14, 1964, detailing acts of
interference of Avelina Magno under color of title as administratrix
of the Estate of Linnie Jane Hodges;
which are all prejudicial, and which involve no issues of fact, all facts involved
therein being matters of record, and therefore require only the resolution of questions
of law;
3. That whatever claims any alleged heirs or other persons may have could be very
easily threshed out in the Testate Estate of Charles Newton Hodges;
4. That the maintenance of two separate estate proceedings and two administrators
only results in confusion and is unduly burdensome upon the Testate Estate of
Charles Newton Hodges, particularly because the bond filed by Avelina Magno is
grossly insufficient to answer for the funds and property which she has inofficiously
collected and held, as well as those which she continues to inofficiously collect
and hold;
5. That it is a matter of record that such state of affairs affects and inconveniences
not only the estate but also third-parties dealing with it;" (Annex "V", Petition.)
and then, after further reminding the court, by quoting them, of the relevant allegations of its earlier
motion of September 14, 1964, Annex U, prayed that:
1. Immediately order Avelina Magno to account for and deliver to the administrator
of the Estate of C. N. Hodges all the assets of the conjugal partnership of the
deceased Linnie Jane Hodges and C. N. Hodges, plus all the rents, emoluments and
income therefrom;
2. Pending the consideration of this motion, immediately order Avelina Magno to
turn over all her collections to the administrator Philippine Commercial & Industrial
Bank;
3. Declare the Testate Estate of Linnie Jane Hodges (Sp. Proc. No. 1307) closed;
4. Defer the hearing and consideration of the motion for declaration of heirs in the
Testate Estate of Linnie Jane Hodges until the matters hereinabove set forth are
resolved.
(Prayer, Annex "V" of Petition.)
On October 12, 1966, as already indicated at the outset of this opinion, the respondent court denied the
foregoing motion, holding thus:
ORDER
On record is a motion (Vol. X, Sp. 1672, pp. 4379-4390) dated April 22, 1966 of
administrator PCIB praying that (1) Immediately order Avelina Magno to account
for and deliver to the administrator of the estate of C. N. Hodges all assets of the
conjugal partnership of the deceased Linnie Jane Hodges and C. N. Hodges, plus all
the rents, emoluments and income therefrom; (2) Pending the consideration of this
motion, immediately order Avelina Magno to turn over all her collections to the
administrator PCIB; (3) Declare the Testate Estate of Linnie Jane Hodges (Sp. Proc.
No. 1307) closed; and (4) Defer the hearing and consideration of the motion for
declaration of heirs in the Testate Estate of Linnie Jane Hodges until the matters
hereinabove set forth are resolved.
This motion is predicated on the fact that there are matters pending before this court
such as (a) the examination already ordered by this Honorable Court of documents
relating to the allegation of Avelina Magno that Charles Newton Hodges thru written
declaration and sworn public statements renounced, disclaimed and repudiated his
life-estate and usufruct over the estate of Linnie Jane Hodges (b) the urgent motion
for accounting and delivery to the estate of C. N. Hodges of all the assets of the
conjugal partnership of the deceased Linnie Jane Hodges and C. N. Hodges existing
as of May 23, 1957 plus all the rents, emoluments and income therefrom; (c) various
motions to resolve the aforesaid motion; and (d) manifestation of September 14,
1964, detailing acts of interference of Avelina Magno under color of title as
administratrix of the estate of Linnie Jane Hodges.
These matters, according to the instant motion, are all pre-judicial involving no
issues of facts and only require the resolution of question of law; that in the motion
of October 5, 1963 it is alleged that in a motion dated December 11, 1957 filed by
Atty. Leon Gellada as attorney for the executor C. N. Hodges, the said executor C.
N. Hodges is not only part owner of the properties left as conjugal but also the
successor to all the properties left by the deceased Linnie Jane Hodges.
Said motion of December 11, 1957 was approved by the Court in consonance with
the wishes contained in the last will and testament of Linnie Jane Hodges.
That on April 21, 1959 this Court approved the inventory and accounting submitted
by C. N. Hodges thru counsel Atty. Leon Gellada in a motion filed on April 14, 1959
stating therein that executor C. N. Hodges is the only devisee or legatee of Linnie
Jane Hodges in accordance with the last will and testament already probated by the
Court.
That on July 13, 1960 the Court approved the annual statement of accounts submitted
by the executor C. N. Hodges thru his counsel Atty. Gellada on July 21, 1960
wherein it is stated that the executor, C. N. Hodges is the only devisee or legatee of
the deceased Linnie Jane Hodges; that on May 2, 1961 the Court approved the
annual statement of accounts submitted by executor, C. N. Hodges for the year 1960
which was submitted by Atty. Gellada on April 20, 1961 wherein it is stated that
executor Hodges is the only devisee or legatee of the deceased Linnie Jane Hodges;
That during the hearing on September 5 and 6, 1963 the estate of C. N. Hodges
claimed all the assets belonging to the deceased spouses Linnie Jane Hodges and C.
N. Hodges situated in the Philippines; that administratrix Magno has executed illegal
acts to the prejudice of the testate estate of C. N. Hodges.
An opposition (Sp. 1672, Vol. X, pp. 4415-4421) dated April 27, 1966 of
administratrix Magno has been filed asking that the motion be denied for lack of
merit and that the motion for the official declaration of heirs of the estate of Linnie
Jane Hodges be set for presentation and reception of evidence.
It is alleged in the aforesaid opposition that the examination of documents which are
in the possession of administratrix Magno can be made prior to the hearing of the
motion for the official declaration of heirs of the estate of Linnie Jane Hodges,
during said hearing.
That the matters raised in the PCIB's motion of October 5, 1963 (as well as the other
motion) dated September 14, 1964 have been consolidated for the purpose of
presentation and reception of evidence with the hearing on the determination of the
heirs of the estate of Linnie Jane Hodges. It is further alleged in the opposition that
the motion for the official declaration of heirs of the estate of Linnie Jane Hodges is
the one that constitutes a prejudicial question to the motions dated October 5 and
September 14, 1964 because if said motion is found meritorious and granted by the
Court, the PCIB's motions of October 5, 1963 and September 14, 1964 will become
moot and academic since they are premised on the assumption and claim that the
only heir of Linnie Jane Hodges was C. N. Hodges.
That the PCIB and counsel are estopped from further questioning the determination
of heirs in the estate of Linnie Jane Hodges at this stage since it was PCIB as early as
January 8, 1965 which filed a motion for official declaration of heirs of Linnie Jane
Hodges that the claim of any heirs of Linnie Jane Hodges can be determined only in
the administration proceedings over the estate of Linnie Jane Hodges and not that of
C. N. Hodges, since the heirs of Linnie Jane Hodges are claiming her estate and not
the estate of C. N. Hodges.
A reply (Sp. 1672, Vol. X, pp. 4436-4444) dated May 11, 1966 of the PCIB has been
filed alleging that the motion dated April 22, 1966 of the PCIB is not to seek
deferment of the hearing and consideration of the motion for official declaration of
heirs of Linnie Jane Hodges but to declare the testate estate of Linnie Jane Hodges
closed and for administratrix Magno to account for and deliver to the PCIB all assets
of the conjugal partnership of the deceased spouses which has come to her
possession plus all rents and income.
A rejoinder (Sp. 1672, Vol. X, pp. 4458-4462) of administratrix Magno dated May
19, 1966 has been filed alleging that the motion dated December 11, 1957 only
sought the approval of all conveyances made by C. N. Hodges and requested the
Court authority for all subsequent conveyances that will be executed by C. N.
Hodges; that the order dated December 14, 1957 only approved the conveyances
made by C. N. Hodges; that C. N. Hodges represented by counsel never made any
claim in the estate of Linnie Jane Hodges and never filed a motion to declare himself
as the heir of the said Linnie Jane Hodges despite the lapse of more than five (5)
years after the death of Linnie Jane Hodges; that it is further alleged in the rejoinder
that there can be no order of adjudication of the estate unless there has been a prior
express declaration of heirs and so far no declaration of heirs in the estate of Linnie
Jane Hodges (Sp. 1307) has been made.
Considering the allegations and arguments in the motion and of the PCIB as well as
those in the opposition and rejoinder of administratrix Magno, the Court finds the
opposition and rejoinder to be well taken for the reason that so far there has been no
 official declaration of heirs in the testate estate of Linnie Jane Hodges and therefore
no disposition of her estate.
WHEREFORE, the motion of the PCIB dated April 22, 1966 is hereby DENIED.
(Annex "W", Petition)
In its motion dated November 24, 1966 for the reconsideration of this order, petitioner alleged inter
alia that:
It cannot be over-stressed that the motion of December 11, 1957 was based on the
fact that:
a. Under the last will and testament of the deceased, Linnie Jane
Hodges, the late Charles Newton Hodges was the sole heir
instituted insofar as her properties in the Philippines are concerned;
b. Said last will and testament vested upon the said late Charles
Newton Hodges rights over said properties which, in sum, spell
ownership, absolute and in fee simple;
c. Said late Charles Newton Hodges was, therefore, "not only part
owner of the properties left as conjugal, but also, the successor to
all the properties left by the deceased Linnie Jane Hodges.
Likewise, it cannot be over-stressed that the aforesaid motion was granted by this
Honorable Court "for the reasons stated" therein.
Again, the motion of December 11, 1957 prayed that not only "all the sales,
conveyances, leases, and mortgages executed by" the late Charles Newton Hodges,
but also all "the subsequent sales, conveyances, leases, and mortgages ..." be
approved and authorized. This Honorable Court, in its order of December 14, 1957,
"for the reasons stated" in the aforesaid motion, granted the same, and not only
approved all the sales, conveyances, leases and mortgages of all properties left by the
deceased Linnie Jane Hodges executed by the late Charles Newton Hodges, but also
authorized "all subsequent sales, conveyances, leases and mortgages of the properties
left by the said deceased Linnie Jane Hodges. (Annex "X", Petition)
and reiterated its fundamental pose that the Testate Estate of Linnie Jane Hodges had already been
factually, although not legally, closed with the virtual declaration of Hodges and adjudication to him,
as sole universal heir of all the properties of the estate of his wife, in the order of December 14, 1957,
Annex G. Still unpersuaded, on July 18, 1967, respondent court denied said motion for reconsideration
and held that "the court believes that there is no justification why the order of October 12, 1966 should
be considered or modified", and, on July 19, 1967, the motion of respondent Magno "for official
declaration of heirs of the estate of Linnie Jane Hodges", already referred to above, was set for hearing.
In consequence of all these developments, the present petition was filed on August 1, 1967 (albeit
petitioner had to pay another docketing fee on August 9, 1967, since the orders in question were issued
in two separate testate estate proceedings, Nos. 1307 and 1672, in the court below).
Together with such petition, there are now pending before Us for resolution herein, appeals from the
following:
1. The order of December 19, 1964 authorizing payment by respondent Magno of
overtime pay, (pp. 221, Green Record on Appeal) together with the subsequent
orders of January 9, 1965, (pp. 231-232, id.) October 27, 1965, (pp. 227, id.) and
February 15, 1966 (pp. 455-456, id.) repeatedly denying motions for reconsideration
thereof.
2. The order of August 6, 1965 (pp. 248, id.) requiring that deeds executed by
petitioner to be co-signed by respondent Magno, as well as the order of October 27,
1965 (pp. 276-277) denying reconsideration.
3. The order of October 27, 1965 (pp. 292-295, id.) enjoining the deposit of all
collections in a joint account and the same order of February 15, 1966 mentioned in
No. 1 above which included the denial of the reconsideration of this order of October
27, 1965.
4. The order of November 3, 1965 (pp. 313-320, id.) directing the payment of
attorney's fees, fees of the respondent administratrix, etc. and the order of February
16, 1966 denying reconsideration thereof.
5. The order of November 23, 1965 (pp. 334-335, id.) allowing appellee Western
Institute of Technology to make payments to either one or both of the administrators
of the two estates as well as the order of March 7, 1966 (p. 462, id.) denying
reconsideration.
6. The various orders hereinabove earlier enumerated approving deeds of sale
executed by respondent Magno in favor of appellees Carles, Catedral, Pablito,
Guzman, Coronado, Barrido, Causing, Javier, Lucero and Batisanan, (see pp. 35 to
37 of this opinion), together with the two separate orders both dated December 2,
1966 (pp. 306-308, and pp. 308-309, Yellow Record on Appeal) denying
reconsideration of said approval.
7. The order of January 3, 1967, on pp. 335-336, Yellow Record on Appeal,
approving similar deeds of sale executed by respondent Magno, as those in No. 6, in
favor of appellees Pacaonsis and Premaylon, as to which no motion for
reconsideration was filed.
8. Lastly, the order of December 2, 1966, on pp. 305-306, Yellow Record on Appeal,
directing petitioner to surrender to appellees Lucero, Batisanan, Javier, Pablito,
Barrido, Catedral, Causing, Guzman, and Coronado, the certificates of title covering
the lands involved in the approved sales, as to which no motion for reconsideration
was filed either.
Strictly speaking, and considering that the above orders deal with different matters, just as they affect
distinctly different individuals or persons, as outlined by petitioner in its brief as appellant on pp. 12-20
thereof, there are, therefore, thirty-three (33) appeals before Us, for which reason, petitioner has to pay
also thirty-one (31) more docket fees.
It is as well perhaps to state here as elsewhere in this opinion that in connection with these appeals,
petitioner has assigned a total of seventy-eight (LXXVIII) alleged errors, the respective discussions
and arguments under all of them covering also the fundamental issues raised in respect to the petition
for certiorari and prohibition, thus making it feasible and more practical for the Court to dispose of all
these cases together.4
The assignments of error read thus:
I to IV
THE ORDER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE
IN FAVOR OF THE APPELLEES, PEPITO G. IYULORES, ESPIRIDION
PARTISALA, WINIFREDO C. ESPADA AND ROSARIO ALINGASA,
EXECUTED BY THE APPELLEE, AVELINA A. MAGNO, COVERING
PARCELS OF LAND OWNED BY THE DECEASED, CHARLES NEWTON
 HODGES, AND THE CONTRACTS TO SELL COVERING WHICH WERE
EXECUTED BY HIM DURING HIS LIFETIME.
V to VIII
THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN
FAVOR OF THE APPELLEES, PEPITO G. IYULORES, ESPIRIDION
PARTISALA, WINIFREDO C. ESPADA AND ROSARIO ALINGASA,
COVERING PARCELS OF LAND FOR WHICH THEY HAVE NEVER PAID IN
FULL IN ACCORDANCE WITH THE ORIGINAL CONTRACTS TO SELL.
IX to XII
THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF
OWNERSHIP OVER REAL PROPERTY OF THE APPELLEES, PEPITO G.
IYULORES, ESPIRIDION PARTISALA, WINIFREDO C. ESPADA AND
ROSARIO ALINGASA, WHILE ACTING AS A PROBATE COURT.
XIII to XV
THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE
IN FAVOR OF THE APPELLEES ADELFA PREMAYLON (LOT NO. 102),
SANTIAGO PACAONSIS, AND ADELFA PREMAYLON (LOT NO. 104),
EXECUTED BY THE APPELLEE, AVELINA A. MAGNO, COVERING
PARCELS OF LAND OWNED BY THE DECEASED, CHARLES NEWTON
HODGES, AND THE CONTRACTS TO SELL COVERING WHICH WERE
EXECUTED BY HIM DURING HIS LIFETIME.
XVI to XVIII
THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN
FAVOR OF THE APPELLEES ADELFA PREMAYLON (LOT NO. 102),
SANTIAGO PACAONSIS, AND ADELFA PREMAYLON (LOT NO. 104)
COVERING PARCELS OF LAND FOR WHICH THEY HAVE NEVER PAID IN
FULL IN ACCORDANCE WITH THE ORIGINAL CONTRACTS TO SELL.
XIX to XXI
THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF
OWNERSHIP OVER REAL PROPERTY OF THE APPELLEES ADELFA
PREMAYLON (LOT NO. 102), SANTIAGO PACAONSIS, AND ADELFA
PREMAYLON (LOT NO. 104) WHILE ACTING AS A PROBATE COURT.
XXII to XXV
THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE
IN FAVOR OF THE APPELLEES LORENZO CARLES, JOSE PABLICO,
ALFREDO CATEDRAL AND SALVADOR S. GUZMAN, EXECUTED BY THE
APPELLEE, AVELINA A. MAGNO, COVERING PARCELS OF LAND OWNED
BY THE DECEASED, CHARLES NEWTON HODGES, AND THE CONTRACTS
TO SELL COVERING WHICH WERE EXECUTED BY HIM DURING HIS
LIFETIME.
XXVI to XXIX
THE LOWER COURT ERRED IN APPROVING THE FINAL DEED OF SALE
EXECUTED IN FAVOR OF THE APPELLEES, LORENZO CARLES, JOSE
PABLICO, ALFREDO CATEDRAL AND SALVADOR S. GUZMAN
PURSUANT TO CONTRACTS TO SPELL WHICH WERE CANCELLED AND
RESCINDED.
XXX to XXXIV
THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF
OWNERSHIP OVER REAL PROPERTY OF THE LORENZO CARLES, JOSE
PABLICO, ALFREDO CATEDRAL AND SALVADOR S. GUZMAN, WHILE
ACTING AS A PROBATE COURT.
XXXV to XXXVI
THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE
IN FAVOR OF THE APPELLEES, FLORENIA BARRIDO AND PURIFICACION
CORONADO, EXECUTED BY THE APPELLEE, AVELINA A. MAGNO,
COVERING PARCELS OF LAND OWNED BY THE DECEASED, CHARLES
NEWTON HODGES, AND THE CONTRACTS TO SELL COVERING WHICH
WERE EXECUTED BY HIM DURING HIS LIFETIME.
XXXVII to XXXVIII
THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN
FAVOR OF THE APPELLEES, FLORENIA BARRIDO AND PURIFICACION
CORONADO, ALTHOUGH THEY WERE IN ARREARS IN THE PAYMENTS
AGREED UPON IN THE ORIGINAL CONTRACT TO SELL WHICH THEY
EXECUTED WITH THE DECEASED, CHARLES NEWTON HODGES, IN THE
AMOUNT OF P10,680.00 and P4,428.90, RESPECTIVELY.
XXXIX to XL
THE LOWER COURT ERRED IN DEPRIVING THE DECEASED, CHARLES
NEWTON HODGES, OF THE CONTRACTUAL RIGHT, EXERCISED
THROUGH HIS ADMINISTRATOR, THE INSTANT APPELLANT, TO
CANCEL THE CONTRACTS TO SELL OF THE APPELLEES, FLORENIA
BARRIDO AND PURIFICACION CORONADO.
XLI to XLIII
THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE
IN FAVOR OF THE APPELLEES, GRACIANO LUCERO, ARITEO THOMAS
JAMIR AND MELQUIADES BATISANAN, EXECUTED BY THE APPELLEE,
AVELINA A. MAGNO, COVERING PARCELS OF LAND OWNED BY THE
DECEASED, CHARLES NEWTON HODGES, AND THE CONTRACTS TO
SELL COVERING WHICH WERE EXECUTED BY HIM DURING HIS
LIFETIME.
XLIV to XLVI
THE LOWER COURT ERRED IN APPROVING THE FINAL DEED OF SALE IN
FAVOR OF THE APPELLEES, GRACIANO LUCERO, ARITEO THOMAS
JAMIR AND MELQUIADES BATISANAN, PURSUANT TO CONTRACTS TO
SELL EXECUTED BY THEM WITH THE DECEASED, CHARLES NEWTON
HODGES, THE TERMS AND CONDITIONS OF WHICH THEY HAVE NEVER
COMPLIED WITH.
XLVII to XLIX
THE LOWER COURT ERRED IN DEPRIVING THE DECEASED, CHARLES
NEWTON HODGES, OF HIS RIGHT, EXERCISED THROUGH HIS
ADMINISTRATION, THE INSTANT APPELLANT, TO CANCEL THE
CONTRACTS TO SELL OF THE APPELLEES, GRACIANO LUCERO, ARITEO
THOMAS JAMIR AND MELQUIADES BATISANAN, AND IN DETERMINING
 THE RIGHTS OF THE SAID APPELLEES OVER REAL PROPERTY WHILE
ACTING AS A PROBATE COURT.
L LXVI
THE LOWER COURT ERRED IN APPROVING THE FINAL DEEDS OF SALE
IN FAVOR OF THE APPELLEE, BELCESAR CAUSING, EXECUTED BY THE
APPELLEE, AVELINA A. MAGNO, COVERING PARCELS OF LAND OWNED
BY THE DECEASED, CHARLES NEWTON HODGES, AND THE CONTRACTS
TO SELL COVERING WHICH WERE EXECUTED BY HIM DURING HIS
LIFETIME.
LI
THE LOWER COURT ERRED IN APPROVING THE DEEDS OF SALE IN
FAVOR OF THE APPELLEE, BELCESAR CAUSING, ALTHOUGH HE WAS IN
ARREARS IN THE PAYMENTS AGREED UPON IN THE ORIGINAL
CONTRACT TO SELL WHICH HE EXECUTED WITH THE DECEASED,
CHARLES NEWTON HODGES, IN THE AMOUNT OF P2,337.50.
LII
THE LOWER COURT ERRED IN APPROVING THE DEED OF SALE IN
FAVOR OF THE APPELLEE, BELCESAR CAUSING, ALTHOUGH THE SAME
WAS NOT EXECUTED IN ACCORDANCE WITH THE RULES OF COURT.
LIII to LXI
THE LOWER COURT ERRED IN ORDERING THE APPELLANT, PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK TO SURRENDER THE OWNER'S
DUPLICATE CERTIFICATES OF TITLE OVER THE RESPECTIVE LOTS
COVERED BY THE DEEDS OF SALE EXECUTED BY THE APPELLEE,
AVELINA A. MAGNO, IN FAVOR OF THE OTHER APPELLEES, JOSE
PABLICO, ALFREDO CATEDRAL, SALVADOR S. GUZMAN, FLRENIA
BARRIDO, PURIFICACION CORONADO, BELCESAR CAUSING, ARITEO
THOMAS JAMIR, MAXIMA BATISANAN AND GRACIANO L. LUCERO.
LXII
THE LOWER COURT ERRED IN RESOLVING THE MOTION OF THE
APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY, DATED NOVEMBER
3, 1965, WITHOUT ANY COPY THEREOF HAVING BEEN SERVED UPON
THE APPELLANT, PHILIPPINE COMMERCIAL & INDUSTRIAL BANK.
LXIII
THE LOWER COURT ERRED IN HEARING AND CONSIDERING THE
MOTION OF THE APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY,
DATED NOVEMBER 3rd, 1965, ON NOVEMBER 23, 1965, WHEN THE
NOTICE FOR THE HEARING THEREOF WAS FOR NOVEMBER 20, 1965.
LXIV
THE LOWER COURT ERRED IN GRANTING THE APPELLEE, WESTERN
INSTITUTE OF TECHNOLOGY A RELIEF OTHER THAN THAT PRAYED
FOR IN ITS MOTION, DATED NOVEMBER 3, 1965, IN THE ABSENCE OF A
PRAYER FOR GENERAL RELIEF CONTAINED THEREIN.
LXV
THE LOWER COURT ERRED IN ALLOWING THE APPELLEE, WESTERN
INSTITUTE OF TECHNOLOGY, TO CONTINUE PAYMENTS UPON A
CONTRACT TO SELL THE TERMS AND CONDITIONS OF WHICH IT HAS
FAILED TO FULFILL.
THE LOWER COURT ERRED IN DETERMINING THE RIGHTS OF THE
APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY OVER THE REAL
PROPERTY SUBJECT MATTER OF THE CONTRACT TO SELL IT
EXECUTED WITH THE DECEASED, CHARLES NEWTON HODGES, WHILE
ACTING AS A PROBATE COURT.
LXVII
LOWER COURT ERRED IN ALLOWING THE CONTINUATION OF
PAYMENTS BY THE APPELLEE, WESTERN INSTITUTE OF TECHNOLOGY,
UPON A CONTRACT TO SELL EXECUTED BY IT AND THE DECEASED,
CHARLES NEWTON HODGES, TO A PERSON OTHER THAN HIS
LAWFULLY APPOINTED ADMINISTRATOR.
LXVIII
THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF
RETAINER'S FEES FROM THE SUPPOSED ESTATE OF THE DECEASED,
LINNIE JANE HODGES, WHEN THERE IS NEITHER SUCH ESTATE NOR
ASSETS THEREOF.
LXIX
THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF
RETAINER'S FEES OF LAWYERS OF ALLEGED HEIRS TO THE SUPPOSED
ESTATE OF THE DECEASED, LINNIE JANE HODGES.
LXX
THE LOWER COURT ERRED IN IMPLEMENTING THE ALLEGED
AGREEMENT BETWEEN THE HEIRS OF THE SUPPOSED ESTATE OF THE
DECEASED, LINNIE JANE HODGES, AND THEIR LAWYERS.
LXXI
THE LOWER COURT ERRED IN ORDERING THE PREMATURE
DISTRIBUTION OF ESTATE ASSETS TO ALLEGED HEIRS OR
BENEFICIARIES THEREOF, BY WAY OF RETAINER'S FEES.
LXXII
THE LOWER COURT ERRED IN ORDERING THAT ALL FINAL DEEDS OF
SALE EXECUTED PURSUANT TO CONTRACTS TO SELL ENTERED INTO
BY THE DECEASED, CHARLES NEWTON HODGES, DURING HIS
LIFETIME, BE SIGNED JOINTLY BY THE APPELLEE, AVELINA A. MAGNO,
AND THE APPELLANT, PHILIPPINE COMMERCIAL AND INDUSTRIAL
BANK, AND NOT BY THE LATTER ONLY AS THE LAWFULLY APPOINTED
ADMINISTRATOR OF HIS ESTATE.
LXXIII
THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF LEGAL
EXPENSES FROM THE SUPPOSED ESTATE OF THE DECEASED, LINNIE
JANE HODGES, WHEN THERE IS NEITHER SUCH ESTATE NOR ASSETS
THEREOF.
LXXIV
 THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF LEGAL
EXPENSES OF LAWYERS OF ALLEGED HEIRS TO THE SUPPOSED ESTATE
OF THE DECEASED, LINNIE JANE HODGES.
LXXV
THE LOWER COURT ERRED IN ORDERING THE PREMATURE
DISTRIBUTION OF ESTATE ASSETS TO ALLEGED HEIRS OR
BENEFICIARIES THEREOF, BY WAY OF LEGAL EXPENSES.
LXXVI
THE LOWER COURT ERRED IN ORDERING THE PAYMENT OF
COMPENSATION TO THE PURPORTED ADMINISTRATRIX OF THE
SUPPOSED ESTATE OF THE DECEASED, LINNIE JANE HODGES, THE
INSTANT APPELLEE, AVELINA A. MAGNO, WHEN THERE IS NEITHER
SUCH ESTATE NOR ASSETS THEREOF.
LXXVII
THE LOWER COURT ERRED IN ORDERING THAT THE FUNDS OF THE
TESTATE ESTATE OF THE DECEASED, CHARLES NEWTON HODGES, BE
PLACED IN A JOINT ACCOUNT OF THE APPELLANT, PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK, AND THE APPELLEE, AVELINA
A. MAGNO, WHO IS A COMPLETE STRANGER TO THE AFORESAID
ESTATE.
LXXVIII
THE LOWER COURT ERRED IN ORDERING THAT THE APPELLEE,
AVELINA A. MAGNO, BE GIVEN EQUAL ACCESS TO THE RECORDS OF
THE TESTATE ESTATE OF THE DECEASED, CHARLES NEWTON HODGES,
WHEN SHE IS A COMPLETE STRANGER TO THE AFORESAID ESTATE. (Pp.
73-83, Appellant's Brief.)
To complete this rather elaborate, and unavoidably extended narration of the factual setting of these
cases, it may also be mentioned that an attempt was made by the heirs of Mrs. Hodges to have
respondent Magno removed as administratrix, with the proposed appointment of Benito J. Lopez in her
place, and that respondent court did actually order such proposed replacement, but the Court declared
the said order of respondent court violative of its injunction of August 8, 1967, hence without force and
effect (see Resolution of September 8, 1972 and February 1, 1973). Subsequently, Atty. Efrain B.
Trenas, one of the lawyers of said heirs, appeared no longer for the proposed administrator Lopez but
for the heirs themselves, and in a motion dated October 26, 1972 informed the Court that a motion had
been filed with respondent court for the removal of petitioner PCIB as administrator of the estate of C.
N. Hodges in Special Proceedings 1672, which removal motion alleged that 22.968149% of the share
of C. N. Hodges had already been acquired by the heirs of Mrs. Hodges from certain heirs of her
husband. Further, in this connection, in the answer of PCIB to the motion of respondent Magno to have
it declared in contempt for disregarding the Court's resolution of September 8, 1972 modifying the
injunction of August 8, 1967, said petitioner annexed thereto a joint manifestation and motion,
appearing to have been filed with respondent court, informing said court that in addition to the fact that
22% of the share of C. N. Hodges had already been bought by the heirs of Mrs. Hodges, as already
stated, certain other heirs of Hodges representing 17.343750% of his estate were joining cause with the
heirs of Mrs. Hodges as against PCIB, thereby making somewhat precarious, if not possibly untenable,
petitioners' continuation as administrator of the Hodges estate.
RESOLUTION OF ISSUES IN THE CERTIORARI AND
PROHIBITION CASES
I
As to the Alleged Tardiness
of the Present Appeals
The priority question raised by respondent Magno relates to the alleged tardiness of all the
aforementioned thirty-three appeals of PCIB. Considering, however, that these appeals revolve around
practically the same main issues and that it is admitted that some of them have been timely taken, and,
moreover, their final results hereinbelow to be stated and explained make it of no consequence whether
or not the orders concerned have become final by the lapsing of the respective periods to appeal them,
We do not deem it necessary to pass upon the timeliness of any of said appeals.
II
The Propriety Here of Certiorari and
Prohibition instead of Appeal
The other preliminary point of the same respondent is alleged impropriety of the special civil action
of certiorari and prohibition in view of the existence of the remedy of appeal which it claims is proven
by the very appeals now before Us. Such contention fails to take into account that there is a common
thread among the basic issues involved in all these thirty-three appeals which, unless resolved in one
single proceeding, will inevitably cause the proliferation of more or less similar or closely related
incidents and consequent eventual appeals. If for this consideration alone, and without taking account
anymore of the unnecessary additional effort, expense and time which would be involved in as many
individual appeals as the number of such incidents, it is logical and proper to hold, as We do hold, that
the remedy of appeal is not adequate in the present cases. In determining whether or not a special civil
action of certiorari or prohibition may be resorted to in lieu of appeal, in instances wherein lack or
excess of jurisdiction or grave abuse of discretion is alleged, it is not enough that the remedy of appeal
exists or is possible. It is indispensable that taking all the relevant circumstances of the given case,
appeal would better serve the interests of justice. Obviously, the longer delay, augmented expense and
trouble and unnecessary repetition of the same work attendant to the present multiple appeals, which,
after all, deal with practically the same basic issues that can be more expeditiously resolved or
determined in a single special civil action, make the remedies of certiorari and prohibition, pursued by
petitioner, preferable, for purposes of resolving the common basic issues raised in all of them, despite
the conceded availability of appeal. Besides, the settling of such common fundamental issues would
naturally minimize the areas of conflict between the parties and render more simple the determination
of the secondary issues in each of them. Accordingly, respondent Magno's objection to the present
remedy of certiorari and prohibition must be overruled.
We come now to the errors assigned by petitioner-appellant, Philippine Commercial & Industrial Bank,
(PCIB, for short) in the petition as well as in its main brief as appellant.
III
On Whether or Not There is Still Any Part of the Testate
Estate Mrs. Hodges that may be Adjudicated to her brothers
and sisters as her estate, of which respondent Magno is the
unquestioned Administratrix in special Proceedings 1307.
In the petition, it is the position of PCIB that the respondent court exceeded its jurisdiction or gravely
abused its discretion in further recognizing after December 14, 1957 the existence of the Testate Estate
of Linnie Jane Hodges and in sanctioning purported acts of administration therein of respondent
Magno. Main ground for such posture is that by the aforequoted order of respondent court of said date,
Hodges was already allowed to assert and exercise all his rights as universal heir of his wife pursuant
to the provisions of her will, quoted earlier, hence, nothing else remains to be done in Special
Proceedings 1307 except to formally close it. In other words, the contention of PCIB is that in view of
said order, nothing more than a formal declaration of Hodges as sole and exclusive heir of his wife and
the consequent formal unqualified adjudication to him of all her estate remain to be done to completely
close Special Proceedings 1307, hence respondent Magno should be considered as having ceased to be
Administratrix of the Testate Estate of Mrs. Hodges since then.
After carefully going over the record, We feel constrained to hold that such pose is patently untenable
from whatever angle it is examined.
To start with, We cannot find anywhere in respondent Order of December 14, 1957 the sense being
read into it by PCIB. The tenor of said order bears no suggestion at all to such effect. The declaration
of heirs and distribution by the probate court of the estate of a decedent is its most important function,
and this Court is not disposed to encourage judges of probate proceedings to be less than definite, plain
and specific in making orders in such regard, if for no other reason than that all parties concerned, like
the heirs, the creditors, and most of all the government, the devisees and legatees, should know with
certainty what are and when their respective rights and obligations ensuing from the inheritance or in
relation thereto would begin or cease, as the case may be, thereby avoiding precisely the legal
complications and consequent litigations similar to those that have developed unnecessarily in the
present cases. While it is true that in instances wherein all the parties interested in the estate of a
deceased person have already actually distributed among themselves their respective shares therein to
the satisfaction of everyone concerned and no rights of creditors or third parties are adversely affected,
it would naturally be almost ministerial for the court to issue the final order of declaration and
distribution, still it is inconceivable that the special proceeding instituted for the purpose may be
considered terminated, the respective rights of all the parties concerned be deemed definitely settled,
and the executor or administrator thereof be regarded as automatically discharged and relieved already
of all functions and responsibilities without the corresponding definite orders of the probate court to
such effect.
Indeed, the law on the matter is specific, categorical and unequivocal. Section 1 of Rule 90 provides:
SECTION 1. When order for distribution of residue made. — When the debts,
funeral charges, and expenses of administration, the allowance to the widow and
inheritance tax, if any, chargeable to the estate in accordance with law have been
paid, the court, on the application of the executor or administrator, or of a person
interested in the estate, and after hearing upon notice, shall assign the residue of the
estate to the persons entitled to the same, naming them and the proportions, or parts,
to which each is entitled, and such persons may demand and recover their respective
shares from the executor or administrator, or any other person having the same in his
possession. 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.
No distribution shall be allowed until the payment of the obligations above
mentioned has been made or provided for, unless the distributees, or any of them
give a bond, in a sum to be fixed by the court, conditioned for the payment of said
obligations within such time as the court directs.
These provisions cannot mean anything less than that in order that a proceeding for the settlement of
the estate of a deceased may be deemed ready for final closure, (1) there should have been issued
already an order of distribution or assignment of the estate of the decedent among or to those entitled
thereto by will or by law, but (2) such order shall not be issued until after it is shown that the "debts,
funeral expenses, expenses of administration, allowances, taxes, etc. chargeable to the estate" have
been paid, which is but logical and proper. (3) Besides, such an order is usually issued upon proper and
specific application for the purpose of the interested party or parties, and not of the court.
... it is only after, and not before, the payment of all debts, funeral charges, expenses
of administration, allowance to the widow, and inheritance tax shall have been
effected that the court should make a declaration of heirs or of such persons as are
entitled by law to the residue. (Moran, Comments on the Rules of Court, 2nd ed.,
Vol. II, p. 397, citing Capistrano vs. Nadurata, 49 Phil., 726; Lopez vs. Lopez, 37
Off. Gaz., 3091.) (JIMOGA-ON v. BELMONTE, 84 Phil. 545, 548) (p. 86,
Appellee's Brief)
xxx xxx xxx
Under Section 753 of the Code of Civil Procedure, (corresponding to Section 1, Rule
90) what brings an intestate (or testate) proceeding to a close is the order of
distribution directing delivery of the residue to the persons entitled thereto after
paying the indebtedness, if any, left by the deceased. (Santiesteban vs. Santiesteban,
68 Phil. 367, 370.)
In the cases at bar, We cannot discern from the voluminous and varied facts, pleadings and orders
before Us that the above indispensable prerequisites for the declaration of heirs and the adjudication of
the estate of Mrs. Hodges had already been complied with when the order of December 14, 1957 was
issued. As already stated, We are not persuaded that the proceedings leading to the issuance of said
order, constituting barely of the motion of May 27, 1957, Annex D of the petition, the order of even
date, Annex E, and the motion of December 11, 1957, Annex H, all aforequoted, are what the law
contemplates. We cannot see in the order of December 14, 1957, so much relied upon by the petitioner,
anything more than an explicit approval of "all the sales, conveyances, leases and mortgages of all the
properties left by the deceased Linnie Jane Hodges executed by the Executor Charles N. Hodges" (after
the death of his wife and prior to the date of the motion), plus a general advance authorization to
enable said "Executor — to execute subsequent sales, conveyances, leases and mortgages of the
properties left the said deceased Linnie Jane Hodges in consonance with wishes conveyed in the last
will and testament of the latter", which, certainly, cannot amount to the order of adjudication of the
estate of the decedent to Hodges contemplated in the law. In fact, the motion of December 11, 1957 on
which the court predicated the order in question did not pray for any such adjudication at all. What is
more, although said motion did allege that "herein Executor (Hodges) is not only part owner of the
properties left as conjugal, but also, the successor to all the properties left by the deceased Linnie Jane
Hodges", it significantly added that "herein Executor, as Legatee (sic), has the right to sell, convey,
lease or dispose of the properties in the Philippines — during his lifetime", thereby indicating that what
said motion contemplated was nothing more than either the enjoyment by Hodges of his rights under
the particular portion of the dispositions of his wife's will which were to be operative only during his
lifetime or the use of his own share of the conjugal estate, pending the termination of the proceedings.
In other words, the authority referred to in said motions and orders is in the nature of that contemplated
either in Section 2 of Rule 109 which permits, in appropriate cases, advance or partial implementation
of the terms of a duly probated will before final adjudication or distribution when the rights of third
parties would not be adversely affected thereby or in the established practice of allowing the surviving
spouse to dispose of his own share of he conjugal estate, pending its final liquidation, when it appears
that no creditors of the conjugal partnership would be prejudiced thereby, (see the Revised Rules of
Court by Francisco, Vol. V-B, 1970 ed. p. 887) albeit, from the tenor of said motions, We are more
inclined to believe that Hodges meant to refer to the former. In any event, We are fully persuaded that
the quoted allegations of said motions read together cannot be construed as a repudiation of the rights
unequivocally established in the will in favor of Mrs. Hodges' brothers and sisters to whatever have not
been disposed of by him up to his death.
Indeed, nowhere in the record does it appear that the trial court subsequently acted upon the premise
suggested by petitioner. On the contrary, on November 23, 1965, when the court resolved the motion
of appellee Western Institute of Technology by its order We have quoted earlier, it categorically held
that as of said date, November 23, 1965, "in both cases (Special Proceedings 1307 and 1672) there is as
yet no judicial declaration of heirs nor distribution of properties to whomsoever are entitled thereto." In
this connection, it may be stated further against petitioner, by way of some kind of estoppel, that in its
own motion of January 8, 1965, already quoted in full on pages 54-67 of this decision, it prayed inter
alia that the court declare that "C. N. Hodges was the sole and exclusive heir of the estate of Linnie
Jane Hodges", which it would not have done if it were really convinced that the order of December 14,
1957 was already the order of adjudication and distribution of her estate. That said motion was later
withdrawn when Magno filed her own motion for determination and adjudication of what should
correspond to the brothers and sisters of Mrs. Hodges does not alter the indubitable implication of the
prayer of the withdrawn motion.
It must be borne in mind that while it is true that Mrs. Hodges bequeathed her whole estate to her
husband and gave him what amounts to full powers of dominion over the same during his lifetime, she
imposed at the same time the condition that whatever should remain thereof upon his death should go
to her brothers and sisters. In effect, therefore, what was absolutely given to Hodges was only so much
of his wife's estate as he might possibly dispose of during his lifetime; hence, even assuming that by
the allegations in his motion, he did intend to adjudicate the whole estate to himself, as suggested by
petitioner, such unilateral act could not have affected or diminished in any degree or manner the right
of his brothers and sisters-in-law over what would remain thereof upon his death, for surely, no one
can rightly contend that the testamentary provision in question allowed him to so adjudicate any part of
the estate to himself as to prejudice them. In other words, irrespective of whatever might have been
Hodges' intention in his motions, as Executor, of May 27, 1957 and December 11, 1957, the trial
court's orders granting said motions, even in the terms in which they have been worded, could not have
had the effect of an absolute and unconditional adjudication unto Hodges of the whole estate of his
wife. None of them could have deprived his brothers and sisters-in-law of their rights under said will.
And it may be added here that the fact that no one appeared to oppose the motions in question may
only be attributed, firstly, to the failure of Hodges to send notices to any of them, as admitted in the
motion itself, and, secondly, to the fact that even if they had been notified, they could not have taken
said motions to be for the final distribution and adjudication of the estate, but merely for him to be
able, pending such final distribution and adjudication, to either exercise during his lifetime rights of
dominion over his wife's estate in accordance with the bequest in his favor, which, as already observed,
may be allowed under the broad terms of Section 2 of Rule 109, or make use of his own share of the
conjugal estate. In any event, We do not believe that the trial court could have acted in the sense
pretended by petitioner, not only because of the clear language of the will but also because none of the
interested parties had been duly notified of the motion and hearing thereof. Stated differently, if the
orders of May 27, 1957 and December 4, 1957 were really intended to be read in the sense contended
by petitioner, We would have no hesitancy in declaring them null and void.
Petitioner cites the case of Austria vs. Ventenilla, G. R. No. L-10018, September 19, 1956, (unreported
but a partial digest thereof appears in 99 Phil. 1069) in support of its insistence that with the orders of
May 27 and December 14, 1957, the closure of Mrs. Hodges' estate has become a mere formality,
inasmuch as said orders amounted to the order of adjudication and distribution ordained by Section 1
of Rule 90. But the parallel attempted to be drawn between that case and the present one does not hold.
There the trial court had in fact issued a clear, distinct and express order of adjudication and
distribution more than twenty years before the other heirs of the deceased filed their motion asking that
the administratrix be removed, etc. As quoted in that decision, the order of the lower court in that
respect read as follows:
En orden a la mocion de la administradora, el juzgado la encuentra procedente bajo
la condicion de que no se hara entrega ni adjudicacion de los bienes a los herederos
antes de que estos presten la fianza correspondiente y de acuerdo con lo prescrito en
el Art. 754 del Codigo de Procedimientos: pues, en autos no aparece que hayan sido
nombrados comisionados de avaluo y reclamaciones. Dicha fianza podra ser por un
valor igual al de los bienes que correspondan a cada heredero segun el testamento.
Creo que no es obice para la terminacion del expediente el hecho de que la
administradora no ha presentado hasta ahora el inventario de los bienes; pues, segun
la ley, estan exentos de esta formalidad os administradores que son legatarios del
residuo o remanente de los bienes y hayan prestado fianza para responder de las
gestiones de su cargo, y aparece en el testamento que la administradora Alejandra
Austria reune dicha condicion.
POR TODO LO EXPUESTO, el juzgado declara, 1.o: no haber lugar a la mocion de
Ramon Ventenilla y otros; 2.o, declara asimismo que los unicos herederos del finado
Antonio Ventenilla son su esposa Alejandra Austria, Maria Ventenilla, hermana del
testador, y Ramon Ventenilla, Maria Ventenilla, Ramon Soriano, Eulalio Soriano,
Jose Soriano, Gabriela Ventenilla, Lorenzo Ventenilla, Felicitas Ventenilla, Eugenio
Ventenilla y Alejandra Ventenilla, en representacion de los difuntos Juan, Tomas,
Catalino y Froilan, hermanos del testador, declarando, ademas que la heredera
Alejandra Austria tiene derecho al remanente de todos los bienes dejados por el
finado, despues de deducir de ellos la porcion que corresponde a cada uno de sus
coherederos, conforme esta mandado en las clausulas 8.a, 9.a, 10.a, 11.a, 12.a y 13.a
del testamento; 3.o, se aprueba el pago hecho por la administradora de los gastos de
la ultima enfermedad y funerales del testador, de la donacion hecha por el testador a
favor de la Escuela a Publica del Municipio de Mangatarem, y de las misas en
sufragio del alma del finado; 4.o, que una vez prestada la fianza mencionada al
principio de este auto, se haga la entrega y adjudicacion de los bienes, conforme se
dispone en el testamento y se acaba de declarar en este auto; 5.o, y, finalmente, que
verificada la adjudicacion, se dara por terminada la administracion, revelandole toda
responsabilidad a la administradora, y cancelando su fianza.
ASI SE ORDENA.
Undoubtedly, after the issuance of an order of such tenor, the closure of any proceedings for the
settlement of the estate of a deceased person cannot be but perfunctory.
In the case at bar, as already pointed out above, the two orders relied upon by petitioner do not
appear ex-facie to be of the same tenor and nature as the order just quoted, and, what is more, the
circumstances attendant to its issuance do not suggest that such was the intention of the court, for
nothing could have been more violative of the will of Mrs. Hodges.
Indeed, to infer from Hodges' said motions and from his statements of accounts for the years 1958,
1959 and 1960, A Annexes I, K and M, respectively, wherein he repeatedly claimed that "herein
executor (being) the only devisee or legatee of the deceased, in accordance with the last will and
testament already probated," there is "no (other) person interested in the Philippines of the time and
place of examining herein account to be given notice", an intent to adjudicate unto himself the whole
of his wife's estate in an absolute manner and without regard to the contingent interests of her brothers
and sisters, is to impute bad faith to him, an imputation which is not legally permissible, much less
warranted by the facts of record herein. Hodges knew or ought to have known that, legally speaking,
the terms of his wife's will did not give him such a right. Factually, there are enough circumstances
extant in the records of these cases indicating that he had no such intention to ignore the rights of his
co-heirs. In his very motions in question, Hodges alleged, thru counsel, that the "deceased Linnie Jane
Hodges died leaving no descendants and ascendants, except brothers and sisters and herein petitioner,
as surviving spouse, to inherit the properties of the decedent", and even promised that "proper
accounting will be had — in all these transactions" which he had submitted for approval and
authorization by the court, thereby implying that he was aware of his responsibilities vis-a-vis his co-
heirs. As alleged by respondent Magno in her brief as appellee:
Under date of April 14, 1959, C. N. Hodges filed his first "Account by the Executor"
of the estate of Linnie Jane Hodges. In the "Statement of Networth of Mr. C. N.
Hodges and the Estate of Linnie Jane Hodges" as of December 31, 1958 annexed
thereto, C. N. Hodges reported that the combined conjugal estate earned a net income
of P328,402.62, divided evenly between him and the estate of Linnie Jane Hodges.
Pursuant to this, he filed an "individual income tax return" for calendar year 1958 on
the estate of Linnie Jane Hodges reporting, under oath, the said estate as having
earned income of P164,201.31, exactly one-half of the net income of his combined
personal assets and that of the estate of Linnie Jane Hodges. (p. 91, Appellee's Brief.)
Under date of July 21, 1960, C. N. Hodges filed his second "Annual Statement of
Account by the Executor" of the estate of Linnie Jane Hodges. In the "Statement of
Networth of Mr. C. N. Hodges and the Estate of Linnie Jane Hodges" as of
December 31, 1959 annexed thereto, C. N. Hodges reported that the combined
conjugal estate earned a net income of P270,623.32, divided evenly between him and
the estate of Linnie Jane Hodges. Pursuant to this, he filed an "individual income tax
return" for calendar year 1959 on the estate of Linnie Jane Hodges reporting, under
oath, the said estate as having earned income of P135,311.66, exactly one-half of the
net income of his combined personal assets and that of the estate of Linnie Jane
Hodges. (pp. 91-92, id.)
Under date of April 20, 1961, C. N. Hodges filed his third "Annual Statement of
Account by the Executor for the year 1960" of the estate of Linnie Jane Hodges. In
the "Statement of Net Worth of Mr. C. N. Hodges and the Estate of Linnie Jane
Hodges" as of December 31, 1960 annexed thereto, C. N. Hodges reported that the
combined conjugal estate earned a net income of P314,857.94, divided of Linnie
Jane Hodges. Pursuant to this, he filed an "individual evenly between him and the
estate income tax return" for calendar year 1960 on the estate of Linnie Jane Hodges
reporting, under oath, the said estate as having earned income of P157,428.97,
exactly one-half of the net income of his combined personal assets and that of the
estate of Linnie Jane Hodges. (pp. 92-93, id.)
In the petition for probate that he (Hodges) filed, he listed the seven brothers and
sisters of Linnie Jane as her "heirs" (see p. 2, Green ROA). The order of the court
admitting the will to probate unfortunately omitted one of the heirs, Roy Higdon (see
p. 14, Green ROA). Immediately, C. N. Hodges filed a verified motion to have Roy
Higdon's name included as an heir, stating that he wanted to straighten the records
"in order (that) the heirs of deceased Roy Higdon may not think or believe they were
omitted, and that they were really and are interested in the estate of deceased Linnie
Jane Hodges".
Thus, he recognized, if in his own way, the separate identity of his wife's estate from his own share of
the conjugal partnership up to the time of his death, more than five years after that of his wife. He
never considered the whole estate as a single one belonging exclusively to himself. The only
conclusion one can gather from this is that he could have been preparing the basis for the eventual
transmission of his wife's estate, or, at least, so much thereof as he would not have been able to dispose
of during his lifetime, to her brothers and sisters in accordance with her expressed desire, as intimated
in his tax return in the United States to be more extensively referred to anon. And assuming that he did
pay the corresponding estate and inheritance taxes in the Philippines on the basis of his being sole heir,
such payment is not necessarily inconsistent with his recognition of the rights of his co-heirs. Without
purporting to rule definitely on the matter in these proceedings, We might say here that We are
inclined to the view that under the peculiar provisions of his wife's will, and for purposes of the
applicable inheritance tax laws, Hodges had to be considered as her sole heir, pending the actual
transmission of the remaining portion of her estate to her other heirs, upon the eventuality of his death,
and whatever adjustment might be warranted should there be any such remainder then is a matter that
could well be taken care of by the internal revenue authorities in due time.
It is to be noted that the lawyer, Atty. Leon P. Gellada, who signed the motions of May 27, 1957 and
December 11, 1957 and the aforementioned statements of account was the very same one who also
subsequently signed and filed the motion of December 26, 1962 for the appointment of respondent
Magno as "Administratrix of the Estate of Mrs. Linnie Jane Hodges" wherein it was alleged that "in
accordance with the provisions of the last will and testament of Linnie Jane Hodges, whatever real
properties that may remain at the death of her husband, Charles Newton Hodges, the said properties
shall be equally divided among their heirs." And it appearing that said attorney was Hodges' lawyer as
Executor of the estate of his wife, it stands to reason that his understanding of the situation, implicit in
his allegations just quoted, could somehow be reflective of Hodges' own understanding thereof.
As a matter of fact, the allegations in the motion of the same Atty. Gellada dated July 1, 1957, a
"Request for Inclusion of the Name of Roy Higdon in the Order of the Court dated July 19, 1957, etc.",
reference to which is made in the above quotation from respondent Magno's brief, are over the oath of
Hodges himself, who verified the motion. Said allegations read:
1. — That the Hon. Court issued orders dated June 29, 1957, ordering the probate of
the will.
2. — That in said order of the Hon. Court, the relatives of the deceased Linnie Jane
Hodges were enumerated. However, in the petition as well as in the testimony of
Executor during the hearing, the name Roy Higdon was mentioned, but deceased. It
was unintentionally omitted the heirs of said Roy Higdon who are his wife Aline
Higdon and son David Higdon, all of age, and residents of Quinlan, Texas, U.S.A.
3. — That to straighten the records, and in order the heirs of deceased Roy Higdon
may not think or believe they were omitted, and that they were really and are
interested in the estate of deceased Linnie Jane Hodges, it is requested of the Hon.
Court to insert the names of Aline Higdon and David Higdon, wife and son of
deceased Roy Higdon in the said order of the Hon. Court dated June 29, 1957. (pars.
1 to 3, Annex 2 of Magno's Answer — Record, p. 260)
As can be seen, these italicized allegations indicate, more or less, the real attitude of Hodges in regard
to the testamentary dispositions of his wife.
In connection with this point of Hodges' intent, We note that there are documents, copies of which are
annexed to respondent Magno's answer, which purportedly contain Hodges' own solemn declarations
recognizing the right of his co-heirs, such as the alleged tax return he filed with the United States
Taxation authorities, identified as Schedule M, (Annex 4 of her answer) and his supposed affidavit of
renunciation, Annex 5. In said Schedule M, Hodges appears to have answered the pertinent question
thus:
2a. Had the surviving spouse the right to declare an election between (1) the
provisions made in his or her favor by the will and (11) dower, curtesy or a statutory
interest? (X) Yes ( ) No
2d. Does the surviving spouse contemplate renouncing the will and electing to take
dower, curtesy, or a statutory interest? (X) Yes ( ) No
3. According to the information and belief of the person or persons filing the return,
is any action described under question 1 designed or contemplated? ( ) Yes (X) No
(Annex 4, Answer — Record, p. 263)
and to have further stated under the item, "Description of property interests passing to surviving
spouse" the following:
None, except for purposes of administering the Estate, paying debts, taxes and other
legal charges. It is the intention of the surviving husband of deceased to distribute
the remaining property and interests of the deceased in their Community Estate to
the devisees and legatees named in the will when the debts, liabilities, taxes and
expenses of administration are finally determined and paid. (Annex 4, Answer —
Record, p. 263)
In addition, in the supposed affidavit of Hodges, Annex 5, it is stated:
I, C. N. Hodges, being duly sworn, on oath affirm that at the time the United States
Estate Tax Return was filed in the Estate of Linnie Jane Hodges on August 8, 1958, I
renounced and disclaimed any and all right to receive the rents, emoluments and
income from said estate, as shown by the statement contained in Schedule M at page
29 of said return, a copy of which schedule is attached to this affidavit and made a
part hereof.
The purpose of this affidavit is to ratify and confirm, and I do hereby ratify and
confirm, the declaration made in Schedule M of said return and hereby formally
disclaim and renounce any right on my part to receive any of the said rents,
emoluments and income from the estate of my deceased wife, Linnie Jane Hodges.
This affidavit is made to absolve me or my estate from any liability for the payment
of income taxes on income which has accrued to the estate of Linnie Jane Hodges
since the death of the said Linnie Jane Hodges on May 23, 1957. (Annex 5, Answer
— Record, p. 264)
Although it appears that said documents were not duly presented as evidence in the court below, and
We cannot, therefore, rely on them for the purpose of the present proceedings, still, We cannot close
our eyes to their existence in the record nor fail to note that their tenor jibes with Our conclusion
discussed above from the circumstances related to the orders of May 27 and December 14, 1957. 5
Somehow, these documents, considering they are supposed to be copies of their originals found in the
official files of the governments of the United States and of the Philippines, serve to lessen any
possible apprehension that Our conclusion from the other evidence of Hodges' manifest intent vis-a-vis
the rights of his co-heirs is without basis in fact.
Verily, with such eloquent manifestations of his good intentions towards the other heirs of his wife,
We find it very hard to believe that Hodges did ask the court and that the latter agreed that he be
declared her sole heir and that her whole estate be adjudicated to him without so much as just
annotating the contingent interest of her brothers and sisters in what would remain thereof upon his
demise. On the contrary, it seems to us more factual and fairer to assume that Hodges was well aware
of his position as executor of the will of his wife and, as such, had in mind the following admonition
made by the Court in Pamittan vs. Lasam, et al., 60 Phil., 908, at pp. 913-914:
Upon the death of Bernarda in September, 1908, said lands continued to be conjugal
property in the hands of the defendant Lasam. It is provided in article 1418 of the
Civil Code that upon the dissolution of the conjugal partnership, an inventory shall
immediately be made and this court in construing this provision in connection with
section 685 of the Code of Civil Procedure (prior to its amendment by Act No. 3176
of November 24, 1924) has repeatedly held that in the event of the death of the wife,
the law imposes upon the husband the duty of liquidating the affairs of the
partnership without delay (desde luego) (Alfonso vs. Natividad, 6 Phil., 240; Prado
vs. Lagera, 7 Phil., 395; De la Rama vs. De la Rama, 7 Phil., 745; Enriquez vs.
Victoria, 10 Phil., 10; Amancio vs. Pardo, 13 Phil., 297; Rojas vs. Singson Tongson,
17 Phil., 476; Sochayseng vs. Trujillo, 31 Phil., 153; Molera vs. Molera, 40 Phil.,
566; Nable Jose vs. Nable Jose, 41 Phil., 713.)
In the last mentioned case this court quoted with approval the case of Leatherwood
vs. Arnold (66 Texas, 414, 416, 417), in which that court discussed the powers of the
surviving spouse in the administration of the community property. Attention was
called to the fact that the surviving husband, in the management of the conjugal
property after the death of the wife, was a trustee of unique character who is liable
for any fraud committed by him with relation to the property while he is charged
with its administration. In the liquidation of the conjugal partnership, he had wide
powers (as the law stood prior to Act No. 3176) and the high degree of trust reposed
in him stands out more clearly in view of the fact that he was the owner of a half
interest in his own right of the conjugal estate which he was charged to administer.
He could therefore no more acquire a title by prescription against those for whom he
was administering the conjugal estate than could a guardian against his ward or a
judicial administrator against the heirs of estate. Section 38 of Chapter III of the
Code of Civil Procedure, with relation to prescription, provides that "this chapter
shall not apply ... in the case of a continuing and subsisting trust." The surviving
husband in the administration and liquidation of the conjugal estate occupies the
position of a trustee of the highest order and is not permitted by the law to hold that
estate or any portion thereof adversely to those for whose benefit the law imposes
upon him the duty of administration and liquidation. No liquidation was ever made
by Lasam — hence, the conjugal property which came into his possession on the
death of his wife in September, 1908, still remains conjugal property, a continuing
and subsisting trust. He should have made a liquidation immediately (desde luego).
He cannot now be permitted to take advantage of his own wrong. One of the
conditions of title by prescription (section 41, Code of Civil Procedure) is possession
 "under a claim of title exclusive of any other right". For a trustee to make such a
claim would be a manifest fraud.
And knowing thus his responsibilities in the premises, We are not convinced that Hodges arrogated
everything unto himself leaving nothing at all to be inherited by his wife's brothers and sisters.
PCIB insists, however, that to read the orders of May 27 and December 14, 1957, not as adjudicatory,
but merely as approving past and authorizing future dispositions made by Hodges in a wholesale and
general manner, would necessarily render the said orders void for being violative of the provisions of
Rule 89 governing the manner in which such dispositions may be made and how the authority therefor
and approval thereof by the probate court may be secured. If We sustained such a view, the result
would only be that the said orders should be declared ineffective either way they are understood,
considering We have already seen it is legally impossible to consider them as adjudicatory. As a matter
of fact, however, what surges immediately to the surface, relative to PCIB's observations based on
Rule 89, is that from such point of view, the supposed irregularity would involve no more than some
non-jurisdictional technicalities of procedure, which have for their evident fundamental purpose the
protection of parties interested in the estate, such as the heirs, its creditors, particularly the government
on account of the taxes due it; and since it is apparent here that none of such parties are objecting to
said orders or would be prejudiced by the unobservance by the trial court of the procedure pointed out
by PCIB, We find no legal inconvenience in nor impediment to Our giving sanction to the blanket
approval and authority contained in said orders. This solution is definitely preferable in law and in
equity, for to view said orders in the sense suggested by PCIB would result in the deprivation of
substantive rights to the brothers and sisters of Mrs. Hodges, whereas reading them the other way will
not cause any prejudice to anyone, and, withal, will give peace of mind and stability of rights to the
innocent parties who relied on them in good faith, in the light of the peculiar pertinent provisions of the
will of said decedent.
Now, the inventory submitted by Hodges on May 12, 1958 referred to the estate of his wife as
consisting of "One-half of all the items designated in the balance sheet, copy of which is hereto
attached and marked as "Annex A"." Although, regrettably, no copy of said Annex A appears in the
records before Us, We take judicial notice, on the basis of the undisputed facts in these cases, that the
same consists of considerable real and other personal kinds of properties. And since, according to her
will, her husband was to be the sole owner thereof during his lifetime, with full power and authority to
dispose of any of them, provided that should there be any remainder upon his death, such remainder
would go to her brothers and sisters, and furthermore, there is no pretension, much less any proof that
Hodges had in fact disposed of all of them, and, on the contrary, the indications are rather to the effect
that he had kept them more or less intact, it cannot truthfully be said that, upon the death of Hodges,
there was no more estate of Mrs. Hodges to speak of. It is Our conclusion, therefore, that properties do
exist which constitute such estate, hence Special Proceedings 1307 should not yet be closed.
Neither is there basis for holding that respondent Magno has ceased to be the Administratrix in said
proceeding. There is no showing that she has ever been legally removed as such, the attempt to replace
her with Mr. Benito Lopez without authority from the Court having been expressly held ineffective by
Our resolution of September 8, 1972. Parenthetically, on this last point, PCIB itself is very emphatic in
stressing that it is not questioning said respondent's status as such administratrix. Indeed, it is not clear
that PCIB has any standing to raise any objection thereto, considering it is a complete stranger insofar
as the estate of Mrs. Hodges is concerned.
It is the contention of PCIB, however, that as things actually stood at the time of Hodges' death, their
conjugal partnership had not yet been liquidated and, inasmuch as the properties composing the same
were thus commingled pro indiviso and, consequently, the properties pertaining to the estate of each of
the spouses are not yet identifiable, it is PCIB alone, as administrator of the estate of Hodges, who
should administer everything, and all that respondent Magno can do for the time being is to wait until
the properties constituting the remaining estate of Mrs. Hodges have been duly segregated and
delivered to her for her own administration. Seemingly, PCIB would liken the Testate Estate of Linnie
Jane Hodges to a party having a claim of ownership to some properties included in the inventory of an
administrator of the estate of a decedent, (here that of Hodges) and who normally has no right to take
part in the proceedings pending the establishment of his right or title; for which as a rule it is required
that an ordinary action should be filed, since the probate court is without jurisdiction to pass with
finality on questions of title between the estate of the deceased, on the one hand, and a third party or
even an heir claiming adversely against the estate, on the other.
We do not find such contention sufficiently persuasive. As We see it, the situation obtaining herein
cannot be compared with the claim of a third party the basis of which is alien to the pending probate
proceedings. In the present cases what gave rise to the claim of PCIB of exclusive ownership by the
estate of Hodges over all the properties of the Hodges spouses, including the share of Mrs. Hodges in
the community properties, were the orders of the trial court issued in the course of the very settlement
proceedings themselves, more specifically, the orders of May 27 and December 14, 1957 so often
mentioned above. In other words, the root of the issue of title between the parties is something that the
court itself has done in the exercise of its probate jurisdiction. And since in the ultimate analysis, the
question of whether or not all the properties herein involved pertain exclusively to the estate of Hodges
depends on the legal meaning and effect of said orders, the claim that respondent court has no
jurisdiction to take cognizance of and decide the said issue is incorrect. If it was within the competence
of the court to issue the root orders, why should it not be within its authority to declare their true
significance and intent, to the end that the parties may know whether or not the estate of Mrs. Hodges
had already been adjudicated by the court, upon the initiative of Hodges, in his favor, to the exclusion
of the other heirs of his wife instituted in her will?
At this point, it bears emphasis again that the main cause of all the present problems confronting the
courts and the parties in these cases was the failure of Hodges to secure, as executor of his wife's
estate, from May, 1957 up to the time of his death in December, 1962, a period of more than five years,
the final adjudication of her estate and the closure of the proceedings. The record is bare of any
showing that he ever exerted any effort towards the early settlement of said estate. While, on the one
hand, there are enough indications, as already discuss that he had intentions of leaving intact her share
of the conjugal properties so that it may pass wholly to his co-heirs upon his death, pursuant to her
will, on the other hand, by not terminating the proceedings, his interests in his own half of the conjugal
properties remained commingled pro-indiviso with those of his co-heirs in the other half. Obviously,
such a situation could not be conducive to ready ascertainment of the portion of the inheritance that
should appertain to his co-heirs upon his death. Having these considerations in mind, it would be
giving a premium for such procrastination and rather unfair to his co-heirs, if the administrator of his
estate were to be given exclusive administration of all the properties in question, which would
necessarily include the function of promptly liquidating the conjugal partnership, thereby identifying
and segregating without unnecessary loss of time which properties should be considered as constituting
the estate of Mrs. Hodges, the remainder of which her brothers and sisters are supposed to inherit
equally among themselves.
To be sure, an administrator is not supposed to represent the interests of any particular party and his
acts are deemed to be objectively for the protection of the rights of everybody concerned with the
estate of the decedent, and from this point of view, it maybe said that even if PCIB were to act alone,
there should be no fear of undue disadvantage to anyone. On the other hand, however, it is evidently
implicit in section 6 of Rule 78 fixing the priority among those to whom letters of administration
should be granted that the criterion in the selection of the administrator is not his impartiality alone but,
more importantly, the extent of his interest in the estate, so much so that the one assumed to have
greater interest is preferred to another who has less. Taking both of these considerations into account,
inasmuch as, according to Hodges' own inventory submitted by him as Executor of the estate of his
wife, practically all their properties were conjugal which means that the spouses have equal shares
therein, it is but logical that both estates should be administered jointly by representatives of both,
pending their segregation from each other. Particularly is such an arrangement warranted because the
actuations so far of PCIB evince a determined, albeit groundless, intent to exclude the other heirs of
Mrs. Hodges from their inheritance. Besides, to allow PCIB, the administrator of his estate, to perform
now what Hodges was duty bound to do as executor is to violate the spirit, if not the letter, of Section 2
of Rule 78 which expressly provides that "The executor of an executor shall not, as such, administer
the estate of the first testator." It goes without saying that this provision refers also to the administrator
of an executor like PCIB here.
We are not unmindful of the fact that under Section 2 of Rule 73, "When the marriage is dissolved by
the death of the husband or wife, the community property shall be inventoried, administered, and
liquidated, and the debts thereof paid, in the testate or intestate proceedings of the deceased spouse. If
both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate
proceedings of either." Indeed, it is true that the last sentence of this provision allows or permits the
conjugal partnership of spouses who are both deceased to be settled or liquidated in the testate or
intestate proceedings of either, but precisely because said sentence allows or permits that the
liquidation be made in either proceeding, it is a matter of sound judicial discretion in which one it
should be made. After all, the former rule referring to the administrator of the husband's estate in
respect to such liquidation was done away with by Act 3176, the pertinent provisions of which are now
embodied in the rule just cited.
Thus, it can be seen that at the time of the death of Hodges, there was already the pending judicial
settlement proceeding of the estate of Mrs. Hodges, and, more importantly, that the former was the
executor of the latter's will who had, as such, failed for more than five years to see to it that the same
was terminated earliest, which was not difficult to do, since from ought that appears in the record, there
were no serious obstacles on the way, the estate not being indebted and there being no immediate heirs
other than Hodges himself. Such dilatory or indifferent attitude could only spell possible prejudice of
his co-heirs, whose rights to inheritance depend entirely on the existence of any remainder of Mrs.
Hodges' share in the community properties, and who are now faced with the pose of PCIB that there is
no such remainder. Had Hodges secured as early as possible the settlement of his wife's estate, this
problem would not arisen. All things considered, We are fully convinced that the interests of justice
will be better served by not permitting or allowing PCIB or any administrator of the estate of Hodges
exclusive administration of all the properties in question. We are of the considered opinion and so hold
that what would be just and proper is for both administrators of the two estates to act conjointly until
after said estates have been segregated from each other.
At this juncture, it may be stated that we are not overlooking the fact that it is PCIB's contention that,
viewed as a substitution, the testamentary disposition in favor of Mrs. Hodges' brothers and sisters may
not be given effect. To a certain extent, this contention is correct. Indeed, legally speaking, Mrs.
Hodges' will provides neither for a simple or vulgar substitution under Article 859 of the Civil Code
nor for a fideicommissary substitution under Article 863 thereof. There is no vulgar substitution therein
because there is no provision for either (1) predecease of the testator by the designated heir or (2)
refusal or (3) incapacity of the latter to accept the inheritance, as required by Article 859; and neither is
there a fideicommissary substitution therein because no obligation is imposed thereby upon Hodges to
preserve the estate or any part thereof for anyone else. But from these premises, it is not correct to
jump to the conclusion, as PCIB does, that the testamentary dispositions in question are therefore
inoperative and invalid.
The error in PCIB's position lies simply in the fact that it views the said disposition exclusively in the
light of substitutions covered by the Civil Code section on that subject, (Section 3, Chapter 2, Title IV,
Book III) when it is obvious that substitution occurs only when another heir is appointed in a will "so
that he may enter into inheritance in default of the heir originally instituted," (Article 857, id.) and, in
the present case, no such possible default is contemplated. The brothers and sisters of Mrs. Hodges are
not substitutes for Hodges because, under her will, they are not to inherit what Hodges cannot, would
not or may not inherit, but what he would not dispose of from his inheritance; rather, therefore, they
are also heirs instituted simultaneously with Hodges, subject, however, to certain conditions, partially
resolutory insofar as Hodges was concerned and correspondingly suspensive with reference to his
brothers and sisters-in-law. It is partially resolutory, since it bequeaths unto Hodges the whole of her
estate to be owned and enjoyed by him as universal and sole heir with absolute dominion over
them6 only during his lifetime, which means that while he could completely and absolutely dispose of
any portion thereof inter vivos to anyone other than himself, he was not free to do so mortis causa, and
all his rights to what might remain upon his death would cease entirely upon the occurrence of that
contingency, inasmuch as the right of his brothers and sisters-in-law to the inheritance, although vested
already upon the death of Mrs. Hodges, would automatically become operative upon the occurrence of
the death of Hodges in the event of actual existence of any remainder of her estate then.
Contrary to the view of respondent Magno, however, it was not the usufruct alone of her estate, as
contemplated in Article 869 of the Civil Code, that she bequeathed to Hodges during his lifetime, but
the full ownership thereof, although the same was to last also during his lifetime only, even as there
was no restriction whatsoever against his disposing or conveying the whole or any portion thereof to
anybody other than himself. The Court sees no legal impediment to this kind of institution, in this
jurisdiction or under Philippine law, except that it cannot apply to the legitime of Hodges as the
surviving spouse, consisting of one-half of the estate, considering that Mrs. Hodges had no surviving
ascendants nor descendants. (Arts. 872, 900, and 904, New Civil Code.)
But relative precisely to the question of how much of Mrs. Hodges' share of the conjugal partnership
properties may be considered as her estate, the parties are in disagreement as to how Article 16 of the
Civil Code7 should be applied. On the one hand, petitioner claims that inasmuch as Mrs. Hodges was a
resident of the Philippines at the time of her death, under said Article 16, construed in relation to the
pertinent laws of Texas and the principle of renvoi, what should be applied here should be the rules of
succession under the Civil Code of the Philippines, and, therefore, her estate could consist of no more
than one-fourth of the said conjugal properties, the other fourth being, as already explained, the
legitime of her husband (Art. 900, Civil Code) which she could not have disposed of nor burdened with
any condition (Art. 872, Civil Code). On the other hand, respondent Magno denies that Mrs. Hodges
died a resident of the Philippines, since allegedly she never changed nor intended to change her
original residence of birth in Texas, United States of America, and contends that, anyway, regardless of
the question of her residence, she being indisputably a citizen of Texas, under said Article 16 of the
Civil Code, the distribution of her estate is subject to the laws of said State which, according to her, do
not provide for any legitime, hence, the brothers and sisters of Mrs. Hodges are entitled to the
remainder of the whole of her share of the conjugal partnership properties consisting of one-half
thereof. Respondent Magno further maintains that, in any event, Hodges had renounced his rights
under the will in favor of his co-heirs, as allegedly proven by the documents touching on the point
already mentioned earlier, the genuineness and legal significance of which petitioner seemingly
questions. Besides, the parties are disagreed as to what the pertinent laws of Texas provide. In the
interest of settling the estates herein involved soonest, it would be best, indeed, if these conflicting
claims of the parties were determined in these proceedings. The Court regrets, however, that it cannot
do so, for the simple reason that neither the evidence submitted by the parties in the court below nor
their discussion, in their respective briefs and memoranda before Us, of their respective contentions on
the pertinent legal issues, of grave importance as they are, appear to Us to be adequate enough to
enable Us to render an intelligent comprehensive and just resolution. For one thing, there is no clear
and reliable proof of what in fact the possibly applicable laws of Texas are. 7* Then also, the
genuineness of documents relied upon by respondent Magno is disputed. And there are a number of
still other conceivable related issues which the parties may wish to raise but which it is not proper to
mention here. In Justice, therefore, to all the parties concerned, these and all other relevant matters
should first be threshed out fully in the trial court in the proceedings hereafter to be held therein for the
purpose of ascertaining and adjudicating and/or distributing the estate of Mrs. Hodges to her heirs in
accordance with her duly probated will.
To be more explicit, all that We can and do decide in connection with the petition for certiorari and
prohibition are: (1) that regardless of which corresponding laws are applied, whether of the Philippines
or of Texas, and taking for granted either of the respective contentions of the parties as to provisions of
the latter,8 and regardless also of whether or not it can be proven by competent evidence that Hodges
renounced his inheritance in any degree, it is easily and definitely discernible from the inventory
submitted by Hodges himself, as Executor of his wife's estate, that there are properties which should
constitute the estate of Mrs. Hodges and ought to be disposed of or distributed among her heirs
pursuant to her will in said Special Proceedings 1307; (2) that, more specifically, inasmuch as the
question of what are the pertinent laws of Texas applicable to the situation herein is basically one of
fact, and, considering that the sole difference in the positions of the parties as to the effect of said laws
has reference to the supposed legitime of Hodges — it being the stand of PCIB that Hodges had such a
legitime whereas Magno claims the negative - it is now beyond controversy for all future purposes of
these proceedings that whatever be the provisions actually of the laws of Texas applicable hereto, the
estate of Mrs. Hodges is at least, one-fourth of the conjugal estate of the spouses; the existence and
effects of foreign laws being questions of fact, and it being the position now of PCIB that the estate of
Mrs. Hodges, pursuant to the laws of Texas, should only be one-fourth of the conjugal estate, such
contention constitutes an admission of fact, and consequently, it would be in estoppel in any further
proceedings in these cases to claim that said estate could be less, irrespective of what might be proven
later to be actually the provisions of the applicable laws of Texas; (3) that Special Proceedings 1307
for the settlement of the testate estate of Mrs. Hodges cannot be closed at this stage and should proceed
to its logical conclusion, there having been no proper and legal adjudication or distribution yet of the
estate therein involved; and (4) that respondent Magno remains and continues to be the Administratrix
therein. Hence, nothing in the foregoing opinion is intended to resolve the issues which, as already
stated, are not properly before the Court now, namely, (1) whether or not Hodges had in fact and in law
waived or renounced his inheritance from Mrs. Hodges, in whole or in part, and (2) assuming there had
been no such waiver, whether or not, by the application of Article 16 of the Civil Code, and in the light
of what might be the applicable laws of Texas on the matter, the estate of Mrs. Hodges is more than the
one-fourth declared above. As a matter of fact, even our finding above about the existence of
properties constituting the estate of Mrs. Hodges rests largely on a general appraisal of the size and
extent of the conjugal partnership gathered from reference made thereto by both parties in their briefs
as well as in their pleadings included in the records on appeal, and it should accordingly yield, as to
which exactly those properties are, to the more concrete and specific evidence which the parties are
supposed to present in support of their respective positions in regard to the foregoing main legal and
factual issues. In the interest of justice, the parties should be allowed to present such further evidence
in relation to all these issues in a joint hearing of the two probate proceedings herein involved. After
all, the court a quo has not yet passed squarely on these issues, and it is best for all concerned that it
should do so in the first instance.
Relative to Our holding above that the estate of Mrs. Hodges cannot be less than the remainder of one-
fourth of the conjugal partnership properties, it may be mentioned here that during the deliberations,
the point was raised as to whether or not said holding might be inconsistent with Our other ruling here
also that, since there is no reliable evidence as to what are the applicable laws of Texas, U.S.A. "with
respect to the order of succession and to the amount of successional rights" that may be willed by a
testator which, under Article 16 of the Civil Code, are controlling in the instant cases, in view of the
undisputed Texan nationality of the deceased Mrs. Hodges, these cases should be returned to the court
a quo, so that the parties may prove what said law provides, it is premature for Us to make any specific
ruling now on either the validity of the testamentary dispositions herein involved or the amount of
inheritance to which the brothers and sisters of Mrs. Hodges are entitled. After nature reflection, We
are of the considered view that, at this stage and in the state of the records before Us, the feared
inconsistency is more apparent than real. Withal, it no longer lies in the lips of petitioner PCIB to make
any claim that under the laws of Texas, the estate of Mrs. Hodges could in any event be less than that
We have fixed above.
It should be borne in mind that as above-indicated, the question of what are the laws of Texas
governing the matters herein issue is, in the first instance, one of fact, not of law. Elementary is the rule
that foreign laws may not be taken judicial notice of and have to be proven like any other fact in
dispute between the parties in any proceeding, with the rare exception in instances when the said laws
are already within the actual knowledge of the court, such as when they are well and generally known
or they have been actually ruled upon in other cases before it and none of the parties concerned do not
claim otherwise. (5 Moran, Comments on the Rules of Court, p. 41, 1970 ed.) In Fluemer vs. Hix, 54
Phil. 610, it was held:
It is the theory of the petitioner that the alleged will was executed in Elkins West Virginia, on
November 3, 1925, by Hix who had his residence in that jurisdiction, and that the laws of West
Virginia govern. To this end, there was submitted a copy of section 3868 of Acts 1882, c. 84 as found
in West Virginia Code, Annotated, by Hogg Charles E., vol. 2, 1914, p. 1960, and as certified to by the
Director of the National Library. But this was far from a compliance with the law. The laws of a
foreign jurisdiction do not prove themselves in our courts. The courts of the Philippine Islands are not
authorized to take judicial notice of the laws of the various States of the American Union. Such laws
must be proved as facts. (In re Estate of Johnson [1918], 39 Phil., 156.) Here the requirements of the
law were not met. There was no showing that the book from which an extract was taken was printed or
published under the authority of the State of West Virginia, as provided in section 300 of the Code of
Civil Procedure. Nor was the extract from the law attested by the certificate of the officer having
charge of the original, under the seal of the State of West Virginia, as provided in section 301 of the
Code of Civil Procedure. No evidence was introduced to show that the extract from the laws of West
Virginia was in force at the time the alleged will was executed."
No evidence of the nature thus suggested by the Court may be found in the records of the cases at bar.
Quite to the contrary, the parties herein have presented opposing versions in their respective pleadings
and memoranda regarding the matter. And even if We took into account that in Aznar vs. Garcia, the
Court did make reference to certain provisions regarding succession in the laws of Texas, the disparity
in the material dates of that case and the present ones would not permit Us to indulge in the hazardous
conjecture that said provisions have not been amended or changed in the meantime.
On the other hand, in In re Estate of Johnson, 39 Phil. 156, We held:
Upon the other point — as to whether the will was executed in conformity with the
statutes of the State of Illinois — we note that it does not affirmatively appear from
the transcription of the testimony adduced in the trial court that any witness was
examined with reference to the law of Illinois on the subject of the execution of will.
The trial judge no doubt was satisfied that the will was properly executed by
examining section 1874 of the Revised Statutes of Illinois, as exhibited in volume 3
of Starr & Curtis's Annotated Illinois Statutes, 2nd ed., p. 426; and he may have
assumed that he could take judicial notice of the laws of Illinois under section 275 of
the Code of Civil Procedure. If so, he was in our opinion mistaken. That section
authorizes the courts here to take judicial notice, among other things, of the acts of
the legislative department of the United States. These words clearly have reference to
Acts of the Congress of the United States; and we would hesitate to hold that our
courts can, under this provision, take judicial notice of the multifarious laws of the
various American States. Nor do we think that any such authority can be derived
from the broader language, used in the same section, where it is said that our courts
may take judicial notice of matters of public knowledge "similar" to those therein
enumerated. The proper rule we think is to require proof of the statutes of the States
of the American Union whenever their provisions are determinative of the issues in
any action litigated in the Philippine courts.
Nevertheless, even supposing that the trial court may have erred in taking judicial
notice of the law of Illinois on the point in question, such error is not now available
to the petitioner, first, because the petition does not state any fact from which it
would appear that the law of Illinois is different from what the court found, and,
secondly, because the assignment of error and argument for the appellant in this
court raises no question based on such supposed error. Though the trial court may
have acted upon pure conjecture as to the law prevailing in the State of Illinois, its
judgment could not be set aside, even upon application made within six months
under section 113 of the Code of Civil Procedure, unless it should be made to appear
affirmatively that the conjecture was wrong. The petitioner, it is true, states in
general terms that the will in question is invalid and inadequate to pass real and
personal property in the State of Illinois, but this is merely a conclusion of law. The
affidavits by which the petition is accompanied contain no reference to the subject,
and we are cited to no authority in the appellant's brief which might tend to raise a
doubt as to the correctness of the conclusion of the trial court. It is very clear,
therefore, that this point cannot be urged as of serious moment.
It is implicit in the above ruling that when, with respect to certain aspects of the foreign laws
concerned, the parties in a given case do not have any controversy or are more or less in agreement, the
Court may take it for granted for the purposes of the particular case before it that the said laws are as
such virtual agreement indicates, without the need of requiring the presentation of what otherwise
would be the competent evidence on the point. Thus, in the instant cases wherein it results from the
respective contentions of both parties that even if the pertinent laws of Texas were known and to be
applied, the amount of the inheritance pertaining to the heirs of Mrs. Hodges is as We have fixed
above, the absence of evidence to the effect that, actually and in fact, under said laws, it could be
otherwise is of no longer of any consequence, unless the purpose is to show that it could be more. In
other words, since PCIB, the petitioner-appellant, concedes that upon application of Article 16 of the
Civil Code and the pertinent laws of Texas, the amount of the estate in controversy is just as We have
determined it to be, and respondent-appellee is only claiming, on her part, that it could be more, PCIB
may not now or later pretend differently.
To be more concrete, on pages 20-21 of its petition herein, dated July 31, 1967, PCIB states
categorically:
Inasmuch as Article 16 of the Civil Code provides that "intestate and testamentary
successions both with respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of the country wherein
said property may be found", while the law of Texas (the Hodges spouses being
nationals of U.S.A., State of Texas), in its conflicts of law rules, provides that the
domiciliary law (in this case Philippine law) governs the testamentary dispositions
and successional rights over movables or personal properties, while the law of the
situs (in this case also Philippine law with respect to all Hodges properties located in
the Philippines), governs with respect to immovable properties, and applying
therefore the 'renvoi doctrine' as enunciated and applied by this Honorable Court in
the case of In re Estate of Christensen (G.R. No. L-16749, Jan. 31, 1963), there can
be no question that Philippine law governs the testamentary dispositions contained in
the Last Will and Testament of the deceased Linnie Jane Hodges, as well as the
successional rights to her estate, both with respect to movables, as well as to
immovables situated in the Philippines.
In its main brief dated February 26, 1968, PCIB asserts:
The law governing successional rights.
As recited above, there is no question that the deceased, Linnie Jane Hodges, was an
American citizen. There is also no question that she was a national of the State of
Texas, U.S.A. Again, there is likewise no question that she had her domicile of
choice in the City of Iloilo, Philippines, as this has already been pronounced by the
above-cited orders of the lower court, pronouncements which are by now res
adjudicata (par. [a], See. 49, Rule 39, Rules of Court; In re Estate of Johnson, 39
Phil. 156).
Article 16 of the Civil Code provides:
"Real property as well as personal property is subject to the law of the country where
it is situated.
However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country wherein said property may be found."
Thus the aforecited provision of the Civil Code points towards the national law of the
deceased, Linnie Jane Hodges, which is the law of Texas, as governing succession
"both with respect to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions ...". But the law of Texas, in
its conflicts of law rules, provides that the domiciliary law governs the testamentary
 dispositions and successional rights over movables or personal property, while the
law of the situs governs with respect to immovable property. Such that with respect
to both movable property, as well as immovable property situated in the Philippines,
the law of Texas points to the law of the Philippines.
Applying, therefore, the so-called "renvoi doctrine", as enunciated and applied by
this Honorable Court in the case of "In re Christensen" (G.R. No. L-16749, Jan. 31,
1963), there can be no question that Philippine law governs the testamentary
provisions in the Last Will and Testament of the deceased Linnie Jane Hodges, as
well as the successional rights to her estate, both with respect to movables, as well as
immovables situated in the Philippines.
The subject of successional rights.
Under Philippine law, as it is under the law of Texas, the conjugal or community
property of the spouses, Charles Newton Hodges and Linnie Jane Hodges, upon the
death of the latter, is to be divided into two, one-half pertaining to each of the
spouses, as his or her own property. Thus, upon the death of Linnie Jane Hodges,
one-half of the conjugal partnership property immediately pertained to Charles
Newton Hodges as his own share, and not by virtue of any successional rights. There
can be no question about this.
Again, Philippine law, or more specifically, Article 900 of the Civil Code provides:
If the only survivor is the widow or widower, she or he shall be
entitled to one-half of the hereditary estate of the deceased spouse,
and the testator may freely dispose of the other half.
If the marriage between the surviving spouse and the testator was
solemnized in articulo mortis, and the testator died within three
months from the time of the marriage, the legitime of the surviving
spouse as the sole heir shall be one-third of the hereditary estate,
except when they have been living as husband and wife for more
than five years. In the latter case, the legitime of the surviving
spouse shall be that specified in the preceding paragraph.
This legitime of the surviving spouse cannot be burdened by a fideicommisary
substitution (Art. 864, Civil code), nor by any charge, condition, or substitution (Art,
872, Civil code). It is clear, therefore, that in addition to one-half of the conjugal
partnership property as his own conjugal share, Charles Newton Hodges was also
immediately entitled to one-half of the half conjugal share of the deceased, Linnie
Jane Hodges, or one-fourth of the entire conjugal property, as his legitime.
One-fourth of the conjugal property therefore remains at issue.
In the summary of its arguments in its memorandum dated April 30, 1968, the following appears:
Briefly, the position advanced by the petitioner is:
a. That the Hodges spouses were domiciled legally in the Philippines (pp. 19-20,
petition). This is now a matter of res adjudicata (p. 20, petition).
b. That under Philippine law, Texas law, and the renvoi doctrine, Philippine law
governs the successional rights over the properties left by the deceased, Linnie Jane
Hodges (pp. 20-21, petition).
c. That under Philippine as well as Texas law, one-half of the Hodges properties
pertains to the deceased, Charles Newton Hodges (p. 21, petition). This is not
questioned by the respondents.
d. That under Philippine law, the deceased, Charles Newton Hodges, automatically
inherited one-half of the remaining one-half of the Hodges properties as his legitime
(p. 21, petition).
e. That the remaining 25% of the Hodges properties was inherited by the deceased,
Charles Newton Hodges, under the will of his deceased spouse (pp. 22-23, petition).
Upon the death of Charles Newton Hodges, the substitution 'provision of the will of
the deceased, Linnie Jane Hodges, did not operate because the same is void (pp. 23-
25, petition).
f. That the deceased, Charles Newton Hodges, asserted his sole ownership of the
Hodges properties and the probate court sanctioned such assertion (pp. 25-29,
petition). He in fact assumed such ownership and such was the status of the
properties as of the time of his death (pp. 29-34, petition).
Of similar tenor are the allegations of PCIB in some of its pleadings quoted in the earlier part of this
option.
On her part, it is respondent-appellee Magno's posture that under the laws of Texas, there is no system
of legitime, hence the estate of Mrs. Hodges should be one-half of all the conjugal properties.
It is thus unquestionable that as far as PCIB is concerned, the application to these cases of Article 16 of
the Civil Code in relation to the corresponding laws of Texas would result in that the Philippine laws
on succession should control. On that basis, as We have already explained above, the estate of Mrs.
Hodges is the remainder of one-fourth of the conjugal partnership properties, considering that We have
found that there is no legal impediment to the kind of disposition ordered by Mrs. Hodges in her will in
favor of her brothers and sisters and, further, that the contention of PCIB that the same constitutes an
inoperative testamentary substitution is untenable. As will be recalled, PCIB's position that there is no
such estate of Mrs. Hodges is predicated exclusively on two propositions, namely: (1) that the
provision in question in Mrs. Hodges' testament violates the rules on substitution of heirs under the
Civil Code and (2) that, in any event, by the orders of the trial court of May 27, and December 14,
1957, the trial court had already finally and irrevocably adjudicated to her husband the whole free
portion of her estate to the exclusion of her brothers and sisters, both of which poses, We have
overruled. Nowhere in its pleadings, briefs and memoranda does PCIB maintain that the application of
the laws of Texas would result in the other heirs of Mrs. Hodges not inheriting anything under her will.
And since PCIB's representations in regard to the laws of Texas virtually constitute admissions of fact
which the other parties and the Court are being made to rely and act upon, PCIB is "not permitted to
contradict them or subsequently take a position contradictory to or inconsistent with them." (5 Moran,
id, p. 65, citing Cunanan vs. Amparo, 80 Phil. 227; Sta. Ana vs. Maliwat, L-23023, Aug. 31, 1968, 24
SCRA 1018).
Accordingly, the only question that remains to be settled in the further proceedings hereby ordered to
be held in the court below is how much more than as fixed above is the estate of Mrs. Hodges, and this
would depend on (1) whether or not the applicable laws of Texas do provide in effect for more, such
as, when there is no legitime provided therein, and (2) whether or not Hodges has validly waived his
whole inheritance from Mrs. Hodges.
In the course of the deliberations, it was brought out by some members of the Court that to avoid or, at
least, minimize further protracted legal controversies between the respective heirs of the Hodges
spouses, it is imperative to elucidate on the possible consequences of dispositions made by Hodges
after the death of his wife from the mass of the unpartitioned estates without any express indication in
the pertinent documents as to whether his intention is to dispose of part of his inheritance from his wife
or part of his own share of the conjugal estate as well as of those made by PCIB after the death of
Hodges. After a long discussion, the consensus arrived at was as follows: (1) any such dispositions
made gratuitously in favor of third parties, whether these be individuals, corporations or foundations,
shall be considered as intended to be of properties constituting part of Hodges' inheritance from his
wife, it appearing from the tenor of his motions of May 27 and December 11, 1957 that in asking for
general authority to make sales or other disposals of properties under the jurisdiction of the court,
which include his own share of the conjugal estate, he was not invoking particularly his right over his
own share, but rather his right to dispose of any part of his inheritance pursuant to the will of his wife;
(2) as regards sales, exchanges or other remunerative transfers, the proceeds of such sales or the
properties taken in by virtue of such exchanges, shall be considered as merely the products of "physical
changes" of the properties of her estate which the will expressly authorizes Hodges to make, provided
that whatever of said products should remain with the estate at the time of the death of Hodges should
go to her brothers and sisters; (3) the dispositions made by PCIB after the death of Hodges must
naturally be deemed as covering only the properties belonging to his estate considering that being only
the administrator of the estate of Hodges, PCIB could not have disposed of properties belonging to the
estate of his wife. Neither could such dispositions be considered as involving conjugal properties, for
the simple reason that the conjugal partnership automatically ceased when Mrs. Hodges died, and by
the peculiar provision of her will, under discussion, the remainder of her share descended also
automatically upon the death of Hodges to her brothers and sisters, thus outside of the scope of PCIB's
administration. Accordingly, these construction of the will of Mrs. Hodges should be adhered to by the
trial court in its final order of adjudication and distribution and/or partition of the two estates in
question.
THE APPEALS
A cursory examination of the seventy-eight assignments of error in appellant PCIB's brief would
readily reveal that all of them are predicated mainly on the contention that inasmuch as Hodges had
already adjudicated unto himself all the properties constituting his wife's share of the conjugal
partnership, allegedly with the sanction of the trial court per its order of December 14, 1957, there has
been, since said date, no longer any estate of Mrs. Hodges of which appellee Magno could be
administratrix, hence the various assailed orders sanctioning her actuations as such are not in
accordance with law. Such being the case, with the foregoing resolution holding such posture to be
untenable in fact and in law and that it is in the best interest of justice that for the time being the two
estates should be administered conjointly by the respective administrators of the two estates, it should
follow that said assignments of error have lost their fundamental reasons for being. There are certain
matters, however, relating peculiarly to the respective orders in question, if commonly among some of
them, which need further clarification. For instance, some of them authorized respondent Magno to act
alone or without concurrence of PCIB. And with respect to many of said orders, PCIB further claims
that either the matters involved were not properly within the probate jurisdiction of the trial court or
that the procedure followed was not in accordance with the rules. Hence, the necessity of dealing
separately with the merits of each of the appeals.
Indeed, inasmuch as the said two estates have until now remained commingled pro-indiviso, due to the
failure of Hodges and the lower court to liquidate the conjugal partnership, to recognize appellee
Magno as Administratrix of the Testate Estate of Mrs. Hodges which is still unsegregated from that of
Hodges is not to say, without any qualification, that she was therefore authorized to do and perform all
her acts complained of in these appeals, sanctioned though they might have been by the trial court. As
a matter of fact, it is such commingling pro-indiviso of the two estates that should deprive appellee of
freedom to act independently from PCIB, as administrator of the estate of Hodges, just as, for the same
reason, the latter should not have authority to act independently from her. And considering that the
lower court failed to adhere consistently to this basic point of view, by allowing the two administrators
to act independently of each other, in the various instances already noted in the narration of facts
above, the Court has to look into the attendant circumstances of each of the appealed orders to be able
to determine whether any of them has to be set aside or they may all be legally maintained
notwithstanding the failure of the court a quo to observe the pertinent procedural technicalities, to the
end only that graver injury to the substantive rights of the parties concerned and unnecessary and
undesirable proliferation of incidents in the subject proceedings may be forestalled. In other words, We
have to determine, whether or not, in the light of the unusual circumstances extant in the record, there
is need to be more pragmatic and to adopt a rather unorthodox approach, so as to cause the least
disturbance in rights already being exercised by numerous innocent third parties, even if to do so may
not appear to be strictly in accordance with the letter of the applicable purely adjective rules.
Incidentally, it may be mentioned, at this point, that it was principally on account of the confusion that
might result later from PCIB's continuing to administer all the community properties, notwithstanding
the certainty of the existence of the separate estate of Mrs. Hodges, and to enable both estates to
function in the meantime with a relative degree of regularity, that the Court ordered in the resolution of
September 8, 1972 the modification of the injunction issued pursuant to the resolutions of August 8,
October 4 and December 6, 1967, by virtue of which respondent Magno was completely barred from
any participation in the administration of the properties herein involved. In the September 8 resolution,
We ordered that, pending this decision, Special Proceedings 1307 and 1672 should proceed jointly and
that the respective administrators therein "act conjointly — none of them to act singly and
independently of each other for any purpose." Upon mature deliberation, We felt that to allow PCIB to
continue managing or administering all the said properties to the exclusion of the administratrix of
Mrs. Hodges' estate might place the heirs of Hodges at an unduly advantageous position which could
result in considerable, if not irreparable, damage or injury to the other parties concerned. It is indeed to
be regretted that apparently, up to this date, more than a year after said resolution, the same has not
been given due regard, as may be gleaned from the fact that recently, respondent Magno has filed in
these proceedings a motion to declare PCIB in contempt for alleged failure to abide therewith,
notwithstanding that its repeated motions for reconsideration thereof have all been denied soon after
they were filed.9
Going back to the appeals, it is perhaps best to begin first with what appears to Our mind to be the
simplest, and then proceed to the more complicated ones in that order, without regard to the numerical
sequence of the assignments of error in appellant's brief or to the order of the discussion thereof by
counsel.
Assignments of error numbers
LXXII, LXXVII and LXXVIII.
These assignments of error relate to (1) the order of the trial court of August 6, 1965 providing that
"the deeds of sale (therein referred to involving properties in the name of Hodges) should be signed
jointly by the PCIB, as Administrator of Testate Estate of C.N. Hodges, and Avelina A. Magno, as
Administratrix of the Testate Estate of Linnie Jane Hodges, and to this effect, the PCIB should take the
necessary steps so that Administratrix Avelina A. Magno could sign the deeds of sale," (p. 248, Green
Rec. on Appeal) (2) the order of October 27, 1965 denying the motion for reconsideration of the
foregoing order, (pp. 276-277, id.) (3) the other order also dated October 27, 1965 enjoining inter alia,
that "(a) all cash collections should be deposited in the joint account of the estate of Linnie Jane
Hodges and estate of C. N. Hodges, (b) that whatever cash collections (that) had been deposited in the
account of either of the estates should be withdrawn and since then (sic) deposited in the joint account
of the estate of Linnie Jane Hodges and the estate of C. N. Hodges; ... (d) (that) Administratrix Magno
— allow the PCIB to inspect whatever records, documents and papers she may have in her possession,
in the same manner that Administrator PCIB is also directed to allow Administratrix Magno to inspect
whatever records, documents and papers it may have in its possession" and "(e) that the accountant of
the estate of Linnie Jane Hodges shall have access to all records of the transactions of both estates for
the protection of the estate of Linnie Jane Hodges; and in like manner, the accountant or any
authorized representative of the estate of C. N. Hodges shall have access to the records of transactions
of the Linnie Jane Hodges estate for the protection of the estate of C. N. Hodges", (pp. 292-295, id.)
and (4) the order of February 15, 1966, denying, among others, the motion for reconsideration of the
order of October 27, 1965 last referred to. (pp. 455-456, id.)
As may be readily seen, the thrust of all these four impugned orders is in line with the Court's above-
mentioned resolution of September 8, 1972 modifying the injunction previously issued on August 8,
1967, and, more importantly, with what We have said the trial court should have always done pending
the liquidation of the conjugal partnership of the Hodges spouses. In fact, as already stated, that is the
arrangement We are ordering, by this decision, to be followed. Stated differently, since the questioned
orders provide for joint action by the two administrators, and that is precisely what We are holding out
to have been done and should be done until the two estates are separated from each other, the said
orders must be affirmed. Accordingly the foregoing assignments of error must be, as they are hereby
overruled.
Assignments of error Numbers LXVIII
to LXXI and LXXIII to LXXVI.
The orders complained of under these assignments of error commonly deal with expenditures made by
appellee Magno, as Administratrix of the Estate of Mrs. Hodges, in connection with her administration
thereof, albeit additionally, assignments of error Numbers LXIX to LXXI put into question the
payment of attorneys fees provided for in the contract for the purpose, as constituting, in effect,
premature advances to the heirs of Mrs. Hodges.
More specifically, assignment Number LXXIII refers to reimbursement of overtime pay paid to six
employees of the court and three other persons for services in copying the court records to enable the
lawyers of the administration to be fully informed of all the incidents in the proceedings. The
reimbursement was approved as proper legal expenses of administration per the order of December 19,
1964, (pp. 221-222, id.) and repeated motions for reconsideration thereof were denied by the orders of
January 9, 1965, (pp. 231-232, id.) October 27, 1965, (p. 277, id.) and February 15, 1966. (pp. 455-
456, id.) On the other hand, Assignments Numbers LXVIII to LXXI, LXXIV and LXXV question the
trial court's order of November 3, 1965 approving the agreement of June 6, 1964 between
Administratrix Magno and James L. Sullivan, attorney-in-fact of the heirs of Mrs. Hodges, as Parties of
the First Part, and Attorneys Raul Manglapus and Rizal R. Quimpo, as Parties of the Second Part,
regarding attorneys fees for said counsel who had agreed "to prosecute and defend their interests (of
the Parties of the First Part) in certain cases now pending litigation in the Court of First Instance of
Iloilo —, more specifically in Special Proceedings 1307 and 1672 —" (pp. 126-129, id.) and directing
Administratrix Magno "to issue and sign whatever check or checks maybe needed to implement the
approval of the agreement annexed to the motion" as well as the "administrator of the estate of C. N.
Hodges — to countersign the said check or checks as the case maybe." (pp. 313-320, id.),
reconsideration of which order of approval was denied in the order of February 16, 1966, (p. 456, id.)
Assignment Number LXXVI imputes error to the lower court's order of October 27, 1965, already
referred to above, insofar as it orders that "PCIB should counter sign the check in the amount of P250
in favor of Administratrix Avelina A. Magno as her compensation as administratrix of Linnie Jane
Hodges estate chargeable to the Testate Estate of Linnie Jane Hodges only." (p. 294, id.)
Main contention again of appellant PCIB in regard to these eight assigned errors is that there is no such
estate as the estate of Mrs. Hodges for which the questioned expenditures were made, hence what were
authorized were in effect expenditures from the estate of Hodges. As We have already demonstrated in
Our resolution above of the petition for certiorari and prohibition, this posture is incorrect. Indeed, in
whichever way the remaining issues between the parties in these cases are ultimately resolved, 10 the
final result will surely be that there are properties constituting the estate of Mrs. Hodges of which
Magno is the current administratrix. It follows, therefore, that said appellee had the right, as such
administratrix, to hire the persons whom she paid overtime pay and to be paid for her own services as
administratrix. That she has not yet collected and is not collecting amounts as substantial as that paid to
or due appellant PCIB is to her credit.
Of course, she is also entitled to the services of counsel and to that end had the authority to enter into
contracts for attorney's fees in the manner she had done in the agreement of June 6, 1964. And as
regards to the reasonableness of the amount therein stipulated, We see no reason to disturb the
discretion exercised by the probate court in determining the same. We have gone over the agreement,
and considering the obvious size of the estate in question and the nature of the issues between the
parties as well as the professional standing of counsel, We cannot say that the fees agreed upon require
the exercise by the Court of its inherent power to reduce it.
PCIB insists, however, that said agreement of June 6, 1964 is not for legal services to the estate but to
the heirs of Mrs. Hodges, or, at most, to both of them, and such being the case, any payment under it,
insofar as counsels' services would redound to the benefit of the heirs, would be in the nature of
advances to such heirs and a premature distribution of the estate. Again, We hold that such posture
cannot prevail.
Upon the premise We have found plausible that there is an existing estate of Mrs. Hodges, it results
that juridically and factually the interests involved in her estate are distinct and different from those
involved in her estate of Hodges and vice versa. Insofar as the matters related exclusively to the estate
of Mrs. Hodges, PCIB, as administrator of the estate of Hodges, is a complete stranger and it is without
personality to question the actuations of the administratrix thereof regarding matters not affecting the
estate of Hodges. Actually, considering the obviously considerable size of the estate of Mrs. Hodges,
We see no possible cause for apprehension that when the two estates are segregated from each other,
the amount of attorney's fees stipulated in the agreement in question will prejudice any portion that
would correspond to Hodges' estate.
And as regards the other heirs of Mrs. Hodges who ought to be the ones who should have a say on the
attorney's fees and other expenses of administration assailed by PCIB, suffice it to say that they appear
to have been duly represented in the agreement itself by their attorney-in-fact, James L. Sullivan and
have not otherwise interposed any objection to any of the expenses incurred by Magno questioned by
PCIB in these appeals. As a matter of fact, as ordered by the trial court, all the expenses in question,
including the attorney's fees, may be paid without awaiting the determination and segregation of the
estate of Mrs. Hodges.
Withal, the weightiest consideration in connection with the point under discussion is that at this stage
of the controversy among the parties herein, the vital issue refers to the existence or non-existence of
the estate of Mrs. Hodges. In this respect, the interest of respondent Magno, as the appointed
administratrix of the said estate, is to maintain that it exists, which is naturally common and identical
with and inseparable from the interest of the brothers and sisters of Mrs. Hodges. Thus, it should not be
wondered why both Magno and these heirs have seemingly agreed to retain but one counsel. In fact,
such an arrangement should be more convenient and economical to both. The possibility of conflict of
interest between Magno and the heirs of Mrs. Hodges would be, at this stage, quite remote and, in any
event, rather insubstantial. Besides, should any substantial conflict of interest between them arise in the
future, the same would be a matter that the probate court can very well take care of in the course of the
independent proceedings in Case No. 1307 after the corresponding segregation of the two subject
estates. We cannot perceive any cogent reason why, at this stage, the estate and the heirs of Mrs.
Hodges cannot be represented by a common counsel.
Now, as to whether or not the portion of the fees in question that should correspond to the heirs
constitutes premature partial distribution of the estate of Mrs. Hodges is also a matter in which neither
PCIB nor the heirs of Hodges have any interest. In any event, since, as far as the records show, the
estate has no creditors and the corresponding estate and inheritance taxes, except those of the brothers
and sisters of Mrs. Hodges, have already been paid, 11 no prejudice can caused to anyone by the
comparatively small amount of attorney's fees in question. And in this connection, it may be added
that, although strictly speaking, the attorney's fees of the counsel of an administrator is in the first
instance his personal responsibility, reimbursable later on by the estate, in the final analysis, when, as
in the situation on hand, the attorney-in-fact of the heirs has given his conformity thereto, it would be
idle effort to inquire whether or not the sanction given to said fees by the probate court is proper.
For the foregoing reasons, Assignments of Error LXVIII to LXXI and LXXIII to LXXVI should be as
they are hereby overruled.
Assignments of error I to IV,
XIII to XV, XXII to XXV, XXXV
to XXX VI, XLI to XLIII and L.
These assignments of error deal with the approval by the trial court of various deeds of sale of real
properties registered in the name of Hodges but executed by appellee Magno, as Administratrix of the
Estate of Mrs. Hodges, purportedly in implementation of corresponding supposed written "Contracts to
Sell" previously executed by Hodges during the interim between May 23, 1957, when his wife died,
and December 25, 1962, the day he died. As stated on pp. 118-120 of appellant's main brief, "These
are: the, contract to sell between the deceased, Charles Newton Hodges, and the appellee, Pepito G.
Iyulores executed on February 5, 1961; the contract to sell between the deceased, Charles Newton
Hodges, and the appellant Esperidion Partisala, executed on April 20, 1960; the contract to sell
between the deceased, Charles Newton Hodges, and the appellee, Winifredo C. Espada, executed on
April 18, 1960; the contract to sell between the deceased, Charles Newton Hodges, and the appellee,
Rosario Alingasa, executed on August 25, 1958; the contract to sell between the deceased, Charles
Newton Hodges, and the appellee, Lorenzo Carles, executed on June 17, 1958; the contract to sell
between the deceased, Charles Newton Hodges, and the appellee, Salvador S. Guzman, executed on
September 13, 1960; the contract to sell between the deceased, Charles Newton Hodges, and the
appellee, Florenia Barrido, executed on February 21, 1958; the contract to sell between the deceased,
Charles Newton Hodges, and the appellee, Purificacion Coronado, executed on August 14, 1961; the
contract to sell between the deceased, Charles Newton Hodges, and the appellee, Graciano Lucero,
executed on November 27, 1961; the contract to sell between the deceased, Charles Newton Hodges,
and the appellee, Ariteo Thomas Jamir, executed on May 26, 1961; the contract to sell between the
deceased, Charles Newton Hodges, and the appellee, Melquiades Batisanan, executed on June 9, 1959;
the contract to sell between the deceased, Charles Newton Hodges, and the appellee, Belcezar Causing,
executed on February 10, 1959 and the contract to sell between the deceased, Charles Newton Hodges,
and the appellee, Adelfa Premaylon, executed on October 31, 1959, re Title No. 13815."
Relative to these sales, it is the position of appellant PCIB that, inasmuch as pursuant to the will of
Mrs. Hodges, her husband was to have dominion over all her estate during his lifetime, it was as
absolute owner of the properties respectively covered by said sales that he executed the
aforementioned contracts to sell, and consequently, upon his death, the implementation of said
contracts may be undertaken only by the administrator of his estate and not by the administratrix of the
estate of Mrs. Hodges. Basically, the same theory is invoked with particular reference to five other
sales, in which the respective "contracts to sell" in favor of these appellees were executed by Hodges
before the death of his wife, namely, those in favor of appellee Santiago Pacaonsis, Alfredo Catedral,
Jose Pablico, Western Institute of Technology and Adelfa Premaylon.
Anent those deeds of sale based on promises or contracts to sell executed by Hodges after the death of
his wife, those enumerated in the quotation in the immediately preceding paragraph, it is quite obvious
that PCIB's contention cannot be sustained. As already explained earlier, 11* all proceeds of
remunerative transfers or dispositions made by Hodges after the death of his wife should be deemed as
continuing to be parts of her estate and, therefore, subject to the terms of her will in favor of her
brothers and sisters, in the sense that should there be no showing that such proceeds, whether in cash or
property have been subsequently conveyed or assigned subsequently by Hodges to any third party by
acts inter vivos with the result that they could not thereby belong to him anymore at the time of his
death, they automatically became part of the inheritance of said brothers and sisters. The deeds here in
question involve transactions which are exactly of this nature. Consequently, the payments made by
the appellees should be considered as payments to the estate of Mrs. Hodges which is to be distributed
and partitioned among her heirs specified in the will.
The five deeds of sale predicated on contracts to sell executed Hodges during the lifetime of his wife,
present a different situation. At first blush, it would appear that as to them, PCIB's position has some
degree of plausibility. Considering, however, that the adoption of PCIB's theory would necessarily
have tremendous repercussions and would bring about considerable disturbance of property rights that
have somehow accrued already in favor of innocent third parties, the five purchasers aforenamed, the
Court is inclined to take a pragmatic and practical view of the legal situation involving them by
overlooking the possible technicalities in the way, the non-observance of which would not, after all,
detract materially from what should substantially correspond to each and all of the parties concerned.
To start with, these contracts can hardly be ignored. Bona fide third parties are involved; as much as
possible, they should not be made to suffer any prejudice on account of judicial controversies not of
their own making. What is more, the transactions they rely on were submitted by them to the probate
court for approval, and from already known and recorded actuations of said court then, they had reason
to believe that it had authority to act on their motions, since appellee Magno had, from time to time
prior to their transactions with her, been allowed to act in her capacity as administratrix of one of the
subject estates either alone or conjointly with PCIB. All the sales in question were executed by Magno
in 1966 already, but before that, the court had previously authorized or otherwise sanctioned expressly
many of her act as administratrix involving expenditures from the estate made by her either conjointly
with or independently from PCIB, as Administrator of the Estate of Hodges. Thus, it may be said that
said buyers-appellees merely followed precedents in previous orders of the court. Accordingly, unless
the impugned orders approving those sales indubitably suffer from some clearly fatal infirmity the
Court would rather affirm them.
It is quite apparent from the record that the properties covered by said sales are equivalent only to a
fraction of what should constitute the estate of Mrs. Hodges, even if it is assumed that the same would
finally be held to be only one-fourth of the conjugal properties of the spouses as of the time of her
death or, to be more exact, one-half of her estate as per the inventory submitted by Hodges as executor,
on May 12, 1958. In none of its numerous, varied and voluminous pleadings, motions and
manifestations has PCIB claimed any possibility otherwise. Such being the case, to avoid any conflict
with the heirs of Hodges, the said properties covered by the questioned deeds of sale executed by
appellee Magno may be treated as among those corresponding to the estate of Mrs. Hodges, which
would have been actually under her control and administration had Hodges complied with his duty to
liquidate the conjugal partnership. Viewing the situation in that manner, the only ones who could stand
to be prejudiced by the appealed orders referred to in the assignment of errors under discussion and
who could, therefore, have the requisite interest to question them would be only the heirs of Mrs.
Hodges, definitely not PCIB.
It is of no moment in what capacity Hodges made the "contracts to sell' after the death of his wife.
Even if he had acted as executor of the will of his wife, he did not have to submit those contracts to the
court nor follow the provisions of the rules, (Sections 2, 4, 5, 6, 8 and 9 of Rule 89 quoted by appellant
on pp. 125 to 127 of its brief) for the simple reason that by the very orders, much relied upon by
appellant for other purposes, of May 27, 1957 and December 14, 1957, Hodges was "allowed or
authorized" by the trial court "to continue the business in which he was engaged and to perform acts
which he had been doing while the deceased was living", (Order of May 27) which according to the
motion on which the court acted was "of buying and selling personal and real properties", and "to
execute subsequent sales, conveyances, leases and mortgages of the properties left by the said deceased
Linnie Jane Hodges in consonance with the wishes conveyed in the last will and testament of the
latter." (Order of December 14) In other words, if Hodges acted then as executor, it can be said that he
had authority to do so by virtue of these blanket orders, and PCIB does not question the legality of
such grant of authority; on the contrary, it is relying on the terms of the order itself for its main
contention in these cases. On the other hand, if, as PCIB contends, he acted as heir-adjudicatee, the
authority given to him by the aforementioned orders would still suffice.
As can be seen, therefore, it is of no moment whether the "contracts to sell" upon which the deeds in
question were based were executed by Hodges before or after the death of his wife. In a word, We
hold, for the reasons already stated, that the properties covered by the deeds being assailed pertain or
should be deemed as pertaining to the estate of Mrs. Hodges; hence, any supposed irregularity
attending the actuations of the trial court may be invoked only by her heirs, not by PCIB, and since the
said heirs are not objecting, and the defects pointed out not being strictly jurisdictional in nature, all
things considered, particularly the unnecessary disturbance of rights already created in favor of
innocent third parties, it is best that the impugned orders are not disturbed.
In view of these considerations, We do not find sufficient merit in the assignments of error under
discussion.
Assignments of error V to VIII,
XVI to XVIII, XXVI to XXIX, XXXVII
to XXXVIII, XLIV to XLVI and LI.
All these assignments of error commonly deal with alleged non-fulfillment by the respective vendees,
appellees herein, of the terms and conditions embodied in the deeds of sale referred to in the
assignments of error just discussed. It is claimed that some of them never made full payments in
accordance with the respective contracts to sell, while in the cases of the others, like Lorenzo Carles,
Jose Pablico, Alfredo Catedral and Salvador S. Guzman, the contracts with them had already been
unilaterally cancelled by PCIB pursuant to automatic rescission clauses contained in them, in view of
the failure of said buyers to pay arrearages long overdue. But PCIB's posture is again premised on its
assumption that the properties covered by the deeds in question could not pertain to the estate of Mrs.
Hodges. We have already held above that, it being evident that a considerable portion of the conjugal
properties, much more than the properties covered by said deeds, would inevitably constitute the estate
of Mrs. Hodges, to avoid unnecessary legal complications, it can be assumed that said properties form
part of such estate. From this point of view, it is apparent again that the questions, whether or not it
was proper for appellee Magno to have disregarded the cancellations made by PCIB, thereby reviving
the rights of the respective buyers-appellees, and, whether or not the rules governing new dispositions
of properties of the estate were strictly followed, may not be raised by PCIB but only by the heirs of
Mrs. Hodges as the persons designated to inherit the same, or perhaps the government because of the
still unpaid inheritance taxes. But, again, since there is no pretense that any objections were raised by
said parties or that they would necessarily be prejudiced, the contentions of PCIB under the instant
assignments of error hardly merit any consideration.
Assignments of error IX to XII, XIX
to XXI, XXX to XXIV, XXXIX to XL,
XLVII to XLIX, LII and LIII to LXI.
PCIB raises under these assignments of error two issues which according to it are fundamental,
namely: (1) that in approving the deeds executed by Magno pursuant to contracts to sell already
cancelled by it in the performance of its functions as administrator of the estate of Hodges, the trial
court deprived the said estate of the right to invoke such cancellations it (PCIB) had made and (2) that
in so acting, the court "arrogated unto itself, while acting as a probate court, the power to determine the
contending claims of third parties against the estate of Hodges over real property," since it has in effect
determined whether or not all the terms and conditions of the respective contracts to sell executed by
Hodges in favor of the buyers-appellees concerned were complied with by the latter. What is worse, in
the view of PCIB, is that the court has taken the word of the appellee Magno, "a total stranger to his
estate as determinative of the issue".
Actually, contrary to the stand of PCIB, it is this last point regarding appellee Magno's having agreed
to ignore the cancellations made by PCIB and allowed the buyers-appellees to consummate the sales in
their favor that is decisive. Since We have already held that the properties covered by the contracts in
question should be deemed to be portions of the estate of Mrs. Hodges and not that of Hodges, it is
PCIB that is a complete stranger in these incidents. Considering, therefore, that the estate of Mrs.
Hodges and her heirs who are the real parties in interest having the right to oppose the consummation
of the impugned sales are not objecting, and that they are the ones who are precisely urging that said
sales be sanctioned, the assignments of error under discussion have no basis and must accordingly be
as they are hereby overruled.
With particular reference to assignments LIII to LXI, assailing the orders of the trial court requiring
PCIB to surrender the respective owner's duplicate certificates of title over the properties covered by
the sales in question and otherwise directing the Register of Deeds of Iloilo to cancel said certificates
and to issue new transfer certificates of title in favor of the buyers-appellees, suffice it to say that in the
light of the above discussion, the trial court was within its rights to so require and direct, PCIB having
refused to give way, by withholding said owners' duplicate certificates, of the corresponding
registration of the transfers duly and legally approved by the court.
Assignments of error LXII to LXVII
All these assignments of error commonly deal with the appeal against orders favoring appellee
Western Institute of Technology. As will be recalled, said institute is one of the buyers of real property
covered by a contract to sell executed by Hodges prior to the death of his wife. As of October, 1965, it
was in arrears in the total amount of P92,691.00 in the payment of its installments on account of its
purchase, hence it received under date of October 4, 1965 and October 20, 1965, letters of collection,
separately and respectively, from PCIB and appellee Magno, in their respective capacities as
administrators of the distinct estates of the Hodges spouses, albeit, while in the case of PCIB it made
known that "no other arrangement can be accepted except by paying all your past due account", on the
other hand, Magno merely said she would "appreciate very much if you can make some remittance to
bring this account up-to-date and to reduce the amount of the obligation." (See pp. 295-311, Green R.
on A.) On November 3, 1965, the Institute filed a motion which, after alleging that it was ready and
willing to pay P20,000 on account of its overdue installments but uncertain whether it should pay PCIB
or Magno, it prayed that it be "allowed to deposit the aforesaid amount with the court pending
resolution of the conflicting claims of the administrators." Acting on this motion, on November 23,
1965, the trial court issued an order, already quoted in the narration of facts in this opinion, holding
that payment to both or either of the two administrators is "proper and legal", and so "movant — can
pay to both estates or either of them", considering that "in both cases (Special Proceedings 1307 and
1672) there is as yet no judicial declaration of heirs nor distribution of properties to whomsoever are
entitled thereto."
The arguments under the instant assignments of error revolve around said order. From the procedural
standpoint, it is claimed that PCIB was not served with a copy of the Institute's motion, that said
motion was heard, considered and resolved on November 23, 1965, whereas the date set for its hearing
was November 20, 1965, and that what the order grants is different from what is prayed for in the
motion. As to the substantive aspect, it is contended that the matter treated in the motion is beyond the
jurisdiction of the probate court and that the order authorized payment to a person other than the
administrator of the estate of Hodges with whom the Institute had contracted.
The procedural points urged by appellant deserve scant consideration. We must assume, absent any
clear proof to the contrary, that the lower court had acted regularly by seeing to it that appellant was
duly notified. On the other hand, there is nothing irregular in the court's having resolved the motion
three days after the date set for hearing the same. Moreover, the record reveals that appellants' motion
for reconsideration wherein it raised the same points was denied by the trial court on March 7, 1966 (p.
462, Green R. on A.) Withal, We are not convinced that the relief granted is not within the general
intent of the Institute's motion.
Insofar as the substantive issues are concerned, all that need be said at this point is that they are mere
reiterations of contentions We have already resolved above adversely to appellants' position.
Incidentally, We may add, perhaps, to erase all doubts as to the propriety of not disturbing the lower
court's orders sanctioning the sales questioned in all these appeal s by PCIB, that it is only when one of
the parties to a contract to convey property executed by a deceased person raises substantial objections
to its being implemented by the executor or administrator of the decedent's estate that Section 8 of Rule
89 may not apply and, consequently, the matter has, to be taken up in a separate action outside of the
probate court; but where, as in the cases of the sales herein involved, the interested parties are in
agreement that the conveyance be made, it is properly within the jurisdiction of the probate court to
give its sanction thereto pursuant to the provisions of the rule just mentioned. And with respect to the
supposed automatic rescission clauses contained in the contracts to sell executed by Hodges in favor of
herein appellees, the effect of said clauses depend on the true nature of the said contracts, despite the
nomenclature appearing therein, which is not controlling, for if they amount to actual contracts of sale
instead of being mere unilateral accepted "promises to sell", (Art. 1479, Civil Code of the Philippines,
2nd paragraph) the pactum commissorium or the automatic rescission provision would not operate, as a
matter of public policy, unless there has been a previous notarial or judicial demand by the seller (10
Manresa 263, 2nd ed.) neither of which have been shown to have been made in connection with the
transactions herein involved.
Consequently, We find no merit in the assignments of error
Number LXII to LXVII.
SUMMARY
Considering the fact that this decision is unusually extensive and that the issues herein taken up and
resolved are rather numerous and varied, what with appellant making seventy-eight assignments of
error affecting no less than thirty separate orders of the court a quo, if only to facilitate proper
understanding of the import and extent of our rulings herein contained, it is perhaps desirable that a
brief restatement of the whole situation be made together with our conclusions in regard to its various
factual and legal aspects. .
The instant cases refer to the estate left by the late Charles Newton Hodges as well as that of his wife,
Linnie Jane Hodges, who predeceased him by about five years and a half. In their respective wills
which were executed on different occasions, each one of them provided mutually as follows: "I give,
devise and bequeath all of the rest, residue and remainder (after funeral and administration expenses,
taxes and debts) of my estate, both real and personal, wherever situated or located, to my beloved
(spouse) to have and to hold unto (him/her) — during (his/her) natural lifetime", subject to the
condition that upon the death of whoever of them survived the other, the remainder of what he or she
would inherit from the other is "give(n), devise(d) and bequeath(ed)" to the brothers and sisters of the
latter.
Mrs. Hodges died first, on May 23, 1957. Four days later, on May 27, Hodges was appointed special
administrator of her estate, and in a separate order of the same date, he was "allowed or authorized to
continue the business in which he was engaged, (buying and selling personal and real properties) and
to perform acts which he had been doing while the deceased was living." Subsequently, on December
14, 1957, after Mrs. Hodges' will had been probated and Hodges had been appointed and had qualified
as Executor thereof, upon his motion in which he asserted that he was "not only part owner of the
properties left as conjugal, but also, the successor to all the properties left by the deceased Linnie Jane
Hodges", the trial court ordered that "for the reasons stated in his motion dated December 11, 1957,
which the Court considers well taken, ... all the sales, conveyances, leases and mortgages of all
properties left by the deceased Linnie Jane Hodges executed by the Executor, Charles Newton Hodges
are hereby APPROVED. The said Executor is further authorized to execute subsequent sales,
conveyances, leases and mortgages of the properties left by the said deceased Linnie Jane Hodges in
consonance with the wishes contained in the last will and testament of the latter."
Annually thereafter, Hodges submitted to the court the corresponding statements of account of his
administration, with the particularity that in all his motions, he always made it point to urge the that
"no person interested in the Philippines of the time and place of examining the herein accounts be
given notice as herein executor is the only devisee or legatee of the deceased in accordance with the
last will and testament already probated by the Honorable Court." All said accounts approved as
prayed for.
Nothing else appears to have been done either by the court a quo or Hodges until December 25, 1962.
Importantly to be the provision in the will of Mrs. Hodges that her share of the conjugal partnership
was to be inherited by her husband "to have and to hold unto him, my said husband, during his natural
lifetime" and that "at the death of my said husband, I give, devise and bequeath all the rest, residue and
remainder of my estate, both real and personal, wherever situated or located, to be equally divided
among my brothers and sisters, share and share alike", which provision naturally made it imperative
that the conjugal partnership be promptly liquidated, in order that the "rest, residue and remainder" of
his wife's share thereof, as of the time of Hodges' own death, may be readily known and identified, no
such liquidation was ever undertaken. The record gives no indication of the reason for such omission,
although relatedly, it appears therein:
1. That in his annual statement submitted to the court of the net worth of C. N.
Hodges and the Estate of Linnie Jane Hodges, Hodges repeatedly and consistently
 reported the combined income of the conjugal partnership and then merely divided
the same equally between himself and the estate of the deceased wife, and, more
importantly, he also, as consistently, filed corresponding separate income tax returns
for each calendar year for each resulting half of such combined income, thus
reporting that the estate of Mrs. Hodges had its own income distinct from his own.
2. That when the court a quo happened to inadvertently omit in its order probating
the will of Mrs. Hodges, the name of one of her brothers, Roy Higdon then already
deceased, Hodges lost no time in asking for the proper correction "in order that the
heirs of deceased Roy Higdon may not think or believe they were omitted, and that
they were really interested in the estate of the deceased Linnie Jane Hodges".
3. That in his aforementioned motion of December 11, 1957, he expressly stated that
"deceased Linnie Jane Hodges died leaving no descendants or ascendants except
brothers and sisters and herein petitioner as the surviving spouse, to inherit the
properties of the decedent", thereby indicating that he was not excluding his wife's
brothers and sisters from the inheritance.
4. That Hodges allegedly made statements and manifestations to the United States
inheritance tax authorities indicating that he had renounced his inheritance from his
wife in favor of her other heirs, which attitude he is supposed to have reiterated or
ratified in an alleged affidavit subscribed and sworn to here in the Philippines and in
which he even purportedly stated that his reason for so disclaiming and renouncing
his rights under his wife's will was to "absolve (him) or (his) estate from any liability
for the payment of income taxes on income which has accrued to the estate of Linnie
Jane Hodges", his wife, since her death.
On said date, December 25, 1962, Hodges died. The very next day, upon motion of herein respondent
and appellee, Avelina A. Magno, she was appointed by the trial court as Administratrix of the Testate
Estate of Linnie Jane Hodges, in Special Proceedings No. 1307 and as Special Administratrix of the
estate of Charles Newton Hodges, "in the latter case, because the last will of said Charles Newton
Hodges is still kept in his vault or iron safe and that the real and personal properties of both spouses
may be lost, damaged or go to waste, unless Special Administratrix is appointed," (Order of December
26, 1962, p. 27, Yellow R. on A.) although, soon enough, on December 29, 1962, a certain Harold K.
Davies was appointed as her Co-Special Administrator, and when Special Proceedings No. 1672,
Testate Estate of Charles Newton Hodges, was opened, Joe Hodges, as next of kin of the deceased, was
in due time appointed as Co-Administrator of said estate together with Atty. Fernando P. Mirasol, to
replace Magno and Davies, only to be in turn replaced eventually by petitioner PCIB alone.
At the outset, the two probate proceedings appear to have been proceeding jointly, with each
administrator acting together with the other, under a sort of modus operandi. PCIB used to secure at the
beginning the conformity to and signature of Magno in transactions it wanted to enter into and
submitted the same to the court for approval as their joint acts. So did Magno do likewise. Somehow,
however, differences seem to have arisen, for which reason, each of them began acting later on
separately and independently of each other, with apparent sanction of the trial court. Thus, PCIB had
its own lawyers whom it contracted and paid handsomely, conducted the business of the estate
independently of Magno and otherwise acted as if all the properties appearing in the name of Charles
Newton Hodges belonged solely and only to his estate, to the exclusion of the brothers and sisters of
Mrs. Hodges, without considering whether or not in fact any of said properties corresponded to the
portion of the conjugal partnership pertaining to the estate of Mrs. Hodges. On the other hand, Magno
made her own expenditures, hired her own lawyers, on the premise that there is such an estate of Mrs.
Hodges, and dealth with some of the properties, appearing in the name of Hodges, on the assumption
that they actually correspond to the estate of Mrs. Hodges. All of these independent and separate
actuations of the two administrators were invariably approved by the trial court upon submission.
Eventually, the differences reached a point wherein Magno, who was more cognizant than anyone else
about the ins and outs of the businesses and properties of the deceased spouses because of her long and
intimate association with them, made it difficult for PCIB to perform normally its functions as
administrator separately from her. Thus, legal complications arose and the present judicial
controversies came about.
Predicating its position on the tenor of the orders of May 27 and December 14, 1957 as well as the
approval by the court a quo of the annual statements of account of Hodges, PCIB holds to the view
that the estate of Mrs. Hodges has already been in effect closed with the virtual adjudication in the
mentioned orders of her whole estate to Hodges, and that, therefore, Magno had already ceased since
then to have any estate to administer and the brothers and sisters of Mrs. Hodges have no interests
whatsoever in the estate left by Hodges. Mainly upon such theory, PCIB has come to this Court with a
petition for certiorari and prohibition praying that the lower court's orders allowing respondent Magno
to continue acting as administratrix of the estate of Mrs. Hodges in Special Proceedings 1307 in the
manner she has been doing, as detailed earlier above, be set aside. Additionally, PCIB maintains that
the provision in Mrs. Hodges' will instituting her brothers and sisters in the manner therein specified is
in the nature of a testamentary substitution, but inasmuch as the purported substitution is not, in its
view, in accordance with the pertinent provisions of the Civil Code, it is ineffective and may not be
enforced. It is further contended that, in any event, inasmuch as the Hodges spouses were both
residents of the Philippines, following the decision of this Court in Aznar vs. Garcia, or the case of
Christensen, 7 SCRA 95, the estate left by Mrs. Hodges could not be more than one-half of her share
of the conjugal partnership, notwithstanding the fact that she was citizen of Texas, U.S.A., in
accordance with Article 16 in relation to Articles 900 and 872 of the Civil Code. Initially, We issued a
preliminary injunction against Magno and allowed PCIB to act alone.
At the same time PCIB has appealed several separate orders of the trial court approving individual acts
of appellee Magno in her capacity as administratrix of the estate of Mrs. Hodges, such as, hiring of
lawyers for specified fees and incurring expenses of administration for different purposes and
executing deeds of sale in favor of her co-appellees covering properties which are still registered in the
name of Hodges, purportedly pursuant to corresponding "contracts to sell" executed by Hodges. The
said orders are being questioned on jurisdictional and procedural grounds directly or indirectly
predicated on the principal theory of appellant that all the properties of the two estates belong already
to the estate of Hodges exclusively.
On the other hand, respondent-appellee Magno denies that the trial court's orders of May 27 and
December 14, 1957 were meant to be finally adjudicatory of the hereditary rights of Hodges and
contends that they were no more than the court's general sanction of past and future acts of Hodges as
executor of the will of his wife in due course of administration. As to the point regarding substitution,
her position is that what was given by Mrs. Hodges to her husband under the provision in question was
a lifetime usufruct of her share of the conjugal partnership, with the naked ownership passing directly
to her brothers and sisters. Anent the application of Article 16 of the Civil Code, she claims that the
applicable law to the will of Mrs. Hodges is that of Texas under which, she alleges, there is no system
of legitime, hence, the estate of Mrs. Hodges cannot be less than her share or one-half of the conjugal
partnership properties. She further maintains that, in any event, Hodges had as a matter of fact and of
law renounced his inheritance from his wife and, therefore, her whole estate passed directly to her
brothers and sisters effective at the latest upon the death of Hodges.
In this decision, for the reasons discussed above, and upon the issues just summarized, We overrule
PCIB's contention that the orders of May 27, 1957 and December 14, 1957 amount to an adjudication
to Hodges of the estate of his wife, and We recognize the present existence of the estate of Mrs.
Hodges, as consisting of properties, which, while registered in that name of Hodges, do actually
correspond to the remainder of the share of Mrs. Hodges in the conjugal partnership, it appearing that
pursuant to the pertinent provisions of her will, any portion of said share still existing and undisposed
of by her husband at the time of his death should go to her brothers and sisters share and share alike.
Factually, We find that the proven circumstances relevant to the said orders do not warrant the
conclusion that the court intended to make thereby such alleged final adjudication. Legally, We hold
that the tenor of said orders furnish no basis for such a conclusion, and what is more, at the time said
orders were issued, the proceedings had not yet reached the point when a final distribution and
adjudication could be made. Moreover, the interested parties were not duly notified that such
disposition of the estate would be done. At best, therefore, said orders merely allowed Hodges to
dispose of portions of his inheritance in advance of final adjudication, which is implicitly permitted
under Section 2 of Rule 109, there being no possible prejudice to third parties, inasmuch as Mrs.
Hodges had no creditors and all pertinent taxes have been paid.
More specifically, We hold that, on the basis of circumstances presently extant in the record, and on
the assumption that Hodges' purported renunciation should not be upheld, the estate of Mrs. Hodges
inherited by her brothers and sisters consists of one-fourth of the community estate of the spouses at
the time of her death, minus whatever Hodges had gratuitously disposed of therefrom during the period
from, May 23, 1957, when she died, to December 25, 1962, when he died provided, that with regard to
remunerative dispositions made by him during the same period, the proceeds thereof, whether in cash
or property, should be deemed as continuing to be part of his wife's estate, unless it can be shown that
he had subsequently disposed of them gratuitously.
At this juncture, it may be reiterated that the question of what are the pertinent laws of Texas and what
would be the estate of Mrs. Hodges under them is basically one of fact, and considering the respective
positions of the parties in regard to said factual issue, it can already be deemed as settled for the
purposes of these cases that, indeed, the free portion of said estate that could possibly descend to her
brothers and sisters by virtue of her will may not be less than one-fourth of the conjugal estate, it
appearing that the difference in the stands of the parties has reference solely to the legitime of Hodges,
PCIB being of the view that under the laws of Texas, there is such a legitime of one-fourth of said
conjugal estate and Magno contending, on the other hand, that there is none. In other words, hereafter,
whatever might ultimately appear, at the subsequent proceedings, to be actually the laws of Texas on
the matter would no longer be of any consequence, since PCIB would anyway be in estoppel already to
claim that the estate of Mrs. Hodges should be less than as contended by it now, for admissions by a
party related to the effects of foreign laws, which have to be proven in our courts like any other
controverted fact, create estoppel.
In the process, We overrule PCIB's contention that the provision in Mrs. Hodges' will in favor of her
brothers and sisters constitutes ineffective hereditary substitutions. But neither are We sustaining, on
the other hand, Magno's pose that it gave Hodges only a lifetime usufruct. We hold that by said
provision, Mrs. Hodges simultaneously instituted her brothers and sisters as co-heirs with her husband,
with the condition, however, that the latter would have complete rights of dominion over the whole
estate during his lifetime and what would go to the former would be only the remainder thereof at the
time of Hodges' death. In other words, whereas they are not to inherit only in case of default of
Hodges, on the other hand, Hodges was not obliged to preserve anything for them. Clearly then, the
essential elements of testamentary substitution are absent; the provision in question is a simple case of
conditional simultaneous institution of heirs, whereby the institution of Hodges is subject to a partial
resolutory condition the operative contingency of which is coincidental with that of the suspensive
condition of the institution of his brothers and sisters-in-law, which manner of institution is not
prohibited by law.
We also hold, however, that the estate of Mrs. Hodges inherited by her brothers and sisters could be
more than just stated, but this would depend on (1) whether upon the proper application of the
principle of renvoi in relation to Article 16 of the Civil Code and the pertinent laws of Texas, it will
appear that Hodges had no legitime as contended by Magno, and (2) whether or not it can be held that
Hodges had legally and effectively renounced his inheritance from his wife. Under the circumstances
presently obtaining and in the state of the record of these cases, as of now, the Court is not in a position
to make a final ruling, whether of fact or of law, on any of these two issues, and We, therefore, reserve
said issues for further proceedings and resolution in the first instance by the court a quo, as
hereinabove indicated. We reiterate, however, that pending such further proceedings, as matters stand
at this stage, Our considered opinion is that it is beyond cavil that since, under the terms of the will of
Mrs. Hodges, her husband could not have anyway legally adjudicated or caused to be adjudicated to
himself her whole share of their conjugal partnership, albeit he could have disposed any part thereof
during his lifetime, the resulting estate of Mrs. Hodges, of which Magno is the uncontested
administratrix, cannot be less than one-fourth of the conjugal partnership properties, as of the time of
her death, minus what, as explained earlier, have been gratuitously disposed of therefrom, by Hodges
in favor of third persons since then, for even if it were assumed that, as contended by PCIB, under
Article 16 of the Civil Code and applying renvoi the laws of the Philippines are the ones ultimately
applicable, such one-fourth share would be her free disposable portion, taking into account already the
legitime of her husband under Article 900 of the Civil Code.
The foregoing considerations leave the Court with no alternative than to conclude that in predicating its
orders on the assumption, albeit unexpressed therein, that there is an estate of Mrs. Hodges to be
distributed among her brothers and sisters and that respondent Magno is the legal administratrix
thereof, the trial court acted correctly and within its jurisdiction. Accordingly, the petition
for certiorari and prohibition has to be denied. The Court feels however, that pending the liquidation
of the conjugal partnership and the determination of the specific properties constituting her estate, the
two administrators should act conjointly as ordered in the Court's resolution of September 8, 1972 and
as further clarified in the dispositive portion of its decision.
Anent the appeals from the orders of the lower court sanctioning payment by appellee Magno, as
administratrix, of expenses of administration and attorney's fees, it is obvious that, with Our holding
that there is such an estate of Mrs. Hodges, and for the reasons stated in the body of this opinion, the
said orders should be affirmed. This We do on the assumption We find justified by the evidence of
record, and seemingly agreed to by appellant PCIB, that the size and value of the properties that should
correspond to the estate of Mrs. Hodges far exceed the total of the attorney's fees and administration
expenses in question.
With respect to the appeals from the orders approving transactions made by appellee Magno, as
administratrix, covering properties registered in the name of Hodges, the details of which are related
earlier above, a distinction must be made between those predicated on contracts to sell executed by
Hodges before the death of his wife, on the one hand, and those premised on contracts to sell entered
into by him after her death. As regards the latter, We hold that inasmuch as the payments made by
appellees constitute proceeds of sales of properties belonging to the estate of Mrs. Hodges, as may be
implied from the tenor of the motions of May 27 and December 14, 1957, said payments continue to
pertain to said estate, pursuant to her intent obviously reflected in the relevant provisions of her will,
on the assumption that the size and value of the properties to correspond to the estate of Mrs. Hodges corresponding complete segregation and partition of the two estates in the proportions that may result
would exceed the total value of all the properties covered by the impugned deeds of sale, for which from the said resolution.
reason, said properties may be deemed as pertaining to the estate of Mrs. Hodges. And there being no Generally and in all other respects, the parties and the court a quo are directed to adhere henceforth, in
showing that thus viewing the situation, there would be prejudice to anyone, including the government, all their actuations in Special Proceedings 1307 and 1672, to the views passed and ruled upon by the
the Court also holds that, disregarding procedural technicalities in favor of a pragmatic and practical Court in the foregoing opinion.
approach as discussed above, the assailed orders should be affirmed. Being a stranger to the estate of Appellant PCIB is ordered to pay, within five (5) days from notice hereof, thirty-one additional appeal
Mrs. Hodges, PCIB has no personality to raise the procedural and jurisdictional issues raised by it. And docket fees, but this decision shall nevertheless become final as to each of the parties herein after
inasmuch as it does not appear that any of the other heirs of Mrs. Hodges or the government has fifteen (15) days from the respective notices to them hereof in accordance with the rules.
objected to any of the orders under appeal, even as to these parties, there exists no reason for said Costs against petitioner-appellant PCIB.
orders to be set aside. Zaldivar, Castro, Esguerra and Fernandez, JJ., concur.
DISPOSITIVE PART Makasiar, Antonio, Muñoz Palma and Aquino, JJ., concur in the result.
IN VIEW OF ALL THE FOREGOING PREMISES, judgment is hereby rendered DISMISSING the  
petition in G. R. Nos. L-27860 and L-27896, and AFFIRMING, in G. R. Nos. L-27936-37 and the EN BANC
other thirty-one numbers hereunder ordered to be added after payment of the corresponding docket G.R. No. L-11622 January 28, 1961
fees, all the orders of the trial court under appeal enumerated in detail on pages 35 to 37 and 80 to 82 THE COLLECTOR OF INTERNAL REVENUE, Petitioner, vs. DOUGLAS FISHER AND
of this decision; the existence of the Testate Estate of Linnie Jane Hodges, with respondent-appellee BETTINA FISHER, and the COURT OF TAX APPEALS, Respondents.
Avelina A. Magno, as administratrix thereof is recognized, and it is declared that, until final judgment x---------------------------------------------------------x
is ultimately rendered regarding (1) the manner of applying Article 16 of the Civil Code of the G.R. No. L-11668 January 28, 1961.
Philippines to the situation obtaining in these cases and (2) the factual and legal issue of whether or not DOUGLAS FISHER AND BETTINA FISHER, Petitioner, vs. THE COLLECTOR OF
Charles Newton Hodges had effectively and legally renounced his inheritance under the will of Linnie INTERNAL REVENUE, and the COURT OF TAX APPEALS, Respondents.
Jane Hodges, the said estate consists of one-fourth of the community properties of the said spouses, as BARRERA, J.:chanrobles virtual law library
of the time of the death of the wife on May 23, 1957, minus whatever the husband had already This case relates to the determination and settlement of the hereditary estate left by the deceased
gratuitously disposed of in favor of third persons from said date until his death, provided, first, that Walter G. Stevenson, and the laws applicable thereto. Walter G. Stevenson (born in the Philippines on
with respect to remunerative dispositions, the proceeds thereof shall continue to be part of the wife's August 9, 1874 of British parents and married in the City of Manila on January 23, 1909 to Beatrice
estate, unless subsequently disposed of gratuitously to third parties by the husband, and second, that Mauricia Stevenson another British subject) died on February 22, 1951 in San Francisco, California,
should the purported renunciation be declared legally effective, no deductions whatsoever are to be U.S.A. whereto he and his wife moved and established their permanent residence since May 10, 1945.
made from said estate; in consequence, the preliminary injunction of August 8, 1967, as amended on In his will executed in San Francisco on May 22, 1947, and which was duly probated in the Superior
October 4 and December 6, 1967, is lifted, and the resolution of September 8, 1972, directing that Court of California on April 11, 1951, Stevenson instituted his wife Beatrice as his sole heiress to the
petitioner-appellant PCIB, as Administrator of the Testate Estate of Charles Newton Hodges, in following real and personal properties acquired by the spouses while residing in the Philippines,
Special Proceedings 1672, and respondent-appellee Avelina A. Magno, as Administratrix of the described and preliminary assessed as follows:
Testate Estate of Linnie Jane Hodges, in Special Proceedings 1307, should act thenceforth always
conjointly, never independently from each other, as such administrators, is reiterated, and the same is Gross Estate
made part of this judgment and shall continue in force, pending the liquidation of the conjugal
partnership of the deceased spouses and the determination and segregation from each other of their Real Property - 2 parcels of land in Baguio,
respective estates, provided, that upon the finality of this judgment, the trial court should immediately covered by T.C.T. Nos. 378 and 379 P43,500.00
proceed to the partition of the presently combined estates of the spouses, to the end that the one-half Personal Property
share thereof of Mrs. Hodges may be properly and clearly identified; thereafter, the trial court should
forthwith segregate the remainder of the one-fourth herein adjudged to be her estate and cause the (1) 177 shares of stock of Canacao Estate at
same to be turned over or delivered to respondent for her exclusive administration in Special P10.00 each 1,770.00
Proceedings 1307, while the other one-fourth shall remain under the joint administration of said (2) 210,000 shares of stock of Mindanao Mother
respondent and petitioner under a joint proceedings in Special Proceedings 1307 and 1672, whereas the Lode Mines, Inc. at P0.38 per share 79,800.00
half unquestionably pertaining to Hodges shall be administered by petitioner exclusively in Special (3) Cash credit with Canacao Estate Inc. 4,870.88
Proceedings 1672, without prejudice to the resolution by the trial court of the pending motions for its
removal as administrator12; and this arrangement shall be maintained until the final resolution of the (4) Cash, with the Chartered Bank of India,
two issues of renvoi and renunciation hereby reserved for further hearing and determination, and the Australia & China   851.97
Total Gross Assets P130,792.85
On May 22, 1951, ancillary administration proceedings were instituted in the Court of First Instance of
Manila for the settlement of the estate in the Philippines. In due time Stevenson's will was duly
admitted to probate by our court and Ian Murray Statt was appointed ancillary administrator of the
estate, who on July 11, 1951, filed a preliminary estate and inheritance tax return with the reservation
of having the properties declared therein finally appraised at their values six months after the death of
Stevenson. Preliminary return was made by the ancillary administrator in order to secure the waiver of
the Collector of Internal Revenue on the inheritance tax due on the 210,000 shares of stock in the
Mindanao Mother Lode Mines Inc. which the estate then desired to dispose in the United States.
Acting upon said return, the Collector of Internal Revenue accepted the valuation of the personal
properties declared therein, but increased the appraisal of the two parcels of land located in Baguio
City by fixing their fair market value in the amount of P52.200.00, instead of P43,500.00. After
allowing the deductions claimed by the ancillary administrator for funeral expenses in the amount of
P2,000.00 and for judicial and administration expenses in the sum of P5,500.00, the Collector assessed
the state the amount of P5,147.98 for estate tax and P10,875,26 or inheritance tax, or a total of
P16,023.23. Both of these assessments were paid by the estate on June 6,
1952.chanroblesvirtualawlibrarychanrobles virtual law library
On September 27, 1952, the ancillary administrator filed in amended estate and inheritance tax return
in pursuance f his reservation made at the time of filing of the preliminary return and for the purpose of
availing of the right granted by section 91 of the National Internal Revenue
Code.chanroblesvirtualawlibrarychanrobles virtual law library
In this amended return the valuation of the 210,000 shares of stock in the Mindanao Mother Lode
Mines, Inc. was reduced from 0.38 per share, as originally declared, to P0.20 per share, or from a total
valuation of P79,800.00 to P42,000.00. This change in price per share of stock was based by the
ancillary administrator on the market notation of the stock obtaining at the San Francisco California)
Stock Exchange six months from the death of Stevenson, that is, As of August 22, 1931. In addition,
the ancillary administrator made claim for the following deductions:
Funeral expenses ($1,04326) P2,086.52
Judicial Expenses:
(a) Administrator's Fee P1,204.34
(b) Attorney's Fee 6.000.00
(c) Judicial and Administration expenses
as of August 9, 1952 1,400.05
8,604.39
Real Estate Tax for 1951 on Baguio real
properties (O.R. No. B-1 686836) 652.50
Claims against the estate:
($5,000.00) P10,000.00 P10,000.00
Plus: 4% int. p.a. from Feb. 2 to 22, 1951 22.47   10,022.47
Sub-Total P21,365.88
In the meantime, on December 1, 1952, Beatrice Mauricia Stevenson assigned all her rights and
interests in the estate to the spouses, Douglas and Bettina Fisher, respondents
herein.chanroblesvirtualawlibrarychanrobles virtual law library
On September 7, 1953, the ancillary administrator filed a second amended estate and inheritance tax
return (Exh. "M-N"). This return declared the same assets of the estate stated in the amended return of
September 22, 1952, except that it contained new claims for additional exemption and deduction to
wit: (1) deduction in the amount of P4,000.00 from the gross estate of the decedent as provided for in
Section 861 (4) of the U.S. Federal Internal Revenue Code which the ancillary administrator averred
was allowable by way of the reciprocity granted by Section 122 of the National Internal Revenue
Code, as then held by the Board of Tax Appeals in case No. 71 entitled "Housman vs. Collector,"
August 14, 1952; and (2) exemption from the imposition of estate and inheritance taxes on the 210,000
shares of stock in the Mindanao Mother Lode Mines, Inc. also pursuant to the reciprocity proviso of
Section 122 of the National Internal Revenue Code. In this last return, the estate claimed that it was
liable only for the amount of P525.34 for estate tax and P238.06 for inheritance tax and that, as a
consequence, it had overpaid the government. The refund of the amount of P15,259.83, allegedly
overpaid, was accordingly requested by the estate. The Collector denied the claim. For this reason,
action was commenced in the Court of First Instance of Manila by respondents, as assignees of
Beatrice Mauricia Stevenson, for the recovery of said amount. Pursuant to Republic Act No. 1125, the
case was forwarded to the Court of Tax Appeals which court, after hearing, rendered decision the
dispositive portion of which reads as follows:
In fine, we are of the opinion and so hold that: (a) the one-half (�) share of the surviving spouse in the
conjugal partnership property as diminished by the obligations properly chargeable to such property
should be deducted from the net estate of the deceased Walter G. Stevenson, pursuant to Section 89-C
of the National Internal Revenue Code; (b) the intangible personal property belonging to the estate of
said Stevenson is exempt from inheritance tax, pursuant to the provision of section 122 of the National
Internal Revenue Code in relation to the California Inheritance Tax Law but decedent's estate is not
entitled to an exemption of P4,000.00 in the computation of the estate tax; (c) for purposes of estate
and inheritance taxation the Baguio real estate of the spouses should be valued at P52,200.00, and
210,000 shares of stock in the Mindanao Mother Lode Mines, Inc. should be appraised at P0.38 per
share; and (d) the estate shall be entitled to a deduction of P2,000.00 for funeral expenses and judicial
expenses of P8,604.39.
From this decision, both parties appealed.chanroblesvirtualawlibrarychanrobles virtual law library
The Collector of Internal Revenue, hereinafter called petitioner assigned four errors allegedly
committed by the trial court, while the assignees, Douglas and Bettina Fisher hereinafter called
respondents, made six assignments of error. Together, the assigned errors raise the following main
issues for resolution by this Court:chanrobles virtual law library
(1) Whether or not, in determining the taxable net estate of the decedent, one-half (�) of the net estate
should be deducted therefrom as the share of tile surviving spouse in accordance with our law on
conjugal partnership and in relation to section 89 (c) of the National Internal revenue Code;chanrobles
virtual law library
(2) Whether or not the estate can avail itself of the reciprocity proviso embodied in Section 122 of the
National Internal Revenue Code granting exemption from the payment of estate and inheritance taxes
on the 210,000 shares of stock in the Mindanao Mother Lode Mines Inc.;chanrobles virtual law library
(3) Whether or not the estate is entitled to the deduction of P4,000.00 allowed by Section 861, U.S.
Internal Revenue Code in relation to section 122 of the National Internal Revenue Code;chanrobles
virtual law library
(4) Whether or not the real estate properties of the decedent located in Baguio City and the 210,000
shares of stock in the Mindanao Mother Lode Mines, Inc., were correctly appraised by the lower
court;chanrobles virtual law library
(5) Whether or not the estate is entitled to the following deductions: P8,604.39 for judicial and
administration expenses; P2,086.52 for funeral expenses; P652.50 for real estate taxes; and
P10,0,22.47 representing the amount of indebtedness allegedly incurred by the decedent during his
lifetime; andchanrobles virtual law library
(6) Whether or not the estate is entitled to the payment of interest on the amount it claims to have
overpaid the government and to be refundable to it.chanroblesvirtualawlibrarychanrobles virtual law
library
In deciding the first issue, the lower court applied a well-known doctrine in our civil law that in the
absence of any ante-nuptial agreement, the contracting parties are presumed to have adopted the
system of conjugal partnership as to the properties acquired during their marriage. The application of
this doctrine to the instant case is being disputed, however, by petitioner Collector of Internal Revenue,
who contends that pursuant to Article 124 of the New Civil Code, the property relation of the spouses
Stevensons ought not to be determined by the Philippine law, but by the national law of the decedent
husband, in this case, the law of England. It is alleged by petitioner that English laws do not recognize
legal partnership between spouses, and that what obtains in that jurisdiction is another regime of
property relation, wherein all properties acquired during the marriage pertain and belong Exclusively
to the husband. In further support of his stand, petitioner cites Article 16 of the New Civil Code (Art.
10 of the old) to the effect that in testate and intestate proceedings, the amount of successional rights,
among others, is to be determined by the national law of the
decedent.chanroblesvirtualawlibrarychanrobles virtual law library
In this connection, let it be noted that since the mariage of the Stevensons in the Philippines took place
in 1909, the applicable law is Article 1325 of the old Civil Code and not Article 124 of the New Civil
Code which became effective only in 1950. It is true that both articles adhere to the so-called
nationality theory of determining the property relation of spouses where one of them is a foreigner and
they have made no prior agreement as to the administration disposition, and ownership of their
conjugal properties. In such a case, the national law of the husband becomes the dominant law in
determining the property relation of the spouses. There is, however, a difference between the two
articles in that Article 1241 of the new Civil Code expressly provides that it shall be applicable
regardless of whether the marriage was celebrated in the Philippines or abroad while Article 13252 of
the old Civil Code is limited to marriages contracted in a foreign
land.chanroblesvirtualawlibrarychanrobles virtual law library
It must be noted, however, that what has just been said refers to mixed marriages between a Filipino
citizen and a foreigner. In the instant case, both spouses are foreigners who married in the Philippines.
Manresa,3 in his Commentaries, has this to say on this point:
La regla establecida en el art. 1.315, se refiere a las capitulaciones otorgadas en Espana y entre
espanoles. El 1.325, a las celebradas en el extranjero cuando alguno de los conyuges es espanol. En
cuanto a la regla procedente cuando dos extranjeros se casan en Espana, o dos espanoles en el
extranjero hay que atender en el primer caso a la legislacion de pais a que aquellos pertenezean, y en el
segundo, a las reglas generales consignadas en los articulos 9 y 10 de nuestro Codigo. (Emphasis
supplied.)
If we adopt the view of Manresa, the law determinative of the property relation of the Stevensons,
married in 1909, would be the English law even if the marriage was celebrated in the Philippines, both
of them being foreigners. But, as correctly observed by the Tax Court, the pertinent English law that
allegedly vests in the decedent husband full ownership of the properties acquired during the marriage
has not been proven by petitioner. Except for a mere allegation in his answer, which is not sufficient,
the record is bereft of any evidence as to what English law says on the matter. In the absence of proof,
the Court is justified, therefore, in indulging in what Wharton calls "processual presumption," in
presuming that the law of England on this matter is the same as our law. 4
Nor do we believe petitioner can make use of Article 16 of the New Civil Code (art. 10, old Civil
Code) to bolster his stand. A reading of Article 10 of the old Civil Code, which incidentally is the one
applicable, shows that it does not encompass or contemplate to govern the question of property relation
between spouses. Said article distinctly speaks of amount of successional rights and this term, in
speaks in our opinion, properly refers to the extent or amount of property that each heir is legally
entitled to inherit from the estate available for distribution. It needs to be pointed out that the property
relation of spouses, as distinguished from their successional rights, is governed differently by the
specific and express provisions of Title VI, Chapter I of our new Civil Code (Title III, Chapter I of the
old Civil Code.) We, therefore, find that the lower court correctly deducted the half of the conjugal
property in determining the hereditary estate left by the deceased
Stevenson.chanroblesvirtualawlibrarychanrobles virtual law library
On the second issue, petitioner disputes the action of the Tax Court in the exempting the respondents
from paying inheritance tax on the 210,000 shares of stock in the Mindanao Mother Lode Mines, Inc.
in virtue of the reciprocity proviso of Section 122 of the National Internal Revenue Code, in relation to
Section 13851 of the California Revenue and Taxation Code, on the ground that: (1) the said proviso of
the California Revenue and Taxation Code has not been duly proven by the respondents; (2) the
reciprocity exemptions granted by section 122 of the National Internal Revenue Code can only be
availed of by residents of foreign countries and not of residents of a state in the United States; and (3)
there is no "total" reciprocity between the Philippines and the state of California in that while the
former exempts payment of both estate and inheritance taxes on intangible personal properties, the
latter only exempts the payment of inheritance tax..chanroblesvirtualawlibrarychanrobles virtual law
library
To prove the pertinent California law, Attorney Allison Gibbs, counsel for herein respondents, testified
that as an active member of the California Bar since 1931, he is familiar with the revenue and taxation
laws of the State of California. When asked by the lower court to state the pertinent California law as
regards exemption of intangible personal properties, the witness cited article 4, section 13851 (a) and
(b) of the California Internal and Revenue Code as published in Derring's California Code, a
publication of the Bancroft-Whitney Company inc. And as part of his testimony, a full quotation of the
cited section was offered in evidence as Exhibits "V-2" by the
respondents.chanroblesvirtualawlibrarychanrobles virtual law library
It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them.5 Like any other fact, they must be alleged and
proved.6chanrobles virtual law library
Section 41, Rule 123 of our Rules of Court prescribes the manner of proving foreign laws before our
tribunals. However, although we believe it desirable that these laws be proved in accordance with said
rule, we held in the case of Willamette Iron and Steel Works v. Muzzal, 61 Phil. 471, that "a reading of
sections 300 and 301 of our Code of Civil Procedure (now section 41, Rule 123) will convince one that
these sections do not exclude the presentation of other competent evidence to prove the existence of a
foreign law." In that case, we considered the testimony of an attorney-at-law of San Francisco,
California who quoted verbatim a section of California Civil Code and who stated that the same was in
force at the time the obligations were contracted, as sufficient evidence to establish the existence of
said law. In line with this view, we find no error, therefore, on the part of the Tax Court in considering
the pertinent California law as proved by respondents' witness.chanroblesvirtualawlibrarychanrobles
virtual law library
We now take up the question of reciprocity in exemption from transfer or death taxes, between the
State of California and the Philippines.Fchanrobles virtual law library
Section 122 of our National Internal Revenue Code, in pertinent part, provides:
... And, provided, further, That no tax shall be collected under this Title in respect of intangible
personal property (a) if the decedent at the time of his death was a resident of a foreign country which
at the time of his death did not impose a transfer of tax or death tax of any character in respect of
intangible personal property of citizens of the Philippines not residing in that foreign country, or (b) if
the laws of the foreign country of which the decedent was a resident at the time of his death allow a
similar exemption from transfer taxes or death taxes of every character in respect of intangible personal
property owned by citizens of the Philippines not residing in that foreign country." (Emphasis
supplied).
On the other hand, Section 13851 of the California Inheritance Tax Law, insofar as pertinent, reads:.
"SEC. 13851, Intangibles of nonresident: Conditions. Intangible personal property is exempt from the
tax imposed by this part if the decedent at the time of his death was a resident of a territory or another
State of the United States or of a foreign state or country which then imposed a legacy, succession, or
death tax in respect to intangible personal property of its own residents, but
either:.chanroblesvirtualawlibrarychanrobles virtual law library
(a) Did not impose a legacy, succession, or death tax of any character in respect to intangible personal
property of residents of this State, orchanrobles virtual law library
(b) Had in its laws a reciprocal provision under which intangible personal property of a non-resident
was exempt from legacy, succession, or death taxes of every character if the Territory or other State of
the United States or foreign state or country in which the nonresident resided allowed a similar
exemption in respect to intangible personal property of residents of the Territory or State of the United
States or foreign state or country of residence of the decedent." (Id.)
It is clear from both these quoted provisions that the reciprocity must be total, that is, with respect to
transfer or death taxes of any and every character, in the case of the Philippine law, and to legacy,
succession, or death taxes of any and every character, in the case of the California law. Therefore, if
any of the two states collects or imposes and does not exempt any transfer, death, legacy, or succession
tax of any character, the reciprocity does not work. This is the underlying principle of the reciprocity
clauses in both laws.chanroblesvirtualawlibrarychanrobles virtual law library
In the Philippines, upon the death of any citizen or resident, or non-resident with properties therein,
there are imposed upon his estate and its settlement, both an estate and an inheritance tax. Under the
laws of California, only inheritance tax is imposed. On the other hand, the Federal Internal Revenue
Code imposes an estate tax on non-residents not citizens of the United States,7 but does not provide for
any exemption on the basis of reciprocity. Applying these laws in the manner the Court of Tax Appeals
did in the instant case, we will have a situation where a Californian, who is non-resident in the
Philippines but has intangible personal properties here, will the subject to the payment of an estate tax,
although exempt from the payment of the inheritance tax. This being the case, will a Filipino, non-
resident of California, but with intangible personal properties there, be entitled to the exemption clause
of the California law, since the Californian has not been exempted from every character of legacy,
succession, or death tax because he is, under our law, under obligation to pay an estate tax? Upon the
other hand, if we exempt the Californian from paying the estate tax, we do not thereby entitle a
Filipino to be exempt from a similar estate tax in California because under the Federal Law, which is
equally enforceable in California he is bound to pay the same, there being no reciprocity recognized in
respect thereto. In both instances, the Filipino citizen is always at a disadvantage. We do not believe
that our legislature has intended such an unfair situation to the detriment of our own government and
people. We, therefore, find and declare that the lower court erred in exempting the estate in question
from payment of the inheritance tax.chanroblesvirtualawlibrarychanrobles virtual law library
We are not unaware of our ruling in the case of Collector of Internal Revenue vs. Lara (G.R. Nos. L-
9456 & L-9481, prom. January 6, 1958, 54 O.G. 2881) exempting the estate of the deceased Hugo H.
Miller from payment of the inheritance tax imposed by the Collector of Internal Revenue. It will be
noted, however, that the issue of reciprocity between the pertinent provisions of our tax law and that of
the State of California was not there squarely raised, and the ruling therein cannot control the
determination of the case at bar. Be that as it may, we now declare that in view of the express
provisions of both the Philippine and California laws that the exemption would apply only if the law of
the other grants an exemption from legacy, succession, or death taxes of every character, there could
not be partial reciprocity. It would have to be total or none at all.chanroblesvirtualawlibrarychanrobles
virtual law library
With respect to the question of deduction or reduction in the amount of P4,000.00 based on the U.S.
Federal Estate Tax Law which is also being claimed by respondents, we uphold and adhere to our
ruling in the Lara case (supra) that the amount of $2,000.00 allowed under the Federal Estate Tax Law
is in the nature of a deduction and not of an exemption regarding which reciprocity cannot be claimed
under the provision of Section 122 of our National Internal Revenue Code. Nor is reciprocity
authorized under the Federal Law. .chanroblesvirtualawlibrarychanrobles virtual law library
On the issue of the correctness of the appraisal of the two parcels of land situated in Baguio City, it is
contended that their assessed values, as appearing in the tax rolls 6 months after the death of
Stevenson, ought to have been considered by petitioner as their fair market value, pursuant to section
91 of the National Internal Revenue Code. It should be pointed out, however, that in accordance with
said proviso the properties are required to be appraised at their fair market value and the assessed value
thereof shall be considered as the fair market value only when evidence to the contrary has not been
shown. After all review of the record, we are satisfied that such evidence exists to justify the valuation
made by petitioner which was sustained by the tax court, for as the tax court aptly observed:
"The two parcels of land containing 36,264 square meters were valued by the administrator of the
estate in the Estate and Inheritance tax returns filed by him at P43,500.00 which is the assessed value
of said properties. On the other hand, defendant appraised the same at P52,200.00. It is of common
knowledge, and this Court can take judicial notice of it, that assessments for real estate taxation
purposes are very much lower than the true and fair market value of the properties at a given time and
place. In fact one year after decedent's death or in 1952 the said properties were sold for a price of
P72,000.00 and there is no showing that special or extraordinary circumstances caused the sudden
increase from the price of P43,500.00, if we were to accept this value as a fair and reasonable one as of
1951. Even more, the counsel for plaintiffs himself admitted in open court that he was willing to
purchase the said properties at P2.00 per square meter. In the light of these facts we believe and
therefore hold that the valuation of P52,200.00 of the real estate in Baguio made by defendant is fair,
reasonable and justified in the premises." (Decision, p. 19).
In respect to the valuation of the 210,000 shares of stock in the Mindanao Mother Lode Mines, Inc., (a
domestic corporation), respondents contend that their value should be fixed on the basis of the market
quotation obtaining at the San Francisco (California) Stock Exchange, on the theory that the
certificates of stocks were then held in that place and registered with the said stock exchange. We
cannot agree with respondents' argument. The situs of the shares of stock, for purposes of taxation,
being located here in the Philippines, as respondents themselves concede and considering that they are
sought to be taxed in this jurisdiction, consistent with the exercise of our government's taxing
authority, their fair market value should be taxed on the basis of the price prevailing in our
country.chanroblesvirtualawlibrarychanrobles virtual law library
Upon the other hand, we find merit in respondents' other contention that the said shares of stock
commanded a lesser value at the Manila Stock Exchange six months after the death of Stevenson.
Through Atty. Allison Gibbs, respondents have shown that at that time a share of said stock was bid
for at only P.325 (p. 103, t.s.n.). Significantly, the testimony of Atty. Gibbs in this respect has never
been questioned nor refuted by petitioner either before this court or in the court below. In the absence
of evidence to the contrary, we are, therefore, constrained to reverse the Tax Court on this point and to
hold that the value of a share in the said mining company on August 22, 1951 in the Philippine market
was P.325 as claimed by respondents..chanroblesvirtualawlibrarychanrobles virtual law library
It should be noted that the petitioner and the Tax Court valued each share of stock of P.38 on the basis
of the declaration made by the estate in its preliminary return. Patently, this should not have been the
case, in view of the fact that the ancillary administrator had reserved and availed of his legal right to
have the properties of the estate declared at their fair market value as of six months from the time the
decedent died..chanroblesvirtualawlibrarychanrobles virtual law library
On the fifth issue, we shall consider the various deductions, from the allowance or disallowance of
which by the Tax Court, both petitioner and respondents have
appealed..chanroblesvirtualawlibrarychanrobles virtual law library
Petitioner, in this regard, contends that no evidence of record exists to support the allowance of the
sum of P8,604.39 for the following expenses:.
1) Administrator's fee P1,204.34
2) Attorney's fee 6,000.00
3) Judicial and Administrative expenses   2,052.55
Total Deductions P8,604.39
An examination of the record discloses, however, that the foregoing items were considered deductible
by the Tax Court on the basis of their approval by the probate court to which said expenses, we may
presume, had also been presented for consideration. It is to be supposed that the probate court would
not have approved said items were they not supported by evidence presented by the estate. In allowing
the items in question, the Tax Court had before it the pertinent order of the probate court which was
submitted in evidence by respondents. (Exh. "AA-2", p. 100, record). As the Tax Court said, it found
no basis for departing from the findings of the probate court, as it must have been satisfied that those
expenses were actually incurred. Under the circumstances, we see no ground to reverse this finding of
fact which, under Republic Act of California National Association, which it would appear, that while
still living, Walter G. Stevenson obtained we are not inclined to pass upon the claim of respondents in
respect to the additional amount of P86.52 for funeral expenses which was disapproved by the court a
quo for lack of evidence.chanroblesvirtualawlibrarychanrobles virtual law library
In connection with the deduction of P652.50 representing the amount of realty taxes paid in 1951 on
the decedent's two parcels of land in Baguio City, which respondents claim was disallowed by the Tax
Court, we find that this claim has in fact been allowed. What happened here, which a careful review of
the record will reveal, was that the Tax Court, in itemizing the liabilities of the estate, viz:
P1,204.3
1) Administrator's fee 4
2) Attorney's fee 6,000.00
3) Judicial and Administration expenses as of August 9, 1952   2,052.55
P9,256.8
Total 9
added the P652.50 for realty taxes as a liability of the estate, to the P1,400.05 for judicial and
administration expenses approved by the court, making a total of P2,052.55, exactly the same figure
which was arrived at by the Tax Court for judicial and administration expenses. Hence, the difference
between the total of P9,256.98 allowed by the Tax Court as deductions, and the P8,604.39 as found by
the probate court, which is P652.50, the same amount allowed for realty taxes. An evident oversight
has involuntarily been made in omitting the P2,000.00 for funeral expenses in the final computation.
This amount has been expressly allowed by the lower court and there is no reason why it should not be.
.chanroblesvirtualawlibrarychanrobles virtual law library
We come now to the other claim of respondents that pursuant to section 89(b) (1) in relation to section
89(a) (1) (E) and section 89(d), National Internal Revenue Code, the amount of P10,022.47 should
have been allowed the estate as a deduction, because it represented an indebtedness of the decedent
incurred during his lifetime. In support thereof, they offered in evidence a duly certified claim,
presented to the probate court in California by the Bank of California National Association, which it
would appear, that while still living, Walter G. Stevenson obtained a loan of $5,000.00 secured by
pledge on 140,000 of his shares of stock in the Mindanao Mother Lode Mines, Inc. (Exhs. "Q-Q4", pp.
53-59, record). The Tax Court disallowed this item on the ground that the local probate court had not
approved the same as a valid claim against the estate and because it constituted an indebtedness in
respect to intangible personal property which the Tax Court held to be exempt from inheritance
tax.chanroblesvirtualawlibrarychanrobles virtual law library
For two reasons, we uphold the action of the lower court in disallowing the
deduction.chanroblesvirtualawlibrarychanrobles virtual law library
Firstly, we believe that the approval of the Philippine probate court of this particular indebtedness of
the decedent is necessary. This is so although the same, it is averred has been already admitted and
approved by the corresponding probate court in California, situs of the principal or domiciliary
administration. It is true that we have here in the Philippines only an ancillary administration in this
case, but, it has been held, the distinction between domiciliary or principal administration and ancillary
administration serves only to distinguish one administration from the other, for the two proceedings are
separate and independent.8 The reason for the ancillary administration is that, a grant of administration
does not ex proprio vigore, have any effect beyond the limits of the country in which it was granted.
Hence, we have the requirement that before a will duly probated outside of the Philippines can have
effect here, it must first be proved and allowed before our courts, in much the same manner as wills
originally presented for allowance therein.9 And the estate shall be administered under letters
testamentary, or letters of administration granted by the court, and disposed of according to the will as
probated, after payment of just debts and expenses of administration.10 In other words, there is a
regular administration under the control of the court, where claims must be presented and approved,
and expenses of administration allowed before deductions from the estate can be authorized.
Otherwise, we would have the actuations of our own probate court, in the settlement and distribution of
the estate situated here, subject to the proceedings before the foreign court over which our courts have
no control. We do not believe such a procedure is countenanced or contemplated in the Rules of
Court.chanroblesvirtualawlibrarychanrobles virtual law library
Another reason for the disallowance of this indebtedness as a deduction, springs from the provisions of
Section 89, letter (d), number (1), of the National Internal Revenue Code which reads:
(d) Miscellaneous provisions - (1) No deductions shall be allowed in the case of a non-resident not a
citizen of the Philippines unless the executor, administrator or anyone of the heirs, as the case may be,
includes in the return required to be filed under section ninety-three the value at the time of his death of
that part of the gross estate of the non-resident not situated in the Philippines."
In the case at bar, no such statement of the gross estate of the non-resident Stevenson not situated in
the Philippines appears in the three returns submitted to the court or to the office of the petitioner
Collector of Internal Revenue. The purpose of this requirement is to enable the revenue officer to
determine how much of the indebtedness may be allowed to be deducted, pursuant to (b), number (1)
of the same section 89 of the Internal Revenue Code which provides:
(b) Deductions allowed to non-resident estates. - In the case of a non-resident not a citizen of the
Philippines, by deducting from the value of that part of his gross estate which at the time of his death is
situated in the Philippines - chanrobles virtual law library
(1) Expenses, losses, indebtedness, and taxes. - That proportion of the deductions specified in
paragraph (1) of subjection (a) of this section11 which the value of such part bears the value of his
entire gross estate wherever situated;"
In other words, the allowable deduction is only to the extent of the portion of the indebtedness which is
equivalent to the proportion that the estate in the Philippines bears to the total estate wherever situated.
Stated differently, if the properties in the Philippines constitute but 1/5 of the entire assets wherever
situated, then only 1/5 of the indebtedness may be deducted. But since, as heretofore adverted to, there
is no statement of the value of the estate situated outside the Philippines, no part of the indebtedness
can be allowed to be deducted, pursuant to Section 89, letter (d), number (1) of the Internal Revenue
Code.chanroblesvirtualawlibrarychanrobles virtual law library
For the reasons thus stated, we affirm the ruling of the lower court disallowing the deduction of the
alleged indebtedness in the sum of P10,022.47.chanroblesvirtualawlibrarychanrobles virtual law
library
In recapitulation, we hold and declare that:
(a) only the one-half (1/2) share of the decedent Stevenson in the conjugal partnership property
constitutes his hereditary estate subject to the estate and inheritance taxes;chanrobles virtual law library
(b) the intangible personal property is not exempt from inheritance tax, there existing no complete total
reciprocity as required in section 122 of the National Internal Revenue Code, nor is the decedent's
estate entitled to an exemption of P4,000.00 in the computation of the estate tax;chanrobles virtual law
library
(c) for the purpose of the estate and inheritance taxes, the 210,000 shares of stock in the Mindanao
Mother Lode Mines, Inc. are to be appraised at P0.325 per share; andchanrobles virtual law library
(d) the P2,000.00 for funeral expenses should be deducted in the determination of the net asset of the
deceased Stevenson.
In all other respects, the decision of the Court of Tax Appeals is
affirmed.chanroblesvirtualawlibrarychanrobles virtual law library
Respondent's claim for interest on the amount allegedly overpaid, if any actually results after a
recomputation on the basis of this decision is hereby denied in line with our recent decision
in Collector of Internal Revenue v. St. Paul's Hospital (G.R. No. L-12127, May 29, 1959) wherein we
held that, "in the absence of a statutory provision clearly or expressly directing or authorizing such
payment, and none has been cited by respondents, the National Government cannot be required to pay
interest." chanrobles virtual law library
WHEREFORE, as modified in the manner heretofore indicated, the judgment of the lower court is
hereby affirmed in all other respects not inconsistent herewith. No costs. So
ordered.chanroblesvirtualawlibrarychanrobles virtual law library
Paras, C.J., Bengzon, Bautista Angelo, Labrador, Concepcion, R
G. R. No. 183622               February 8, 2012
MEROPE ENRIQUEZ VDA. DE CATALAN, Petitioner,
vs.
LOUELLA A. CATALAN-LEE, Respondent.
RESOLUTION
SERENO, J.:
Before us is a Petition for Review assailing the Court of Appeals (CA) Decision 1 and
Resolution2 regarding the issuance of letters of administration of the intestate estate of Orlando B.
Catalan.
The facts are as follows:
Orlando B. Catalan was a naturalized American citizen. After allegedly obtaining a divorce in the
United States from his first wife, Felicitas Amor, he contracted a second marriage with petitioner
herein.
On 18 November 2004, Orlando died intestate in the Philippines.
Thereafter, on 28 February 2005, petitioner filed with the Regional Trial Court (RTC) of Dagupan City
a Petition for the issuance of letters of administration for her appointment as administratrix of the
intestate estate of Orlando. The case was docketed as Special Proceedings (Spec. Proc.) No. 228.
On 3 March 2005, while Spec. Proc. No. 228 was pending, respondent Louella A. Catalan-Lee, one of
the children of Orlando from his first marriage, filed a similar petition with the RTC docketed as Spec.
Proc. No. 232.
The two cases were subsequently consolidated.
Petitioner prayed for the dismissal of Spec. Proc. No. 232 on the ground of litis pendentia, considering
that Spec. Proc. No. 228 covering the same estate was already pending.
On the other hand, respondent alleged that petitioner was not considered an interested person qualified
to file a petition for the issuance of letters of administration of the estate of Orlando. In support of her
contention, respondent alleged that a criminal case for bigamy was filed against petitioner before
Branch 54 of the RTC of Alaminos, Pangasinan, and docketed as Crim. Case No. 2699-A.
Apparently, Felicitas Amor filed a Complaint for bigamy, alleging that petitioner contracted a second
marriage to Orlando despite having been married to one Eusebio Bristol on 12 December 1959.
On 6 August 1998, the RTC had acquitted petitioner of bigamy.3 The trial court ruled that since the
deceased was a divorced American citizen, and since that divorce was not recognized under Philippine
jurisdiction, the marriage between him and petitioner was not valid.
Furthermore, it took note of the action for declaration of nullity then pending action with the trial court
in Dagupan City filed by Felicitas Amor against the deceased and petitioner. It considered the pending
action to be a prejudicial question in determining the guilt of petitioner for the crime of bigamy.
Finally, the trial court found that, in the first place, petitioner had never been married to Eusebio
Bristol.
On 26 June 2006, Branch 70 of the RTC of Burgos, Pangasinan dismissed the Petition for the issuance
of letters of administration filed by petitioner and granted that of private respondent. Contrary to its
findings in Crim. Case No. 2699-A, the RTC held that the marriage between petitioner and Eusebio
Bristol was valid and subsisting when she married Orlando. Without expounding, it reasoned further
that her acquittal in the previous bigamy case was fatal to her cause. Thus, the trial court held that
petitioner was not an interested party who may file a petition for the issuance of letters of
administration.4
After the subsequent denial of her Motion for Reconsideration, petitioner elevated the matter to the
Court of Appeals (CA) via her Petition for Certiorari, alleging grave abuse of discretion on the part of
the RTC in dismissing her Petition for the issuance of letters of administration.
Petitioner reiterated before the CA that the Petition filed by respondent should have been dismissed on
the ground of litis pendentia. She also insisted that, while a petition for letters of administration may
have been filed by an "uninterested person," the defect was cured by the appearance of a real party-in-
interest. Thus, she insisted that, to determine who has a better right to administer the decedent’s
properties, the RTC should have first required the parties to present their evidence before it ruled on
the matter.
On 18 October 2007, the CA promulgated the assailed Decision. First, it held that petitioner undertook
the wrong remedy. She should have instead filed a petition for review rather than a petition for
certiorari. Nevertheless, since the Petition for Certiorari was filed within the fifteen-day reglementary
period for filing a petition for review under Sec. 4 of Rule 43, the CA allowed the Petition and
continued to decide on the merits of the case. Thus, it ruled in this wise:
As to the issue of litis pendentia, we find it not applicable in the case. For litis pendentia to be a ground
for the dismissal of an action, there must be: (a) identity of the parties or at least such as to represent
the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being
founded on the same acts, and (c) the identity in the two cases should be such that the judgment which
may be rendered in one would, regardless of which party is successful, amount to res judicata in the
other. A petition for letters of administration is a special proceeding. A special proceeding is an
application or proceeding to establish the status or right of a party, or a particular fact. And, in contrast
to an ordinary civil action, a special proceeding involves no defendant or respondent. The only party in
this kind of proceeding is the petitioner of the applicant. Considering its nature, a subsequent petition
for letters of administration can hardly be barred by a similar pending petition involving the estate of
the same decedent unless both petitions are filed by the same person. In the case at bar, the petitioner
was not a party to the petition filed by the private respondent, in the same manner that the latter was
not made a party to the petition filed by the former. The first element of litis pendentia is wanting. The
contention of the petitioner must perforce fail.
Moreover, to yield to the contention of the petitioner would render nugatory the provision of the Rules
requiring a petitioner for letters of administration to be an "interested party," inasmuch as any person,
for that matter, regardless of whether he has valid interest in the estate sought to be administered, could
be appointed as administrator for as long as he files his petition ahead of any other person, in
derogation of the rights of those specifically mentioned in the order of preference in the appointment of
administrator under Rule 78, Section 6 of the Revised Rules of Court, which provides:
x x x           x x x          x x x
The petitioner, armed with a marriage certificate, filed her petition for letters of administration. As a
spouse, the petitioner would have been preferred to administer the estate of Orlando B. Catalan.
However, a marriage certificate, like any other public document, is only prima facie evidence of the
facts stated therein. The fact that the petitioner had been charged with bigamy and was acquitted
has not been disputed by the petitioner. Bigamy is an illegal marriage committed by contracting a
second or subsequent marriage before the first marriage has been dissolved or before the absent spouse
has been declared presumptively dead by a judgment rendered in a proper proceedings. The deduction
of the trial court that the acquittal of the petitioner in the said case negates the validity of her
subsequent marriage with Orlando B. Catalan has not been disproved by her. There was not
even an attempt from the petitioner to deny the findings of the trial court. There is therefore no
basis for us to make a contrary finding. Thus, not being an interested party and a stranger to the estate
of Orlando B. Catalan, the dismissal of her petition for letters of administration by the trial court is in
place.
x x x           x x x          x x x
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. No
pronouncement as to costs.
SO ORDERED.5 (Emphasis supplied)
Petitioner moved for a reconsideration of this Decision.6 She alleged that the reasoning of the CA was
illogical in stating, on the one hand, that she was acquitted of bigamy, while, on the other hand, still
holding that her marriage with Orlando was invalid. She insists that with her acquittal of the crime of
bigamy, the marriage enjoys the presumption of validity.
On 20 June 2008, the CA denied her motion.
Hence, this Petition.
At the outset, it seems that the RTC in the special proceedings failed to appreciate the finding of the
RTC in Crim. Case No. 2699-A that petitioner was never married to Eusebio Bristol. Thus, the trial
court concluded that, because petitioner was acquitted of bigamy, it follows that the first marriage with
Bristol still existed and was valid. By failing to take note of the findings of fact on the nonexistence of
the marriage between petitioner and Bristol, both the RTC and CA held that petitioner was not an
interested party in the estate of Orlando.
Second, it is imperative to note that at the time the bigamy case in Crim. Case No. 2699-A was
dismissed, we had already ruled that under the principles of comity, our jurisdiction recognizes a valid
divorce obtained by a spouse of foreign nationality. This doctrine was established as early as 1985 in
Van Dorn v. Romillo, Jr.7 wherein we said:
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. 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. xxx
We reiterated this principle in Llorente v. Court of Appeals,8 to wit:
In Van Dorn v. Romillo, Jr. we held 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. In the same case, the Court
ruled that aliens may obtain divorces abroad, provided they are valid according to their national
law.
Citing this landmark case, the Court held in Quita v. Court of Appeals, that once proven that
respondent was no longer a Filipino citizen when he obtained the divorce from petitioner, the
ruling in Van Dorn would become applicable and petitioner could "very well lose her right to
inherit" from him.
In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the respondent in his country, the
Federal Republic of Germany. There, we stated that divorce and its legal effects may be recognized
in the Philippines insofar as respondent is concerned in view of the nationality principle in our
civil law on the status of persons.
For failing to apply these doctrines, the decision of the Court of Appeals must be reversed. We hold
that the divorce obtained by Lorenzo H. Llorente from his first wife Paula was valid and
recognized in this jurisdiction as a matter of comity. xxx
Nonetheless, the fact of divorce must still first be proven as we have enunciated in Garcia v. Recio, 9 to
wit:
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. A divorce obtained abroad is
proven by the divorce decree itself. Indeed the best evidence of a judgment is the judgment itself. The
decree purports to be a written act or record of an act of an official body or tribunal of a foreign
country.
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
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.
The divorce decree between respondent and Editha Samson appears to be an authentic one issued by an
Australian family court. However, appearance is not sufficient; compliance with the aforementioned
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. The trial court ruled that it was
admissible, subject to petitioner's qualification. Hence, 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.
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.
Naturalization is the legal act of adopting an alien and clothing him with the political and civil rights
belonging to a citizen. 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." 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.
Since the divorce was a defense raised by respondent, the burden of proving the pertinent Australian
law validating it falls squarely upon him.
It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign
laws.1âwphi1 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. The power
of judicial notice must be exercised with caution, and every reasonable doubt upon the subject should
be resolved in the negative. (Emphasis supplied)
It appears that the trial court no longer required petitioner to prove the validity of Orlando’s divorce
under the laws of the United States and the marriage between petitioner and the deceased. Thus, there
is a need to remand the proceedings to the trial court for further reception of evidence to establish the
fact of divorce.
Should petitioner prove the validity of the divorce and the subsequent marriage, she has the
preferential right to be issued the letters of administration over the estate. Otherwise, letters of
administration may be issued to respondent, who is undisputedly the daughter or next of kin of the
deceased, in accordance with Sec. 6 of Rule 78 of the Revised Rules of Court.
This is consistent with our ruling in San Luis v. San Luis,10 in which we said:
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,
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.
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 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.
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.
(Emphasis supplied)
Thus, it is imperative for the trial court to first determine the validity of the divorce to ascertain the
rightful party to be issued the letters of administration over the estate of Orlando B. Catalan.
WHEREFORE, premises considered, the Petition is hereby PARTIALLY GRANTED. The
Decision dated 18 October 2007 and the Resolution dated 20 June 2008 of the Court of Appeals are
hereby REVERSED and SET ASIDE. Let this case be REMANDED to Branch 70 of the Regional
Trial Court of Burgos, Pangasinan for further proceedings in accordance with this Decision.
SO ORDERED.
.R. No. 178551               October 11, 2010
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and MINISTRY OF PUBLIC
HEALTH-KUWAIT Petitioners,
vs.
MA. JOSEFA ECHIN, Respondent.
DECISION
CARPIO MORALES, J.:
Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation in behalf of its
principal-co-petitioner, the Ministry of Public Health of Kuwait (the Ministry), for the position of
medical technologist under a two-year contract, denominated as a Memorandum of Agreement
(MOA), with a monthly salary of US$1,200.00.
Under the MOA,1 all newly-hired employees undergo a probationary period of one (1) year and are
covered by Kuwait’s Civil Service Board Employment Contract No. 2.
Respondent was deployed on February 17, 2000 but was terminated from employment on February 11,
2001, she not having allegedly passed the probationary period.
As the Ministry denied respondent’s request for reconsideration, she returned to the Philippines on
March 17, 2001, shouldering her own air fare.
On July 27, 2001, respondent filed with the National Labor Relations Commission (NLRC) a
complaint2 for illegal dismissal against petitioner ATCI as the local recruitment agency, represented by
petitioner, Amalia Ikdal (Ikdal), and the Ministry, as the foreign principal.
By Decision3 of November 29, 2002, the Labor Arbiter, finding that petitioners neither showed that
there was just cause to warrant respondent’s dismissal nor that she failed to qualify as a regular
employee, held that respondent was illegally dismissed and accordingly ordered petitioners to pay her
US$3,600.00, representing her salary for the three months unexpired portion of her contract.
On appeal of petitioners ATCI and Ikdal, the NLRC affirmed the Labor Arbiter’s decision by
Resolution4 of January 26, 2004. Petitioners’ motion for reconsideration having been denied by
Resolution5 of April 22, 2004, they appealed to the Court of Appeals, contending that their principal,
the Ministry, being a foreign government agency, is immune from suit and, as such, the immunity
extended to them; and that respondent was validly dismissed for her failure to meet the performance
rating within the one-year period as required under Kuwait’s Civil Service Laws. Petitioners further
contended that Ikdal should not be liable as an officer of petitioner ATCI.
By Decision6 of March 30, 2007, the appellate court affirmed the NLRC Resolution.
In brushing aside petitioners’ contention that they only acted as agent of the Ministry and that they
cannot be held jointly and solidarily liable with it, the appellate court noted that under the law, a
private employment agency shall assume all responsibilities for the implementation of the contract of
employment of an overseas worker, hence, it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of employment.
As to Ikdal’s liability, the appellate court held that under Sec. 10 of Republic Act No. 8042, the
"Migrant and Overseas Filipinos’ Act of 1995," corporate officers, directors and partners of a
recruitment agency may themselves be jointly and solidarily liable with the recruitment agency for
money claims and damages awarded to overseas workers.
Petitioners’ motion for reconsideration having been denied by the appellate court by Resolution7 of
June 27, 2007, the present petition for review on certiorari was filed.
Petitioners maintain that they should not be held liable because respondent’s employment contract
specifically stipulates that her employment shall be governed by the Civil Service Law and
Regulations of Kuwait. They thus conclude that it was patent error for the labor tribunals and the
appellate court to apply the Labor Code provisions governing probationary employment in deciding the
present case.
Further, petitioners argue that even the Philippine Overseas Employment Act (POEA) Rules relative to
master employment contracts (Part III, Sec. 2 of the POEA Rules and Regulations) accord respect to
the "customs, practices, company policies and labor laws and legislation of the host country."
Finally, petitioners posit that assuming arguendo that Philippine labor laws are applicable, given that
the foreign principal is a government agency which is immune from suit, as in fact it did not sign any
document agreeing to be held jointly and solidarily liable, petitioner ATCI cannot likewise be held
liable, more so since the Ministry’s liability had not been judicially determined as jurisdiction was not
acquired over it.
The petition fails.
Petitioner ATCI, as a private recruitment agency, cannot evade responsibility for the money claims of
Overseas Filipino workers (OFWs) which it deploys abroad by the mere expediency of claiming that
its foreign principal is a government agency clothed with immunity from suit, or that such foreign
principal’s liability must first be established before it, as agent, can be held jointly and solidarily liable.
In providing for the joint and solidary liability of private recruitment agencies with their foreign
principals, Republic Act No. 8042 precisely affords the OFWs with a recourse and assures them of
immediate and sufficient payment of what is due them. Skippers United Pacific v. Maguad 8 explains:
. . . [T]he obligations covenanted in the recruitment agreement entered into by and between the
local agent and its foreign principal are not coterminous with the term of such agreement so that
if either or both of the parties decide to end the agreement, the responsibilities of such parties towards
the contracted employees under the agreement do not at all end, but the same extends up to and until
the expiration of the employment contracts of the employees recruited and employed pursuant to the
said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the
law governing the employment of workers for foreign jobs abroad was enacted. (emphasis
supplied)
The imposition of joint and solidary liability is in line with the policy of the state to protect and
alleviate the plight of the working class.9 Verily, to allow petitioners to simply invoke the immunity
from suit of its foreign principal or to wait for the judicial determination of the foreign principal’s
liability before petitioner can be held liable renders the law on joint and solidary liability inutile.
As to petitioners’ contentions that Philippine labor laws on probationary employment are not
applicable since it was expressly provided in respondent’s employment contract, which she voluntarily
entered into, that the terms of her engagement shall be governed by prevailing Kuwaiti Civil Service
Laws and Regulations as in fact POEA Rules accord respect to such rules, customs and practices of the
host country, the same was not substantiated.
Indeed, a contract freely entered into is considered the law between the parties who can establish
stipulations, clauses, terms and conditions as they may deem convenient, including the laws which they
wish to govern their respective obligations, as long as they are not contrary to law, morals, good
customs, public order or public policy.
It is hornbook principle, however, that the party invoking the application of a foreign law has the
burden of proving the law, under the doctrine of processual presumption which, in this case, petitioners
failed to discharge. The Court’s ruling in EDI-Staffbuilders Int’l., v. NLRC10 illuminates:
In the present case, the employment contract signed by Gran specifically states that Saudi Labor Laws
will govern matters not provided for in the contract (e.g. specific causes for termination, termination
procedures, etc.). Being the law intended by the parties (lex loci intentiones) to apply to the contract,
Saudi Labor Laws should govern all matters relating to the termination of the employment of Gran.
In international law, the party who wants to have a foreign law applied to a dispute or case has the
burden of proving the foreign law. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. He is
presumed to know only domestic or forum law.
Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the matter; thus, the
International Law doctrine of presumed-identity approach or processual presumption comes into play.
Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign
law is the same as ours. Thus, we apply Philippine labor laws in determining the issues presented
before us. (emphasis and underscoring supplied)
The Philippines does not take judicial notice of foreign laws, hence, they must not only be alleged;
they must be proven. To prove a foreign law, the party invoking it must present a copy thereof and
comply with Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. — The record of public documents referred to in paragraph (a) of
Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or
by a copy attested by the officer having the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the certificate may be made by
a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any
officer in the foreign service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office. (emphasis supplied)
SEC. 25. What attestation of copy must state. — Whenever a copy of a document or record is attested
for the purpose of the evidence, the attestation must state, in substance, that the copy is a correct copy
of the original, or a specific part thereof, as the case may be. The attestation must be under the official
seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal
of such court.
To prove the Kuwaiti law, petitioners submitted the following: MOA between respondent and the
Ministry, as represented by ATCI, which provides that the employee is subject to a probationary period
of one (1) year and that the host country’s Civil Service Laws and Regulations apply; a translated
copy11 (Arabic to English) of the termination letter to respondent stating that she did not pass the
probation terms, without specifying the grounds therefor, and a translated copy of the certificate of
termination,12 both of which documents were certified by Mr. Mustapha Alawi, Head of the
Department of Foreign Affairs-Office of Consular Affairs Inslamic Certification and Translation Unit;
and respondent’s letter13 of reconsideration to the Ministry, wherein she noted that in her first eight (8)
months of employment, she was given a rating of "Excellent" albeit it changed due to changes in her
shift of work schedule.
These documents, whether taken singly or as a whole, do not sufficiently prove that respondent was
validly terminated as a probationary employee under Kuwaiti civil service laws. Instead of submitting
a copy of the pertinent Kuwaiti labor laws duly authenticated and translated by Embassy
officials thereat, as required under the Rules, what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the MOA and the termination
letter which does not prove at all that Kuwaiti civil service laws differ from Philippine laws and
that under such Kuwaiti laws, respondent was validly terminated. Thus the subject certifications
read:
xxxx
This is to certify that the herein attached translation/s from Arabic to English/Tagalog and or vice versa
was/were presented to this Office for review and certification and the same was/were found to be in
order. This Office, however, assumes no responsibility as to the contents of the document/s.
This certification is being issued upon request of the interested party for whatever legal purpose it may
serve. (emphasis supplied)1avvphi1
Respecting Ikdal’s joint and solidary liability as a corporate officer, the same is in order too following
the express provision of R.A. 8042 on money claims, viz:
SEC. 10. Money Claims.—Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual moral, exemplary and other forms of
damages.
The liability of the principal/employer and the recruitment/placement agency for any and all claims
under this section shall be joint and several. This provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. The performance bond to be
filed by the recruitment/placement agency, as provided by law, shall be answerable for all money
claims or damages that may be awarded to the workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors and partners as the case may be, shall themselves
be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and
damages. (emphasis and underscoring supplied)
WHEREFORE, the petition is DENIED.
SO ORDERED.
. No. 156330               November 19, 2014
NEDLLOYD LIJNEN B.V. ROTTERDAM and THE EAST ASIATIC CO., LTD., Petitioners,
vs.
GLOW LAKS ENTERPRISES, LTD., Respondent.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari1 filed pursuant to Ruic 45 of the Revised Rules of Comi,
primarily assailing the 11 December 2002 Resolution rendered by the Special Former Sixteenth
Division of the Court of Appeals in CA-G.R. CV No. 48277,2 the decretal portion of which states:
WHEREFORE, the appeal is GRANTED and the April 29. 1994 Decision of the Regional Trial Court
of Manila, Branch 52 thereof' in Civil Case No. 88-45595, SET ASIDE. Nedlloyd Lijncn B.V.
Rotterdam and The East Asiatic Co., Ltd arc ordered to pay Glow l ,aks Enterprises, I ,td. the
following:
1. The invoice value of the goodslost worth $53,640.00, or its equivalent in Philippine
currency;
2. Attorney’s fees of ₱50,000.00; and
3. Costs.3
The Facts
Petitioner Nedlloyd Lijnen B.V. Rotterdam (Nedlloyd) is a foreign corporation engaged in the business
of carrying goods by sea, whose vessels regularly call at the port of Manila. It is doing business in the
Philippines thru its local ship agent, co-petitioner East Asiatic Co., Ltd. (East Asiatic).
Respondent Glow Laks Enterprises,Ltd., is likewise a foreign corporation organized and existing under
the laws of Hong Kong. It is not licensed to do, and it is not doing business in, the Philippines.
On or about 14 September 1987, respondent loaded on board M/S Scandutch at the Port of Manila a
total 343 cartoons of garments, complete and in good order for pre-carriage tothe Port of Hong Kong.
The goods covered by Bills of Lading Nos. MHONX-2 and MHONX-34 arrived in good condition in
Hong Kong and were transferred to M/S Amethyst for final carriage to Colon, Free Zone, Panama.
Both vessels, M/S Scandutch and M/S Amethyst, are owned by Nedlloyd represented in the Phlippines
by its agent, East Asiatic. The goods which were valued at US$53,640.00 was agreed to be released to
the consignee, Pierre Kasem, International, S.A., upon presentation of the original copies of the
covering bills of lading.5 Upon arrival of the vessel at the Port of Colon on 23 October 1987,
petitioners purportedly notified the consignee of the arrival of the shipments, and its custody was
turned over tothe National Ports Authority in accordance with the laws, customs regulations and
practice of trade in Panama. By an unfortunate turn ofevents, however, unauthorized persons managed
to forge the covering bills of lading and on the basis of the falsified documents, the ports authority
released the goods.
On 16 July 1988, respondent filed a formal claim with Nedlloyd for the recovery of the amount of
US$53,640.00 representing the invoice value of the shipment but to no avail.6 Claiming that petitioners
are liable for the misdelivery of the goods, respondent initiated Civil Case No. 88-45595 before the
Regional Trial Court (RTC) of Manila, Branch 52, seeking for the recovery of the amount of
US$53,640.00, including the legal interest from the date of the first demand.7
In disclaiming liability for the misdelivery of the shipments, petitioners asserted in their Answer 8 that
they were never remiss in their obligation as a common carrier and the goods were discharged in good
order and condition into the custody of the National Ports Authority of Panama in accordance with the
Panamanian law. They averred that they cannot be faulted for the release of the goods to unauthorized
persons, their extraordinary responsibility as a common carrier having ceased at the time the
possession of the goods were turned over to the possession of the port authorities.
After the Pre-Trial Conference, trial on the merits ensued. Both parties offered testimonial and
documentary evidence to support their respective causes. On 29 April 2004, the RTC rendered a
Decision9 ordering the dismissal of the complaint but granted petitioners’ counterclaims. In effect,
respondent was directed to pay petitioners the amount of ₱120,000.00 as indemnification for the
litigation expenses incurred by the latter. In releasing the common carrier from liability for the
misdelivery of the goods, the RTC ruled that Panama law was duly proven during the trial and
pursuant to the said statute, carriers of goods destined to any Panama port of entry have to discharge
their loads into the custody of Panama Ports Authority to make effective government collection of port
dues, customs duties and taxes. The subsequent withdrawal effected by unauthorized persons on the
strength of falsified bills of lading does not constitute misdelivery arising from the fault of the common
carrier. The decretal part of the RTC Decision reads: WHEREFORE, judgment is renderedfor
[petitioners] and against [Respondent], ordering the dismissal of the complaint and ordering the latter
to pay [petitioners] the amount of ONE HUNDRED TWENTY THOUSAND PESOS (₱120,000.00)
on their counterclaims.
Cost against [Respondent].10
On appeal, the Court of Appeals reversed the findings of the RTC and held that foreign laws were not
proven in the manner provided by Section 24, Rule 132 of the Revised Rules of Court, and therefore, it
cannot be given full faith and credit.11 For failure to prove the foreign law and custom, it is presumed
that foreign laws are the sameas our local or domestic or internal law under the doctrine of processual
presumption. Under the New Civil Code, the discharge of the goods intothe custody of the ports
authority therefore does not relieve the commoncarrier from liability because the extraordinary
responsibility of the common carriers lasts until actual or constructive delivery of the cargoes tothe
consignee or to the person who has the right to receive them. Absent any proof that the notify party or
the consignee was informed of the arrival of the goods, the appellate court held that the extraordinary
responsibility of common carriers remains. Accordingly, the Court of Appeals directed petitioners to
pay respondent the value of the misdelivered goods in the amount of US$53,640.00.
The Issues
Dissatisfied with the foregoing disquisition, petitioners impugned the adverse Court of Appeals
Decision before the Court on the following grounds:
I.
THERE IS ABSOLUTELY NO NEED TO PROVE PANAMANIAN LAWS BECAUSE
THEYHAD BEEN JUDICIALLY ADMITTED. AN ADMISSION BY A PARTY IN THE
COURSE OF THE PROCEEDINGS DOES NOT REQUIRE PROOF.
II.
BY PRESENTING AS EVIDENCE THE [GACETA] OFFICIAL OF REPUBLICA DE
PANAMA NO. 17.596 WHERE THE APPLICABLE PANAMANIAN LAWS WERE
OFFICIALLY PUBLISHED, AND THE TESTIMONY OF EXPERT WITNESSES,
PETITIONERS WERE ABLE TO PROVE THE LAWS OF PANAMA.
III.
IF WE HAVE TO CONCEDE TO THE COURT OF APPEALS’ FINDING THAT THERE
WAS FAILURE OF PROOF, THE LEGAL QUESTION PRESENTED TO THE
HONORABLE COURT SHOULD BE RESOLVED FAVORABLY BECAUSE THE
CARRIER DISCHARGED ITS DUTY WHETHER UNDER THE PANAMANIAN LAW
OR UNDER PHILIPPINE LAW.12
The Court’s Ruling
We find the petition bereft of merit.
It is well settled that foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. 13 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 Court14 which read: 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 foreigncountry, the certificate may be made by a secretary of the embassy or legation,
consul general, consul, vice- consul, or consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of
his office.
SEC. 25. What attestation of copy must state. — Whenever a copy of a document or record is attested
for the purpose of 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.
For a copy of a foreign public document to be admissible, the following requisites are mandatory: (1)
itmust be attested by the officer having legal custody of the records or by his deputy; and (2) it must be
accompanied by a certificate by a secretary of the embassy or legation, consul general, consul, vice-
consular or consular agent or foreign service officer, and with the seal of his office. 15 Such official
publication or copy must be accompanied, if the record is not kept in the Philippines, with a certificate
that the attesting officer has the legal custody thereof. 16 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. 17 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, and mustbe under
the official seal of the attesting officer. 18
Contrary to the contention of the petitioners, the Panamanian laws, particularly Law 42 and its
Implementing Order No. 7, were not duly proven in accordance with Rules of Evidence and as such, it
cannot govern the rights and obligations of the parties in the case at bar. While a photocopy of the
Gaceta Official of the Republica de Panama No. 17.596, the Spanish text of Law 42 which is
theforeign statute relied upon by the court a quoto relieve the common carrier from liability, was
presented as evidence during the trial of the case below, the same however was not accompanied by
the required attestation and certification.
It is explicitly required by Section 24, Rule 132 of the Revised Rules of Court that a copy of the statute
must be accompanied by a certificate of the officer who has legal custody of the records and a
certificate made by the secretary of the embassy or legation, consul general, consul, vice-consular or
by any officer in the foreign service of the Philippines stationed in the foreign country, and
authenticated by the seal of his office. The latter requirement is not merely a technicality but is
intended to justify the giving of full faith and credit to the genuineness of the document in a foreign
country.19 Certainly, the deposition of Mr. Enrique Cajigas, a maritime law practitioner in the Republic
of Panama, before the Philippine Consulate in Panama, is not the certificate contemplated by law. At
best, the deposition can be considered as an opinion of an expert witness who possess the required
special knowledge on the Panamanian laws but could not be recognized as proof of a foreign law, the
deponent not being the custodian of the statute who can guarantee the genuineness of the document
from a foreign country. To admit the deposition as proof of a foreign law is, likewise, a disavowal of
the rationaleof Section 24, Rule 132 of the Revised Rules of Court, which isto ensure authenticity of a
foreign law and its existence so as to justify its import and legal consequence on the event or
transaction in issue. The above rule, however, admits exceptions, and the Court in certain cases
recognized that Section 25, Rule132 of the Revised Rules of Court does not exclude the presentation of
other competent evidence to prove the existence of foreign law. In Willamete Iron and Steel Works v.
Muzzal20 for instance, we allowed the foreign law tobe established on the basis of the testimony in
open court during the trial in the Philippines of an attorney-atlaw in San Francisco, California, who
quoted the particular foreign law sought to be established.21 The ruling is peculiar to the facts.
Petitioners cannot invoke the Willamete ruling to secure affirmative relief since their so called expert
witness never appeared during the trial below and his deposition, that was supposed to establish the
existence of the foreign law, was obtained ex-parte.
It is worth reiterating at this point that under the rules of private international law, a foreign law must
be properly pleaded and proved as a fact. In the absence of pleading and proof, the laws of the foreign
country or state will be presumed to be the same as our local or domestic law. This is known as
processual presumption.22 While the foreign law was properly pleaded in the case at bar, it
was,however, proven not in the manner provided by Section 24, Rule 132 of the Revised Rules of
Court. The decision of the RTC, which proceeds from a disregard of specific rules cannot be
recognized.
Having settled the issue on the applicable Rule, we now resolve the issue of whether or not petitioners
are liable for the misdelivery of goods under Philippine laws.
Under the New Civil Code, common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligencein the vigilance over goods, according to
the circumstances of each case.23 Common carriers are responsible for loss, destruction or deterioration
of the goods unless the same is due to flood, storm, earthquake or other natural disaster or
calamity.24 Extraordinary diligence is that extreme care and caution which persons of unusual prudence
and circumspection use for securing or preserving their own property or rights.25 This expecting
standardimposed on common carriers in contract of carrier of goods is intended to tilt the scales in
favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for
the shipment.26 Hence, in case of loss of goods in transit, the common carrier is presumed under the
law to have been in fault or negligent.27
While petitioners concede that, as a common carrier, they are bound to observe extraordinary diligence
in the care and custody of the goods in their possession, they insist that they cannot be held liable for
the loss of the shipments, their extraordinary responsibility having ceased at the time the goods were
discharged into the custody of the customs arrastreoperator, who in turn took complete responsibility
over the care, storage and delivery of the cargoes. 28
In contrast, respondent, submits that the fact that the shipments were not delivered to the consignee as
statedin the bill of lading or to the party designated or named by the consignee, constitutes misdelivery
thereof, and under the law it is presumed that the common carrier is at fault or negligent if the goods
they transported, as in this case, fell into the hands of persons who have no right to receive them.
We sustain the position of the respondent.
Article 1736 and Article 1738 are the provisions in the New Civil Code which define the period when
the common carrier is required to exercise diligence lasts, viz:
Article 1736. The extraordinary responsibility of the common carrier lasts from the time the goodsare
unconditionally placed in the possession of, and received by the carrier for transportation until the
same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has
a right to receive them, without prejudice to the provisions of article 1738.
Article 1738. The extraordinary liability of the common carrier continues to be operative even during
the time the goods are stored in a warehouse of the carrier at the place of destination, until the
consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to
remove them or otherwise dispose of them.
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the
common carrier begins from the time the goods are delivered to the carrier. 29 This responsibility
remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the
shipper or owner exercises the right of stop page in transitu, and terminates only after the lapse of a
reasonable time for the acceptance, of the goods by the consignee or such other person entitled to
receive them.30
It was further provided in the samestatute that the carrier may be relieved from the responsibility for
loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the
consignee or to the person who has the right to receive them.31 In sales, actual delivery has been
defined as the ceding of the corporeal possession by the seller, and the actual apprehension of the
corporeal possession by the buyer or by some person authorized by him to receive the goods as his
representative for the purpose of custody or disposal.32 By the same token, there is actual delivery in
contracts for the transport of goods when possession has been turned over to the consignee or to his
duly authorized agent and a reasonable time is given him to remove the goods.33
In this case, there is no dispute that the custody of the goods was never turned over to the consignee or
his agents but was lost into the hands of unauthorized persons who secured possession thereof on the
strength of falsified documents. The loss or the misdelivery of the goods in the instant case gave rise to
the presumption that the common carrier is at fault or negligent.
A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary
vigilance over the goods it transported.34 When the goods shipped are either lost or arrived in damaged
condition, a presumption arises against the carrier of its failure to observe that diligence, and there
need not be an express finding of negligence to hold it liable.35 To overcome the presumption of
negligence, the common carrier must establish by adequateproof that it exercised extraordinary
diligence over the goods.36 It must do more than merely show that some other party could be
responsible for the damage.37
In the present case, petitioners failed to prove that they did exercise the degree of diligence required by
law over the goods they transported. Indeed, aside from their persistent disavowal of liability by
conveniently posing an excuse that their extraordinary responsibility isterminated upon release of the
goods to the Panamanian Ports Authority, petitioners failed to adduce sufficient evidence they
exercised extraordinary care to prevent unauthorized withdrawal of the shipments. Nothing in the New
Civil Code, however, suggests, even remotely, that the common carriers’ responsibility over the goods
ceased upon delivery thereof to the custom authorities. To the mind of this Court, the contract of
carriage remains in full force and effect even after the delivery of the goods to the port authorities; the
only delivery that releases it from their obligation to observe extraordinary care is the delivery to the
consignee or his agents. Even more telling of petitioners’ continuing liability for the goods transported
to the fact that the original bills of lading up to this time, remains in the possession of the notify party
or consignee. Explicit on this point is the provision of Article 353 of the Code of Commerce which
provides:
Article 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of
lading, by the contents of which the disputes which may arise regarding their execution and
performance shall be decided, no exceptions being admissible other than those of falsity and material
error in the drafting.
After the contract has been complied with, the bill of lading which the carrier has issued shall be
returned to him, and by virtue of the exchange of this title with the thing transported, the respective
obligations and actions shall be considered cancelled, unless in the same act the claim which the parties
may wish to reserve be reduced to writing, with the exception of that provided for in Article 366.
In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the
carrier, because of its loss or of any other cause, he must give the latter a receiptfor the goods
delivered, this receipt producing the same effects as the return of the bill of lading.
While surrender of the original bill of lading is not a condition precedent for the common carrier to
bedischarged from its contractual obligation, there must be, at the very least, an acknowledgement of
the delivery by signing the delivery receipt, if surrender of the original of the bill of lading is not
possible.38 There was neither surrender of the original copies of the bills of lading nor was there
acknowledgment of the delivery in the present case. This leads to the conclusion that the contract of
carriage still subsists and petitioners could be held liable for the breach thereof.
Petitioners could have offered evidence before the trial court to show that they exercised the highest
degree of care and caution even after the goods was turned over to the custom authorities, by promptly
notifying the consignee of its arrival at the P01i of Cristobal in order to afford them ample opportunity
to remove the cargoes from the port of discharge. We have scoured the records and found that neither
the consignee nor the notify paiiy was informed by the petitioners of the arrival of the goods, a crucial
fact indicative of petitioners' failure to observe extraordinary diligence in handling the goods entrusted
to their custody for transport. They could have presented proof to show that they exercised
extraordinary care but they chose in vain, full reliance to their cause on applicability of Panamanian
law to local jurisdiction. It is for this reason that we find petitioners liable for the misdelivery of the
goods. It is evident from the review of the records and by the evidence adduced by the respondent that
petitioners failed to rebut the prima facie presumption of negligence. We find no compelling reason to
depa1i from the ruling of the Court of Appeals that under the contract of carriage, petitioners are liable
for the value of the misdelivcred goods.
WHEREFORE, premises considered, the petition is hereby DENIED. The assailed Resolution of the
Court of Appeals is hereby AFFIRMED.
SO ORDERED.
IV. RULES OF ADMISSIBILITY 
V. G.R. No. 157177             February 11, 2008
VI. BANK OF THE PHILIPPINE ISLANDS, petitioner,
vs.
JESUSA P. REYES and CONRADO B. REYES, respondents.
VII. DECISION
VIII. AUSTRIA-MARTINEZ, J.:.
IX. Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking
to annul the Decision1 of the Court of Appeals (CA) dated October 29, 2002 as well as its
Resolution2 dated February 12, 2003, which affirmed with modification the Decision of the
Regional Trial Court (RTC) of Makati, Branch 142, in Civil Case No. 91-3453,3 requiring
Bank of Philippine Islands (petitioner) to return to spouses Jesusa P. Reyes and Conrado B.
Reyes (respondents) the amount of P100,000.00 plus interest and damages.
X. The conflicting versions of the parties are aptly summarized by the trial court, to wit:
XI. On December 7, 1990 at around 2:00 p.m., plaintiff Jesusa Reyes together with her daughter,
Joan Reyes, went to BPI Zapote Branch to open an ATM account, she being interested with
the ongoing promotions of BPI entitling every depositor with a deposit amounting
to P2,000.00 to a ticket with a car as its prize to be raffled every month.
XII. She was accommodated, in lieu of the bank manager Mr. Nicasio, by Cicero Capati (Pats)
who was an employee of the bank and in charge of the new accounts and time deposits
characteristically described as having homosexual inclinations. They were entertained by
Capati and were made to sit at a table occupied by a certain Liza.
XIII. Plaintiff informed Capati that they wanted to open an ATM account for the amount
of P200,000.00, P100,000.00 of which shall be withdrawn from her exiting savings account
with BPI bank which is account no. 0233-2433-88 and the other P100,000.00 will be given by
her in cash.
XIV. Capati allegedly made a mistake and prepared a withdrawal slip for P200,00.00 to be
withdrawn from her existing savings account with said bank and the plaintiff Jesusa Reyes
believing in good faith that Capati prepared the papers with the correct amount signed the
same unaware of the mistakes in figures.
XV. While she was being entertained by Capati, her daughter Joan Reyes was filling up the
signature cards and several other forms.
XVI. Minutes later after the slips were presented to the teller, Capati returned to where the plaintiff
was seating and informed the latter that the withdrawable balance could not
accommodate P200,000.00.
XVII. Plaintiff explained that she is withdrawing the amount of P100,000.00 only and then changed
and correct the figure two (2) into one (1) with her signature super-imposed thereto signifying
the change, afterwhich the amount of P100,000.00 in cash in two bundles containing 100
pieces of P500.00 peso bill were given to Capati with her daughter Joan witnessing the same.
 Thereafter Capati prepared a deposit slip for P200,000.00 in the name of plaintiff Jesusa
Reyes with the new account no. 0235-0767-48 and brought the same to the teller's booth.
XVIII. After a while, he returned and handed to the plaintiff her duplicate copy of her deposit to
account no. 0235-0767-48 reflecting the amount of P200,000.00 with receipt stamp showing
December 7, as the date.
XIX. Plaintiff and daughter then left.
XX. On December 14, 1990, Mrs. Jesusa received her express teller card from said bank.
XXI. Thereafter on December 26, 1990, plaintiff left for the United States (Exhs. "T", "U"- "U-1")
and returned to Manila on January 31, 1991 (Exhs. "V"-"V-1").
XXII. When she went to her pawnshop, she was made aware by her statement of account sent to her
by BPI bank that her ATM account only contained the amount of P100,000.00 with interest.
XXIII. She then sent her daughter to inquire, however, the bank manager assured her that they would
look into the matter.
XXIV. On February 6, 1991, plaintiff instructed Efren Luna, one of her employees, to update her
savings account passbook at the BPI with the folded deposit slip for P200,000.00 stapled at
the outer cover of said passbook. After presenting the passbook to be updated and when the
same was returned, Luna noticed that the deposit slip stapled at the cover was removed and
validated at the back portion thereof.
XXV. Thereafter, Luna returned with the passbook to the plaintiff and when the latter saw the
validation, she got angry.
XXVI. Plaintiff then asked the bank manager why the deposit slip was validated, whereupon the
manager assured her that the matter will be investigated into.
XXVII. When no word was heard as to the investigation made by the bank, Mrs. Reyes sent two (2)
demand letters thru her lawyer demanding return of the missing P100,000.00 plus interest
(Exhs. "B" and "C"). The same was received by defendant on July 25, 1991 and October 7,
1991, respectively.
XXVIII. The last letter prompted reply from defendant inviting plaintiff to sit down and discuss the
problem.
XXIX. The meeting resulted to the bank promising that Capati will be submitted to a lie detector test.
XXX. Plaintiff, however, never learned of the result of said test. Plaintiff filed this instant case.
XXXI. Defendant on the other hand claimed that Bank of the Philippine Island admitted that Jesusa
Reyes had effected a fund transfer in the amount of P100,000.00 from her ordinary savings
account to the express teller account she opened on December 7, 1990 (Exhs. "3" to "3-C"),
however, it was the only amount she deposited and no additional cash deposit of P100,000.00
was made. That plaintiff wanted to effect the transfer of P200,000.00 but the balance in her
account was not sufficient and could not accommodate the same. Plaintiff thereafter agreed to
reduce the amount to be withdrawn from P200,000.00 to P100,000.00 with plaintiff’s
signature superimposed on said corrections; that the original copy of the deposit slip was also
altered from P200,000.00 to P100,000.00, however, instead of plaintiff signing the same, the
clerk-in-charge of the bank, in this case Cicero Capati, signed the alteration himself for Jesusa
Reyes had already left without signing the deposit slip. The documents were subsequently
machine validated for the amount of P100,000.00 (Exhs. "2" and "4").
XXXII. Defendant claimed that there was actually no cash involved with the transactions which
happened on December 7, 1990 as contained in the bank’s teller tape (Exhs."1" to "1-C").
XXXIII. Defendant further claimed that when they subjected Cicero Capati to a lie detector test, the
latter passed the same with flying colors (Exhs. "5" to "5-C"), indicative of the fact that he
was not lying when he said that there really was no cash transaction involved when plaintiff
Jesusa Reyes went to the defendant bank on December 7, 1990; defendant further alleged that
they even went to the extent of informing Jesusa Reyes that her claim would not be given
credit (Exh. "6") considering that no such transaction was really made on December 7, 1990. 4
XXXIV. On August 12, 1994, the RTC issued a Decision5 upholding the versions of respondents, the
dispositive portion of which reads:
XXXV. WHEREFORE, premises considered, the Court finds in favor of the plaintiff Jesusa P. Reyes
and Conrado Reyes and against defendant Bank of the Philippine Islands ordering the latter
to:
XXXVI. 1. Return to plaintiffs their P100,000.00 with interest at 14% per annum from December 7,
1990;
XXXVII. 2. Pay plaintiffs P1,000,000.00 as moral damages;
XXXVIII. 2. Pay plaintiffs P350,000.00 as exemplary damages;
XXXIX. 3. Pay plaintiffs P250,000.00 for and attorney's fees.6
XL. The RTC found that petitioner's claim that respondent Jesusa deposited only P100,000.00
instead of P200,000.00 was hazy; that what should control was the deposit slip issued by the
bank to respondent, for there was no chance by which respondent could write the amount
of P200,000.00 without petitioner's employee noticing it and making the necessary
corrections; that it was deplorable to note that it was when respondent Jesusa's bankbook was
submitted to be updated after the lapse of several months when the alleged error claimed by
petitioner was corrected; that Article 1962 of the New Civil Code provides that a deposit is
constituted from the moment a person receives a thing belonging to another with the
obligation of safely keeping it and of returning the same; that under Article 1972, the
depositary is obliged to keep the thing safely and to return it when required to the depositor or
to his heirs and successors or to the person who may have been designated in the contract.
XLI. Aggrieved, petitioner appealed to the CA which in a Decision dated October 29, 2002
affirmed the RTC decision with modification as follows:
XLII. Nonetheless, the award of 14% interest per annum on the missing P100,000.00 can stand
some modification. The interest thereon should be 12% per annum, reckoned from May 12,
1991, the last day of the five day-grace period given by plaintiff-appellees' counsel under the
first demand letter dated May 6, 1991 (Exhibit B), or counted from May 7, 1991, the date
when defendant-appellant received said letter. Interest is demandable when the obligation
consist in the payment of money and the debtor incurs in delay.
XLIII. Also, we have to reduce the P1 million award of moral damages to a reasonable sum
of P50,000.00. Moral damages are not intended to enrich a plaintiff at the expense of a
defendant. They are awarded only to enable the injured party to obtain means, diversion, or
amusements that will serve to alleviate the moral suffering he has undergone, by reason of the
defendant's culpable action. The award of moral damages must be proportionate to the
suffering inflicted.
XLIV. In addition, we have to delete the award of P350,000.00 as exemplary damages. The absence
of malice and bad faith, as in this case, renders the award of exemplary damages improper.
XLV. Finally, we have to reduce the award of attorney's fees to a reasonable sum of P30,000.00, as
the prosecution of this case has not been attended with any unusual difficulty.
XLVI. WHEREFORE, with the modifications thus indicated, the judgment appealed from is in all
other respects AFFIRMED. Without costs.7
XLVII. In finding petitioner liable for the missing P100,000.00, the CA held that the RTC correctly
gave credence to the testimonies of respondent Jesusa and Joan Reyes to the effect that aside
from the fund transfer of P100,000.00 from Jesusa's savings account, Jesusa also made a cash
deposit of P100,000.00 in the afternoon of December 7, 1990; that it is unlikely for these two
to concoct a story of falsification against a banking institution of the stature of petitioner if
their claims were not true; that the duplicate copy of the deposit slip showed a deposit
of P200,000.00; this, juxtaposed with the fact that it was not machine-validated and the
original copy altered by the bank's clerk from P200,000.00 to P100,000.00 with the altered
amount "validated," is indicative of anomaly; that even if it was bank employee Cicero Capati
who prepared the deposit slip, Jesusa stood her ground and categorically denied having any
knowledge of the alteration therein made; that petitioner must account for the
missing P100,000.00 because it was the author of the loss; that banks are engaged in business
imbued with public interest and are under strict obligation to exercise utmost fidelity in
dealing with its clients, in seeing to it that the funds therein invested or by them received are
properly accounted for and duly posted in their ledgers.
XLVIII. Petitioner's motion for reconsideration was denied in a Resolution dated February 12, 2003.
XLIX. Hence, the present petition on the following grounds:
L. A. In affirming the decision of the trial court holding BPI liable for the amount
of P100,000.00 representing an alleged additional deposit of respondents, the Honorable
Court of Appeals gravely abused its discretion by resolving the issue based on a conjecture
and ignoring physical evidence in favor of testimonial evidence.
LI. B. The Court of Appeals gravely abused its discretion, being as it is contrary to law, in
holding BPI liable to respondents for the payment of interest at the rate of 12% per annum.
LII. C. This Honorable Court gravely abused its discretion, being as it is contrary to law, in
holding BPI liable for moral damages and attorney's fees at the reduced amounts
of P50,000.00 and P30,000.00, respectively. 8
LIII. The main issue for resolution is whether the CA erred in sustaining the RTC's finding that
respondent Jesusa made an initial deposit of P200,000.00 in her newly opened Express Teller
account on December 7, 1990.
LIV. The issue raises a factual question. The Court is not a trier of facts, its jurisdiction being
limited to reviewing only errors of law that may have been committed by the lower
courts.9 As a rule, the findings of fact of the trial court when affirmed by the CA are final and
conclusive and cannot be reviewed on appeal by this Court, as long as they are borne out by
the record or are based on substantial evidence.10 Such rule however is not absolute, but is
subject to well-established exceptions, which are: 1) when the inference made is manifestly
mistaken, absurd or impossible; 2) when there is a grave abuse of discretion; 3) when the
finding is grounded entirely on speculations, surmises or conjectures; 4) when the judgment of
the CA is based on a misapprehension of facts; 5) when the findings of facts are conflicting;
6) when the CA, in making its findings, went beyond the issues of the case, and those findings
are contrary to the admissions of both appellant and appellee; 7) when the findings of the CA
are contrary to those of the trial court; 8) when the findings of fact are conclusions without
citation of specific evidence on which they are based; 9) when the CA manifestly overlooked
certain relevant facts not disputed by the parties and which, if properly considered, would
justify a different conclusion; and 10) when the findings of fact of the CA are premised on the
absence of evidence and are contradicted by the evidence on record. 11 We hold that this case
falls under exception Nos. 1, 3, 4, and 9 which constrain us to resolve the factual issue.
LV. It is a basic rule in evidence that each party to a case must prove his own affirmative
allegations by the degree of evidence required by law.12 In civil cases, the party having the
burden of proof must establish his case by preponderance of evidence, 13 or that evidence
which is of greater weight or is more convincing than that which is in opposition to it. It does
not mean absolute truth; rather, it means that the testimony of one side is more believable than
that of the other side, and that the probability of truth is on one side than on the other. 14
LVI. Section 1, Rule 133 of the Rules of Court provides the guidelines for determining
preponderance of evidence, thus:
LVII. SECTION 1. Preponderance of evidence, how determined.- In civil cases, the party having
the burden of proof must establish his case by a preponderance of evidence. In determining
where the preponderance or superior weight of evidence on the issues involved lies the court
may consider all the facts and circumstances of the case, the witnesses' manner of testifying,
their intelligence, their means and opportunity of knowing the facts to which they are
testifying, the nature of the facts to which they testify, the probability or improbability of their
testimony, their interest or want of interest, and also their personal credibility so far as the
same legitimately appear upon the trial. The court may also consider the number of witnesses,
though the preponderance is not necessarily with the greater number.
LVIII. For a better perspective on the calibration of the evidence on hand, it must first be stressed
that the judge who had heard and seen the witnesses testify was not the same judge who
penned the decision. Thus, not having heard the testimonies himself, the trial judge or the
appellate court would not be in a better position than this Court to assess the credibility of
witnesses on the basis of their demeanor.
LIX. Hence, to arrive at the truth, we thoroughly reviewed the transcripts of the witnesses'
testimonies and examined the pieces of evidence on record.
LX. After a careful and close examination of the records and evidence presented by the parties, we
find that respondents failed to successfully prove by preponderance of evidence that
respondent Jesusa made an initial deposit of P200,000.00 in her Express Teller account.
LXI. Respondent Jesusa and her daughter Joan testified that at the outset, respondent Jesusa told
Capati that she was opening an Express Teller account for P200,000.00; that she was going to
withdraw and transfer P100,000.00 from her savings account to her new account, and that she
had an additional P100,000.00 cash. However, these assertions are not borne out by the other
evidence presented. Notably, it is not refuted that Capati prepared a withdrawal
slip15 for P200,000.00. This is contrary to the claim of respondent Jesusa that she instructed
Capati to make a fund transfer of only P100,000.00 from her savings account to the Express
Teller account she was opening. Yet, respondent Jesusa signed the withdrawal slip. We find it
strange that she would sign the withdrawal slip if her intention in the first place was to
withdraw only P100,000.00 from her savings account and deposit P100,000.00 in cash with
her.
LXII. Moreover, respondent Jesusa's claim that she signed the withdrawal slip without looking at
the amount indicated therein fails to convince us, for respondent Jesusa, as a businesswoman
in the regular course of business and taking ordinary care of her concerns,16 would make sure
that she would check the amount written on the withdrawal slip before affixing her signature.
Significantly, we note that the space provided for her signature is very near the space where
the amount of P200,000.00 in words and figures are written; thus, she could not have failed to
notice that the amount of P200,000.00 was written instead of P100,000.00.
 LXIII. The fact that respondent Jesusa initially intended to transfer the amount of P200,000.00 from CVI. ***4000.00 ***4000.00
her savings account to her new Express Teller account was further established by the teller's CVII. 152557 07DEC90 1601 288A 233069469
tape presented as petitioner's evidence and by the testimony of Emerenciana Torneros, the CVIII. ***2000.00
teller who had attended to respondent Jesusa's transactions. CIX. 152736 07DEC90 1601 288A 233254584
LXIV. The teller's tape,17 Exhibit "1" unequivocally shows the following data: CX. ***2000.00
LXV. 151159 07DEC90 1370 288A 233324299 CXI. 152849 07DEC90 0600 288A 231017585
LXVI. 151245 07DEC90 1601 288A 233243388 CXII. ***3150.00 686448
LXVII. ***200000.0018 CXIII. 152941 07DEC90 1790 288A 3135052255
LXVIII. BIG AMOUNT CXIV. ***2800.00 ***2800.00
LXIX. 151251 07DEC90 1601 288J 233243388 CXV. 153252 07DEC90 1601 288A 233098264
LXX. ***200000.00 CXVI. (Emphasis supplied)
LXXI. 151309 07DEC90 1601 288A 233243388 CXVII. The first column shows the exact time of the transactions; the second column shows the date
LXXII. ***200000.00 of the transactions; the third column shows the bank transaction code; the fourth column
LXXIII. PB BALANCE ERROR shows the teller's code; and the fifth column shows the client's account number. The teller's
LXXIV. BAL. 229,257.64 tape reflected various transactions involving different accounts on December 7, 1990 which
LXXV. 151338 07DEC90 1601 288A 233243388 included respondent Jesusa's Savings Account No. 233243388 and her new Express Teller
LXXVI. ***200000.00 Account No. 235076748. It shows that respondent Jesusa's initial intention to
LXXVII. BIG AMOUNT withdraw P200,000.00, not P100,000.00, from her Savings Account No. 233324299 was
LXXVIII. 151344 07DEC90 1601 288J 233243388 begun at 3 o'clock, 12 minutes and 45 seconds as shown in Exhibit "1-c."
LXXIX. ***200000.00 CXVIII. In explaining the entries in the teller's tape, Torneros testified that when she was processing
LXXX. 151404 07DEC90 1601 288A 233243388 respondent Jesusa's withdrawal in the amount of P200,000.00, her computer rejected the
LXXXI. ***200000.00 transaction because there was a discrepancy;21 thus, the word "BIG AMOUNT" appeared on
LXXXII. TOD the tape. "Big amount" means that the amount was so big for her to approve, 22 so she keyed in
LXXXIII. 151520 07DEC90 1601 288A 233320145 the amount again and overrode the transaction to be able to process the withdrawal using an
LXXXIV. ***2000.00 officer's override with the latter's approval.23 The letter "J" appears after Figure 288 in the
LXXXV. 151705 07DEC90 1789 288A 233324299 fourth column to show that she overrode the transaction. She then keyed again the amount
LXXXVI. ***22917.00 of P200,000.00 at 3 o'clock 13 minutes and 9 seconds; however, her computer rejected the
LXXXVII. 151727 07DEC90 1601 288A 233243388 transaction, because the balance she keyed in based on respondent Jesusa's passbook was
LXXXVIII. ***100000.00 wrong;24 thus appeared the phrase "balance error" on the tape, and the computer produced the
LXXXIX. BIG AMOUNT balance of P229,257.64, and so she keyed in the withdrawal of P200,000.00.25 Since it was a
XC. 151730 07DEC90 1601 288J 233243388 big amount, she again had to override it, so she could process the amount. However, the
XCI. ***100000.00 withdrawal was again rejected for the reason "TOD, overdraft,"26 which meant that the
XCII. 151746 07DEC90 1601 288A 233243388 amount to be withdrawn was more than the balance, considering that there was a debited
XCIII. ***100000.0019 amount of P30,935.16 reflected in respondent Jesusa's passbook, reducing the available
XCIV. 151810 07DEC90 1370 288A 235076748 balance to only P198,322.48.27
XCV. 151827 07DEC90 1790 288A 235076748 CXIX. Torneros then called Capati to her cage and told him of the insufficiency of respondent
XCVI. ***100000.00 ***100000.0020 Jesusa's balance.28 Capati then motioned respondent Jesusa to the teller's cage; and when she
XCVII. 151903 07DEC90 1301 288A 233282405 was already in front of the teller's cage, Torneros told her that she could not
XCVIII. 151914 07DEC90 1690 288A 235008955 withdraw P200,000.00 because of overdraft; thus, respondent Jesusa decided to just
XCIX. ***1778.05 withdraw P100,000.00.29
C. 152107 07DEC90 1601 288A 3333241381 CXX. This explains the alteration in the withdrawal slip with the superimposition of the figure "1"
CI. ***5000.00 on the figure "2" and the change of the word "two" to "one" to show that the withdrawn
CII. 152322 07DEC90 1601 288A 233314374 amount from respondent Jesusa's savings account was only P100,000.00, and that respondent
CIII. ***2000.00 Jesusa herself signed the alterations.
CIV. 152435 07DEC90 1370 288A 235076764 CXXI. The teller's tape showed that the withdrawal of the amount of P100,000.00 by fund transfer
CV. 152506 07DEC90 1790 288A 235076764 was resumed at 3 o'clock 17 minutes and 27 seconds; but since it was a big amount, there was
 a need to override it again, and the withdrawal/fund transfer was completed. At 3 o'clock 18 CXXVII.
minutes and 27 seconds, the amount of P100,000.00 was deposited to respondent Jesusa's new
Express Teller Account No. 235076748.
CXXII. The teller's tape definitely establishes the fact of respondent Jesusa's original intention to
withdraw the amount of P200,000.00, and not P100,000.00 as she claims, from her savings
account, to be transferred as her initial deposit to her new Express Teller account, the CXXVIII.
insufficiency of her balance in her savings account, and finally the fund transfer of the amount
of P100,000.00 from her savings account to her new Express Teller account. We give great
evidentiary weight to the teller's tape, considering that it is inserted into the bank's computer CXXIX.
terminal, which records the teller's daily transactions in the ordinary course of business, and CXXX.
there is no showing that the same had been purposely manipulated to prove petitioner's claim. CXXXI.
CXXIII. Respondent Jesusa's bare claim, although corroborated by her daughter, that the former
deposited P100,000.00 cash in addition to the fund transfer of P100,000.00, is not established
by physical evidence. While the duplicate copy of the deposit slip30 was in the amount
of P200,000.00 and bore the stamp mark of teller Torneros, such duplicate copy failed to CXXXII.
show that there was a cash deposit of P100,000.00. An examination of the deposit slip shows CXXXIII.
that it did not contain any entry in the breakdown portion for the specific denominations of the CXXXIV.
cash deposit. This demolishes the testimonies of respondent Jesusa and her daughter Joan.
CXXIV. Furthermore, teller Torneros's explanation of why the duplicate copy of the deposit slip in the CXXXV.
amount of P200,000.00 bore the teller's stamp mark is convincing and consistent with logic
and the ordinary course of business. She testified that Capati went to her cage bringing with
him a withdrawal slip for P200,000.00 signed by respondent Jesusa, two copies of the deposit CXXXVII.
slip for P200,000.00 in respondent Jesusa's name for her new Express Teller account, and the
latter's savings passbook reflecting a balance of P249,657.6431 as of November 19,
1990.32 Thus, at first glance, these appeared to Torneros to be sufficient for the withdrawal CXXXIX.
of P200,000.00 by fund transfer. Capati then got her teller's stamp mark, stamped it on the
duplicate copy of the deposit slip, and gave the duplicate to respondent Jesusa, while the CXL.
original copy33 of the deposit slip was left in her cage.34 However, as Torneros started
processing the transaction, it turned out that respondent Jesusa's balance was insufficient to
accommodate the P200,000.00 fund transfer as narrated earlier.
CXXV. Since respondent Jesusa had signed the alteration in the withdrawal slip and had already left
the teller's counter thereafter and Capati was still inside the teller's cage, Torneros asked
Capati about the original deposit slip and the latter told her, "Ok naman iyan,"35 and Capati
superimposed the figures "1" on "2" on the deposit slip36 to reflect the initial deposit
of P100,000.00 for respondent Jesusa's new Express Teller account and signed the alteration.
Torneros then machine-validated the deposit slip. Thus, the duplicate copy of the deposit slip, CXLII.
which bore Torneros’s stamp mark and which was given to respondent Jesusa prior to the
processing of her transaction, was not machine-validated unlike the original copy of the
deposit slip.
CXXVI. While the fact that the alteration in the original deposit slip was signed by Capati and not by
respondent Jesusa herself was a violation of the bank's policy requiring the depositor to sign
the correction,37 nevertheless, we find that respondents failed to satisfactorily establish by
preponderance of evidence that indeed there was an additional cash of P100,000.00 deposited
to the new Express Teller account.
CXLIV.
Physical evidence is a mute but eloquent manifestation of truth, and it ranks high in our
hierarchy of trustworthy evidence.38 We have, on many occasions, relied principally upon
physical evidence in ascertaining the truth. Where the physical evidence on record runs
counter to the testimonial evidence of the prosecution witnesses, we consistently rule that the
physical evidence should prevail.39
In addition, to uphold the declaration of the CA that it is unlikely for respondent Jesusa and
her daughter to concoct a false story against a banking institution is to give weight to
conjectures and surmises, which we cannot countenance.
In fine, respondents failed to establish their claim by preponderance of evidence.
Considering the foregoing, we find no need to tackle the other issues raised by petitioner.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated
October 29, 2002 as well as its Resolution dated February 12, 2003 are
hereby REVERSED and SET ASIDE. The complaint filed by respondents, together with the
counterclaim of petitioner, is DISMISSED.
No costs.
SO ORDERED.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JOSE ENCARNACION
MALIMIT alias "MANOLO", Accused- appellant.
CXXXVI. DECISION
CXXXVIII. FRANCISCO, J.:
Appellant Jose Encarnacion Malimit, charged with 1 and convicted of the special complex
crime of robbery with homicide, 2 was meted by the trial court 3 the penalty of reclusion
perpetua. He was also ordered to indemnify the heirs of Onofre Malaki the sum of Fifty
Thousand Pesos (P50,000.00) without subsidiary imprisonment in case of insolvency, and to
pay the cost. 4
In this appeal, appellant asks for his acquittal alleging that the trial court committed the
following errors, to wit:chanrob1es virtual 1aw library
CXLI. "I
THE TRIAL COURT ERRED IN GIVING CREDENCE TO THE UNRELIABLE
TESTIMONIES OF THE PROSECUTION WITNESSES ON THEIR ALLEGED
IDENTIFICATION OF THE ACCUSED-APPELLANT AS THE PERPETRATOR OF THE
CRIME DESPITE THE FACT (SIC) THEY REVEALED THEIR ALLEGED
‘KNOWLEDGE’ OF THE CRIME MORE THAN FIVE MONTHS AFTER THE
INCIDENT.
CXLIII. II
 THE TRIAL COURT ERRED IN ADMITTING AS EVIDENCE THE WALLET AND ITS
CONTENTS ALTHOUGH THE CIRCUMSTANCES WHICH LEAD TO ITS
PRODUCTION WAS OBTAINED IN VIOLATION OF THE CONSTITUTIONAL
RIGHTS OF THE ACCUSED.
CXLV. III
CXLVI.
THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED-APPELLANT DESPITE
FAILURE OF THE PROSECUTION TO PROVE HIS GUILT BEYOND REASONABLE
DOUBT. 5
The following is the recital of facts as summarized by the appellee in its Brief, and duly
supported by the evidence on record:jgc:chanrobles.com.ph
"On April 15, 1991, around 8:00 o’clock in the evening, [Onofre] Malaki was attending to his
store. Malaki’s houseboy Edilberto Batin, on the other hand, was busy cooking chicken for
supper at the kitchen located at the back of the store (TSN, June 19, 199 (sic), p. 14).
"Soon thereafter, Florencio Rondon, a farmer, arrived at the store of Malaki. Rondon was to
purchase chemical for his rice farm (TSN, May 22, 1992, p. 19). Rondon came from his
house, approximately one hundred and fifty (150) meters distant from Malaki’s store (Ibid., p.
24).
"Meanwhile, Batin had just finished cooking and from the kitchen, he proceeded directly to
the store, to ask his employer (Malaki) if supper is to be prepared. As Batin stepped inside the
store, he was taken aback when he saw appellant coming out of the store with a bolo (TSN,
June 9, 1992, p. 14), while his boss, bathed in his own blood, was sprawled on the floor
‘struggling’ for his life’ (hovering between life and death) (Ibid.).
"Rondon, who was outside and barely five (5) meters away from the store, also saw appellant
Jose Malimit (or ‘Manolo’) rushing out through the front door of Malaki’s store with a blood-
stained bolo (TSN, May 22, 1992, p. 29). Aided by the illumination coming from a pressure
lamp (’petromax’) inside the store, Rondon clearly recognized Malimit (Ibid., p. 22).
"Batin immediately went out of the store to seek help. Outside the store, he met Rondon
(TSN, June 9, 1992, p. 15). After a brief conversation, both Batin and Rondon rushed to the
nearby house of Malaki’s brother-in-law Eutiquio Beloy and informed Beloy of the tragic
incident which befell Malaki. Batin, along with Beloy, went back to the store. Inside, they saw
the lifeless body of Malaki in a pool of blood lying prostrate at the floor. Beloy readily
noticed that the store’s drawer was opened and ransacked and the wallet of Malaki was
missing from his pocket (Ibid., pp. 16-17)." 6
In his first assignment of error, appellant questions the credibility of prosecution witnesses
Florencio Rondon and Edilberto Batin by pointing out their alleged delay in revealing what
they knew about the incident. He posits that while the crime took place on April 15, 1991, it
was only on September 17, 1991 when these witnesses tagged him as the culprit.
We find these contentions bereft of merit. Appellant haphazardly concluded that Rondon and
Batin implicated the appellant to this gruesome crime only on September 17, 1991. The
aforementioned date however, was merely the date 7 when Rondon and Batin executed their
respective affidavits, 8 narrating-that they saw the appellant on the night of April 15, 1991
carrying a bolo stained with blood and rushing out of Malaki’s store. As to appellant’s claim
of delay suffice it to state that extant from the records are ample testimonial evidence negating
appellant’s protestation, to wit. (1) after having discovered the commission of the crime,
Rondon and Batin immediately looked for Eutiquio Beloy, Malaki s brother-in-law, and
informed him that appellant was the only person they saw running away from the crime scene;
9 (2) Beloy and Batin reported the crime with the CAFGU detachment in their barangay
where Batin declared that it was appellant who robbed Malaki on that fateful night; 10 and (3)
Batin again made a similar statement later at the Silago Police Station. 11
Next, appellant derided the non-presentation by the prosecution of the police blotter which
could prove, if appellant was indeed implicated right away by Batin to the crime. 12 We do
not believe, however, that it was necessary for the prosecution to present as evidence a copy
of the aforementioned police blotter. Neither was its non-presentation in court fatal to the
prosecution’s case. Entries in the police blotter are merely corroborative evidence of the
uncontroverted testimony of Batin that he identified the appellant as the perpetrator of the
crime before the Silago police. As such, its presentation as evidence is not indispensable. 13
Besides, if appellant believed that he was not identified therein, then he should have secured a
copy thereof from the Silago Police Station and utilized the same as controverting evidence to
impeach Batin’s credibility as witness. 14 Having failed to do so appellant cannot now pass
the blame on the prosecution for something which appellant himself should have done.
Even assuming arguendo that Rondon and Batin identified the appellant only on September
15, 1991, or after the lapse of five months from commission of the crime, this fact alone does
not render their testimony less credible. The non-disclosure by the witness to the police
officers of appellant’s identity immediately after the occurrence of the crime is not entirely
against human experience. 15 In fact the natural reticence of most people to get involved in
criminal prosecutions against immediate neighbors, as in this case, 16 is of judicial notice. 17
At any rate, the consistent teaching of our jurisprudence is that the findings of the trial court
with regard to the credibility of witnesses are given weight and the highest degree of respect
by the appellate court. 18 This is the established rule of evidence, as the matter of assigning
values to the testimony of witnesses is a function best performed by the trial court which can
weigh said testimony in the light of the witness’ demeanor, conduct and attitude at the trial. 19
And although the rule admits of certain exceptions, namely: when patent inconsistencies in
the statements of witnesses are ignored by the trial court, or (2) when the conclusions arrived
at are clearly unsupported by the evidence, 20 we found none in this case.
In his second assignment of error, appellant asseverates that the admission as evidence of
Malaki’s wallet 21 together with its contents, viz., (1) Malaki’s residence certificate; 22 (2)
his identification card; 23 and (3) bunch of keys, 24 violates his right against self-
incrimination. 25 Likewise, appellant sought for their exclusion because during the custodial
investigation, wherein he pointed to the investigating policemen the place where he hid
 Malaki’s wallet, he was not informed of his constitutional rights.
We are not persuaded. The right against self-incrimination guaranteed under our fundamental
law finds no application in this case. This right, as put by Mr. Justice Holmes in Holt v.
United States, 26." . . is a prohibition of the use of physical or moral compulsion, to extort
communications from him . . ." It is simply a prohibition against legal process to extract from
the [accused]’s own lips, against his will, admission of his guilt. 27 It does not apply to the
instant case where the evidence sought to be excluded is not an incriminating statement but an
object evidence. Wigmore, discussing the question now before us in his treatise on evidence,
thus, said:jgc:chanrobles.com.ph
"If, in other words (the rule) created inviolability not only for his [physical control of his] own
vocal utterances, but also for his physical control in whatever form exercise, then, it would be
possible for a guilty person to shut himself up in his house, with all the tools and indicia of his
crime, and defy the authority of the law to employ in evidence anything that might be
obtained by forcibly overthrowing his possession and compelling the surrender of the
evidential articles — a clear reduction ad absurdum. In other words, it is not merely
compulsion that is the kernel of the privilege, . . . but testimonial compulsion" 28
Neither are we prepared to order the exclusion of the questioned pieces of evidence pursuant
to the provision of the Constitution under Article III, Section 12, viz:jgc:chanrobles.com.ph
"(1) Any person under investigation for the commission of an offense shall have the right to
be informed of his right to remain silent and to have competent and independent counsel
preferably of his own choice. If the person cannot afford the services of counsel, he must be
provided with one. These rights cannot be waived except in writing and in the presence of
counsel.
CXLVII. x       x       x
CXLVIII.
"(3) Any confession or admission obtained in violation of this or Sec. 17 hereof, shall be
inadmissible in evidence against him." (Emphasis ours.)
CXLIX. x       x       x
CL.
"These are the so-called "Miranda rights" so oftenly disregarded by our men in uniform.
However, infractions thereof render inadmissible only the extrajudicial confession or
admission made during custodial investigation. The admissibility of other evidence, provided
they are relevant to the issue and is not otherwise excluded by law or rules, 29 is not affected
even if obtained or taken in the course of custodial investigation. Concededly, appellant was
not informed of his right to remain silent and to have his own counsel by the investigating
policemen during the custodial investigation. Neither did he execute a written waiver of these
rights in accordance with the constitutional prescriptions. Nevertheless, these constitutional
short-cuts do not affect the admissibility of Malaki’s wallet, identification card, residence
certificate and keys for the purpose of establishing other facts relevant to the crime. Thus, the
wallet is admissible to establish the fact that it was the very wallet taken from Malaki on the
night of the robbery. The identification card, residence certificate and keys found inside the
wallet, on the other hand, are admissible to prove that the wallet really belongs to Malaki.
Furthermore, even assuming arguendo that these pieces of evidence are inadmissible, the
same will not detract from appellant’s culpability considering the existence of other evidence
and circumstances establishing appellant’s identity and guilt as perpetrator of the crime
charged.
We, now come to appellant’s third assignment of error where he demurs on the prosecution’s
evidence, contending that they are insufficient to sustain his conviction.
Our close scrutiny of the record reveals otherwise. Time and again, we ruled that there can be
a verdict of conviction based on circumstantial evidence when the circumstances proved form
an unbroken chain which leads to a fair and reasonable conclusion pinpointing the accused, to
the exclusion of all the others, as the perpetrator of the crime. 30 In order that circumstantial
evidence may be sufficient to convict, the same must comply with these essential requisites,
viz., (a) there is more than one circumstance; (b) the facts from which the inferences are
derived are proven; and (c) the combination of all the circumstances is such as to produce a
conviction beyond reasonable doubt. 31 In this case, there were at least five (5) circumstances
constituting an unbroken chain of events which by their "concordant combination and
cumulative effect", satisfy the requirements for the conviction of the appellant, 32
specifically: (1) appellant was seen by Rondon and Batin, whose credibilities were
untarnished, holding a bolo in his right hand and rushing out of Malaki’s store seconds prior
to their discovery of the crime; 33 (2) Malaki sustained multiple stab wounds 34 and he died
of "cardiac arrest, secondary to severe external hemorrhage due to multiple stab wounds" ; 35
(3) witness Elmer Ladica saw the appellant on August 6, 1991, accompanied by some
policemen, retrieve Malaki’s wallet underneath a stone at the seashore in Barangay
Hingatungan; 36 (4) appellant himself admitted in his testimony that on August 6, 1991, he
accompanied several policemen to the seashore where he hid Malaki’s wallet; 37 and (5)
appellant’s flight and his subsequent disappearance from Hingatungan immediately after the
incident. 38
On the other hand, appellant’s version of the story does not inspire belief. He maintains that
on that fateful night he was in his house together with his wife. He claims that they had just
arrived from a gambling spree allegedly in the house of a certain Maui Petalcorin.
Surprisingly, however, the defense did not bother to call appellant’s wife to the witness stand
to corroborate appellant’ s alibi. Neither did it present as witness Maui Petalcorin, or any
other person who may have seen the appellant in the said place, if only to provide a semblance
of truth to this assertion. As the defense of alibi is weak in view of the positive identification
of the appellant by the prosecution witnesses, 39 it becomes weaker because of the
unexplained failure of the defense to present any corroboration. 40 Furthermore, proof that
appellant was in his house when the crime was committed is not enough, Appellant must
likewise demonstrate that he could not have been physically present at the place of the crime
on in its vicinity, at the time of its commission. 41 In this case, appellant himself admitted that
his house was just about eighty (80) meters away from the house of Malaki. 42 It was,
therefore, not impossible for him to have been physically present at the place of the
commission of the crime, as in fact, no evidence to negate this possibility was ever adduced
 by him at the trial.
Appellant’s insistence that he merely found Malaki’s wallet by chance while gathering shells
along the seashore, and that he feared being implicated in the crime for which reason he hid
the wallet underneath a stone, hardly inspires belief. We are at a loss, just as the trial court
was, as to why appellant should fear being implicated in the crime if indeed he merely found
Malaki’s wallet by chance. No inference can be drawn from appellant’s purported
apprehension other than the logical conclusion that appellant had knowledge of the crime.
Besides, proof that appellant is in possession of a stolen property gives rise to a valid
presumption that he stole the same. 43
In fine, as the killing of Malaki took place on the occasion of robbery, appellant was correctly
convicted by the trial court of the special complex crime of robbery with homicide, defined
and penalized under Article 294, paragraph 1 of the Revised Penal Code.
WHEREFORE, the appealed judgment of conviction is hereby AFFIRMED in toto.
SO ORDERED.
CLI. PO1 CRISPIN OCAMPO Y SANTOS, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.
CLII. DECISION
CLIII. SERENO, C.J.:
CLIV. Before this Court is an appeal from the Court of Appeals (CA) Decision1 in CA-G.R. CR No.
30957 dated 23 April 2010 and Resolution2 dated 13 October 2010. The CA affirmed the
Decision of the Regional Trial Court (RTC) dated 10 May 2006 in Criminal Case No. 00-
183183, finding accused-appellant Police Officer 1 (PO1) Crispin Ocampo guilty beyond
reasonable doubt of the crime of homicide.
On 01 June 2001, accused-appellant was charged with the crime of homicide under Article
249 of the Revised Penal Code (RPC). The Information reads:chanroblesvirtuallawlibrary
CLV. That on or about May 27, 2000, in the City of Manila, Philippines, the accused, with
intent to kill, did [then] and there wilfully, unlawfully, and feloniously attack, assault
and use personal violence upon one MARIO DE LUNA y HALLARE, by then and
there firing his service firearm, .9 mm Barreta Pistol with Serial No. M19498Z,
hitting the said Mario De Luna y Hallare on the chest and other parts of the body
thereby inflicting upon him gunshot wounds which were necessarily fatal and mortal
and which were the direct and immediate cause of his death thereafter.
Contrary to law.3cralawlawlibrary
CLVI. Upon arraignment, accused-appellant pleaded not guilty to the crime charged.4
The prosecution's version of the events as narrated by the CA is as
follows:chanroblesvirtuallawlibrary
CLVII. On May 27, 2000, at about seven o'clock in the evening, Mario De Luna, Emil
Hipolito and Florentino Magante were having a drinking session at Mario's house
located at Panday Pira Street, Tondo, Manila.
At about 8:30 in the evening, the three, together with Edwin Hipolito and Jaime
Mabugat continued their drinking session at the house of Edwin, also at Panday Pira
Street, Tondo, Manila. While drinking thereat, they noticed that another group, with
appellant (accused-appellant), was also having a drinking session along Panday Pira
Street which was about three to four arms length from Edwin's place.
Emil, Mario, Jaime and Florante joined the group in their drinking session. While
drinking, appellant (accused-appellant) poked a gun at Jaime and told him "wag kang
magulo, babarilin kita." Jaime retorted, "san, bakit," and was then approached by her
sister who asked him to go home to which he acceded. Thereafter, appellant
(accused-appellant) called on Mario De Luna and fired several shots at him. Mario
de Luna fell down to the ground. He was then immediately brought to the hospital by
his mother and sister where he was pronounced dead on arrival.
Dr. Emmanuel Arenas, Medico-Legal Officer of the PNP Crime Laboratory, Camp
Crame, Quezon City, conducted a post-mortem examination of the body of Mario De
Luna and found that the victim died as a result of the gunshot wounds on the chest
and different parts of his body.5cralawlawlibrary
CLVIII. For his part, accused-appellant admitted to having shot the victim to death, but claimed to
have done so in self-defense.6 In support of this claim, defense witness Marita averred that the
shooting incident was precipitated by the victim's unprovoked knife attack upon accused-
appellant. The latter was allegedly left with no other recourse but to use his service firearm to
neutralize the aggressor.7 As testified to by witness Marita:chanroblesvirtuallawlibrary
CLIX. On May 27, 2000, at about 10:00 p.m., she was in front of their house at 1663
Interior 24, F. Varona, Tondo, Manila, when she saw Ferdie Tapang, her nephew,
and four others having a drinking spree beside a lighted electric post. Shortly
thereafter, she noticed appellant (accused-appellant) pass by. Then Jaime together
with Mario arrived at the scene and approached the group of Ferdie Tapang, uttering
the words: "Gusto nyo itaob ko long lamesang ito." Sensing trouble upon seeing two
of Ferdie Tapang's drinking buddies rise from the bench where they were seated,
Marita rushed to the house of appellant (accused-appellant) to ask for his help in
preventing a confrontation between the two groups.
Appellant (accused-appellant) had just arrived from his duty as police officer at the
Criminal Investigation and Detection Unit of the Western Police District and was
changing into civilian clothes when Marita came and apprised him of the situation.
Together with Marita, he proceeded to the site of the drinking spree. Noticing the
group was becoming rowdy, appellant (accused-appellant) approached Mario and
asked if the latter knew him. When Mario replied yes, appellant (accused-appellant)
went on to tell the group to put an end to their drinking session. Mario and Jaime
immediately left the scene while the others voluntarily dispersed.
Minutes later, Mario and Jaime went back to the locus. While standing beside
appellant (accused-appellant), Marita heard Mario shout towards their direction the
words: "Walang pulis-pulis sa akin!" Appellant (accused-appellant) likewise heard
 Mario's utterances: "Walang pulis-pulis sa amin! Anong akala mo sa amin, basta-
basta mo na lang pauuwiin." Mario then pulled out a knife and lunged at appellant
(accused-appellant) who evaded the first thrust. Mario tried to stab appellant
(accused-appellant) a second time but the latter dodged the knife, drew his pistol and
fired two successive shots at Mario. Appellant (accused-appellant) was leaning
backwards when he fired at Mario. Fatally hit, the latter slumped to the ground.
Having immediately left the crime scene after hearing the first gunshot, Marita failed
to witness what transpired thereafter. 8cralawlawlibrary
CLX. On 28 May 2008, accused-appellant, accompanied by Police Senior Inspector (PS/Insp.)
Rosauro Dalisay, arrived at the Western Police District and surrendered his service firearm. 9
On 10 May 2006, the RTC convicted accused-appellant of homicide. The dispositive portion
of the RTC Decision reads:chanroblesvirtuallawlibrary
CLXI. WHEREFORE, premises considered, this Court finds the accused GUILTY of the
crime of Homicide and hereby imposes upon him the penalty of six (6) years and one
(1) day of prision mayor as minimum to twelve (12) years and one (1) day
of reclusion temporal as maximum and to pay the heirs of Mario De Luna the
amount of Php1,600,000.00 as loss of earning capacity; Php50,000.00 as civil
indemnity; Php2,577.00 as hospital expenses; and Php300.00 as funeral expenses;
and Php250,000 as attorney's fees.
SO ORDERED.10cralawlawlibrary
CLXII. On appeal, the CA affirmed the conviction of accused-appellant, but modified some of the
monetary damages awarded. It affirmed the P50,000 civil indemnity in favor of the victim's
heirs.11 But instead of the actual damages in the total amount of P2,877 (P2,577 for hospital
expense plus P300 for funeral expenses), temperate damages of P25,000 were awarded in
their favor.12 The appellate court deleted the award of P1,600,000 for loss of earning capacity
on the ground of lack of competent proof to substantiate the claim and reduced the attorney's
fees from P250,000 to P100,000.13 It affirmed the factual findings of the RTC and the latter's
assessment of the credibility of the witnesses.14 The CA likewise found that the trial court did
not err in overruling accused-appellant's plea of self-defense. 15
Hence, this appeal.
The sole issue for resolution is whether the prosecution was able to prove accused-appellant's
guilt beyond reasonable doubt.
The Court has carefully reviewed the case records and finds accused-appellant's conviction
proper.
It is a well-settled doctrine that findings of trial courts on the credibility of witnesses deserve a
high degree of respect.16 Having observed their deportment in court, the trial judge is in a
better position to determine the issue of credibility.17 For this reason, the findings of trial
judges will not be disturbed on appeal in the absence of any clear showing that they have
overlooked, misunderstood or misapplied some facts or circumstances of weight and
substance that could have altered the conviction of appellants.18 In the case at bar, the
circumstances pointed out by accused-appellant are too trivial to affect the assessment and the
eventual findings of the trial court that he indeed committed the crime.
The Court therefore finds that the courts a quo have correctly appreciated the facts. Their
Decisions are fully supported by evidence on record including the transcript of stenographic
notes, which are extant and complete.
We are convinced that accused-appellant is guilty of homicide. We note that he admitted to
having killed the victim albeit in self-defense. The rule consistently adhered to in this
jurisdiction is that when the accused admit that they are the authors of the death of the victim,
and their defense is anchored on self-defense, it becomes incumbent upon them to prove the
justifying circumstance to the satisfaction of the court.19
Self-defense is a time-worn excuse resorted to by assailants in criminal cases. 20 We have held
in a host of instances that for self-defense to prosper, the following requisites must be met: (1)
unlawful aggression on the part of the victim; (2) reasonable necessity of the means employed
to prevent or repel the attack; and (3) lack of sufficient provocation on the part of the person
engaged in self-defense.21
In this case, accused-appellant has failed to prove by clear and convincing evidence the first
element of self-defense: unlawful aggression on the part of the victim.22 Appellant showed no
attack or assault that had placed his life in imminent or actual danger. 23 As aptly ruled by the
CA:chanroblesvirtuallawlibrary
CLXIII. [A]ppellant's tale of self-defense is negated by the physical evidence, specifically the
trajectory of the bullets that penetrated the victim's body. Medico-Legal Report No.
W-359-2000, the autopsy report, showed that the victim sustained two gunshot
wounds, one at the base of his neck and another in the chest area. In both injuries,
after penetrating the victim's body, the bullets traveled from left side downward to
the right portion of his body. Xxx
xxxx
The graphic representation of the travel path of the bullets from the entry to the exit
points is shown in prosecution's Exhibit "B-5." On the basis of the bullet's trajectory,
Dr. Aranas concluded that the shooter must have been positioned higher than the
victim when the shots were fired. Thus, the trial court concluded that the results of
the autopsy disproves appellant's claim that he fired the shots while leaning
backward after the victim tried to stab him a second time. 24 (Emphasis supplied)
CLXIV. Indeed, physical evidence is a mute but eloquent manifestation of truth, and it ranks higher in
our hierarchy of trustworthy evidence.25 In criminal cases such as murder/homicide or rape, in
which the accused stand to lose their liberty if found guilty, this Court has, on many
occasions, relied principally upon physical evidence in ascertaining the truth.26 Where the
physical evidence on record runs counter to the testimonies of witnesses, the primacy of the
physical evidence must be upheld.27
Ineluctably, the victim in this case cannot be considered as the aggressor. For one, an
eyewitness attested that accused-appellant shot the victim without any provocation. 28 Also, as
correctly noted by the trial court, there was failure to impute ill motive on the part of the
eyewitness who had implicated accused-appellant in the fatal shooting of the
victim.29 Jurisprudence holds that when there is no evidence to show any improper motive on
the part of the witness to testify falsely against the accused or to pervert the truth, the logical
conclusion is that no such motive exists, and that the former's testimony is worthy of full faith
and credit.30
With regard to the second element of self-defense, the Court finds that the means employed
by accused-appellant was grossly disproportionate to the victim's alleged unlawful aggression.
The victim suffered multiple gunshot wounds in his chest and different parts of his
body.31 Besides, the Advance Information prepared by Senior Police Officer 1 (SPO1) Virgo
Villareal, the investigator of the case, reveals that there was no mention of either a stabbing
incident that happened or a knife that was recovered from the crime scene.32 Suffice it to say
that a plea of self-defense is belied by the "nature, number, and location of the wounds"
inflicted on the victim, "since the gravity of said wounds is indicative of a determined effort to
kill and not just to defend."33 Here, the wounds sustained by the victim clearly show the intent
of accused-appellant to kill and not merely to prevent or repel an attack. Verily, since the
means employed by the latter were unreasonable and excessive, his plea of self-defense is
unacceptable.
We, therefore, find no reversible error in the Decisions of the CA and the RTC as to the guilt
of accused-appellant.
Anent the appropriate penalty, we affirm the penalty imposed by the RTC and the CA: an
indeterminate penalty of imprisonment from six (6) years and one (1) day of prision mayor as
minimum34 to twelve (12) years and one (1) day of reclusion temporal as maximum for the
crime of homicide.
The penalty for homicide under Article 249 of the Revised Penal Code is reclusion
temporal.35 Considering that there is one mitigating circumstance of voluntary surrender and
no aggravating circumstance that attended the commission of the crime, the imposable
penalty, pursuant to Article 64 (2) of the Revised Penal Code, is reclusion temporal in
its minimum period.36 This being a divisible penalty, the Indeterminate Sentence Law37 is
applicable. Accordingly, accused-appellant can be sentenced to an indeterminate penalty, the
minimum38 of which shall be within the range of prision mayor and the maximum39 of which
shall be within the range of reclusion temporal in its minimum period, there being one
ordinary mitigating circumstance of voluntary surrender and no aggravating circumstance.
With regard to the appropriate indemnity and damages, the CA retained the award of P50,000
as civil indemnity and modified other monetary damages as follows: (a) P25,000 as temperate
damages; (b) P50,000 as moral damages; and (c) P100,000 as attorney's fees. 40
As correctly ruled by the CA, an award for civil indemnity in favor of the heirs of the victim
must be automatically imposed against the accused without need of proof other than the fact
of the commission of murder or homicide.41 Based on recent jurisprudence,42 however, the
award of civil indemnity ex delicto of P75,000 for the heirs of Mario de Luna is in order.
With respect to other compensatory damages, the Court in People v. Agudez43 declared that
competent evidence must likewise be presented to support the claim for those damages. In this
case, the heirs of Mario de Luna claimed that they spent P2,577 for hospital expense and P300
for funeral expenses. However, when actual damages substantiated by receipts presented
during trial amount to less than P25,000, the award of P25,000 as temperate damages, in
lieu of actual damages for a lesser amount, is justified.44
The award for moral damages by the CA shall be adjusted from P50,000 to P75,000 to
conform to the prevailing jurisprudence.45
We also depart from the CA and the RTC rulings awarding the heirs of the victim attorney's
fees, as none of the grounds therefor under Article 220846 of the Civil Code is present in this
case.
Finally, the Court also imposes interest on all the monetary awards for damages at the legal
rate of six percent (6%) per annum from the date of finality of this Decision until fully paid.47
WHEREFORE, the appeal is DISMISSED. The Decision of the Court of Appeals Manila in
CA-G.R. CR No. 30957 dated 23 April 2010 is
hereby AFFIRMED with MODIFICATION in that accused-appellant PO1 CRISPIN
OCAMPO y SANTOS is found GUILTY beyond reasonable doubt of HOMICIDE and is
sentenced to suffer an indeterminate penalty of six (6) years and one (1) day of prision
mayor as minimum to twelve (12) years and one (1) day of reclusion temporal as maximum.
He is further ordered to pay the heirs of Mario de Luna the amounts of P75,000 as civil
indemnity, P75,000 as moral damages, and P25,000 as temperate damages. All monetary
awards for damages shall earn interest at the legal rate of 6% per annum from the date of the
finality of this Decision until fully paid.
No pronouncement as to costs.
SO ORDERED.chanroblesvirtuallawlibrary
CLXV. G.R. No. 131516. March 5, 2003
CLXVI. PEOPLE OF THE PHILIPPINES,Plaintiff-Appellee, vs. RONNIE RULLEPA y
GUINTO, Accused-Appellant.
CLXVII. DECISION
CLXVIII. CARPIO-MORALES, J.:
CLXIX. On complaint of Cyra May Francisco Buenafe, accused-appellant Ronnie Rullepa y Guinto
was charged with Rape before the Regional Trial Court (RTC) of Quezon City allegedly
committed as follows:
CLXX. That on or about the 17th day of November, 1995, in Quezon City, Philippines, the said
accused, by means of force and intimidation, to wit: by then and there willfully, unlawfully
and feloniously removing her panty, kissing her lips and vagina and thereafter rubbing his
 penis and inserting the same to the inner portion of the vagina of the undersigned CLXXXVII. CONCLUSION:
complainant, 3 years of age, a minor, against her will and without her CLXXXVIII. Subject is in virgin state physically.
consent.1cräläwvirtualibräry CLXXXIX. There are no external signs of recent application of any form of trauma at the time of
CLXXI. Arraigned on January 15, 1996, accused-appellant pleaded not guilty.2cräläwvirtualibräry examination. (Emphasis supplied.)
CLXXII. From the testimonies of its witnesses, namely Cyra May, 3 her mother Gloria Francisco CXC. By Dr. Preyras explanation, the abrasions on the labia minora could have been caused by
Buenafe, Dr. Cristina V. Preyra, and SPO4 Catherine Borda, the prosecution established the friction with an object, perhaps an erect penis. She doubted if riding on a bicycle had caused
following facts: the injuries.8cräläwvirtualibräry
CLXXIII. On November 20, 1995, as Gloria was about to set the table for dinner at her house in Quezon CXCI. The defenses sole witness was accused-appellant, who was 28 and single at the time he took
City, Cyra May, then only three and a half years old, told her, Mama, si kuya Ronnie lagay the witness stand on June 9, 1997. He denied having anything to do with the abrasions found
niya titi niya at sinaksak sa puwit at sa bibig ko. in Cyra Mays genitalia, and claimed that prior to the alleged incident, he used to be ordered to
CLXXIV. Kuya Ronnie is accused-appellant Ronnie Rullepa, the Buenafes house boy, who was buy medicine for Cyra May who had difficulty urinating. He further alleged that after he
sometimes left with Cyra May at home. refused to answer Glorias queries if her husband Buenafe, whom he usually accompanied
CLXXV. Gloria asked Cyra May how many times accused-appellant did those things to her, to which whenever he went out of the house, was womanizing, Gloria would always find fault in him.
she answered many times. Pursuing, Gloria asked Cyra May what else he did to her, and Cyra He suggested that Gloria was behind the filing of the complaint. Thus:
May indicated the room where accused-appellant slept and pointed at his pillow. CXCII. q- According to them you caused the abrasions found in her genital?
CLXXVI. As on the night of November 20, 1995 accused-appellant was out with Glorias husband Col. CXCIII. a- That is not true, sir.
Buenafe,4 she waited until their arrival at past 11:00 p.m. Gloria then sent accused-appellant CXCIV. q- If that is not true, what is the truth?
out on an errand and informed her husband about their daughters plaint. Buenafe thereupon CXCV. a- As I have mentioned earlier that before I started working with the family I was sent to
talked to Cyra May who repeated what she had earlier told her mother Gloria. Crame to buy medicine for the daughter because she had difficulty in urinating.
CLXXVII. When accused-appellant returned, Buenafe and Gloria verified from him whether what Cyra CXCVI. q- Did you know why the child has difficulty in urinating?
May had told them was true. Ronnie readily admitted doing those things but only once, at CXCVII. a- No, I do not know, sir.
4:00 p.m. of November 17, 1995 or three days earlier. Unable to contain her anger, Gloria CXCVIII. q- And how about the present complaint filed against you, the complaint filed by the mother
slapped accused-appellant several times. of the victim?
CXCIX. a- I did not do it, sir.
CLXXVIII. Since it was already midnight, the spouses waited until the following morning to bring
CC. q- What is the truth, what can you say about this present complaint filed against you?
accused-appellant to Camp Karingal where he admitted the imputations against him, on
account of which he was detained. Glorias sworn statement5 was then CCI. a- As I said Mrs. Buenafe got mad at me because after I explained to her that I was going with
taken.6cräläwvirtualibräry her gusband (sic) to the children of the husband with a former marriage.9cräläwvirtualibräry
CLXXIX. Recalling what accused-appellant did to her, Cyra May declared at the witness CCII. Finding for the prosecution, Branch 96 of the Quezon City RTC rendered judgment, the
stand: Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga, thus causing her pain dispositive portion of which reads:
and drawing her to cry. She added that accused-appellant did these to her twice in his CCIII. WHEREFORE, judgment is hereby rendered finding accused RONNIE
bedroom. RULLEPA y GUINTO guilty beyond reasonable doubt of rape, and he is accordingly
sentenced to death.
CLXXX. Dr. Ma. Cristina V. Preyra, the Medico-Legal Officer and Chief of the Biological Science
CCIV. The accused is ordered to pay CYRA MAE BUENAFE the amount of P40,000.00 as civil
Branch of the Philippine National Police Crime Laboratory who examined Crya May, came indemnity.
up with her report dated November 21, 1995,7 containing the following findings and
conclusions: CCV. Costs to be paid by the accused.10 (Italics in the original.)
CLXXXI. FINDINGS: CCVI. Hence, this automatic review, accused-appellant assigning the following errors to the trial
CLXXXII. GENERAL AND EXTRA GENITAL: court:
CLXXXIII. Fairly developed, fairly nourished and coherent female child subject. Breasts are undeveloped. CCVII. I
Abdomen is flat and soft. CCVIII. THE COURT A QUO ERRED IN CONSIDERING AS ADMISSIBLE IN EVIDENCE THE
CLXXXIV. GENITAL: ACCUSED-APPELLANTS ADMISSION.
CLXXXV. There is absence of pubic hair. Labia majora are full, convex and coaptated with congested CCIX. II
and abraded labia minora presenting in between. On separating the same is disclosed an CCX. THE COURT A QUO ERRED ON (sic) RULING THAT THE ACCUSED-APPELLANTS
abraded posterior fourchette and an elastic, fleshy type intact hymen. External vaginal orifice SILENCE DURING TRIAL AMOUNTED TO AN IMPLIED ADMISSION OF GUILT.
does not admit the tip of the examining index finger. CCXI. III
CLXXXVI. xxx
 CCXII. THE COURT A QUO ERRED IN FINDING THAT THE GUILT OF THE ACCUSED- CCXXXIX. a- Pepe ko po. When I went to the bathroom to urinate, I felt pain in my organ,
APPELLANT FOR THE CRIME CHARGED HAS BEEN PROVEN BEYOND sir.13cräläwvirtualibräry
REASONABLE DOUBT. CCXL. Cyra May reiterated her testimony during cross-examination, providing more revolting details
CCXIII. IV of her ordeal:
CCXIV. THE COURT A QUO GRAVELY ERRED IN IMPOSING THE SUPREME PENALTY OF CCXLI. q- So, you said that Kuya Ronnie did something to you what did he do to you on November
DEATH UPON THE ACCUSED-APPELLANT.11 (Emphasis supplied.) 17, 1995?
CCXV. Accused-appellant assails the crediting by the trial court, as the following portion of its CCXLII. a- Sinaksak nga yong titi nya. He inserted his penis to my organ and to my mouth, sir.
decision shows, of his admission to Gloria of having sexually assaulted Cyra May: CCXLIII. xxx
CCXVI. In addition, the mother asserted that Rullepa had admitted Cyra Ma[y]s complaint during the CCXLIV. q- When you said that your kuya Ronnie inserted his penis into your organ, into your mouth,
confrontation in the house. Indeed, according to the mother, the admission was even and into your anus, would you describe what his penis?
expressly qualified by Rullepas insistence that he had committed the sexual assault only once, CCXLV. a- It is a round object, sir.
specifying the time thereof as 4:00 pm of November 17, 1995. That qualification proved that CCXLVI. C o u r t:
the admission was voluntary and true. An uncoerced and truthful admission like this should be CCXLVII. Is this titi of your kuya Ronnie a part of his body?
absolutely admissible and competent. CCXLVIII. a- Opo.
CCXVII. xxx CCXLIX. q- Was that in the head of kuya Ronnie?
CCXVIII. Remarkably, the admission was not denied by the accused during trial despite his freedom to CCL. a- No, sir.
deny it if untrue. Hence, the admission became conclusive upon him.12 (Emphasis supplied.) CCLI. q- Which part of his body that titi located?
CCXIX. To accused-appellant, the statements attributed to him are inadmissible since they were made CCLII. (Witness pointing to her groin area)
out of fear, having been elicited only after Cyra Mays parents bullied and questioned him. He CCLIII. C o u r t:
thus submits that it was error for the trial court to take his failure to deny the statements CCLIV. Continue
during the trial as an admission of guilt. CCLV. xxx
CCXX. Accused-appellants submission does not persuade. The trial court considered his admission CCLVI. q- Why were you in that room?
merely as an additional ground to convince itself of his culpability. Even if such admission, CCLVII. a- Gusto nya po matulog ako sa kuwarto niya.
as well as the implication of his failure to deny the same, were disregarded, the evidence CCLVIII. q- When you were in that room, what did Kuya Ronnie do to you?
suffices to establish his guilt beyond reasonable doubt. CCLIX. a- Hinubo po niya ang panty ko.
CCXXI. The plain, matter-of-fact manner by which Cyra May described her abuse in the hands of CCLX. q- And after he remove your panty, what did Kuya Ronnie do, what did he do to you?
her Kuya Ronnie is an eloquent testament to the truth of her accusations. Thus she testified on CCLXI. a- He inserted his penis to my organ, sir.
direct examination: CCLXII. q- Why did kuya Ronnie, was kuya Ronnie already naked or he was already wearing any
CCXXII. q- Do you recall if Ronnie Rullepa did anything to you? clothing?
CCXXIII. a- Yes, sir. CCLXIII. a- Still had his clothing on, sir.
CCXXIV. q- What did he do to you? CCLXIV. q- So, where did his penis, saan lumabas ang penis ni Kuya Ronnie?
CCXXV. a- Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga CCLXV. a- Dito po, (Witness referring or pointing to her groin area)
CCXXVI. q- How many times did he do that to you? CCLXVI. xxx
CCXXVII. a- Twice, sir. CCLXVII. q- So, thats the and at the time, you did not cry and you did not shout for help?
CCXXVIII. xxx CCLXVIII. a- Sabi nya po, not to make any noise because my mother might be roused from sleep.
CCXXIX. q- Do you remember when he did these things to you? CCLXIX. q- How long was kuya Ronnie did that to you?
CCXXX. a- Opo. CCLXX. a- Matagal po.
CCXXXI. q- When was that? CCLXXI. q- After kuya Ronnie scrub his penis to your vagina, what other things did he do?
CCXXXII. a- When my mother was asleep, he put he removed my panty and inserted his penis inside my CCLXXII. a- After that he inserted his penis to my mouth, and to my anus, sir.
vagina, my anus and my mouth, sir. CCLXXIII. q- You did not complain and you did not shout?
CCXXXIII. xxx CCLXXIV. a- I cried, sir.14cräläwvirtualibräry
CCXXXIV. q- After your Kuya Ronnie did those things to you what did you feel? CCLXXV. Accused-appellant draws attention to the statement of Cyra May that he was not in the house
CCXXXV. a- Sabi nya ganito (Witness putting her finger in her lips) Nasaktan po ako at umiyak po ako. on November 17 (1995), as reflected in the following transcript of her testimony:
CCXXXVI. q- Did you cry because of hurt? CCLXXVI. q- Is it not a fact that you said a while ago that when your father leaves the house, he [was]
CCXXXVII. a- Yes. usually accompanied by your kuya Ronnie?
CCXXXVIII. q- What part of your body hurt? CCLXXVII. a- Opo.
CCLXXVIII. q- Why is it that Kuya Ronnie was in the house when you father left the house at that time, on CCXCIII.
November 17?
CCLXXIX. a- He was with Kuya Ronnie, sir.
CCLXXX. q- So, it is not correct that kuya Ronnie did something to you because your kuya Ronnie [was]
always with your Papa?
CCLXXXI. a- Yes, sir.15cräläwvirtualibräry
CCLXXXII. The above-quoted testimony of Cyra May does not indicate the time when her father Col. CCXCIV.
Buenafe left their house on November 17, 1995 with accused-appellant and, thus, does not
preclude accused-appellants commission of rape on the same date. In any event, a young child
is vulnerable to suggestion, hence, her affirmative response to the defense counsels above- CCXCV.
quoted leading questions.
CLXXXIII. As for the variance in the claim regarding when Gloria was informed of the rape, Gloria
having testified that she learned of it on November 20, 199516 while Cyra May said that
immediately after the incident, she awakened her mother who was in the adjacent room and CCXCVI.
reported it:17 This is a minor matter that does not detract from Cyra Mays categorical, material
testimony that accused-appellant inserted his penis into her vagina.
CCLXXXIV. Accused-appellant goes on to contend that Cyra May was coached, citing the following
portion of her testimony:
CCLXXXV. q- Yong sinabi mong sinira nya ang buhay mo, where did you get that phrase?
CLXXXVI. a- It was the word of my Mama, sir.18cräläwvirtualibräry CCXCVII.
CCLXXXVII. On the contrary, the foregoing testimony indicates that Cyra May was really narrating the
truth, that of hearing her mother utter sinira niya ang buhay mo.
LXXXVIII. Accused-appellants suggestion that Cyra May merely imagined the things of which he is CCXCVIII.
accused, perhaps getting the idea from television programs, is preposterous. It is true that the CCXCIX.
ordinary child is a great weaver of romances, and her imagination may induce (her) to relate CCC.
something she has heard or read in a story as personal experience. 19 But Cyra Mays account is CCCI.
hardly the stuff of romance or fairy tales. Neither is it normal TV fare, if at all. CCCII.
CLXXXIX. This Court cannot believe that a victim of Cyra Mays age could concoct a tale of defloration,
allow the examination of her private parts, and undergo the expense, trouble, inconvenience,
not to mention the trauma of public trial.20cräläwvirtualibräry CCCIII.
CCXC. Besides, her testimony is corroborated by the findings of Dr. Preyra that there were abrasions
in her labia minora, which she opined, could have been caused by friction with an erect penis. CCCIV.
CCXCI. This Court thus accords great weight to the following assessment of the trial court regarding
the competency and credibility of Cyra May as a witness:
CCXCII. Her very tender age notwithstanding, Cyra Ma(y) nonetheless appeared to possess the
necessary intelligence and perceptiveness sufficient to invest her with the competence to CCCV.
testify about her experience. She might have been an impressionable child as all others of her
age are but her narration of Kuya Ronnies placing his titi in her pepe was certainly one which CCCVI.
could not be considered as a common childs tale. Her responses during the examination of
counsel and of the Court established her consciousness of
the distinction between good and bad, which rendered inconceivable for her to describe a bad CCCVIII.
act of the accused unless it really happened to her. Needless to state, she described the act of
the accused as bad. Her demeanor as a witness manifested during trial by her unhesitant, CCCX.
spontaneous, and plain responses to questions further enhanced her claim to credit and
trustworthiness.21 (Italics in the original.)
In a futile attempt at exculpation, accused-appellant claims that even before the alleged
incident Cyra May was already suffering from pain in urinating. He surmises that she could
have scratched herself which caused the abrasions. Dr. Preyra, however, was quick to rule out
this possibility. She stated categorically that that part of the female organ is very sensitive and
rubbing or scratching it is painful.22 The abrasions could not, therefore, have been self-
inflicted.
That the Medical-Legal Officer found no external signs of recent application of any form of
trauma at the time of the examination does not preclude accused-appellants conviction since
the infliction of force is immaterial in statutory rape.23cräläwvirtualibräry
More. That Cyra May suffered pain in her vagina but not in her anus despite her testimony
that accused-appellant inserted his penis in both orifices does not diminish her credibility. It is
possible that accused-appellants penis failed to penetrate her anus as deeply as it did her
vagina, the former being more resistant to extreme forces than the latter.
Accused-appellants imputation of ill motive on the part of Gloria is puerile. No mother in her
right mind would subject her child to the humiliation, disgrace and trauma attendant to a
prosecution for rape if she were not motivated solely by the desire to incarcerate the person
responsible for the childs defilement.24 Courts are seldom, if at all, convinced that a mother
would stoop so low as to subject her daughter to physical hardship and shame concomitant to
a rape prosecution just to assuage her own hurt feelings.25cräläwvirtualibräry
Alternatively, accused-appellant prays that he be held liable for acts of lasciviousness instead
of rape, apparently on the basis of the following testimony of Cyra May, quoted verbatim, that
he merely scrubbed his penis against her vagina:
q- Is it not a fact that kuya Ronnie just made some scrubbed his penis into your vagina?
a- Yes, sir.
q- And when he did not actually penetrated your vagina?
a- Yes, sir.26cräläwvirtualibräry
Dr. Preya, however, found abrasions in the labia minora, which is directly beneath the labia
majora,27 proving that there was indeed penetration of the vagina, not just a mere rubbing or
scrubbing of the penis against its surface.
In fine, the crime committed by accused-appellant is not merely acts of lasciviousness but
statutory rape.
The two elements of statutory rape are (1) that the accused had carnal knowledge of a woman,
and (2) that the woman is below twelve years of age.28 As shown in the previous discussion,
the first element, carnal knowledge, had been established beyond reasonable doubt. The same
is true with respect to the second element.
The victims age is relevant in rape cases since it may constitute an element of the offense.
Article 335 of the Revised Penal Code, as amended by Republic Act No. 7659,29 provides:
Art. 335. When and how rape is committed. Rape is committed by having carnal knowledge of
a woman under any of the following circumstances:
CCCVII. x x x.
3. When the woman is under twelve years of age x x x.
CCCIX. x x x.
The crime of rape shall be punished by reclusion perpetua.
CCCXI. x x x.
 CCCXII. Furthermore, the victims age may constitute a qualifying circumstance, warranting the testimonial evidence was presented to establish LIZETTEs age. Her mother, Jacqueline,
imposition of the death sentence. The same Article states: testified (that the victim was three years old at the time of the commission of the crime).
CCCXIII. The death penalty shall also be imposed if the crime of rape is committed with any of the CCCXXXII. xxx
following attendant circumstances: CCCXXXIII. Likewise, LIZETTE testified on 20 November 1996, or almost two years after the incident,
CCCXIV. 1. when the victim is under eighteen (18) years of age and the offender is a parent, that she was 5 years old. However, when the defense counsel asked her how old she was on 3
ascendant, step-parent, guardian, relative by consanguinity or affinity with the third civil January 1995, or at the time of the rape, she replied that she was 5 years old. Upon further
degree, or the common-law spouse of the parent of the victim. question as to the date she was born, she could not answer.
CCCXV. x x x. CCCXXXIV. For PRUNA to be convicted of rape in its qualified form and meted the supreme penalty of
CCCXVI. 4. when the victim is x x x a child below seven (7) years old. death, it must be established with certainty that LIZETTE was below 7 years old at the time of
CCCXVII. x x x. the commission of the crime. It must be stressed that the severity of the death penalty,
CCCXVIII. Because of the seemingly conflicting decisions regarding the sufficiency of evidence of the especially its irreversible and final nature once carried out, makes the decision-making
victims age in rape cases, this Court, in the recently decided case of People v. process in capital offenses aptly subject to the most exacting rules of procedure and evidence.
Pruna,30 established a set of guidelines in appreciating age as an element of the crime or as a CCCXXXV. In view of the uncertainty of LIZETTEs exact age, corroborative evidence such as her birth
qualifying circumstance, to wit: certificate, baptismal certificate or any other authentic document should be introduced in
CCCXIX. 1. The best evidence to prove the age of the offended party is an original or certified true copy evidence in order that the qualifying circumstance of below seven (7) years old is appreciated
of the certificate of live birth of such party. against the appellant. The lack of objection on the part of the defense as to her age did not
CCCXX. 2. In the absence of a certificate of live birth, similar authentic documents such as baptismal excuse the prosecution from discharging its burden. That the defense invoked LIZETTEs
certificate and school records which show the date of birth of the victim would suffice to tender age for purposes of questioning her competency to testify is not necessarily an
prove age. admission that she was below 7 years of age when PRUNA raped her on 3 January 1995.
CCCXXI. 3. If the certificate of live birth or authentic document is shown to have been lost or destroyed Such being the case, PRUNA cannot be convicted of qualified rape, and hence the death
or otherwise unavailable, the testimony, if clear and credible, of the victims mother or a penalty cannot be imposed on him.
member of the family either by affinity or consanguinity who is qualified to testify on matters CCCXXXVI. However, conformably with no. 3 (b) of the foregoing guidelines, the testimony of LIZETTEs
respecting pedigree such as the exact age or date of birth of the offended party pursuant to mother that she was 3 years old at the time of the commission of the crime is sufficient for
Section 40, Rule 130 of the Rules on Evidence shall be sufficient under the following purposes of holding PRUNA liable for statutory rape, or rape of a girl below 12 years of age.
circumstances: Under the second paragraph of Article 335, as amended by R.A. No. 7659, in relation to no. 3
CCCXXII. a. If the victim is alleged to be below 3 years of age and what is sought to be proved is that of the first paragraph thereof, having carnal knowledge of a woman under 12 years of age is
she is less than 7 years old; punishable by reclusion perpetua. Thus, the penalty to be imposed on PRUNA should
CCCXXIII. b. If the victim is alleged to be below 7 years of age and what is sought to be proved is that be reclusion perpetua, and not death penalty. (Italics in the original.)
she is less than 12 years old; CCCXXXVII. Several cases31 suggest that courts may take judicial notice of the appearance of the victim in
CCCXXIV. c. If the victim is alleged to be below 12 years of age and what is sought to be proved is that determining her age. For example, the Court, in People v. Tipay,32 qualified the ruling
she is less than 18 years old. in People v. Javier,33 which required the presentation of the birth certificate to prove the rape
CCCXXV. 4. In the absence of a certificate of live birth, authentic document, or the testimony of the victims age, with the following pronouncement:
victims mother or relatives concerning the victims age, the complainants testimony will CCCXXXVIII. This does not mean, however, that the presentation of the certificate of birth is at all times
suffice provided that it is expressly and clearly admitted by the accused. necessary to prove minority. The minority of a victim of tender age who may be below the
CCCXXVI. 5. It is the prosecution that has the burden of proving the age of the offended party. The age of ten is quite manifest and the court can take judicial notice thereof. The crucial years
failure of the accused to object to the testimonial evidence regarding age shall not be taken pertain to the ages of fifteen to seventeen where minority may seem to be dubitable due to
against him. ones physical appearance. In this situation, the prosecution has the burden of proving with
CCCXXVII. 6. The trial court should always make a categorical finding as to the age of the victim. certainty the fact that the victim was under 18 years of age when the rape was committed in
CCCXXVIII. Applying the foregoing guidelines, this Court in the Pruna case held that the therein accused- order to justify the imposition of the death penalty under the above-cited provision. (Emphasis
appellant could only be sentenced to suffer the penalty of reclusion perpetua since: supplied.)
CCCXXIX. x x x no birth certificate or any similar authentic document, such as a baptismal certificate CCCXXXIX.
of On the other hand, a handful of cases34 holds that courts, without the requisite hearing
LIZETTE, was presented to prove her age. x x x. prescribed by Section 3, Rule 129 of the Rules of Court,35 cannot take judicial notice of the
CCCXXX. x x x. victims age.
CCCXXXI. However, the Medico-Legal Report relied upon by the trial court does not in any way prove CCCXL. Judicial notice signifies that there are certain facta probanda, or propositions in a partys case,
the age of LIZETTE, for there is nothing therein which even mentions her age. Only as to which he will not be required to offer evidence; these will be taken for true by the
tribunal without the need of evidence.36 Judicial notice, however, is a phrase sometimes used
 in a loose way to cover some other judicial action. Certain rules of Evidence, usually known CCCXLVII.
under other names, are frequently referred to in terms of judicial
notice.37chanroblesvirtuallawlibrary CCCXLVIII.
CCCXLI. The process by which the trier of facts judges a persons age from his or her appearance cannot
be categorized as judicial notice. Judicial notice is based upon convenience and expediency
for it would certainly be superfluous, inconvenient, and expensive both to parties and the
court to require proof, in the ordinary way, of facts which are already known to
courts.38 As Tundag puts it, it is the cognizance of certain facts which judges may properly
take and act on without proof because they already know them. Rule 129 of the Rules of CCCXLIX.
Court, where the provisions governing judicial notice are found, is entitled What Need Not Be
Proved. When the trier of facts observes the appearance of a person to ascertain his or her age, CCCL.
he is not taking judicial notice of such fact; rather, he is conducting an examination of the
evidence, the evidence being the appearance of the person. Such a process militates against
the very concept of judicial notice, the object of which is to do away with the presentation of
evidence.
CCCXLII. This is not to say that the process is not sanctioned by the Rules of Court; on the contrary, it
does. A persons appearance, where relevant, is admissible as object evidence, the same being
addressed to the senses of the court. Section 1, Rule 130 provides:
CCCXLIII. SECTION 1. Object as evidence. Objects as evidence are those addressed to the senses of the CCCLI.
court. When an object is relevant to the fact in issue, it may be exhibited to, examined or
viewed by the court.
CCCXLIV. To be sure, one author writes, this practice of inspection by the court of objects, things
or persons relevant to the fact in dispute, has its roots in ancient judicial procedure.39 The
author proceeds to quote from another authority:
CCCXLV. Nothing is older or commoner in the administration of law in all countries than the submission CCCLII.
to the senses of the tribunal itself, whether judge or jury, of objects which furnish evidence.
The view of the land by the jury, in real actions, of a wound by the judge where mayhem was
alleged, and of the person of one alleged to be an infant, in order to fix his age, the
inspection and comparison of seals, the examination of writings, to determine whether they
are ()blemished,() the implements with which a crime was committed or of a person alleged, CCCLIII.
in a bastardy proceeding, to be the child of another, are few illustrations of what may be found
abundantly in our own legal records and textbooks for seven centuries past.40 (Emphasis
supplied.)
CCCXLVI. A persons appearance, as evidence of age (for example, of infancy, or of being under the
age of consent to intercourse), is usually regarded as relevant; and, if so, the tribunal may
properly observe the person brought before it.41 Experience teaches that corporal appearances
are approximately an index of the age of their bearer, particularly for the marked extremes of
old age and youth. In every case such evidence should be accepted and weighed for what it
may be in each case worth. In particular, the outward physical appearance of an alleged minor CCCLIV.
may be considered in judging his age; a contrary rule would for such an inference be
pedantically over-cautious.42 Consequently, the jury or the court trying an issue of fact may be
allowed to judge the age of persons in court by observation of such persons.43 The formal
offer of the person as evidence is not necessary. The examination and cross-examination of a
party before the jury are equivalent to exhibiting him before the jury and an offer of such
person as an exhibit is properly refused. 44cräläwvirtualibräry
This Court itself has sanctioned the determination of an aliens age from his appearance.
In Braca v. Collector of Customs,45 this Court ruled that:
The customs authorities may also determine from the personal appearance of the immigrant
what his age is. The person of a Chinese alien seeking admission into the Philippine Islands is
evidence in an investigation by the board of special inquiry to determine his right to enter; and
such body may take into consideration his appearance to determine or assist in determining
his age and a finding that the applicant is not a minor based upon such appearance is not
without evidence to support it.
This Court has also implicitly recognized the same process in a criminal case. Thus, in United
States v. Agadas,46 this Court held:
Rosario Sabacahan testified that he was 17 years of age; that he had never purchased a cedula;
and that he was going to purchase a cedula the following january. Thereupon the court asked
this defendant these questions: You are a pretty big boy for seventeen. Answer: I cannot tell
exactly because I do not remember when I was born, but 17 years is my guess. Court: If you
are going to take advantage of that excuse, you had better get some positive evidence to that
effect. Answer: I do not remember, as I already stated on what date and in what year I was
born. The court, in determining the question of the age of the defendant, Rosario Sabacahan,
said:
The defendant, Rosario Sabacahan, testified that he thought that he was about 17 years of age,
but judging by his appearance he is a youth 18 or 19 years old. He has shown that he has no
positive information on the subject and no effort was made by the defense to prove the fact
that he is entitled to the mitigating circumstance of article 9, paragraph 2, of the Penal code,
which fact it is held to be incumbent upon the defense to establish by satisfactory evidence in
order to enable the court to give an accused person the benefit of the mitigating circumstance.
In United States vs. Estavillo and Perez (10 Off. Gaz., 1984) Estavillo testified, when the case
was tried in the court below, that he then was only 16 years of age. There was no other
testimony in the record with reference to his age. But the trial judge said: The accused
Estavillo, notwithstanding his testimony giving his age as 16 years, is, as a matter of fact, not
less than 20. This court, in passing upon the age of Estavillo, held:
We presume that the trial court reached this conclusion with reference to the age of Estavillo
from the latters personal appearance. There is no proof in the record, as we have said, which
even tends to establish the assertion that this appellant understated his age. * * * It is true that
the trial court had an opportunity to note the personal appearance of Estavillo for the purpose
of determining his age, and by so doing reached the conclusion that he was at least 20, just
two years over 18. This appellant testified that he was only 16, and this testimony stands
uncontradicted. Taking into consideration the marked difference in the penalties to be
imposed upon that age, we must, therefore, conclude (resolving all doubts in favor of the
appellants) that the appellants ages were 16 and 14 respectively.
While it is true that in the instant case Rosario testified that he was 17 years of age, yet the
trial court reached the conclusion, judging from the personal appearance of Rosario, that he is
a youth 18 or 19 years old. Applying the rule enunciated in the case just cited, we must
conclude that there exists a reasonable doubt, at least, with reference to the question whether
Rosario was, in fact 18 years of age at the time the robbery was committed. This doubt must
be resolved in favor of the defendant, and he is, therefore, sentenced to six months of arresto
mayor in lieu of six years ten months and one day of presidio mayor. x x x.
 CCCLV. There can be no question, therefore, as to the admissibility of a persons appearance in element of statutory rape, i.e., that the victim was below twelve years of age at the time of the
determining his or her age. As to the weight to accord such appearance, especially in rape commission of the offense, is present.
cases, Pruna laid down guideline no. 3, which is again reproduced hereunder: CCCLXXIV. Whether the victim was below seven years old, however, is another matter. Here, reasonable
CCCLVI. 3. If the certificate of live birth or authentic document is shown to have been lost or destroyed doubt exists. A mature three and a half-year old can easily be mistaken for an underdeveloped
or otherwise unavailable, the testimony, if clear and credible, of the victims mother or a seven-year old. The appearance of the victim, as object evidence, cannot be accorded much
member of the family either by affinity or consanguinity who is qualified to testify on matters weight and, following Pruna, the testimony of the mother is, by itself, insufficient.
respecting pedigree such as the exact age or date of birth of the offended party pursuant to CCCLXXV. As it has not been established with moral certainty that Cyra May was below seven years old
Section 40, Rule 130 of the Rules on Evidence shall be sufficient under the following at the time of the commission of the offense, accused-appellant cannot be sentenced to suffer
circumstances: the death penalty. Only the penalty of reclusion perpetua can be imposed upon him.
CCCLVII. a. If the victim is alleged to be below 3 years of age and what is sought to be proved is that CCCLXXVI. In line with settled jurisprudence, the civil indemnity awarded by the trial court is increased
she is less than 7 years old; to P50,000.00. In addition, Cyra May is entitled to an award of moral damages in the amount
CCCLVIII. b. If the victim is alleged to be below 7 years of age and what is sought to be proved is that of P50,000.00.50cräläwvirtualibräry
she is less than 12 years old; CCCLXXVII. WHEREFORE, the Decision of the Regional Trial Court of Quezon City, Branch 96,
CCCLIX. c. If the victim is alleged to be below 12 years of age and what is sought to be proved is that is AFFIRMED with MODIFICATION. Accused-appellant Ronnie Rullepa y Guinto is
she is less than 18 years old. found GUILTY of Statutory Rape, defined and punished by Article 335 (3) of the Revised
CCCLX. Under the above guideline, the testimony of a relative with respect to the age of the victim is Penal Code, as amended, and is sentenced to suffer the penalty of reclusion perpetua. He is
sufficient to constitute proof beyond reasonable doubt in cases (a), (b) and (c) above. In such ordered to pay private complainant, Cyra May Buenafe y Francisco, the amount of P50,000.00
cases, the disparity between the allegation and the proof of age is so great that the court can as civil indemnity and P50,000.00 as moral damages.
easily determine from the appearance of the victim the veracity of the testimony. The CCCLXXVIII. SO ORDERED.
appearance corroborates the relatives testimony.
CCCLXI. As the alleged age approaches the age sought to be proved, the persons appearance, as object CCCLXXIX. Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panga
evidence of her age, loses probative value. Doubt as to her true age becomes greater and,
following Agadas, supra, such doubt must be resolved in favor of the accused.
CCCLXII. This is because in the era of modernism and rapid growth, the victims mere physical
appearance is not enough to gauge her exact age. For the extreme penalty of death to be a. Chain of Custody
upheld, nothing but proof beyond reasonable doubt of every fact necessary to constitute the
crime must be substantiated. Verily, the minority of the victim should be not only alleged but G.R. No. 205639, January 18, 2016
likewise proved with equal certainty and clearness as the crime itself. Be it remembered that PEOPLE OF THE PHILIPPRNES, Appellee, v. ANITA MIRANBA Y BELTRAN, Appellant.
the proof of the victims age in the present case spells the difference between life and DECISION
death.47cräläwvirtualibräry PERALTA, J.:
CCCLXIII. In the present case, the prosecution did not offer the victims certificate of live birth or similar Appellant was charged before the Regional Trial, Court (RTC) of Calapan City, Oriental Mindoro,
authentic documents in evidence. The victim and her mother, however, testified that she was Branch 39, with violation of Section 5, Article 11 of Republic Act (R.A.) No. 9165, otherwise known
only three years old at the time of the rape. Cyra Mays testimony goes: as the Comprehensive Dangerous Drugs Act of 2002.1 When arraigned, she pleaded not guilty to the
CCCLXIV. q- Your name is Cyra Mae is that correct? charge.
CCCLXV. a- Yes, sir.
CCCLXVI. q- And you are 3 years old? The prosecution's evidence established that after a surveillance conducted outside appellant's house
CCCLXVII. 48
a- Yes, sir. cräläwvirtualibräry located in Barangay Ibaba West, Calapan City, it was confirmed that she was engaged in the illegal
CCCLXVIII. That of her mother goes: sale of shabu. Thus, at 12:00 noon of May 6, 2005, the police formed a buy-bust team designating PO2
CCCLXIX. Q How old was your daughter when there things happened? Mariel D. Rodil (PO2 Rodil) to act as the poseur-buyer, SPO1 Noel Buhay (SPO1 Buhay) and PO2
CCCLXX. A 3 and years old. Ritchie Chan (PO2 Chan) as the arresting officers and the other team members as back up. Marked and
CCCLXXI. Q When was she born? given to PO2 Rodil were four (4) one hundred peso bills. At 2:00 p.m., the buy-bust team arrived in
CCCLXXII. 49
A In Manila, May 10, 1992. cräläwvirtualibräry Barangay Ibaba West and PO2 Rodil proceeded to appellant's house, while the rest of the team hid
CCCLXXIII. Because of the vast disparity between the alleged age (three years old) and the age sought to somewhere near appellant's house. PO2 Rodil saw appellant outside her house and after a brief
be proved (below twelve years), the trial court would have had no difficulty ascertaining the conversation, told her that she was buying shabu worth P400.00. Appellant then went inside her house
victims age from her appearance. No reasonable doubt, therefore, exists that the second and upon her return,' handed to PO2 Rodil one (1) transparent plastic sachet containing white
crystalline substance. After PO2 Rodil gave appellant the marked money as payment, she then made a
missed call to PO2 Chan's cell phone as a pre-arranged signal. SPO1 Buhay and PO2 Chan effected,
appellant's arrest. PO2 Chan got the marked money from appellant, while PO2 Rodil held on to the
plastic sachet containing white crystalline substance. The team then informed Arnel Almazan,
Barangay Councilor of Barangay Ibaba West, about the operation and they all brought appellant to the
Calapan Police Station.2chanroblesvirtuallawlibrary
Both the inventory of the seized item and the taking of appellant's photos were made at the police
station. PO2 Rodil marked the seized item and submitted the same for laboratory examination on the
same day.3 The Forensic Chemist, Police Inspector Rhea Fe DC Alviar (PI Alviar) confirmed the
specimen submitted -positive for methamphetamine hydroch 1 oride (shabu).
Appellant denied selling illegal drugs saying that at 2:00 p.m. of May 6, 2005, she was at home
watching TV when the police officers entered her house, frisked her and searched her house. She was
later brought to the Calapan Police Station where she was asked to point to the shabu placed on top of
a table; and that she was also subjected to a drug test.4chanroblesvirtuallawlibrary
On March 9, 2010, the RTC rendered its Decision5 as follows:
ACCORDINGLY, in view of the foregoing, this Court finds the accused ANITA MIRANDA y
BELTRAN GUILTY beyond reasonable doubt as principal of the crime charged in the aforequoted
information and in default of any modifying circumstances attendant, hereby sentences her to sutler the
penalty of LIFE IMPRISONMENT and a fine of VIVE HUNDRED THOUSAND (P500,000.00)
PESOS, with the accessories provided by law and with credit for preventive imprisonment undergone,
if any.
The 0.04 grain of methamphetamine hydrochloride (shabu) subject matter of this case is hereby
ordered confiscated in favor of the government to be disposed of in accordance with the
law.6chanrobleslaw
Appellant filed her appeal with the CA, which in a Decision7 dated July 4, 2012, denied the same and
affirmed the RTC decision in toto.
Dissatisfied, appellant is now before us seeking a reversal of her conviction. We required the parties to
submit their Supplemental Briefs if they so desire. Appellant filed a Supplemental Brief, while the
OSG representing the People did not, saying that it had already exhaustively discussed the issues in its
Appellee's Brief filed with the CA.
In her Supplemental Brief,8 appellant insists that: (1) the prosecution evidence showed no indication of
full compliance with Section 21(1) of Republic Act (RA) 9165 on the custody and disposition of
confiscated, seized, and/or surrendered dangerous drugs; (2) PO2 Rodil failed to establish that the
shabu presented in court was the very item seized from her at the time of her arrest; and (3) the person
who received the seized item from PO2 Rodil, as well as the person who was tasked to bring the illegal
drug from the laboratory to the court, were never presented in court nor their testimonies offered in
evidence.
We find no merit in this appeal. 
it is material in every prosecution for the illegal sale of a prohibited drug that the drug, which is
the corpus delicti, be presented as evidence in court. Hence, the identity of the prohibited drug must be
established without any doubt. Hven more than this, what must also be established is the fact that the
substance bought during the buy-bust operation is the same substance offered in court as exhibit.9 The
chain of custody requirement performs this function in that it ensures that unnecessary doubts
concerning the identity of the evidence are removed.10chanroblesvirtuallawlibrary
Chain of custody, as defined under Section l(b) of Dangerous Drugs Board Regulation No. 1, series of
2002, which implements RA 9165, states:
Chain of Custody means the duly recorded authorized movements and custody of seized drugs or
controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each stage, from
the time oi' seizure/confiscation to receipt in the forensic laboratory to safekeeping to presentation in
court for destruction. Such record of movements and custody of seized item shall include the identity
and signature of the person who held temporary custody of the seized item, the date and time when
such transfer of custody were made in the course of safekeeping and use in court as evidence, and the
final disposition.
In this case, we find that the prosecution was able to establish the crucial links in the chain of custody
of the seized sachet of shabu. After PO2 Rodil received the plastic sachet of white crystalline substance
from appellant, she was in possession of the shabu up to the time appellant was brought to the police
station for investigation. With the buy-bust team and appellant at the police station were the Kill Droga
Provincial President, Nicanor Ocampo, Sr. and Barangay Councilor Almazan. PO2 Rodil made an
inventory11 of the seized item which was attested by Ocampo. She also marked the seized item with her
initials "MDR".12 Appellant's photos were also taken pointing to the plastic
sachet.13chanroblesvirtuallawlibrary
PO2 Rodil prepared and signed the request14 for laboratory examination and brought the letter request
and the seized item to the Regional Crime Laboratory Office-4B Mimaropa, Suqui, Calapan City for
qualitative analysis. The specimen was received at the laboratory at 5:00 p.m. of the same day.15 PI
Alviar examined the white crystalline substance contained in a heat-sealed plastic transparent plastic
sachet with marking "MDR" on the same right and issued Chemistry Report No. D-025-05 wherein she
stated that the specimen was tested positive for methamphetaminc hydrochloride (shabu). 16 The staple-
sealed brown envelope with markings D-025-05 RFDCA (PI Alviar's initials), which contained one
rectangular transparent plastic sachet sealed with masking tape with the same marking, was offered in
evidence and identified in court by PI Alviar.17chanroblesvirtuallawlibrary
There is no doubt that the sachet of shabu, which was bought and confiscated from appellant, brought
to the police station, and was submitted to the crime laboratory for a qualitative examination, was the
very same shabu presented and identified in court. The police had sufficiently preserved the integrity
and evidentiary value of the seized item, thus, complying with the prescribed procedure in the custody
and control of the confiscated drugs.18chanroblesvirtuallawlibrary
We; find that the penalty imposed, by the RTC and affirmed by the CA is proper under the
law. 19chanroblesvirtuallawlibrary
WHEREFORE, the instant appeal is DISMISSED. The Decision dated July 4, 2012 of the Court of
Appeals in CA-G.R. CR HC No. 04416, which affirmed in toto the Decision dated March 9, 2010 of
the Regional Trial Court of Calapan City, Oriental Mindoro, Branch 39, finding appellant Anita
Miranda y Beltran guilty of violation of Article II, Section 5 of Republic Act No. 9165, is
hereby AFFIRMED.
SO ORDERED.cralawlawlibrary
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee
vs.
SALIM ISMAEL y RADANG, Accused-Appellant
DECISION
DEL CASTILLO, J.:
This is an appeal from the June 14, 2013 Decision1 of the Court of Appeals (CA) in CA-G.R. CR H.C.
No. 00902, which affirmed the August 31, 2010 Judgment2 of Branch 12, Regional Trial Court (RTC)
of Zamboanga City in Criminal Case Nos. 5021 (19952) and 5022 (19953), finding appellant Salim
Ismael y Radang (Salim) guilty beyond reasonable doubt of violating Sections 5 and 11, Article II of
Republic Act No. 9165 (RA 9165), otherwise known as the Comprehensive Dangerous Drugs Act of
2002. In Criminal Case No. 5021 (19952), Salim was sentenced to suffer the penalty of life
imprisonment and to pay a fine of ₱500,000.00 for illegal sale of shabu under Section 5, Article II of
RA 9165; and in Criminal Case No. 5022 (19953), he was sentenced to suffer the penalty of
imprisonment of twelve (12) years and one (1) day to fifteen (15) years and pay a fine of ₱300,000.00
for illegal possession of shabu under Section 11 of the said law.
Factual Antecedents
Salim was charged with violation of Sections 5 and 11, Article II of RA 9165 for selling and
possessing methamphetamine hydrochloride (shabu). The twin Informations3 instituted therefor
alleged:
In Criminal Case No. 5021 (19952)
That on or about August 25, 2003, in the City of Zamboanga, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, not being authorized by law to sell, deliver, transport,
distribute or give away to another any dangerous drug, did then and there willfully, unlawfully and
feloniously, sell and deliver to SPO1 Roberto Alberto Santiago, PNP, Culianan Police Station, who
acted as poseur buyer, one (1) small size transparent plastic pack containing white crystalline substance
as certified to by PO1 Rodolfo Dagalea Tan as METHAMPHETAMINE HYDROCHLORIDE
(SHABU), said accused knowing the same to be a dangerous drug.
CONTRARY TO LAW.
In Criminal Case No. 5022 (19953)
That on or about August 25, 2003, in the City of Zamboanga, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, not being authorized by law, did then and there
willfully, unlawfully and feloniously have in his possession and under his custody and control, two (2)
small size heat-sealed transparent plastic packs each containing white crystalline substance as certified
to by PO1 Rodolfo Dagalea Tan asMETHAMPHETAMINE HYDROCHLORIDE (SHABU), said
accused knowing the same to be a dangerous drug.
CONTRARY TO LAW.
Arraigned on July 6, 2004, Salim, assisted by counsel, pleaded not guilty to both charges. Upon
termination of the joint pre-trial conference, trial on the merits followed.
Version of the Prosecution
Culled from the records4 were the following operative facts:
On August 25, 2003, at around 1:00 o'clock in the afternoon, a confidential informant reported to SPO4
Menardo Araneta [SPO4 Araneta], Chief of the Intelligence Division of the Culianan Police
Station4 [at Zamboanga City], that a certain "Ismael Salim" was engaged in
selling shabu at Barangay Talabaan near the Muslim [c]emetery [in that city.
To verify the report, SPO4 Araneta instructed the said informant to [monitor] the area. After the
informant confim1ed that the said Ismael Salim was indeed selling illegal drugs in the reported area,
SPO4 Araneta formed a buy-bust team composed of SPO1 Enriquez, SPO1 Eduardo N. Rodriguez
(SPO1 Rodriguez), SPO1 Roberto A. Santiago (SPO1 Santiago) and PO2 Rodolfo Dagalea Tan (PO2
Tan). It was then agreed that SPO1 Santiago would act as poseur buyer with SPO1 Rodriguez as back-
up. For the purpose, SPO4 Araneta gave SPO1 Santiago a [₱100] bill bearing Serial No. M419145 as
marked money [to be used] in the buy-bust operation.
Upon arrival at Barangay Talabaan, the team parked their service vehicle along the road. SPO1
Santiago, the confidential informant and SPO1 Rodriguez alighted from the vehicle and walked
towards the [area fronting] the Muslim cemetery. As they approached the area, the informant pointed
to a man wearing a brown T-shirt and black short pants with white towel around his neck [whom he
identified] as appellant Ismael Salim, the target of the operation.
SPO1 Santiago then [walked] towards appellant and [told] the latter that he [wanted] to buy shabu; to
this appellant replied "how much?" SPO1 Santiago answered that he [wanted to buy ₱100.00 worth of
the shabu, and gave appellant] the ₱100.00 marked money; [whereupon appellant] took from his left
pocket one plastic sachet containing a white crystalline substance [which he] handed over to SPO1
Santiago.
Upon seeing the exchange, SPO1 Rodriguez, who was positioned [some 10] meters away, rushed in
and arrested appellant[.] SPO1 Rodriguez made a precautionary search of appellant's body for any
concealed weapon[, and found none]. Instead, SPO1 Rodriguez found, tucked inside [appellant's left
front pocket the ₱100.00] marked money and two (2) more plastic sachets containing white crystalline
substance wrapped in a golden cigarette paper.
The police officers then brought appellant to the Culianan Police Station [in Zamboanga City] with
SPO1 Santiago keeping personal custody of the items confiscated from [him]. At the [police] station,
the plastic sachet containing white crystalline substance subject of the buy-bust operation, the two (2)
plastic sachets also containing white crystalline substance[, and the ₱100.00] marked money bearing
Serial No. M419145 recovered from appellant's left pocket, were respectively turned over by SPO1
Santiago and SPO1 Rodriguez to the Desk Officer, PO3 Floro Napalcruz [PO3 Napalcruz], who
likewise turned [these over] to the Duty Investigator, [PO2 Tan]. PO2 Tan then placed his initial
"RDT" on the items recovered from appellant.
PO2 Tan also prepared a request to the PNP Regional Crime Laboratory 9, [at] Zamboanga City for
laboratory examination of the plastic sachet containing the white crystalline substance subject of the
sale between appellant and SPO1 Santiago, and the other two (2) plastic sachet[s] found inside
appellant's pocket by SPO1 Rodriguez.
After conducting qualitative examination on the said specimens, Police Chief Inspector [PCI]
Mercedes D. Diestro, Forensic Chemist [Forensic Chemist Diestro], issued Chemistry Report No. D-
367-2003 dated August 25, 2003, finding [the above-mentioned] plastic sachets positive for
Methamphetamine Hydrochloride (shabu) a dangerous drug.
Version of the Defense
The defense presented appellant as its lone witness. Appellant denied both charges; he denied
selling shabu to SPO1 Santiago, just as he denied having shabu in his possession when he was arrested
on August 25, 2003.
According to appellant, on August 25, 2003, he went to a store to buy cellphone load so that he could
call his wife. After buying the cellphone load, he went back to his house on board a sikad-sikad, a
bicycle-driven vehicle with a sidecar. When he was about 160 meters away from the Muslim cemetery
in Barangay Talabaan, he was arrested by five persons in civilian attire who introduced themselves as
police officers. The police officers conducted a search on his person but did not find any dangerous
dn1gs. Thereafter, he was brought to Culianan Police Station where he was detained for two days.
Appellant insisted that he never sold shabu to the police officers who arrested him. He said that the
first time he saw the alleged shabu was when it was presented before the trial court. He denied that the
police officers had confiscated a cellular phone from him. He also asserted that all these police officers
took away from him was his money and that he had never met the said police officers prior to his
arrest.
Ruling of the Regional Trial Court
On August 31, 2010, the RTC of Zamboanga City, Branch 12 rendered its Judgment finding appellant
guilty beyond reasonable doubt of having violated Sections 5 and 11,Article II of RA 9165.
The RTC gave full credence to the testimonies of SPO1 Santiago and SPO1 Rodriguez who conducted
the buy-bust operation against appellant; it rejected appellant's defense of denial and frame-up. The
RTC noted that the defense of frame-up is easily concocted and is commonly used as a standard line of
defense in most prosecutions arising from violations of the comprehensive dangerous drugs
act.5 Moreover, other than the self-serving statements of appellant, no clear and convincing exculpatory
evidence was presented in the present case.
The dispositive part of the Judgment of the RTC reads:
WHEREFORE, IN VIEW OF ALL THE FOREGOING; this Court hereby finds the accused herein,
SALIM ISMAEL y RADANG guilty beyond reasonable doubt in both cases, for violation of Sections
5 and 11, Article II of Republic Act No. 9165 otherwise known as the Comprehensive Dangerous
Drugs Act of 2002 and hereby sentences the said accused, in Criminal Case No. 5021 (19952) for
Violation of Section 5, Article II of Republic Act No. 9165, to suffer the penalty of LIFE
IMPRISONMENT and to pay a fine of Five Hundred Thousand Pesos (₱500,000.00), and in Criminal
Case No. 5022 (19953) for Violation of Section 11, Article II of Republic Act No. 9165, to suffer the
penalty of Imprisonment of TWELVE (12) YEARS and ONE (1) DAY to FIFTEEN (15) YEARS and
to pay a fine of Three Hundred Thousand Pesos (₱300,000.00).
The dangerous drugs seized and recovered from the accused in these cases are hereby ordered
confiscated and forfeited in favor of the government to be disposed in accordance with the pertinent
provisions of Republic Act No. 9165 and its in1plementing rules and guidelines.
Cost against the accused.
SO ORDERED.6
Ruling of the Court of Appeals
Dissatisfied with the RTC's verdict, appellant appealed to the CA, but on June 14, 2013, the CA
affirmed in toto the RTC's Judgment. The CA held that the elements of both illegal sale and illegal
possession of dangerous drugs had been duly proven in the instant case. The CA joined the RTC in
giving full credence to the testimonies of the aforementioned police officers, as they are presumed to
have performed their duties in a regular manner, no evidence to the contrary having been adduced in
the twin cases. Moreover, the CA found that in these cases, the integrity and evidentiary value of the
seized drugs had not at all been compromised, but were in fact duly preserved.
The CA disposed as fol1ows:
WHEREFORE, the assailed Judgment of the Regional Trial Court, 9th Judicial Region, Branch 12,
Zamboanga City finding accused-appellant Salim Ismael y Radang guilty beyond reasonable doubt of
Sections 5 and 11, Article II of Republic Act No. 9165, otherwise known as the Comprehensive
Dangerous Drugs Act of 2002 is AFFIRMED in toto.
SO ORDERED.7
Taking exception to the CA's Decision, appellant instituted the present appeal before this Court and in
his Appellant's Brief8 argues that:
THE COURT A QUO GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT
WHEN [HIS] GUILT WAS NOT PROVEN BEYOND REASONABLE DOUBT.9
It is appellant's contention that his guilt had not been proven beyond reasonable doubt because the
prosecution: (1) failed to establish the identity of the prohibited drugs allegedly seized from him and;
(2) likewise failed to comply with the strict requirements of Section 21 of RA 9165.
Our Ruling
The appeal is meritorious.
To secure a conviction for illegal sale of dangerous drugs under Section 5, Article II of RA 9165, 1he
prosecution must establish the following elements: (1) the identity of the buyer and the seller, the
object of the sale and its consideration; and (2) the delivery of the thing sold and the payment
therefor.10 What is important is that the sale transaction of drugs actually took place and that the object
of the transaction is properly presented as evidence in court and is shown to be the same drugs seized
from the accused.
On the other hand, for illegal possession of dangerous drugs, the following elements must be
established: "[1] the accused was in possession of dangerous drugs; [2] such possession was not
authorized by law; and [3] the accused was freely and consciously aware of being in possession of
dangerous drugs."11
In cases of illegal sale and illegal possession of dangerous drugs, the dangerous drug seized from the
accused constitutes the corpus delicti of the offense. Thus, it is of utmost importance that the integrity
and identity of the seized drugs must be shown to have been duly preserved. "The chain of custody rule
performs this function as it ensures that unnecessary doubts concerning the identity of the evidence are
removed."12
After a careful examination of the records of the case, we find that the prosecution failed to establish
an unbroken chain of custody of the seized drugs in violation of Section 21, Article II of RA 9165.
The pertinent provisions of Section 21 state:
Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs. Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment-The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof;
Similarly, the Implementing Rules and Regulations (IRR) further elaborate on the proper procedure to
be followed in Section 21(a) of RA 9165. It states:
(a) The apprehending office/team having initial custody and control of the drugs shall, inm1ediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the
search warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further that non-
compliance with these requirement" under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items;
In Mallillin v. People,13 the Court explained the chain of custody rule as follows:
As a method of authenticating evidence, the chain of custody rule requires that the admission of an
exhibit be preceded by evidence sufficient to support a finding that the matter in question is what the
proponent clain1s it to be. It would include testimony about every link in the chain, from the
moment the item was picked up to the time it is offered into evidence, in such a way that every
person who touched the exhibit would describe how and from whom it was received, where it
was and what happened to it while in the witness' possession, the condition in which it was
received and the condition in which it was delivered to the next link in the chain. These witnesses
would then describe the precautions taken to ensure that there had been no change in the condition of
the item and no opportunity for someone not in the chain to have possession of the same. (Emphasis
supplied)
The first link in the chain is the marking of the seized drug. We have previously held that:
x x x Marking after seizure is the starting point in the custodial link, thus it is vital that the seized
contraband are immediately marked because succeeding handlers of the specimen will use the
markings as reference. The marking of the evidence serves to separate the marked evidence from
the corpus of all other similar or related evidence from the time they are seized from the accused until
they are disposed of at the end of the criminal proceedings, obviating switching, 'planting,' or
contamination of evidence.14
It is important that the seized drugs be immediately marked, if possible, as soon as they are seized from
the accused.
Furthermore, in People v. Gonzales,15 the Court explained that:
The first stage in the chain of custody rule is the marking of the dangerous drugs or related
items. Marking, which is the affixing on the dangerous drugs or related items by the
apprehending officer or the poseur-buyer of his initials or signature or other identifying signs,
should be made in the presence of the apprehended violator immediately upon arrest. The
importance of the prompt marking cannot be denied, because succeeding handlers of dangerous drugs
or related items will use the marking as reference. Also, the marking operates to set apart as evidence
the dangerous drugs or related items from other material from the moment they are confiscated until
they are disposed of at the close of the criminal proceedings, thereby forestalling switching, planting or
contamination of evidence. In short, the marking immediately upon confiscation or recovery of the
dangerous drugs or related items is indispensable in the preservation of their integrity and
evidentiary value. (Emphasis supplied)
In this case, SPO1 Rodriguez testified on the seizure of the sachets of shabu he found in appellant's
possession alter the latter was arrested. SPO1 Rodriguez shared the details of how the seized drugs
were handled following its confiscation as follows:
RSP II Ivan C. Mendoza, Jr.:
Q: You are telling the Honorable Court that instead of finding concealed weapon, yon x x x found two
small sized heat-sealed transparent plastic bag[s]?
A: Yes, sir.
Q: Where [were] these two small[-]sized heat-sealed transparent plastic [packs] found?
A: [In] his left-front pocket.
Q: Were they wrapped further in another piece of paper or were they just found in that pocket?
A: [They were] wrapped in a [golden-colored] cigarette paper.
Q: Would you x x x be able to remember that [golden- colored] cigarette paper? The wrapper of plastic
pack?
A: Yes, sir.
Q: Why will you be able to remember it?
A: Because I turned it over to the desk officer and the desk officer turned it over to the
investigator, the investigator marked it.
Q: Who is the investigator?
A: PO2 Rodolfo Tan.
Q: So did you see anything that the investigator Rodolfo Tan do in that golden paper?
A: He marked his initial [sic].
Q: Ah, you saw him [mark] an initial?
A: Yes, sir.
Q: What did you see him [mark] on the paper?
A: RDT.
Q: And do you know the meaning of RDT?
A: Yes, Rodolfo Dagalea Tan. 16
The testimony of SPO l Rodriguez on the chain of custody of the seized drugs leaves much to be
desired. It is evident that there was a break in the very first link of the chain when he failed to mark the
sachet'3 of shabu immediately upon seizing them from the appellant. According to SPO1 Rodriguez,
after finding sachets of shabu in appellant's possession, he turned the drugs over to the desk officer.
SPO1 Rodriguez did not even explain why he failed to mark or why he could not have marked the
seized items immediately upon confiscation. Allegedly, the desk officer, after receiving the seized
items from SPO1 Rodriguez, in turn handed them over to PO2 Tan. Notably, this desk officer was not
presented in court thereby creating another break in the chain of custody. Again, no explanation was
offered for the non-presentation of the desk officer or why he himself did not mark the seized items. It
was only upon receipt by PO2 Tan, allegedly from the desk officer, of the seized chugs that the same
were marked at the police station. This means that from the time the drugs were seized from appellant
until the time PO2 Tan marked the same, there was already a significant gap in the chain of custody.
Because of this gap, there is no certainty that the sachets of drugs presented as evidence in the trial
court were the same drugs found in appellant's possession.
SPO1 Santiago, the poseur-buyer in the buy-bust operation, was presented to corroborate the testimony
of SPO1 Rodriguez. However, his testimony likewise showed that the arresting officers did not mark
the seized drugs immediately after the arrest and in the presence of the appellant. Similarly, no
explanation was given for the lapse. SPO1 Santiago testified as follows:
Q: So what did you do with the small transparent sachet after police officer Rodriguez came to assist
you?
A: After the arrest of a certain Ismael we proceeded to our police station when we arrived there I
turnover [sic] the transparent sachet to our desk officer.
Q: Who was the desk officer?
A: At that time it was PO3 Floro Napalcruz.
Q: Did you notice anything that he did with the specimen that you turnover [sic] to him, if any?
COURT: You are referring to the desk officer?
RSPII IVAN C. MENDOZA, JR.: Yes, Your Honor.
A: During that time, Your Honor, I gave to him the, [sic] which I buy from him [sic] the one (1) piece
of transparent small sachet of shabu then after that I get [sic] out from the office.17
During cross-examination, SPO1 Santiago reiterated that he did not mark the seized drugs. The sachets
were marked after they were received by PO2 Tan.
Q: Now, you said that this plastic sachet taken from the suspect, you turned it over to the desk officer
of the police station?
A: Yes, sir.
Q: After turning it over, you left?
A: Yes, sir.
Q: You do not know what happened to the sachet?
A: Yes, sir.
Q: You did not place your markings there?
A: None, sir.18
It is clear from the above that SPO1 Rodriguez and SPO1 Santiago did not mark the seized drugs
immediately after they were confiscated from appellant. No explanations were given why markings
were not immediately made. At this stage in the chain, there was already a significant break such that
there can be no assurance against switching, planting, or contamination. The Court has previously held
that, "failure to mark the drugs immediately after they were seized from the accused casts doubt on the
prosecution evidence warranting an acquittal on reasonable doubt."19
Both arresting officers testified that they turned over the sachets of shabu to a desk officer in the
person of PO3 Napalcruz at the police station. Notably, PO3 Napalcruz was not presented in court to
testify on the circumstances surrounding the alleged receipt of the seized drugs. This failure to present
PO3 Napalcruz is another fatal defect in an already broken chain of custody. Every person who takes
possession of seized drugs must show how it was handled and preserved while in his or her custody to
prevent any switching or replacement.
After PO3 Napalcruz, the seized drugs were then turned over to PO2 Tan. It was only at this point that
marking was done on the seized drugs. He revealed in his testimony the following:
4th ACP RAY Z. BONGABONG:
Q: [After the apprehension] of the accused in this case, what happened?
A: SPO1 Roberto Santiago turned over to the Desk Officer one (1) small size heat-sealed transparent
plastic pack containing shabu, allegedly a buy[-]bust stuff confiscated from the subject person and
marked money while SPO1 Eduardo Rodriguez turned over two (2) small size heat[-]sealed transparent
plastic packs allegedly confiscated from the possession of the subject person during a body search
conducted and one (1) Nokia cellphone 3310 and cash money of ₱710.00.
x x xx
Q: You as investigator of the case what did you do, if any, upon the turn over of those items?
A: I prepared a request for laboratory examination addressed to the Chief PNP Crime Laboratory 9, R.
T. Lim Boulevard, this City.
Q: This small heat[-]sealed transparent plastic sachet if you can see this again, will you be able to
identify the same?
A: Yes, Sir.
Q: How?
A: Through my initial, Sir.
Q: What initial?
A: RDT
Q: What does RDT stands [sic] for?
A: It stands for my name Rodolfo Dagalea Tan.20
In fine, PO2 Tan claimed during his direct examination that he received the seized items from the desk
officer.
During cross-examination, however, PO2 Tan contradicted his previous statement on who turned over
the sachets of shabu to him, viz.:
ATTY. EDGARDO D. GONZALES:
Q: Santiago told you that he was the poseur buyer?
A: Yes, Sir.
Q: He turned over to you, what?
A: He turned over to me small size heat[-]sealed transparent plastic pack containing white
crystalline substance, containing shabu.
x x xx
Q: You also identified two other pieces of sachet, correct, Sir?
A: Yes, Sir.
Q: Who turned over to you?
A: SPO1 Eduardo Rodriguez.21
Due to the apparent breaks in the chain of custody, it was possible that the seized item subject of the
sale transaction was switched with the seized items subject of the illegal possession case. This is
material considering that the imposable penalty for illegal possession of shabu depends on the quantity
or weight of the seized drug.
Aside from the failure to mark the seized drugs immediately upon arrest, the arresting officers also
failed to show that the marking of the seized drugs was done in the presence of the appellant. This
requirement must not be brushed aside as a mere technicality. It must be shown that the marking was
done in the presence of the accused to assure that the identity and integrity of the drugs were properly
preserved. Failure to comply with this requirement is fatal to the prosecution's case.
The requirements of making an inventory and taking of photographs of the seized drugs were likewise
omitted without offering an explanation for its non-compliance. This break in the chain tainted the
integrity of the seized drugs presented in court; the very identity of the seized drugs became highly
questionable.
To recap, based on the evidence of the prosecution, it is clear that no markings were made immediately
after the arrest of the appellant.1âwphi1 The seized drugs were allegedly turned over to desk officer
PO3 Napalcruz but the prosecution did not bother to present him to testify on the identity of the items
he received from SPO1 Rodriguez and SPO1 Santiago. PO3 Napalcruz supposedly turned over the
drugs to PO2 Tan who marked the same at the police station. During his direct testimony, PO2 Tan
claimed that he received the drugs from PO3 Napalcruz. However, during his cross-examination, PO2
Tan contradicted himself when he admitted receipt of the seized drugs from SPO1 Santiago and SPO1
Rodriguez. Aside from these glaring infirmities, there was no inventory made, or photographs taken, of
the seized drugs in the presence of the accused or his representative, or in the presence of any
representative from the media, Department of Justice or any elected official, who must sign the
inventory, or be given a copy of the inventory as required by RA 9165 and its IRR.
Lastly, we note that the trial court, in its November 12, 2007 Order, already denied the admission of
Exhibits ''B-1" and "B-2" or the dn1gs subject of the illegal possession case. The relevant portions of
the Order are as follows:
Plaintiff's Exhibits "B-1" and "B-2" however are DENIED admission on the grounds that Exhibit "B-1"
submitted by the prosecution in evidence is merely a cigarette foil, whereas Exhibit "B-2" is a heat
sealed transparent plastic sachet containing 0.0135 gram of methamphetamine hydrochloride which are
inconsistent with its offer that Exhibits "B-1" and "B-2" are two (2) plastic heat sealed transparent
plastic sachets containing shabu with a total weight of 0.0310 gram.22
Surprisingly, however, the trial court rendered a verdict convicting the appellant of violating Section
11, RA 9165 on illegal possession of dangerous drugs based on the same pieces of evidence it
previously denied.
In sum, we find that the prosecution failed to: (1) overcome the presumption of innocence which
appellai1t enjoys; (2) prove the corpus delicti of the crime; (3) establish an unbroken chain of custody
of the seized drugs; and (3) offer any explanation why the provisions of Section 21, RA 9165 were not
complied with. This Court is thus constrained to acquit the appellant based on reasonable doubt.
WHEREFORE, the appeal is GRANTED. The assailed June 14, 2013 Decision of the Court of
Appeals in CA-GR. CR HC No. 00902, which affirmed the August 31, 2010 Judgment of Branch 12,
Regional Trial Court of Zamboanga City in Criminal Case Nos. 5021 (19952) and 5022 (19953)
is REVERSED and SET ASIDE.
Accordingly, appellant Salim R. Ismael is ACQUITTED based on reasonable doubt.
The Director of the Bureau of Corrections is directed to cause the immediate release of appellant,
unless the latter is being lawfully held for another cause, and to inform the Court of the date of his
release or reason for his continued confinement within five days from notice.
SO ORDERED.
G.R. No. 212196, January 12, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RAMIL
DORIA DAHIL AND ROMMEL CASTRO Y CARLOS, Accused-Appellants.
SECOND DIVISION
G.R. No. 212196, January 12, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RAMIL DORIA DAHIL AND
ROMMEL CASTRO Y CARLOS, Accused-Appellants.
DECISION
MENDOZA, J.:
This is an appeal from the September 27, 2013 Decision1 of the Court of Appeals (CA) in CA-G.R.
CR-HC No. 05707, which affirmed the July 17, 2012 Decision2 of the Regional Trial Court, Branch 57,
Angeles City (RTC) in Criminal Case Nos. DC 02-376, DC 02-377 and DC 02-378, finding accused
Ramil Doria Dahil (Dahil) and Rommel Castro (Castro) guilty beyond reasonable doubt for violating
Sections 5 and 11 of Republic Act (R.A.) No. 9165 or the Comprehensive Dangerous Drugs Act of
2002.
The Facts
On October 1, 2002, Dahil and Castro were charged in three (3) separate Informations before the RTC.
In Criminal Case No. DC 02-376, Dahil and Castro were charged with violation of Section 5, Article II
of R.A. No. 9165 for the sale of 26.8098 grams of marijuana in the Information which
reads:ChanRoblesVirtualawlibrary
That on or about the 29th day of September, 2002, in the City of Angeles, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating and
mutually helping one another, did, then and there, willfully, unlawfully and feloniously sell and/or
deliver to a poseur buyer six (6) tea bags of dried marijuana fruiting tops weighing TWENTY SIX
GRAMS AND EIGHT THOUSAND NINETY EIGHT TEN THOUSANDTHS OF A GRAM
(26.8098), which is a dangerous drug, without authority whatsoever.
CONTRARY TO LAW.3
In Criminal Case No. DC 02-377, Dahil was charged with possession of 20.6642 grams of marijuana in
violation of Section 11, Article II of R.A. No. 9165, in the Information which
reads:chanroblesvirtuallawlibrary
That on or about the 29th day of September, 2002, in the City of Angeles, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, did then and there, willfully,
unlawfully and feloniously have in his possession and custody and control Five (5) tea bags of dried
marijuana fruiting tops weighing TWENTY GRAMS AND SIX THOUSAND SIX HUNDRED
FORTY TWO TEN THOUSANDTHS OF A GRAM (20.6642), which is a dangerous drug, without
authority whatsoever.
CONTRARY TO LAW.4
In Criminal Case No. DC 02-378, Castro was charged with possession of 130.8286 grams of marijuana
in violation of Section 11, Article II of R.A. No. 9165, in the Information which
reads:chanroblesvirtuallawlibrary
That on or about the 29th day of September, 2002, in the City of Angeles, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, did, then and there, willfully,
unlawfully and feloniously have in his possession and custody and control One (1) brick in form
wrapped in masking tape of dried marijuana fruiting tops weighing ONE HUNDRED THIRTY
GRAMS and EIGHT THOUSAND TWO HUNDRED EIGHTY SIX TEN THOUSANDTHS OF A
GRAM (130.8286), which is a dangerous drug, without authority whatsoever.
CONTRARY TO LAW.5
On November 14, 2002, Castro was arraigned and he pleaded not guilty. Dahil, on the other hand, filed
a motion for reinvestigation and his arraignment was deferred. Trial ensued and the prosecution
presented PO2 Arieltino Corpuz (PO2 Corpuz) and SPO1 Eliseo Licu (SPO1 Licu), as witnesses.
On August 6, 2009, the RTC discovered that Dahil was never arraigned through inadvertence. 6 The
RTC informed the parties of the situation and the defense counsel did not interpose any objection to the
reopening of the case and the arraignment of Dahil. The latter was then arraigned and he pleaded not
guilty. Thereafter, the public prosecutor manifested that he was adopting all the evidence already
adduced.
Version of the Prosecution
Evidence of the prosecution tended to show that, for a couple of weeks, the agents of the Philippine
Drug Enforcement Agency (PDEA), Region 3, conducted surveillance and casing operations relative to
the information they received that a certain alias “Buddy” and alias “Mel” were trafficking dried
marijuana in TB Pavilion, Marisol Subdivision, Barangay Ninoy Aquino, Angeles City. On September
29, 2002, the Chief of PDEA formed a team to conduct a buy-bust operation. The team was composed
of four (4) police officers, namely, Sergeant Juanito dela Cruz (Sergeant dela Cruz), as team leader;
and PO2 Corpuz, SPO1 Licu and PO2 Javiar, as members. PO2 Corpuz was designated as the poseur-
buyer while SPO1 Licu was assigned as his back-up.
The team proceeded to the target place at around 8:00 o’clock in the evening. Upon arriving, PO2
Corpuz together with the informant went to the house of Dahil which was within the TB Pavillon
compound. When PO2 Corpuz and the informant were in front of the house, they met Dahil and
Castro. The informant then introduced PO2 Corpuz as the buyer of marijuana. Dahil asked PO2
Corpuz how much would he be buying and the latter answered that he would buy P200.00 worth of
marijuana. At this juncture, Dahil took out from his pocket six (6) plastic sachets of marijuana and
handed them to PO2 Corpuz. After checking the items, PO2 Corpuz handed two (2) P100.00 marked
bills to Castro.
Immediately thereafter, PO2 Cruz took off his cap to signal that the sale had been consummated. The
rest of the buy-bust team then rushed to their location and arrested Castro and Dahil. PO2 Corpuz
frisked Dahil and recovered from his possession another five (5) plastic sachets containing marijuana
while SPO1 Licu searched the person of Castro and confiscated from him one (1) brick of suspected
marijuana.
Both Castro and Dahil, together with the confiscated drugs, were then brought by the buy-bust team to
the PDEA office. There, the seized items were marked by PO2 Corpuz and SPO1 Licu. First, the six
(6) plastic sachets of marijuana which were sold by Dahil to PO2 Corpuz were marked with “A-1” to
“A-6” and with letters “RDRC,” “ADGC” and “EML.” Second, the five (5) plastic sachets recovered
from Dahil were marked with “B-1” to “B-5” and with letters “RDRC,” “ADGC” and “EML.” Finally,
the marijuana brick confiscated from Castro was marked “C-RDRC.” Sergeant dela Cruz then prepared
the request for laboratory examination, affidavits of arrest and other pertinent documents. An inventory
of the seized items7 was also prepared which was signed by Kagawad Pamintuan. Thereafter, PO2
Corpuz brought the confiscated drugs to the Philippine National Police (PNP) Crime Laboratory for
examination, which subsequently yielded positive results for marijuana.
The prosecution and defense entered into stipulation as to the essential contents of the prospective
testimony of the forensic chemist, to wit:chanroblesvirtuallawlibrary
1. That a laboratory examination request was prepared by PO3 Dela Cruz;
2. That said letter request for laboratory examination was sent to the PNP Crime
Laboratory, Camp Olivas, San Fernando, Pampanga;
3. That Engr. Ma. Luisa Gundran David is a forensic chemist;
4. That said forensic chemist conducted an examination on the substance subject of the
letter request with qualification that said request was not subscribed or under oath
and that the forensic chemist has no personal knowledge as from whom and where
said substance was taken;
5. That the result of the laboratory examination is embodied in Chemistry Report No.
D-0518-2002; and
6. The findings and conclusion thereof.8
The prosecution was ordered to formally offer its evidence on March 7, 2007.9 After much delay, the
public prosecutor was finally able to orally submit his formal offer of exhibits after almost two
years, or on January 6, 2009.10 He offered the following documentary evidence: (1) Joint Affidavit of
Arrest, (2) Custodial Investigation Report, (3) Photocopy of the marked money, (4) Brown envelope
containing the subject illegal drugs, (5) Inventory of Property Seized, (6) Laboratory Examination
Request, and (7) Chemistry Report No. D-0518-2002.
Version of the Defense
In his defense, Dahil claimed that on September 29, 2002, a tricycle driver came looking for him after
he had arrived home. He saw the tricycle driver with another man already waiting for him. He was then
asked by the unknown man whether he knew a certain Buddy in their place. He answered that there
were many persons named Buddy. Suddenly, persons alighted from the vehicles parked in front of his
house and dragged him into one of the vehicles. He was brought to Clark Air Base and was charged
with illegal selling and possession of marijuana.
For his part, Castro testified that on September 29, 2002, he was on 4th Street of Marisol, Barangay
Ninoy Aquino, Angeles City, watching a game of chess when he was approached by some men who
asked if he knew a certain Boy residing at Hardian Extension. He then replied that he did not know the
said person and then the men ordered him to board a vehicle and brought him to Clark Air Base where
he was charged with illegal possession of marijuana.
RTC Ruling
In its Decision,11 dated July 17, 2012, the RTC found both accused liable for violating Sections 5 and
11 of R.A. No. 9165, and imposed upon them the penalty of life imprisonment and a fine of
P500,000.00 each for the crime of illegal sale of marijuana; Twelve (12) Years and One (1) Day, as
minimum, to Fourteen (14) Years of Reclusion Temporal, as maximum, and a fine of P300,000.00
each for the crime of illegal possession of marijuana.
The RTC was convinced that the prosecution was able to prove the case of selling and possession of
illegal drugs against the accused. All the elements of the crimes were established. To the trial court, the
evidence proved that PO2 Corpuz bought marijuana from Dahil. The latter examined the marijuana
purchased and then handed the marked money to Castro.
The marked money was lost in the custody of the police officers, but the RTC ruled that the same was
not fatal considering that a photocopy of the marked money was presented and identified by the
arresting officers.12 It did not give credence to the defense of frame-up by Dahil and Castro explaining
that it could easily be concocted with no supporting proof.
CA Ruling
The accused then appealed to the CA. In their Brief for the Accused-Appellants, 13 they argued that
there were irregularities on the preservation of the integrity and evidentiary value of the illegal items
seized from them. The prosecution witnesses exhibited gross disregard of the procedural safeguards
which generated clouds of doubts as to the identity of the seized items presented in
evidence. 14chanRoblesvirtualLawlibrary
In its Brief for the Appellee,15 the OSG contended that the prosecution was able to prove all the
elements of the crime of illegal sale and possession of marijuana. As to the chain of custody procedure,
it insists that the prosecution witnesses were able to account for the series of events that transpired,
from the time the buy-bust operation was conducted until the time the items were presented in court.
The CA denied the appeal in its Decision, dated September 27, 2013. In its view, the prosecution was
able to establish that the illegal sale of marijuana actually took place. As could be gleaned from the
testimony of PO2 Corpuz, there was an actual exchange as Dahil took out from his pocket six (6)
sachets containing marijuana, while PO2 Corpuz handled out the two (2) P100.00 marked bills, after
they agreed to transact P200.00 worth of the illegal drug.16 The charge of illegal possession of
marijuana, was also thus established by the prosecution.17 Another five (5) plastic sachets of marijuana
were recovered from Dahil’s possession while one (1) brick of marijuana from Castro’s
possession.18chanRoblesvirtualLawlibrary
It was likewise proven that the illicit drugs confiscated from the accused during the buy-bust operation
were the same drugs presented before the RTC. As testified to by PO2 Corpuz, the six (6) plastic
sachets of marijuana, which were sold by Dahil to PO2 Corpuz were marked “A-1” to “A-6” and with
letters “RDRC,” “ADGC” and “EML,” the five (5) plastic sachets recovered in the possession of Dahil
were marked “B-1” to “B-5” and with the initials “ADGC” and “EML,” while the marijuana brick
confiscated from Castro was marked “C-RDRC.”19chanRoblesvirtualLawlibrary
It was also held that the prosecution was able to establish the chain of custody. PO2 Corpuz and SPO1
Licu testified that the said drugs were marked at the police station. An inventory of the seized items
was made as shown by the Inventory Report of Property Seized, duly signed by Kagawad Pamintuan.
The Request for Laboratory Examination revealed that the confiscated drugs were the same items
submitted to the PNP crime laboratory for examination. On the other hand, Chemistry Report No. D-
0518-2002 showed that the specimen gave positive results to the test of marijuana. The accused failed
to show that the confiscated marijuana items were tampered with, or switched, before they were
delivered to the crime laboratory for examination.20chanRoblesvirtualLawlibrary
Hence, this appeal.
This appeal involves the sole issue of whether or not the law enforcement officers substantially
complied with the chain of custody procedure required by R.A. No. 9165.cralawred
The Court’s Ruling
Let it be underscored that appeal in criminal cases throws the whole case open for review and it is the
duty of the appellate court to correct, cite and appreciate errors in the appealed judgment whether they
are assigned or unassigned.21 Considering that what is at stake here is no less than the liberty of the
accused, this Court has meticulously and thoroughly reviewed and examined the records of the case
and finds that there is merit in the appeal. The Court holds that that there was no unbroken chain of
custody and that the prosecution failed to establish the very corpus delicti of the crime charged.
A buy-bust operation gave rise to the present case. While this kind of operation has been proven to be
an effective way to flush out illegal transactions that are otherwise conducted covertly and in secrecy, a
buy-bust operation has a significant downside that has not escaped the attention of the framers of the
law. It is susceptible to police abuse, the most notorious of which is its use as a tool for
extortion. 22chanRoblesvirtualLawlibrary
The presentation of the dangerous drugs as evidence in court is material if not indispensable in every
prosecution for the illegal sale and possession of dangerous drugs. As such, the identity of the
dangerous drugs should be established beyond doubt by showing that the items offered in court were
the same substances bought during the buy-bust operation. This rigorous requirement, known under
R.A. No. 9165 as the chain of custody, performs the function of ensuring that unnecessary doubts
concerning the identity of the evidence are removed.23 In People v. Catalan,24 the Court
said:chanroblesvirtuallawlibrary
To discharge its duty of establishing the guilt of the accused beyond reasonable doubt, therefore, the
Prosecution must prove the corpus delicti. That proof is vital to a judgment of conviction. On the other
hand, the Prosecution does not comply with the indispensable requirement of proving the violation of
Section 5 of Republic Act No. 9165 when the dangerous drugs are missing but also when there are
substantial gaps in the chain of custody of the seized dangerous drugs that raise doubts about the
authenticity of the evidence presented in court.
Although R.A. No. 9165 does not define the meaning of chain of custody, Section 1(b) of Dangerous
Drugs Board Regulation No. 1, Series of 2002, which implements R.A. No. 9165, explains the said
term as follows:chanroblesvirtuallawlibrary
"Chain of Custody" means the duly recorded authorized movements and custody of seized drugs or
controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each stage, from
the time of seizure/confiscation to receipt in the forensic laboratory to safekeeping to presentation in
court for destruction. Such record of movements and custody of seized item shall include the identity
and signature of the person who held temporary custody of the seized item, the date and time when
such transfer of custody were made in the course of safekeeping and use in court as evidence, and the
final disposition.
As a means of ensuring the establishment of the chain of custody, Section 21 (1) of R.A. No. 9165
specifies that:chanroblesvirtuallawlibrary
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof.
 A: In our office, sir.
Specifically, Article II, Section 21(a) of the Implementing Rules and Regulations (IRR) of R.A. No. Q: Already in your office?
9165 enumerates the procedures to be observed by the apprehending officers to confirm the chain of A: Yes, sir.
custody, to wit:chanroblesvirtuallawlibrary
Q: Who prepared the inventory of the property seized?
xxx
A: Our investigator, sir.
(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately Q: And that was prepared while you were already at your office?
after seizure and confiscation, physically inventory and photograph the same in the presence of the A: Yes, sir, because we did not bring with us the material or equipment for the preparation of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her documents so, we invited him to our office.25
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy PO2 Corpuz gave the flimsy excuse that they failed to immediately conduct an inventory because they
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the did not bring with them the material or equipment for the preparation of the documents. Such
search warrant is served; or at the nearest police station or at the nearest office of the apprehending explanation is unacceptable considering that they conducted a surveillance on the target for a couple of
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further that non- weeks.26 They should have been prepared with their equipment even before the buy-bust operation took
compliance with these requirements under justifiable grounds, as long as the integrity and the place.
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items; Second, there is doubt as to the identity of the person who prepared the Inventory of Property Seized.
xxx According to the CA decision, it was Sergeant dela Cruz who prepared the said document.27 PO2 Cruz
on the other hand, testified that it was their investigator who prepared the document while SPO1
The strict procedure Licu’s testimony was that a certain SPO4 Jamisolamin was their
under Section 21 of R.A. investigator.28chanRoblesvirtualLawlibrary
No. 9165 was not
complied with. Third, there were conflicting claims on whether the seized items were photographed in the presence of
the accused or his/her representative or counsel, a representative from the media and the DOJ, and any
Although the prosecution offered in evidence the Inventory of the Property Seized signed by the elected public official. During the cross-examination, PO2 Corpuz testified:chanroblesvirtuallawlibrary
arresting officers and Kagawad Pamintuan, the procedures provided in Section 21 of R.A. No. 9165
were not observed. The said provision requires the apprehending team, after seizure and confiscation, Q: After you arrested Ramil Dahil, did you conduct the inventory of the alleged seized
to immediately (1) conduct a physically inventory; and (2) photograph the same in the presence of the items?
accused or the person/s from whom such items were confiscated and/or seized, or his/her A: Yes, sir (sic).
representative or counsel, a representative from the media and the DOJ, and any elected public official Q: Where did you conduct the inventory?
who shall be required to sign the copies of the inventory and be given a copy thereof. A: In our office, ma’am
Q: Were pictures taken on the alleged seized items together with Ramil Dahil?
First, the inventory of the property was not immediately conducted after seizure and confiscation as it
was only done at the police station. Notably, Article II, Section 21(a) of the IRR allows the inventory A: No, ma’am.29chanRoblesvirtualLawlibrary
to be done at the nearest police station or at the nearest office of the apprehending team whichever is
practicable, in case of warrantless seizures. In this case, however, the prosecution did not even claim [Emphases supplied]
that the PDEA Office Region 3 was the nearest office from TB Pavilion where the drugs were seized.
The prosecution also failed to give sufficient justification for the delayed conduct of the inventory.  SPO1 Licu when cross-examined on the same point, testified this was:chanroblesvirtuallawlibrary
PO2 Corpuz testified, to wit:chanroblesvirtuallawlibrary
Q: After you conducted the alleged buy-bust operation, did you conduct an inventory of the alleged
Q: What documents did you ask Kgd. Abel Pamintuan to sign? seized items?
A: The inventory of the property seized, sir. A: Yes, ma’am.
Q: And did he sign that? Q: Were the accused assisted by counsel at the time you conduct the inventory?
A: Yes, sir. A: No, ma’am.
Q: Where was he when he signed that? Q: Were pictures taken on them including the alleged seized items?
A: Pictures were taken on the accused, ma’am.
 the court.

[Emphasis supplied] First link: Marking of the

Drugs Recovered from the
Accused by the Apprehending
In other words, when questioned on the conduct of the inventory, PO2 Corpuz testified that no pictures
Officer
of the seized items were taken while SPO1 Licu said that pictures of the accused were taken. From the
vague statements of the police officers, the Court doubts that photographs of the alleged drugs were
Crucial in proving the chain of custody is the marking of the seized drugs or other related items
indeed taken. The records are bereft of any document showing the photos of the seized items. The
immediately after they have been seized from the accused. "Marking" means the placing by the
Court notes that SPO1 Licu could have misunderstood the question because he answered that “pictures
apprehending officer or the poseur-buyer of his/her initials and signature on the items seized. Marking
were taken on the accused” when the question referred to photographs of the drugs and not of the
after seizure is the starting point in the custodial link; hence, it is vital that the seized contraband be
accused.
immediately marked because succeeding handlers of the specimens will use the markings as reference.
The marking of the evidence serves to separate the marked evidence from the corpus of all other
The prosecution failed to
similar or related evidence from the time they are seized from the accused until they are disposed of at
establish that the integrity and
the end of the criminal proceedings, thus, preventing switching, planting or contamination of
evidentiary value of the seized
evidence.35chanRoblesvirtualLawlibrary
items were preserved.
It must be noted that marking is not found in R.A. No. 9165 and is different from the inventory-taking
Notwithstanding the failure of the prosecution to establish the rigorous requirements of Section 21 of
and photography under Section 21 of the said law. Long before Congress passed R.A. No. 9165,
R.A. No. 9165, jurisprudence dictates that substantial compliance is sufficient. Failure to strictly
however, this Court had consistently held that failure of the authorities to immediately mark the seized
comply with the law does not necessarily render the arrest of the accused illegal or the items seized or
drugs would cast reasonable doubt on the authenticity of the corpus
confiscated from him inadmissible. 30 The issue of non-compliance with the said section is not of
delicti.36chanRoblesvirtualLawlibrary
admissibility, but of weight to be given on the evidence.31 Moreover, Section 21 of the IRR requires
"substantial" and not necessarily "perfect adherence," as long as it can be proven that the integrity and
In the present case, PO2 Corpuz and SPO1 Licu claimed that they had placed their initials on the
the evidentiary value of the seized items are preserved as the same would be utilized in the
seized items. They, however, gave little information on how they actually did the marking. It is clear,
determination of the guilt or innocence of the accused.32chanRoblesvirtualLawlibrary
nonetheless, that the marking was not immediately done at the place of seizure, and the markings were
only placed at the police station based on the testimony of PO2 Corpuz, to
To ensure that the integrity and the evidentiary value of the seized items are preserved, the proper
wit:chanroblesvirtuallawlibrary
chain of custody of the seized items must be shown. The Court explained in People v. Malillin33 how
the chain of custody or movement of the seized evidence should be maintained and why this must be
shown by evidence, viz:chanroblesvirtuallawlibrary Q: So, after recovering all those marijuana bricks and plastic sachets of marijuana and the marked
As a method of authenticating evidence, the chain of custody rule requires that the admission of an money from the accused, what else did you do?
exhibit be preceded by evidence sufficient to support a finding that the matter in question is what the A: We brought the two (2) suspects and the evidence and marked money to our office, sir.
proponent claims it to be. It would include testimony about every link in the chain, from the moment Q: So, in your office, what happened there?
the item was picked up to the time it is offered into evidence, in such a way that every person who A: Our investigator prepared the necessary documents, sir, the request for crime lab examination, joint
touched the exhibit would describe how and from whom it was received, where it was and what affidavit of arrest, booking sheet, and all other documents necessary for the filing of the case
happened to it while in the witness’ possession, the condition in which it was received and the against the two (2), sir.
condition in which it was delivered to the next link in the chain. These witnesses would then describe xxx
the precautions taken to ensure that there had been no change in the condition of the item and no Q: What about the marijuana, subject of the deal, and the one which you confiscated from the accused,
opportunity for someone not in the chain to have possession of the same. what did you do with those?
A: Before sending them to Olivas, we placed our markings, sir.37
In People v. Kamad,34  the  Court  identified  the  links  that  the prosecution must establish in the chain
of custody in a buy-bust situation to be as follows: first, the seizure and marking, if practicable, of the
Hence, from the place of the seizure to the PDEA Office Region 3, the seized items were not marked.
illegal drug recovered from the accused by the apprehending officer; second, the turnover of the illegal
It could not, therefore, be determined how the unmarked drugs were handled. The Court must conduct
drug seized by the apprehending officer to the investigating officer; third, the turnover by the
guesswork on how the seized drugs were transported and who took custody of them while in transit.
investigating officer of the illegal drug to the forensic chemist for laboratory examination;
Evidently, the alteration of the seized items was a possibility absent their immediate marking thereof.
and fourth, the turnover and submission of the marked illegal drug seized by the forensic chemist to

Still, there are cases when the chain of a custody rule is relaxed such as when the marking of the seized
items is allowed to be undertaken at the police station rather than at the place of arrest for as long as it
is done in the presence of the accused in illegal drugs cases.38  Even a less stringent application of the
requirement, however, will not suffice to sustain the conviction of the accused in this case. Aside from
the fact that the police officers did not immediately place their markings on the seized marijuana upon
their arrival at the PDEA Office, there was also no showing that the markings were made in the
presence of the accused.
PO2 Corpuz testified that they only placed their markings on the drugs when they were about to send
them to Camp Olivas for forensic examination. This damaging testimony was corroborated by the
documentary evidence offered by the prosecution. The following documents were made at the PDEA
Office: (1) Joint Affidavit of Arrest, (2) Custodial Investigation Report, (3) Inventory of Property
Seized, and (4) Laboratory Examination Request. Glaringly, only the Laboratory Examination Request
cited the markings on the seized drugs. Thus, it could only mean that when the other documents were
being prepared, the seized drugs had not been marked and the police officers did not have basis for
identifying them. Considering that the seized drugs were to be used for different criminal charges, it
was imperative for the police officers to properly mark them at the earliest possible opportunity. Here,
they failed in such a simple and critical task. The seized drugs were prone to mix-up at the PDEA
Office itself because of the delayed markings.
Worse, not all of the seized drugs were properly marked. As noted by the RTC, Exhibit B-3 RC
RD,39 Exhibit A-5 RC RD and Exhibit A-6 RD RC40 did not have the initials of the apprehending
officers on the back. Bearing in mind the importance of marking the seized items, these lapses in the
procedure are too conspicuous and cannot be ignored. They placed uncertainty as to the identity of
the corpus delicti from the moment of seizure until it was belatedly marked at the PDEA Office.
Similarly, in People v. Garcia,41 the Court considered the belated marking of the seized drug by the
apprehending officer in acquitting the accused in the case. The officer testified that he marked the
confiscated items only after he had returned to the police station. Such admission showed that the
marking was not done immediately after the seizure of the items, but after the lapse of a significant
intervening time.
Second Link: Turnover of the
Seized Drugs by the Apprehending
Officer to the Investigating Officer
The second link in the chain of custody is the transfer of the seized drugs by the apprehending officer
to the investigating officer. Usually, the police officer who seizes the suspected substance turns it over
to a supervising officer, who will then send it by courier to the police crime laboratory for
testing.42 This is a necessary step in the chain of custody because it will be the investigating officer
who shall conduct the proper investigation and prepare the necessary documents for the developing
criminal case. Certainly, the investigating officer must have possession of the illegal drugs to properly
prepare the required documents.
The investigator in this case was a certain SPO4 Jamisolamin.43 Surprisingly, there was no testimony
from the witnesses as to the turnover of the seized items to SPO4 Jamisolamin. It is highly improbable
for an investigator in a drug-related case to effectively perform his work without having custody of the
seized items. Again, the case of the prosecution is forcing this Court to resort to guesswork as to
whether PO2 Corpuz and SPO1 Licu gave the seized drugs to SPO4 Jamisolamin as the investigating
officer or they had custody of the marijuana all night while SPO4 Jamisolamin was conducting his
investigation on the same items.
In People v. Remigio,44 the Court noted the failure of the police officers to establish the chain of
custody as the apprehending officer did not transfer the seized items to the investigating officer. The
apprehending officer kept the alleged shabu from the time of confiscation until the time he transferred
them to the forensic chemist. The deviation from the links in the chain of custody led to the acquittal of
the accused in the said case.
Third Link: Turnover by the
Investigating Officer of the Illegal
Drugs to the Forensic Chemist
From the investigating officer, the illegal drug is delivered to the forensic chemist. Once the seized
drugs arrive at the forensic laboratory, it will be the laboratory technician who will test and verify the
nature of the substance. In this case, it was only during his cross-examination that PO2 Corpuz
provided some information on the delivery of the seized drugs to Camp Olivas, to
wit:chanroblesvirtuallawlibrary
Q: How about the alleged marijuana, you stated that the same was brought to the crime laboratory,
who brought the same to the crime lab?
A: Me and my back-up, ma’am.
Q: When did you bring the marijuana to the crime lab for examination?
A: I think it was the following day, ma’am.45
As can be gleaned from the testimony of PO2 Corpuz, very little detail was offered on how the seized
marijuana was handled and transferred from the PDEA Office in Angeles City to the crime laboratory
in Camp Olivas, San Fernando, Pampanga. PO2 Corpuz kept possession of the seized drugs overnight
without giving details on the safekeeping of the items. The most palpable deficiency of the testimony
would be the lack of information as to who received the subject drugs in Camp Olivas.
Engr. Ma. Luisa Gundran, the forensic chemist who conducted the tests on the subject drugs, did not
appear in court despite the numerous subpoenas sent to her.46 Instead, the prosecution and the defense
agreed to stipulate on the essential points of her proffered testimony. Regrettably, the stipulated
testimony of the forensic chemist failed to shed light as to who received the subject drugs in Camp
Olivas. One of the stipulations was “that said forensic chemist conducted an examination on the
substance of the letter-request with qualification that said request was not subscribed or under oath and
that forensic chemist has no personal knowledge as from whom and where said substance was
taken.”47 This bolsters the fact that the forensic chemist had no knowledge as to who received the
seized marijuana at the crime laboratory.
The recent case of People v. Beran48 involved irregularities in the third link. The police officer, who
both served as apprehending and investigating officer, claimed that he personally took the drug to the
laboratory for testing, but there was no showing who received the drug from him. The records also
showed that he submitted the sachet to the laboratory only on the next day, without explaining how he
preserved his exclusive custody thereof overnight. All those facts raised serious doubt that the integrity
and evidentiary value of the seized item have not been fatally compromised. Hence, the accused in the
said case was also acquitted.
Fourth Link: Turnover of the
Marked Illegal Drug Seized by the
Forensic Chemist to the Court.
The last link involves the submission of the seized drugs by the forensic chemist to the court when
presented as evidence in the criminal case. No testimonial or documentary evidence was given
whatsoever as to how the drugs were kept while in the custody of the forensic chemist until it was
transferred to the court. The forensic chemist should have personally testified on the safekeeping of the
drugs but the parties resorted to a general stipulation of her testimony. Although several subpoenae
were sent to the forensic chemist, only a brown envelope containing the seized drugs arrived in
court.49  Sadly, instead of focusing on the essential links in the chain of custody, the prosecutor
propounded questions concerning the location of the misplaced marked money, which was not even
indispensable in the criminal case.
The case of People v. Gutierrez50 also had inadequate stipulations as to the testimony of the forensic
chemist. No explanation was given regarding the custody of the seized drug in the interim - from the
time it was turned over to the investigator up to its turnover for laboratory examination. The records of
the said case did not show what happened to the allegedly seized shabu between the turnover by the
investigator to the chemist and its presentation in court. Thus, since there was no showing that
precautions were taken to ensure that there was no change in the condition of that object and no
opportunity for someone not in the chain to have possession thereof, the accused therein was likewise
acquitted.
In view of all the foregoing, the Court can only conclude that, indeed, there was no compliance with
the procedural requirements of Section 21 of R.A. No. 9165 because of the inadequate physical
inventory and the lack of photography of the marijuana allegedly confiscated from Dahil and Castro.
No explanation was offered for the non-observance of the rule. The prosecution cannot apply the
saving mechanism of Section 21 of the IRR of R.A. No. 9165 because it miserably failed to prove that
the integrity and the evidentiary value of the seized items were preserved. The four links required to
establish the proper chain of custody were breached with irregularity and lapses.
The Court cannot either agree with the CA that the evidentiary rule involving the presumption of
regularity of the performance of official duties could apply in favor of the police officers. The
regularity of the performance of duty could not be properly presumed in favor of the police officers
because the records were replete with indicia of their serious lapses.51 The presumption stands when no
reason exists in the records by which to doubt the regularity of the performance of official duty. And
even in that instance, the presumption of regularity will never be stronger than the presumption of
innocence in favor of the accused. Otherwise, a mere rule of evidence will defeat the constitutionally
enshrined right of an accused to be presumed innocent.52chanRoblesvirtualLawlibrary
Given the procedural lapses, serious uncertainty hangs over the identity of the seized marijuana that the
prosecution presented as evidence before the Court. In effect, the prosecution failed to fully prove the
elements of the crime charged, creating a reasonable doubt on the criminal liability of the
accused.53chanRoblesvirtualLawlibrary
For said reason, there is no need to discuss the specific defenses raised by the accused.chanrobleslaw
WHEREFORE, the appeal is GRANTED. The September 27, 2013 Decision of the Court of Appeals
in CA-G.R. CR-HC No. 05707 is REVERSED and SET ASIDE. The accused-appellants, Ramil
Doria Dahil and Rommel Castro y Carlos, are ACQUITTED of the crime charged against them and
ordered immediately RELEASED from custody, unless they are being held for some other lawful
cause.
The Director of the Bureau of Corrections is ORDERED to implement this decision and to inform this
Court of the date of the actual release from confinement of the accused within five (5) days from
receipt of copy.
SO ORDERED.cralawlawlibrary
G.R. No. 177222              October 29, 2008
PEOPLE OF THE PHILIPPINES, appellee,
vs.
RANILO DE LA CRUZ Y LIZING, appellant.
DECISION
TINGA, J.:
On appeal is the Decision 1 dated 30 November 2006 of the Court of Appeals in C.A.-G.R. CR No.
01266 affirming in toto the judgment 2 dated 14 June 2004 of the Regional Trial Court (RTC) of
Mandaluyong City, Branch 211, finding appellant Ranilo Dela Cruz y
Lizing guilty beyond reasonable doubt of violating Section 5, Article II of Republic Act No. 9165
(R.A. No. 9165) and sentencing him to suffer the penalty of life imprisonment and ordering him to pay
a fine of ₱500,000.00. 3
On 13 September 2002, Dela Cruz was charged with the violation of the aforesaid offense in an
Information 4 that reads:
That on or about the 12th day of September 2002, in the City of Mandaluyong, Philippines, a place
within the jurisdiction of this Honorable Court, the above-named accused, without any lawful
authority, did then and there willfully, unlawfully and feloniously deliver, distribute, transport or sell to
poseur-buyer PO2 Nick Resuello[,] one (1) heat-sealed transparent plastic sachet containing 0.03 gram
each of white crystalline substance, which were found positive to the test for Methamphetamine
Hydrochloride, commonly known as "shabu," a dangerous drug, for the amount of ₱100.00 with Serial
No. XY588120, without the corresponding license and prescription, in violation of the above-cited law.
CONTRARY TO LAW. 5
On arraignment, petitioner pleaded not guilty. Thereafter, trial on the merits ensued with the
prosecution presenting as witnesses arresting officers PO2 Braulio Peregrino, PO2 Nick Resuello, PO2
Marcelino Boyles, PO2 Allan Drilon, investigator-on-case PO3 Virgilio Bismonte and Forensic
Chemist Joseph Perdido.
Prosecution evidence shows that on 12 September 2002, the Office of the Station Drugs Enforcement
Unit (SDEU), Mandaluyong City received information that appellant, alias "Boy Tigre," of No. 73,
Dela Cruz Street, Barangay Old Zaniga, Mandaluyong City was engaging in the trade of illegal drugs.
A team composed of Peregrino, Boyles, Drilon and Resuello was dispatched to conduct a buy-bust
operation in the area at around 2:00 p.m. of the same day. Peregrino, Boyles, and Drilon positioned
themselves at a nearby area while Resuello, the designated poseur-buyer, approached appellant
described as a long-haired, medium built, not-so-tall male, sporting a moustache and frequently seen
wearing short pants. 6 At the time, appellant was standing outside of their gate and kept on glancing
from side to side. 7 Resuello then told appellant that he wanted to buy shabu. Dela Cruz looked
surprised prompting Resuello to repeat what he had said and handed him the ₱100 bill with Serial No.
XY 588120. Appellant, in turn, handed him a plastic sachet containing the white crystalline substance.
At which point, Resuello executed the pre-arranged signal and Peregrino immediately rushed to the
scene. 8
Peregrino, identifying himself as a policeman, held appellant and informed him of his constitutional
rights. Peregrino then recovered the buy-bust money from appellant. Subsequently, appellant was
brought to SDECU for investigation. Thereat, Peregrino placed his initials (BP) on the plastic sachet
containing the white crystalline substance before sending it to the Eastern Police District Crime
Laboratory for chemical examination. The sachet was later tested positive for methamphetamine
hydrochloride, a dangerous drug. Subsequently, Peregrino and Resuello accomplished the booking and
information sheets regarding the incident. Peregrino also executed an affidavit on the
matter. 9 Appellant was later identified as Ranilo Dela Cruz y Lising. 10
On cross-examination, Peregrino and Resuello admitted that the buy-bust money had neither been
dusted with fluorescent powder nor marked. They only made a photocopy of it prior to the operation
for purposes of identification. 11 Peregrino also testified that appellant had not been tested for the
presence of fluorescent powder; neither was a drug examination conducted on him. After the arrest,
Peregrino narrated that his office made a report on the matter which was forwarded to the Philippine
Drug Enforcement Agency (PDEA). 12 Boyles testified likewise on cross-examination that at the time
of the arrest, they had no coordination with PDEA. 13 Drilon, on the other hand, testified that he had
not actually seen the transaction. 14
Forensic Chemist Perdido testified that the plastic sachet was found to contain methamphetamine
hydrochloride. He, however, admitted that he examined the specimen and had made the markings on
the same without the presence of appellant. 15
For the defense, appellant testified that on 12 September 2002, at around 1:00 to 2:00 p.m., he was in
his house watching television with his wife when he heard a knock at the door. Outside, he came upon
two men looking for "Boy Tigre." After admitting that it was he they were looking for, he was told that
the barangay captain needed him. He went with the two men to see the barangay captain. Thereat, the
barangay captain asked whether he knew of anyone engaged in large-scale drug pushing. Appellant
replied in the negative and in response, the barangay captain stated that there was nothing more he (the
barangay captain) can do. Appellant was then told to go to the City Hall. At first, his wife accompanied
him there but he later asked her to go home and raise the money Bismonte had allegedly demanded
from him in exchange for his freedom. When appellant’s wife failed to return as she had given birth, a
case for violation of Section 5, Article II of R.A. No. 9165 was filed against him. 16 Appellant added
that he used to be involved in "video-karera" and surmised that this involvement could have provoked
the barangay captain’s wrath. 17
Appellant’s wife, Jocelyn Dela Cruz, corroborated appellant’s testimony. She further stated that after
appellant had identified himself as "Boy Tigre," the two men held on to him and asked him to go with
them to the barangay captain. There, the barangay captain asked appellant if he knew a certain "Amon"
of Pitong Gatang. When appellant replied that he did not, he was then brought to the SDECU where
Bismonte allegedly demanded ₱100,000.00 from them or else a case without bail will be filed against
appellant. 18
Finding that the prosecution had proven appellant’s guilt beyond reasonable doubt, the RTC rendered
judgment against him, sentencing him to suffer the penalty of life imprisonment and ordering him to
pay a fine of ₱500,000.00. On appeal to the Court of Appeals, the challenged decision was affirmed in
toto by the appellate court, after it ruled that the trial court did not commit any reversible error in
finding appellant guilty of the offense charged.
Before the Court, appellant reiterates his contention that the apprehending police officers’ failure to
comply with Sections 21 19 and 86 20 of R.A. No. 9165 and that failure casts doubt on the validity of his
arrest and the admissibility of the evidence allegedly seized from him. 21 Through his Manifestation (In
Lieu of Supplemental Brief) dated 4 September 2007, appellant stated that he had exhaustively argued
all the relevant issues in his Brief filed before the Court of Appeals and thus, he is adopting it as
Supplemental Brief. 22
The Office of the Solicitor General (OSG) manifested that it was dispensing with the admission of a
supplemental brief. 23 Earlier,
in its Appellee’s Brief, the OSG maintained that despite the non-compliance with the requirements of
R.A. No. 9165, the seized drugs are admissible in evidence because their integrity and evidentiary
value were properly preserved in accordance with the Implementing Rules and Regulations of R.A.
No. 9165. 24
At the outset, it is well to restate the constitutional mandate that an accused shall be presumed innocent
until the contrary is proven beyond reasonable doubt. The burden lies on the prosecution to overcome
such presumption of innocence by presenting the quantum evidence required. In so doing, the
prosecution must rest on its own merits and must not rely on the weakness of the defense. And if the
prosecution fails to meet the required amount of evidence, the defense may logically not even present
evidence on its own behalf. In which case the presumption prevails and the accused should necessarily
be acquitted. 25
In prosecutions for illegal sale of dangerous drugs, the following must be proven: (1) that the
transaction or sale took place; (2) the corpus delicti or the illicit drug was presented as evidence; and
(3) that the buyer and seller were identified. 26 The dangerous drug is the very corpus delicti of the
offense. 27
Section 21 of R.A. No. 9165 states that:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof;
The IRR of the same provision adds a proviso, to wit:
Provided, that the physical inventory and photograph shall be conducted at the place where the search
warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
compliance with these requirements under justifiable grounds, as long as the integrity and evidentiary
value of the seized items are properly preserved by the apprehending officer/team, shall not render
void and invalid such seizures of and custody over said items;
In the case at bar, the Court finds that the arresting officers failed to strictly comply with the guidelines
prescribed by the law regarding the custody and control of the seized drugs despite its mandatory
terms. While there was testimony regarding the marking of the seized items at the police station, there
was no mention whether the same had been done in the presence of appellant or his representatives.
There was likewise no mention that any representative from the media, DOJ or any elected official had
been present during the inventory or that any of these people had been required to sign the copies of
the inventory. Neither does it appear on record that the team photographed the contraband in
accordance with law. Peregrino testified as follows:
Q While you were at the office, what did you do with the physical evidence, subject of the buy-bust
operation?
A When we were at the office[,] we marked the subject physical evidence and requested for physical
examination[,] Ma’am.
ACP Indunan:
What were the markings placed on the physical evidence?
A What we put is initial "BP"
Q What does this BP means [sic]?
A My initial Ma’am, Braulio Perigrino [sic]. 28
Resuello likewise testified in this wise:
ACP Indunan:
Q Before you brought this item to the crime laboratory[,] what other markings you placed on the
sachet?
A We put a marking BP, Ma’am.
Q That BP stands for what[,] Mr. witness?
A Braulio Perigrino[,] Ma’am. 29
Following the rule that penal laws shall be construed strictly against the government, and liberally in
favor of the accused, 30 the apprehending team’s omission to observe the procedure outlined by R.A.
9165 in the custody and disposition of the seized drugs significantly impairs the prosecution’s case.
Now, the prosecution cannot seek refuge in the proviso of the IRR in the absence of proof of
entitlement to such leniency. The prosecution rationalizes its oversight by merely stating that the
integrity and evidentiary value of the seized items were properly preserved in accordance with law.
The allegation hardly sways the Court save when it is accompanied by proof. According to the proviso
of the IRR of Section 21(a) of R.A. No. 9165, non-compliance with the procedure shall not render void
and invalid the seizure of and custody of the drugs only when: (1) such non-compliance was under
justifiable grounds; and (2) the integrity and the evidentiary value of the seized items are properly
preserved by the apprehending team. Clearly, there must be proof that these two (2) requirements were
met before any such non-compliance may be said to fall within the scope of the proviso. Significantly,
not only does the present case lack the most basic or elementary attempt at compliance with the law
and its implementing rules; it fails as well to provide any justificatory ground showing that the
integrity of the evidence had all along been preserved. 31
Failing to prove entitlement to the application of the proviso, the arresting officers’ non-compliance
with the procedure laid down by R.A No. 9156 is not excused. This inexcusable non-compliance
effectively invalidates their seizure of and custody over the seized drugs, thus, compromising the
identity and integrity of the same. We resolve the doubt in the integrity and identity of the corpus
delicti in favor of appellant 32 as every fact necessary to constitute the crime must be established by
proof beyond reasonable doubt. 33 Considering that the prosecution failed to present the required
quantum of evidence, appellant’s acquittal is in order.
It is well to recall that in several cases that came before us, we have repeatedly emphasized the
importance of compliance with the prescribed procedure in the custody and disposition of the seized
drugs. We have over and over declared that the deviation from the standard procedure dismally
compromises the integrity of the evidence. 34
Anent the argument that the buy-bust operation was conducted without the assistance or consent of
PDEA, in violation of Section 86 of R.A. No. 9165, it must be pointed out that the second paragraph of
the same provision states that the transfer, absorption and integration of the different offices into
PDEA shall take effect within eighteen (18) months from the effectivity of the law which was on 4
July 2002. 35 In view of the fact that the buy-bust operation was conducted on 12 September 2002, it is
excusable that the same was not done in coordination with PDEA.
All told, the totality of the evidence presented in the instant case does not support appellant’s
conviction for violation of Section 5, Article II, R.A. No. 9165, since the prosecution failed to prove
beyond reasonable doubt all the elements of the offense. Following the constitutional mandate, when
the guilt of the appellant has not been proven with moral certainty, as in this case, the presumption of
innocence prevails and his exoneration should be granted as a matter of right.
WHEREFORE, the Decision dated 14 June 2004 of the Regional Trial Court of Mandaluyong City,
Branch 211 in Criminal Case No. MC02-5912-D is REVERSED and SET ASIDE. Appellant
RANILO DELA CRUZ y LIZING is ACQUITTED of the crime charged on the ground of reasonable
doubt and ordered immediately RELEASED from custody, unless he is being held for some other
lawful case.
The Director of the Bureau of Corrections is ORDERED to implement this Decision forthwith and to
INFORM this Court, within five (5) days from receipt hereof, of the date appellant was actually
released from confinement.
Costs de oficio.
SO ORDERED.
G.R. No. 172953             April 30, 2008
JUNIE MALILLIN Y. LOPEZ, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
TINGA, J.:
The presumption of regularity in the performance of official functions cannot by its lonesome
overcome the constitutional presumption of innocence. Evidence of guilt beyond reasonable doubt and
nothing else can eclipse the hypothesis of guiltlessness. And this burden is met not by bestowing
distrust on the innocence of the accused but by obliterating all doubts as to his culpability.
In this Petition for Review1 under Rule 45 of the Rules of Court, Junie Malillin y Lopez (petitioner)
assails the Decision2 of the Court of Appeals dated 27 January 2006 as well as its Resolution3 dated 30
May 2006 denying his motion for reconsideration. The challenged decision has affirmed the
Decision4 of the Regional Trial Court (RTC) of Sorsogon City, Branch 525 which found petitioner
guilty beyond reasonable doubt of illegal possession of methamphetamine hydrochloride, locally
known as shabu, a prohibited drug.
The antecedent facts follow.
On the strength of a warrant6 of search and seizure issued by the RTC of Sorsogon City, Branch 52, a
team of five police officers raided the residence of petitioner in Barangay Tugos, Sorsogon City on 4
February 2003. The team was headed by P/Insp. Catalino Bolanos (Bolanos), with PO3 Roberto
Esternon (Esternon), SPO1 Pedro Docot, SPO1 Danilo Lasala and SPO2 Romeo Gallinera (Gallinera)
as members. The search—conducted in the presence of barangay kagawad Delfin Licup as well as
petitioner himself, his wife Sheila and his mother, Norma—allegedly yielded two (2) plastic sachets
of shabu and five (5) empty plastic sachets containing residual morsels of the said substance.
Accordingly, petitioner was charged with violation of Section 11,7 Article II of Republic Act No. 9165,
otherwise known as The Comprehensive Dangerous Drugs Act of 2002, in a criminal information
whose inculpatory portion reads:
That on or about the 4th day of February 2003, at about 8:45 in the morning in Barangay
Tugos, Sorsogon City, Philippines, the said accused did then and there willfully, unlawfully
and feloniously have in his possession, custody and control two (2) plastic sachets of
methamphetamine hydrochloride [or] "shabu" with an aggregate weight of 0.0743 gram, and
four empty sachets containing "shabu" residue, without having been previously authorized by
law to possess the same.
CONTRARY TO LAW.8
Petitioner entered a negative plea.9 At the ensuing trial, the prosecution presented Bolanos, Arroyo and
Esternon as witnesses.
Taking the witness stand, Bolanos, the leader of the raiding team, testified on the circumstances
surrounding the search as follows: that he and his men were allowed entry into the house by petitioner
after the latter was shown the search warrant; that upon entering the premises, he ordered Esternon
and barangay kagawad Licup, whose assistance had previously been requested in executing the
warrant, to conduct the search; that the rest of the police team positioned themselves outside the house
to make sure that nobody flees; that he was observing the conduct of the search from about a meter
away; that the search conducted inside the bedroom of petitioner yielded five empty plastic sachets
with suspected shabu residue contained in a denim bag and kept in one of the cabinets, and two plastic
sachets containing shabu which fell off from one of the pillows searched by Esternon—a discovery
that was made in the presence of petitioner.10 On cross examination, Bolanos admitted that during the
search, he was explaining its progress to petitioner's mother, Norma, but that at the same time his eyes
were fixed on the search being conducted by Esternon.11
Esternon testified that the denim bag containing the empty plastic sachets was found "behind" the door
of the bedroom and not inside the cabinet; that he then found the two filled sachets under a pillow on
the bed and forthwith called on Gallinera to have the items recorded and marked. 12 On cross, he
admitted that it was he alone who conducted the search because Bolanos was standing behind him in
the living room portion of the house and that petitioner handed to him the things to be searched, which
included the pillow in which the two sachets of shabu were kept;13 that he brought the seized items to
the Balogo Police Station for a "true inventory," then to the trial court 14 and thereafter to the
laboratory.15
Supt. Lorlie Arroyo (Arroyo), the forensic chemist who administered the examination on the seized
items, was presented as an expert witness to identify the items submitted to the laboratory. She
revealed that the two filled sachets were positive of shabu and that of the five empty sachets, four were
positive of containing residue of the same substance.16 She further admitted that all seven sachets were
delivered to the laboratory by Esternon in the afternoon of the same day that the warrant was executed
except that it was not she but rather a certain Mrs. Ofelia Garcia who received the items from Esternon
at the laboratory.17
The evidence for the defense focused on the irregularity of the search and seizure conducted by the
police operatives. Petitioner testified that Esternon began the search of the bedroom with Licup and
petitioner himself inside. However, it was momentarily interrupted when one of the police officers
declared to Bolanos that petitioner's wife, Sheila, was tucking something inside her underwear.
Forthwith, a lady officer arrived to conduct the search of Sheila's body inside the same bedroom. At
that point, everyone except Esternon was asked to step out of the room. So, it was in his presence that
Sheila was searched by the lady officer. Petitioner was then asked by a police officer to buy cigarettes
at a nearby store and when he returned from the errand, he was told that nothing was found on Sheila's
body.18 Sheila was ordered to transfer to the other bedroom together with her children.19
Petitioner asserted that on his return from the errand, he was summoned by Esternon to the bedroom
and once inside, the officer closed the door and asked him to lift the mattress on the bed. And as he
was doing as told, Esternon stopped him and ordered him to lift the portion of the headboard. In that
instant, Esternon showed him "sachet of shabu" which according to him came from a pillow on the
bed.20 Petitioner's account in its entirety was corroborated in its material respects by Norma, barangay
kagawad Licup and Sheila in their testimonies. Norma and Sheila positively declared that petitioner
was not in the house for the entire duration of the search because at one point he was sent by Esternon
to the store to buy cigarettes while Sheila was being searched by the lady officer. 21 Licup for his part
testified on the circumstances surrounding the discovery of the plastic sachets. He recounted that after
the five empty sachets were found, he went out of the bedroom and into the living room and after about
three minutes, Esternon, who was left inside the bedroom, exclaimed that he had just found two filled
sachets.22
On 20 June 2004 the trial court rendered its Decision declaring petitioner guilty beyond reasonable
doubt of the offense charged. Petitioner was condemned to prison for twelve years (12) and one (1) day
to twenty (20) years and to pay a fine of P300,000.00.23 The trial court reasoned that the fact
that shabu was found in the house of petitioner was prima facie evidence of petitioner's animus
possidendi sufficient to convict him of the charge inasmuch as things which a person possesses or over
which he exercises acts of ownership are presumptively owned by him. It also noted petitioner's failure
to ascribe ill motives to the police officers to fabricate charges against him.24
Aggrieved, petitioner filed a Notice of Appeal.25 In his Appeal Brief26 filed with the Court of Appeals,
petitioner called the attention of the court to certain irregularities in the manner by which the search of
his house was conducted. For its part, the Office of the Solicitor General (OSG) advanced that on the
contrary, the prosecution evidence sufficed for petitioner's conviction and that the defense never
advanced any proof to show that the members of the raiding team was improperly motivated to hurl
false charges against him and hence the presumption that they had regularly performed their duties
should prevail.27
On 27 January 2006, the Court of Appeals rendered the assailed decision affirming the judgment of the
trial court but modifying the prison sentence to an indeterminate term of twelve (12) years as minimum
to seventeen (17) years as maximum.28 Petitioner moved for reconsideration but the same was denied
by the appellate court.29 Hence, the instant petition which raises substantially the same issues.
In its Comment,30 the OSG bids to establish that the raiding team had regularly performed its duties in
the conduct of the search.31 It points to petitioner's incredulous claim that he was framed up by
Esternon on the ground that the discovery of the two filled sachets was made in his and Licup's
presence. It likewise notes that petitioner's bare denial cannot defeat the positive assertions of the
prosecution and that the same does not suffice to overcome the prima facie existence of animus
possidendi.
This argument, however, hardly holds up to what is revealed by the records.
Prefatorily, although the trial court's findings of fact are entitled to great weight and will not be
disturbed on appeal, this rule does not apply where facts of weight and substance have been
overlooked, misapprehended or misapplied in a case under appeal.32 In the case at bar, several
circumstances obtain which, if properly appreciated, would warrant a conclusion different from that
arrived at by the trial court and the Court of Appeals.
Prosecutions for illegal possession of prohibited drugs necessitates that the elemental act of possession
of a prohibited substance be established with moral certainty, together with the fact that the same is not
authorized by law. The dangerous drug itself constitutes the very corpus delicti of the offense and the
fact of its existence is vital to a judgment of conviction.33 Essential therefore in these cases is that the
identity of the prohibited drug be established beyond doubt.34 Be that as it may, the mere fact of
unauthorized possession will not suffice to create in a reasonable mind the moral certainty required to
sustain a finding of guilt. More than just the fact of possession, the fact that the substance illegally
possessed in the first place is the same substance offered in court as exhibit must also be established
with the same unwavering exactitude as that requisite to make a finding of guilt. The chain of custody
requirement performs this function in that it ensures that unnecessary doubts concerning the identity of
the evidence are removed.35
As a method of authenticating evidence, the chain of custody rule requires that the admission of an
exhibit be preceded by evidence sufficient to support a finding that the matter in question is what the
proponent claims it to be.36 It would include testimony about every link in the chain, from the moment
the item was picked up to the time it is offered into evidence, in such a way that every person who
touched the exhibit would describe how and from whom it was received, where it was and what
happened to it while in the witness' possession, the condition in which it was received and the
condition in which it was delivered to the next link in the chain. These witnesses would then describe
the precautions taken to ensure that there had been no change in the condition of the item and no
opportunity for someone not in the chain to have possession of the same.37
While testimony about a perfect chain is not always the standard because it is almost always
impossible to obtain, an unbroken chain of custody becomes indispensable and essential when the item
of real evidence is not distinctive and is not readily identifiable, or when its condition at the time of
testing or trial is critical, or when a witness has failed to observe its uniqueness. 38 The same standard
likewise obtains in case the evidence is susceptible to alteration, tampering, contamination 39 and even
substitution and exchange.40 In other words, the exhibit's level of susceptibility to fungibility, alteration
or tampering—without regard to whether the same is advertent or otherwise not—dictates the level of
strictness in the application of the chain of custody rule.
Indeed, the likelihood of tampering, loss or mistake with respect to an exhibit is greatest when the
exhibit is small and is one that has physical characteristics fungible in nature and similar in form to
substances familiar to people in their daily lives.41 Graham vs. State42 positively acknowledged this
danger. In that case where a substance later analyzed as heroin—was handled by two police officers
prior to examination who however did not testify in court on the condition and whereabouts of the
exhibit at the time it was in their possession—was excluded from the prosecution evidence, the court
pointing out that the white powder seized could have been indeed heroin or it could have been sugar or
baking powder. It ruled that unless the state can show by records or testimony, the continuous
whereabouts of the exhibit at least between the time it came into the possession of police officers until
it was tested in the laboratory to determine its composition, testimony of the state as to the laboratory's
findings is inadmissible.43
A unique characteristic of narcotic substances is that they are not readily identifiable as in fact they are
subject to scientific analysis to determine their composition and nature. The Court cannot reluctantly
close its eyes to the likelihood, or at least the possibility, that at any of the links in the chain of custody
over the same there could have been tampering, alteration or substitution of substances from other
cases—by accident or otherwise—in which similar evidence was seized or in which similar evidence
was submitted for laboratory testing. Hence, in authenticating the same, a standard more stringent than
that applied to cases involving objects which are readily identifiable must be applied, a more exacting
standard that entails a chain of custody of the item with sufficient completeness if only to render it
improbable that the original item has either been exchanged with another or been contaminated or
tampered with.
A mere fleeting glance at the records readily raises significant doubts as to the identity of the sachets
of shabu allegedly seized from petitioner. Of the people who came into direct contact with the seized
objects, only Esternon and Arroyo testified for the specific purpose of establishing the identity of the
evidence. Gallinera, to whom Esternon supposedly handed over the confiscated sachets for recording
and marking, as well as Garcia, the person to whom Esternon directly handed over the seized items for
chemical analysis at the crime laboratory, were not presented in court to establish the circumstances
under which they handled the subject items. Any reasonable mind might then ask the question: Are the
sachets of shabu allegedly seized from petitioner the very same objects laboratory tested and offered in
court as evidence?
The prosecution's evidence is incomplete to provide an affirmative answer. Considering that it was
Gallinera who recorded and marked the seized items, his testimony in court is crucial to affirm whether
the exhibits were the same items handed over to him by Esternon at the place of seizure and
acknowledge the initials marked thereon as his own. The same is true of Garcia who could have, but
nevertheless failed, to testify on the circumstances under which she received the items from Esternon,
what she did with them during the time they were in her possession until before she delivered the same
to Arroyo for analysis.
The prosecution was thus unsuccessful in discharging its burden of establishing the identity of the
seized items because it failed to offer not only the testimony of Gallinera and Garcia but also any
sufficient explanation for such failure. In effect, there is no reasonable guaranty as to the integrity of
the exhibits inasmuch as it failed to rule out the possibility of substitution of the exhibits, which cannot
but inure to its own detriment. This holds true not only with respect to the two filled sachets but also to
the five sachets allegedly containing morsels of shabu.
Also, contrary to what has been consistently claimed by the prosecution that the search and seizure was
conducted in a regular manner and must be presumed to be so, the records disclose a series of
irregularities committed by the police officers from the commencement of the search of petitioner's
house until the submission of the seized items to the laboratory for analysis. The Court takes note of
the unrebutted testimony of petitioner, corroborated by that of his wife, that prior to the discovery of
the two filled sachets petitioner was sent out of his house to buy cigarettes at a nearby store. Equally
telling is the testimony of Bolanos that he posted some of the members of the raiding team at the door
of petitioner's house in order to forestall the likelihood of petitioner fleeing the scene. By no stretch of
logic can it be conclusively explained why petitioner was sent out of his house on an errand when in
the first place the police officers were in fact apprehensive that he would flee to evade arrest. This fact
assumes prime importance because the two filled sachets were allegedly discovered by Esternon
immediately after petitioner returned to his house from the errand, such that he was not able to witness
the conduct of the search during the brief but crucial interlude that he was away.
It is also strange that, as claimed by Esternon, it was petitioner himself who handed to him the items to
be searched including the pillow from which the two filled sachets allegedly fell. Indeed, it is contrary
to ordinary human behavior that petitioner would hand over the said pillow to Esternon knowing fully
well that illegal drugs are concealed therein. In the same breath, the manner by which the search of
Sheila's body was brought up by a member of the raiding team also raises serious doubts as to the
necessity thereof. The declaration of one of the police officers that he saw Sheila tuck something in her
underwear certainly diverted the attention of the members of petitioner's household away from the
search being conducted by Esternon prior to the discovery of the two filled sachets. Lest it be omitted,
the Court likewise takes note of Esternon's suspicious presence in the bedroom while Sheila was being
searched by a lady officer. The confluence of these circumstances by any objective standard of
behavior contradicts the prosecution's claim of regularity in the exercise of duty.
Moreover, Section 2144 of the Implementing Rules and Regulations of R.A. No. 9165 clearly outlines
the post-seizure procedure in taking custody of seized drugs. In a language too plain to require a
different construction, it mandates that the officer acquiring initial custody of drugs under a search
warrant must conduct the photographing and the physical inventory of the item at the place where the
warrant has been served. Esternon deviated from this procedure. It was elicited from him that at the
close of the search of petitioner's house, he brought the seized items immediately to the police station
for the alleged purpose of making a "true inventory" thereof, but there appears to be no reason why a
true inventory could not be made in petitioner's house when in fact the apprehending team was able to
record and mark the seized items and there and then prepare a seizure receipt therefor. Lest it be
forgotten, the raiding team has had enough opportunity to cause the issuance of the warrant which
means that it has had as much time to prepare for its implementation. While the final proviso in Section
21 of the rules would appear to excuse non-compliance therewith, the same cannot benefit the
prosecution as it failed to offer any acceptable justification for Esternon's course of action.
Likewise, Esternon's failure to deliver the seized items to the court demonstrates a departure from the
directive in the search warrant that the items seized be immediately delivered to the trial court with a
true and verified inventory of the same,45 as required by Rule 126, Section 1246 of the Rules of
Court. People v. Go47 characterized this requirement as mandatory in order to preclude the substitution
of or tampering with said items by interested parties.48 Thus, as a reasonable safeguard, People vs. Del
Castillo49 declared that the approval by the court which issued the search warrant is necessary before
police officers can retain the property seized and without it, they would have no authority to retain
possession thereof and more so to deliver the same to another agency.50 Mere tolerance by the trial
court of a contrary practice does not make the practice right because it is violative of the mandatory
requirements of the law and it thereby defeats the very purpose for the enactment. 51
Given the foregoing deviations of police officer Esternon from the standard and normal procedure in
the implementation of the warrant and in taking post-seizure custody of the evidence, the blind reliance
by the trial court and the Court of Appeals on the presumption of regularity in the conduct of police
duty is manifestly misplaced. The presumption of regularity is merely just that—a mere presumption
disputable by contrary proof and which when challenged by the evidence cannot be regarded as
binding truth.52 Suffice it to say that this presumption cannot preponderate over the presumption of
innocence that prevails if not overthrown by proof beyond reasonable doubt.53 In the present case the
lack of conclusive identification of the illegal drugs allegedly seized from petitioner, coupled with the
irregularity in the manner by which the same were placed under police custody before offered in court,
strongly militates a finding of guilt.
In our constitutional system, basic and elementary is the presupposition that the burden of proving the
guilt of an accused lies on the prosecution which must rely on the strength of its own evidence and not
on the weakness of the defense. The rule is invariable whatever may be the reputation of the accused,
for the law presumes his innocence unless and until the contrary is shown.54 In dubio pro reo. When
moral certainty as to culpability hangs in the balance, acquittal on reasonable doubt inevitably becomes
a matter of right.
WHEREFORE, the assailed Decision of the Court of Appeals dated 27 January 2006 affirming with
modification the judgment of conviction of the Regional Trial Court of Sorsogon City, Branch 52, and
its Resolution dated 30 May 2006 denying reconsideration thereof, are REVERSED and SET ASIDE.
Petitioner Junie Malillin y Lopez is ACQUITTED on reasonable doubt and is accordingly ordered
immediately released from custody unless he is being lawfully held for another offense.
The Director of the Bureau of Corrections is directed to implement this Decision and to report to this
Court the action taken hereon within five (5) days from receipt.
SO ORDERED.
Quisumbing,Chairperson Carpio-Morales, Velasco, Jr., B
G.R. No. 206770               April 2, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
NOEL PRAJES and ALIPA MALA, Accused-Appellants.
DECISION
REYES, J.:
Before the Court is an appeal from the Decision1 dated May 30, 2012 of the Court of Appeals (CA) in
CA-G.R. CEB CR-HC No. 00462, which affirmed the Decision2 dated June 29, 2004 of the Regional
Trial Court (RTC) of Cebu City, Branch 15, finding Noel Prajes (Prajes) and Alipa Mala (Mala)
(accused-appellants) guilty for violation of Section 5, Article II of Republic Act (R.A.) No. 9165,
otherwise known as the Comprehensive Dangerous Drugs Act of 2002.
The Antecedents
The accused-appellants were accused of violating Section 5, Article II of R.A. No. 9165 via an
Information filed with the RTC of Cebu and docketed as Crim. Case No. CBU-63836. The accusatory
portion of the Information reads:
That sometime on 04 September 2002, in the City of Cebu, Philippines and within the jurisdiction of
this Honorable Court, the above-named accused, conniving and confederating with each other and
mutually helping one another, with deliberate intent, did then and there sell, trade, dispense, deliver
and/or give away to a National Bureau of Investigation Operative who posed as buyer: White
Crystalline substances having a total net weight of 195.6580 grams placed inside three (3) transparent
plastic packs: positive for methylamphetamine hydrochloride, a dangerous drug locally known as
shabu, without authority of law.3
The accused-appellants pleaded "not guilty" when arraigned. After pre-trial, trial on the merits ensued. 4
According to the prosecution, the National Bureau of Investigation (NBI) in Cebu City received reports
that the accused-appellants were engaged in the sale of illegal drugs. Following surveillance operations
conducted during the last week of August 2002, a buy-bust operation was organized by the NBI for
September 4, 2002.5
Thus, at around 1:00 p.m. on September 4, 2002, NBI’s informant, Rene Sabayton (Sabayton)
transacted with the accused-appellants for a supposed buyer’s purchase of shabu weighing 200 grams
for ₱180,000.00.6 At 4:00 p.m., the buy-bust team, headed by Senior Agent Atty. Angelito Magno
(Atty. Magno) and composed of NBI Supervising Agent Vicente Minguez (SA Minguez), Special
Investigator Teodoro Saavedra (SI Saavedra), SI Ray Tumalon (SI Tumalon), SI Danilo Garay and SA
Rennan Oliva, proceeded to Kinasang-an, Pardo, Cebu City where the purchase would be made. SI
Tumalon was designated the poseur-buyer. Atty. Magno prepared the buy-bust money amounting to
₱4,500.00, composed of nine ₱500.00 bills dusted with fluorescent powder and which were combined
with boodle money.7
As previously arranged with Sabayton, Prajes met up with Sabayton and SI Tumalon in a makeshift
house in Kinasang-an, where Mala later joined them. Since Prajes had not brought with him the illegal
drugs to be sold, the group proceeded to his father’s house which was only 15 to 20 meters away from
the makeshift house8 and there, SI Tumalon received the illegal drugs from Prajes.
While they were at the ground floor of the house, Prajes handed to SI Tumalon two packs of shabu
having a total weight of 100 grams. When SI Tumalon pointed out that he needed 200 grams, Prajes
instructed Mala to produce more stock. Mala left the house, then later came back with another pack,
which he handed to SI Tumalon. Thereafter, SI Tumalon gave one bundle of the buy-bust money to
Prajes, and the other bundle to Mala.9
Upon the accused-appellants’ receipt of the buy-bust money, SI Tumalon introduced himself to them
as an NBI agent. SI Tumalon made a "missed call" to SA Minguez’s phone, the team’s pre-agreed
signal to indicate that the sale had been consummated, and then arrested the accused-appellants. 10 Soon
thereafter, the other members of the buy-bust team arrived. The accused-appellants were handcuffed
and brought to the NBI office, where their photographs and fingerprints were taken.11 At the NBI
office, SI Tumalon handed the buy-bust money and three packs of shabu to SI Saavedra, who placed
his markings on the packs of shabu. SI Saavedra also prepared the letter-request for examination of the
illegal drugs, which he personally turned over to Chemist Rommel Paglinawan 12 of the Forensic
Chemistry Section, Central Visayas Regional Office of the NBI. A laboratory examination of the three
packs sold by the accused-appellants to SI Tumalon confirmed that the specimen contained
methylamphetamine hydrochloride or shabu. An ultraviolet examination performed by the NBI also
confirmed the presence of fluorescent powder on the accused-appellants’ hands.
The accused-appellants denied the charge against them. Prajes claimed that at about 4:00 p.m. on
September 4, 2002, he was sleeping at his house in Kinasang-an when a neighbor, Renante Paradero
(Paradero), woke him up to inform him that some persons were looking for him. He then proceeded to
Paradero’s house and there saw Sabayton, whom he had previously met in a "sniffing session" and who
had called him up at around 1:00 p.m. on September 4, 2002 for the purchase of shabu. Sabayton was
with two companions, who inquired from Prajes about the purchase. Prajes, Sabayton and his two
companions then proceeded to the house of Prajes’ father, where Prajes received the drugs from a
person sent by a certain "Alex". Prajes handed the pack of shabu to Sabayton, then was immediately
handcuffed by SI Tumalon. Sabayton hit Prajes’ handcuffed right hand with money that was brought
by the buy-bust team. Thereafter, Prajes was taken to the NBI Office.
For Mala’s defense, witness Magdalena Abarquez claimed that at around 4:00 p.m. on September 4,
2002, she saw Mala enter the house of Prajes. When he tried to leave the house, he was prevented by
someone who was inside the house.13
Sabayton was called on the witness stand by the defense as a hostile witness. He claimed that he was
arrested by NBI operatives on September 3, 2002. While at the NBI office, the operatives asked for a
gift or "regalo" by giving names of persons whom they could arrest, in exchange for his freedom. Thus,
he gave the name of Prajes and coordinated with the latter for the drug purchase. 14 After Prajes
presented the shabu to Sabayton during the buy-bust operation, he called on Mala to test and sniff the
shabu. Before the latter could do so, SI Tumalon pointed a gun at the accused-appellants and
handcuffed them. When Prajes refused to receive the buy-bust money, SI Tumalon slapped the money
on Prajes’ handcuffed hands. Notwithstanding Sabayton’s participation in the buy-bust which led to
the arrest of the accused-appellants, he was neither released from jail nor relieved from prosecution for
his violation of R.A. No. 9165.15
The RTC Ruling
On June 29, 2004, the RTC of Cebu City, Branch 15, rendered a Decision16 finding the accused-
appellants guilty for violation of Section 5, Article II of R.A. No. 9165, and sentencing them to each
suffer the penalty of life imprisonment and to pay fine of ₱500,000.00.17 Dissatisfied with the trial
court’s ruling, the accused-appellants appealed to the CA.
The CA Ruling
In a Decision18 dated May 30, 2012, the CA affirmed in toto the decision of the RTC. The appellate
court found no credence in the denials that were posed by the accused-appellants. Instead, it found
credible the evidence presented by the prosecution to prove the elements of the crime of illegal sale of
drugs, as well as its showing that there was sufficient compliance by the NBI operatives with the rule
on chain of custody.
The Present Appeal
Hence, the present appeal wherein the accused-appellants insist on the prosecution’s failure to prove
their guilt beyond reasonable doubt. The accused-appellants also question the subject drugs’ identity
and the NBI’s observance of the rule on the chain of custody. They argue that it was unclear as to who
actually marked the subject packs of shabu, and that there were no photographs and physical inventory
of the seized items, even when the same are required under the law.
This Court’s Ruling
The appeal is bereft of merit.
At the outset, the Court reiterates the settled rule that "the findings of the trial court, its calibration of
the testimonies of the witnesses, and its assessment of the probative weight thereof, as well as its
conclusions anchored on said findings are accorded respect if not conclusive effect. This is truer if such
findings were affirmed by the appellate court. When the trial court’s findings have been affirmed by
the appellate court, x x x, said findings are generally binding upon us[,]" 19 save in settled exceptions
such as: (1) when the inference made is manifestly mistaken, absurd or impossible; (2) when there is
grave abuse of discretion; (3) when the findings are grounded entirely on speculations, surmises or
conjectures; (4) when the judgment of the CA is based on misapprehension of facts; (5) when the CA,
in making its findings, went beyond the issues of the case and the same is contrary to the admissions of
both appellant and appellee; (6) when the findings of fact are conclusions without citation of specific
evidence on which they are based; (7) when the CA manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would justify a different conclusion; and (8)
when the findings of fact of the CA are premised on the absence of evidence and are contradicted by
the evidence on record.20 Upon review, the Court has determined that the present case does not fall
under any of these exceptions. We find no cogent reason to deviate from the factual findings, and
consequent rulings, of the trial and appellate courts.
On the issue of chain of custody, Section 21 of R.A. No. 9165 mandates that "[t]he apprehending team
having initial custody and control of the [seized] drugs shall, immediately after seizure and
confiscation, physically inventory and photograph the same in the presence of the accused or the
person/s from whom such items were confiscated and/or seized, or his/her representative or counsel, a
representative from the media and the Department of Justice (DOJ), and any elected public official
who shall be required to sign the copies of the inventory and be given a copy thereof[.]" In relation
thereto, Section 21 of the law’s Implementing Rules and Regulations (IRR) provides in part:
SECTION 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. — x x x:
(a) x x x the physical inventory and photograph shall be conducted at the place where the search
warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items[.]
These "[s]tatutory rules on preserving the chain of custody of confiscated prohibited drugs and related
items are designed to ensure the integrity and reliability of the evidence to be presented against the
accused. Their observance is the key to the successful prosecution of illegal possession or illegal sale
of prohibited drugs."21
In a line of cases, the Court has nonetheless explained that "while the chain of custody should ideally
be perfect, in reality it is not, ‘as it is almost always impossible to obtain an unbroken chain.’" 22 The
limitation on chain of custody is also recognized in the afore-quoted Section 21 of R.A. No. 9165’s
IRR, as it states that non-compliance with the rules’ requirements under justifiable grounds, as long as
the integrity and evidentiary value of the seized items are properly preserved by the apprehending
officer/team, shall not render void and invalid such seizures of and custody over said items. In
resolving drug cases, we then repeatedly emphasize that "what is essential is ‘the preservation of the
integrity and the evidentiary value of the seized items, as the same would be utilized in the
determination of the guilt or innocence of the accused.’"23
On the issue of the subject drugs’ marking as part of the chain of custody requirement, the accused-
appellants point out that SI Tumalon and SI Saavedra both named SI Saavedra as the one who marked
the seized drugs, but witnesses SA Minguez and Atty. Magno each testified that it was SI Tumalon and
the forensic chemist, respectively, who effected such marking. The Court, however, agrees with the
CA’s observation that although there were conflicting accounts by the prosecution witnesses as to the
person who actually marked the seized drugs, the failure of SA Minguez and Atty. Magno to identify
the said person could be readily explained by the fact that they had no actual participation in the
evidence’s marking. As against their conflicting statements, what were significant were the testimonies
of SI Tumalon and SI Saavedra, being the persons who actually seized, endorsed and marked the
evidence. Both agreed that following the accused-appellants’ arrest, the seized packs of shabu were
handed by SI Tumalon to SI Saavedra, who was the one who placed the markings on the
evidence,24 before the same were brought to the laboratory for examination. As aptly explained by the
appellate court:
SA Minguez may have incorrectly assumed that it was SI Tumalon, their poseur-buyer, who made the
markings on the packs of shabu that were confiscated in the ensuing confusion. However, SI Tumalon
himself testified that he turned-over the drugs to SA Saavedra. Atty. Magno’s statement that it was
"maybe our Forensic Chemist" who made the markings on the three packs is inconsequential when
considered with the positive testimonies of SI Tumalon and SA Saavedra. SA Minguez and Atty.
Magno assumed supporting roles. It was SI Tumalon who was in the thick of things so to speak, as he
was the poseur-buyer and he was the one who took the shabu from accused-appellants and handed it to
SA Saavedra for marking. Moreover, SA Saavedra’s identification of his own handwriting puts any
doubt to rest.25 (Citations omitted)
The fact that the marking was performed by SA Saavedra only upon the buy-bust team’s arrival at the
NBI office did not adversely affect the prosecution’s case against the accused-appellants. Given the
situation at the house where the accused-appellants were caught in flagrante delicto and then arrested
by the buy-bust team, the failure of SA Saavedra to mark the seized drugs at the said site was justified.
In his testimony before the trial court, SA Minguez described that after the accused-appellants’ arrest,
their neighbors interfered and rallied for the accused-appellants, even compelling members of the buy-
bust team inside the house to seek the immediate aid of their peers so that they could leave the
premises.26
Even the failure of the prosecution to present a physical inventory and photograph of the seized drugs
did not render inadmissible the packs of shabu that were seized from the accused-appellants, especially
as we consider that the integrity and evidentiary value of the drugs did not appear to have been
compromised. This was similar with the Court's ruling in People v. Torres 27 and Ambre v.
People,28 wherein we affirmed the conviction of the accused notwithstanding some deviations from the
required procedure on physical inventory and photographs of the seized items.1âwphi1
As against the accused-appellants' denial, an inherently weak defense, the evidence presented by the
prosecution deserves credence. The following elements of illegal sale of shabu were sufficiently
established during the trial: (a) the identities of the buyer and the seller, the object of the sale, and the
consideration; and (b) the delivery of the thing sold and the payment for the thing.29 During a planned
buy-bust operation, SI Tumalon served as a poseur-buyer and was able to successfully purchase packs
of shabu weighing 195 grams, more or less, from the accused-appellants for a total consideration of
₱180,000.00. The payment was handed to the accused-appellants by SI Tumalon. An examination
conducted by the Forensic Chemistry Section, Central Visayas Regional Office, NBI in Capitol Site,
Cebu City, confirmed that the packs contained methylamphetamine hydrochloride. 30 There was nothing
on record which would indicate that the substance purchased by SI Tumalon from the accused-
appellants during the buy-bust operation was different from the subject of the NBI Forensic Chemistry
Section's examination, and that which was eventually presented by the prosecution in court to establish
their case against the accused-appellants.
WHEREFORE, the Decision dated May 30, 2012 of the Court of Appeals in CA-G.R. CEB CR-HC
No. 00462 is AFFIRMED.
SO ORDERED.
G.R. No. 184758               April 21, 2014
PEOPLE OF THE PHILIPPINES, Appellee,
vs.
SONNY SABDULA y AMANDA, Appellant.
DECISION
BRION, J.:
We review the February 8, 2008 decision1 of the Court of Appeals (CA) in CA-G.R. CR. H.C. No.
02726, which affirmed the January 29, 2007 decision2 of the Regional Trial Court (RTC), Branch 82,
Quezon City. The RTC decision found appellant Sonny Sabdula y Amanda guilty beyond reasonable
doubt of violating Section 5,3 Article II of Republic Act (R.A.) No. 9165 (the Comprehensive
Dangerous Drugs Act of 2002). The trial court imposed on him the penalty of life imprisonment.
THE FACTS
The prosecution charged the appellant with violation of Section 5, Article II of R.A. No. 9165 before
the RTC, under an Information that states:
That on or about the 1st day of February, 2004, in Quezon City, Philippines, the said accused not being
authorized by law to sell, dispense, deliver, transport or distribute any dangerous drug, did then and
there, willfully, and unlawfully sell, dispense, deliver, transport, distribute or act as broker in the said
transaction, 0.10 (zero point ten) gram of white crystalline substance containing Methylamphetamine
Hydrochloride, a dangerous drug.
CONTRARY TO LAW.4
The appellant pleaded not guilty to the charge. 5 The prosecution presented Police Officer (PO) 2
Bernard Centeno at the trial, while the testimonies of PO3 Joselito Chantengco and PO1 Alan Fortea
became the subject of the parties’ stipulations. The appellant and Shirley Sabdula, on the other hand,
took the witness stand for the defense.
The evidence for the prosecution established that in the morning of February 1, 2004, a confidential
informant told the members of the Central Police District (CPD) in Baler, Quezon City about the
illegal drug activities of one alias "Moneb" at a squatter’s area in San Roque II, Quezon City. Acting
on this information, operatives of the Station Intelligence and Investigation Branch, Baler Police
Station 2, CPD formed a buy-bust team composed of PO2 Centeno (the designated poseur-buyer), PO1
Fortea, PO2 Rolando Daduya, PO1 Victor Porte, PO1 Louise Escarlan and PO1 Noel de Guzman. 6
At around 7:00 p.m., the buy-bust team and the informant went to the target area. When they arrived
there, the informant introduced PO2 Centeno as his "kumpare" to the appellant. PO2 Centeno asked the
appellant if he could "score" two hundred pesos worth of shabu.7 The appellant responded by taking
out a plastic sachet from his pocket, and handing it to PO2 Centeno. PO2 Centeno in turn handed
₱200.00 to the appellant, and then gave the pre-arranged signal.
As the other members of the buy-bust team were rushing to the scene, PO2 Centeno introduced himself
as a police officer and arrested the appellant. Afterwards, he frisked the appellant and recovered the
buy-bust money from his right pocket.8
The police thereafter brought the appellant to the Baler Police Station 2 for investigation. Upon arrival,
PO2 Centeno gave the seized plastic sachet to SPO2 Salinel who, in turn, handed it to PO3 Chantengco
who made a request for laboratory examination that PO3 Centeno brought, together with the seized
item to the Central Police District Crime Laboratory for analysis.9 Per Chemistry Report No. D-140-
2004 of Engr. Leonard Jabonillo (the forensic chemist), the submitted specimen tested positive for the
presence of methylamphetamine hydrochloride (shabu).10
In his defense, the appellant testified that between 8:00 to 9:00 p.m. on January 29, 2004, he was on
board a taxi at C5 Road, Fort Bonifacio, Taguig City, when a group of about five (5) men pointed their
guns at him and told him to get out of the vehicle. After he alighted, the armed men told him to board a
mobile car11 and brought him to the Baler Police Station. At the station, the police asked him to remove
his clothes, and confiscated his wallet, bracelet, cap and ₱300.00. The police then told him that he
would be detained for drug charges and that he would be jailed for 40 years.12
Shirley’s testimony was summarized by the RTC as follows:
x x x On February 1, 2004, she was at home when her brother was brought to Precinct 2, Baler[,]
Quezon City. On January 29, 2004, at about 11:00 p.m., she received a text message from Allan
Fortea, a policeman, telling her to call a certain number if she loves her brother. The next day, at about
8:00 a.m., she called Fortea at the number he gave her. He told her that his brother at Station 2 Baler
Quezon City and asked her to produce ₱200,000.00 as ransom for her brother. She asked him if he
could talk to him. He allowed her and her brother to talk and the latter pleaded to her for help and
cried. Fortea told her not to talk in their dialect and took the phone. Fortea then told her to see him at
SM North Edsa Car Park on January 30, 2004 at 7:00 p.m. Fortea did not come. At about 9:00 p.m.,
she proceeded to Station 2 and met Fortea. He asked her about the money but she told him she cannot
afford it. Her brother was then detained when she failed to give in to the said demand.13
The RTC, in its decision dated January 29, 2007, found the appellant guilty beyond reasonable doubt
of illegal sale of shabu, and sentenced him to suffer the penalty of life imprisonment. It also ordered
the appellant to pay a ₱500,000.00 fine.
THE CASE BEFORE THE CA
The appellant appealed his conviction to the CA where his appeal was docketed as CA-G.R. CR. H.C.
No. 02726. In its decision of February 8, 2008, the CA affirmed the RTC decision.
The CA held that the prosecution successfully established all the elements of illegal sale of shabu: PO2
Centeno, the poseur-buyer, positively identified the appellant as the person who gave him shabu
weighing 0.10 gram in exchange for ₱200.00. The CA also ruled that the buy-bust team were presumed
to have performed their duties regularly. It added that the appellant failed to impute improper motive
on the part of the arresting officers.
The CA further held that the chain of custody over the seized plastic sachet were properly established,
even if the time of the actual marking of the seized item had not been shown.
THE PETITION
In his present petition,14 the petitioner claims that he was not selling drugs when the police arrested
him. He adds that his alibi was corroborated by his sister, Shirley. He also argues that the seized plastic
sachet was not properly marked by the police.
The Office of the Solicitor General (OSG) counters that the police were presumed to have performed
their duties in a regular manner. It further maintains that the chain of custody over the seized drug was
not broken.15
THE COURT’S RULING
After due consideration, we resolve to ACQUIT the appellant for the prosecution’s failure to prove his
guilt beyond reasonable doubt.
We restate at the outset the constitutional mandate that an accused shall be presumed innocent until the
contrary is proven beyond reasonable doubt. The burden lies with the prosecution to overcome this
presumption of innocence by presenting the required quantum evidence; the prosecution must rest on
its own merits and must not rely on the weakness of the defense. If the prosecution fails to meet the
required evidence, the defense does not even need to present evidence in its own behalf; the
presumption prevails and the accused should be declared acquitted.16
I. No moral certainty on the corpus delicti
A successful prosecution for the sale of illegal drugs requires more than the perfunctory presentation of
evidence establishing each element of the crime, namely: the identities of the buyer and seller, the
transaction or sale of the illegal drug and the existence of the corpus delicti.
In securing or sustaining a conviction under RA No. 9165, the intrinsic worth of these pieces of
evidence, especially the identity and integrity of the corpus delicti, must definitely be shown to have
been preserved. This requirement necessarily arises from the illegal drug's unique characteristic that
renders it indistinct, not readily identifiable, and easily open to tampering, alteration or substitution
either by accident or otherwise.
Thus, to remove any doubt or uncertainty on the identity and integrity of the seized drug, evidence
must definitely show that the illegal drug presented in court is the same illegal drug actually recovered
from the accused-appellant; otherwise, the prosecution for possession or for drug pushing under RA
No. 9165 fails.17
a. The ‘Marking’ Requirement vis-à-vis the Chain of Custody Rule
Dangerous Drugs Board Regulation No. 1, Series of 2002 (which implements R.A. No. 9165) defines
chain of custody as the duly recorded authorized movements and custody of seized drugs or controlled
chemicals or plant sources of dangerous drugs or laboratory equipment of each stage, from the time of
seizure/confiscation to the receipt in the forensic laboratory, to safekeeping and the presentation in
court for identification and eventual destruction.
The Court explained the importance of establishing the chain of custody over the seized drug in the
recent case of People of the Philippines v. Joselito Beran y Zapanta @ "Jose,"18 as follows:
The purpose of the requirement of proof of the chain of custody is to ensure that the integrity and
evidentiary value of the seized drug are preserved, as thus dispel unnecessary doubts as to the identity
of the evidence. To be admissible, the prosecution must establish by records or testimony the
continuous whereabouts of the exhibit, from the time it came into the possession of the police officers,
until it was tested in the laboratory to determine its composition, and all the way to the time it was
offered in evidence.
Thus, crucial in proving chain of custody is the marking of the seized drugs or other related items
immediately after they are seized from the accused. "Marking" means the placing by the apprehending
officer or the poseur-buyer of his/her initials and signature on the items seized. Long before Congress
passed R.A. No. 9165, this Court has consistently held that failure of the authorities to immediately
mark the seized drugs casts reasonable doubt on the authenticity of the corpus delicti.
Marking after seizure is the starting point in the custodial link; hence, it is vital that the seized
contraband be immediately marked because succeeding handlers of the specimens will use the
markings as reference. The marking of the evidence serves to separate the marked evidence from the
corpus of all other similar or related evidence from the time they are seized from the accused until they
are disposed of at the end of the criminal proceedings, thus preventing switching, "planting," or
contamination of evidence.19
The records in the present case do not show that the police marked the seized plastic sachet
immediately upon confiscation, or at the police station. Nowhere in the court testimony of PO2
Centeno, or in the stipulated testimonies of PO3 Chantengco and PO1 Fortea, did they indicate that the
seized item had ever been marked. Notably, the members of the buy-bust team did not also mention
that they marked the seized plastic sachet in their Joint Affidavit of Arrest.
How the apprehending team could have omitted such a basic and vital procedure in the initial handling
of the seized drugs truly baffles and alarms us. We point out that succeeding handlers of the specimen
would use the markings as reference. If at the first or the earliest reasonably available opportunity, the
apprehending team did not mark the seized items, then there was nothing to identify it later on as it
passed from hand to hand. Due to the procedural lapse in the first link of the chain of custody, serious
uncertainty hangs over the identification of the seized shabu that the prosecution introduced into
evidence.
We are not unaware that the seized plastic sachet already bore the markings "BC 02-01-04" when it
was examined by Forensic Chemist Jabonillo. In the absence, however, of specifics on how, when and
where this marking was done and who witnessed the marking procedure, we cannot accept this
marking as compliance with the required chain of custody requirement. There was also no stipulation
between the parties regarding the circumstances surrounding this marking. We note in this regard that
it is not enough that the seized drug be marked; the marking must likewise be made in the presence of
the apprehended violator. As earlier stated, the police did not at any time ever hint that they marked the
seized drug.
In Lito Lopez v. People of the Philippines20 we acquitted the accused for failure of the police to mark
the seized drugs. The Court had a similar ruling in People of the Philippines v. Merlita Palomares y
Costuna;21 the Court acquitted the accused for the prosecution’s failure to clearly establish the identity
of the person who marked the seized drugs; the place where marking was made; and whether the
marking had been made in the accused’s presence. These recent cases show that the Court will not
hesitate to free an accused if irregularities attended the first stage of the chain of custody over the
seized drugs.
b. The requirements of paragraph 1, Section 21 of Article II of R.A. No. 9165, and its Implementing
Rules and Regulations
The required procedure on the seizure and custody of drugs is embodied in Section 21, paragraph 1,
Article II of R.A. No. 9165, which states:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof.
[Emphasis ours]
This is implemented by Section 21(a), Article II of the Implementing Rules and Regulations of R.A.
No. 9165, which reads:
(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the
search warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items; [Emphasis ours]
In the present case, no evidence was produced showing that the members of the buy-bust team had
extended reasonable efforts to comply with these requirements in handling the evidence. The lapse is
patent from the following exchanges during trial:
FISCAL ROGELIO ANTERO:
Q: x x x After the body frisk and the recovery of the buy-bust money from the person of the accused,
what happened next?
PO2 CENTENO:
A: We went to the station and turned over to the desk officer for proper disposition.
xxxx
Q: How about the pieces of evidence you recovered?
A: I also turned it over to the desk officer, sir.
Q: Who was the desk officer?
A: SPO2 Salinel, sir.
Q: What did the desk officer do with the evidence?
A: He designated the investigator. Then, the investigator made the proper request for Crime Lab.
Q: Who was the investigator?
A: PO3 Chantengco.
xxxx
Q: Why do you know that the duty desk officer turned over the pieces of evidence to Chantengco?
A: I was there, sir.
Q: What happened when this pieces of evidence was turned over to the investigator?
A: The investigator made the request for Crime Lab.
Q: After the request for laboratory examination of specimen was made. [W]hat happened next?
A: We immediately brought [sic] to the Crime Lab. for examination.22
These exchanges further show that the apprehending team never conducted an inventory nor did they
photograph the confiscated item in the presence of the appellant or his counsel, a representative from
the media and the Department of Justice, or an elective official either at the place of seizure, or at the
police station. The Joint Affidavit of the police did not also mention any inventory conducted of any
photograph taken. Corollarily, there was no certificate of inventory or inventory receipt and
photographs of the seized drugs attached to the records.
In People v. Gonzales,23 the police failed to conduct an inventory and to photograph the seized plastic
sachet. In acquitting the accused based on reasonable doubt, we explained that [t]he omission of the
inventory and photographing exposed another weakness of the evidence of guilt, considering that the
inventory and photographing — to be made in the presence of the accused or his representative, or
within the presence of any representative from the media, Department of Justice or any elected official,
who must sign the inventory, or be given a copy of the inventory — were really significant stages of
the procedures outlined by the law and its IRR.24
We recognize that strict compliance with the legal prescriptions of R.A. No. 9165 may not always be
possible. Section 21(a), Article II of the IRR, in fact, offers some flexibility in complying with the
express requirements under paragraph 1, Section 21, Article II of R.A. No. 9165, i.e., "non-compliance
with these requirements under justifiable grounds, as long as the integrity and the evidentiary value of
the seized items are properly preserved by the apprehending officer/team, shall not render void and
invalid such seizures of and custody over said items[.]" This saving clause, however, applies only
where the prosecution recognized the procedural lapses and thereafter cited justifiable grounds to
explain them. In all cases, the prosecution must have established that the integrity and evidentiary
value of the evidence seized had been preserved.25
These conditions were not met in the present case as the prosecution did not even attempt to offer any
justification for the failure of the apprehending team to follow the prescribed procedures in the
handling of the seized drug. We stress that the justifiable ground for non-compliance must be
adequately explained; the Court cannot presume what these grounds are or that they even exist.
II. No Presumption of Regularity
in the Performance of Official Duties
The CA relied on the presumption that regular duties have been regularly performed in sustaining the
appellant’s conviction. This presumption of regularity, however, is disputable; any taint of irregularity
taints the performance undertaken and negates the presumption.26 It cannot by itself overcome the
presumption of innocence nor constitute proof beyond reasonable doubt.27
In the present case, the lack of conclusive identification of the illegal drugs allegedly seized from
petitioner due to the failure of the police to mark, inventory and photograph the seized plastic sachet
effectively negated the presumption of regularity. The procedural lapses by the police put in doubt the
identity and evidentiary value of the seized plastic sachet. Our ruling in People v. Cantalejo28 on this
point is particularly instructive:
As a general rule, the testimony of the police officers who apprehended the accused is usually accorded
full faith and credit because of the presumption that they have performed their duties regularly.
However, when the performance of their duties is tainted with irregularities, such presumption is
effectively destroyed.
While the law enforcers enjoy the presumption of regularity in the performance of their duties, this
presumption cannot prevail over the constitutional right of the accused to be presumed innocent and it
cannot by itself constitute proof of guilt beyond reasonable doubt. The presumption of regularity is
merely just that - a mere presumption disputable by contrary proof and which when challenged by
evidence cannot be regarded as binding truth.29
In fine, we hold that the totality of the presented evidence do not support a finding of guilt with the
certainty that criminal cases require. The procedural lapses committed by the apprehending team show
glaring gaps in the chain of custody, creating a reasonable doubt on whether the shabu seized from the
appellant was the same shabu that were brought to the crime laboratory for chemical analysis, and
eventually offered in court as evidence. In the absence of concrete evidence on the illegal drug bought
and sold, the body of the crime - the corpus delicti - has not been adequately proven. In effect, the
prosecution failed to fully prove the elements of the crime charged.1âwphi1
The Court is one with all the agencies concerned in pursuing a serious and unrelenting campaign
against illicit drugs. But we remind our law enforcers to be ever mindful of the procedures required in
the seizure, handling and safekeeping of confiscated drugs. Observance of these procedures is
necessary to dispel any doubt of the outcome of arrests and buy-bust operations, and to avoid wasting
the efforts and the resources in the apprehension and prosecution of violators of our drug laws. 30
WHEREFORE, in light of all these premises, we REVERSE and SET ASIDE the February 8, 2008
decision of the Court of Appeals in CA-G.R. CR. H.C. No. 02726. Appellant Sonny Sabdula y
Amanda is hereby ACQUITTED for failure of the prosecution to prove his guilt beyond reasonable
doubt. He is ordered immediately RELEASED from detention unless he is otherwise legally confined
for another cause.
Let a copy of this Decision be sent the Director, Bureau of Corrections, Muntinlupa City, for
immediate implementation. The Director of the Bureau of Corrections is directed to report the action
he has taken to this Court within five (5) days from receipt of this Decision.
SO ORDERED.
G.R. No. 209785, June 04, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. MARLON ABETONG Y
ENDRADO, Accused-Appellant.
DECISION
VELASCO JR., J.:
The Case
This treats of accused-appellant Marlon Abetong’s appeal from the June 28, 2013 Decision 1 of the
Court of Appeals (CA) in CA-G.R. CR-H.C. No. 01357 affirming his conviction beyond reasonable
doubt of violating Section 5, Article II of Republic Act No. (RA) 9165 or the Comprehensive
Dangerous Drugs Act of 2002.cra1awredjgc
The Facts
Accused-appellant was charged in an Information2 that reads:
That on or about the 22nd day of August 2003, in the City of Bacolod, Philippines, and within the
jurisdiction of this Honorable Court, the herein accused, not being authorized by law to sell, trade,
dispense, deliver, give away to another, distribute, dispatch in transit or transport any dangerous drugs,
did, then and there wilfully, unlawfully and feloniously sell, deliver, give away to a police poseur
buyer in a buy-bust operation one (1) heat-sealed transparent plastic packet containing
methylamphetamine hydrochloride or shabu weighing 0.02 gram(s) more or less, in exchange for a
price of P100.00 in mark money, consisting of two (2) P50.00 bill with Serial Nos. BZ323461 and
CN467805, in violation of the aforementioned law.
Act contrary to law.
During trial, prosecution witness Police Officer 3 Wilfredo Perez (PO3 Perez) of the Police Station 1,
Bacolod City Police Office, testified that, in the morning of August 22, 2003, their office received
information that a certain alias “Cano,” later identified as accused-appellant, was selling drugs in his
house at Purok Sigay, Barangay 2, Bacolod City. Police Senior Inspector Jonathan Lorilla (Inspector
Lorilla) then called for a briefing for the conduct of a buy-bust operation against “Cano” and
designated PO3 Perez as the poseur-buyer. In preparation for the operation, PO3 Perez initialled two
(2) PhP 50 bills bearing Serial Nos. CN467805 and BZ323461, which were going to be used as marked
money. After recording the details of the preparation in the police blotter, PO3 Perez and the informant
proceeded to the address while Inspector Lorilla and some of his personnel tailed in a car.
Upon arrival at the target area, PO3 Perez and the asset knocked on the door and were greeted by
accused-appellant, who asked the purpose of the visit. PO3 Perez answered that he wanted to buy PhP
100 worth of shabu. The two were ushered in by accused-appellant and once inside, PO3 Perez saw
three persons sitting around a table, passing to one another a tooter and allegedly engaged in a pot
session. The three were identified as Ricky Bayotas, Reynaldo Relos and Archie Berturan. PO3 Perez
then drew two PhP 50 bills marked “WCP” and handed them over to accused-appellant who in turn
gave him a plastic sachet containing white crystalline substance from his right pocket.
After receiving the plastic sachet, PO3 Perez introduced himself as a police officer and signalled his
back-up to effect the arrest of the four individuals. The suspects attempted to flee but their plans were
foiled by the timely arrival of the other policemen.  They were then brought to the police station where
their arrest and the list of the items confiscated from them were entered in the police blotter. From their
arrest until the items seized were transmitted to the Philippine National Police (PNP) Crime
Laboratory, the pieces of evidence were allegedly under PO3 Perez’s custody.  In his testimony, PO3
Perez stated that he kept the items inside the evidence locker in the Drug Enforcement Unit Office, to
which only Inspector Lorilla has a key.
On August 25, 2013, PO3 Perez brought the sachet containing crystalline substance and the tooter to
the PNP Crime Laboratory for testing. The items were received by Inspector Augustina Ompoy
(Inspector Ompoy), the Forensic Chemical Officer of the Regional PNP Crime Laboratory 6, Camp
Delgado, Iloilo City, who then performed the necessary examinations on the items recovered.
Inspector Ompoy testified for the prosecution on the receipt in the PNP Crime Laboratory of the letter-
request for laboratory examination of the specimens. According to her, she conducted quantitative and
qualitative tests and found that the white crystalline substance in the plastic sachet tested positive for
methamphetamine hydrochloride, a dangerous drug, weighing 0.04 gram while the tooter tested
negative for any prohibited drug.
Accused-appellant, for his part, raised that he was illegally arrested, a defense corroborated by Crispin
Mejorada, Jr., a friend and neighbor of the former. As succinctly put by the trial court:3
Testifying in his defense, accused Marlon Abetong declared being at home in Purok Sigay, Brgy. 2,
Bacolod City at 11:50 AM of August 22, 2003, sweeping the floor, alone. Suddenly, a male person
entered the open door and held him by his pants. When Marlon asked what his fault was, the man
answered to just go with him. The person was in civvies, fair-skinned and tall; he did not introduce
himself. Marlon was handcuffed while they were at the foot-walk heading to 26th Aguinaldo Street,
and searched, but nothing was recovered from him except his money – P9.00. Accused was made to
board a vehicle at Aguinaldo; three handcuffed persons were inside. All four were brought to BAC-Up
2 and placed in a cell. Abetong was not informed of the cause of his arrest; no drugs were presented to
him. He knew of the charge – Violation of Section 5, R.A. 9165 – only during arraignment in court.
The Ruling of the RTC
On May 25, 2011, the Regional Trial Court (RTC), Branch 47 in Bacolod City did not give credence to
accused-appellant’s defense and rendered a Decision4 convicting him of the crime charged.  To wit:
WHEREFORE, finding accused Marlon Abetong y Endrardo guilty beyond reasonable doubt of
Violation of Section 5, Article II of R.A. 9165 (Sale, Delivery, etc. of Dangerous Drugs), as charged,
judgment is hereby rendered sentencing him to suffer Life Imprisonment and to pay a fine of
P500,000.00. He is also to bear the accessory penalty prescribed by law. Costs against accused.
The subject one (1) sachet of methamphetamine hydrochloride/shabu (Exh. “B-3-A”) recovered/bought
from him being a dangerous drug, the same is hereby ordered confiscated and/or forfeited in favor of
the government, and to be forthwith delivered/turned over to the Philippine Drug Enforcement Agency
(PDEA) provincial office for immediate destruction or disposition in accordance with law.
The immediate commitment of accused to the national penitentiary for service of sentence is likewise
further ordered.
SO ORDERED.
Aggrieved, accused-appellant appealed to the CA, raising the sole issue that his guilt was not proved
beyond reasonable doubt. He maintained that, assuming without conceding the validity of the buy-bust
operation, the prosecution failed to sufficiently prove that the integrity of the evidence was preserved.
Raising non-compliance with Sec. 21 of RA 9165, he argued, among others: (1) that the markings on
the items seized do not bear the date and time of the confiscation, as required; (2) that about three days
have passed since the items were confiscated before they were brought to the crime laboratory; and (3)
that there was neither an inventory nor a photograph of the recovered plastic sachet. Accused-appellant
likewise hinged his appeal on the fact that Inspector Lorilla, who had the only key to the evidence
locker, did not testify during trial.cra1awredjgc
The Ruling of the CA
On June 28, 2013, the court a quo promulgated the assailed Decision denying the appeal.
The fallo reads:
WHEREFORE, premises considered, the appeal is DENIED. The decision dated May 25, 2011 of the
Regional Trial Court Branch 47 in Bacolod City, convicting the accused-appellant of the offense
charged and sentencing him to life imprisonment and to pay a fine of P500,000.00, is AFFIRMED.
SO ORDERED.
In upholding the RTC conviction, the CA ratiocinated that the prosecution’s evidence was sufficient to
afford the court a reliable assurance that the evidence presented is one and the same as those
confiscated from accused-appellant. Hence, this appeal.cra1awredjgc
The Court’s Ruling
We find for accused-appellant.
Sec. 21 of RA 9165 or the Comprehensive Dangerous Drugs Act of 2002, in part, requires:
Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner:chanroblesvirtuallawlibrary
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof;
(2) Within twenty-four (24) hours upon confiscation/seizure of dangerous drugs, plant sources of
dangerous drugs, controlled precursors and essential chemicals, as well as instruments/paraphernalia
and/or laboratory equipment, the same shall be submitted to the PDEA Forensic Laboratory for a
qualitative and quantitative examination.
The case People v. Musa5 was instrumental for the CA in justifying leniency in the compliance with
Sec. 21 of RA 9165. Relying on the case, the CA dispensed with several procedural requirements
resulting in accused-appellant’s conviction. As cited:
Since the “perfect chain” is almost always impossible to obtain, non-compliance with Sec. 21 of RA
9165, as stated in the Implementing Rules and Regulations, does not, without more, automatically
render the seizure of the dangerous drug void, and evidence is admissible as long as the integrity and
evidentiary value of the seized items are properly preserved by the apprehending officer/team.
In the present case, accused-appellants insist on the police officer’s non-compliance with the chain of
custody rule since there was “no physical inventory and photograph of the seized items were taken in
their presence or in the presence of their counsel, a representative from the media and the Department
of Justice and an elective official.”
We, however, find these observations insignificant since a review of the evidence on record shows that
the chain of custody rule has been sufficiently observed by the apprehending officers.
Jurisprudence indeed instructs that failure to observe strictly the above-quoted provision can be
excused as long as (1) the integrity and evidentiary value of the seized items are properly preserved by
the apprehending officers and (2) non-compliance was attended by justifiable grounds.6  However, the
prosecution in this case was unsuccessful in showing that there was no opportunity for tampering,
contamination, substitution, nor alteration of the specimens submitted. On the contrary, there is a
dearth of evidence to show that the evidence presented was well-preserved. The prosecution likewise
failed to offer any justification on why the afore-quoted provision was not complied with.
The prosecution failed to establish an unbroken chain of custody over the drug evidence
A unique characteristic of narcotic substances is that they are not readily identifiable as in fact they are
subject to scientific analysis to determine their composition and nature. And the risk of tampering, loss
or mistake with respect to an exhibit of this nature is greatest when the exhibit is small and is one that
has physical characteristics fungible in nature and similar in form to substances familiar to people in
their daily lives. As a reasonable measure, in authenticating narcotic specimens, a standard more
stringent than that applied to cases involving objects which are readily identifiable must be applied––a
more exacting standard that entails a chain of custody of the item with sufficient completeness if only
to render it improbable that the original item has either been exchanged with another or been
contaminated or tampered with.7
The chain of custody rule requires that the admission of an exhibit be preceded by evidence sufficient
to support a finding that the matter in question is what the proponent claims it to be. It would include
testimony about every link in the chain, from the moment the item was picked up to the time it is
offered into evidence, in such a way that every person who touched the exhibit would describe how
and from whom it was received, where it was and what happened to it while in the witness’ possession,
the condition in which it was received and the condition in which it was delivered to the next link in
the chain. These witnesses would then describe the precautions taken to ensure that there had been no
change in the condition of the item and no opportunity for someone not in the chain to have possession
of it.8
In the case at bar, the failure of Inspector Lorilla to testify is fatal to the prosecution’s case. To recall,
only PO3 Perez and Inspector Ompoy testified against accused-appellant. During his testimony, PO3
Perez admitted that he put the confiscated item in the evidence locker on August 22, 2003 for
safekeeping and subsequently brought them to Inspector Ompoy at the crime laboratory on August 25,
2003.9  During this three-day interval, the items were allegedly kept inside the evidence locker to
which only Inspector Lorilla has the key. As per the records:10
Q: From the time that the items were confiscated on August 22, 2003 at around 11:50 in the morning
up to the time it was delivered to the PNP Crime Laboratory on August 25, 2003 at 10:40 in the
morning, where were the items kept?
A: It was placed in the evidence locker of the Drug Enforcement Unit together with other exhibits.
Q: Who placed the confiscated items inside the locker in the office of the Drug Enforcement Unit?
A: Myself.
Q: Who keeps the key to that locker?
A: Police Inspector Jonathan Lorilla.
Q: Aside from Police Inspector Jonathan Lorilla, is there any other person who has access to that
locker?
A: No more.
It is evident from this sequence of events that during the interim, Inspector Lorilla constructively
acquired custody over the seized items. As the lone key holder and consequentially a link in the chain,
Inspector Lorilla’s testimony became indispensable in proving the guilt of accused-appellant beyond
reasonable doubt. Only he could have testified that from August 22 to 25, 2003 no one else obtained
the key from him for purposes of removing the items from their receptacle. Only he could have
enlightened the courts on what safety mechanisms have been installed in order to preserve the integrity
of the evidence acquired while inside the locker. Absent his testimony, therefore, it cannot be plausibly
claimed that the chain of custody has sufficiently been established. To be sure, PO3 Perez did not even
testify that he was assigned to safeguard the evidence locker for the said duration; only that he was the
one who put it in and three days later took them out of the locker room before bringing them to the
crime laboratory.
Requiring the key holder’s testimony is especially significant in this case in view of the law enforcers’
failure to deliver the confiscated items to the crime laboratory within 24 hours, as required under Sec.
21 of RA 9165. While the delay in itself is not fatal to the prosecution’s case as it may be excused
based on a justifiable ground, it exposes the items seized to a higher probability of being handled by
even more personnel and, consequently, to a higher risk of tampering or alteration. Thus, the testimony
of the key holder becomes necessary to attest to the fact that the integrity and evidentiary value of the
confiscated evidence have been preserved.
The CA erred in applying the doctrine that the testimony of a lone prosecution witness, as long as it is
credible and positive, can prove the guilt of the accused beyond reasonable doubt.11 Such doctrine is
unavailing in drugs cases wherein all who acquired custody over the confiscated items would
necessarily have to testify in order to establish an unbroken chain. Additionally, worth noting is that
PO3 Perez’s testimony is not “virtually free from any form of inconsistency and contradictions as to
besmirch it with doubt and question” contrary to the CA’s findings.12  In fact, it can be gleaned from
the records that one of his key statements has been refuted by forensic chemist Ompoy herself.
Based on the affidavit13 executed by PO3 Perez on August 25, 2003, three persons were engaged in a
pot session in the house of accused-appellant. However, when the tooter allegedly confiscated from the
three was tested for dangerous drugs, the test yielded a negative result.14  While the guilt of the three
others is not an issue in this case, this is illustrative of a disparity in the prosecution’s version of facts
and militates against PO3 Perez’s credibility.
The presumption of regularity has been overturned
The prosecution cannot skirt the issue of the broken chain of custody by relying on the presumption of
regularity. This presumption, it must be stressed, is not conclusive. Any taint of irregularity affects the
whole performance and should make the presumption unavailable.15 The presumption, in other words,
obtains only when nothing in the records suggests that the law enforcers involved deviated from the
standard conduct of official duty as provided for in the law. But where the official act in question is
irregular on its face, as in this case, an adverse presumption arises as a matter of course. 16
A perusal of the Information filed against accused-appellant and Inspector Ompoy’s chemistry report
reveals a glaring inconsistency in this case. As can be recalled, the Information charges accused-
appellant of selling 0.02 gram of methamphetamine hydrochloride. Relative to the crime charged,
Inspector Ompoy, on the other hand, testified17 in the following wise:
Q: Tell us what kind of tests did you conduct on the specimen?
A: This consists of the physical, chemical and confirmatory tests. In the physical this includes the
weighing of the specimen out of its container. Specimen “A” weighs 0.04 gram of white crystalline
substance. Then I proceeded to my chemical test in which Marqui and Simons tests were employed. In
the Marqui test, a drop of Marqui reagent was added to the representative sample and it [yielded]
orange-to-brown color which is indicative of the presence of methamphetamine hydrochloride. In the
Simons test, Simons reagents 1, 2 and 3 were added to another representative sample and it produced a
deep-blue color reaction, also indicative of the presence of methamphetamine hydrochloride.
xxxx
Q: For the record, please read the description of Specimen “A”
A: One heat-sealed transparent plastic packet with markings containing 0.04 gram of white crystalline
substance, placed inside a staple-sealed transparent plastic bag with markings.
From the foregoing transcript, the incongruence between the weight of the drug accused-appellant is
being charged of selling and the weight of the drug tested by the forensic chemist becomes patent. For
sure, this discrepancy in the weight of the substance is fatal to the case of the prosecution. 18 It
automatically casts doubt as to the identity of the item seized and of the one tested as it erases any
assurance that the evidence being offered is indeed the same as the one recovered during the buy-bust
operation.
Well-settled is that “the dangerous drug itself, the shabu in this case, constitutes the very corpus
delicti of the offense, and in sustaining a conviction under RA 9165, the identity and integrity of
the corpus delicti must definitely be shown to have been preserved. x x x Thus, to remove any doubt or
uncertainty on the identity and integrity of the seized drug, evidence must definitely show that the
illegal drug presented in court is the very same illegal drug actually recovered from the accused;
otherwise, the prosecution for possession under RA 9165 fails.”19 Applying this precept in the case at
bar, any guarantee of the drug item’s preservation was effectively removed by the failure of the
prosecution to describe consistently the very corpus delicti of the criminal offense.
The arresting officers unduly deviated from legal procedure 
It is beyond dispute that the date and time of confiscation do not appear on the markings of the seized
items. It cannot also be denied that no photograph was taken of the recovered items for documentation
purposes. It is admitted that no representative from the media, from the Department of Justice, or any
elective official was present to serve as witness in recording the arrest. The prosecution’s testimonial
evidence is likewise bereft of any allegation of efforts undertaken by the law enforcers to contact these
representatives. Nevertheless, an accused can still be convicted in spite of these circumstances
provided that a justifiable ground for excusing non-compliance with the requirements under Sec. 21 of
RA 9165 has satisfactorily been established by the prosecution as required by jurisprudence and the
law’s implementing rules.
Such justifiable ground is wanting in this case. No explanation whatsoever was offered by PO3 Perez
in his testimony justifying non-compliance. Without this justification, it was improper for the court a
quo to affirm accused-appellant’s conviction. To sustain the RTC and the CA’s findings would render
the legal requirements under Sec. 21 of RA 9165 inutile and would effectively diminish the safeguards
offered by the law in favor of the accused.cra1awlaw1ibrary
WHEREFORE, the appeal is GRANTED. The June 28, 2013 Decision of the Court of Appeals is
hereby REVERSED and SET ASIDE. Accused-appellant Marlon Abetong y Endrano is
hereby ACQUITTED based on reasonable doubt.
The Director of the Bureau of Prisons is ordered to immediately RELEASE accused-appellant from
custody, unless he is being held for some other lawful cause, and to INFORM this Court, within five
(5) days from receipt of this Decision, of the date accused-appellant was actually released from
confinement.
SO ORDERED.
.R. No. 205202, June 09, 2014 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. NENITA
GAMATA Y VALDEZ, Accused-Appellant.

FIRST DIVISION
G.R. No. 205202, June 09, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. NENITA GAMATA Y
VALDEZ, Accused-Appellant.
RESOLUTION
REYES, J.:
This is an appeal from the Decision1 dated May 11, 2012 of the Court of Appeals (CA) in CA-G.R.
CR-HC No. 04839 which affirmed the Decision2 dated September 15, 2010 of the Regional Trial Court
(RTC) of Makati City, Branch 64 in Criminal Case Nos. 06-1344 to 1345 finding Nenita
Gamata y Valdez (accused-appellant) guilty in Criminal Case No. 06-1344 for violating Section 5,
Article II of Republic Act (R.A.) No. 9165, otherwise known as the Comprehensive Dangerous Drugs
Act of 2002, and sentencing her to suffer the penalty of life imprisonment and to pay a fine of
P500,000.00.
The Information in Criminal Case No. 06-1344 to which the accused-appellant pleaded “Not Guilty”
contained the following accusations:chanroblesvirtuallawlibrary
That on or about the 25TH day of July 2006, in the City of Makati, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, not being lawfully authorized by law,
did then and there willfully, unlawfully and feloniously sell, give away, distribute and deliver to
another, zero point zero three [0.03] gram of Methylamphetamine Hydrochloride which is a dangerous
drug, in exchange of Php.500.00 pesos.3 [sic]
Meanwhile, the information in Criminal Case No. 06-1345 indicted the accused-appellant for illegal
possession of 0.14 gram of methylamphetamine hydrochloride, an act punishable under Section 11,
Article II of R.A. No. 9165.4 Considering, however, that the accused-appellant was acquitted by the
RTC of such criminal charge, the present discussion shall concern only Criminal Case No. 06-1344.
During trial, the prosecution presented the testimonies of Police Officer 2 Renie Aseboque (PO2
Aseboque), Noel Pulido (Pulido) and Juan Siborboro, Jr., both operatives of the Makati Anti-Drug
Abuse Council (MADAC), and Police Inspector May Andrea Bonifacio (P/Insp. Bonifacio), Forensic
Chemist of the Philippine National Police (PNP) Crime Laboratory. Their declarations depicted the
following events:chanroblesvirtuallawlibrary
On July 25, 2006, an information was received by Senior Inspector Joefel Felongco Siason (S/Insp.
Siason) of the Station Anti-Illegal Drugs Special Operations Task Force (SAIDSOTF), Makati City,
from a confidential asset of the MADAC that rampant illegal drug peddling in Laperal
Compound, Barangay Guadalupe Viejo, Makati City was being carried out by the accused-appellant,
Jun Gamata (Jun), Toto Madera and Totoy Pajayjay. Apparently, their names are also included in the
watch list of the MADAC.
Forthwith, a team composed of SAIDSOTF police officers and MADAC operatives was formed to
conduct a buy-bust operation against the said subjects. During the briefing, PO2 Aseboque was
designated as the poseur-buyer while the rest of the team members were assigned to be his back-up.
The operation was coordinated with the Philippine Drug Enforcement Agency (PDEA) under Pre-
Coordination Sheet Control Number MMRO-072506-0212 duly acknowledged to have been received
by PO1 Nemencio V. Domingo of the PDEA.5 One piece of a P500.00 bill was also marked for use in
the operation.6
At around 4:30 p.m., the team, together with the confidential informant, proceeded to the subject area.
The team members positioned themselves in spots where they can monitor the possible transaction.
Meanwhile, PO2 Aseboque and the informant walked towards Laperal Compound and thereupon
noticed a woman clad in white t-shirt and maong pants. The informant identified her to PO2 Aseboque
as the accused-appellant.
The two of them then approached the accused-appellant whom PO2 Aseboque queried as to the
whereabouts of Jun. In response, the accused-appellant said that Jun was not around and that “kami
nandito lang, bakit kukuha ba kayo?” PO2 Aseboque comprehended her response as the street
language used in the dealing of dangerous drugs and that she actually meant that she was
selling shabu if they wanted to buy one. PO2 Aseboque repeated his query to which the accused-
appellant replied, “Wag niyo ng hintayin si Jun, ako meron.” PO2 Aseboque took her response as a
confirmation that she was indeed selling shabu. He then asked her if she had P500.00 worth of shabu.
The accused-appellant took out one plastic sachet from her right pocket and handed it over to PO2
Aseboque who in turn examined its contents and thereafter handed the buy-bust money to the accused-
appellant. As she was placing the money inside her pocket, PO2 Aseboque made the pre-arranged
signal to his buy-bust team mates by lighting a cigarette.
Upon seeing MADAC operative Pulido rushing towards the scene, PO2 Aseboque held the accused-
appellant and introduced himself as a police officer. He directed her to empty the contents of her
pockets but she refused. This prompted PO2 Aseboque to order Pulido to dig into the accused-
appellant’s pockets. Pulido complied and discovered three more pieces of transparent plastic sachet
containing white crystalline substance suspected as shabu along with the buy-bust money and P120.00
of the accused-appellant’s personal money.
The accused-appellant was then informed of her constitutional rights while the sachet she sold to PO2
Aseboque was immediately marked by the latter with his initials “REA” while those recovered by
Pulido were marked with “REA-1”, “REA-2”, and “REA-3”. At the crime scene, PO2 Aseboque also
prepared an Acknowledgment Receipt7 which he and the arresting team signed.
The accused-appellant and the seized evidence were subsequently brought to the Makati SAIDSOTF
office where they were turned over to PO2 Rafael Castillo (PO2 Castillo) for investigation,
interrogation and proper disposition. At the same office, PO2 Aseboque executed an Affidavit of
Arrest8 and a Supplemental Affidavit.
Along with a Request for Laboratory Examination9 prepared by S/Insp. Siason, Pulido brought the
seized specimens to the PNP Crime Laboratory. The same were received by a certain Relos, officer of
the day, in the presence of Crime Laboratory Forensic Chemist P/Insp. Bonifacio.
P/Insp. Bonifacio conducted the necessary tests on the subject specimens and the results thereof
yielded positive results for methylamphetamine hydrochloride or shabu. Thereafter, she tagged each
item with tape markings and reduced her findings in Physical Science Report Number D-506-
06S.10 She then turned over the specimens to the evidence custodian from whom she later on retrieved
them upon the instructions of the prosecutor after the filing of criminal informations against the
accused-appellant.11
The defense refuted all of the above occurrences and claimed, through the testimony of the accused-
appellant, that at around 3:00 p.m. of July 25, 2006, she had just finished taking a bath when she heard
someone banging the door of her house in Laperal Compound. When she opened the door, five armed
men in civilian clothing greeted her and asked for Jun, her brother-in-law. When she answered them
that she did not know Jun’s whereabouts, they began searching her house. Since Jun actually resides at
about five houses away from hers, the armed men were unable to locate him at the accused-appellant’s
house. They then handcuffed the accused-appellant and loaded her in a van where she saw her
neighbor, Alaw, and a certain Jonalyn Silvano. The three of them were brought to the SAIDSOTF
office where the accused-appellant was shown items that will be used as evidence against her. 12
In a Decision13 dated September 15, 2010, the RTC sustained the prosecution’s version and held that
the pieces of evidence submitted established the presence of the elements of illegal sale of dangerous
drugs, viz: (1) the identity of the buyer and the seller, object and consideration; and (2) the delivery of
the thing sold and the payment therefor. Both elements were found present in the poseur-buyer’s
positive identification of the accused-appellant as the person from whom he was able to purchase
P500.00 worth of shabu.
The accused-appellant’s denial and alibi were rejected for being unsubstantiated. Her imputations of
frame-up to the police officers were likewise found uncorroborated by convincing proof and thus
overthrown by the presumption of regularity attached to the performance of the police officers’ official
duties.
The RTC disposed thus:chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing, [judgment] is hereby rendered as follows:
1. Finding the accused NENITA GAMATA y VALDEZ, GUILTY in Criminal
Case No. 06-1344 of the charge for violation of Section 5, Article II of RA 9165
and sentencing her to life imprisonment and to pay a fine of FIVE HUNDRED
THOUSAND PESOS (Php500,000.00);
2. ACQUITTING the accused NENITA GAMATA y VALDEZ in Criminal Case No.
06-1345 of the charge for violation of Section 11, Article II of RA 9165.
SO ORDERED.14 (Emphasis ours)
On appeal, the accused-appellant argued for her acquittal on the ground that the identity of the drugs
seized from her was not proved beyond reasonable doubt because the prosecution failed to supply all
the links in the chain of their custody. She further pointed out the inconsistent testimonial and
documentary evidence on the markings placed on the seized items. The accused-appellant also
questioned the failure of the police officers to comply with the procedure laid down in Section 21,
Article II of R.A. No. 9165 particularly, the preparation of the inventory and taking of photographs of
the seized items.15
In a Decision16 dated May 11, 2012, the CA denied the appeal and concurred with the findings and
conclusions of the RTC that the identities of the buyer and seller as well as the consummation of the
sale of illegal drugs was proved beyond reasonable doubt by the prosecution through the
straightforward testimony of the poseur-buyer himself, PO2 Aseboque, as believably corroborated by
two other members of the buy-bust team and by extensive documentary evidence. The CA rejected the
accused-appellant’s arguments and held that the same were disproved by the evidence on record,
thus:chanroblesvirtuallawlibrary
Accused-appellant contends that while [PO2] Aseboque maintains that he had custody of the items
seized from her, Pulido testified that he was the one who held the items recovered from accused-
appellant. A careful perusal of the transcript of stenographic notes, however, reveals that there was
actually no inconsistency as what Pulido testified to as the items that was with him were the ones he
recovered from the pocket of the accused-appellant and not the one that was subject of the sale. x x x
xxxx
x x x [W]hen Pulido testified as to the seized items, he was referring to those sachets that he was able
to fish out of the pocket of accused-appellant and he held on to the same as [PO2] Aseboque had his
hands full trying to restrain accused-appellant. x x x Pulido corroborated [PO2] Aseboque’s statement
that it was the latter who prepared the inventory of the items seized from the accused-appellant. x x x
xxxx
It is noted that the four sachets were already marked with the initial of the apprehending officer at the
scene of the crime. The act was attested to by the rest of the arresting team and the markings were
reflected in the acknowledgement report. Even if [PO2] Castillo failed to note in his spot report that the
items were marked with the initial of [PO2] Aseboque, it could not be discounted that the items were
the ones seized from the person of accused-appellant because if the same were different, the items that
were turned over to the forensic chemist P/Insp. Bonifacio would not have borne the initial of [PO2]
Aseboque considering that from the hands of [PO2] Castillo, the seized items were personally handed
by him to Relos, who in turn gave the same to P/Insp. Bonifacio who was, likewise, present when
[PO2] Castillo handed the items to Relos. Moreover, [P/Insp.] Bonifacio explained that there is
actually no difference between the marking “REA” and “R.E.A.” x x x
xxxx
In addition, an examination of the letter request (Request for Laboratory Examination) shows that
while the signatory mentioned that the item subject of the sale was marked as “REA”, when he
attached the sachet to the request, the signatory made a handwritten reference to the attached specimen
as “R.E.A.” To Our mind, the presence or absence of the punctuation marks is of no moment as the
request was precisely clear that the items to be examined were the ones attached to the request
itself.17 (Citation omitted)ChanRoblesVirtualawlibrary
The CA also dismissed the accused-appellant’s contentions that the statutory procedure for the
inventory and photograph of the seized items was not observed. The CA held that the absence of a
media representative or an elected public official during the inventory was not material to overturn a
conviction as it did not pertain to the elements of the crime charged. The CA further stressed that non-
compliance with the inventory and photograph requirements will not render void and invalid the WITNESS: I asked her, “Si Jun wala ba?”
seizure and custody over the items.
PROS. PAGGAO: Any answer from the woman?
Accordingly, the decision disposed as follows:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the instant appeal is DENIED and the appealed Decision dated WITNESS: She said, “Wag n’yo ng hintayin si Jun, ako meron.”
September 15, 2010 rendered by the Regional Trial Court, Branch 64, Makati City, in Criminal Case
No. 06-1344 for Violation of Article II, Section 5 of Republic Act No. 9165 is hereby AFFIRMED. PROS. PAGGAO: What did you do?

SO ORDERED.18cralawlawlibrary WITNESS: I asked her if she has worth Five Hundred Pesos, sir.

The accused-appellant is now before the Court pleading for her acquittal based on the same arguments PROS. PAGGAO: What was her reply, if any?
raised in her Appellant’s Brief before the CA.19
Ruling of the Court WITNESS: She told me that she has worth Five Hundred Pesos, sir.

The Court denies the appeal. PROS. PAGGAO: And, after that, what did you do, if any?

The arguments proffered in support of the accused-appellant’s plea for acquittal has already been WITNESS: She took one plastic sachet from her right pocket, sir.
exhaustively traversed by the CA and based on evidence on record, the Court finds no reversible error
imputable to the appellate court and the trial court in finding her guilty beyond reasonable doubt of PROS. PAGGAO: What did she do with that?
illegal sale of shabu defined and penalized under Section 5, Article II of R.A. No. 9165.
WITNESS: She handed that to me, sir.
Illegal sale of prohibited drugs is consummated at the moment the buyer receives the drug from the
seller. In a buy-bust operation, the crime is consummated when the police officer makes an offer to buy PROS. PAGGAO: And, upon receiving the sachet of shabu, what did you do?
that is accepted by the accused, and there is an ensuing exchange between them involving the delivery
of the dangerous drugs to the police officer.20 In order to successfully prosecute the offense, proof WITNESS: I checked it first if it has contents, sir.
beyond reasonable doubt of two elements must be satisfied by the prosecution, viz: (a) the identity of
the buyer and the seller, the identity of the object and the consideration of the sale; and (b) the delivery PROS. PAGGAO: After checking, what did you do?
of the thing sold and of the payment for the thing.
WITNESS: I then handed the buy bust money worth Five Hundred Pesos, sir.
As correctly ruled by the courts a quo, the presence of both requisites was clearly established by the
testimony of the poseur-buyer himself, PO2 Aseboque, who positively testified that the illegal sale PROS. PAGGAO: And, after she received the Five Hundred Pesos, what happened next?
took place when he gave the P500.00 marked money to the accused-appellant in exchange for
the shabu, thus:chanroblesvirtuallawlibrary WITNESS: While she is putting the buy bust money inside her pocket, I made the pre-arranged signal
WITNESS [PO2 Aseboque]: After I asked her if where is Jun, she told me that Jun is not around, sir. by lighting a cigarette, sir.

PROS. PAGGAO: What did you do next? xxxx

WITNESS: She said: Kami nandito lang, bakit kukuha ba kayo? PROS. PAGGAO: Now, you have been mentioning of Nenita against [sic] whom you were able to buy
shabu and the one you arrested, is she in the courtroom?
PROS. PAGGAO: What did you understand by that?
WITNESS: Yes, sir.
WITNESS: It is a street language that they are using with dangerous drugs, so it is understood that we
are going to buy shabu, sir. PROS. PAGGAO: Will you kindly step down and tap her shoulder?

PROS. PAGGAO: What did you reply, if any?

(The witness tapped the right shoulder of a female person and that woman upon being asked of her
name answered: Nenita Gamata)21cralawlawlibrary
The CA was also correct in ruling that the failure of the arresting officers to strictly comply with
paragraph 1, Section 21, Article II of R.A. No. 916522 mandating the procedure for the inventory and
photograph of seized illegal drugs did not affect the evidentiary weight of the drugs seized from the
accused-appellant. As held in People v. Cardenas:23
[N]on-compliance with Section 21 of said law, particularly the making of the inventory and the
photographing of the drugs confiscated and/or seized, will not render the drugs inadmissible in
evidence. Under Section 3 of Rule 128 of the Rules of Court, evidence is admissible when it is relevant
to the issue and is not excluded by the law or these rules. For evidence to be inadmissible, there should
be a law or rule which forbids its reception. If there is no such law or rule, the evidence must be
admitted subject only to the evidentiary weight that will accorded it by the courts. x x x
We do not find any provision or statement in said law or in any rule that will bring about the
non-admissibility of the confiscated and/or seized drugs due to non-compliance with Section 21 of
Republic Act No. 9165. The issue therefore, if there is non-compliance with said section, is not of
admissibility—but of weight—evidentiary merit or probative value—to be given the evidence.
The weight to be given by the courts on said evidence depends on the circumstances obtaining in
each case.24 (Emphasis supplied)ChanRoblesVirtualawlibrary
This is especially true when the chain of custody of the corpus delicti or the illegal drug itself was
shown to be unbroken,25 as in this case. Testimonial and documentary evidence show that the poseur-
buyer, PO2 Aseboque, marked the seized illegal drug at the crime scene with his initials “REA”. At the
same place, he also prepared an Acknowledgment Receipt of the items seized from the accused-
appellant whose refusal to sign was duly noted in the same document.26 The seized item was then
immediately turned over by PO2 Aseboque to SAIDSOTF investigating officer PO2 Castillo.27 On the
same day, PO2 Castillo brought the seized illegal drug, together with the Request for Laboratory
Examination,28 to the PNP Crime Laboratory where it was received by a certain Relos in the presence
of Forensic Chemist, P/Insp. Bonifacio.29 In her Physical Science Report No. D-506-06S,30 the contents
of the seized item marked REA weighed 0.03 gram tested positive for methylamphetamine
hydrochloride or shabu. After her examination, P/Insp. Bonifacio turned over the seized item to the
evidence custodian from whom she later retrieved them upon the instructions of and for submission to
the prosecutor. On the witness stand, P/Insp. Bonifacio categorically identified the specimen presented
as evidence as the very same specimen which she tested based on the marking she placed thereon: “D-
506-06S”.31
Indeed, the following links in the chain of custody of the seized illegal drug were duly accounted
for, to wit: (1) the seizure and marking of the illegal drug recovered from the accused by the
apprehending officer; (2) the turnover of the illegal drug seized by the apprehending officer to the
investigating officer; (3) the turnover by the investigating officer of the illegal drug to the forensic
chemist for laboratory examination; and (4) the turnover and submission of the marked illegal drug
seized by the forensic chemist to the court.32
The alleged discrepancy between the testimony of PO2 Aseboque that he placed the marking REA on
the seized item, the forensic chemist’s report stating that the specimen was marked “R.E.A.” and the
absence of any such description in the Spot Report33 of PO2 Castillo did not cause a gap in the chain of
custody. As exhaustively discussed by the CA, the identity and integrity of the seized item was
preserved because, despite lack of accurate description in the Spot Report, P/Insp. Bonifacio testified
that the item she received for laboratory examination bore the markings “REA” placed by PO2
Aseboque at the crime scene. It is for this same reason that the punctuation marks after the letters R, E
and A in her Physical Science Report No. D-506-06S did not alter the identity and integrity of the
actual specimen marked as “REA.” The specimen marked at the crime scene, turned over to PO2
Castillo and then received by P/Insp. Bonifacio were one and the same.
Further, the failure of the evidence custodian to take the witness stand did not weaken the case for the
prosecution because P/Insp. Bonifacio was able to positively identify that the evidence submitted in
court was the very same specimen which she subjected to laboratory examination and its contents
tested positive for shabu.34
In sum, the Court finds no reversible error in the conviction meted the accused-appellant. The penalty
of life imprisonment and ?500,000.00 fine imposed upon her were in accord with Section 5, Article II
of R.A. No. 9165.35
WHEREFORE, premises considered, the appeal is DENIED and the Decision dated May 11, 2012 of
the Court of Appeals in CA-G.R. CR-HC No. 04839 is hereby AFFIRMED.
SO ORDERED.
G.R. No. 190177               June 11, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
VIVIAN BULOTANO y AMANTE, Accused-Appellant.
DECISION
PEREZ, J.:
In the prosecution of a case for sale of illegal drugs punishable under Section 5, Artic1e II of Republic
Act No. 9165, noncompliance with the procedure set forth in Section 21 of the law is not necessarily
fatal as to render an accused's arrest illegal or the items confiscated from him inadmissible as evidence
of his guilt, if, nonetheless, the integrity and evidentiary value of the confiscated items is preserved,
there will yet be basis for the establishment of the guilt of the accused. 1
Under review is the conviction of Vivian A. Bulotano (Bulotano) for illegal sale of shabu, punishable
under the "Comprehensive Dangerous Drugs Act of 2002". The challenged decision is the Decision2 of
the Court of Appeals (CA) dated 23 July 2009, which affirmed the Decision 3 of the Regional Trial
Court (RTC) dated 10 August 2005 in Criminal Case No. 2004-727.
The facts as culled from the records are as follows:
Upon a tip-off, a team of agents from the Philippine Drug Enforcement Agency (PDEA) conducted a
buy-bust operation in Barangay 31, Sto. Niño, Cagayan de Oro City, toentrap Bulotano for allegedly
selling illegal drugs or shabu.
Acting as poseur-buyers, PO1 Dizon Dagaraga (PO1 Dagaraga), together with an informant,
approached Bulotano, who was playing a card game with two (2) other persons inside a billiard hall.
When Bulotano noticed the two, she approached them and asked what they were looking for. PO1
Dagaraga replied that he wants to buy ₱200.00 worth of shabu. After Bulotano handed PO1 Dagaraga
a transparent plastic sachet containing crystals, PO1 Dagaraga handed Bulotano marked money in the
amount of ₱200.00.
Immediately, PO1 Dagaraga went out of the billiard hall to call the back-up officers to arrest Bulotano.
During her arrest, PO1 Cotta Tanggote informed Bulotano of the reason for her arrest and of her
constitutional rights. Bulotano was brought to the PDEA- Region 10 Office at Cagayan De Oro City
for her inquest for violation of Republic Act No. 9165.
Bulotano was then brought to the PNP Crime Laboratory where she was asked for her urine sample.
When tested, the result came positive for Methamphetamine Hydrochloride or shabu. 4 The laboratory
examination by the PNP Crime Laboratory of the transparent plastic sachet containing crystalline
substance also tested positive for 0.10 gram of Methamphetamine Hydrochloride or shabu.5
As her defense, Bulotano claims that during her arrest, she was merely playing a card game when three
(3) armed men suddenly barged into the billiard hall and approached her. According to Bulotano, one
of the three (3) armed men introduced himself as a policeman, after which, she was brought outside
and made to board a police vehicle. Bulotano further claims that during the entire incident, she was in a
state of shock and was never informed of the reason for her arrest, as well as of her constitutional
rights. Contrary to the prosecution’s allegation of facts, Bulotano claims that she found out the reason
for her arrest only upon arrival at the PDEA-Region 10 Office, where PO1 Dagaraga made her sign an
inventory receipt of the illegal drugs allegedly seized from her.
One Joel Flores was presented in support of the defense. Essentially, he testified that there was no buy-
bust operation which took place and that the PDEA agents just suddenly barged into the billiard hall
and poked a gun at Bulotano’s forehead.6
Bulotano entered a plea of not guilty on the Information which reads:
That on or about September 6, 2004, at 6:00 o’clock P.M., at Sto. Niño Brgy. 31, Cagayan de Oro City,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, without
being authorized by law, did then and there willfully, unlawfully and feloniously sell, deliver,
distribute and give away one (1) small sachet heat sealed transparent plastic cellophane containing 0.10
gram of met[h]amphetamine hydrochloride (shabu), to a poseur buyer in consideration of two (2)
₱100.00 bills, which was marked money bearing Serial Number Q₱541321 and R₱780963, while the
other members of the police unit strategically located nearby, intently observing the consummation of
the transaction, including the giving of marked money by the poseur buyer to the accused on a buy-
bust operation, well knowing that it is dangerous drug.
Contrary to and in violation of Section 5, Article II of Republic Act 9165.7
After trial, the trial court found Bulotano guilty of violation of Section 5 of Republic Act No. 9165.
The dispositive portion of the decision reads:
WHEREFORE, in the light of the foregoing, (sic) consideration, this Court hereby rendered judgment
finding the accused Vivian Bulotano y Amante guilty beyond reasonable doubt of the crime charged in
the information and sentences her to life imprisonment and a fine of ₱500,000.00 and to pay the cost.
Accused Vivian Bulotano who has been detained since her arrest shall be credited in the service of her
sentence consisting of deprivation of liberty with the full time during which she has undergone
preventive imprisonment if she agrees voluntarily in writing to abide by the same disciplinary rules
imposed upon corrected prisoners.
SO ORDERED.8
On appeal, the CA affirmed the trial court decision, thus:
WHEREFORE, Premises considered, the APPEAL is hereby DENIED. The decision dated August 10,
2005 of Branch 25 of the Regional trial Court of Cagayan de Oro City is hereby AFFIRMED in toto.
SO ORDERED.
Before Us, Bulotano insists that her conviction is without basis. She anchors her arguments on the
following allegations:
(1) There were no photographs of the alleged seized illegal drugs taken;
(2) The inventory of the alleged seized illegal drugs was not immediately done after her arrest.
The inventory was conducted only after she underwent inquest proceedings at the City
Prosecutor’s Office, following which the inventory was shown to her and she was forced to
sign the same. There were no witnesses in the conduct of the inventory and that the inventory
report was solely signed by PO1 Dagaraga;
(3) The Chemistry Report, prepared by P/S Insp. April Madroño
(Forensic Chemical Officer), dated 7 September 2004, was not duly notarized; and
(4) The trial court failed to appreciate the testimony of Joel Flores.
On these arguments, the CA ruled that, "even if it were to be conceded that the above arguments
presented by accused-appellant are indeed meritorious, regrettably, the same arguments do not militate
nor mitigate accused-appellant’s conviction for violation of Republic Act No. 9165. At most, the above
arguments constitute infractions that may subject the parties concerned to administrative charges." 9
Further, the CA ratiocinated that the "alleged deviations from the guidelines of Republic Act No. 9165
relate only to minor procedural matters, which by any means, does not operate to tilt the scales of
justice in favor of accused-appellant, as the fact of sale of illegal drugs was duly established by the
prosecution against her."10
With the observations that follow, We affirm the conviction of the defendant for illegal sale of shabu.
Necessity of presenting in evidence the corpus delicti.
The elements necessary for the prosecution of the illegal sale of drugs are as follows: (a) the identity of
the buyer and the seller, the object and the consideration; and (2) the delivery of the thing sold and
payment therefor.11 The prosecution, to prove guilt beyond reasonable doubt, must present in evidence
the corpus delicti of the case. The corpus delicti is the seized illegal drugs.
The duty of the prosecution is not merely to present in evidence the seized illegal drugs. It is essential
that the illegal drugs seized from the suspect is the very same substance offered in evidence in court as
the identity of the drug must be established with the same unwavering exactitude as that required to
make a finding of guilt.12
Section 21 of Republic Act No. 9165 as a legal safeguard that the seized illegal drugs are the same one
presented in court.
Because of the unique characteristic of illegal drugs, rendering them indistinct, not readily identifiable,
and susceptible to tampering, alteration or substitution either by accident or otherwise, the law laid
down rules to preserve the identity and integrity of the seized illegal drugs. Section 21 of Republic Act
No. 9165 provides for the procedure that ensures that what was confiscated is the one presented in
court. Thus:
Section 21.Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner: (1) The apprehending team having
initial custody and control of the drugs shall, immediately after seizure and confiscation, physically
inventory and photograph the same in the presence of the accused or the person/s from whom such
items were confiscated and/or seized, or his/her representative or counsel, a representative from the
media and the Department of Justice (DOJ), and any elected public official who shall be required to
sign the copies of the inventory and be given a copy thereof; x x x x
(3) A certification of the forensic laboratory examination results, which shall be done under oath by the
forensic laboratory examiner, shall be issued within twenty-four (24) hours after the receipt of the
subject item/s: Provided, That when the volume of the dangerous drugs, plant sources of dangerous
drugs, and controlled precursors and essential chemicals does not allow the completion of testing
within the time frame, a partial laboratory examination report shall be provisionally issued stating
therein the quantities of dangerous drugs still to be examined by the forensic laboratory: Provided,
however, That a final certification shall be issued on the completed forensic laboratory examination on
the same within the next twenty-four (24) hours; x x x x
Otherwise stated, Section 21 of Republic Act No. 9165 requires that upon seizure of illegal drug items,
the apprehending team having initial custody of the drugs shall (a) conduct a physical inventory of the
drugs and (b) take photographs thereof (c) in the presence of the person from whom these items were
seized or confiscated and (d) a representative from the media and the Department of Justice and any
elected public official (e) who shall all be required to sign the inventory and be given copies thereof.
There were no photographs of the alleged seized illegal drugs taken.
Based on the records, in violation to Section 21, paragraph 1 of Republic Act No. 9165, the arresting
officers completely failed to take photographs of the seized illegal drugs in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official.13
The testimony of PO1 Dagaraga affirms the fact:
Q: You also did not photograph the shabu at the scene in the presence of Vivian Bulotano?
A: No, sir.
Q: In the PDEA Office, did you photograph the shabu in the presence of Vivian Bulotano?
A: I cannot recall.
Q: Meaning to say, it is possible that you have perhaps the evidence together with Vivian Bulotano at
the PDEA Office already?
A: Yes.14
There were no witnesses in the conduct of the inventory, except PO1 Dagaraga.
Besides the failure to photograph the seized illegal drugs, the defense claims that the inventory was not
done immediately after the arrest. However, the defense failed to adduce evidence to establish such
fact. Thus, on this point, the presumption of regularity must prevail.
The defense’s arguments, however, do not solely center on the promptness of the conduct of the
inventory. The defense maintains that the inventory report is defective on the ground of lack of
witnesses.
A simple perusal of the inventory report will reveal that PO1 Dagaraga was the sole signatory in the
inventory report.15 PO1 Dagaraga affirmed such procedural lapse. Thus:
Q: Will you agree with me that there are no witnesses who signed in this inventory receipt?
A: No, myself only.16
The Chemistry Report,
prepared by P/S Insp. April
Madroño (Forensic Chemical
Officer) was not duly notarized.
Again, contrary to the procedural requirement laid down in Section 21, paragraph (3) of Republic Act
No. 9165, which requires that the laboratory certification must be under oath, the Chemistry Report
was not duly notarized.17
As defined in the 2004 Rules on Notarial Practice, an ‘affirmation’ or ‘oath’ refers to an act in which
an individual on a single occasion:18
(a) appears in person before the notary public;
(b) is personally known to the notary public or identified by the notary public through
competent evidence of identity as defined by these Rules; and
(c) avows under penalty of law to the whole truth of the contents of the instrument or
document.
Contrary to the requirements in the law, the Chemistry Report was notarized by a certain Theodore
Ipan Baja (Baja), a Police Chief Inspector/QD Examiner/C/OPN OFFR.19 Baja is not a duly
commissioned notary public. Also, there were no allegations that PO1 Dagaraga was personally known
to Baja and that PO1 Dagaraga avows under the penalty of law to the whole truth of the contents of the
Chemistry Report.
In sum, the procedural requirements of Section 21, Republic Act No. 9165 were not followed. First,no
photograph of the seized shabu was taken. Second, the arresting officers did not immediately mark the
seized shabu at the scene of the crime. Third, although there was testimony about the marking of the
seized items at the police station, the records do not show that the marking was done in the presence of
Bulotano. Fourth, no representative of the media and the Department of Justice, and any elected
official attended the conduct of the physical inventory and signed the inventory. And finally, the
Chemistry Report was not duly notarized.
The "chain of custody" rule.
Without doubt, the arresting officers failed to strictly comply with the requirements provided in
Section 21.However, noncompliance with the regulations is not necessarily fatal as to render an
accused’s arrest illegal or the items confiscated from him inadmissible as evidence of his guilt, for
what is of the utmost importance is the preservation of the integrity and the evidentiary value of the
confiscated items that will be utilized in the determination of his guilt or innocence. 20 Such that, when
there is a failure to follow strictly the said procedure, the crime can still be proven, i.e., that the
noncompliance was under justifiable grounds or that the shabu taken is the same one presented in court
by proof of "chain of custody".
We refer to the last paragraph of Section 21(a) of the IRR, which provides a saving mechanism to
ensure that not every case of noncompliance irreversibly prejudices the State’s evidence, to wit:
(a) The apprehending office/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the
search warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items; (Emphasis and Underscoring
supplied)
As thus provided, noncompliance with the enumerated requirements in Section 21 of the law, does not
automatically exonerate the accused. Upon proof that noncompliance was due to justifiable grounds,
and that the integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, the seizure and custody over said items are not, by the noncompliance,
rendered void. This is the "chain of custody" rule.
In Mallillin v. People,21 the Court explained that the "chain of custody" requirement ensures that
unnecessary doubts concerning the identity of the evidence are removed. The chain of evidence is
constructed by proper exhibit handling, storage, labelling and recording, and must exist from the time
the evidence is found until the time it is offered in evidence.22 Failure to prove that the specimen
submitted for laboratory examination was the same one allegedly seized from accused is fatal to the
prosecution’s case. When there are doubts on whether the item confiscated was the same specimen
examined and established to be the prohibited drug, there can be no crime of illegal possession or
illegal sale of a prohibited drug.23
In the chain of custody, the marking immediately after seizure is the starting point in the custodial link.
Thereafter, the specimen shall undergo different processes and will inevitably be passed on to different
persons. Thus, it is vital that there be an unbroken link in the chain to obviate switching, "planting," or
contamination of evidence,24 a fortiori, to segregate the marked evidence from the corpus of all other
similar and related evidence from the time they are seized from the accused until they are disposed of
at the end of the criminal proceedings.25
In the case at bar, the records establish the links in the chain of custody.
After PO1 Dagaraga seized from Bulotano a transparent plastic sachet containing crystalline substance
(specimen) and the marked money of ₱200.00, PO1 Dagaraga then prepared an inventory and request
for laboratory examination and brought the specimen, the marked money, and Bulotano, to the PNP
Crime Laboratory.
During his cross-examination, PO1 Dagaraga attested that it was the same seized illegal drugs which
were presented in court because of the markings "DGD" on the specimen and the marked money. The
examination on PO1 Dagaraga as shown in the TSN:26
Q: What did you do next?
A: Then I brought Vivian to our office at PDEA, and I let her filled [sic] up the booking sheet for her
identification.
Q: What else did you do?
A: We prepared a request for laboratory examination for the specimen recovered from Vivian
Bulotano.
Q: If that laboratory request as you said prepared by you be shown to you, will you be able to identify
it?
A: Yes, sir.
xxxx
Q: I’m showing to you a specimen already marked Exhibit "D", is that the one you bought from the
accused?
(Pros. Borja handed to the witness Exhibit "D").
A: Yes, this is the one, the sachet that we bought from Vivian Bulotano worth ₱200.00 peso bills.
Q: Why do you say that this is the one that you bought from Vivian Bulotano?
A: Because of the mark DGD, sir.
xxxx
Q: Why do you say that you were the one who submitted the letter request to the PNP Crime
Laboratory?
A: Because it bears my signatory receipt and I indicated my names (sic) sir.
To corroborate PO1 Dagaraga’s testimony, SPO1 Samuel Daang Tabligan (SPO1 Tabligan) testified
that he was the one who received the request, specimen, and marked money from PO1 Dagaraga:
Q: I am showing to you this request, is this the request that you received from the PDEA?
A: Yes, sir, including the specimen.
Q: Is this the specimen that you are referring to?
A: Yes, sir.27
xxxx
Q: Mr. Witness, when you received the laboratory request and the specimen, where did the requesting
party placed the small sachet containing a white crystalline substance?
A: It is placed in a bigger transparent cellophane.
Q: Where there markings on the bigger plastic cellophane where the small plastic sachet was placed?
A: There was none.
Q: Now, how was that big cellophane sealed, was it sealed through masking tape or staple wire?
A: It was sealed through staple wire.
Q: When you received it, did you also open it in order to examine the specimen that was placed inside?
A: Yes, Ma’am. I opened the bigger plastic for comparison.
xxxx
Q: By the way, who delivered this laboratory request and this specimen?
A: PO1 Dizon Dagaraga. He was the one who brought the written request together with the specimen.28
To prove that the specimen presented in court was the same specimen he received from PO1 Dagaraga
and the same specimen he examined and thereafter, forwarded to the PNP Chemical Laboratory, SPO1
Tabligan positively identified the seized shabu:
Q: Now, Mr. Witness, on the smaller sachet which contains a white crystalline substance, what were
the markings you found?
A: I found the making "DGD".
xxxx
Q: And did you record in your police logbook, the receipt of this specimen and the laboratory request?
A: Yes, Ma’am.29
In detail, the records of the case indicate that after Bulotano’s arrest, she was taken to the police station
and turned over to the police investigator. Although there were no photographs taken, PO1 Dagaraga,
the poseur-buyer and arresting officer, testified that he personally30 made the markings "DGD"
(representing his initials) on the plastic sachet containing crystalline substance. PO1 Dagaraga also
testified that he was the one who drafted the inventory.31 PO1 Dagaraga, also, drafted the request for
chemical laboratory examination.32 After drafting the request, it was still PO1 Dagaraga, who delivered
the plastic sachet containing crystalline substance,33 which had the marking "DGD" to the PNP
Chemical Laboratory for examination. The request, together with the sachet containing crystalline
substance, was received by SPO1 Tabligan.34 Then, it was transferred to the Forensic Chemical
Officer, P/S Insp. Madroño.35 The plastic sachet containing white crystalline substance was later on
determined to be positive for Methamphetamine Hydrochloride or shabu.36
Despite noncompliance with the requirements in Section 21, there is no showing of a break in the chain
in the custody of the seized item, later on determined to be shabu, from the moment of its seizure by
the entrapment team, to the investigating officer, to the time it was brought to the forensic chemist at
the PNP Crime Laboratory for laboratory examination.37 The prosecution’s failure to submit in
evidence the required photograph and inventory conducted in the presence of the accused and
witnesses of the seized drugs pursuant to Section 21, Article II of Republic Act No. 9165 will not
exonerate Bulotano.38 Noncompliance with the requirements is not fatal and will not render an
accused’s arrest illegal or the items seized/confiscated from him inadmissible. 39 What is of utmost
importance is the preservation of the integrity and the evidentiary value of the seized items, as the
same would be utilized in the determination of the guilt or innocence of the accused. 40
Finally, We find need to comment on the statement by the appellate court that, "even if it were to be
conceded that the above arguments presented by accused-appellant are indeed meritorious, regrettably,
the same arguments do not militate nor mitigate accused-appellant’s conviction for violation of
Republic Act No. 9165. At most, the above arguments constitute infractions that may subject the
parties concerned to administrative charges."41
The requirements laid down in Section 21 are not a statement of duties or a job description of the drugs
law enforcement officers.1âwphi1 It is a statement of procedure for compliance with the imperative
that the thing presented as proof of violation of the law is precisely that which was confiscated or taken
from the accused, recognizing the unique characteristic of illegal drugs being vulnerable to tampering,
altering or substitution.42 When it is not followed without any justifiable reason, an acquittal of the
accused results.
Thus, while minor deviations from the procedures under Republic Act No. 9165 would not
automatically exonerate an accused, when there is gross disregard of the procedural safeguards
prescribed in the substantive law, serious uncertainty is generated about the identity of the seized items
that the prosecution presented in evidence.43 Which is why the rule of chain of custody was included in
the IRR of the law.
Credence is given to prosecution witnesses who are police officers for they are presumed to have
performed their duties in a regular manner, unless there is evidence to the contrary suggesting ill-
motive on the part of the police officers.44
The same presumption holds good insofar as the fact of sale is concerned. Bulotano failed to show any
motive on the part of the arresting officers to implicate her in a crime she claimed she did not commit.
Bulotano’s bare denial cannot prevail over the positive identification by PO1 Dagaraga that she is the
same person who sold the shabu to him, corroborated by SPO1 Tabligan. Parenthetically, the testimony
of Joel Flores, merely corroborative of the defense is likewise of no moment.
We uphold the performance in this case of the police officers of their duty. We are not, however,
unmindful of the abuses that can possibly be committed by enforcing officers of the law. We take note
that arresting officers cannot run around the law unscathed; thus, the more stringent implementation of
Sections 27, 29 and 32 of Republic Act No. 9165, which criminalizes misappropriation,
misapplication, failure to account confiscated or seized illegal drugs, planting of illegal drugs as
evidence, and violation of rules of the PDEA of arresting officers. 45
Thus said, We go back to what is this case at bottom. All the elements necessary for the prosecution of
the illegal sale of drugs has been established beyond reasonable doubt (a) the identity of the buyer:
PO1 Dagaraga; and the seller: Bulotano; the object: shabu; and the consideration: ₱200.00 marked
money; and (2) the delivery of the thing sold and payment therefor.46
Accordingly, We AFFIRM the 23 July 2009 Decision of the Court of Appeals in CA-G.R. CR-HC No.
00254-MIN, which in turn affirmed in toto the decision of the Regional Trial Court in Criminal Case
No. 2004-727 dated 10 August 2005, finding accused-appellant VIVIAN BULOTANO y AMANTE
guilty of violating Section 5, Article II of Republic Act No. 9165.
SO ORDERED.
EOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. GIL SALVIDAR Y GARLAN, Accused-
Appellant.
RESOLUTION
REYES, J.:
For review1 is the Decision2 rendered by the Court of Appeals (CA) on October 31, 2012 in CA-G.R.
CR-HC No. 04989 affirming, albeit with modification as to the wordings of one of the penalties
imposed, the Decision3 dated April 11, 2011 by the Regional Trial Court (RTC) of Caloocan City,
Branch 120 in Criminal Case Nos. C-78532-33, convicting Gil Salvidar y Garlan (accused-appellant)
for violation of Sections 54 and 11,5 Article II of Republic Act (R.A.) No. 9165.6
Factual Antecedents
The informations filed before the RTC against the accused-appellant partially read as
follows:chanroblesvirtuallawlibrary
CRIM CASE NO. 78532
Violation of Section 5, Art. II, RA 9165
“That on or about the 12th day of November 2007 in Caloocan City, Metro Manila, and within the
jurisdiction of this Honorable Court, the above-named accused, without authority of law, did then and
there, willfully, unlawfully and feloniously sell and deliver to PO3 RAMON GALVEZ, who posed, as
buyer, ten (10) heat-sealed transparent plastic sachets each containing dried MARIJUANA fruiting
tops weighing 0.37 gram, 0.35 gram, 0.40 gram, 0.28 gram, 0.35 gram, 0.36 gram, 0.32 gram, 0.36
gram, 0.67 gram & 0.57 gram, a dangerous drug, without the corresponding license or prescription
therefore, knowing the same to be such.
Contrary to law.”
CRIM CASE NO. 78533
Violation of Section 11, Art. II, RA 9165
“That on or about the 12th day of November 2007, in Caloocan City[,] Metro Manila and within the
jurisdiction of this Honorable Court, the above-named accused, without being authorized by law, did
then and there, willfully, unlawfully and feloniously have in his possession, custody and control one (1)
transparent plastic box containing dried MARIJUANA fruiting tops weighing 29.01 grams, when
subjected for laboratory examination gave positive result to the tests of Marijuana, a dangerous drug.
Contrary to law.”7cralawlawlibrary
During arraignment, the accused-appellant entered a “not guilty” plea. Pre-trial then ensued. Since the
two cases were filed against the same accused and revolve around the same facts and evidence, they
were consolidated and tried jointly.
Version of the Prosecution
The prosecution offered the following as witnesses: (a) Police Officer 3 Ramon Galvez (PO3 Galvez),
the poseur-buyer in the buy-bust operation conducted against the accused-appellant; (b) PO2 Randulfo
Hipolito (PO2 Hipolito), likewise a member of the buy-bust operation; (c) Senior Police Officer 1
Fernando Moran (SPO1 Moran), then the investigator-on-duty to whom the accused-appellant and the
seized evidence were turned over at the police station; and (d) Police Chief Inspector Albert S. Arturo
(PCI Arturo), Forensic Chemical Officer of the Northern Police District Crime Laboratory Office,
Caloocan City, who conducted the examination on the evidence seized from the accused-appellant.
PO3 Galvez testified that on November 12, 2007, he was ordered by their chief to conduct a
surveillance operation to verify reported illegal drug selling activities in Don Antonio
Street, Barangay 19, Caloocan City. A confidential informant told the police that a certain “Keempee,”
who would later on be identified as the herein accused-appellant, was notoriously selling marijuana in
the area. A buy-bust team was thereafter formed. PO3 Galvez was designated as the poseur-buyer, PO3
Fernando Modina (PO3 Modina) as team leader, and PO2 Hipolito as back-up member. A hundred
peso bill, marked with PO3 Galvez’s initials, was prepared. To send a signal to the other members of
the buy-bust team of the consummation of the transaction with the accused-appellant, PO3 Galvez was
instructed to throw a lit cigarette. 8
The buy-bust team proceeded to the target area. PO3 Galvez and the informant saw the accused-
appellant near the front door of his house, stripping marijuana leaves. The rest of the team remained in
the perimeter. PO3 Galvez approached the house, uttered “Keempee, pakuha nga ng damo, halagang
isang daan,” and gave the latter the P100.00 marked money. The accused-appellant then held ten (10)
pieces of plastic, which appeared to contain marijuana and white pieces of paper, placed them inside a
Marlboro pack, and handed them all to PO3 Galvez. When PO3 Galvez threw a lit cigarette, PO2
Hipolito joined him in arresting the accused-appellant, who was apprised of his constitutional rights.
After a further search, one transparent plastic box containing what likewise appeared to be
dried marijuana leaves, one plastic sachet with white pieces of paper, and a few empty transparent
plastic sachets were also seized from the accused-appellant. 9
PO3 Galvez marked the ten (10) plastic sachets with “GSG/RG 11/12/07” representing his and the
accused-appellant’s initials and the date the imprint was made. The rest of the items seized were
marked with “GSG/RH,” the last two letters representing PO2 Hipolito’s initials. The accused-
appellant and the seized items were thereafter taken to the police station and turned over to SPO1
Moran, who prepared the letter request for laboratory examination. The crime laboratory tested the
seized items and found the same to be marijuana.10
PO2 Hipolito corroborated PO3 Galvez’s testimony about the conduct of a buy-bust operation and the
turnover of the accused-appellant and the seized items to the investigator at the police station.
Additionally, PO2 Hipolito stated that he held the accused-appellant while PO3 Galvez was marking
some of the seized items. The accused-appellant was turned over to PO3 Modina upon the latter’s
arrival, while PO2 Hipolito marked the rest of the seized items.11
The prosecution and the defense entered into stipulations and admissions of facts
anent:chanroblesvirtuallawlibrary
(a) SPO1 Moran’s (1) having caused the buy-bust money to be photographed; (2) receipt, while
at the police station, of the person of the accused-appellant and the items allegedly seized
from him; (3) preparation of the evidence acknowledgment receipt, affidavit of arrest of the
police officers, and referral slip to the inquest prosecutor; (4) preparation of a letter request
for laboratory examination of the seized items; and (5) receipt of the result of the laboratory
examination, which yielded positive for marijuana;12 and
(b) PCI Arturo’s (1) receipt of a letter request for laboratory examination of ten (10) heat-sealed
transparent plastic sachets containing white pieces of paper and
dried marijuana fruiting/flowering tops; (2) conduct of a laboratory examination on the
aforecited specimens; and (3) preparation of Physical Science Report No. D-382-07 stating
therein the result of the laboratory examination.13
The testimonies of SPO1 Moran and PCI Arturo were thus dispensed with.
Version of the Defense
The defense, on its part, offered the testimonies of the accused-appellant and his son, Guillar Salvidar
(Guillar).
The accused-appellant claimed that contrary to the prosecution’s statements, he was instead arrested at
around 4:00 p.m. of November 11, 2007. While playing a video game with Guillar, he stood up to get
snacks for the latter. Several men arrived, brought him to their vehicle, and handcuffed him. He was
subsequently asked to reveal the identities of big time drug pushers in the area. The accused-appellant
was unable to comply with the order and was brought to the Sangandaan precinct. The men, who
seized the accused-appellant, turned out to be police officers. PO3 Galvez and SPO1 Moran belonged
to the group. They inquired from him about his and his wife’s employment. The men then asked him to
settle the case for P30,000.00. He told them that he did not have money. When his wife arrived, she
argued with the police officers. The officers got angry and informed him that he would be indicted. 14
Guillar corroborated the accused-appellant’s testimony about the date of the arrest and their
whereabouts at that time. He added that three policemen arrived. They dragged his father out of the
video game shop and the latter, in turn, resisted. Guillar cried while he chased his father who was taken
away, but the former’s attempt was futile. Guillar went home to inform his mother about the incident.15
Ruling of the RTC
On April 11, 2011, the RTC rendered a decision,16 the dispositive portion of which
reads:chanroblesvirtuallawlibrary
Premises considered, this court finds and so holds the accused Gil Salvidar y Garlan
GUILTY beyond reasonable doubt for violation of Sections 5 and 11, Article II of [R.A. No. 9165], x
x x and imposes upon him the following:chanroblesvirtuallawlibrary
(1) In Crim. Case No. C-78532, the penalty of Life Imprisonment and a fine of Five Hundred
Thousand Pesos ([P]500,000.00); and
(2) In Crim. Case No. C-78533, the penalty of Imprisonment of twelve (12) years and one (1) day to
Fourteen (14) years and a fine of Three Hundred Thousand Pesos ([P]300,000.00).
The drugs subject matter of these cases consisting of ten (10) heat-sealed transparent plastic sachets
each containing dried MARIJUANA fruiting tops weighing 0.37 gram, 0.35 gram, 0.40 gram, 0.28
gram, 0.35 gram, 0.36 gram, 0.32 gram, 0.36 gram, 0.67 gram & 0.57 gram[,] as well as the one (1)
transparent plastic box containing dried MARIJUANA fruiting tops weighing 29.01 grams[,] are
hereby confiscated and forfeited in favor of the government to be dealt with in accordance with law.

17
SO ORDERED.
The RTC found the accused-appellant’s defense of denial and claim of attempted police extortion as
bare, hence, unmeritorious. The trial court declared that the testimonies of the members of the buy-bust
team deserve full faith and credit, unless it can be shown that they did not properly perform their
duties, or that they were inspired by ill motives. The accused-appellant, in this case, did not personally
know the policemen and had no previous altercation with any of them, which could have otherwise
prompted the filing of fabricated charges against him. Besides, the police officers could not have been
oblivious of the fact that Section 29 of R.A. No. 9165 imposes the penalty of death upon persons found
guilty of planting dangerous drugs as evidence.18
Citing People v. Cueno19 and People v. Rigodon,20 the RTC emphasized that only two basic elements
must be present for the charge of illegal sale of drugs to prosper, namely: (a) the determination of the
identities of the buyer and the seller, the object and the consideration; and (b) the delivery of the thing
sold and the payment therefor. In the case at bar, PO3 Galvez gave a detailed account of how the sale
involving the accused-appellant was consummated and his testimony was corroborated by PO2
Hipolito. The seized items were also positively identified and the unbroken chain of custody over the
same was established.21
The Parties’ Arguments Before the CA
and its Ruling
The accused-appellant challenged the above ruling before the CA claiming that the prosecution’s
version of what transpired was highly incredible. The members of the buy-bust team narrated that the
accused-appellant was packing and selling his illegal merchandise in public view. This, however, is
improbable and contrary to common experience.22
The accused-appellant also alleged that the prosecution failed to establish an unbroken chain of
custody over the evidence. There was no explicit testimony that the specimens were marked in the
presence of the accused-appellant. There was likewise no proof that the items were photographed and
inventoried in the presence of a member of the media, a Department of Justice (DOJ) representative,
and an elective government official.23
Further, not all who had custody of the specimens testified on the condition of the same upon receipt
and the precautions they took to preserve their integrity. It is perplexing as well why SPO1 Moran
delivered the seized items twice to the crime laboratory – at first to a certain PO1 Bolora at 9:40 p.m.
of November 12, 2007, and subsequently to PCI Arturo at 9:45 p.m. of the same date. While PO1
Bolora’s custody over the seized items merely lasted for a few minutes, still, he should have testified
because that short span of time was more than sufficient to destroy the integrity of the evidence. 24
Admittedly, there are exceptions to the strict implementation of the rules and procedures mandated by
R.A. No. 9165. However, the prosecution should have, at the outset, recognized the procedural lapses
and cite justifiable grounds for the omissions, failing at which, a taint of doubt is cast upon the
presumption that official duties have been performed with regularity.25
The Office of the Solicitor General (OSG) opposed the appeal arguing that drug pushers have become
more daring in selling their wares without regard for place and time.26
The prosecution had likewise proven beyond reasonable doubt that an illegal sale of ten (10) plastic
sachets containing marijuana was consummated and the accused-appellant was the vendor. The same
ten (10) plastic sachets were seized from the accused-appellant, then later on, identified and offered as
evidence during the trial. PO3 Galvez and PO2 Hipolito had testified in detail about the conduct of the
buy-bust operation, including the markings done on the plastic sachets and transparent box seized from
the accused-appellant in the place where he was arrested, and no irregularity can be ascribed as to the
concerned police officers’ performance of duties.27
On October 31, 2012, the CA rendered the herein assailed decision, the dispositive portion of which
states:chanroblesvirtuallawlibrary
WHEREFORE, the appeal is DENIED. The Decision of the Regional Trial Court of Caloocan City,
Br. 120 in 1) Crim. Case No. C-78532 sentencing the Accused-Appellant to suffer life imprisonment
and to pay a fine of Five Hundred Thousand Pesos(PhP500,000.00) is AFFIRMED; and, 2) Crim.
Case No. C-78533 is likewise AFFIRMED but with MODIFICATION as to the penalty imposed in
that the Accused-Appellant is sentenced to suffer an indeterminate penalty of Twelve(12) years and
One(1) day, as minimum, to Fourteen(14) years, as maximum. Costs against the Accused-Appellant.
SO ORDERED.28
In affirming the accused-appellant’s conviction, the CA cited the following
grounds:chanroblesvirtuallawlibrary
Settled is the rule that in the prosecution for illegal sale of drugs, it is material to prove that the
transaction or sale actually took place, coupled with the presentation in court of the evidence of corpus
delicti. Said otherwise, the essential elements of the crime of illegal sale of dangerous drugs are: 1)the
accused sold and delivered a prohibited drug to another; and 2) he knew that what he had sold and
delivered was a prohibited drug.
In the instant case, PO3 Galvez’[s] testimony proves that the sale of illegal drugs actually took place. x
x x [T]he Accused-Appellant was caught in a buy-bust operation freely and knowingly selling and
delivering prohibited drugs. x x x.
x x x The prosecution has proven beyond reasonable doubt that the Accused-Appellant committed the
crime of illegal possession of dangerous drugs. It was able to prove the following elements: 1)the
accused is in possession of an object identified as a prohibited drug; 2)such possession is not
authorized by law; and, 3)he freely and consciously possessed the said drug.
The records manifestly show that, after the buy-bust team arrested the Accused-Appellant, the
procedural body search was conducted on his person. The search led to the discovery of one(1)
transparent plastic box containing an undetermined amount of suspected dried marijuana leaves (later
weighed at 29.01 grams), which he freely possessed knowing the same to be prohibited drugs. After
the conduct of laboratory examinations, the same yielded positive for marijuana. Further, he failed to
present any document authorizing him by law to possess the same. x x x.
The Accused-Appellant’s allegation that the prosecution failed to preserve the integrity and prove the
identity of the seized drugs, holds no water.
In all cases involving the handling and custody of dangerous drugs, the police officers are guided by
Sec. 21 of the Implementing Rules and Regulations of R.A. No. 9165. The language of the foregoing
provision shows that the failure of the police officers to strictly comply with it is not fatal and does not
render the evidence adduced against the Accused-Appellant void and inadmissible. What is important
is the preservation of the integrity and the evidentiary value of the seized items, as the same would
be utilized in the determination of the guilt or innocence of the accused.
At bench, there was compliance with the said provision and the integrity of the drugs confiscated from
the Accused-Appellant remained intact. The chain of custody of the seized drugs, later on determined
to be marijuana, was not shown to have been broken. The records show that, after PO3 Galvez bought
ten(10) pieces of plastic sachets suspected of containing marijuana, the Accused-Appellant was bodily
searched and found to be in possession of one(1) transparent plastic box containing an undetermined
amount of suspected dried marijuana leaves. Immediately thereafter, the confiscated drugs were
marked with the initials “GSG/RG 11/12/07” and “GSG/RH” and inventoried at the place of arrest and
in the presence of the Accused-Appellant. PO3 Galvez and PO2 Hipolito then brought the Accused-
Appellant to the Sangandaan police station where the same were turned over to SPO1 Moran.
Thereafter, the latter prepared the Evidence Acknowledgment Receipt and the letter-request for
laboratory examination of the seized substances for determination of the presence of any dangerous
drugs. PCI Arturo conducted the laboratory test and found them positive for marijuana, a dangerous
drug.
What is more, during the trial, PO3 Galvez and PO2 Hipolito were able to positively identify all the
plastic sachets containing marijuana with markings “GSG/RG 11/12/07” and “GSG/RH” as the same
ones that they confiscated from the Accused-Appellant. x x x.
In comparison to the prosecution’s evidence, all that the Accused-Appellant could raise is the defense
of denial. x x x The defense of denial in drug cases requires strong and convincing evidence because of
the presumption that the law enforcement agencies acted in the regular performance of their official
duties. Bare denial of the Accused-Appellant cannot prevail over the positive testimony of the
prosecution witness. x x x.
The Accused-Appellant’s allegation that the police officers were exacting Thirty Thousand
Pesos(PhP30,000.00) from him has no basis. Other than his bare allegations, unsupported by concrete
proof, We cannot give such imputation a second look.29 (Citations
omitted)ChanRoblesVirtualawlibrary
The CA modified the wordings of the penalty imposed by the RTC on the accused-appellant for
violation of Section 11 of R.A. No. 9165. The CA emphasized that the Indeterminate Sentence Law
should be applied. Consequently, the proper penalty should be “expressed at a range whose maximum
term shall not exceed the maximum fixed by the special law, and the minimum term shall not be less
than the minimum prescribed.”30
Issues
The accused-appellant and the OSG both manifested that they no longer intended to file supplemental
briefs.31
Hence, the issues before this Court are the same ones raised before and disposed of by the CA.
Essentially then, the Court is once again asked to determine whether or not: (a) the testimonies of the
members of the buy-bust team about the accused-appellant’s illegal selling activities and possession
of marijuana while the latter was at the front door of his house and within public view are credible;
and (b) the prosecution had complied with the procedural requirements mandated by Section 2132 of the
Implementing Rules and Regulations (IRR) of R.A. No. 9165 as regards the chain of custody over the
evidence seized from the accused-appellant.cra1awredjgc
Ruling of the Court
The instant appeal lacks merit.
In cases involving violations of the Dangerous Drugs Law, appellate courts tend to rely heavily on the
trial court’s assessment of the credibility of witnesses, because the latter had the unique opportunity,
denied to the appellate courts, to observe the witnesses and to note their demeanor, conduct, and
attitude under direct and cross-examination. Hence, its factual findings are accorded great respect, even
finality, absent any showing that certain facts of weight and substance bearing on the elements of the
crime have been overlooked, misapprehended, or misapplied.33
In the instant appeal, the RTC and CA uniformly found that PO3 Galvez’s and PO2 Hipolito’s
testimonies anent the conduct of the buy-bust operation were categorical, detailed, and
credible.34 Moreover, the accused-appellant had not ascribed any ill motive against the two police
officers which could have otherwise induced them to fabricate the charges.
As the first issue, the accused-appellant claimed that it was highly improbable for him to peddle and
possess marijuana right in front of his house and within public view. This allegation fails to persuade
especially in the light of the court’s observation that of late, drug pushers have turned more daring and
defiant in the conduct of their illegal activities.35
Anent the second issue, the Court finds the chain of custody over the evidence seized from the
accused-appellant as unbroken and that there was sufficient compliance with Section 21 of the IRR of
R.A. No. 9165.
PO3 Galvez positively testified that he marked the ten (10) plastic sachets containing marijuana and
the pieces of white paper while still in the place where the accused-appellant was arrested, and in the
presence of the latter.36 PO2 Hipolito did the same relative to the plastic container
with marijuana likewise found in the accused-appellant’s possession.37 When the members of the buy-
bust team arrived in the police station, they turned-over the person of the accused-appellant and the
items seized from him to SPO1 Moran, who in turn, prepared the Evidence Acknowledgment Receipt
and letter request for laboratory examination.38 Thereafter, PCI Arturo conducted the laboratory
examinations and found the specimens to be marijuana.39 These were the same items identified by the
prosecution witnesses and presented to the trial court as evidence.
The accused-appellant lamented that the evidence seized were not photographed and inventoried in the
presence of a member of the media, a representative from the DOJ, and an elective government
official. While this factual allegation is admitted, the Court stresses that what Section 21 of the IRR of
R.A. No. 9165 requires is “substantial” and not necessarily “perfect adherence,”40 as long as it can be
proven that the integrity and the evidentiary value of the seized items are preserved as the same would
be utilized in the determination of the guilt or innocence of the accused. 41
The accused-appellant attempted to establish that there was a breach in the chain of custody over the
evidence seized from him by pointing out that SPO1 Moran twice delivered the items to the crime
laboratory – at first to a certain PO1 Bolora and later, to PCI Arturo.42 The Court notes that despite the
foregoing allegation, the defense agreed with the prosecution to dispense with the testimonies of SPO1
Moran and PCI Arturo. The parties entered into stipulations and admissions of facts as regards the
participation of the aforementioned two. This is no less than an admission on the part of the defense
that there was nothing irregular in SPO1 Moran and PCI Arturo’s performance of their duties relative
to preserving the integrity of the evidence which fell in their custody. Had the accused-appellant
sincerely believed that there was indeed a breach in the chain of custody over the seized items, he
would have insisted on putting SPO1 Moran and PCI Arturo on the witness stand for cross-
examination.
In sum, the Court finds the herein assailed decision affirming the RTC’s conviction of the accused-
appellant for violation of Sections 5 and 11, Article II of R.A. No. 9165 as amply supported by both
evidence and jurisprudence. The Court agrees as well with the CA in its modification of the wordings
of the penalty imposed on the accused-appellant for violation of the above-mentioned Section 11, as
the same is mandated by Section 1 of the Indeterminate Sentence Law.
IN VIEW OF THE FOREGOING, the Decision of the Court of Appeals dated October 31, 2012 in
CA-G.R. CR-HC No. 04989 is AFFIRMED in toto.
SO ORDERED.
G.R. No. 188133, July 07, 2014
PEOPLE OF THE PHILIPPINES, Appellee, v. OLIVER RENATO EDAÑO Y
EBDANE, Appellant.
DECISION
BRION, J.:
We resolve in this appeal the challenge to the October 16, 2008 decision1 and the December 23, 2008
resolution2 of the Court of Appeals (CA) in CA-G.R. CR HC No. 01142.  The challenged CA decision
affirmed the April 22, 2004 joint decision3 of the Regional Trial Court (RTC), Branch 103, Quezon
City, finding appellant Oliver Renato Edaño guilty beyond reasonable doubt of violating Section 11,
Article II of Republic Act (R.A.) No. 9165 (the Comprehensive Dangerous Drugs Act of 2002), and
imposing on him the penalty of life imprisonment.  The assailed resolution, on the other hand, denied
the appellant’s motion for reconsideration.
BACKGROUND FACTS
The prosecution charged the appellant and Godofredo Siochi with violation of Section 11, Article II of
R.A. No. 9165 under two separate Informations, docketed as Criminal Case Nos. Q-02-111200 and Q-
02-112104.
The appellant and Siochi pleaded not guilty to the charge on arraignment. Joint trial on the merits
followed.
The prosecution presented, as its witnesses, Police Inspector (P/Insp.) Aylin Casignia and Police
Officer (PO) 3 Elmer Corbe.  The appellant, Siochi and Ruben Forteza took the witness stand for the
defense.
The evidence for the prosecution established that on the evening of August 6, 2002, members of the
Metro Manila Drugs Enforcement Group, composed of PO3 Corbe, PO3 Nelson Javier, PO3 Dennis
Padpad, PO3 Marcelo Alcancia, Jr., together with a female informant, went to the parking area of
McDonalds, West Avenue to conduct an entrapment operation against a certain alias “Nato.”4
At around 7:00 p.m., the appellant arrived on board a space wagon driven by Siochi.5  The informant
approached the appellant and talked to him inside the vehicle.  Afterwards, the informant waved at
PO3 Corbe.6  When PO3 Corbe was approaching the appellant, the latter went out of the vehicle and
ran away.  PO3 Corbe, PO3 Padpad and PO3 Alcancia chased the appellant; PO3 Corbe was able to
grab the appellant, causing the latter to fall on the ground.  PO3 Corbe recovered a “knot-tied”
transparent plastic bag from the appellant’s right hand, while PO3 Alcancia seized a gun tucked in the
appellant’s waist.  The other members of the police arrested Siochi.  Thereafter, the police brought the
appellant, Siochi and the seized items to the police station for investigation.7
P/Insp. Casignia, the Forensic Chemical Officer of the Western Police District Crime Laboratory,
examined the seized items and found them positive for the presence of shabu.8
The appellant, for his part, testified that at around 4:00 p.m. on August 6, 2002, he called Siochi on the
phone, and informed him that the motorbike starter the latter needed was already available. 9  On the
same day, Vanessa Paduada called the appellant, and asked for the directions to McDonalds, West
Avenue.10  At around 6:00 p.m., Siochi and Ruben arrived at the gate of Philam Homes on board a
space wagon.  The appellant met them at the subdivision gate, and showed the starter to Siochi. 
Thereafter, Vanessa called on the appellant’s cellular phone.  The appellant then boarded the vehicle,
and told Siochi that he would just talk to a person at McDonalds.11  When the space wagon arrived at
McDonalds, the appellant alighted from the vehicle and proceeded towards the restaurant’s entrance. 
Afterwards, Vanessa called him from inside a parked car.  The appellant approached Vanessa who, for
her part, alighted from the car. Vanessa told the appellant to get inside the car’s rear.  The appellant did
as instructed; Vanessa went to the front passenger seat, beside a male driver. 12  Immediately after, the
male driver alighted from the vehicle and entered the car’s rear.  The appellant went out of the car, but
the male driver followed him and grabbed his hand. The appellant resisted, and wrestled with the
driver along West Avenue.  During this commotion, the appellant heard a gunfire; four (4) persons
approached him, and then tied his hands with a masking tape.13  The police placed him on board a pick-
up truck, and then brought him to Bicutan. In Bicutan, the police brought him to the interrogation
room, where they punched him and placed a plastic on his head.14
In its joint decision dated April 22, 2004, the RTC found the appellant guilty beyond reasonable doubt
of illegal possession of shabu under Section 11, Article II of R.A. No. 9165, and sentenced him to
suffer the penalty of life imprisonment.  It also ordered him to pay a P500,000.00 fine.
The RTC, however, acquitted Siochi on the ground of reasonable doubt.

On appeal, the CA affirmed the RTC decision in toto.  The CA found PO3 Corbe to be a credible
witness. The CA also found the appellant’s warrantless arrest to be valid; it explained that the
appellant’s act of running when PO3 Corbe was approaching him reinforced the latter’s suspicion that
“something was amiss.”15
attributed to the appellant to rouse suspicion in the mind of PO3 Corbe that he (appellant) had just
committed, was actually committing, or was attempting to commit a crime.  In fact, PO3 Corbe
testified that the appellant and the informant were just talking with each other when he approached
them.  For clarity and certainty, we reproduce PO3 Corbe’s court testimony dated February 21, 2003,
thus:chanroblesvirtuallawlibrary

The CA added that strict compliance with Section 21, Article II of R.A. No. 9165 was not required as ATTY. RENATO SARMIENTO:
long as the integrity of the seized item had been ensured.  It further held that the police officers were Q: You and the informant were not able to approach Nato because he sense[d] that you are (sic)
presumed to have regularly performed their official duties. a policeman?
PO3 CORBE:
Finally, the CA held that the prosecution was able to establish all the elements of illegal possession of A: Our informant first approached Renato Edano[,] and they talked but when he (sic) called
shabu. me, Renato run (sic), sir.
Q: You said tinawag ka[,] who was that that call (sic) you?
The appellant moved to reconsider this decision, but the CA denied his motion in its resolution dated A: Team informant, sir.
December 23, 2008. xxxx
Q: How did she call you?
In his brief16 and supplemental brief,17 the appellant essentially alleged that PO3 Corbe’s testimony was A: She waived (sic) her had (sic), sir.
“vague and equivocal;”18 it lacked details on how the appellant was lured to sell shabu to the informant, Q: What was she doing?
and how the entrapment operation had been planned. The appellant also argued that his warrantless A: She was talking to Alias Nato[,] sir.
arrest was illegal since he was not committing any crime when the police arrested him.  He also Q: Did you hear what they are talking? (sic)
claimed that the police did not mark and photograph the seized items, and that there was a broken A: I was still in the car[.] I was not able to hear[,] sir.
chain of custody over the confiscated drugs. Q: How would you know that they are talking, Mr. Witness? (sic)
A: I could see them, sir.
The Office of the Solicitor General (OSG) counters with the argument that the testimony of PO3 Corbe Q: What did you see?
was clear and convincing; the inconsistencies in his court testimony pertained only to minor details.  It A: They were talking, sir.
also claimed that the appellant’s arrest was valid, and the seized shabu was admissible in evidence.  Q: They were not exchanging stuff and money, Mr. witness?
Finally, the OSG maintained that there was no break in the chain of custody over the seized plastic bag A: Not yet, sir.
containing shabu.19 Q: While talking[,] the female informant call[ed] you, Mr. Witness?
THE COURT’S RULING A: Yes, sir.22 (emphases ours)

After due consideration, we resolve to ACQUIT the appellant.
Warrantless arrest invalid;
seized items inadmissible
Section 5(a), Rule 113 of the Rules of Criminal Procedure provides that a peace officer or a private
person may, without a warrant, arrest a person when, in his presence, the person to be arrested has
committed, is actually committing, or is attempting to commit an offense. This is known an arrest in
flagrante delicto.20
“For a warrantless arrest of an accused caught in flagrante delicto to be valid, two requisites must
concur: (1) the person to be arrested must execute an overt act indicating that he has just committed, is
actually committing, or is attempting to commit a crime; and (2) such overt act is done in the presence
or within the view of the arresting officer.”21
In the present case, there was no overt act indicative of a felonious enterprise that could be properly
As testified to by PO3 Corbe himself, the appellant and the informant were just talking to each other;
there was no exchange of money and drugs when he approached the car.  Notably, while it is true that
the informant waved at PO3 Corbe, the latter admitted that this was not the pre-arranged signal to
signify that the sale of drugs had been consummated.  PO3 Corbe also admitted on cross-examination
that he had no personal knowledge on whether there was a prohibited drug and gun inside the space
wagon when he approached it.
That the appellant attempted to run away when PO3 Corbe approached him is irrelevant and cannot by
itself be construed as adequate to charge the police officer with personal knowledge that the appellant
had just engaged in, was actually engaging in or was attempting to engage in criminal activity.
As the Court explained in People v. Villareal:23
Furthermore, appellant’s act of darting away when PO3 de Leon approached him should not be
construed against him. Flight per se is not synonymous with guilt and must not always be attributed to
one’s consciousness of guilt. It is not a reliable indicator of guilt without other circumstances, for even
in high crime areas there are many innocent reasons for flight, including fear of retribution for
speaking to officers, unwillingness to appear as witnesses, and fear of being wrongfully apprehended Q: At your station?
as a guilty party. Thus, appellant’s attempt to run away from PO3 de Leon is susceptible of various A: Yes, sir.
explanations; it could easily have meant guilt just as it could likewise signify innocence. 24 Q: You did not put your initial?
A: No, sir.
In other words, trying to run away when no crime has been overtly committed, and without more, Q: Why did you not put your initial?
cannot be evidence of guilt. A: I was not able to put sir.26 (emphases ours)

Considering that the appellant’s warrantless arrest was unlawful, the search and seizure that resulted Marking, as used in drug cases, means the placing by the apprehending officer or the poseur-buyer of
from it was likewise illegal.  Thus, the alleged plastic bag containing white crystalline substances his/her initials and signature on the item/s seized.  “Consistency with the "chain of custody" rule
seized from him is inadmissible in evidence, having come from an invalid search and seizure. requires that the "marking" of the seized items - to truly ensure that they are the same items that enter
the chain and are eventually the ones offered in evidence - should be done (1) in the presence of the
Corpus delicti not proved with moral certainty apprehended violator (2) immediately upon confiscation.”27 The Court clarified in People v.
Resurreccion28 that marking upon immediate confiscation contemplates even marking at the nearest
Even granting, for the sake of argument, that the appellant’s warrantless arrest was valid, the latter’s police station or office of the apprehending team.
acquittal is still in order due to the prosecution’s failure to establish the evidence of the corpus
delicti with moral certainty. Thus, while marking of the seized drugs at the police station is permitted, the marking should be
done by the police, and not by the accused.  The appellant’s participation in the marking procedure
We stress that “[t]he existence of dangerous drugs is a condition sine qua non for conviction for the should only be as a witness.  Why the police failed to do a basic police procedure truly baffles us.
illegal sale and possession of dangerous drugs, it being the very corpus delicti of the crimes.”25  Thus,
the evidence of the corpus delicti must be established beyond reasonable doubt. We also point out that per the testimony of P/Insp. Casignia, the Forensic Chemical Officer, the police
forwarded two (2) plastic bags containing white crystalline substances to the crime laboratory for
In the present case, the various lapses – enumerated and discussed below – committed by the police in examination – one marked with the initials “OR” and the other marked with “GS.”  Both plastic bags
the handling, safekeeping and custody over the seized drug tainted the integrity and evidentiary value were used as evidence against the appellant.  The records, however, did not indicate who marked the
of the confiscated shabu. plastic bag with “GS,” who witnessed this marking, and when this marking had been made.  As with
the bag that had been marked “OR,” we express doubts on whether the plastic bag containing white
First, we find it highly unusual and irregular that the police officers would let the appellant mark the crystalline substances marked as “GS” was the same plastic bag taken from the appellant’s co-accused,
drugs seized from him, instead of doing the marking themselves.  To directly quote from the Siochi.
records:chanroblesvirtuallawlibrary
Second, the police did not inventory or photograph the seized drugs, whether at the place of
ATTY. SARMIENTO: confiscation or at the police station.  These omissions were admitted by the prosecution during pre-
Q: This item was not marked at the place allegedly where you apprehended the suspect at trial.29
McDonald’s, West Avenue, Quezon City, am I correct to say that?
PO3 CORBE: The required procedure on the seizure and custody of drugs is embodied in Section 21, paragraph 1,
A: Yes, sir. Article II of R.A. No. 9165, which states:chanroblesvirtuallawlibrary
Q: You are also required not only to mark it but to put your initial to it, my question did you (1) The apprehending team having initial custody and control of the drugs shall, immediately after
place your initial in this evidence? (sic) seizure and confiscation, physically inventory and photograph the same in the presence of the
A: No, sir. accused or the person/s from whom such items were confiscated and/or seized, or his/her
Q: You did not, Mr. Witness? representative or counsel, a representative from the media and the Department of Justice (DOJ), and
A: No, sir. any elected public official who shall be required to sign the copies of the inventory and be given a copy
Q: You were also required to put the date of apprehension, being the arresting officer, did you thereof[.] [emphases ours]
put the date in this evidence, Mr. Witness?
A: No, sir. This is implemented by Section 21 (a), Article II of the Implementing Rules and Regulations (IRR)  of
Q: Why did you not do that, Mr. Witness? R.A. No. 9165, which reads:chanroblesvirtuallawlibrary
A: What I remembered there is an initial of the accused, sir. (a) The apprehending officer/team having initial custody and control of the drugs shall, immediately
Q: Who put the initial, Mr. Witness? after seizure and confiscation, physically inventory and photograph the same in the presence of the
A: He was the one, sir. accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the
search warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items[.] [emphasis ours]
To be sure, Section 21(a), Article II of the IRR offers some flexibility in complying with the express
requirements under paragraph 1, Section 21, Article II of R.A. No. 9165, i.e.,"non-compliance with
these requirements under justifiable grounds, as long as the integrity and the evidentiary value of the
seized items are properly preserved by the apprehending officer/team, shall not render void and
invalid such seizures of and custody over said items[.]"  This saving clause, however, applies only
where the prosecution recognized the procedural lapses and thereafter explained the cited justifiable
grounds, and when the prosecution established that the integrity and evidentiary value of the evidence
seized had been preserved.30
These conditions were not met in the present case, as the prosecution did not even attempt to offer any
justification for its failure to follow the prescribed procedures in the handling and safekeeping of the
seized items.  “We stress that it is the prosecution who has the positive duty to establish that earnest
efforts were employed in contacting the representatives enumerated under Section 21[a] of R.A. No.
9165, or that there was a justifiable ground for failing to do so.”31 The Court cannot simply presume
what these justifications are.
Although the Court has recognized that minor deviations from the procedures under R.A. No. 9165
would not automatically exonerate an accused, we have also declared that when there is gross
disregard of the procedural safeguards prescribed in the substantive law (R.A. No. 9165),  serious
uncertainty is generated about the identity of the seized items that the prosecution presented in
evidence.  This doubt cannot be remedied by simply invoking the presumption of regularity in
the performance of official duties, for a gross, systematic, or deliberate disregard of the
procedural safeguards effectively produces an irregularity in the performance of official duties.32
In sum, we hold that the appellant’s acquittal is in order since the shabu purportedly seized from him is
inadmissible in evidence for being the proverbial fruit of the poisonous tree.  Corollarily, the
prosecution's failure to comply with Section 21, Article II of R.A. No. 9165, and with the chain of
custody requirement of this Act, compromised the identity of the item seized, leading to the failure to
adequately prove the corpus delicti of the crime charged.
WHEREFORE, premises considered, we REVERSE and SET ASIDE the October 16, 2008 decision
and the December 23, 2008 resolution of the Court of Appeals in CA-G.R. CR HC No. 01142.  there willfully, unlawfully and knowingly use, smoke and ingest into his body
Appellant Oliver Renato Edaño y Ebdane is hereby ACQUITTED for failure of the prosecution to
prove his guilt beyond reasonable doubt.  He is ordered immediately RELEASED from detention
unless he is otherwise legally confined for another cause.
Let a copy of this Decision be sent to the Director of the Bureau of Corrections, Muntinlupa City, for
immediate implementation. The Director of the Bureau of Corrections is directed to report the action
he has taken to this Court within five (5) days from receipt of this Decision.
SO ORDERED.
G.R. No. 205610, July 30, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RAMONITO VILLARTA Y RIVERA
AND ALLAN ARMENTA Y CABILES, Accused-Appellants.
DECISION
PEREZ, J.:
This is an appeal from the Court of Appeals Decision1 dated 20 July 2012 in CA-G.R. CR-HC No.
04953 affirming the Regional Trial Court2 (RTC) Joint Decision3 dated 26 October 2010 in Criminal
Case Nos. 14948-D, 14949-D, 14950-D, 14951-D and 14952-D, convicting herein appellant Ramonito
Villarta y Rivera alias Monet (Villarta) for Violation of Sections 5 and 11, Article II of Republic Act
No. 9165, otherwise known as the “Comprehensive Dangerous Drugs Act of 2002,” and herein
appellant Allan Armenta y Cabiles alias Ambo (Armenta) for Violation of Section 11 of the same law.
Appellant Villarta was charged in three (3) separate Informations, 4 all dated 24 April 2006, for
Violation of Sections 5 (Illegal Sale of Dangerous Drugs), 11 (Illegal Possession of Dangerous Drugs)
and 15 (Illegal Use of Dangerous Drugs), Article II of Republic Act No. 9165, the accusatory portions
of which read:chanRoblesvirtualLawlibrary
CRIMINAL CASE NO. 14948-D
On or about [20 April 2006] in Pasig City, and within the jurisdiction of this Honorable Court, the
[herein appellant Villarta], not being lawfully authorized by law, did then and there willfully,
unlawfully and feloniously sell, deliver and give away to [Police Officer 2 (PO2) Ronald R.
Caparas], a police poseur buyer, one (1) heat-sealed transparent plastic sachet containing 0.02
gram of white crystalline substance, which was found positive to the test for ephedrine, a
dangerous drug, in violation of the said law.5  (Emphasis supplied).
CRIMINAL CASE NO. 14949-D
On or about [20 April 2006] in Pasig City, and within the jurisdiction of this Honorable Court, the
[appellant Villarta], not being lawfully authorized to possess any dangerous drug, did then and
there willfully, unlawfully and feloniously have in his possession and under his custody and control
one (1) heat-sealed transparent plastic sachet containing 0.03 gram of white crystalline
substance, which was found positive to the test for ephedrine, a dangerous drug, in violation of the
said law.6  (Emphasis supplied).
CRIMINAL CASE NO. 14950-D
On or about [20 April 2006] in Pasig City, and within the jurisdiction of this Honorable Court, the
[appellant Villarta], not being lawfully authorized by law to use any dangerous drug, did then and
a methylamphetamine hydrochloride, a dangerous drug, and, that this is the first offense of the
[appellant Villarta] under Section 15, of the above-cited law, who after a confirmatory urine test,
was found positive to the test for methamphetamine hydrochloride, a dangerous drug, in violation of
the above-cited law.7  (Emphasis supplied).chanrobleslaw

8
Appellant Armenta was charged in two (2) separate Informations,  all dated 24 April 2006, for
Violation of Sections 11 and 15, Article II of Republic Act No. 9165, the accusatory portions of which
read:chanRoblesvirtualLawlibrary
CRIMINAL CASE NO. 14951-D
On or about [20 April 2006] in Pasig City, and within the jurisdiction of this Honorable Court, [the
herein appellant Armenta], not being lawfully authorized to possess any dangerous drug, did then
and there willfully, unlawfully and feloniously have in his possession and under his custody and
control one (1) heat-sealed transparent plastic sachet containing 0.03 gram of white crystalline
substance, which was found positive to the test for ephedrine, a dangerous drug, in violation of the
said law.9  (Emphasis supplied).
CRIMINAL CASE NO. 14952-D
On or about [20 April 2006] in Pasig City, and within the jurisdiction of this Honorable Court, the
[appellant Armenta], not being lawfully authorized by law to use any dangerous drug, did then and
there willfully, unlawfully and knowingly use, smoke and ingest into his body a THC-metabolites, a
dangerous drug, and, that this is the first offense of the [appellant Armenta] under Section 15, of the
above-cited law, who after a confirmatory urine test, was found positive to the test
for methamphetamine hydrochloride, a dangerous drug, in violation of the above-cited law.10  MONET P100.00.  Immediately thereafter, MONET handed one sachet to PO2 Caparas and the other
(Emphasis supplied).
Upon arraignment,11 both appellants pleaded NOT GUILTY to the respective charges against them.  identified as [herein appellant] Ramonito Villarta [y Rivera].
Thereafter, joint trial on the merits ensued.
The prosecution presented PO2 Ronald R. Caparas (PO2 Caparas), who acted as the poseur-buyer in
the buy-bust operation conducted against appellant Villarta;12 PO2 Jesus Cambronero (PO2
Cambronero), who acted as the immediate back-up of PO2 Caparas;13 and Police Senior Inspector
Sandra Decena Go (P/Sr. Insp. Go), the forensic chemical officer who conducted physical, chemical
and confirmatory tests on the items seized from the appellants.14  The testimony, however, of the other
prosecution witness PO1 Allan Mapula (PO1 Mapula) was dispensed with per stipulation of the parties
that: (1) he is the investigating officer in these cases; and (2) he was the one who prepared the
Affidavit of Arrest of PO2 Caparas and the Request for Laboratory Examination, as well as the
Request for Drug Test.15cralawred
On the side of the defense, both appellants were presented to contradict all the allegations of the
prosecution.16cralawred
The respective versions of the prosecution and the defense, as accurately summarized by the Court of
Appeals, are as follows:chanRoblesvirtualLawlibrary
On 19 April 2006 at around 9:30 o’clock in the evening, PO2 [Caparas] was at the Station Anti-Illegal
Drugs Special Operation Task Force (SAID-SOTF) office in Pasig City.  A confidential informant
arrived and spoke with Police Inspector Ronaldo Pamor [P/Insp. Pamor].  The informant gave the tip
that a certain MONET was selling shabu along Urbano Velasco Avenue, Pinagbuhatan, Pasig City.  As
a result, [P/Insp. Pamor] conducted a short briefing attended by [Senior Police Officer 1 (SPO1)]
Baltazar, PO2 Camb[r]onero, PO2 Monte, [Police Officer 1 (PO1)] Caridad, PO1 Mapula and PO2
Caparas.  [P/Insp.] Pamor instructed PO1 Mapula to prepare a pre-operational report 17 to be submitted
to the Philippine Drug Enforcement Agency (PDEA), and directed PO1 Caparas to act as the poseur-
buyer while PO2 Camb[r]onera was to serve as his back-up.
In preparation for their operation, PO2 Caparas marked two pieces of the One-Hundred Peso (P100.00)
bill with his initials “RRC” on the lower right portion.  Tout de suite, the team, together with the
confidential informant proceeded to Velasco Avenue.  There, they went inside an alley located at the
Cupa Compound.  However, they learned from the two persons standing along the alley that MONET
had already left.  [P/Insp.] Pamor instructed the informant to inform them whenever MONET would
return.
The following day, at about 5:00 o’clock in the afternoon, the confidential informant called and told a
member of the SAID-SOTF that MONET was already in the target place.  Subsequently, the buy-bust
team met with the former at the market terminal.  PO2 Caparas and the informant again proceeded to
Velasco Avenue.  When they reached Cupa Compound, the latter secretly told PO2 Caparas that
MONET was standing at the alley.  They approached MONET.  The informant then told him: “Pare
iiscore to” referring to PO2 Caparas.  He told MONET that he would buy P200.00 worth of shabu after
which, he handed MONET the money.  At this point, a male person arrived and asked MONET:
“Pare, meron pa ba?”  MONET retorted: “Dalawang piraso na lang ito.”  The male person then gave
one to the male person.  PO2 Caparas examined the sachet and gave the pre-arranged signal by
wearing his cap.  He then introduced himself as a police officer, and arrested MONET who was
When the other members of the team arrived, PO2 Caparas told PO2 Camb[r]oner[o] that the other
male person was also possessing shabu.  In a bit, he was also apprehended and identified later on as
[herein appellant] Allan Armenta [y Cabiles] @ AMBO.  PO2 Caparas recovered from MONET the
marked money and one plastic sachet while PO2 Camb[r]onero recovered from AMBO the other
plastic sachet.  Both PO2 Caparas and PO2 Camb[r]onero marked the items they had seized.
At the police station, PO1 Mapula prepared the requests for drug test and laboratory examination. 
Thereafter, the seized items were brought to the Philippine National Police Crime Laboratory. 
Forensic Chemical Officer [P/Sr. Insp. Go] received the above-mentioned requests and conducted
laboratory tests on the subject specimens.  The seized drugs gave positive result for ephedrine, a
dangerous drug.  Likewise, the drug tests showed that the respective urine samples of MONET and
AMBO were positive for methamphetamine and THC metabolites, both of which are dangerous drugs.
The defense proffered a divergent version of the facts.
Both MONET and AMBO denied the charges.  MONET asseverated that between 3:00 o’clock and
4:00 o’clock in the afternoon of 19 April 2006, he was resting in the room he was renting.  Suddenly,
four armed male persons entered looking for a certain “Jay Jay.”  When he replied that he did not know
such person, he was brought and detained in Pariancillo.  It was there where he first met AMBO.
On the other hand, AMBO maintained that between 1:00 o’clock and 2:00 o’clock in the afternoon on
even date while waiting for a tricycle in front of the 7-11 Store, three armed persons approached him. 
One of them placed his arm around his shoulder, the other one handcuffed him, while the third called
for a tricycle.  Subsequently, he was brought to the Pariancillo Headquarters.  When he asked why he
was arrested, the aforesaid men did not answer him.  At the headquarters, he was frisked since they
were looking for a cellular phone which he had allegedly snatched.  When nothing was found with
him, he was mauled and forced to confess where he brought the phone.  It was there where he got to
know MONET.18
On 26 October 2010, the RTC, after considering the testimonies of both parties, rendered its Joint
Decision, the decretal portion of which reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is hereby rendered as follows:cralawlawlibrary
1) In Criminal Case No. 14948-D, this Court finds the [herein appellant] Ramonito
Villarta y Rivera alias Monet, guilty beyond reasonable doubt of the crime of Violation of Section 5,
Article II of R.A. No. 9165, otherwise known as the Comprehensive Dangerous Drugs of 2002, and he
is sentenced to suffer the penalty of life imprisonment and to pay a fine in the amount of P500,000.00
without subsidiary imprisonment in case of insolvency;chanroblesvirtuallawlibrary
2) In Criminal Case No. 14949-D and Criminal Case No. 14951-D, this Court finds the
[appellants] Ramonito Villarta y Rivera alias Monet and Allan
Armenta y Cabiles alias Ambo, guilty beyond reasonable of the crime of Violation of Section 11,
Article II of R.A. No. 9165, otherwise known as the Comprehensive Dangerous Drugs of 2002 and
they are each sentenced to suffer an indeterminate prison term of twelve (12) years and one (1) day, as
minimum, to fourteen (14) years and eight (8) months, as maximum, and to pay a fine of P300,000.00
without subsidiary imprisonment in case of insolvency; andChanRoblesVirtualawlibrary
3) Criminal Case No. 14950-D and Criminal Case No. 14952-D for Violation of Section 15, Article
II of R.A. No. 9165 otherwise known as the Comprehensive Dangerous Drugs of 2002 against
[appellants] Ramonito Villarta y Rivera alias Monet and Allan Armenta y Cabiles alias Ambo are
ordered DISMISSED.
In the meantime, the Branch Clerk of Court is directed to transmit the dangerous drugs, “ephedrine,”
subject of these cases to the Philippine Drug Enforcement Agency for its disposition in accordance
with law.19  (Emphasis supplied).
The RTC elucidated that the prosecution has sufficiently established all the elements for a successful
prosecution of illegal sale of prohibited drugs, which is in violation of Section 5, Article II of Republic
Act No. 9165.  PO2 Caparas, who acted as the poseur-buyer, specifically stated that appellant Villarta
sold to him one-heat sealed transparent plastic sachet containing 0.02 gram of white crystalline
substance worth P200.00.  It was seized and later on found positive to the test for ephedrine, a
dangerous drug.  Their transaction was proven by the actual exchange of the marked money consisting
of two P100.00-peso bills, and the drug sold.  PO2 Caparas positively identified appellant Villarta as
the seller of the said one-heat sealed transparent plastic sachet containing white crystalline substance,
which was later on confirmed as ephedrine, a dangerous drug, by P/Sr. Insp. Go, the Forensic Chemist,
who performed laboratory examination on all the seized items.20cralawred
As for the charge of illegal possession of prohibited drugs, which is in violation of Section 11, Article
II of Republic Act No. 9165, against both appellants, the RTC also found that all the elements thereof
were completely satisfied.  When the appellants were arrested by PO2 Caparas and PO2 Cambronero,
they were both found in possession of dangerous drugs.  Both of them could not present any proof or
justification that they were fully authorized by law to possess the same.  Having been caught in
flagrante delicto, there is prima facie evidence of animus possidendi or intent to possess.21cralawred
In dismissing the charge of illegal use of dangerous drugs in violation of Section 15, Article II of
Republic Act No. 9165, against both appellants, the RTC applied the proviso of the afore-stated
Section 15.  The RTC, thus, held that when a person is found to have possessed and used dangerous
drugs at the same time, Section 15 shall not be applicable in which case the provisions of Section 11
shall apply.22cralawred
The RTC likewise held that despite the non-compliance with the requirements of physical inventory
and photograph of the seized items, the integrity and evidentiary value of the same were properly
preserved because the chain of custody appears not to have been broken.  Thus, in its entirety, there
was substantial compliance with the law.23cralawred
On appeal, the Court of Appeals affirmed the RTC Joint Decision dated 26 October 2010.24cralawred
Hence, the present appeal raising the same assignment of errors in their Appellants’ Brief filed before
the Court of Appeals, to wit: (a) the trial court gravely erred in pronouncing the guilt of the [appellants]
despite the obvious non-compliance with the requirements for the proper custody of seized dangerous
drugs under Republic Act No. 9165; and (b) the trial court gravely erred in pronouncing the guilt of the
[appellants] notwithstanding the failure of the prosecution to preserve the integrity and evidentiary
value of the allegedly seized dangerous drugs.25cralawred
This Court sustains appellants’ conviction.
Essentially, the findings of fact of the trial court are entitled to great weight on appeal and should not
be disturbed except for strong and valid reasons since the trial court is in a better position to examine
the demeanor of the witnesses while testifying.26  This rule finds an even more stringent application
where said findings are sustained by the Court of Appeals27 as in this case.
After a careful perusal of the records, this Court finds no compelling reason to deviate from the lower
courts’ findings that, indeed, the appellants’ guilt on the respective charges against them were
sufficiently proven by the prosecution beyond reasonable doubt.
In every prosecution for illegal sale of dangerous drugs, like ephedrine in this case, the following
elements must be sufficiently proved to sustain a conviction therefor: (1) the identity of the buyer, as
well as the seller, the object and consideration of the sale; and (2) the delivery of the thing sold and the
payment therefor.  What is material is proof that the transaction or sale actually took place,
coupled with the presentation in court of the dangerous drugs seized as evidence.  The
commission of the offense of illegal sale of dangerous drugs requires merely the consummation of
the selling transaction, which happens the moment the buyer receives the drug from the seller. 
Settled is the rule that as long as the police officer went through the operation as a buyer and his offer
was accepted by appellant and the dangerous drugs delivered to the former; the crime is considered
consummated by the delivery of the goods.28cralawred
In the present case, this Court totally agrees with the lower courts that the aforesaid elements of illegal
sale of dangerous drugs were adequately and satisfactorily established by the prosecution.
To note, appellant Villarta, who was caught in flagrante delicto, was positively identified by PO2
Caparas, who acted as the poseur-buyer, as the same person who sold the one heat-sealed transparent
plastic sachet containing 0.02 gram of white crystalline substance, later confirmed as ephedrine, for a
consideration of P200.00.  The said one heat-sealed transparent plastic sachet of ephedrine was
presented in court, which PO2 Caparas identified to be the same object sold to him by appellant
Villarta.  Moreover, the same bears the markings RRV/RRC 04-20-06, which he had written at the
scene of the crime.  “RRV” represents the initials of appellant Villarta while “RRC” represents the
initials of PO2 Caparas.  The marking “04-20-06” represents the date the said drug was seized.  PO2
Caparas similarly identified in court the recovered marked money from appellant Villarta consisting of
two P100.00-peso bills in the total amount of P200.00 with markings “RRC” on the lower right portion
thereof.29cralawred
Likewise, the testimony of PO2 Caparas clearly established in detail how his transaction with appellant
Villarta happened starting from the moment their informant introduced him to appellant Villarta as
someone interested in buying his stuff, up to the time he handed to appellant Villarta two P100.00 peso
bills marked money amounting to P200.00 and, in turn, appellant Villarta handed him the one heat-
sealed transparent plastic sachet of ephedrine thus consummating the sale transaction between them.  (1) The apprehending officer/team having initial custody and control of the drugs shall, immediately
PO2 Caparas caused the one-heat sealed transparent plastic sachet of ephedrine to be examined at the
PNP Crime Laboratory.  The item weighing 0.02 gram was tested positive for ephedrine as evidenced
by Chemistry Report No. D-355-0630 prepared by P/Sr. Insp. Go, Forensic Chemical Officer of the
PNP Crime Laboratory, Camp Crame, Quezon City.31cralawred
From the foregoing, it is already beyond question that appellant Villarta’s guilt for illegal sale
of ephedrine, a dangerous drug, in violation of Section 5, Article II of Republic Act No. 9165 was
proven by the prosecution beyond reasonable doubt.
With respect to the prosecution of illegal possession of dangerous drugs, the following facts must be
proved: (a) the accused was in possession of dangerous drugs, (b) such possession was not authorized
by law, and (c) the accused was freely and consciously aware of being in possession of dangerous
drugs.32cralawred
In the case under consideration, this Court also conforms to the lower courts’ findings that all the
elements of illegal possession of dangerous drugs were adequately proven by the prosecution.
It bears emphasis that when the sale transaction between PO2 Caparas and appellant Villarta was on-
going, another male person, who was later on identified to be appellant Armenta, came in and also
bought one-heat sealed transparent plastic sachet containing 0.03 gram of white crystalline substance
later on confirmed to be ephedrine, a dangerous drug.  Upon the consummation of the sale transaction,
between PO2 Caparas and appellant Villarta, the former gave the pre-arranged signal by wearing his
cap.  PO2 Caparas then introduced himself as the police officer and arrested appellant Villarta.  PO2
Caparas then recovered from appellant Villarta the marked money and another one-heat sealed
transparent plastic sachet containing 0.03 gram of white crystalline substance later on confirmed
as ephedrine, a dangerous drug.  When the immediate back-up officer, PO2 Cambronero, arrived, PO2
Caparas informed him that appellant Armenta was in possession of one-heat sealed transparent plastic
sachet containing 0.03 gram of white crystalline substance, which the latter just bought from appellant
Villarta.  Thus, appellant Armenta was also apprehended and PO2 Cambronero recovered from him
one heat-sealed transparent plastic sachet containing 0.03 gram of white crystalline substance
confirmed to be ephedrine, a dangerous drug.33  Clearly, both appellants were found in possession of
dangerous drugs.  As observed by the RTC, which the Court of Appeals affirmed, both appellants
could not present any proof or justification that they were fully authorized by law to possess the same. 
Having been caught in flagrante delicto, there is prima facie evidence of animus possidendi or intent
to possess.
Now, going to the issue raised by the appellants on the failure of the prosecution to comply with
Section 21, Article II of Republic Act No. 9165, this Court similarly affirms the findings of both lower
courts that such failure will not render the appellants’ arrest illegal or the items seized/confiscated from
them inadmissible.
In People v. Ventura,34 this Court held that:chanRoblesvirtualLawlibrary
The procedure for the custody and disposition of confiscated, seized and/or surrendered dangerous
drugs, among others, is provided under Section 21, paragraph 1 of Article II of Republic Act No. 9165,
as follows:
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof.
Section 21(a), Article II of the Implementing Rules and Regulations of Republic Act No. 9165, which
implements said provision, stipulates:
(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: x x x Provided, further, that non-compliance with these requirements under justifiable
grounds, as long as the integrity and the evidentiary value of the seized items are properly preserved by
the apprehending officer/team, shall not render void and invalid such seizures of and custody over said
items.
Under the same proviso, non-compliance with the stipulated procedure, under justifiable grounds,
shall not render void and invalid such seizures of and custody over said items, for as long as the
integrity and evidentiary value of the seized items are properly preserved by the apprehending officers.
Clearly, the purpose of the procedure outlined in the implementing rules is centered on
the preservation of the integrity and evidentiary value of the seized items.35  (Emphasis supplied).
The chain of custody requirement performs the function of ensuring that the integrity and
evidentiary value of the seized items are preserved, so much so that unnecessary doubts as to the
identity of the evidence are removed.  To be admissible, the prosecution must show by records or
testimony, the continuous whereabouts of the exhibit at least between the time it came into possession
of the police officers and until it was tested in the laboratory to determine its composition up to the
time it was offered in evidence.36cralawred
In the case at bench, after PO2 Caparas seized and confiscated the one heat-sealed transparent plastic
sachet containing 0.02 gram of ephedrine, which was the subject of the sale transaction, as well as the
one heat-sealed transparent plastic sachet containing 0.03 gram of ephedrine, which was recovered
from appellant Villarta after he was arrested and ordered to empty his pocket, and the marked money
used in the buy-bust operation, the former immediately marked the seized drugs at the place of arrest.  The accusatory portion of the Information against appellant reads:
He put the markings RRV/RRC 04-20-06 on the seized drug subject of the sale and the markings
RRV/RRC on the seized drug recovered from appellant Villarta.  PO2 Cambronero, the immediate
back-up of PO2 Caparas, also recovered from appellant Armenta one-heat sealed transparent plastic
sachet containing 0.03 gram of ephedrine.  PO2 Cambronero, who was then beside PO2 Caparas,
similarly marked the seized drug from appellant Armenta at the place of arrest.  They then brought the
appellants, together with the seized items at their station.  Where PO1 Mapula, the investigating
officer, prepared the Request for Laboratory Examination,37 the Request for Drug Test38 and the
Affidavit of Arrest of PO2 Caparas.39  Thereafter, PO2 Caparas personally brought all the seized items
to the crime laboratory for examination.  The seized items were examined by P/Sr. Insp. Go and they
all yielded positive results for ephedrine, a dangerous drug.  When the seized items were offered in
court, they were all properly identified by the prosecution witnesses.  These facts persuasively proved
that the three plastic sachets of ephedrine presented in court were the same items seized from the
appellants during the buy-bust operation.  The integrity and evidentiary value thereof were duly
preserved.
It has been judicially settled that in buy-bust operations, the testimony of the police officers who
apprehended the accused is usually accorded full faith and credit because of the presumption that
they have performed their duties regularly.  This presumption is overturned only if there is clear and
convincing evidence that they were not properly performing their duty or that they were inspired by
improper motive.40  In this case, there was none.
In comparison to the overwhelming evidence of the prosecution, all that the appellants could muster is
the defense of denial and frame-up.  Denial or frame-up, like alibi, has been viewed with disfavor for it
can just as easily be concocted and is a common and standard defense ploy in most prosecutions for
violation of Dangerous Drugs Act.  The defense of frame-up or denial in drug cases requires strong and
convincing evidence because of the presumption that the law enforcement agencies acted in the regular
performance of their official duties.41  In the present case, the bare denial of the appellants cannot
prevail over the positive testimony of the prosecution witnesses.
WHEREFORE, premises considered, the Court of Appeals Decision dated 20 July 2012 in CA-G.R.
CR-HC No. 04953 is hereby AFFIRMED in toto.
SO ORDERED.
G.R. No. 201111               August 6, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
ALFREDO CERDON y SANCHEZ, Accused-Appellant.
DECISION
PEREZ, J.:
On appeal is the Decision1 of the Court of Appeals promulgated on 10 November 2011, affirming the
conviction by the Regional Trial Court2 (RTC) of Angeles City, Pampanga, Branch 57, of appellant
Alfredo Cerdon y Sanchez for violation of Section 5, Article II of Republic Act No. 9165 and the
corresponding penalty of life imprisonment and fine of ₱500,000.00. Appellant was charged with the
violation following a "buy-bust" operation.
That on or about the 12th day of July 2003, at Brg. Dau, [M]unicipality of Mabalacat, [P]rovince of
Pampanga, Philippines and within the jurisdiction of this Honorable Court, the above-named accused
ALFREDO CERDON Y SANCHEZ, being a person not authorized by law to sell and deliver, did then
and there willfully, unlawfully and feloniously sell and deliver to a poseur-buyer one (1) heat-sealed
transparent plastic sachet containing methylamphetamine hydrochloride (shabu), weighing FIVE
HUNDRED THIRTY EIGHT TENTH THOUSANDTH (0.0538) of a gram, a dangerous drug.3
When arraigned, appellant pleaded not guilty. During the pre-trial, the parties stipulated on the
following points:
1. The identity [o]f the accused;
2. That the accused is also known by the name of Fred;
3. That there was no surveillance conducted prior to the arrest of the accused on July 13,
2003; 4. That there was no photographs taken on the seized confiscated items in the presence
of the accused;
5. That in the confiscation receipt, there was no signature from any public elected officials, a
representative from the media and representative of the DO[J].4
Trial ensued.
The prosecution presented as witnesses, PO1 Michael Yusi (PO1 Yusi), who acted as poseur-buyer,
and PO3 Henry Laxamana (PO3 Laxamana), a back-up operative who assisted PO1 Yusi. Their
testimonies sought to establish the following facts:
Acting on a tip from an asset that a certain "Fred" was selling shabu in his residence at Roxas Street,
Mabalacat, Pampanga, the Chief of Police of Mabalacat Police Station formeda buy-bust team on 12
July 2003 composed of PO1 Yusi as poseur-buyer, SPO4 Israel Gutierrez as team leader, PO3 Rodolfo
Agustin, Jr. (PO3 Agustin), PO3 Laxamana, and a certain PO1 Basangan. PO1 Yusi was then given
two (2) One Hundred Peso bills to be used as buy-bust money. He marked his initials "MVY" on the
bills.5 A pre-operational coordination sheetwas prepared. At about 5:00 p.m. of the same day, the team
proceededto the target place. PO1 Yusi was introduced by the asset to a certainFred, who later was
identified as appellant. Appellant asked from PO1 Yusi how much shabuthe latter would buy.
Appellant then went inside the house and came out a few minutes later handing one plastic sachet of
shabuto PO1 Yusi in exchange for ₱200.00. After the exchange, PO1 Yusi made the pre-arranged
signal of scratching his head. PO3 Laxamana and PO3 Agustin rushed to the scene while PO1 Yusi
introduced himself as a police officer. PO3 Laxamana confiscated the marked money from appellant.
He also noticed that appellant had a Caliber 22 magnum with eight rounds of ammunition tucked on
his waist. PO3 Laxamana confiscated the same. Appellant was then brought to the barangayhall where
the confiscation receipt was prepared. PO1 Yusi likewise placed his markings on the confiscated
shabu. Thereafter, appellant was brought to the police station. At 10:00 p.m. on the same day, PO1
Yusi and PO3 Laxamana brought the confiscated evidence to the crime laboratory.6
In his defense, appellant denied the charge against him. He narrated that at around 4:00 p.m. on 12 July
2003, he was having snack with his livein partner Yvette Jose when three male persons entered his
house. He recognized them as PO1 Yusi, PO3 Laxamana and PO3 Agustin. These three police officers
poked their guns onappellant while PO1 Yusi searched his room. While he was held at the kitchen,
appellant heard PO1 Yusi utter the word "bingo." PO1 Yusi emerged carrying a gun allegedly
confiscated from appellant. Appellant was immediately arrested but he resisted. A commotion ensued
before the barangaychairman arrived. The barangay chairman asked appellant to go with the police
officers to the barangayhall. Afterwards, appellant was brought to the police station.7
On 31 March 2010, the RTC rendered a Decision finding appellant guilty of violation of Section 5,
Article II of Republic Act No. 9165 and sentencing him to suffer the penalty of life imprisonment and
to pay a ₱500,000.00 fine. The trial court gave credence to the prosecution's evidence.8 After receiving
a copy of the trial court's Decision, petitioner seasonably filed a Notice of Appeal before the Court of
Appeals. On 10 November 2011, the appellatecourt affirmed the judgment of the RTC. The appellate
court held that the prosecution was able to prove beyond reasonable doubt the identity of the appellant
as the one who sold the shabu to the poseur-buyer; that the sale that actually took place; and the
payment of ₱200.00. The appellate court ruled that the prosecution was able to sufficiently establish an
unbroken chain of custody of the confiscated illegal drug.
Appellant appealed his conviction before this Court, adopting the same arguments in his Brief before
the Court of Appeals.
Appellant essentially maintains that the prosecution failed to prove beyond reasonable doubt the corpus
delictiof the offense.1âwphi1 Appellant also argues that the prosecution failed to establish the crucial
links in the chain of custody of the shabu.
It is jurisprudential that factual findings of trial courts especially those which revolve on matters of
credibility ofwitnesses deserve to be respected when no glaring errors bordering on a gross
misapprehension of the facts, or where no speculative, arbitrary and unsupported conclusions, can be
gleaned from such findings.9 The evaluation of the credibility of witnesses and their testimonies are
best undertaken by the trial court because of its unique opportunity to observe the
witnesses'deportment, demeanor, conduct and attitude under grilling examination. 10
After a painstaking review of the records, we agree with the lower courts’ findings that the guilt of the
appellant was established beyond reasonable doubt.
In every prosecution for illegal sale of shabu, the following elements must be sufficiently proved: (1)
the identity of the buyer and the seller, the object and the consideration; and (2) the delivery of the
thing sold and the payment therefor.11 Indeed, all these elements were duly established. Appellant was
caught in flagrante delictoselling shabuthrough a buy-bust operation conducted by members of the
Special Operations Group of Mabalacat, Pampanga.
The poseur-buyer, PO1 Yusi, positively testified that the sale took place and appellant was the author
thereof, thus:
Q: Mr. Witness, in the last hearing of this case, you mentioned that when you reached the house of the
target person you were introduced. And you said you were then in front of the house of Alfred. My
next question is: how were you introduced?
A: I was introduced by our asset as his "kumpadre", sir.
Q: And after you were introduced as the asset’s "kumpadre", what else happened then?
A: Accused Alfredo Cerdon asked me how much will I buy shabu from him, sir.
Q: After that, what else happened?
A: Accused Alfredo Cerdon went inside his house and a few minutes later he went back in front of his
house and gave me one plastic sachet of shabu in exchange for ₱200.00, sir.
Q: Which came first, the giving of the shabu or the giving of ₱200.00, sir.
A: It was simultaneous, sir.
Q: You gave him ₱200.00, sir.
A: Yes, sir.
Q: I thought you were buying "aduang pesos"?
A: "Aduang pesos" means ₱200.00, sir.
Q: At the time that this accused gave you the shabuand you gave him the money, where was the asset
then?
A: We were just beside each other, sir.
Q: How far were you from his house then?
A: In front of the house, sir.
Q: So, you were still outside the house at the time?
A: Yes, sir.
Q: And after the giving of the money to him, what else happened?
A: I executed the pre-arranged signal by scratching my head, sir.
Q: After executing the pre-arranged signal, what else happened?
A: I introduced myself as a policeman and then PO3 Laxamana and PO3 Agustin rushed to the scene,
sir.
Q: What was the accused’s reaction when you introduced yourself as policeman?
A: When PO3 Laxamana requested him to shell out the contents of his pocket, he was able to
confiscate the marked money from his possession, sir.12
PO3 Laxamana who acted as one ofthe back-up arresting officers testified that appellant producedthe
plastic sachet containing shabu and handed it to the poseur-buyer in exchange for ₱200.00. He
corroborated PO1 Yusi’s attestation in his own testimony before the Court:
Q: Last hearing, Mr. Witness, you testified that your confidential informant introduced PO1 Yusi to a
certain Fred in front of his house. Can you please tell us where is this house you are referring
to?
A: At No. 356 Roxas St., Barangay Dau, Mabalacat, Pampanga, sir.
Q: When Officer Yusi was introducedto this certain Fred, where wer you?
A: We were 10 to 15 meters away from them, sir.
Q: Who were with you?
A: PO3 Agustin, sir.
Q: So, while you were 10 to 15 meters away from Officer Yusi, where is your attention focused?
A: To PO1 Yusi and the suspect, sir.
Q: And what did you observe subsequently?
A: After the confidential informant introduced PO1 Michael Yusi to the suspect, then moments later,
the suspect went inside his house and another moments later, he went back and handed something to
Yusi, simultaneously, Yusi handed something to the suspect, sir.
Q: After that exchange, can you please tell us what happened?
A: Yusi gave the pre-arranged signal to us by scratching his head, sir.
Q: When was this scratching of head agreed as the pre-arranged signal?
A: During the briefing in our office, sir.
Q: What is the significance ofYusi scratching his head?
A: It means when the buy-bust operation is already consummated then he will scratch his head as pre-
arranged signal so that we can arrest the suspect, sir.
Q: So, after seeing Yusi scratching his head, what would you do and the rest of the team?
A: We immediately rushed to the scene and arrested the suspect, sir.13
The result of the laboratory examination confirmed the presence of methylamphetamine
hydrochlorideon the white crystalline substance inside the plastic sachet confiscated from
appellant.14 The delivery of the illicit drug to the poseur-buyer and the receipt by the seller of the
marked money successfully consummated the buy-bust transaction. This was further corroborated by
the presentation ofthe marked money in evidence.15
Appellant avers that there was no testimony which proves that the police officers complied with
Section 21 of Republic Act No. 9165 in effecting his arrest and in the subsequent disposition of the
prohibited drug involved. Appellant asserts that there was no evidence presented to show that the
police officers conducted an inventory, and took photographs, of the confiscated items in his presence,
a representative from the media and the Department of Justice (DOJ). Appellant points out that the
confiscation receipt was neither prepared by the police officers in the presence of the media
representative and the DOJ, nor was it signed by the latter. Furthermore, appellant claims that the
police officers presented no valid justification as to their non-compliance with the procedural mandates
of the law.
Section 21, paragraph 1, Article II of Republic Act No. 9165 provides for the custody and disposition
of the confiscated illegal drugs, to wit:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof.
In elaboration of the rule in Section 21(a), Article II of the Implementing Rules and Regulations of
Republic Act No. 9165, viz:
a) The apprehending officer/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same inthe presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative orcounsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the
search warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid suchseizures of and custody over said items.
The failure of the prosecution toshow that the police officers conducted the required physical inventory
and photograph of the evidence confiscated in the presence of representatives from the media and the
DOJ pursuant to said guidelines does not automatically render appellant’s arrest illegal or the item
seized from him inadmissible. A provisowas added in the implementing rules that "non-compliance
with these requirements under justifiable grounds, as long as the integrity and the evidentiary value of
the seized items are properly preserved by the apprehending officer/team, shall not render void and
invalid such seizures of and custody over said items."
Pertinently, it is the preservation ofthe integrity and evidentiary value of the seized items which mustbe
proven to establish the corpus delicti.
Appellant then contends that the prosecution failed to prove the crucial links in the chain of custody of
shabu, such as: 1) immediate marking of the seized shabu; 2) to whom PO3 Laxamana turned over the
sachet at the crime laboratory; 3) the presentation ofthe chemist on the witness stand; and 4) the
identity of the person who had custody over the subject drug pending its presentation in court.
PO1 Yusi was able to put the necessary markings on the plastic sachet of shabuseized from appellant at
the police station. The general rule is that "marking" of the seized items – to truly ensure that they are
the same items that enter the chain and are eventuallythe ones offered in evidence – should be done, (1)
in the presence of the apprehended violator, and (2) immediately upon confiscation. To be able to
create a first link in the chain of custody, then, what is required is that the marking should be made in
the presence of the accused and upon immediate confiscation. In People v. Gum-Oyen, 16 a testimony
that included the marking of the seized items at the police station and in the presence of the accused
was sufficient in showing compliance with the rules on chain ofcustody. Marking upon immediate
confiscation contemplates even marking at the nearest police station or office of the apprehending
team.17
The non-presentation of the forensic chemist is not fatal to the prosecution’s case. In People v.
Quebral,18 this Court explained that "the corpus delictiin dangerous drugs cases constitutes the
dangerous drug itself. x x x [I]t has nothing to do with the testimony of the laboratory analyst. In fact,
this Court has ruled that the report of an official forensic chemist regarding a recovered prohibited drug
enjoys the presumption of regularity in its preparation. Corollarily, under Section 44, Rule 130, of the
Revised Rules of Court, entries in official records made in the performance of official duty are prima
facieevidence of the facts they state."19
The prosecution was able to preserve the integrity and evidentiary value of the illegal drug. The
concurrence of all the elements of the illegal sale of shabuwas proven by the prosecution. The chain of
custody did not appear to be broken. The recoveryand handling of the seized drug was satisfactorily
established. As correctly found by the appellate court:
Withal, the prosecution was able to sufficiently establish the following circumstances showing
anunbroken chain of custody over the shabuthat was seized from herein accused-appellant: (1) PO1
Yusi, who acted as the poseur buyer during the buy-bust operation, was the one who received the
transparent plastic sachet containing a substance later identified as shabu from the accused-appellant;
(2) the said transparent plastic sachet was then brought to the barangayoutpost where the same was
marked "MVY" and a confiscation receipt was prepared by PO1 Yusi; (3) thereafter, the said
sachetwas turned over to the Mabalacat Municipal Police Station; (4) in the said station, Chief
Inspector Ritchie Duldulao, in behalf of P/Supt. Manulid, prepared the request addressed to the PNP
Regional Crime Laboratory Office 3 for the laboratory examination of the substance contained in the
said plastic sachet; (5) after preparing the said request, PO1 Yusi personally delivered the said request
together with the substance contained inthe said plastic sachet to the PNP Regional Crime Laboratory
Office 3; and (6) the laboratory examination was conducted by P/Insp[.] Agala.20
Appellant’s defense, which is predicated on bare denial, deserves scant consideration in light of the
positive testimonies of the police officers. The defense of frame-up or denial in drug cases requires
strong and convincing evidence because of the presumption that the law enforcement agencies acted in
the regular performance of their official duties.21 Bare denial of appellant cannot prevail over the
positive testimonies of the three police officers. 22 Moreover, there is no evidence of any improper
motive on the part of the police officers who conducted the buy-bust operation to falsely testify against
appellant.
In fine, it has been established by proof beyond reasonable doubt that appellant sold shabu. Under
Section 5, Article II of Republic Act No. 9165, "[t]he penalty of Ii fe imprisonment to death and fine
ranging from Five hundred thousand pesos (₱500,000.00) to Ten million pesos (₱10,000,000.00) shall
be imposed upon any person, who, unless authorized by law, shall sell, trade, administer, dispense,
deliver, give away to another, distribute dispatch in transit or transport any dangerous drug, including
any and all species of opium poppy regardless of the quantity and purity involved x x x." Hence, the
trial court, as affirmed by the Court of Appeals, correctly imposed upon appellant the penalty of life
imprisonment and a fine of ₱500,000.00. WHEREFORE, the Decision dated 10 November 2011 of the
Court of Appeals affirming the conviction of appellant by the RTC of Angeles City, Pampanga, Branch
57 for violation of Section 5, Article II of Republic Act No. 9165 and sentencing him to suffer the
penalty of LIFE IMPRISONMENT and to pay a FINE of ₱500,000.00 is hereby AFFIRMED.
SO ORDERED.
G.R. No. 206366               August 13, 2014
PEOPLE OF THE PHILIPPINES, Appellee,
vs.
EDUARDO BALAQUIOT y BALDERAMA, Appellant.
DECISION
PEREZ, J.:
At bench is an appeal1 assailing the Decision2 dated 29 August 2012 of the Court of Appeals (CA) in
CA-G.R. CR-H.C. No. 04595. In the said decision, the appellate court affirmed the conviction of
herein appellant Eduardo B. Balaquit for violation of Section 5 of Republic Act No. 9165 or the
Comprehensive Dangerous Drugs Act of 2002.
The facts are as follows:
On 11 June 2008, appellant was arrested during a buy bust operation performed by officers of the
Philippine National Police (PNP) in Camiling, Tarlac. He was thereafter charged with the offense of
illegal sale of shabu under an Information filed before the Regional Trial Court (RTC) of Tarlac. 3 The
Information reads:
That on June 11, 2008 at on or about 10 AM at Bobon 1st , in the Municipality of Camiling, Province
of Tarlac, Philippines, and within the jurisdiction of this Honorable Court, the said accused, did then
and there willfully and feloniously sell to one another one (1) heat sealed plastic sachet containing
0.049 grams of met[h]amphetamine hydrochloride commonly known as "shabu", a dangerous drug,
without being authorized by law.
Appellant was arraigned on 26 August 2008 and entered a plea of not guilty. Trial thereafter ensued.
During trial, the prosecution presented, among others, the following object evidence:
1. One (1) heat-sealed transparent plastic sachet containing 0.049 grams of white crystalline
substance.The plastic sachet is dated "11 June 2008" and marked with "JSE-EBB,"4 and
2. Chemistry Report D-184-085
The foregoing object evidence weresupplemented by the testimonies of Police Officer Jay Espiritu
(PO3 Espiritu), Special Police Officer Noli Daraman (SPO1 Daraman) and police chemist Jebie
Timario (Mr. Timario).
PO3 Espiritu and SPO1 Daraman were the police officers who conducted the buy-bust operation that
led tothe arrest of the appellant. Their testimonies recounted the following events:6
1. On 11 June 2008, PO3 Espiritu and SPO1 Daraman engaged in a buy-bust operation
against appellantafter receiving confirmation from the Chief Intelligence Officer(CIO) of the
Camiling PNP that the former was involved in the peddling of shabu. The confirmation from
the CIO came at the heels of a week-long surveillance on the appellant conducted by the
Camiling PNP.
2. As the designated poseur-buyer of the operation, PO3 Espiritu met with the appellant
outside the latter’s residence at Bobon 1st, Camiling, Tarlac. SPO1 Daraman,on the other
hand, hid behind a tree about ten (10) to twenty(20) meters from where PO3 Espiritu and
appellant were standing.
3. PO3 Espiritu was able to negotiate and successfully purchase from the appellant one (1)
heat-sealed transparent plastic sachet.1âwphi1 In exchange, PO3 Espiritu handed to the
appellant a previously marked ₱500 bill. After the transaction, PO3 Espiritu proceeded to
arrest appellant. SPO1 Daraman, who was able to witness the exchange, emerged from his
hiding place and aided in the arrest of the appellant.
4. PO3 Espiritu and SPO1 Daraman retrieved from appellant the marked ₱500 bill. They then
proceeded to call the barangay officials of the place to witness the inventory of the plastic
sachet containing white crystalline substance and the marked money. Photographs of the
plastic sachet, the marked bill and of the appellant were also taken.
5. PO3 Espiritu and SPO1 Daraman brought the appellant and the recovered items to the
Camiling PNP station. The plastic sachet containing white crystalline substance were then
dated "11 June 2008" and marked with "JSE-EBB"—the initials of both PO3 Espiritu and the
appellant. 6. On 12 June 2008, PO3 Espiritu and SPO1 forwarded to the PNP Crime
Laboratory the plastic sachet, now dated "11 June 2008" and marked "JSE-EBB," along with
a request for laboratory examination.
In his testimony, PO3 Espiritu also identified the plastic sachet dated "11 June 2008" and marked with
"JSE-EBB" presented by the prosecution as the very one he retrieved from the appellant during the
buy-bust.7
Mr. Timario, on the other hand, isa police chemist for the Camiling PNP and the one who conducted
laboratory examination on the contents of the plastic sachet dated "11 June 2008" and marked "JSE-
EBB." He is also the signatory of Chemistry Report D-184-08. Mr. Timario testified that per
Chemistry Report D-184-08, hewas able to confirm that the contents of the plastic sachet dated "11
June 2008" and marked "JSE-EBB" are positive for methamphetamine hydrochloride or shabu.8
The defense, for its part, relied on the testimonies of the appellant and his brother, Exequil Balaquit
(Exequil).
In substance, appellantdenied being caught, in flagrante, selling shabuand claimed that he was merely a
victim of a police frame-up. He professed the following version of events:9
1. On the date and time of the supposed buy-bust, he was in a day care center where he bought
some sopasfor his children. On his way home, he encountered two (2) men aboard a
motorcycle. 2. One of the two (2) men aboard the motorcycle alighted and drew a gun at him.
At that point, SPO1 Daraman arrived and introduced himself and the one pointing a gun at
him as policemen.
3. Afterwards, SPO1 Daraman and other police officers led him to an alley. One of the police
officers twisted his arms. At the alley, he was forced to sign a report. Later, the barangay
captain also arrived and signed the same report.
4. He was then brought to the Camiling PNP station where he was detained.
Exequil corroborated the denial of his brother. He recounted that he saw the appellant, arm-twisted and
all, being led to an alley by police officers. 10
On 24 June 2010, the RTC rendered a decision11 finding appellant guilty beyond reasonable doubt of
the offense of illegal sale of shabuunder Section 512 of the Comprehensive Dangerous Drugs Act of
2002. In doing so, the RTC gave full faith and credenceto the version of the prosecution as established
by the testimonies of PO3 Espiritu, SPO1 Daraman and Mr. Timario. Accordingly, the RTC sentenced
appellant to suffer the penalty of life imprisonment and to pay a fine of ₱500,000.00.
Aggrieved, appellant appealedthe RTC decision to the CA.
On 29 August 2012, the CA rendered a decision affirming the RTC. Hence, this appeal.
In this appeal, appellant claims that the RTC and the CA erred in giving full faith and credence to the
version of the prosecution. To support his claim, he cites three (3) circumstances:
1. The prosecution never presented as a witness the CIO of the Camiling PNP.
2. The Camiling PNP never coordinated with the Philippine Drug Enforcement Agency
(PDEA).
3. The representation by the prosecution that the appellant was under surveillance prior to the
buy-bust is not believable. If it were true, then the Camiling PNP could have just applied for a
search warrant against the appellant.
These circumstances, the appellant believes, destroy the credibility of the prosecution story that the
Camiling PNP really undertook a genuine buybust operation and also lend trustworthiness to his own
version that he was merely a victim of a frame-up.
At any rate, the appellant adds thathis acquittal for the two charges is in order because the prosecution
failed to prove the corpus delicti of the offense charged. Appellant claims that the identity of the
shabuthat was presented by the prosecution in evidence issuspect in view of the failure by PO3 Espiritu
and SPO1 Daraman to mark the plastic sachet they allegedly retrieved during the buy-bust immediately
thereat as required by Section 2113 of the Comprehensive Dangerous Drugs Act of 2002. Appellant
points out that PO3 Espiritu and SPO1 Daraman, by their own testimonies, admitted to marking such
plastic sachetonly after bringing the same to the police station.
OUR RULING
We deny the appeal.
The RTC and the Court of Appeals did not err in giving full faith and credence to the testimony of the
prosecution witnesses
We find no error on the part of the RTC and the CA in sustaining the prosecution’s version of events.
The circumstances cited by the appellant does not at all destroy its credibility:
First. The non-presentation as a witness of the CIO of the Camiling PNP does not discount that a
legitimate buy-bust operation was undertaken in this case. The conduct of the buy-bust operation was
already adequately established by the testimonies of PO3 Espiritu and SPO1 Daraman who were the
very participants of such operation. Indeed, the testimony of the CIO would, at most, merely
corroborate the testimonies of PO3 Espiritu and SPO1 Daraman.
Second. The appellant’s qualm regarding the absence of coordination between the Camiling PNP and
the PDEA is also immaterial. In People v. Roa,14 this Court ruled that prior coordination with the
PDEA is not a condition sine qua nonfor the validity of every entrapment operation conducted by
police authorities:
In the first place, coordination with the PDEA is not an indispensable requirement before police
authorities may carry out a buy-bust operation.1âwphi1 While it is true that Section 8615 of Republic
Act No. 9165 requires the National Bureau of Investigation, PNP and the Bureau of Customs to
maintain "close coordination with the PDEA on all drug related matters," the provision does not, by so
saying, make PDEA’s participation a condition sine qua nonfor every buy-bust operation. After all, a
buy-bust is just a form of an in flagrante arrest sanctioned by Section 5, Rule 11316 of the Rules of the
Court, which police authorities may rightfully resort to in apprehending violators of Republic Act No.
9165 in support of the PDEA.17 A buy-bust operation is not invalidated by mere non-coordination with
the PDEA.
Third. The assertion that the Camiling PNP could have just applied for a search warrant instead of
conducting a buy-bust operation is irrelevant to the issue of whether a legitimate buy-bust operation
was, in fact, undertaken. The decision whether to apply for a search warrant or to conduct instead a
buy-bust operation on any given case is a matter rightfully addressed to the sound discretion of the
police officers. Certainly, police officers have the right to choose which legal means or processes are
best suited, given the circumstances, in accomplishing the task they are called upon to perform.
Verily, appellant is left with only his denial to fend off the serious accusations against him. Such
denial, by itself, however, cannot overcome the weight traditionally accorded toaffirmative testimonies
by police officers with unsullied credibility.18 The RTC and the CAwere, therefore, correct in giving
full faith and credit to the open court narrations of PO3 Espiritu and SPO1 Daraman.
Corpus delicti of the offense
proven beyond reasonable doubt
We also find that the corpus delictiof the offense was adequately proven in this case.
A review of the evidence on recordwill show that the prosecution was able to establish an unbroken
chain of custody over the shabuthat it claims as having been sold by the appellant:
1. PO3 Espiritu testified that he was able to buy ₱500.00 worth of shabuinside a transparent
plastic sachet from appellant, which he brought to the Camiling PNP station.19
2. Upon arrival at the station, PO3 Espiritu Espiritu testified that he dated the plastic sachet
"11 June 2008" a marked it with "JSE-EBB." Afterwards, a request for laboratory
examination was prepared.20
3. The next day, plastic sachet dated "11 June 2008" and marked "JSE-EBB" was sent to the
PNP Crime Laboratory along with the request for laboratory examination.21
4. At the PNP Crime Laboratory, Mr. Timario conducted examination on the contents of the
plastic sachet dated "11 June 2008" and marked "JSE-EBB" that yielded positive results for
shabu.22
5. Afterwards, the shabuwas retrieved for purposes of the trial.23
Evidently, the prosecution was able to account for each and every link in the chain of custody over the
shabu, from the moment it was retrieved during the buy-bust operation up to the time it was presented
before the court as proof of the corpus delicti.
Contrary to appellant’s assertion, the failure by PO3 Espiritu and SPO1 Daraman to mark the seized
shabuimmediately at the place where the buy-bust was conducted will notautomatically impair the
integrity of the chain of custody so established. Strictly speaking, marking the seized contraband at the
nearest police station,rather than at the place where the buy-bust operation was conducted, is not even
a violation of the procedure set forth in Section 21 of the Comprehensive Dangerous Drugs Act of
2002. Thus, in People v. Resurreccion,24 this Court explained:
Accused-appellant broaches the view that SA Isidoro’s failure to mark the confiscated
shabuimmediately after seizure creates a reasonable doubt as to the drug’s identity. People v.
Sanchez,25 however, explains that RA 9165 does not specify a time frame for "immediate marking," or
where said marking should be done:
What Section 21 of R.A. No. 9165 and its implementing rule do not expressly specify is the matter of
"marking" of the seized items in warrantless seizures to ensure that the evidence seized upon
apprehension is the same evidence subjected to inventory and photography when these activities are
undertaken at the police station rather than at the place of arrest. Consistency with the enter the chain
and are eventually the ones offered in evidence - should be done ( 1) in the presence of the
apprehended violator (2) immediately upon confiscation.1âwphi1
To be able to create a first link in the chain of custody, then, what is required is that the marking be
made in the presence of the accused and upon immediate confiscation. "Immediate confiscation" has
no exact definition. Thus, in People v. Gum-Oyen,26 testimony that included the marking of the seized
items at the police station and in the presence of the accused was sufficient in showing compliance
with the rules on chain of custody. Marking upon immediate confiscation contemplates even marking
at the nearest police station or office of the apprehending team. (Emphasis supplied)
Verily, We are satisfied that the corpus delicti of the offense in this case was proven beyond reasonable
doubt.
WHEREFORE, premises considered, the instant appeal is DENIED. The Decision dated 29 August
2012 of the Court of Appeals in CA-G.R. CR-H.C. No. 04595 is hereby AFFIRMED.
SO ORDERED.
JOSE PORTUGAL PEREZ
G.R. No. 206912, September 10, 2014 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v.
DEMOSTHENES BONTUYAN, Accused-Appellant.
FIRST DIVISION
G.R. No. 206912, September 10, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. DEMOSTHENES
BONTUYAN, Accused-Appellant.
DECISION
PEREZ, J.:
Before this Court is an appeal from the Decision1 of the Twentieth Division of the Court of Appeals
(CA), Cebu City in CA-G.R. CR.-H.C. No. 01112 affirming in toto the Joint Decision2 in Criminal
Case Nos. CBU-74092 and CBU-74093 rendered by the Regional Trial Court (RTC), Branch 13 of
Cebu City. The RTC Joint Decision found Demosthenes Bontuyan (accused-appellant) guilty beyond
reasonable doubt of violations of Sections 11 and 12, Article II of Republic Act No. 9165 (R.A. No.
9165), otherwise known as the Comprehensive Dangerous Drugs Act of 2002.
The Facts
The accused-appellant was charged with the crimes of violations of Sections 11 and 12, Article II of
R.A. No. 9165, in two (2) Informations, both dated 27 July 2005, which respectively read as
follows:ChanRoblesVirtualawlibrary
Criminal Case No. CBU-74092 (For violation of Section 11, R.A. No. 9165)
That on or about the 26th day of July, 2005, at about 4:55 A.M., in the City of Cebu, Philippines, and
within the jurisdiction of this Honorable Court, the said accused, with deliberate intent, did then and
there have in his/her (sic) possession and under his/her (sic) control the following:
“Twenty (20) small heat-sealed plastic sachets each containing white crystalline substance having a
total weight of 7.04 grams.”
locally known as “SHABU”, containing methamphetamine hydrochloride a dangerous drug/s, without
being authorized by law.3cralawred
Criminal Case No. CBU-74093 (For violation of Section 12, R.A. No. 9165)
That on or about the 26th day of July, 2005, at about 4:55 o’clock A.M., in the City of Cebu,
Philippines, and within the jurisdiction of this Honorable Court, the said accused, with [deliberate]
intent, and without any lawful purpose, did then and there have in his possession and control the
following:
1. one (1) disposable lighter
2. one (1) tinfoil strip
3. two (2) pcs. used candle
4. one (1) long folded tissue paper
fit or intended for smoking, consuming, administering, ingesting or introducing any dangerous drug
into the body.4cralawred
Upon arraignment, accused-appellant pleaded not guilty to said charges.5 Pre-trial followed limiting the
issues to: (1) whether or not in the implementation of the search warrant, the police officers committed
irregularities; and (2) whether or not there were shabu and shabu paraphernalia recovered from his
house. Incidentally, the defense admitted the identity of the accused-appellant and the fact of the search
but not as to the manner it was conducted.6 Thereafter, a joint trial proceeded.
Records reveal that, based on the evidence presented,7 the summary of factual findings shows various
versions of the story:ChanRoblesVirtualawlibrary
The Evidence of the Prosecution
The prosecution, through the corroborative testimonies of its two (2) police officer witnesses, PO2
Jonas Tajanlangit8 [(Tahanlangit) and] SPO1 Alfredo Petallar [(SPO1 Petallar)], was able to establish
the following:ChanRoblesVirtualawlibrary
By virtue of Search Warrant No. 07-05-F issued by the court a quo against accused[-appellant], a team
of Police Officers headed by P/Supt. Pablo Labra, with members PO2 [Tahanlangit] designated as the
Searcher and SPO1 Petallar as the Recorder, together with some SWAT and CIIB members
implemented the said warrant on July 26, 2005, at around 4:55 early dawn at Sitio Dita, Barangay
Pulangbato, Cebu City.
With the assistance of PO1 Luardo, one of the deponents for the issuance of the Search Warrant, the
team was able to locate the residence of the accused[-appellant]. Upon their arrival, PO2 [Tahanlangit]
saw the accused[-appellant] sleeping. He knocked the door calling the accused[-appellant’s] attention;
informed him that they have a search warrant; and ordered him to read the same. After reading the
warrant, accused requested that his brother, Barangay Councilor Segundo Bontuyan, Jr. [(Councilor
Bontuyan)], be summoned to witness the search, which the police officers granted. In less than one (1)
minute and being a neighbour of the accused[-appellant], Councilor Bontuyan arrived at the subject
house and read the search warrant.
Thenceforth, the searcher PO2 [Tahanlangit], together with SPO1 Petallar, witnesses Councilor
Bontuyan and Barangay Tanod [Lucio] Leyson [(Barangay Tanod Leyson)], conducted the search first
in the sala where he found no illicit items. They went to the room where he found one (1) tin foil, two
(2) used candles, one (1) disposable lighter, (and) one (1) folded long tissue paper found on top of a
small wooden stool. When they proceeded to the lower portion of the house, PO2 [Tahanlangit] found
a plastic container with a name Centrum. Councilor Bontuyan opened the container and found therein
twenty (20) small packs of white crystalline substance believed to be shabu.
PO2 [Tahanlangit] turned over the confiscated items to SPO1 Petallar for proper inventory. The latter,
who was designated as the “Recorder” then prepared a Receipt and a Certificate of Good Conduct of
the Search which were duly signed by Councilor Bontuyan and Barangay Tanod Leyson. Accused
refused to sign them.
The police officers then placed the accused under arrest, informed him of his constitutional rights, and
proceeded to the Police Station with the confiscated items. SPO1 Petallar took custody of the evidence
and marked the twenty (20) plastic sachets with SW-DB-1 to SW-DB-20.9cralawred
xxxx
The Evidence of the Accused-Appellant
The defense presented another version of the story. The corroborative testimonies of accused[-
appellant], his brother Councilor Bontuyan and Barangay Tanod Leyson showed that on July 26, 2004
at around 4 o’clock in the morning, accused was sleeping at the house of his deceased parents when
somebody woke him up. He turned the lights on and saw some police officers in uniform informing
him that they are conducting a raid in his house. Showing no authority to search the house, accused
argued that the said search cannot be done. He also requested that his brother be ordered to witness the
search, which the police officers acceded.
While accused’s brother was being fetched by one of the implementing officers, he stayed in the living
room. Thereafter, they placed a plastic bottle of Pharmaton vitamins in the table.
Just across the house subject of the raid, Segundo Bontuyan, Jr., accused’s brother, was sleeping in
their house when he was awakened by police officers who commanded him to go with them to witness
the search. When he reached his parents’ house, he saw his brother being handcuffed in the nook of the
house.
When Councilor Bontuyan arrived, the police officers commanded him to open the plastic bottle and
when he did so, they declared that the small packs inside it were shabu. They then introduced
themselves as police officers and informed the accused that they were conducting a raid. The accused
got scared but did not resist or attempt to run. He was then brought to the police station.
Barangay Tanod Leyson testified that when he arrived at the place of the raid, he saw accused seated in
the house already handcuffed. The police officers then announced that they should start and
subsequently opened the bottle placed on top of the table. When the bottle was opened, the police
officers uttered that there was shabu. Later, he was instructed to sign a piece of document. He
requested permission to go home and left the place.10cralawred
The Ruling of the RTC
The RTC rendered a Joint Decision11 finding accused-appellant guilty beyond reasonable doubt for
violations of Sections 11 and 12 of R.A. No. 9165, the dispositive portion of which is as
follows:ChanRoblesVirtualawlibrary
WHEREFORE, judgment is hereby rendered finding accused Demosthenes Bontuyan GUILTY of
Violation of Section 11, Article II, RA 9165 for possession of 7.04 grams of shabu containing
[methamphetamine] hydrochloride and sentences him to suffer a penalty of imprisonment of from
twenty (20) years and one (1) day to life imprisonment plus fine in the amount of P400,000.00. And for
Violation of Sec. 12, Article II, RA 9165 the court sentences him to six (6) months and one (1) day to
two (2) years imprisonment plus fine in the amount of P10,000.00.
The twenty (20) heat-sealed plastic sachets containing white crystalline substance locally known as
shabu with a total weight of 7.04 grams and marked as Exhibit “B” for the prosecution and the shabu
paraphernalia marked as Exhibit “H” are hereby ordered confiscated and destroyed pursuant to RA
9165.12
The trial court relied on the fact that accused-appellant was the lone occupant and thus had full control
of the house where the illegal drugs and paraphernalia were confiscated. Consequently, everything in it
were considered to be his own or under his possession. It likewise explained that the following
established factual circumstances further strengthened the fact of his guilt beyond reasonable doubt: (a)
an inventory was conducted in the presence of the accused and his brother who is an elected official;
(b) the accused-appellant, and the object evidence were brought to the police station; and (c) the object
evidence consisting of twenty (20) packs of shabu were examined and found to be positive for the
presence of methamphetamine hydrochloride. Accordingly, the RTC ruled that the chain of custody of
the object evidence was substantially established, and that the integrity and the evidentiary value of the
seized items were properly preserved by the apprehending team since there appears no evidence of
substitution or tampering with said evidence. 13cralawred
The Ruling of the CA
On intermediate appellate review, the CA affirmed the RTC’s Joint Decision in convicting the
accused-appellant. It ruled that the prosecution was able to sufficiently bear out the statutory elements
of the crime, to wit: (a) the accused was in possession of an item or an object identified to be a
prohibited or regulated drug; (b) such possession is not authorized by law; and (c) the accused was
freely and consciously aware of being in possession of the drugs.14 More so, it elaborated that
possession of dangerous drugs constitutes prima facie evidence of knowledge or animus
possidendi sufficient to convict an accused in the absence of a satisfactory explanation of such
possession. In other words, the burden of evidence was shifted to the accused to explain the absence of
knowledge or animus possidendi. Unfortunately, accused-appellant failed to do so in the instant case
since he merely relied on the defense of denial or frame-up, which was weak without any clear and
convincing evidence to back it up.15cralawred
In addition, the undisputed fact that accused-appellant’s witnesses, Councilor Bontuyan and Barangay
Tanod Leyson, signed their names on the Receipt of Property Seized prepared by the police officer,
clearly implied their conformity to the contents thereof. Hence, it became apparent that these
two Barangay Officials, who witnessed the implementation of the subject search operation, knew that
it was conducted legally. The appellate court further ruled that while there may be inconsistencies or
contradictions on the testimonies of the prosecution’s witnesses, the same cannot affect accused-
appellant’s culpability because such inconsistencies have no relevance with the elements of the offense
charged. Thus, inconsistency, which has nothing to do with the elements of the crime, is not a ground
to reverse a conviction.16 Besides, in criminal cases, the evaluation of the credibility of witnesses is
addressed to the sound discretion of the trial judge, whose conclusion thereon deserves much weight
and respect, because the judge has the unique opportunity to observe their demeanor, conduct and
manner while testifying.17cralawred
Moreover, the CA held that the prosecution’s evidence clearly established an unbroken link in the
chain of custody, thus removing any doubt or suspicion that the shabu and shabu paraphernalia had
been altered, substituted or otherwise tampered with. Said unbroken link in the chain of custody also
precluded the possibility that a person, not in the chain, ever gained possession of the seized
evidence.18cralawred
Lastly, as regards the violation of Section 12, Article II of R.A. No. 9165, it was ruled that the crime
was deemed consummated the moment accused-appellant was found in possession of said articles
without the necessary license or prescription. What is primordial is the proof of the illegal drugs and
paraphernalia recovered from the accused-appellant.19cralawred
The Issue
Whether or not the RTC and the CA erred in finding that the evidence of the prosecution was sufficient
to convict accused-appellant for violations of Sections 11 and 12, Article II of R.A. No. 9165.
Our Ruling
We sustain the judgment of conviction.
In resolving the issue, accused-appellant seeks before this Court to delve into the factual matters of the
case. However, settled is the rule that factual findings of the appellate court affirming those of the trial
court are binding on this Court, unless there is a clear showing that such findings are tainted with
arbitrariness, capriciousness or palpable error.20 Considering that accused-appellant failed to show any
arbitrariness, palpable error, or capriciousness on the findings of fact of the trial and appellate courts,
these findings deserve great weight and are deemed conclusive and binding. Besides, an assiduous
review of the records at hand reveals that the CA did not err in affirming accused-appellant’s
conviction.
By way of emphasis, we have adhered to the time-honored principle that for illegal possession of
regulated or prohibited drugs, the prosecution must establish the following elements: (1) the accused is
in possession of an item or object, which is identified to be a prohibited or regulated drug; (2) such
possession is not authorized by law; and (3) the accused freely and consciously possessed the drug.21 In
the case at bench, all these elements were duly established by the prosecution. As aptly pointed out by
the appellate court:ChanRoblesVirtualawlibrary
Despite the presence of such inconsistencies, the categorical fact remains, as proven by the
implementing police officers, that there were indeed illegal drugs and paraphernalia recovered
from the house of the accused-appellant where he was the sole occupant. With positive and
straight-forward declarations, the police officers proved that the seized items composing the
twenty (20) sachets marked with SW-DB-1 to SW-DB-20 and the shabu paraphernalia – one (1)
disposable lighter, one (1) tin foil strip, two (2) used candles and one (1) long tissue paper – were
the same illicit items recovered during the implementation of the search warrant issued against
accused-appellant. What assumes primary importance in drug cases is the prosecution’s proof,
to the point of moral certainty, that the prohibited drug presented in court as evidence against
the accused is the same item recovered from his possession. In the same vein, the testimonial
evidence coincides and concurs with the pieces of object evidence presented before the Court
affording greater strength to the case of the prosecution.22 (Emphasis supplied)
Certainly, accused-appellant was found to have in his possession 7.04 grams of shabu and some drug
paraphernalia. There was nothing in the records showing that he had authority to possess them. And
jurisprudence is rich in pronouncing that mere possession of a prohibited drug constitutes prima
facie evidence of knowledge or animus possidendi sufficient to convict an accused in the absence of
any satisfactory explanation.23 Worst, accused-appellant likewise failed to present contrary evidence to
rebut his possession of the shabu and drug paraphernalia; hence, his guilt was indeed established
beyond reasonable doubt.
Also, it is worthy to mention that failure to strictly comply with the prescribed procedures in the
inventory of seized drugs does not render the arrest of the accused-appellant illegal or the item
seized/confiscated from him inadmissible. The essential thing to consider is “the preservation of the
integrity and the evidentiary value of the seized items, as the same would be utilized in the
determination of the guilt or innocence of the accused.” 24 Thus, applying the foregoing principle in the
case at bench, the chain of custody25 of the seized prohibited drugs was adequately established herein.
The CA affirmed that:ChanRoblesVirtualawlibrary
In the instant case, the prosecution substantiated beyond an iota of doubt the preservation of the
integrity and evidentiary value of the seized items as provided for by the rules. Records show that
immediately after the seizure of the illegal items recovered inside the house of the accused-
appellant, the designated searcher, PO2 [Tahanlangit], turned them over to SPO1 Petallar who
thereafter prepared the Receipt of Property Seized and the Certification of Good Conduct
Search both duly signed by witnesses Barangay Councilor Bontuyan and Barangay Tanod
Leyson. SPO1 Petallar took custody of the seized items and marked them at the police station
with SW-DB-1 to 20. The illegal paraphernalia were placed inside a plastic cellophane
collectively marked Exhibit “H”.
At the police station, a Request for Laboratory Examination was prepared by Police Chief
Labra. The request, together with the illegal drugs, were duly delivered by SPO1 Petallar to the
Philippine National Police Crime Laboratory. As per Chemistry Report No. D-1079-2005 duly
admitted by the court a quo, the specimen submitted with markings SW-DB-1 to 20 were positive
for the presence of Methamphetamine Hydrochloride, a dangerous drug. Under the circumstance,
the prosecution’s evidence clearly established an unbroken link in the chain of custody, thus removing
any doubt or suspicion that the shabu and drug paraphernalia had been altered, substituted or otherwise
tampered with. The unbroken link in the chain of custody also precluded the possibility that a person,
not in the chain, ever gained possession of the seized evidence.26 (Emphases supplied)
Admittedly, a testimony about a perfect chain is not always the standard as it is almost always
impossible to obtain an unbroken chain. What is of utmost importance is the preservation of the
integrity and the evidentiary value of the seized items.27 Here, there was substantial compliance with
the law and the integrity of the seized items from accused-appellant was preserved.
Accused-appellant further insists that the courts relied mainly on the version of the prosecution’s
witnesses and placed more weight on the presumption of regularity in the performance of duty instead
of the accused’s right to be presumed innocent.
In People v. De Guzman,28 we held that in cases involving violations of the Dangerous Drugs Act,
credence is given to prosecution witnesses who are police officers for they are presumed to have
performed their duties in a regular manner, unless there is evidence to the contrary suggesting illmotive
on the part of the police officers. In this case, accused-appellant failed to show that the police officers
deviated from the regular performance of their duties. His defense of denial is weak and self-serving.
Unless corroborated by other evidence, it cannot overcome the presumption that the police officers
have performed their duties in a regular and proper manner. The defense simply failed to show any ill
motive or odious intent on the part of the police officers to impute such a serious crime that would put
in jeopardy the life and liberty of an innocent person, such as in the case of accused-appellant.
Additionally, in weighing the testimonies of the prosecution’s witnesses vis-à-vis that of the defense, it
is a well-settled rule that in the absence of palpable error or grave abuse of discretion on the part of the
trial judge, the trial court’s evaluation of the credibility of witnesses will not be disturbed on
appeal.29cralawred
While it is true that an accused in a criminal case is presumed innocent until proven guilty, the
evidence of the prosecution must stand on its own strength and not rely on the weakness of the
evidence of the defense.30 In this case, the quantum of evidence necessary to prove accused-appellant’s
guilt beyond reasonable doubt had been sufficiently met. Accordingly, the prosecution was able to
overcome accused-appellant’s constitutional right to be presumed innocent.
Of equal importance is the propriety of the penalties imposed by the trial court against accused-
appellant, which we find in accord with the provisions of R.A. No. 9165, the Indeterminate Sentence
Law (ISL), and in line with recent jurisprudential pronouncements.
In sum, we find no cogent reason to depart from the decisions of the RTC and the CA. Accused-
appellant is guilty beyond reasonable doubt of violations of Sections 11 and 12, Article II of R.A. No.
9165.
WHEREFORE, the appeal is DENIED. The Court of Appeals Decision in CA-G.R. CR.-H.C. No.
01112, is AFFIRMED in all respects.
SO ORDERED.cralawlaw library
G.R. No. 208169               October 8, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
EDWARD ADRIANO y SALES, Accused-Appellant.
RESOLUTION
PEREZ, J.:
For review is the conviction of Edward Adriano y Sales (Adriano) for the crime of illegal sale of shabu
punishable under Section 5, Article II of the Republic Act No. 9165 (R.A. No. 9165), otherwise known
as Comprehensive Dangerous Drugs Act (CDDA) of 2002, by the Court of Appeals (CA) in a
Decision1 dated 29 October 2012 in CA-G.R. CR-H.C. No. 05182, which affirmed the Decision2 of the
Regional Trial Court (RTC) dated 23 August 2011 in "People of the Philippines v. Edward Adriano y
Sales", docketed as Criminal Case No. 16444-D.
The Information
That on or about 25th day of October 2008, in the City of Taguig, Philippines, and within the
jurisdiction of this Honorable Court, the abovenamed accused, without being authorized by law, sell,
deliver, and give away to a poseur buyer, zero point twelve (0.12) gram of a white crystalline
substance, commonly known as "shabu" which is a dangerous drug, in consideration of the amount of
Two Hundred Pesos (Php200.00) and in violation of the above cited law.3 When arraigned, Adriano
pleaded not guilty to the crime charged. During the pre-trial conference on 13 July 2009, the parties
stipulated on the following:
1. The identity of the accused as the same person named in the information;
2. The existence of the specimens and documents marked as evidence but with a counter-
proposal that the forensic chemist has no personal knowledge as to the source of the
specimen; 3. The qualification of the forensic chemist, P/Sr. Insp. Yelah Manaog;
4. The existence and due execution of the Physical Science Report No. D-334-08;
5. The due execution and genuineness of the FINDINGS on the qualitative examination
conducted on the specimens gave POSITIVE result to the test for the presence of
Methylamphetamine Hydrochloride, a dangerous drug;4
During trial, the prosecution presented Police Officer 1 Teodoro Morales (PO1 Morales), who testified
that acting on a report received from a barangay official and an informant that Adriano was selling
drugs in North Daang Hari, Taguig City, Police Chief Inspector Porfirio Calagan formed a team to
conduct a buy-bust operation to entrap Adriano, designating PO1 Morales as the poseur-buyer, and
marking the buy-bust money consisting of ten ₱100.00 bills with the initials "PC". After briefing, PO1
Morales, together with the informant and his team, proceeded to North Daang Hari where PO1 Morales
bought ₱200.00 worth of shabu from Adriano. Upon giving Adriano the marked money and after
receiving a plastic sachet containing white crystalline substance, PO1 Morales signaled his team to
arrest Adriano. PO2 Ronnie Fabroa immediately arrested Adriano.5 The marked money confiscated
from Adriano was brought to the police station for investigation, while the plastic sachet containing
white crystalline substance, which was marked with "ESA-251008"6 at the crime scene was brought to
the Philippine National Police (PNP) Crime Laboratory by PO2 Vergelio Del Rosario, who also
prepared the letter-request.7
In the PNP Crime Laboratory, the result of the laboratory examination conducted by Police/Senior
Inspector Yelah Manaog confirmed the presence of methamphetamine hydrochloride. 8
On the other hand, the defense presented Adriano, who testified that on 22 October 2008, at around
10:00 p.m., he was at home, putting his nephews and nieces to sleep when suddenly two (2) armed
men barged into the house and dragged him outside and forcibly took him to the police station in
Taguig City. It was only whenthey arrived at the police station when he learned that he was arrested for
illegal sale of shabu.9
The Ruling of the RTC
In a Decision dated 23 August 2011, the RTC found Adriano guilty beyond reasonable doubt of the
crime charged.1âwphi1 The RTC gave credence to the testimony of PO1 Morales based on the
presumption that police officers perform their duties in a regular manner because the defense failed to
establish any ill-motive on the part of the arresting officers to at least create a dent in the prosecution’s
case. The positive identification of Adriano as the perpetrator of the crime charged without any
showing of ill-motive on the part of the witness testifying on the matter, prevails over Adriano’s alibi
and denial. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing, the accused Edward Adriano y Sales is hereby found
GUILTY beyond reasonable doubt of committing the crime, as charged, and is hereby sentenced to
suffer the penalty of LIFE IMPRISONMENT and a fine of FIVE HUNDRED THOUSAND PESOS
(PH₱500,000.00).10 x x x x
On appeal, Adriano argued that the shabu allegedly seized from his possession is inadmissible because
of the following reasons: (1) the warrantless arrest on his person is invalid; and (2) the arresting
officers violated Section 21 of R.A. No. 9165. Adriano asserted that the warrantless arrest was illegal
because there was no reason why the police officers could not have obtained a judicial warrant before
the arrest.
The Ruling of the CA
The CA affirmed the ruling of the RTC. The CA ruled that the prosecution established the elements of
the crime of illegal sale of shabu. Even if the prosecution failed to comply with the requirements
provided in Section 21 of R.A. No. 9165, such noncompliance did not render the seized items
inadmissible in evidence. Further, the CA rejected the defense’s attempt to debunk PO1 Morales’
testimony based on the defense’s failure to substantiate its allegation of ill-motive on the part of the
arresting officers.
The appeal before us maintained thatthe lower courts gravely erred in not finding the warrantless arrest
on the person of Adriano as illegal and in convicting Adriano despite the police officers’
noncompliance with Section 21 of R.A. No. 9165.
We rule in the negative.
Our Ruling
In prosecutions for illegal sale of dangerous drugs, the following two (2) elements must be duly
established: (1) proof that the transaction or sale took place; and (2) the presentation in court of the
corpus delicti or the illicit drug as evidence.11
In the case at bar, the prosecution duly established the two (2) elements: (1) to account that the
transaction or sale indeed took place, PO1 Morales narrated the transaction in a clear and direct
manner; and (2) the seized illegal drugs and marked money were presented before the trial court as
proof of the identity of the object of the crime and of the corpus delicti.12
The argument on the arresting officers’ noncompliance with Section 21 of R.A. No. 9165 deals with
the procedure for the custody and disposition of confiscated, seized or surrendered dangerous drugs.
The law reads:
Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence
of the accused or the person/s from whom such items were confiscated and/or seized, or
his/her representative or counsel, a representative from the media and the Department of
Justice (DOJ), and any elected public official who shall be required to sign the copies of the
inventory and be given a copy thereof;
(2) Within twenty-four (24) hours upon confiscation/seizure of dangerous drugs, plant sources
of dangerous drugs, controlled precursors and essential chemicals, as well
asinstruments/paraphernalia and/or laboratory equipment, the same shall be submitted to the
PDEA Forensic Laboratory for a qualitative and quantitative examination;
(3) A certification of the forensic laboratory examination results, which shall be done under
oath by the forensic laboratory examiner, shall be issued within twenty-four (24) hours after
the receipt of the subject item/s: Provided, That when the volume of the dangerous drugs,
plant sources of dangerous drugs, and controlled precursors and essential chemicals does not
allow the completion of testing within the time frame, a partial laboratory examination report
shall be provisionally issued stating therein the quantities of dangerous drugs still to be
examined by the forensic laboratory: Provided, however, That a final certification shall be
issued on the completed forensic laboratory examination on the same within the next twenty-
four (24) hours;
However, it has been repeatedly noted by the Court, the Implementing Rules of R.A. No. 9165 offer
some measure of flexibility through the proviso, "non-compliance with these requirements under
justifiable grounds, as long as the integrity and the evidentiary value of the seized items are properly
preserved by the apprehending officer/team, shall not render void and invalid such seizures of and
custody over said items". Otherwise stated, non-compliance does not invalidate the seizure or render
the arrest of the accused illegal or the items seized from him as inadmissible as long as the integrity
and evidentiary value of the seized items are preserved.
To prove that the integrity and evidentiary value of the seized items are preserved, the Implementing
Rules allow the prosecution to establish an unbroken chain of custody of the seized item, which in this
case, has been duly established by the prosecution. "Chain of custody" means the duly recorded
authorized movements and custody of seized drugs or controlled chemicals from the time of
seizure/confiscation to receipt in the forensic laboratory to safekeeping to presentation in court for
destruction.13
The details of the unbroken chain of custody as found by the CA: The first link in the chain of custody
is from the time PO1 Morales took possession of the plastic sachet of shabu from accused-appellant
and marked the same with the initials "EAS", to the time the plastic sachet of shabu was brought to the
Police Station. The Certificate of Inventory for the items seized from accused-appellant was signed by
PO1 Morales, PO2 Ronnie Fabroa, and the accused-appellant. The second link in the chain of custody
is from the time the plastic sachet of shabu was brought from the Police Station, to the PNP Crime
Laboratory. A letter-request was made for the laboratory examination of the contents of the plastic
sachet of shabu seized from accused-appellant. The letter-request, and plastic sachet of shabu, were
delivered to the PNP Crime Laboratory by PO2 Del Rosario. Per Chemistry Report No. D-334-08
prepared by Police Senior Inspector Yelah Manaog, the contents of the plastic sachet tested positive for
shabu.14
Thus, despite the arresting officers’failure to strictly observe the requirements of Section 21 on the
custody and disposition of the seized items, the violation of the CDDA of 2002 was duly proven. The
arresting officers duly recorded the movements and custody of the seized items from the time of
seizure/confiscation to receipt by the forensic laboratory to safekeeping up to presentation in court.
With regard to the warrantless arrest, the defense’s contention that the buy-bust team should have
procured a search warrant for the validity of the buy-bust operation is misplaced. Warrantless arrests
are allowed in three (3) instances as provided by Section 5 of Rule 113 of the Rules on Criminal
Procedure, to wit:
Sec. 5. Arrest without warrant; when lawful.A peace officer or a private person may, without a
warrant, arrest a person:
(a) When, in his presence, the person to be arrested has committed, is actually committing,
oris attempting to commit an offense;
(b) When an offense has in fact just been committed, and he has personal knowledge of facts
indicating that the person to be arrested has committed it; and
(c) When the person to be arrested is a prisoner who escaped from a penal establishment or
place where he is serving final judgment or temporarily confined while his case is pending, or
has escaped while being transferred from one confinement to another.
Based on the above provision, Adriano was arrested pursuant to Section 5(a), which provides that a
person may be arrested without a warrant if he "has committed, is actually committing, or is attempting
to commit an offense." In the case at bar, Adriano was caught in the act of committing an offense, in
flagrante delicto, when Adriano was caught selling illegal shabu through a buy-bust operation, within
the plain view of the arresting officers.
A buy-bust operation is "a form of entrapment, in which the violator is caught in flagrante delictoand
the police officers conducting the operation are not only authorized but duty-boundto apprehend the
violator and to search him for anything that may have been part of or used in the commission of the
crime."15 In People v. Agulay,16 we discussed buy-bust operation as a form of a valid and effective
mode of apprehending drug pushers:
A buy-bust operation is a form of entrapment which in recent years has been accepted as a valid and
effective mode of apprehending drug pushers. In a buy-bust operation, the idea to commit a crime
originates from the offender, without anybody inducing or prodding him to commit the offense. If
carried out with due regard for constitutional and legal safeguards, a buy-bust operation deserves
judicial sanction.17
Finally, the arresting officers enjoy the presumption of regularity in the performance of their official
duties. The presumption may be overcome by clear and convincing evidence. However, in the case at
bar, the defense failed to present any proof to substantiate its imputation of ill-motive on the part of the
arresting officers. Contrarily, the prosecution duly proved the existence of the two elements ofthe
crime of illegal sale of shabu and established the integrity and evidentiary value of the seized items.
The presumption of regularity in favor of the arresting officers prevails. WHEREFORE, we find no
cogent reason to reverse the finding of the lower court which found Edward Adriano y Salesguilty
beyond reasonable doubt of the crime of illegal sale of shabu. The appeal is hereby DISMISSED. The
Court of Appeal's decision in "People of the Philippines v. Edward Adriano y Sales", docketed as CA-
G.R. CR-H.C. No. 05182 is AFFIRMED.
SO ORDERED.
G.R. No. 200877               November 12, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
CHARVE JOHN LAGAHIT, Accused-Appellant.
DECISION
PEREZ, J.:
On appeal is the Decision1 dated 17 March 2011 of the Court of Appeals in CA-G.R. CEB-CR HC. No.
000867 affirming the Decision2 dated 21June2007 of the Regional Trial Court (RTC) of Cebu City,
Branch 13, in Criminal Case Nos. CBU-67096 and CBU-67097 finding herein appellant Charve John
Lagahit guilty beyond reasonable doubt of violating Sections 5 (Illegal Sale of Dangerous Drugs) and
11 (Illegal Possession of Dangerous Drugs), Article II of Republic Act No. 9165, otherwise known as
the "Comprehensive Dangerous Drugs Act of 2002."
Two separate Informations,3 both dated 1 September 2003, were filed against appellant for violation of
Sections 5 and 11, Article II of Republic Act No. 9165, for allegedly (a) selling 0.49 gram of
marijuana; and (b) being in illegal possession of 0.88 gram of marijuana.
The offense involved in CriminalCase No. CBU-67096 for violation of Section 5, Article II of
RepublicAct No. 9165, was allegedly committed as follows:
That on or about the 29th day of August, 2003, at about 8:45 P.M., in the City of Cebu, Philippines,
and within the jurisdiction of this Honorable Court, the said [herein appellant], with deliberate intent,
and without authority of law, did then and there sell, deliver or give away to a poseur-buyer:
Four (4) sticks of handrolled marijuanacigarette[s] having a total net weight 0.49 gram
x x x, a dangerous drug/s.4 (Emphasis supplied).
On the other hand, the Information pertaining to Criminal Case No. CBU-67097 for violation of
Section 11, Article II of the same law, reads:
That on or about the 29th day of August 2003, at about 8:45 P.M., in the City of Cebu, Philippines, and
within the jurisdiction of this Honorable Court, the said [appellant], with deliberate intent, did then and
there have in [his] possession and under [his] control the following: B- Eight (8) sticks of handrolled
marijuanacigarette[s] having total net weight of 0.88 gram: a dangerous drug, without being authorized
by law.5 (Emphasis supplied).
When arraigned, appellant pleaded NOT GUILTY to both charges.6 Pre-trial was conducted. Trial on
the merits followed.
The prosecution presented two witnesses, namely: Police Officer 3 Arturo B. Lawas, Jr. (PO3 Lawas,
Jr.), the arresting officer assigned at Station 4 of the Mabolo Police Station; and Police Senior
Inspector Mutchit Salinas (P/S. Insp. Salinas), Forensic Chemical Officer, Philippine National Police
(PNP) Regional Crime Laboratory Office 7, Camp Sotero Cabahug, Gorordo Ave., Cebu City. The
testimony,however, of this forensic chemist was later on dispensed with per agreement of the parties. 7
The prosecution presented its case as follows:
Based on the reports of some teachers of BarangayLahug Elementary School in Cebu City, and on the
information gathered by the trusted informant who is a resident of the place, regarding the illegal sale
of dangerous drugs in the area and that the appellant was among the perpetrators, PO3 Lawas, Jr.,
being the community cop of Barangay Lahug, Cebu City, together with two barangay tanod, namely:
Celso Nicor (Nicor) and Reuben Laping, was instructed to closely monitor the said illegal activities.
PO3 Lawas, Jr. then conducted surveillance. As a result, PO3 Lawas, Jr. confirmed that, indeed, the
appellant plies his illegal drug trade in Barangay Lahug, particularly near the stairway of the flyover,
which is also in close proximity to the barangayhall. Worse, most of his clients are the students of the
night high school of the said barangay.8
A week after the surveillance, oron 29 August 2003, at around 8:45 p.m., PO3 Lawas, Jr. formed a
buy-bust team to conduct a buy-bust operation against the appellant. PO3 Lawas, Jr., the team leader,
designated his trusted informant to act as the poseur-buyer while he and the two barangay tanodwere to
serve as back-ups. A ₱20.00 peso bill buy-bust money with markings "ABL," representing the initials
of PO3 Lawas, Jr., was given to the trusted informant. The buy-bust team agreed to the prearranged
signal that the trusted informant will take off his bull cap upon consummation of the sale
transaction.Thereafter, the buy-bust team proceeded to the target area of its buy-bust operation, i.e.,
near the stairway of the flyover that is close to the barangay hall of Barangay Lahug.9
At the target area, PO3 Lawas, Jr. and the two barangay tanod positioned themselves on the
oppositeside of the road near the barangay hall. On the other hand, the trusted informant, who is the
designated poseurbuyer, immediately approached the appellant upon seeing the latter. The trusted
informant handed the ₱20.00 peso bill marked money to the appellant and the latter, in turn, gave four
sticksof handrolled marijuana cigarettes to the former. From his position, PO3 Lawas, Jr. can vividly
see the ongoing sale transaction between the trusted informant and the appellant, as there was a
lamppost of the Visayan Electric Company (VECO) one meter away right below the flyover of
Barangay Lahug. Upon the consummation of the sale, the trusted informant executed at once their
prearranged signal by taking off his bull cap. Without ado, PO3 Lawas, Jr. and the two barangay tanod
crossed the road to apprehend the appellant. But, before they could do so, another person approached
the appellant and walked with him towards the opposite side of the road. Nonetheless, PO3 Lawas, Jr.
and the two barangay tanodfollowed them until they apprehended the appellant. Appellant’s
companion, on the other hand, managed to escape. After the appellant was handcuffed, PO3 Lawas, Jr.
recovered from the pocket of the former eight more sticks of handrolled marijuana cigarettes. The
₱20.00 peso bill marked money and the cash money amounting to ₱90.00, consisting of three
pieces₱20.00 peso bills and six pieces ₱5.00 peso coins, believed to be proceeds of appellant’s illegal
activities, were also recovered from the latter’s possession.10
The appellant was, thereafter, brought to the barangay hall and was later transferred to the Mabolo
Police Station. All the seized items remained with PO3 Lawas, Jr. until they reached the police station.
Upon arrival thereat, Barangay Tanod Nicor marked the four sticks of handrolled marijuana cigarettes,
which were the subjectof the sale transaction, with BBCJLR 08292003. While the other eight sticks of
handrolled marijuana cigarettes, which were recovered from the possession of the appellant during his
arrest, were marked by PO3 Lawas, Jr. with CJLR-08292003-18. Afterwards, all the marked pieces of
evidence, together with a Request for Laboratory Examination of the same, were brought by PO3
Lawas, Jr. to the PNP Crime Laboratory, where P/S. Insp. Salinas, the forensic chemist, conducted
qualitative examination on the specimens.11 Per Chemistry Report No. D-1561-2003 dated 30 August
2003, all specimens yielded positive result for the presence of marijuana, a dangerous drug. 12
To counter the evidence of the prosecution, the defense presented the lone testimony of the appellant,
who interposed denial and suggested a frame-up for his exculpation.
Appellant claimed that on 29 August 2003, at around 8:45 p.m., he was beside the barangayhall of
Barangay Lahug waiting for his friend named Roy, a driver of a public utility vehicle, as he would
clean the vehicle of the former. However, he was not able to do so as three men went near him and
arrested him for no apparent reason. As he tried to resist the arrest, one of the men poked a Magnum .
357 at the back of his head. He was then brought to the barangayhall of BarangayLahug, where the
arresting officers told him that they had found something, which looks like a cigarette, inside his
pocket. He, in turn, told the arresting officers that those were not his. Thereafter, he was transferred to
the Mabolo Police Station, where he first knew the two charges filed against him.13
After hearing both parties, the trial court rendered a Decision dated 21 June 2007, finding the appellant
guilty of the offenses charged. The dispositive portion of its decision reads: WHEREFORE, judgment
is hereby rendered finding [herein appellant] CHARVE JOHN LAGAHIT GUILTY beyond reasonable
doubt of the crime of Violation of Section 5, Article II, [Republic Act No. 9165] and sentences him to
LIFE IMPRISONMENT, plus fine in the amount of Three Hundred Thousand (₱300,000.00) Pesos;
and [i]n CBU-67097, the court also finds him guilty beyond reasonable doubt of the crime of Violation
of Section 11, Article II, [Republic Act No. 9165], and sentences him to a penalty of imprisonment of
TWELVE (12) YEARS and ONE (1) DAY, as minimum, to TWENTY (20) YEARS, as maximum,
plus fine in the amount of Two Hundred Thousand (₱200,000.00) Pesos.
The four hand rolled marijuana sticks in CBU-67096 and the eight rolled marijuanasticks in CBU-
67097 are herebyconfiscated in favor of the government and destroyed pursuant to law.
With cost against the [appellant].14
The trial court found that the elements for the crimes of illegal sale and illegal possession of marijuana
were sufficiently established by the evidence of the prosecution beyond reasonable doubt. The trial
court held that appellant’s weak testimony cannotprevail over the straight forward, frank, and honest
testimony ofPO3 Lawas, Jr., a police officer, who was just doing his duty. In the same manner, the trial
court stated that PO3 Lawas, Jr. and the two barangay tanod, who participated in the buy-bust
operation, were properly performing their duties asthey were not inspired by any improper motive.
On appeal,15 the Court of Appeals, inits Decision dated 17 March 2011, affirmed the guilty verdict and
the sentence imposed by the trial court.
Hence, the instant recourse raising this lone assignment of error:
THE TRIAL COURT ERRED IN CONVICTING THE [HEREIN APPELLANT] OF THE CRIMES
CHARGED DESPITE FAILURE OF THE PROSECUTION TO PROVE HIS GUILT BEYOND
REASONABLE DOUBT.16
Appellant contends that the prosecution failed to prove the identity of the corpus delictias its sole
witness never testified as to how he was able to recover the four sticks of handrolled marijuana
cigarettes, which are the corpus delictiof the crime of illegal sale of marijuana from the possession of
the poseur-buyer. This failure leaves lingering doubt if indeed the marijuana was sold by the appellant
to the poseur-buyer. Appellant posits that the four sticks of hand rolled marijuana cigarettes submitted
by the prosecution could be objects totally different from that which was allegedly, or was not that
which was actually seized during the buy-bust operation. Appellant further argues that there was non-
compliance with the requirements set forth in Section 21, Article II of Republic Act No. 9165, i.e., the
physical inventory and the taking of photographs of the seized items.
Appellant also believes that the non-presentation of the police officers who conducted the inquest
proceedings and marked the seized drugs is fatal to the prosecution’s case as a crucial link in the chain
of custody of the illegal drugs was not established by such omission.
Simply put, the issue for resolution is whether there is sufficient evidence to establish appellant’s guilt
beyond reasonable doubt of the crimes charged.
This Court rules in the negative.
The right of the accused to be presumed innocent until proven guilty is guaranteed under Section 14(2),
Article III (Bill of Rights) of the 1987 Philippine Constitution. This fundamental right of the accused is
also embodied under Section 2, Rule 133 of the Rules of Court,17 which specifically states that "in a
criminal case, the accused is entitled to an acquittal, unless his guilt is proved beyond reasonable
doubt. Proof beyond reasonable doubt does not mean such a degree of proof, excluding possibility of
error, produces absolute certainty. Only moral certainty is required, or that degree of proof which
produces conviction in an unprejudiced mind."
Time and again, this Court held that in every prosecution for illegal sale of dangerous drugs, like
marijuana, the following essential elements must be duly established: (1) the identities of the buyer and
the seller, the object, and consideration; and (2) the delivery of the thing sold and the payment for
it.18 Similarly, it is essential that the transaction or sale be proved to have actually taken place coupled
with the presentation in court of evidence of corpus delicti, that is, the actual commission by someone
of the particular crime charged.19
On the other hand, to successfully prosecute a case of illegal possession of dangerous drugs, the
following elements must be established: (1) the accused is in possession of an item or object which is
identified to be a prohibited drug; (2) such possession isnot authorized by law; and (3) the accused
freely and consciously possessed the drug.20
The prohibited drug is an integral part of the corpus delictiof the crimes of illegal sale and illegal
possession of dangerous drugs; proof of its identity, existence, and presentation in court is crucial. A
conviction cannot be sustained if there is a persistent doubt on the identity of the drug. The identity of
the prohibited drug must be established with moral certainty. Apart from showing that the elements of
possession or sale are present, the fact that the substance illegally possessed and sold in the first place
is the same substance offered in court as exhibit must likewise be established with the same degree of
certitude as that needed to sustain a guilty verdict.21 The chain of custody requirement performs this
function in that it ensures that unnecessary doubts concerning the identity of the evidence are
removed.22
Section 1(b) of Dangerous Drugs Board Regulation No. 1, Series of 2002, that implements the
Comprehensive Dangerous Drugs Act of 2002, defines "chain of custody" as follows:
"Chain of Custody" means the duly recorded authorized movements and custody of seized drugs or
controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each stage, from
the time of seizure/confiscation to receipt in the forensic laboratory to safekeeping to presentation in
court for destruction. Such record of movements and custody of seized item shall include the identity
and signature of the person who held temporary custody of the seized item, the date and time when
such transfer of custody were made in the course of safekeeping and use in court as evidence, and the
final disposition.23
In People v. Gatlabayan24 citing People v. Kamad,25 this Court enumerated the links that the
prosecution must establish in the chain of custody in a buy-bust situation to be as follows: first, the
seizure and marking, if practicable, of the illegal drug recovered from the accused by the apprehending
officer; second, the turnover of the illegal drug seized by the apprehending officer to the investigating
officer; third, the turnover by the investigating officer of the illegal drug to the forensic chemist for
laboratory examination; and fourth, the turnover and submission of the marked illegal drug seized by
the forensic chemist to the court.
A careful perusal of the records shows that while the identities of the seller and the buyer and the
consummation of the transaction involving the sale of illegal drug on 29 August 2003 have been
proven by the prosecution through the testimony of PO3 Lawas, Jr.,this Court, nonetheless, finds the
prosecution evidence to be deficient for failure to adequately show the essential links in the chain of
custody, particularly how the four sticks of handrolled marijuana cigarettes subject of the
saletransaction came into the hands of PO3 Lawas, Jr. from the trusted informant, who was the
designated poseur-buyer.
To note, after the exchange of the buy-bust money and the four sticks of handrolled
marijuanacigarettes between the trusted informant and the appellant, the former gave the pre-arranged
signal to PO3 Lawas, Jr. and the two barangay tanodby taking off his bull cap. Immediately, thereafter,
PO3 Lawas, Jr. and the two barangay tanod, who were positioned on the opposite side of the street,
moved towards the other side, where the appellant and the trusted informant were, in order to
apprehend the former. But, before they could do so, another person already approached the appellant
and walked with him towards the opposite side of the road. PO3 Lawas, Jr. and the two barangay
tanodthen followed them until theyapprehended the appellant and whose companion managed to
escape. PO3 Lawas, Jr. handcuffed the appellant and bodily searched him leading to the recovery of
the following: (1) eight more sticks of handrolled marijuanacigarettes from the latter’s pocket; (2)
₱20.00 peso bill marked money; and (3) cash money amounting to ₱90.00, believed to be proceeds
ofhis illegal activities. Thereafter, the appellant was brought to the barangay hall and was later
transferred to the Mabolo Police Station. All the seized items remained with PO3 Lawas, Jr. until they
reached the police station. Upon arrival thereat, Barangay Tanod Nicor marked the four sticks of
handrolled marijuana cigarettes subject of the sale transaction, while the other eight sticks of
handrolled marijuana cigarettes recovered from the possession ofthe appellant during his arrest were
marked by PO3 Lawas, Jr. These marked pieces of evidence, together with a Request for Laboratory
Examination of the same, were brought by PO3 Lawas, Jr. to the PNP Crime Laboratory. 26 The
qualitative examination conducted on the specimens yielded positive result for marijuana, a dangerous
drug.27
From the foregoing set of facts, there was no mention how the four sticks of handrolled marijuana
cigarettes, which were the subject of the sale transaction, came into the hands ofPO3 Lawas, Jr. from
the trusted informant. PO3 Lawas, Jr.’s testimony was lacking as towhen, where and how the said four
sticks of handrolled marijuanacigarettes sold by the appellant to the trusted informant were turned over
to him by the latter. In the same manner, PO3 Lawas,Jr. failed to state that he actually seized the sold
four sticks of handrolled marijuanacigarettes. Considering that PO3 Lawas, Jr. was not the poseur-
buyer and he was not even with the poseur buyer during the sale transaction as he was on the opposite
side of the road, the turning over to him by the trusted informant of the four sticks of handrolled
marijuana cigarettes sold by the appellant was the supposed first link in the chain of custody.
Unfortunately, the prosecution failed to establish the same. This Court cannot overlook this evidentiary
gap as it involves the identification of the sold four sticks of handrolled marijuana cigarettes. In the
absence of the aforesaid link in the chain of custody, doubt arises if, indeed, the recovered four sticks
of handrolled marijuanacigarettes that PO3 Lawas, Jr. brought to the barangayhall and then to the
Mabolo Police Station; subsequently marked by Barangay TanodNicor; later brought to the crime
laboratory; and examined by the forensic chemist, which yielded positive for marijuana, were the same
drugs actually sold by the appellant to the trusted informant.
Given the foregoing circumstances, it is beyond any cavil of doubt that the prosecution miserably
failed to specifically identify the four sticks of handrolled marijuana cigarettes that were actually sold
at the buy-bust as among those that were presented in court. This evidentiary situation effectively
translates to the absence of proof of corpus delicti, and cannot but lead this Court to conclude that no
valid conviction for the crime of illegal sale of marijuanacan result. 28
Now, going to the crime of illegal possession of marijuana, there is also no doubt that the prosecution
was able to fully satisfy all the elements of the crime. The prosecution, however, failed to show that the
apprehending team complied with the required procedure for the custody and disposition of
confiscated, seized and/or surrendered dangerous drugs set forth in Section 21, ArticleII of Republic
Act No. 9165.
The procedure for the custody and disposition of confiscated, seized and/or surrendered dangerous
drugs, among others, is provided under Section 21(a), paragraph 1, ArticleII of Republic Act No. 9165,
thus:
(a) The apprehending team having initialcustody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof.
(Emphasis supplied).
The specific procedures relating to the seizure and custody of drugs have been laid down under the
Implementing Rules and Regulations for Republic Act No. 9165, particularly Section 21(a), Article II
thereof, and it is the prosecution’s burden to adduce evidence that these procedures have been
complied with in proving the elements of the offense.29 The said Section 21(a), Article II of the
Implementing Rules and Regulations of Republic Act No. 9165 reads:
(a) The apprehending team having initialcustody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies ofthe inventory and be given a copy thereof; Provided,
further that non-compliance with these requirements under justifiable grounds, as long as the integrity
and the evidentiary value of the seized items are properly preserved by the apprehending officers/team,
shall not render void and invalid such seizures of and custody over said items. (Emphasis supplied).
In the present case, the records are bereft of any indication that would show that the prosecution was
able to establish the apprehending team’s compliance with the above procedural safeguards. The
records similarly do not contain any physical inventory report or photograph of the confiscated items.
Even the lone prosecution witness never stated in his testimony that he or any member of the buy-bust
team had conducted a physical inventory or taken pictures of the items. Although PO3 Lawas, Jr.
testified that the seized drugs subject of the illegal possession case had been marked, nowhere can it be
found that the marking thereof was done in the presence of the appellant or any of the above-
mentioned third-party representatives.1âwphi1
While this Court recognizes that non-compliance by the buy-bust team with Section 21 of Republic
Act No. 9165 is not fatal as long as there is a justifiable ground therefor, for and as longas the integrity
and the evidentiary value of the seized items are properly preserved by the apprehending team, these
conditions, however, were not met in the present case.30 Despite of all the aforesaid major lapses, the
prosecution neither offered any explanation why the procedure was not followed nor mentioned any
justifiable ground for failing to observe the rule. In People v. Ancheta,31 this Court pronounced that
when there is gross disregard of the procedural safeguards set forth in Republic Act No. 9165, serious
uncertainty is generated as to the identity of the seized items that the prosecution presented in
evidence. Such doubt cannot beremedied by merely invoking the presumption of regularity in the
performance of official duties for a gross, systematic, or deliberate disregard of the procedural
safeguards effectively produces an irregularity in the performance of official duties.32 Also in People v.
Ancheta,this Court explained that:
Indeed, it is the preservation of the integrity and evidentiary value of the seized items that is of utmost
importance in determining the admissibility of the evidence presented in court, especially in cases of
buybust operations. That is why Congress saw fit to fashion a detailed procedure in order to ensure that
the integrity and evidentiary value of the confiscated items would not be compromised. The marking of
the seized items was only a piece in a detailed set of procedural safeguards embodied in [Republic Act
No. 9165]. If the arresting officers were unable to comply with the other requirements, they were under
obligation to explain why the procedure was not followed and prove that the reason provided a
justifiable ground. Otherwise, the requisites under the law would merely be fancy ornaments that may
or may not be disregarded by the arresting officers at their own convenience. 33 (Emphasis supplied).
In view of the foregoing, serious doubt exists whether the drugs subject of the illegal possession case
presented in court were the same as those recovered from the appellant. Thus, the prosecution likewise
failed to prove beyond reasonable doubt the identity of the corpus delictiin the crime of illegal
possession of marijuana.
Concededly, the evidence of the defense is weak and uncorroborated. This, however, cannot be used to
advance the cause of the prosecution as the evidence for the prosecution must stand or fall on its own
weight and cannot be allowed to draw strength from the weakness of the defense. Moreover, when the
circumstances are capable of two or more inferences, as in this case, such that one of which is
consistent with the presumption of innocence and the other is compatible with guilt, the presumption of
innocence must prevail and the court must acquit.34
It is truly distressing how courtsare constrained to make acquittals, dismissals, or reversals by reason of
the inadvertent failure of the arresting officers and the prosecution to establish compliance or justify
noncompliance with a statutory procedure. It is even more troubling when those cases involve
apparently known or long-suspected drug pushers. Congress was clear in its declaration on the
eradication of the drug menace plaguing our country. Yet, also firm and stringent is its mandate to
observe the legal safeguards provided for under Republic Act No. 9165. This is the reason why this
Court has emphasized countless times that courts must remain vigilant in their disposition of cases
related to dangerous drugs. Also, this Court has already called on the police, the Philippine Drug
Enforcement Agency, and the prosecution to reinforce and review the conduct of buy-bust operations
and the presentation of evidence.35
All told, the prosecution failed to establish the element of corpus delicti with the prescribed degree of
proof required for successful prosecution of both sale and possession of prohibited drugs, thus, no valid
conviction for the crimes charged can result.
WHEREFORE, the assailed Decision of the Court of Appeals dated 17 March 2011 in CA-G.R. CEB-
CR HC. No. 000867, is hereby REVERSED and SET ASIDE. Appellant CHARVE JOHN LAGAHIT
is hereby ACQUITTED based on reasonable doubt, and is ordered to be immediately RELEASED
from detention, unless he is confined for any other lawful cause.
Let a copy of this Decision be furnished the Director of the Bureau or Corrections, Muntinlupa City,
for immediate implementation. The Director of the Bureau of Corrections is directed to report to this
Court within five (5) days from receipt of this Decision the action he has taken. Copies shall also be
furnished the Director General, Philippine National Police, and the Director General, Philippine Drug
Enforcement Agency, for their information.
SO ORDERED.
G.R. No. 190175, November 12, 2014 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v.
EDWIN CABRERA, Accused-Appellant.
SECOND DIVISION
G.R. No. 190175, November 12, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. EDWIN CABRERA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
Assailed in this appeal is the June 18, 2009 Decision1 of the Court of Appeals (CA) in CA-G.R. CEB-
CR-H.C. No. 00784 which affirmed in all respects the March 5, 2007 Decision2 of the Regional Trial
Court (RTC), Branch 15, Cebu City in Criminal Case No. CBU-64615, finding appellant Edwin
Cabrera (appellant) guilty beyond reasonable doubt of violation of Section 5, Article II of Republic Act
No. 91653 (RA 9165) and sentencing him tp suffer the penalty of life imprisonment and to pay a fine of
P500,000.00.
Factual Antecedents
After receiving information from residents of Sitio Galaxy, Tangke, Talisay, Cebu and a report from a
confidential asset of the illegal drug activities of appellant, police officers from the Talisay Police
Station composed of PO1 Leopoldo Palconit (PO1 Palconit), PO3 Isaias Cabuenas, and PO2 Joel
Cunan conducted a buy-bust operation against appellant on September 30, 2002. At about 4:30 p.m.,
poseur-buyer POl Palconit, together with the confidential asset, approached appellant who was
standing outside his house. The confidential asset introduced PO1 Palconit to appellant as a person
who wanted to buy shabu. PO1 Palconit gave appellant two marked P50.00 bills, while the latter
handed to him two plastic sachets containing white crystalline substance. Thereupon, PO1 Palconit
made the pre-arranged signal by touching his head with his right hand. His back-ups then rushed to the
scene and simultaneously therewith PO1 Palconit arrested the appellant. He then put the markings
"EC" on the two plastic sachets and brought the same to the Philippine National Police (PNP) Crime
Laboratory for forensic examination.4
The following day or on October 1, 2002, a Complaint/Information was filed against appellant
charging him with violation of Sec. 5, Article II, of RA 9165 as amended, the pertinent portion of
which reads:chanroblesvirtuallawlibrary
That on or about 4:30 P.M. of September 30, 2002, at Tangke, Talisay City, Cebu, Police Operatives of
Talisay City Police Station proceeded to Tangke, Talisay City, Cebu to conduct buy[-]bust operation
[resulting in] the arrest of one (1) Edwin Cabrera and within the jurisdiction of this Honorable Court,
the above[-]named accused without the authority of the law, did then and there, willfully, unlawfully
and feloniously, [recover] from [his] possession, custody and control, [t]wo (2) x x x plastic pack[s] of
white crystalline substance believed to be shabu, other paraphernalia in [his] illegal activity and [t]wo
[f|ifty[-p]eso [b]ill[s] used as mark[ed] money with [the markings] SN.WD565189 and VH234189
(Recovered White [Crystalline] Substance submitted to Crime Lab. [f]or examination.
CONTRARY TO LAW.5
The chemistry report6 from the PNP Crime Laboratory later revealed that the white crystalline
substance with a total weight of 0.11 gram inside the two plastic sachets marked with "EC" tested
positive for methylamphetamine hydrochloride or shabu, a dangerous drug.
Appellant pleaded "not guilty" to the crime charged.7 He denied the accusations against him and
offered his own version of the story. According to appellant, at around 4:30 p.m. of September 30,
2002, he was at the alley outside his house washing clothes. Three men then approached him. They
requested him to buy shabu and gave P200.00. He acceded and thus went to the house of a certain Rey
Campo (Campo) which is about 50 meters or six houses away from his house. After
buying shabu from Campo, he went back to his house to give it to the three men. Thereupon, four
policemen arrived and searched his house, but recovered nothing therefrom. Appellant claimed that he
was familiar with one of the policemen, PO1 Palconit, because he would see him conducting raids in
Sitio Galaxy. Appellant thus averred that he would never sell shabu to PO1 Palconit because he knew
that he is a police officer.8
Ruling of the Regional Trial Court
In a Decision9 dated March 5, 2007, the RTC convicted appellant of the crime
charged, viz:chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing, this Court hereby finds accused Edwin Cabrera GUILTY
beyond reasonable doubt for violation of Section 5, Article II of R.A. 9165 and in the absence of any
mitigating and aggravating circumstances, he is hereby sentenced to suffer the penalty of LIFE
IMPRISONMENT and to pay a FINE of FIVE HUNDRED THOUSAND (P500,000.00) PESOS,
together with all the accessory penalties provided for by law. The physical evidence is hereby forfeited
in favor of the government to be disposed of in accordance with law.
SO ORDERED.10chanrobleslaw
Ruling of the Court of Appeals
On appeal to the CA, appellant questioned the legality of the alleged buy-bust operation. He pointed to
the absence of a prior surveillance and pre-operation report. He likewise assailed the non-presentation
in court of the confidential informant and of the marked money. Moreover, he alleged a break in the
chain of custody by emphasizing that the confiscation of the specimen happened at 4:30 p.m. of
September 30, 2002 while the submission of the same to the PNP Crime Laboratory for examination
was made only at 10:50 p.m. of the same day. Because of these, appellant averred that his guilt was not
proven beyond reasonable doubt.11
In its Decision12 dated June 18, 2009, the CA held that the testimony of PO1 Palconit and the existence
of the dangerous drug seized from appellant more than sufficiently proved the crime charged. PO1
Palconit positively identified appellant as the person who sold to him the plastic sachets containing the
white crystalline substance which was confirmed in the laboratory examination as shabu and later
brought to and identified in court.
The appellate court likewise upheld the legality of the buy-bust operation. It ratiocinated that prior
surveillance is not required in a buy-bust operation especially where the police operatives are
accompanied by their informant during the entrapment, as in this case. Neither is the submission of a
pre-operation report necessary for a conviction under Section 5, Article II of RA 9165 as long as the
elements of the offense are sufficiently established by the prosecution. Further, there is no need to
present in court the confidential informant and the marked money. Presentation of the confidential
informant is only required when there are material inconsistencies in the testimony of the prosecution
witness which is not the case here, since PO1 Palconit's testimony was found by the trial court to be
credible and convincing. In the same way, presentation of the marked money is not required either by
law or jurisprudence.
The CA did not likewise give credence to appellant's claim of gap in the chain of custody as it found
the identity and integrity of the drugs to have been established and preserved by the prosecution.
Besides, the defense admitted the existence, due execution and genuineness of the chemistry report and
the specimen submitted.
The dispositive portion of the CA Decision reads:chanroblesvirtuallawlibrary
WHEREFORE, the Decision dated March 5, 2007 of the Regional Trial Court ("RTC"), 7th Judicial
Region, Branch 15, Cebu City, in Criminal Case No. CBU-64615, finding appellant Edwin Cabrera
guilty beyond reasonable doubt of violation of Section 5, Article II of Republic Act No. 9165 is
AFFIRMED in all respects.
SO ORDERED.13
Appellant thus interposes this appeal where he raised as additional assignment of errors the lack of
physical inventory of the seized specimen and the non-taking of its photograph pursuant to Section
2114 of the Implementing Rules of RA9165.15ChanRoblesVirtualawlibrary
Our Ruling
The appeal has no merit.
The Court has gone over the assailed Decision of the CA and found the appellate court's resolution on
the issues raised, as well as its conclusions, to be in order. Hence, the Court finds no need to dwell on
them again.
With regard to the non-compliance by the police officers with Section 21 of the Implementing Rules of
RA 9165 as alleged by appellant in his Supplemental Brief, particularly the lack of physical inventory
of the seized specimen and the non-taking of photograph thereof, the Court notes that appellant raised
the same only in this appeal. The records of the case is bereft of any showing that appellant objected
before the RTC regarding the seizure and safekeeping of the shabu seized from him on account of the
failure of the police officers to maintain an unbroken chain of custody of the said drugs. The only time
that appellant questioned the chain of custody was before the CA but not on the ground of lack of
physical inventory or non-taking of photograph, but on the alleged gap between the time of
confiscation of the specimen and the time of its submission to the PNP Crime Laboratory. But even
then, it was already too late in the day for appellant to do so. Appellant should have raised the said
issue before the trial court.16 In similar cases, the Court brushed aside the accused's belated contention
that the illegal drugs confiscated from his person were inadmissible because the arresting officers
failed to comply with Section 21 of RA 9165.17 "Whatever justifiable grounds may excuse the police
officers from literally complying with Section 21 will remain unknown, because [appellant] did not
question during trial the safekeeping of the items seized from him. Objection to evidence cannot be
raised for the first time on appeal; when a party desires the court to reject the evidence offered, he must
so state in the form of an objection. Without such objection, he cannot raise the question for the first
time on appeal.18 Besides and as already mentioned, the CA had already aptly concluded that the
identity of the seized drugs was established by the prosecution and its integrity
preserved, viz:chanroblesvirtuallawlibrary
Record show[s] that after the arrest, PO1 Palconit immediately marked the sachets of shabu with
[appellant's] initials, requested a laboratory examination of the confiscated substance and himself
brought the sachets of shabu on the same day to the PNP Regional Crime Laboratory. Thus, the
identity of the drugs had been duly preserved and established by the prosecution. Besides, the integrity
of the evidence is presumed to be preserved unless there is a showing of bad faith, ill will or proof that
the evidence has been tampered with. [Appellant] bears the burden to make some showing that the
evidence was tampered or meddled with to overcome a presumption of regularity in the handling of
exhibits by public officers and a presumption that public officers properly discharged their duties. This
is also bolstered by the defense's admission of the existence, due execution and genuineness of the
request for laboratory examination, the Chemistry Report and specimens submitted.19
Thus, the Court upholds appellant's conviction for violation of Section 5, Article II of RA 9165 as well
as the penalty imposed upon him. It must, however, be added that appellant is not eligible for parole. 20
WHEREFORE, the appeal is DISMISSED. The assailed June 18, 2009 Decision of the Court of
Appeals in CA-G.R. CEB-CR-H.C. No. 00784 is AFFIRMED with the MODIFICATION that
appellant Edwin Cabrera is not eligible for parole.
SO ORDERED.
G.R. No. 193385               December 1, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
DATSGANDAWALI y GAPAS and NOL PAGALAD y ANAS, Accused-Appellants.
RESOLUTION
DEL CASTILLO, J.:
For final review is the June 21, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
03736, which affirmed the November 18, 2008 Decision2 of the Regional Trial Court (RTC), Branch
82 of Quezon City in Criminal Case No. Q-03-118597 finding appellants Dats Gandawali y Gapas
(Gandawali) and Nol Pagalad3 y Anas (Pagalad) guilty beyond reasonable doubt of Violation of
Section 5, Article II of Republic Act No. 9165 (RA 9165) or the Comprehensive Dangerous Drugs Act
of 2002.
Factual Antecedents
On July 3, 2003, an Information4 for Violation of Section Article II of RA 9165 was filed against
Gandawali and Pagalad, viz:
That on or about the 30th day of June 2003, in Quezon City, Philippines, the said accused, conspiring
together, confederating with and mutually helping each other, not being authorized by law tosell,
dispense, deliver[,] transport, or distribute any dangerous drug, did then and there, willfully and
unlawfully sell, dispense, deliver, transport, distribute or act as broker inthe said transaction, zero point
twenty four (0.24) gram of white crystalline substance containing methylamphetamine hydrochloride[,]
a dangerous drug.
CONTRARY TO LAW.5
When arraigned on September 3,2003, both Gandawali and Pagalad pleaded "not guilty"6 to the charge.
Pre-trial and trial ensued.
Version of the Prosecution
On June 30, 2003, a confidential informant informed the Baler Police Station 2 that a possible drug
deal would take place at the corner of Sto. Niño St. and Roosevelt Avenue, San Francisco Del Monte,
Quezon City. A buy-bust team was thereupon created composed of P/Insp. Joseph de Vera (P/Insp.
DeVera), as team leader; PO2 Sofjan Soriano (PO2 Soriano), as the poseur-buyer who was given a
₱500.00 bill as buy-bust money; and PO1 Alvin Pineda (PO1 Pineda), PO1 Ernesto Sarangaya (PO1
Sarangaya), PO2 John John Sapad (PO2 Sapad), and PO2 Eric Jorgensen (PO2Jorgensen), as
members.
The team along with the informant proceeded to the target area and arrived there at at around 1:30 p.m.
In accordance with the plan, PO2 Soriano and the informant approached Gandawali and Pagalad, while
the rest of the team positioned themselves strategically. The informant introduced PO2 Soriano to
appellants as a drug dependent who wanted to buy shabuworth ₱500.00. As Pagalad first asked for
payment, PO2 Soriano gave the ₱500.00 billto Gandawali. Gandawali, in turn, gavethe money to
Pagalad who took a small heat-sealed transparent plastic sachet from his pocket. Pagalad gave the
plastic sachet containing white crystalline substance to Gandawali, who then handed the same to PO2
Soriano. Thereupon, PO2 Soriano signaled to his team members by taking off his cap. He then arrested
appellants together with PO1 Sarangaya, and the latter recovered from Pagalad the ₱500.00 bill used as
buy-bust money. Appellants were thereafter brought to the Baler Police Station 2.
PO2 Soriano marked the plastic sachetwith the initials "ES-6-30-03" (the initials of PO1 Sarangaya)
and together with the ₱500.00 bill, turned them over to the desk officer for proper disposition.
Thereafter, P/Insp. De Vera prepared a Request for Laboratory Examination.7 On the same day, PO2
Soriano and the other team members submitted the plastic sachet to P/Insp. Bernardino M. Banac, Jr.
(P/Insp. Banac) at the Central Police District Crime Laboratory Office where a qualitative examination
of its contents was made. The specimen, as found by P/Insp. Banac, tested positive for
methylamphetamine hydrochloride or shabu, a dangerous drug.8 Version of the Defense
Appellants denied the accusation against them and claimed extortion. Their version of the incident is as
follows:
At about 6:35 a.m. of June 30, 2003,while waiting for a bus at Litex, Fairview, Quezon City, Pagalad
was arrested for unknown reason by PO1 Sarangaya. When questioned, he told the arresting officer
that he has a companion Gandawali, who was likewise later arrested. Both were then brought to Police
Station 2 at Baler, Quezon City where PO1 Sarangaya demanded from them ₱15,000.00 in exchange
for their release. Unfortunately, they were unable to produce the money, hence,their incarceration.
Gandawali and Pagalad explained that despite their wrongful apprehension and the police’s act of
extortion, they did not file any case against them because they were afraid and were also unfamiliar
with the procedures in filing a case.
Ruling of the Regional Trial Court
Finding sufficient evidenceto sustain a finding of guilt, the RTC convicted appellants through a
Decision9 dated November 18, 2008, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered finding accused DATS
GANDAWALI y GAPAS and NOL PAGALAD y ANAS guilty beyond reasonable doubt of x x x
violation of Section 5, Article II of R.A. 9165. Accordingly, they are hereby sentencedto suffer the
penalty of LIFE IMPRISONMENT and each to pay a fine in the amount of Five Hundred Thousand
(₱500,000.00) Pesos.
xxxx
SO ORDERED.10
Ruling of the Court of Appeals
On appeal, the CA found no reason to overturn appellants’ conviction.
Thus, the dispositive portion ofits June 21, 2010 Decision11 reads:
WHEREFORE, premises considered, the judgment promulgated by Branch 82, Regional Trial Court of
Quezon City, inCriminal Case No. Q-03-118597 is hereby AFFIRMED in toto.
SO ORDERED.12
Issues
Appellants argue that all the elements of the offense charged were not proven and that the police
officers failed to preserve the integrity and evidentiary value of the seized item.
The Court's Ruling
The appeal lacks merit.
All the elements of the offense charged were duly established by the prosecution.
The essential requirements for a successful prosecution of illegal sale of dangerous drugs, such as
shabuare: "(1) the identity ofthe buyer and the seller, the object and consideration ofthe sale; and (2)
the delivery of the thing sold and the payment therefor."13 Equally settled is the rule that "[t]he delivery
of the illicit drug to the poseur-buyer and the receipt by the seller of the marked money successfully
consummate the buy-bust transaction."14 Here, the Court is satisfied that the prosecution discharged its
burden of establishing all the aforesaid elements. The prosecution positively identified appellants as
the sellers of the seized substance which was later found to be positive for methamphetamine
hydrochloride, a dangerous drug. Appellants sold the drug to PO2 Soriano, the police officer who acted
asthe poseur-buyer, and received from the latter the ₱500.00 buy-bust money aspayment therefor.
Appellants’ contention that the consideration of the sale was not established since the buy-bust money
was notpresented as evidence is unavailing. Suffice it to say that "[n]either law nor jurisprudence
requires the presentation of any of the money used in a buy-bust operation x x x."15 "It is sufficient to
show that the illicit transaction did take place, coupled with the presentation in court of the corpus
delictiin evidence. These weredone, and were proved by the prosecution’s evidence." 16
The integrity and evidentiary value of the dangerous drug seized from appellants were duly proven by
the prosecution to have been properly preserved; its identity, quantity and quality remained
untarnished.
Appellants persistently argue that the prosecution failed to establish with moral certainty the identity of
the substance seized and the preservation of its integrity. They assert that the apprehending officers
failed to observe the procedures for the custody and disposition of the seized drug as laid down in
Section 21(1), Article II of RA 9165, particularly the conduct of physical inventory and taking of
photograph of the seized item.
The Court finds appellants’ contentions unconvincing.
Section 21(1),17 Article II of RA 9165 clearlyoutlines the post-seizure procedure for the custody and
disposition of seized drugs. The law mandates that the officer taking initial custody of the drug shall,
immediately after seizure and confiscation, conduct the physical inventory of the same and take a
photograph thereof in the presence of the accused or the person/s from whom such items were
confiscated and/or seized or his/her representative or counsel, a representative from the media and the
Department of Justice (DOJ),and any elected public official, who shall be required to sign the copies of
the inventory and be given a copy thereof. The explicit directive of the above statutory provision
notwithstanding, the Implementing Rules and Regulations of the said law provide a saving clause
whenever the procedures laid down in the law are not strictly complied with, to wit:
x x x Provided, further, that non-compliance with these requirements under justifiable grounds, as long
as the integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody over said
items.18
Thus, gleaned from a plain reading of the implementing rules, the most important factor is the
preservation of the integrity and the evidentiary value of the seized items as they will be used to
determine the guilt orinnocence of the accused.19 As long as the evidentiary value and integrity of the
illegal drug are properly preserved, strict compliance of the requisites under Section 21 of RA 9165
may be disregarded.20
In this case, while it was admitted by PO1 Sarangaya that no physical inventory of the seized item was
madeand no photograph thereof was taken as mandated by law, and also while the reason given for
such failure appears to be unsatisfactory, i.e., PO1 Sarangaya was not familiar with Section 21, Article
II of RA 9165 since the said law was just then newly implemented,21 it was nonetheless shown that the
integrity and evidentiary value of the seized item had been preserved and kept intact. The crucial links
in the chain of custody of the seized drug subject matter of the case, from the time Gandawali handed it
to the poseurbuyer up to its presentation as evidence in court, were duly accounted for and shown to
have not been broken.
To recap, the prosecution established that after the seizure of the small plastic sachet containing white
crystalline substance and of the buy-bust money from appellants’ possession, PO2 Soriano marked the
sachet with "ES 6-30-03," the initials of PO1 Sarangaya. The police officers thereafter took appellants
and the recovered items to the desk officer who investigated the case. After the investigation, a request
for laboratory examination was prepared by P/Insp. De Vera. On the same day, the confiscated small
plastic sachet bearing the same marking, "ES-06-30-03," and the request were thereupon brought by
PO2 Sapad, a member of the team, together with PO2 Soriano and some others to the Central Police
District Crime Laboratory Office and were received by P/Insp. Banac for examination. P/Insp. Banac
conducted a laboratory examination of the 0.24 gram of white crystalline substance found inside the
plastic sachet marked with "ES-06-30-03," which per Chemistry Report No. D-555-03 tested positive
for methylamphetamine hydrochloride. During trial, and based on the marking he placed, PO2 Soriano
identified the seized item as the very same sachet containing shabuthat he bought and recovered from
appellants. He also identified appellants to be the same persons who sold the shabu to him. Moreover,
as gleaned from the Pre-Trial Order, P/Insp. Banac, the chemist, brought the specimen himself to the
court during the scheduled hearing.
Following the above sequence of events, the Court entertains no doubt that the sachet containing white
crystalline substance sold by appellants to the poseurbuyer was the same one marked with "ES-06-30-
03," which was submitted for laboratory examination, found positive for shabu,and later presented to
the court during the trial as the corpus delicti. Contrary therefore to appellants’ claim, "the totality of
evidence presented by the prosecution leads to an unbroken chain of custody of the confiscated item
from [appellants]. Though there were deviations from the required procedure, i.e., making physical
inventory and taking of photograph of the seized item, still, the integrity and evidentiary value of the
dangerous drug seized from [appellants] were duly proven by the prosecution to have been properly
preserved; its identity, quantity and quality remained untarnished." 22
Appellants’ defense of extortion and/or frame-up must fail.
"The defense of extortion and/or frame up is often put up in drug cases in order to cast doubt on the
credibility of police officers. This is a serious imputation of a crime hence clear and convincing
evidencemust be presented to support the same. There must also be a showing that the police officers
were inspired by improper motive."23 In this case, appellants claim that PO1 Sarangaya tried to extort
from them ₱15,000.00 in exchange for their release after they were arrested. However, they failed to
substantiate this allegation with clear and convincing evidence.1âwphi1 Neither were they able to
show that the said police officer was impelled by improper motive in imputing the offense against
them. Consequently, appellants’ defense of extortion and/or frame-up must fail.
Conspiracy between appellants in the sale of illegal drug was likewise duly established by the
prosecution.
In line with the principle that an appeal in a criminal case throws wide open the whole case for review
whether raised as an issue or not, the Court finds it imperative to make a brief discussion on the
conspiracy angle of this case considering that the courts below failed to pass uponthe same.
"To establish the existence of conspiracy, direct proof is not essential. Conspiracy may be inferred
from the acts of the accused before, during and after the commission of the crime which indubitably
point to and are indicative of a joint purpose, concert of action and community of interest."24 The series
of overt acts as recounted by the prosecution witnesses unmistakably show that appellants were in
concert and shared a common interest in selling the shabu. Thus, when P02 Soriano gave the ₱500.00
bill to Gandawali, the latter handed the money to Pagalad; when Pagalad took a small heat-sealed
transparent plastic sachet from his pocket, he gave it to Gandawali who, in tum, gave the same to P02
Soriano; and when P02 Soriano announced their arrest, both appellants tried to escape. Clearly, there
was conspiracy between them to sell and deliver a dangerous drug. In view thereof, they are liable as
co-principals regardless of their participation in the commission of the offense.
Appellants are not eligible for parole.
The Court agrees with the penalty of life imprisonment and payment of fine of ₱500,000.00 imposed
by the lower courts upon appellants. It must be emphasized, however, that appellants are not eligible
for parole.25
WHEREFORE, the June 21, 2010 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 03736 is
AFFIRMED with the MODIFICATION that appellants DATS GANDAWALI y GAPAS and NOL
PAGALAD y ANAS shall not be eligible for parole.
SO ORDERED.
MARIANO C. DEL CASTILLO
G.R. No. 193670               December 3, 2014
PEOPLE OF THE PHILIPPINES, Plaintiff Appellee,
vs.
VENERANDO DELA CRUZ y SEBASTIAN, Accused-Appellant.
DECISION
DEL CASTILLO, J.:
Assailed in this appeal is the June 25, 2010 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-
H.C. No. 01025 that affirmed the March 15, 2005 Judgment2 of the Regional Trial Court (RTC) of
Naga City, Branch 28, in Criminal Case No. RTC'03-0289 convicting Venerando Dela Cruz y
Sebastian (appellant) of Violation of Section 5, Article II of Republic Act No. 9165 (RA 9165) or the
Comprehensive Dangerous Drugs Act of 2002.
Factual Antecedents
On July 25, 2003, police asset Warren Ebio (Ebio) received information from another asset that he
could purchase shabu by calling a certain person. He thus called the said person through cellular phone
and agreed to meet with him in front of the barangay hall of Lerma, Naga City. Accordingly, a pre-
operation plan to entrap the alleged seller was immediately drawn up in coordination with the
Philippine Drug Enforcement Agency. SPO1 Ruben Antonio (SPO1 Antonio), SPO1 Cornelio Morano
(SPO1 Morano), PO3 Raul Bongon (PO3 Bongon) and SPO3Julio Tuason (SPO3 Tuason) then formed
themselves into a buy-bust team. Ebio was designated as the poseur-buyer and was given three
₱500.00 bills as buy-bust money, while PO3 Bongon was tasked to apprehend the seller after the
consummation of the transaction. Upon their arrival at the designated area, Ebio, SPO3 Tuason and
SPO1 Morano alighted from their vehicle. Ebio proceeded towards the meeting place while the other
two positioned themselves nearby. A few minutes later, a man riding a motorcycle arrived. The buy-
bust team recognized him asthe seller based on his attire as described by him to Ebio. Ebio introduced
himself asthe buyer. When the man asked for payment, he gave him the buy-bust money. The man then
took out two transparent plastic sachets containing white crystalline substance from his right pocket
and gave them to Ebio. Thereupon, Ebio took off his hat, the pre-arranged signal that the transaction
was already consummated. Immediately, PO3 Bongon, SPO1 Morano and SPO1 Antonio rushed
towards the man and apprehended him. They recovered from him the buy-bust money and another
plastic sachet containing white crystalline substance. Immediately after Ebio turned over to him the
two sachets subject of the sale, PO3 Bongon marked the same with "RSB-1" and "RSB-2." On the
other hand, he marked the third sachet recovered from the seller after he conducted a search on him
with "RSB-3." PO3 Bongon thereafter turned over these seized items together with the marked money
to SPO1 Antonio for proper disposition. A police investigation followed where the person arrested was
identified as the appellant. Afterwards, SPO1 Antonio brought the sachets to the Philippine National
Police Crime Laboratory for examination, during which Forensic Chemist Josephine Macura Clemen
(Clemen) found their contents positive for shabu.Thus, an Information3 for Violation of Section 5,
Article II of RA 9165 was filed against appellant.
Appellant denied the accusation against him and claimed that he was merely a victim of frame-up. In
his version of the incident, appellant alleged that he was riding his motorcycle towards the Panganiban
Bridge near the Barangay Hall of Lerma, Naga City in the evening of July 25, 2003. He was going to
his parents’ house located in the boundary of Lerma and Triangulo Streets to inform them that he and
his family would leave early morning of the next day for Camarines Sur to attend the wake of his
father-in-law who died a few days earlier. As he was descending the bridge, however, two individuals
grabbed his hands. A police officer then suddenly came out ofa car and told him to get off his
motorcycle. PO3 Bongon frisked him and took his cellphone and telephone directory that contained
money. After that, he was madeto board a mobile car and was brought to a police station. Thereat,
police officers threatened to charge him if he would not cooperate in the arrest of a certain "Habagat,"
who engaged his services as a computer technician. He did not accede since he knew nothing about the
case of "Habagat." Hence, the police officers instead filed a case against him.
In the RTC Judgment dated March 15, 2005, appellant was found guilty as charged and sentenced to
suffer the penalty of life imprisonmentwith a fine of ₱500,000.00. On appeal, the CA rendered its
Decision on June 25, 2010 affirming the said RTC Judgment.
Hence, this appeal.
The Issue
Appellant points out the following: (1) it was not made clear by the prosecution where the markings of
the three sachets of shabuwere made; and (2) the prosecution failed to show whether there was already
a clear understanding between appellant and the poseur-buyer with respect to the quantity of shabu
allegedly being purchased. In view of these, appellant asserts that the presumption of innocence in his
favor must be upheld.
The Court’s Ruling
The appeal lacks merit.
"In a prosecution for illegal sale of dangerous drugs, [such as shabu], the following elements must be
duly established: (1) the identity of the buyer and seller, the object, and the consideration, and (2) the
delivery of the thing sold and the payment therefor. The delivery of the illicit drug to the poseur-buyer
and the receipt by the seller of the marked money successfully consummate the buy-bust
transaction."4 Here, the prosecution submitted evidence that duly established the elements of illegal
sale of shabu. It positively identified appellant as the seller of the seized illegal substance which turned
out to be positive for methamphetamine hydrochloride commonly known as shabu, a dangerous drug.
Appellant sold and delivered the drug for ₱1,500.00 to Ebio, a police asset who acted as poseur-buyer.
Verily, all the elements of the sale of illegal drugs were established to support appellant’s conviction of
the said offense.
We cannot give credence to appellant’s argument that failure to mention the place where the three
plastic sachets of shabu were marked constitutes a gap in the chain of custody of evidence. Chain of
custody is "the duly recorded authorized movements and custody of seized drugs or controlled
chemicals or plant sources of dangerous drugs or laboratory equipment of each stage, from the time of
seizure/confiscation to receipt in the forensic laboratory to safekeeping to presentation in court for
destruction."5 It eliminates doubts concerning the proper preservation of the identity and integrity of
the corpus delicti or the shabu in this case. Marking of the seized shabuis the initial stage inthe chain of
custody in buy-bust operations. As requisites, the marking must be made in the presence of the
apprehended offender and upon immediate confiscation, and this contemplate seven marking at the
nearest police station or office of the apprehending team.6
In this case, Ebio turned over to PO3 Bongon the two sachets of shabusold to him by the appellant.
Together with another sachet of shabuhe recovered from appellant, PO3 Bongon immediately marked
each sachet with "RSB-1," "RSB-2" and "RSB-3," respectively, before giving them to SPO1 Antonio.
While it is true that the exact location where the markings were made was not mentioned, it can
reasonably be concluded that the same happened during appellant’s apprehension, in transit to the
police station or before the sachets were turned over to SPO1 Antonio in the police station. Upon
receipt, SPO1 Antonio then submitted the sachets to the crime laboratory. PO2 Henry Escalora, Sr.
received the three sachets and handed them to Forensic Chemist Clemen whose examination of the
contents thereof revealed that they were positive for shabu. During trial, Forensic Chemist Clemen
presented and identified the specimens. Clearly, the prosecution was able to establish the chain of
custody of the shabu from its possession by the police officers, testing in the laboratory to determine its
composition, until the same was presented as evidence in court. Hence, even if there was no statement
as to where the markings were made, what isimportant is that the seized specimen never left the
custody of PO3 Bongon until he turned over the same to SPO1 Antonio and that thereafter, the chain of
custody was shown to be unbroken.7 Indeed, the integrity and evidentiary value of the seized shabuis
shown to have been properly preserved and the crucial links in the chain of custody unbroken.
We also cannot give credence to appellant’s argument that the absence of relevant testimony on any
agreement between him and Ebio with respect to the quantity of shabu sought to be purchased casts
doubt on the existence of a legitimate buy-bust operation. The existence of the illegal sale of the
shabudoes not depend on an agreement about its quantity and price since the offense is consummated
after the exchange of the illegal drug for the marked money. Hence, Ebio’s testimony that appellant
asked for the money before handing over the shabu and that he received the sachets of shabuafter
giving appellant the ₱1,500.00, is by itself sufficient.
Anent appellant’s defense of frame-up, such is inherently weak and viewed with disfavor for it can be
easily concocted.8 For this defense to succeed, it must be proven with strong and convincing
evidence.9 Appellant failed in this regard.
In view of the foregoing discussion,we uphold appellant’s conviction of the offense charged. The
penalty for unauthorized sale of shabu under Section 5, Article II of RA 9165,10 regardless of its
quantity and purity,is life imprisonment to death and a fine ranging from ₱500,000.00 to
₱10,000,000.00. However, with the enactment of RA 9346,11 only life imprisonment and fine shall be
imposed. We therefore find the penalty of life imprisonment and payment of fine in the amount of
₱500,000.00 imposed by the RTC and affirmed by the CA to be proper. It must be emphasized,
however, that appellant shall not be eligible for parole.12
WHEREFORE, the Decision dated June 25, 2010 of the Court of Appeals in CA-G.R. CR-HC No.
01025, which affirmed the conviction of appellant Venerando Dela Cruz y Sebastian for Violation of
Section 5, Article II of Republic Act No. 9165 by the Regional Trial Court of Naga City, Branch 28 in
its March 15, 2005 Judgment, is AFFIRMED with the modification that appellant shall not be eligible
for parole.
SO ORDERED.
G.R. No. 202687               January 14, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,
vs.
JERIC PAVIA Y PALIZA @ "JERIC" AND JUAN BUENDIA Y DELOS REYES@
"JUNE", Accused-Appellants.
RESOLUTION
PEREZ, J.:
For resolution of the Court is the appeal filed by Jeric Pavia and Juan Buendia (appellants) from the
Decision1 of the Court of Appeals (CA) dated 7 February 2012 in CA-G.R. CR-H.C. No. 04020. The
CA affirmed the Judgment2 of the Regional Trial Court (RTC), Branch 31, San Pedro, Laguna which
found appellants guilty beyond reasonable doubt of the offense of illegal possession of dangerous
drugs punishable under Section 13, Article II of Republic Act (R.A.) No. 9165. Appellants were
sentenced to suffer the penalty of life imprisonment and to pay a fine of ₱500,000.00.
The Antecedents
On 29 March 2005, at around 6:00 in the evening, a confidential informant reported to SPO3 Melchor
delaPeña (SPO3 Dela Peña) of the San Pedro Municipal Police Station, San Pedro, Laguna, that a pot
session was taking place at the house of a certain "Obet" located at Barangay Cuyab, San Pedro,
Laguna. Upon receipt of the information, SPO3 Dela Peña formed a team to conduct police operations
against the suspect. The team was composed of the confidential informant, PO2 Rommel Bautista
(PO2 Bautista), PO3 Jay Parunggao (PO3 Parunggao), PO1 Jifford Signap and SPO3 Dela Peña as
team leader.3
At around 9:00 in the evening of the same date, the team proceeded to the target area. When the team
arrived, the members saw that Obet’s house was closed. Since the house was not surrounded by a
fence, PO2 Bautista approached the house and peeped through a small opening in a window where he
saw four persons in a circle having a pot session in the living room. PO3 Parunggao then tried to find a
way to enter the house and found an unlocked door. He entered the house,followed by PO2 Bautista
and they caught the four persons engaged in a pot session by surprise. After they introduced
themselves as police officers, they arrested the four suspects and seized the drug paraphernalia found at
the scene.4 Among those arrested were herein appellants, from each of whom a plastic sachet
containing white crystalline substance were confiscated by PO3 Parunggao after he conducted a body
search on their persons.5 PO3 Parunggao marked the plastic sachet he seized from appellant Pavia with
"JP," representing the initials of Jeric Pavia while that taken from appellant Buendia was marked, also
by PO3 Parunggao, with "JB," representing the initials of Juan Buendia.6 These plastic sachets were
transmitted tothe crime laboratory for qualitative examination where they tested positive for "shabu." 7
Consequently, appellants were charged with violation of Section 13, Article II of R.A. No. 9165 in two
separate but identically worded informations which read:
That on or about 29 March 2005, in the Municipality of San Pedro, Province of Laguna, Philippines,
and within the jurisdiction of this Honorable Court accused without authority of the law, did then and
there willfully, unlawfully and feloniously have in his possession, control and custody [of]
METHAMPHETAMINE HYDROCHLORIDE, commonly known as shabu, a dangerous drug,
weighing zero point zero two (0.02) gram, in the company of two persons.8 When arraigned, both
appellants pleaded not guilty to the offense.9
A joint trial of the cases ensued.
In defense, appellants provided a different version of the incident. According to them, on the
questioned date and time, they were roaming the streets of Baranggay Cuyab, selling star apples. A
prospective buyer of the fruits called them over to his house and requested them to go inside, to which
they acceded. Whenthey were about to leave the house, several persons who introduced themselves as
policemen arrived and invited appellants to go with them to the precinct. There, they were incarcerated
and falsely charged with violation of the Comprehensive Drugs Act of 2002.10
The Ruling of the RTC
The trial court found that the prosecution was able to prove the offense charged through the
spontaneous, positive and credible testimony of its witness. The trial court noted that the police officers
carried out a lawful arrest before they proceeded with the bodily search of appellants. Moreover, there
was no clear and convincing evidence that the team of PO3 Parunggao was inspired by any improper
motive whenthey carried out their operation. Thus, the testimony of PO2 Bautista on the witness stand,
narrating the events leading to the apprehension of appellants, deserves full faith and credit. 11
The Ruling of the Court of Appeals
On appeal, the CA affirmed the decision of the RTC, upon a finding that the evidence on record
support the trial court’s conclusion that a lawful arrest, search and seizure took place, and that the
prosecution fully discharged its burden of establishing, beyond reasonable doubt, all the elements
necessary for the conviction of the offense charged. 12
On the contention of appellants that their warrantless arrest was illegal and, therefore, the items seized
from them as a result of that arrest were inadmissible in evidence against them, the CA held that this
argument totally lacks merit. According to the CA:
We stress at the outset that the [appellants] failed to question the legality of their warrantless arrest.
The established rule is that an accused [is] estopped from assailing the legality of [his] arrest if [he]
failed to move for the quashing of the Information against [him] before [his] arraignment. Any
objection involving the arrest or the procedure in the court’s acquisition of jurisdiction overthe person
of an accused must be made before [he] enter[s] [his] plea; otherwise, the objection is deemed waived.
In any event, we carefully examined the records and now hold that the warrantless arrests conducted on
[appellants] were valid. Section 5, Rule 113 of the Rules on Criminal Procedure lists the situations
when a person may be arrested without a warrant x x x.
xxxx
Paragraph (a) of Section 5 is commonly known as an in flagrante delicto arrest. For a warrantless arrest
of an accused caught in flagrante delictoto be valid, two requisites must concur: (1) the person to be
arrested must execute an overt act indicating that he has just committed, is actually committing, or is
attempting to commit a crime; and (2) such overt act is done in the presence or within the view of the
arresting officer.
After a careful evaluation of the evidence in its totality, we hold that the prosecution successfully
established that the petitioner was arrested in flagrante delicto.
We emphasize that the series of events that led the police to the house where the pot session was
conducted and to their arrest were triggered by a "tip" from a concerned citizen that a "pot session" was
in progress at the house of a certain "Obet" at Baranggay Cuyab, San Pedro, Laguna. Under the
circumstances, the police did not have enough time to secure a search warrant considering the "time
element" involved in the process (i.e., a pot session may not bean extended period of time and it was
then 9:00 p.m.). In view of the urgency, SPO3 Melchor dela Peña immediately dispatched his men to
proceed to the identified place to verify the report. At the place, the responding police officers verified
through a small opening in the window and saw the accused-appellants and their other two (2)
companions sniffing "shabu" to use the words of PO2 Bautista. There was therefore sufficient probable
cause for the police officers to believe that the accused-appellants were then and there committing a
crime. As it turned out, the accused-appellants indeed possessed and were even using a prohibited
drug, contrary to law. When an accused is caught in flagrante delicto, the police officers are not only
authorized but are duty-bound to arrest him even without a warrant.
In the course of the arrest and in accordance with police procedures, the [appellants] were frisked,
which search yielded the prohibited drug in their possession. These circumstances were sufficient to
justify the warrantless search x x x thatyielded two (2) heat-sealed plastic sachets of "shabu." x x x
xxxx
All the x x x requirements for a lawful search and seizure are present in this case. The police officers
had prior justification to be at a certain "Obet’s" place as they were dispatched by their desk officer;
they arrested the [appellants] as they had reason to believe that they were illegally using and
possessing a prohibited drug and drug paraphernalia. The search of the [appellants] incident to their
arrest yielded the confiscated crystalline substance which later proved to be "shabu". In the course of
their lawful intrusion, they inadvertently saw the various drug paraphernalia scattered in the living
room. As these items were plainly visible, the police officers were justified in seizing them.
xxxx
As correctly found by the trial court, the [appellants'] story is unworthy of belief. Their denial mustfail
in the light of the positive identification and declarations made by the prosecution witness. As stated
earlier, PO2 Bautista testified in a straightforward and categorical manner regarding the identities of
the malefactors. He did not waver despite the defense counsel's rigid questioning.
Courts generally view the defense of denial with disfavor due to the facility with which anaccused can
concoct it to suit his or her defense. As evidence that is both negative and self-serving, this defense
cannot attain more credibility than the testimony of the prosecution witness who testified clearly,
providing thereby positive evidence on the various aspects of the crime committed. One such positive
evidence is the result of the laboratory examination conducted by the PNP crime Laboratory on the
drugs recovered from the [appellants] which revealed that the confiscated plastic sachets tested positive
for the presence of "shabu": two (2) heated transparent plastic sachet with markings "JB" and "JP"
containing 0.02 gram of white crystalline substance each both yielded positive results.13
With respect to appellants’ claim that the prosecution failed to establish the chain of custody because
the police operatives failed to strictly comply with Section 21 (1) of R.A. No. 9165, the CA has this to
say:
The chain of custody rule requires that the admission of an exhibit be preceded by evidence sufficient
to support a finding that the matter in question is what the proponent claims it to be.
Contrary to what the [appellants] want to portray, the chain of custody of the seized prohibited drug
was shown not to have been broken. After the seizure of the plastic sachets containing white crystalline
substance from the [appellants'] possession and of the various drug paraphernalia in the living room,
the police immediately brought the [appellants] to the police station, together with the seized items.
PO3 Parunggao himself brought these items to the police station and marked them. The plastic sachets
containing white crystalline substance was marked "JB" and "JP". These confiscated items were
immediately turned over by PO2 Bautista to the PNP Regional Crime Laboratory Office Calabarzon,
Camp Vicente Lim, Calamba City for examination to determine the presence of dangerous drugs. After
a qualitative examination conducted on the specimens, Forensic Chemist Lorna Ravelas Tria
concluded that the plastic sachets recovered from the accused-appellants tested positive for
methylamphetamine hydrochloride, a prohibited drug, per Chemistry Report Nos. D-0381-05 and D-
0382-05.
When the prosecution presented these marked specimens in court, PO2 Baustista positively identified
them to be the same items they seized from the [appellants] and which PO3 Parunggao later marked at
the police station, from where the seized items were turned over to the laboratory for examination
based on a duly prepared request.
Thus, the prosecution established the crucial link in the chain of custody of the seized items from the
time they were first discovered until they were brought for examination. Besides, as earlier stated, the
[appellants] did not contest the admissibility of the seized items during the tria1. The integrity and the
evidentiary value of the drugs seized from the accused-appellants were therefore duly proven not to
have been compromised.
Jurisprudence teems with pronouncements that failure to strictly comply, with Section 2l (1), Article II
of R.A. No. 9165 does not necessarily render an accused's arrestillegal or the items seized or
confiscated from him inadmissible. What is of utmost importance is the preservation of the integrity
and the evidentiary value of the seized items, as these would be utilized in the determination of the
guilt or innocence of the accused. In the present case, we see substantial compliance by the police with
the required procedure on the custody and control of the confiscated items, thus showing that the
integrity of the seized evidence was not compromised. We refer particularly to the succession of events
established by evidence, to the overall handling of the seized items by specified individuals, to the test
results obtained, under a situation where no objection to admissibility was ever raised by the defense.
All these, to the unprejudiced mind, show that the evidence seized were the same evidence tested and
subsequently identified and testified to in court.14 x x x
Our Ruling
We deny the appeal.
Appellants are charged under Section 13, Article II of R.A. No. 9165, which provides:
Section 13. Possession of Dangerous Drugs During Parties, Social Gatherings or Meetings. –Any
person found possessing any dangerous drug during a party, or at a social gathering or meeting, or in
the proximate company of at least two (2) persons, shall suffer the maximum penalties provided for in
Section 11 of this Act, regardless of the quantity and purity of such dangerous drugs.
The elements for the illegal possession of dangerous drugs under Section 13 of R.A. No. 9165 are the
same as those for the violation of Section 11 of the law: (1) possession bythe accused of an item or
object identified to be a prohibited or dangerous drug; (2) such possession is not authorized by law; (3)
the free and conscious possession of the drug by the accused,15 with the additional element that (4) the
accused possessed the prohibited or dangerous drug during a social gathering or meeting, or in the
company of at least two persons.
As correctly found by the CA, the evidence for the prosecution showed the presence of all these
elements. The testimony of PO2 Bautista on this point is determinative:
q. When you said PO3 Parunggao saw that the door of the house was not locked, what did you
do?
a. He entered the house and we followed him, maam [sic].
xxxx
q. In what part of the house where [sic] this [sic] people engaged in a pot session?
a. At the sala, maam [sic].
q. And what was their reaction when PO3 Parunggao and the rest of the team barged in?
a. They were surprised, maam [sic].
xxxx
q. And what did you do after that?
a. PO3 Parunggao introduced ourselves as police officers, maam [sic].
q. What happened after that?
a. We confiscated the drug paraphernalias [sic] and then PO3 Parunggao conducted body
search and was able to confiscate shabu from the two of the people there maam [sic].
q. Where were you when PO3 Parunggao conducted a search?
a. I was behind him, maam [sic]. a. It was P03 Parunggao, maam [sic].
q. Did you see him conducting a search? q. I am showing to you a plastic sachet with white crystalline substance with markings JP,
a. Yes, maam [sic]. please identify the same?
q. What did you see him doing? a. This is the same item confiscated from Jeric Pavia, maam [sic].
a. I saw that he was able to confiscate small plastic sachet containing shabu, maam [sic]. xxxx
q. From whom? q. Did you come to know what Officer Parunggao do with the plastic sachet confiscated from
a. From Jeric Pavia and Juan Buendia, maam [sic]. Juan Buendia?
q. If this Jeric Pavia is in court right now, will you be able to point to him? a. He brought it to the police station, maam [sic].
a. Yes, maam [sic]. q. And what did he do with it?
q. Please point to him? a. He placed the markings JB, maam [sic].
a. That man in the first row wearing yellow shirt, maam [sic] (pointed to a person inside the q. Who was in possession of the plastic sachet with markings JB from Aplaya [where the pot
courtroom who, when asked answered by the name of Jeric Pavia). session took place] to the police station?
q. You said that you saw PO3 Parunggao confiscated plastic sachet containing shabu from a. It was PO3 Parunggao, maam.
Jeric Pavia,from what part of his body was he able to confiscate the same? q. I am showing to you a plastic sachet with white crystalline substance with markings JB,
a. From the pocket of Jeric Pavia, maam [sic]. please identify the same?
xxxx a. This is the same item confiscated from Juan Buendia by PO3 Parunggao, maam [sic]. 17
q. You said that PO3 Parunggao confiscated plastic sachet with white crystalline substance It is likewise important to note that it was PO2 Bautista himself who brought the request 18 for
from two person [sic], one was identified as Jeric Pavia, who was the other one? laboratory examination of the substance taken from appellants from the San Pedro Police Station to the
a. It was Juan Buendia, maam [sic] PNP Crime Laboratory in Calamba City, thereby ensuring that the integrity of the confiscated items are
q. Please identify him if he is in court? preserved. Thus, the fact that the apprehending team did not strictly comply with the procedural
a. That man also in the first row, at the right portion, wearing yellow shirt (pointed to a person requirements of Section 21(1), Article II of R.A. No. 9165 does not necessarily render appellants’
who, when asked answered by the name of Juan Buendia). arrest illegal or the items seized from them inadmissible in evidence.
q. Where were you when PO3 Parunggao confiscated from Juan Buendia the plastic sachet of As held by this Court in the case of People v. Llanita:19
shabu? RA 9165 and its subsequent Implementing Rules and Regulations (IRR) do not require strict
a. I was behind him, maam [sic]. compliance as to the chain of custody rule. x x x. We have emphasized that what is essential is "the
xxxx preservation of the integrity and the evidentiary value of the seized items, as the same would be
q. On [sic] what part of the body of Juan Buendia was the item taken by Officer Parunggao? utilized in the determination of the guilt or innocence of the accused."
a. Also in [sic] his pocket, maam [sic].16 Briefly stated, non-compliance withthe procedural requirements under RA 9165 and its IRR relative to
The same testimony of PO2 Bautista also established the chain of custody of the prohibited the custody, photographing, and drug-testing of the apprehended persons, is not a serious flaw that can
drugs taken from appellants. Thus: render void the seizures and custody of drugs in a buy-bust operation.
q. You said that you saw PO3 Parunggao confiscated [sic] plastic sachet containing shabu xxxx
from Jeric Pavia, from what part of his body was he able to confiscate the same? x x x. We recognize that the strict compliance with the requirements of Section 21 may not always be
a. From the pocket of Jeric Pavia, maam [sic]. possible under field conditions; the police operates under varied conditions, and cannot at all times
q. And do you know what PO3 Parunggao do with the item? attend to all the niceties of the procedures in the handling of confiscated evidence.
a. He placed marking on it, maam [sic]. Finally, both the trial court and the CA rejected appellants' defense of denial and frame-up for failure
q. In what place did he put the marking? to substantiate the same.
a. At the police station maam [sic]. Indeed, the defenses of denial and frame-up have been invariably viewed by this Court with disfavor
q. What markings did he place? for it can easily be concocted and is a common and standard defense ploy in prosecutions for violations
a. It was marked JP representing the initials of accused Jeric Pavia, maam [sic]. of the Dangerous Drugs Act. In order to prosper, the defenses of denial and frame-up must be proved
q. Where were you when Officer Parunggao placed that marking on the item? with strong and convincing evidence. In the case before us, appellants failed to present sufficient
a. I was beside him, maam [sic]. evidence in support of their claims. Aside from their self-serving assertions, no plausible proof was
q. Can you describe the plastic sachet? presented to bolster their allegations.20 Consequently, in the absence of clear and convincing evidence
a. It is a small transparent plastic sachet which contains white crystalline substance otherwise that the police officers were inspired by any improper motive, this Court will not appreciate the
known as shabu, maam [sic]. defense of denial or frame-up and instead apply the presumption of regularity in the performance of
q. Who was in possession of the plastic sachet from the time PO3 Parunggao took it from the official duty by law enforcement agents.21
possession of Jeric Pavia up to the police station?
In view of the foregoing, we see no reason to deviate from the well discussed decision of the CA, its
findings and conclusions having been supported by both law and applicable jurisprudence.
WHEREFORE, the Decision of the Court of Appeals dated 7 February 2012 in CA-G.R. CR-H.C. No.
04020 is AFFIRMED.
SO ORDERED.
G.R. No. 194499, January 14, 2015
MANUEL R. PORTUGUEZ, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition for review on certiorari1 seeking the reversal of the Decision2 dated
August 12, 2010 and the Resolution3 dated November 9, 2010 of the Court of Appeals (CA) in CA-
G.R. CR No. 32096. The CA affirmed in toto the Decision4 dated August 29, 2008 of the Regional
Trial Court (RTC) of Pasig City, Branch 70, finding petitioner Manuel R. Portuguez (petitioner) guilty
beyond reasonable doubt of violation of Section 11, Article II of Republic Act (R.A.) No. 9165.5
The case stemmed from the Information6 dated April 21, 2003, charging petitioner of the crime of
violation of Section 11, Article II of R.A. No. 9165 for illegal possession of five centigrams (0.05
gram) of methamphetamine hydrochloride or shabu, the accusatory portion of which
reads:chanroblesvirtuallawlibrary
On or about April 16, 2003, in Pasig City and within the jurisdiction of this Honorable Court, the said
accused, not being lawfully authorized to possess any dangerous drug, did then and there willfully,
unlawfully and feloniously have in his possession and under his custody and control one (1) heat-
sealed transparent plastic sachet containing five centigrams (0.05 gram) of white crystalline substance,
which was found positive to the test for methamphetamine hydrochloride (shabu), a dangerous drug, in
violation of the said law.
Contrary to law.
Upon arraignment, petitioner pleaded not guilty to the charge.7 Thereafter, trial on the merits ensued.
During the pre-trial conference, the prosecution and the defense stipulated, among others, on the due
execution and genuineness of the Request for Laboratory Examination8 dated April 16, 2003 and
Chemistry Report No. D-687-03E9 issued by the Forensic Chemist, Police Senior Inspector Annalee R.
Forro (P/Sr. Insp. Forro). The parties also stipulated on the existence of the plastic sachet including its
contents which had been the subject of the said Request except for its source or origin.10 After entering
into the aforementioned stipulations, the testimony of P/Sr. Insp. Forro was dispensed with.11
Version of the Prosecution
The prosecution, through the testimonies of Police Officer 1 (PO1) Aldrin R. Mariano (PO1 Mariano)
and PO1 Janet Sabo (PO1 Sabo), established the following:
On April 16, 2003, a confidential asset went to the Pasig City Police Station, City Hall Detachment, to
report the illegal drug activities of a certain alias Bobot at Balmores Street, Barangay Kapasigan, Pasig
City. Upon receipt of the information, the chief of said station formed a buy-bust team wherein PO1
Mariano was designated as the poseur-buyer. After coordinating with the Philippine Drug Enforcement
Agency (PDEA) and preparing the buy-bust money, the team and its asset proceeded to Balmores
Street. Arriving thereat, the asset pointed to Bobot as the target person. PO1 Mariano saw Bobot and
petitioner transacting illegal drugs. When PO1 Mariano and the asset met petitioner and Bobot on the
road, the asset asked petitioner, “P’re, meron pa ba?” At this point, petitioner looked at PO1 Mariano
and thereafter, attempted to run. However, PO1 Mariano was able to take hold of him. Then, the other
police operatives arrived. Petitioner was asked to open his hand. Upon seeing the suspected shabu on
his hand, they arrested petitioner, informed him of his constitutional rights and boarded him on their
service vehicle. Before leaving the area, PO1 Mariano placed the markings “EXH A ARM 04-16-03” on
the seized shabu. Thereafter, the police operatives brought petitioner to the Rizal Medical Center for
physical examination before they proceeded to the police station for investigation.12
On cross-examination, PO1 Mariano testified that at a distance of seven to eight meters, he saw Bobot
handing something to petitioner. PO1 Mariano said that the intended buy-bust operation failed because
of the commotion petitioner caused when he tried to run away. PO1 Mariano also testified that he got
hold of petitioner because he was nearer to him. He claimed that the other police operatives ran after
Bobot but they failed to arrest him.13
In addition, prosecution witness PO1 Sabo testified that on the same day of April 16, 2003, she
delivered the seized shabu and the Request for Laboratory Examination14 to the Philippine National
Police (PNP) Crime Laboratory for chemical analysis.15 Chemistry Report No. D-687-03E16 prepared
by P/Sr. Insp. Forro revealed the following results:chanroblesvirtuallawlibrary
SPECIMEN SUBMITTED:
A – One (1) heat-sealed transparent plastic sachet with markings “EXH A ARM 04/16/03” containing
0.05 gram of white crystalline substance.
xxxx
FINDINGS:
Qualitative examination conducted on the above-stated specimen gave POSITIVE result to the tests
for Methamphetamine Hydrochloride, a dangerous drug.
xxxx
CONCLUSION:
Specimen A contains Methamphetamine Hydrochloride, a dangerous drug.
Version of the Defense
Petitioner testified that at the time of his arrest, he was fixing the katam and was eating infront of his
house with his friends Jonjon Reynoso, Jonjing Reynoso and Junior Da Silva. Two persons from the
Pasig Police headquarters arrived and spoke to his sister who used to work at the said headquarters.
When his sister called him, he was mistaken to be Bobot and thus, they arrested him. Petitioner denied
that he was in possession of the shabu allegedly seized from him. He claimed that he saw the
said shabu for the first time at the headquarters. Petitioner also claimed that at the time he was arrested
on April 16, 2003, Bobot was actually detained at a jail in Bicutan.17

On cross-examination, petitioner admitted that his sister was a former errand girl at the police
headquarters. He divulged that at the time of his arrest, while he was then repairing a “katam,” two
male persons whom petitioner identified as Efren and Dennis approached his sister. Efren told
petitioner that the target person of the police officers was Bobot. Petitioner claimed that PO1 Mariano
and PO1 Sabo arrived a few minutes thereafter and he was arrested in the presence of his sister, Efren
and Dennis. Petitioner also claimed that the target person Bobot is his younger brother, Jovito
Portuguez. He admitted that Bobot was admitted to a rehabilitation center in Bicutan since he used to
sell illegal drugs. He maintained that the police officers already had with them the sachet
of shabu when they arrested him.18
Dawn Portuguez, daughter of petitioner, testified that in the afternoon of April 16, 2003, two male
persons arrived at the house of her aunt and asked for her father. She testified that petitioner was then
sleeping in the nearby house of his friend, Junior. She then called for her father and, upon their return,
four persons, one of whom was in police uniform, approached them and arrested petitioner. She
informed her mother of what happened and the latter proceeded to the headquarters where petitioner
was brought.19
Last to testify for the defense was Maritess Portuguez, petitioner’s sister. She testified that her brother
was then sleeping in a nearby house when apprehended by the police officers. She averred that after
her brother was arrested, they agreed not to file a complaint against the said police officers. On cross-
examination, she said that she heard her niece shouting. Sensing a commotion, she hurried infront of
their house and there she saw the police officers accosting her brother.20
The RTC’s Ruling
On August 29, 2008, the RTC rendered a Decision21 finding petitioner guilty as charged. The RTC
invoked the principle of the presumption of regularity in the performance of official duty, gave
credence to the testimony of PO1 Mariano, and rejected the self-serving testimony of petitioner and the
obviously manufactured testimonies of his witnesses. The fallo of the RTC Decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, accused MANUEL PORTUGUEZ is hereby
found GUILTY beyond reasonable doubt of the offense of Violation of Section 11, Article II of
Republic Act 9165 and is hereby sentenced to Twelve (12) Years and One (1) Day to Twenty (20)
Years and to pay a FINE of Three Hundred Thousand Pesos (P300,000.00).
Pursuant to Section 21 of Republic Act 9165, any authorized representative of the Philippine Drug
Enforcement Agency (PDEA) is hereby ordered to take charge and have custody over the plastic sachet
of shabu, object of this case, for proper disposition.
Costs against the accused.
SO ORDERED.22
The CA’s Ruling
On August 12, 2010, the CA affirmed the decision of the RTC. The CA held that petitioner was
deemed to have waived his right to question the irregularity of his arrest since he failed to move to
quash the Information on this ground and instead, elected to proceed with the trial. The CA also held
that petitioner was caught in flagrante delicto when he was arrested by the police officers as PO1
Mariano saw him buying illegal drugs from Bobot. The CA agreed with the RTC that the police
officers were presumed to have regularly performed their official duties. The CA opined that the
integrity of the seized shabu had been preserved by the concerned police officers.
Petitioner’s Motion for Reconsideration23 was denied by the CA in its Resolution24 dated November 9,
2010. The CA held that the lack of inventory or photographs taken after petitioner’s apprehension does
not render the evidence inadmissible. The CA stressed that the integrity of the evidence taken from
petitioner was duly preserved.
Hence, this petition raising the sole assignment of error that the CA erred in affirming the conviction of
petitioner by the RTC.
Petitioner avers that the prosecution failed to establish the identity of the corpus delicti, as well as the
regularity of the chain of custody. He submits that the testimony of PO1 Sabo was insufficient to
establish the identity of the shabu seized and the regularity of the chain of custody. Petitioner opines
that the failure of the police officers to observe the proper procedure, such as the lack of physical
inventory and the non-taking of photographs, for the custody of the allegedly confiscated drug
compromised its integrity. Moreover, petitioner posits that the prosecution failed to establish a valid
buy-bust operation as there was no pre-operation report and coordination report filed with the PDEA.
Finally, petitioner argues that, assuming that the alleged shabu was recovered from him, the same is
inadmissible in evidence for being a fruit of the poisonous tree. Petitioner prays that he be acquitted. 25
On the other hand, respondent People of the Philippines through the Office of the Solicitor General
(OSG) asserts that the totality of the evidence presented in this case clearly indicates that: (1) the sale
of a prohibited drug had taken place; (2) petitioner was caught in the act of buying the prohibited drug;
(3) petitioner was immediately arrested by the police officers upon consummation of the sale; and (4)
the police officers found in petitioner’s possession a prohibited drug, which was later confirmed
through the chemistry examination as shabu. Moreover, the OSG argues that non-compliance with the
procedure laid down in R.A. No. 9165 and its Implementing Rules and Regulations (IRR) does not
render void and invalid the seizure of dangerous drugs, as long as the integrity and evidentiary value of
the seized items are properly preserved by the apprehending officers, as in this case. Lastly, the OSG
relies on the CA’s ruling on the legality of petitioner’s arrest and the admissibility of the confiscated
evidence.26
Our Ruling
The petition is bereft of merit.
The essential elements in illegal possession of dangerous drugs are (1) the accused is in possession of
an item or object that is identified to be a prohibited drug; (2) such possession is not authorized by law;
and (3) the accused freely and consciously possess the said drug.27
This Court holds that all the aforementioned essential elements in illegal possession of dangerous
drugs were proven in this case.
A close look at the sequence of events narrated by the prosecution witnesses particularly by PO1
Mariano indicates that an intended buy-bust operation was about to be carried out against Bobot. Said
operation was not successful as no sale took place between the intended poseur-buyer, PO1 Mariano,
and Bobot. Bobot was also able to evade arrest.
Nonetheless, PO1 Mariano and the asset chanced upon an ongoing transaction between petitioner and
Bobot. It bears stressing that petitioner was particularly identified by PO1 Mariano as the person who
bought the suspected sachet of shabu from Bobot. When petitioner attempted to run, PO1 Mariano was
able to grab him. And when petitioner was asked to open his hand,28 found in his possession was the
same sachet that he bought from Bobot. Through chemical analysis, the contents of the same sachet
were found to be shabu.
The Court gives full faith and credence to the testimonies of the police officers and upholds the
presumption of regularity in the apprehending officers’ performance of official duty. It is a settled rule
that in cases involving violations of the Dangerous Drugs Act, credence is given to prosecution
witnesses who are police officers, for they are presumed to have performed their duties in a regular
manner, unless there is evidence to the contrary.29 However, petitioner failed to present clear and
convincing evidence to overturn the presumption that the arresting officers regularly performed their
duties. Except for his bare allegations of denial and frame-up, and that the police officers had
mistakenly identified him as Bobot, his younger brother, nothing supports his claim that the police
officers were impelled by improper motives to testify against him. Needless to stress, the integrity of
the evidence is presumed to be preserved, unless there is a showing of bad faith, ill will, or proof that
the evidence has been tampered with.30 On petitioner’s claim that at the time of his arrest, Bobot was
actually confined in a rehabilitation center in Bicutan,31 we note that petitioner failed to fulfill his
promise32 to prove it as fact.
Likewise, this Court has invariably viewed with disfavor the defenses of denial and frame-up. Such
defenses can easily be fabricated and are common ploy in prosecutions for the illegal sale and
possession of dangerous drugs. In order to prosper, such defenses must be proved with strong and
convincing evidence.33
Moreover, it bears stressing that in weighing the testimonies of the prosecution witnesses vis-à-
vis those of the defense, the RTC gave more credence to the version of the prosecution. This Court
finds no reason to disagree. Well-settled is the rule that in the absence of palpable error or grave abuse
of discretion on the part of the trial judge, the trial court’s evaluation of the credibility of witnesses will
not be disturbed on appeal.34 The reason for this is that the trial court is in a better position to decide
the credibility of witnesses, having heard their testimonies and observed their deportment and manner
of testifying during the trial. The rule finds an even more stringent application where said findings are
sustained by the CA as in this case.35
Lastly, petitioner claims that there were no inventory and photographs of the prohibited item allegedly
seized from him. He argues that as a result of this failure, there is doubt as to the identity and integrity
of the drugs, and there was a break in the chain of custody of the evidence.
The argument does not hold water.
Section 21 of the IRR of R.A. No. 9165 provides:chanroblesvirtuallawlibrary
SECTION 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous
Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. — The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner:
(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof; Provided, that the physical inventory and photograph shall be conducted at the place
where the search warrant is served; or at the nearest police station or at the nearest office of the
apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided,
further, that non-compliance with these requirements under justifiable grounds, as long as the
integrity and evidentiary value of the seized items are properly preserved by the apprehending
officer/team, shall not render void and invalid such seizures of and custody over said
items[.] (Emphasis supplied)
Based on the foregoing, this Court has held that non-compliance with the above-mentioned
requirements is not fatal. Non-compliance with Section 21 of the IRR does not make the items seized
inadmissible. What is imperative is “the preservation of the integrity and the evidential value of the
seized items as the same would be utilized in the determination of the guilt or innocence of the
accused.”36
In this case, the chain of custody was established through the following link: (1) PO1 Mariano marked
the seized sachet subject of the in flagrante delicto arrest with “EXH A ARM 04-16-03” which stands
for his full name, Aldrin Reyes Mariano;37 (2) a request for laboratory examination of the seized item
was signed by P/Sr. Insp. Rodrigo E. Villaruel;38 (3) the request and the marked item seized were
personally delivered by PO1 Sabo and received by the PNP Crime Laboratory on the same day of the
arrest on April 16, 2003; (4) Chemistry Report No. D-687-03E39 confirmed that the marked item seized
from petitioner was methamphetamine hydrochloride; and (5) the marked item was duly identified by
PO1 Mariano in court and offered in evidence.
Hence, it is clear that the integrity and the evidentiary value of the seized drugs were preserved. This
Court, therefore, finds no reason to overturn the findings of the RTC that the drugs seized from
petitioner were the same ones presented during trial. Accordingly, we hold that the chain of custody of
the illicit drugs seized from petitioner remains unbroken, contrary to the assertions of petitioner.
In sum, we find no reversible error committed by the RTC and CA in convicting petitioner of illegal
possession of drugs. It is hornbook doctrine that the factual findings of the CA affirming those of the
trial court are binding on this Court unless there is a clear showing that such findings are tainted with
arbitrariness, capriciousness or palpable error.40 This case is no exception to the rule. All told, this
Court thus sustains the conviction of petitioner for violation of Section 11, Article II of R.A. No. 9165.

WHEREFORE, the petition is DENIED. The Decision dated August 12, 2010 and the Resolution
dated November 9, 2010 of the Court of Appeals in CA-G.R. CR No. 32096 are AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. 202837, January 21, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RAKIM
MINANGA Y DUMANSAL, Accused-Appellant.
THIRD DIVISION
G.R. No. 202837, January 21, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RAKIM MINANGA Y
DUMANSAL, Accused-Appellant.
DECISION
VILLARAMA, JR., J.:
Before this Court is an appeal from the June 30, 2011 Decision1 of the Court of Appeals (CA) in CA-
G.R. CR HC No. 00556-MIN  which affirmed the July 10, 2007 Decision2 of the Regional Trial Court
(RTC) of Butuan City, Branch 4, finding accused-appellant Rakim Minanga y Dumansal3 (appellant)
guilty beyond reasonable doubt of illegal possession of dangerous drugs.  Also on appeal is the CA
Resolution4 dated November 21, 2011 denying appellant’s motion for reconsideration.
The case stemmed from the Information5 dated August 13, 2002 charging appellant with violation of
Section 11, Article II of Republic Act (R.A.) No. 9165, otherwise known as the Comprehensive
Dangerous Drugs Act of 2002, for illegal possession of 12.882 grams of methamphetamine
hydrochloride or shabu. The case was docketed as Criminal Case No. 9549.
Upon arraignment, appellant pleaded not guilty to the charge. 6chanRoblesvirtualLawlibrary
At the trial, Police Officer 1 Rommel dela Cruz Condez (PO1 Condez) and PO2 Saldino Virtudazo
(PO2 Virtudazo), Philippine National Police (PNP) officers assigned with the Philippine Drug
Enforcement Agency (PDEA), and Police Senior Inspector Norman G. Jovita (P/Sr. Insp. Jovita), a
Forensic Chemist, testified for the prosecution and established the following facts:
After receiving reliable information from a police asset that appellant is actively engaged in selling
illegal drugs, a team composed of PO1 Condez, PO2 Virtudazo and the police asset was formed to
conduct a buy-bust operation at Purok 3, Barangay 23, Holy Redeemer, Butuan City, against the
appellant.  PO1 Condez was designated to act as the poseur-buyer with PO2 Virtudazo as his back-up. 
The team brought with them the amount of P20,000.00 as show money.7chanRoblesvirtualLawlibrary
Upon arrival at the designated place at around 2:30 p.m. of August 12, 2002, the police asset
introduced PO1 Condez to the appellant as an interested buyer of shabu.  After the appellant agreed to
sell to PO1 Condez four “sacks” of shabu for the amount of P20,000.00, appellant told PO1 Condez to
wait.  Appellant then left and after a few minutes returned.  He then showed PO1 Condez four big
sachets of shabu.  After receiving the four sachets, PO1 Condez examined them and being convinced
of their genuineness, gave the prearranged signal.  Thus, PO2 Virtudazo rushed to the scene.  The
police officers introduced themselves as PDEA agents and arrested the appellant, informing the latter
of his constitutional rights.  The money was not given to appellant as it was intended only as show
money.  PO1 Condez marked the four sachets given by the appellant as RCC 1 to RCC 4. The
appellant was then brought to the police station for investigation.8chanRoblesvirtualLawlibrary
At the police station, appellant was photographed in the presence of a Barangay Captain and a State
Prosecutor.9  Armed with the corresponding requests,10 the four marked sachets and the appellant were
brought by PO1 Condez and PO2 Virtudazo to the PNP Crime Laboratory for examination.11  At the
PNP Crime Laboratory, the four sachets were marked as A-1, A-2, A-3 and A-4 by P/Sr. Insp. Jovita,
the Forensic Chemist.12  While the drug test conducted on the person of the appellant yielded a
negative result,13 the four sachets with a total weight of 12.882 grams were positive for
methamphetamine hydrochloride.14chanRoblesvirtualLawlibrary
On cross-examination, PO1 Condez testified that initially the PDEA filed a case against the appellant
for violation of Section 5, Article II of R.A. No. 9165 or for illegal sale of shabu but when the
investigation reached the Office of the City Prosecutor the case was modified to one for illegal
possession.15chanRoblesvirtualLawlibrary
On the other hand, the defense gave a different version of the story.
The defense presented as its witnesses Nellie Salino Nalasa (Nellie), Benhur Burdeos (Benhur), and
the appellant himself.
Nellie testified that she is the owner of a two-storey house where one Max Malubay (Max) was renting
one of the rooms on the ground floor.  She said that on August 12, 2002, at around 11:30 a.m., she
noticed a commotion emanating from the adjacent room rented by Max.  She saw three armed persons
in white shirts kicking appellant, a visitor of Max.  After witnessing the incident, she hid
herself.16chanRoblesvirtualLawlibrary
Benhur testified that on August 12, 2002, at around 12:00 noon, he saw four to five persons walking on
single file towards Nellie’s house.  He added that he heard a commotion thereafter and saw a person
named Rakim with handcuffed hands taken by the armed men from Nellie’s house.  He said that there
was no buy-bust operation conducted at that time.17chanRoblesvirtualLawlibrary
As the last witness for the defense, appellant denied the charge against him.  He testified that on
August 12, 2002, at around 12:00 noon, five armed men forcibly entered the room rented by Max and
arrested him.  He identified one of the five men as a Muslim who has a grudge against him.  He
claimed that the Muslim influenced the police officers to arrest him.  He added that in his presence the
Muslim gave SPO3 Dindo Alota money as payment for his arrest.  He also claimed that he was mauled
and brought to the police station for investigation; that he was informed that he was arrested for selling
illegal drugs; and that at the police station he was photographed. 18chanRoblesvirtualLawlibrary

On July 10, 2007, the RTC rendered its Decision19 in Criminal Case No. 9549 and found appellant
guilty as charged of violation of Section 11, paragraph 2, sub-paragraph (1),20 Article II of R.A. No.
9165.  The RTC held that the prosecution was able to prove all the elements of illegal possession of
drugs in this case.  The RTC said that appellant’s assertion that money was handed by the Muslim to
the police officers in his presence is illogical, uncommon and unconvincing.  The RTC also found that
the two other defense witnesses lacked candor and their combined testimonies have earmarks of
falsehood.21  Thus, the RTC disposed of the case in this wise:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, accused Rakim Minanga y Dumansal is found guilty beyond
reasonable doubt [of] violation of Section 11, paragraph 2, Sub-par. (1) of Art II of Republic Act 9165,
otherwise known as the Dangerous Drugs Act of 2002, and is hereby sentenced to suffer the extreme
penalty of Life imprisonment and to pay a fine of Four Hundred Thousand (P400,000.00) Pesos
without subsidiary imprisonment in case of insolvency.
The four (4) sachets of shabu [are] hereby declared confiscated in favor of the government to be dealt
with in accordance with law.
Accused shall serve his sentence at the Davao Prison and Penal Farm at Sto. Tomas, Davao del Norte
and shall be credited in the service of his sentence with his preventive imprisonment conformably with
Art. 29 of the Revised Penal Code, as amended.
However, accused shall remain at the City Jail until the termination of Crim. Case No. 10161.
SO ORDERED.22
In its June 30, 2011 Decision, the CA affirmed the RTC’s Decision.  In its November 21, 2011
Resolution,23 the CA denied appellant’s motion for reconsideration.  Hence, this appeal.
In his supplemental brief,24 appellant claims that the CA erred:chanroblesvirtuallawlibrary
I. In failing to appreciate that the buy-bust operation on 12 August [2002] as admitted
to by police officers in their testimonies, constituted the factual backdrop for the
arrest and indictment of Accused-Appellant for illegal possession of prohibited
drugs;
II. In failing to appreciate  serious irregularities attendant to the entrapment operation
and procedure employed by the police officers;
III. In affirming the lower court’s appreciation and application of presumption of
regularity in the performance of official duty by the police officers;
IV. In failing to appreciate that the failure of the prosecution to cross-examine Accused-
Appellant on material and relevant points, did not destroy his oral testimony or direct
examination;
V. In holding that “appellant’s entry of a valid plea and active participation in the trial
cured any defect in his arrest;”
VI. In affirming the lower court’s finding that the prosecution proved all the elements of
the offense; [and]
VII. Assuming arguendo that indeed Accused-Appellant possessed the prohibited drugs,
for failing to consider that police officers may have engaged in or employed
INDUCEMENT rather than ENTRAPMENT.25
The sole issue to be resolved is whether or not the appellant’s guilt was proven beyond reasonable
doubt.
We rule in the affirmative.
The essential elements of illegal possession of dangerous drugs are (1) the accused is in possession of
an item or object that is identified to be a prohibited drug; (2) such possession is not authorized by law;
and (3) the accused freely and consciously possess the said drug.26chanRoblesvirtualLawlibrary
We find that these essential elements were proven in this case.  Appellant was caught in
flagrante possessing 12.882 grams of shabu, a dangerous drug, packed in four big sachets.  His
possession of said dangerous drugs is not authorized by law.  And he was freely and consciously
possessing the contraband as shown by his act of handing these four sachets to PO1 Condez in an
intended sale.  We note that appellant was positively identified by PO1 Condez as the one who handed
over the four sachets.  However, the money was not given to appellant as it was intended only as show
money.
The Court gives full faith and credence to the testimonies of the police officers and upholds the
presumption of regularity in the apprehending officers’ performance of official duty.  It is a settled rule
that in cases involving violations of the Dangerous Drugs Act, credence is given to prosecution
witnesses who are police officers, for they are presumed to have performed their duties in a regular
manner, unless there is evidence to the contrary.27chanRoblesvirtualLawlibrary
On the other hand, appellant failed to present clear and convincing evidence to overturn the
presumption that the arresting officers regularly performed their duties.  Except for his bare allegations
of denial and frame-up that a certain Muslim was behind his arrest, nothing supports his claim that the
police officers were impelled by improper motives to testify against him.  In fact, in his direct
testimony, appellant was asked whether he knew said Muslim but despite the opportunity given to him,
he failed to identify him in court.28chanRoblesvirtualLawlibrary
This Court has invariably viewed with disfavor the defenses of denial and frame-up.  Such defenses
can easily be fabricated and are common ploy in prosecutions for the illegal sale and possession of
dangerous drugs.  In order to prosper, such defenses must be proved with strong and convincing
evidence.29chanRoblesvirtualLawlibrary
Moreover, in weighing the testimonies of the prosecution witnesses vis-à-vis those of the defense, the
RTC gave more credence to the version of the prosecution, to which this Court finds no reason to
disagree.  Well-settled is the rule that in the absence of palpable error or grave abuse of discretion on
the part of the trial judge, the trial court’s evaluation of the credibility of witnesses will not be
disturbed on appeal.30  Prosecutions involving illegal drugs depend largely on the credibility of the
police officers who conduct the “buy-bust” operation and appellate courts, upon established precedents
and of necessity, rely on the assessment of the credibility of witnesses by the trial courts which have
the unique opportunity, unavailable to the appellate courts, to observe the witnesses and to note their
demeanor, conduct, and attitude under direct and cross-examination.31chanRoblesvirtualLawlibrary
Lastly, appellant claims that there was no inventory of the prohibited items allegedly seized from him.
He argues that as a result of this omission, there is doubt as to the identity and integrity of the drugs
and that there was a break in the chain of custody of the evidence. 32chanRoblesvirtualLawlibrary
Such argument cannot prosper.
The Implementing Rules and Regulations (IRR) of R.A. No. 9165
provides:chanroblesvirtuallawlibrary
SECTION 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous
Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner:
(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof; Provided, that the physical inventory and photograph shall be conducted at the place
where the search warrant is served; or at the nearest police station or at the nearest office of the
apprehending officer/team, whichever is practicable, in case of warrantless seizures; Provided,
further, that non-compliance with these requirements under justifiable grounds, as long as the
integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody over
said items[.]  (Emphasis supplied)
Evidently, the law itself lays down exceptions to its requirements.  Thus, non-compliance with the
above-mentioned requirements is not fatal. In fact it has been ruled time and again that non-compliance
with Section 21 of the IRR does not make the items seized inadmissible.  What is imperative is “the
preservation of the integrity and the evidential value of the seized items as the same would be utilized
in the determination of the guilt or innocence of the accused.” 33chanRoblesvirtualLawlibrary
In this case, the chain of custody can be easily established through the following link: (1) PO1 Condez
marked the seized four sachets handed to him by appellant with RCC 1 to RCC 4; (2) a request for
laboratory examination of the seized items marked RCC 1 to RCC 4 was signed by Police
Superintendent Glenn Dichosa Dela Torre;34 (3) the request and the marked items seized, which were
personally delivered by PO1 Condez and PO2 Virtudazo, were received by the PNP Crime Laboratory;
(4) Chemistry Report No. D-106-200235 confirmed that the marked items seized from appellant were
methamphetamine hydrochloride; and (5) the marked items were offered in evidence.
Hence, it is clear that the integrity and the evidentiary value of the seized drugs were preserved.  This
Court, therefore, finds no reason to overturn the findings of the RTC that the drugs seized from
appellant were the same ones presented during trial.  Accordingly, it is but logical to conclude that the
chain of custody of the illicit drugs seized from appellant remains unbroken, contrary to the assertions
of appellant.
In sum, we find no reversible error committed by the RTC and CA in convicting appellant of illegal
possession of drugs as to warrant the modification much less the reversal thereof.  It is hornbook
doctrine that the factual findings of the CA affirming those of the trial court are binding on this Court
unless there is a clear showing that such findings are tainted with arbitrariness, capriciousness or
palpable error.36  This case is no exception to the rule.  All told, this Court thus sustains the conviction
of the appellant for violation of Section 11, Article II of R.A. No. 9165.chanrobleslaw
WHEREFORE, the appeal is DISMISSED.  The June 30, 2011 Decision and November 21, 2011
Resolution of the Court of Appeals in CA-G.R. CR HC No. 00556-MIN are AFFIRMED.
With costs against the accused-appellant.
SO ORDERED.
G.R. No. 205889, February 04, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. SANDER DACUMA Y
LUNSOD, Accused-Appellant.
DECISION
PEREZ, J.:
This is an appeal from the Decision of the Court of Appeals1 in CA G.R. CEB CR-HC No. 00558,
which affirmed the Decision2 dated 17 September 2004 of the Regional Trial Court, Branch 13,
Carigara, Leyte (RTC), finding the accused-appellant Sander Dacuma (Dacuma) guilty of illegal sale
of shabu or methamphetamine hydrochloride, a dangerous drug, in violation of Sec. 5 of Republic Act
No. 9165, otherwise known as The Comprehensive Dangerous Drugs Act of 2002.
On 1 September 2003, two sets of Information were filed against Dacuma for illegal sale and illegal
possession of dangerous drug, committed as follow:chanRoblesvirtualLawlibrary
For Illegal Sale:chanRoblesvirtualLawlibrary
That on or about the 15th day of July, 2003, in the Municipality of Carigara, Province of Leyte,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did then and
there wilfully, unlawfully and criminally sell, dispense, deliver, transport or distribute 0.11 gram [of]
Methamphetamine Hydrochloride (Shabu), a dangerous drug without being authorized by law.3
For Illegal Possession:chanRoblesvirtualLawlibrary
That on or about the 15th day of July, 2003, in the Municipality of Carigara, Province of Leyte,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did then and
there wilfully, unlawfully and feloniously had in his possession, control and custody three (3) small
heat-sealed sachets of Methamphetamine Hydrochloride (Shabu, a dangerous drug, with a total weight
of 0.18 gram without the necessary permit or authority to possess the same.4
On 10 November 2003, Dacuma pleaded not guilty to the offenses charged against
him.5chanroblesvirtuallawlibrary
The prosecution presented Police Officer 2 Frederick B. Cabaltera (PO2 Cabaltera), Forensic Chemist
Benjamin A. Cruto, Jr. (Forensic Chemist Cruto), PO2 Alberto Parena (PO2 Parena), PO3 Ernie B.
Rocha (PO3 Rocha) and Barangay Councilor Allan Lesiguez (Councilor Lesiguez) as its witnesses.
On 15 July 2003, PO2 Cabaltera, certain PO3 Macalino, PO3 Baltar and PO2 Llovia, members of
Anti-Illegal Drug Task Force of Leyte Provincial Police Office under the Philippine Drug Enforcement
Agency (PDEA), were ordered by their superior Superintendent Brigido Basio Unay to proceed to
Carigara (Leyte) Police Station to verify the veracity of a report of a confidential informant about the
sale of dangerous drugs. Upon arrival at the police station at 8:00 in the evening, Chief of Police Jose
Repulda gave a short briefing to conduct a buy-bust operation and gave the assigned poseur-buyer PO2
Cabaltera four pieces of one hundred peso bills to be used as marked money. Thereafter, PO2
Cabaltera, PO2 Parena and the confidential informant proceeded to the target area located at Esperanza
St., Baybay, Carigara, Leyte. Upon arrival, PO2 Cabaltera and the confidential informant approached
the accused-appellant Dacuma and proposed to buy shabu worth P600.00. Meanwhile, PO2 Parena
remained at a distance to act as a back-up police officer. Dacuma, accepted the offer and took from his
pocket four plastic sachets containing white crystalline substance and handed them to PO2 Cabaltera,
who in turn, handed the marked money including his personal money worth P400.00. Thereafter, PO2
Cabaltera raised his hand as pre-arranged signal to alert the back-up police officers that the illegal sale
had already been consummated. PO2 Parena immediately ran towards them and introduced himself as
a police officer. They then apprehended the accused and brought him to the Philippine National Police
(PNP) Station of Carigara, Leyte.
Barangay Councilor Lesiguez and a certain Councilor Macalinao were summoned by the police
officers to conduct a body search on the person of Dacuma inside the police station. During the search,
three sachets of shabu, marked money and one disposable lighter were recovered from
Dacuma.6chanroblesvirtuallawlibrary
The version of the defense is that on the night of the arrest on 15 July 2003, he was sitting in front of a
bakery when his friend Edwin Lagera (Lagera) called his attention and asked him to buy shabu in his
stead. Due to the insistence of Lagera, Dacuma accepted the money consisting of four pieces of one
hundred-peso bills with the intention of returning it to the person who gave it to them, PO2 Parena.
PO2 Parena, however, did not accept the money and assured him of his non-liability. Holding to that
assurance, he left the area but soon after, he was accosted and handcuffed by police officers he
identified as Leo Llovia, John Talua, Baltar and PO2 Cabaltera. He was eventually charged with illegal
sale and possession of dangerous drugs under Sections 5 and 11 of Republic Act No. 9165. His version
was corroborated by Lagera who affirmed the same narration in open
court.7chanroblesvirtuallawlibrary
The Ruling of the Trial Court
The trial court on 17 September 2004 rendered a decision finding the accused guilty of illegal sale but
dismissing the charge for illegal possession for insufficiency of evidence. The dispositive portion
reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Court found accused SANDER DACUMA, GUILTY beyond
reasonable doubt in Criminal Case No. 4319, for VIOLATION OF SECTION 5 OF R.A. [NO.] 9165,
otherwise known as THE COMPREHENSIVE DANGEROUS DRUGS ACT OF 2002, and sentenced
to suffer the maximum penalty of Life Imprisonment, and to pay the fine of Five Hundred Thousand
Pesos (P500, 000.00); and
Pay the Cost.
In Criminal Case No. 4320, the prosecution having failed to establish the quantum of proof to prove
the guilt of the accused beyond reasonable doubt for VIOLATION OF SECTION 11 OF R.A. [NO.]
9165, otherwise known as THE COMPREHENSIVE DANGEROUS DRUGS ACT OF 2002, the same
is hereby DISMISSED, for insufficiency of evidence. 8
The trial court justified the guilty verdict against Dacuma. It was convinced that the elements of illegal
sale of dangerous drug were sufficiently established by the prosecution with the necessary quantum of
proof. It also recognized the presumption of performance of duties of the police officers in the absence
of ill-motive against the accused. On the other hand, it dismissed the argument of self-serving alibi of
frame-up as a lame defense to evade liability. Clear is the fact that the accused was caught red-handed
as a result of a legitimate buy-bust operation.
The Ruling of the Court of Appeals
On 24 October 2011, the appellate court affirmed in toto the ruling of the trial court.
It ruled that the prosecution had presented evidence necessary to convict the accused beyond
reasonable doubt. It also rejected the issue with regard to compliance with the procedure on custody
and safekeeping of seized dangerous drugs due to its belated objection to admissibility. Lastly, it ruled
on the dispensability of pre-trial report in a buy-bust operation, provided that all the elements to upheld
commission of buy-bust are present to convict the accused.
Our Ruling
After a careful review of the evidence, we resolve to acquit the accused and reverse the ruling of
conviction of both the trial court and Court of Appeals.
The following requisites are necessary in order to successfully prosecute an offense of illegal sale of
dangerous drugs: (1) the identity of the buyer and the seller, the object and consideration of the sale;
and (2) the delivery of the thing sold and the payment therefor.9chanroblesvirtuallawlibrary
In the prosecution of illegal sale, what is essential is to prove that the transaction or sale actually took
place, coupled with the presentation in court of evidence of the corpus delicti. The consummation of
sale is perfected the moment the buyer receives the drug from the seller. 10 In this case, the prosecution
failed to prove that the four sachets which tested positive for shabu and eventually presented in court
were the same ones confiscated by the police officers due to its non-marking at the place where the
buy-bust operation was committed at the police station.
In People v. Nacua,11 the Court emphasized that given the unique characteristic of dangerous and
illegal drugs which are indistinct, not readily identifiable, and easily susceptible to tampering,
alteration, or substitution, either by accident or otherwise, there must be strict compliance with the
prescribed measures during and after the seizure of dangerous drugs and related paraphernalia, during
the custody and transfer thereof for examination, and at all times up to their presentation in court.
These measures are clearly defined under Section 21(1) of Republic Act No. 9165 and Section 21(a) of
the Implementing Rules and Regulations (IRR) of Republic Act No.
9165:chanRoblesvirtualLawlibrary
Section 21(1) of Republic Act No. 9165
SEC. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. — The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursor and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner:chanRoblesvirtualLawlibrary
1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof.cralawred
Section 21(a) of the IRR of Republic Act No. 9165:chanRoblesvirtualLawlibrary
SEC. 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous Drugs, Plant
Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. — The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursor and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner: (a) The apprehending officer/team
having initial custody and control of the drugs shall, immediately after seizure and confiscation,
physically inventory and photograph the same in the presence of the accused or the person/s from
whom such items were confiscated and/or seized, or his/her representative or counsel, a representative
from the media and the Department of Justice (DOJ), and any elected public official who shall be
required to sign the copies of the inventory and be given a copy thereof: Provided, that the physical
inventory and photograph shall be conducted at the place where the search warrant is served; or at the
nearest police station or at the nearest office of the apprehending officer/team, whichever is
practicable, in case of warrantless seizures; Provided, further, that non-compliance with these
requirements under justifiable grounds, as long as the integrity and the evidentiary value of the seized
items are properly preserved by the apprehending officer/team, shall not render void and invalid such
seizures of and custody over said items.cralawred
In People v. Kamad,12 the Court enumerated the different links that the prosecution must establish to
preserve the identity and integrity of the seized items: first, the seizure and marking of the illegal
drug recovered from the accused by the apprehending officer; second, the turn over of the illegal
drug seized by the apprehending officer to the investigating officer; third, the turn over by the
investigating officer of the illegal drug to the forensic chemist for laboratory examination; and fourth,
the turn over and submission of the marked illegal drug seized by the forensic chemist to the court.
These requirements are necessary in order to ensure that the confiscated drug are the same ones
presented in court in order to dispel unnecessary doubts as to the identity of the
evidence.13chanroblesvirtuallawlibrary
In this case, records show that the first element to establish chain of custody which is the seizure and
marking of the illegal drug recovered from the accused by the apprehending officer is missing to
establish illegal sale. In fact, no one among the prosecution witnesses testified about the marking of the
four sachets subject of illegal sale. Though the police officers in their testimonies narrated that there
was a buy-bust operation and they apprehended the accused red-handed, all of them failed to testify on
who among them complied with the marking requirement to identify the seized items. Quite notably,
the Joint Affidavit of Arrest also failed to mention that the apprehending officers marked the four
sachets confiscated from Dacuma. It was only then when Police Superintendent Amado E. Marquez,
Jr. sent a request for a laboratory examination to the PNP Crime Laboratory, Region 8 that the fours
sachets containing white crystalline substance were shown to be marked as “SD.”14 These specimens
eventually became the specimens tested by Forensic Chemist Cruto which resulted to a positive result
of methamphetamine hydrochloride and presented in court as the corpus delicti. Clearly from the
foregoing, there is a serious doubt on the identity of the corpus delicti presented in court as subject of
illegal sale.
The importance of marking is emphasized in People v. Salonga:15
x x x Marking after seizure is the starting point in the custodial link, thus, it is vital that the seized
contrabands are immediately marked because succeeding handlers of the specimens will use the
markings as reference. The marking of the evidence serves to separate the marked evidence from the
corpus of all other similar or related evidence from the time they are seized from the accused until they
are disposed of at the end of the criminal proceedings, obviating switching, planting, or contamination
of evidence.cralawred
The requirement of marking is not to be taken lightly as a mere procedural error. In the recent case
of People v. Sabdula, failure to mark the plastic sachets confiscated during the buy-bust operation
became the Court’s basis for acquittal.
How the apprehending team could have omitted such a basic and vital procedure in the initial handling
of the seized drugs truly baffles and alarms us. We point out that succeeding handlers of the specimen
would use the markings as reference. If at the first or the earliest reasonably available opportunity, the
apprehending team did not mark the seized items, then there was nothing to identify it later on as it
passed from hand to hand. Due to the procedural lapse in the first link of the chain of custody, serious
uncertainty hangs over the identification of the seized shabu that the prosecution introduced into
evidence.
We are not unaware that the seized plastic sachet already bore the markings "BC 02-01-04" when it
was examined by Forensic Chemist Jabonillo. In the absence, however, of specifics on how, when and
where this marking was done and who witnessed the marking procedure, we cannot accept this
marking as compliance with the required chain of custody requirement. There was also no stipulation
between the parties regarding the circumstances surrounding this marking. We note in this regard that
it is not enough that the seized drug be marked; the marking must likewise be made in the presence of
the apprehended violator. As earlier stated, the police did not at any time ever hint that they marked the
seized drug.16
In a number of cases,17 the Court sanctioned substantial compliance with the procedure to establish a
chain of custody, provided that the integrity and evidentiary value of the seized items are properly
preserved by the apprehending team/officers. There is a liberality on minor deviations as long as there
is no gross disregard of the procedural safeguards prescribed in the substantive law. However, when
serious uncertainty is generated about the identity of the seized items presented in evidence, 18 liberality
ceases and presumption of innocence takes precedence over substantial compliance.
While we share the same observation of the trial courts that the version of the accused was highly
implausible to become worthy of belief and contrary to human experience, we cannot turn a blind eye
on the presumption of innocence of the accused. The burden lies on the prosecution to overcome such
presumption of innocence by presenting the quantum of evidence required. In so doing, the prosecution
must rest on its own merits and must not rely on the weakness of the defense. And if the prosecution
fails to meet the required amount of evidence, the defense may logically not even present evidence on
its own behalf.19 Settled is the rule that the evidence for the prosecution must stand or fall on its own
weight and cannot be allowed to draw strength from the weakness of the
defense.20chanroblesvirtuallawlibrary
WHEREFORE, the instant appeal is GRANTED. Accordingly, the Decision of the Court of Appeals
dated 24 October 2011 in CA-G.R. CEB CR-H.C. No. 00558 is hereby SET ASIDE.
Accused SANDER DACUMA y LUNSOD is hereby ACQUITTED of the charges on the ground of
reasonable doubt. The Director of the Bureau of Corrections is hereby ORDERED to
immediately RELEASE the accused from custody, unless he is detained for some other lawful cause.
SO ORDERED.
G.R. No. 192785, February 04, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v.
JOMER BUTIAL, Accused-Appellant.
SECOND DIVISION
G.R. No. 192785, February 04, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JOMER BUTIAL, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
The prosecution’s evidence must establish that the illegal drug presented in court is the same illegal
drug actually recovered from appellant.1chanRoblesvirtualLawlibrary
This is an appeal from the February 26, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. CR-
HC No. 03170 which affirmed in toto the December 3, 2007 Decision3 of the Regional Trial Court
(RTC) of Tabaco City, Branch 17 in Criminal Case No. T-3864 finding Jomer Butial (appellant) guilty
of violating Section 5,4 Article II of Republic Act No. 9165 or the Comprehensive Dangerous Drugs
Act of 2002.
Factual Antecedents
On December 16, 2002, an Information5 was filed against appellant, the accusatory portion of which
reads as follows:chanroblesvirtuallawlibrary
That on or about the 21st day of October, 2002, at 10:35 o’clock in the morning, more or less, at Purok
4, Barangay Sto. Cristo, Tabaco City, Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, with deliberate intent to violate the law, did then and there willfully,
unlawfully, knowingly and criminally sell, deliver and give away to a poseur-buyer,
METHAMPHETAMINE HYDROCHLORIDE otherwise known as “SHABU”, contained in two (2)
transparent plastic sachets each weighing approximately 0.1 gm., without the necessary government
authority, to the detriment of public welfare.
ACTS CONTRARY TO LAW.6
After appellant pleaded “not guilty” to the charge, pre-trial and trial ensued.
Version of the Prosecution
The prosecution presented as witnesses Gilbert Borlagdan (Borlagdan), PO2 Roy Martirez (PO2
Martirez), SPO4 Rosalino Bonavente (SPO4 Bonavente), SPO4 Benito Bognaloc and SPO1 Carlos H.
Desuasido (SPO1 Desuasido).7  From their testimonies, the following version emerged:
The Chief of Police of Tabaco City instructed PO2 Martirez and SPO4 Bonavente to conduct a buy-
bust operation on appellant after receiving information that he was selling illegal drugs.  Thus, on
October 21, 2002, PO2 Martirez arranged for Borlagdan, a police asset, to act as a poseur-buyer and
gave him four P100 bills as marked money.  PO2 Martirez, SPO4 Bonavente and Borlagdan proceeded
to Purok 4, Sto. Cristo, Tabaco City to entrap appellant.
Upon their arrival, Borlagdan walked towards a house which is under construction. PO2 Martirez and
SPO4 Bonavente, on the other hand, hid behind houses which were about seven meters away from
where Borlagdan was.  Borlagdan approached appellant who was then working at the construction site
and asked if he could purchase shabu.  When an agreement was reached, Borlagdan handed over the
marked money to the appellant while the latter, in turn, gave him two plastic sachets containing white
crystalline substance.  After the transaction, Borlagdan walked towards the place where PO2 Martirez
and SPO4 Bonavente were hiding.  When he passed by them, Borlagdan nodded his head as a signal
that the sale was already consummated and gave the sachets to PO2 Martirez.  Thereupon, the police
officers came out of hiding. They immediately approached appellant who threw something on the
ground.  PO2 Martirez arrested appellant and brought him to the police station.  SPO4 Bonavente who
was left behind searched the place where he saw appellant throw something and found therein a plastic
sachet containing white crystalline substance.  He also summoned for the owner of the house being
constructed and asked for appellant’s belongings.  He was given a backpack which he brought to the
police station.
Meanwhile at the police station, PO2 Martirez ordered appellant to empty his pockets and recovered
from him one of the four P100 bills used as marked money.  PO2 Martirez then turned over the said
marked money and the two plastic sachets to the police investigator.  When SPO4 Bonavente arrived,
he likewise gave appellant’s backpack to the police investigator, who, in turn, searched the same. 
Found therein were more sachets containing white crystalline substance.
Two days later, five sachets with white crystalline substance were referred and delivered to the crime
laboratory for examination which all tested positive for shabu, viz:chanroblesvirtuallawlibrary
xxxx
SPECIMEN SUBMITTED:
Five (5) heat-sealed transparent plastic sachets marked as “A” through “E” each with white crystalline
substance having the following markings and recorded net weights:
8
A = 3.7240 B = 0.8642 gram C = 0.0513 gram
gram[s]
D = 0.0336 gram E = 0.0313 gram
Version of the Defense
Appellant and two others, namely, Lourdes Benavides and Elsa San Buenaventura, both residents
of Purok 4, Sto. Cristo, Tabaco who claimed to have witnessed appellant’s arrest, testified for the
defense.  Their version of the incident is as follows:
While appellant was working at the construction site, Robert Sierra (Sierra) arrived and asked if there
is a vacancy.  When appellant said that he had to ask the owner first, Sierra departed.  A few minutes
later, PO2 Martirez and SPO4 Bonavente arrived and arrested appellant.  They took him to the police
station.  Thereat, PO2 Martirez opened appellant’s bag which was brought to the station by SPO4
Bonavente.  After asking him to identify the same, PO2 Martirez placed something inside the bag and
then closed it.  Appellant was then ordered to open the bag.  When he complied, pictures of him
holding the bag and the plastic sachets containing white crystalline substance were taken.  PO2
Martirez also inserted a P100 bill into the back pocket of his pants and thereafter presented him to the
Chief of Police.
Ruling of the Regional Trial Court
The RTC gave credence to the testimonies of the prosecution’s witnesses.  It convicted appellant of the
offense charged and disposed of the case in its December 3, 2007 Decision9 as
follows:chanroblesvirtuallawlibrary
WHEREFORE, from the foregoing, accused Jomer Butial is hereby found GUILTY of Violation of
Section 5, Article II, Republic Act [No.] 9165, otherwise known as the Comprehensive Dangerous
Drugs Act of 2002, and he is hereby sentenced to suffer the penalty of life imprisonment and to pay a
fine of P500,000.00.  Costs against accused.
SO ORDERED.10
11 12
Appellant filed a notice of appeal,  which was approved by the RTC.   Hence, the records of the case
were transmitted to the CA where the appeal was docketed as CA-G.R. CR-H.C. No. 03170.
Ruling of the Court of Appeals
Finding the RTC’s conviction of appellant to be well-supported by evidence, the CA, in its February
26, 2010 Decision,13 ruled as follows:chanroblesvirtuallawlibrary
WHEREFORE, the instant appeal is DISMISSED for lack of merit and the challenged Decision dated
December 3, 2007 in Criminal Case No. T-3864 is AFFIRMED in TOTO.
SO ORDERED.14
Hence, this appeal.cralawred
Issues
For the first time in this appeal, appellant questions his warrantless arrest.  He posits that his arrest was
illegal since he was not arrested in flagrante delicto.  The police officers did not have personal
knowledge that he was committing a crime as they were hiding behind houses seven meters away from
the place where the alleged transaction took place and did not actually see the whole incident.  This
being the case, the sachets allegedly seized from him cannot be used in evidence against him being
“fruits of a poisonous tree.”  Appellant also contends that the prosecution was unable to prove all the
elements of the offense of illegal sale of drugs.  He likewise points to the failure of the police officers
to properly observe the procedure outlined in Section 21, RA 9165 and argues that the same constitutes
a break in the chain of custody.cralawred
Our Ruling
The appeal must be granted.
The prosecution failed to show that the
identity and integrity of the corpus delicti
have been preserved.
There is merit in appellant’s contention that not all elements of the offense of illegal sale of shabu were
proven and that there were unexplained gaps and irregularities in the chain of custody of the seized
items.
In a successful prosecution for the illegal sale of drugs, there must be evidence of the following
elements: “(1) the identities of the buyer and the seller, the object, and the consideration; and (2) the
delivery of the thing sold and the payment therefor.”15  The evidence of corpus delicti must also be
established beyond doubt.  In this case, the shabu “constitutes the very corpus delicti of the offense
and in sustaining a conviction under [RA 9165], the identity and integrity of the corpus delicti must
definitely be shown to have been preserved.”16 “The chain of custody requirement performs this
function in buy-bust operations as it ensures that doubts concerning the identity of the evidence are
removed.”17chanRoblesvirtualLawlibrary
The initial link in the chain of custody starts with the seizure of the plastic sachets from appellant and
their marking by the apprehending officer.  “Marking after seizure is the starting point in the custodial
link, thus it is vital that the seized contraband is immediately marked because succeeding handlers of
the specimens will use the markings as reference.  The marking of the evidence serves to separate the
marked evidence from the corpus of all other similar or related evidence from the time they are seized
from the accused until they are disposed at the end of criminal proceedings, obviating switching,
‘planting,’ or contamination of evidence.”18  A review of the records, however, reveals that the
confiscated sachets subject of the illegal sale of shabu were not marked.  PO2 Martirez, himself,
admitted that he did not put any markings on the two plastic sachets that were handed to him by
Borlagdan after the latter’s purchase of the same from appellant.19  While he mentioned that the police
investigator to whom he turned over the items wrote something down or made some initials thereon, he Q- Having seen the evidence already on the table[,] what did you do, if any?
nevertheless could not remember who wrote the initials.20  And albeit later, PO2 Martirez identified the A- I told the desk officer to prepare the papers to preserve the items.
police investigator as SPO1 Desuasido,21 the latter, however, when called to the witness stand, did not Q- To preserve the integrity and identity of the supposed items[,] what else did
testify that he made any markings on the said sachets or, at the very least, that he received the same you undertake, if any?
from PO2 Martirez.  His testimony merely focused on the fact that he prepared the affidavit of a certain
A- I remember, I put my initials [on] the sachets.
Baltazar.22chanRoblesvirtualLawlibrary
Q- Can you still recall what items were those where you put your initials?
While SPO4 Bonavente testified that he put markings on several sachets of shabu allegedly seized A- The sachets, sir.
from appellant, it cannot be gathered from his testimony that the ones he marked were those sachets Q- Can you still recall how many sachets were those?
subject of this case.  Instead, what it suggests is that those he marked were the sachets belonging to A- I cannot recall.
appellant which he subsequently recovered, i.e., the one allegedly thrown away by appellant and Q- Those sachets that bear your initials, if the same will be shown to you again,
picked up by SPO4 Bonavente from the ground, and those found inside appellant’s will you be able to identify them by way of your markings or initials?
bag, viz:chanroblesvirtuallawlibrary A- Yes, sir.
Q- I have here several sachets containing crystalline substance [e]ncased in two
[PROS. At that time[,] how was the buy-bust operation carried out? bigger transparent sachets which were turned over by the PNP Crime No.
BROTAMONTE]- 5[,] please look at [these] and tell us if you could recognize [them]?
[SPO4 Bonavente]- During that time we were in Sto. Cristo. When our asset got in the house and A- Yes, sir, I recognize [them].
came out he sent positive sign that he already bought the prohibited drugs. xxxx
So I and Roy Martirez immediately got inside the house.
Q- I am showing to you the contents of one bigger transparent plastic packet
Q- What happened next? consisting of two small sachets with crystalline substance in [them]. Please
A- Upon seeing us[,] this Butial tried to escape and Roy Martirez grabbed him look at [them] and tell us if you are familiar with [them].
and they grappled with each other. I saw Butial throw pieces of sachets and I A- (Witness examining the very small sachets containing a very small amount
picked up said sachets which contained shabu. of white crystalline substance).
Q- How many sachets? This is not my initial.
A- Only one. Q- There is a marking which is not of the witness and said witness looking at
xxxx the bigger transparent packet from which these two plastic sachets came
Q- What happened next? from. Look at [them] and tell us if you could recognize [them].
A- After two minutes[,] the owner of the house arrived. I asked him [for] the A- (Witness looking and examining the bigger plastic and recogniz[ing] the
belongings of Butial and he picked up the bag in the corner and handed it to initials as [those] of Martirez).
me. Q- How about [the other] marking?
xxxx A- I do not know.
Q- Upon arrival at the Tabaco Police Station[,] what happened there Q- How about these three other plastic sachets containing crystalline substance
particularly, insofar as the bag was concerned? which I just took out from the previously sealed plastic container?
A- I presented the bag to the desk officer for record purposes and to the duty A- [These are] my initials.
investigator. COURT Witness acknowledging that it is his signature and also his marking on the
Q- What did you do with the bag after that? INTERPRETER: other bigger one. Two small and one bigger sachets. Smaller sachet with D-
A- The duty investigator searched the bag. 325-02 marked “A” with initial of Bonavente. Smaller sachet D-325-02
Q- Where were you when the bag was searched. marked “B” with initial of Bonavente. Smallest sachet D-325-02 marked
A- I was outside the investigation room and I was only informed that they “C.”23 (Emphases supplied)
found another sachet inside the bag.
xxxx Moreover, the Request for Laboratory Examination24 of the items seized suggests that the seized items
were improperly handled.  As may be recalled, the police officers submitted five sachets of shabu for
Q- Tell us if you actually witnessed the procedure of the search?
laboratory examination.  Aside from those three sachets marked by SPO4 Bonavente, the two other
A- No. Sir. I just saw the sachet already on the table when I was informed by sachets were listed and described as follows in the said request:chanroblesvirtuallawlibrary
the desk officer.
x xxx
2.  Evidence/Documents submitted:
xxxx
a. Two (2) transparent plastic packets containing white crystalline suspected to be
Methamphetamine Hydrochloride (Shabu), approximately 0.1 gm. each, and One (1)
P100.00 with SN ES684504, all placed in a heat-sealed transparent plastic with
marking [letter] “I” on both sides;25 (Emphasis supplied)
Notably, the portion “and One (1) P100.00 with SN ES684504, all placed in a heat-sealed transparent
plastic with marking [letter] “I” on both sides” was obliterated by pen markings and the erasure was
initialed by SPO1 Desuasido.  But even without the said erasure, the two transparent plastic packets
containing white crystalline substance appear to have no markings at all. Only the heat-sealed
transparent plastic supposedly containing them has the marking letter “I,” which holds no significance
as the making of the said marking is also not supported by any testimony during trial.
Clearly, the absence of markings creates an uncertainty that the two sachets seized during the buy-bust
operation were part of the five sachets submitted to the police crime laboratory.  The prosecution’s
evidence failed to establish the marking of the two sachets of shabu subject of this case, which is the
first link in the chain of custody and which would have shown that the shabu presented in evidence
was the same specimen bought from appellant during the buy-bust operation.  The lack of certainty
therefore on a crucial element of the crime i.e., the identity of the corpus delicti, warrants the reversal
of the judgment of conviction.26chanRoblesvirtualLawlibrary
The failure of the prosecution to identify the corpus delicti is more glaring after considering that none
of the five sachets submitted to the police crime laboratory for qualitative examination and turned out
positive for shabu weighed close to the two plastic sachets that had an approximate weight of 0.1 gram
each as stated in the Information.  As previously mentioned, the police officers sent five sachets that
were marked and given corresponding weights, viz:chanroblesvirtuallawlibrary
A = 3.7240 B = 0.8642 gram C = 0.0513 gram8
gram[s]
D = 0.0336 gram E = 0.0313 gram
It therefore appears that the sachets of shabu confiscated during the buy-bust operation are totally
different from the sachets forwarded to the police crime laboratory and thereafter presented in
evidence.
As a final note, it does not escape the Court’s attention that there was also no testimony from the police
officers that they conducted a physical inventory and took photographs of the sachets
of shabu confiscated from appellant pursuant to Section 21(1)27 of Article II of RA 9165.  Their sworn
statements did not mention any inventory-taking or photographing of the same.  They also did not
bother to offer any justification for this omission.28  At this point, it is apt to restate the Court’s
pronouncement in People v. Pepino-Consulta:29chanRoblesvirtualLawlibrary
[T]he Court cannot emphasize enough that zealousness on the part of law enforcement agencies in the
pursuit of drug peddlers is indeed laudable. However, it is of paramount importance that the procedures
laid down by law be complied with, especially those that involve the chain of custody of the illegal
drugs. This is necessary in order to dispel even the most infinitesimal of doubts on the outcome of
arrests any buy-bust operations, so as not to render naught the efforts and the resources put forth in the
apprehension and prosecution of violators of our drug laws.30
WHEREFORE, the appeal is GRANTED.  The February 26, 2010 Decision of the Court of Appeals
in CA-G.R. CR-HC No. 03170 affirming the December 3, 2007 Decision of the Regional Trial Court
of Tabaco City, Branch 17, in Criminal Case No. T-3864, finding appellant Jomer Butial guilty of
Violating Section 5, Article II of Republic Act No. 9165, is REVERSED and SET ASIDE and a new
one is entered ACQUITTING him of the charge. Criminal Case No. T-3864 is DISMISSED.
The Director of the Bureau of Corrections is ordered to immediately release appellant Jomer Butial
from detention, unless he is confined for another lawful cause, and to report to this Court compliance
within five days from receipt of this Resolution.
SO ORDERED.cralawlawlibrary
G.R. No. 194999, February 09, 2015 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v.
GLORIA NEPOMUCENO Y PEDRAZA, Accused-Appellant.
SECOND DIVISION
G.R. No. 194999, February 09, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. GLORIA
NEPOMUCENO Y PEDRAZA, Accused-Appellant.
RESOLUTION
DEL CASTILLO, J.:
On August 11, 2003, two Informations charging Gloria Nepomuceno y Pedraza (appellant) with
violation of Sections 5 (Sale of Dangerous Drugs) and 15 (Use of Dangerous Drugs), Article II of
Republic Act (RA) No. 9165 or the Comprehensive Dangerous Drugs Act of 2002, were filed in the
Regional Trial Court (RTC) of Makati, Branch 64. The Information in Criminal Case No. 03-2917
charged appellant with violation of Section 5, Article II of RA 9165 in the following
manner:chanRoblesvirtualLawlibrary
That on or about the 9th day of August, 2003, in the City of Makati, Metro Manila, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, without the necessary
license or prescription and without being authorized by law, did then and there willfully, unlawfully
and feloniously sell, deliver and give away Methylamphetamine Hydrochloride weighing zero point
zero three (0.03) gram, a dangerous drug, in consideration of P100.00.
CONTRARY TO LAW.1

On the other hand, the accusatory portion of the Information in Criminal Case No. 04-1407 charged
appellant with violation of Section 15, Article II of RA 9165 as follows:chanRoblesvirtualLawlibrary
That on or about the 9th day of August, 2003 in the City of Makati, Metro Manila, Philippines, a place
within the jurisdiction of this Honorable Court, the above-named accused, not being authorized by law
to use dangerous drug, and having been arrested and found positive for the use of Methylamphetamine
after a confirmatory test, did then and there, willfully, unlawfully and feloniously use
Methylamphetamine, a dangerous drug, in violation of the said law.
CONTRARY TO LAW.2
During arraignment, appellant pleaded not guilty to both charges. After the termination of the pre-trial
conference, trial ensued.
The prosecution established that the Chief of the Drug Enforcement Unit (DEU) of the Makati
Philippine National Police (PNP) received a report from a confidential informant (CI) that appellant
was selling shabu. He thus formed a buy-bust team to entrap appellant composed of PO2 Vicente
Barrameda (PO2 Barrameda), who was designated as the poseur-buyer and team leader, PO2 Virginio
Costa, PO2 Rodrigo Igno, PO1 Alex Inopia, and PO1 Randy Santos (PO1 Santos). The Chief of the
DEU conducted a briefing and provided the buy-bust team with two 50-peso bills as marked money.
Meanwhile, PO2 Barrameda coordinated the buy-bust operation with the Philippine Drug Enforcement
Agency.
On August 9, 2003, at around 2:00 p.m., the buy-bust team deployed itself at the corner of Caton and
Zobel Streets, Barangay La Paz, Makati City. The team members positioned themselves in strategic
locations while PO2 Barrameda and the CI approached appellant. The CI introduced PO2 Barrameda
to appellant as a buyer of shabu. PO2 Barrameda told appellant that he needed P100.00 worth
of shabu and gave her the marked money as payment. Appellant took out from her pocket and turned-
over to PO2 Barrameda a small plastic sachet containing white crystalline substance. Upon receipt
thereof, PO2 Barrameda lighted a cigarette as the pre-arranged signal that the transaction had been
consummated. PO1 Santos rushed to the scene and recovered from the right hand of appellant the buy-
bust money. PO1 Barrameda marked the subject plastic sachet with the initials “GPN.” Appellant was
then arrested and brought to the DEU of Makati where she was turned over to the duty investigator for
documentation. Thereafter, appellant and the seized plastic sachet with its contents were taken to the
PNP Crime Laboratory for drug testing and laboratory examination, respectively. Specimen of the
white crystalline taken from the plastic sachet tested positive for shabu.
Appellant denied selling shabu. She recalled that on August 9, 2003 at around 1:30 p.m., while she was
standing in front of her house in San Andres, Manila, six men in civilian clothes arrested her. They
informed her that they were from the DEU of Makati and that she was being arrested for selling
them shabu. They dragged her away from her house while her husband and son-in-law were inside and
unaware of what was happening to her. At the DEU office, appellant was told to empty her pockets and
was asked of the whereabouts of a certain Johnny, who was an alleged supplier of illegal drugs in their
area.
Rulings of the Regional Trial Court
and the Court of Appeals
On April 5, 2006, the RTC rendered a Decision3 convicting appellant for illegal sale of shabu in
Criminal Case No. 03-2917, but acquitting her for illegal use of the same in Criminal Case No. 04-
1407 due to insufficiency of evidence. The dispositive portion of the Decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, in view of the foregoing[,] judgment is rendered as
follows:chanRoblesvirtualLawlibrary
1. In Criminal Case No. 03-2917, for violation of Section 5, Art. II, RA 9165, the accused GLORIA
NEPOMUCENO y PEDRAZA, is found GUILTY beyond reasonable doubt and is sentenced to suffer
life imprisonment and pay a fine of P500,000.00. The period during which the accused is detained at
the Makati City Jail shall be considered in her favor pursuant to existing rules.
2. In Criminal Case No. 04-1407, for violation of Sec. 15, Art. II, RA 9165, the accused GLORIA
NEPOMUCENO y PEDRAZA, is ACQUITTED for insufficiency of evidence.
The Branch Clerk of Court is directed to transmit to the Philippine Drug Enforcement Agency (PDEA)
the one (1) piece of plastic sachet of shabu weighing of 0.03 gram subject matter of these cases, for
said agency’s appropriate disposition.
SO ORDERED.4
Appellant appealed her conviction to the Court of Appeals (CA) where it was docketed as CA-G.R.
CR-H.C. No. 02318. The CA denied her appeal in its Decision5 dated August 25, 2010. The dispositive
portion reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the present appeal is hereby DENIED and challenged Decision
of the court a quo dated 05 April 2006 STANDS.
SO ORDERED.6
Appellant thus interposed this appeal reiterating that her positive identification by the police officers
cannot be relied upon since the police officers were not familiar with her appearance. Thus, there was
no assurance that she was the person reported by the CI to be engaged in an illegal drug activity.
Appellant insists that the warrantless arrest, search and seizure carried out by the police officers against
her were illegal since they merely suspected that she committed a crime.7 She continues to argue that
the evidence allegedly recovered from her has no evidentiary value for failure of the buy-bust team to
photograph the seized shabu in the presence of a representative from media, the Department of Justice
(DOJ) and any elected public official who shall sign copies of the inventory pursuant to RA 9165.
Our Ruling
The appeal lacks merit.
The Court is satisfied that the prosecution discharged its burden in a prosecution for illegal sale of
dangerous drugs, which are: “(1) the identity of the buyer and the seller, the object and consideration;
and, (2) the delivery of the thing sold and the payment therefor.” 8 This offense merely requires the
consummation of the selling transaction, which occurs the moment the buyer exchanges his money for
the drugs of the seller.9chanroblesvirtuallawlibrary
PO2 Barrameda, the police officer who acted as buyer, testified on the buy-bust operation against
appellant and positively identified her as the seller of the seized shabu that was sold to him for
P100.00. PO1 Santos, another police officer and member of the buy-bust team, corroborated the
testimony of PO2 Barrameda. While they had not seen appellant prior to the buy-bust operation, the CI
readily identified and introduced her to PO2 Barrameda.
In cases involving the illegal sale of dangerous drugs, “credence should be given to the narration of the
incident by the prosecution witnesses, especially when they are police officers who are presumed to
have performed their duties in a regular manner, unless there is evidence to the contrary. Moreover, in
the absence of proof of motive to falsely impute such a serious crime against the appellant, the
presumption of regularity in the performance of official duty, as well as the findings of the trial court
on the credibility of witnesses, shall prevail over [appellant’s] self-serving and uncorroborated
denial.”10 Appellant therefore had the burden to overcome the presumption that the police officers
regularly and properly discharged their duties11 which she failed to do. Against the evidence of the
prosecution, her defenses of alibi, denial and frame-up crumble. Aside from being weak and
uncorroborated, such defenses are viewed with disfavor since they can easily be concocted and are
common and standard ploy in prosecutions for violation of the Dangerous Drugs
Act.12chanroblesvirtuallawlibrary
Appellant’s contention that her warrantless arrest was unlawful does not deserve credence. The facts
on record do not substantiate her claim that she was apprehended merely on suspicion of committing a
crime. On the contrary, appellant was arrested after committing a criminal offense that resulted from a
successful buy-bust operation. Having been apprehended in flagrante delicto, the police officers were
not only authorized but were even duty-bound to arrest her even without a
warrant.13chanroblesvirtuallawlibrary
Besides, appellant’s objection to the legality of her warrantless arrest and the admissibility in evidence
of the shabu she sold is not a valid ground to warrant a reversal of the rulings of the RTC and the CA.
Such an objection must be manifested prior to entering her plea, otherwise, it is deemed
waived.14 Here, appellant failed to move for the quashal of the Information prior to arraignment due to
the alleged illegality of her arrest or to object to the same during her arraignment. She even actively
participated in the trial and only questioned the validity of her arrest in the CA. As a result of this
omission, she is deemed to have waived any objection to the defects that may have attended her arrest.
Also, appellant’s guilt for selling shabu, a dangerous drug, cannot be reversed by her assertion that the
apprehending officers failed to observe the procedure for the custody and disposition of the seized drug
as provided in Section 21(1), Article II of RA 9165, particularly the conduct of physical inventory and
taking of photograph of the seized item.
Section 21(1),15 Article II of RA 9165 clearly outlines the post-seizure procedure for the custody and
disposition of seized drugs. The law mandates that the police officer taking initial custody of the drug
shall immediately after seizure and confiscation, take photograph and conduct physical inventory of
the same in the presence of the accused or the person/s from whom such items were confiscated and/or
seized, his/her representative or counsel, a representative from the media and the DOJ, and any elected
public official, who shall sign the copies of the inventory and be given a copy thereof.
Notwithstanding the explicit directive of said law, Section 21(a) of its Implementing Rules and
Regulations16 provides a saving clause whenever there is non-compliance, to
wit:chanRoblesvirtualLawlibrary
x x x Provided, further, that non-compliance with these requirements under justifiable grounds, as long
as the integrity and the evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody over said
items.
It can be easily understood from a cursory reading of the implementing rules that the crucial factor is
the preservation of the integrity and the evidentiary value of the seized items since they will be used to
determine the guilt or innocence of the accused.17chanroblesvirtuallawlibrary
In this case, it is admitted that there was no physical inventory and photographing of the seized drug as
mandated by law. However, it was shown that the integrity and evidentiary value of the item has been
preserved and remained intact. The crucial links in the chain of custody of the seized drug subject
matter of the case from its confiscation from appellant up to its presentation as evidence was duly
accounted for and shown to have not been broken. It was established that after the seizure of the small
plastic sachet, PO2 Barrameda immediately marked it with the initials “GPN” while PO1 Santos
confiscated the buy-bust money from appellant’s possession. The police officers took appellant and the
recovered items to the desk officer who investigated the case. After the investigation, a request for
laboratory examination was prepared by P/Supt. Jose Ramon Q. Salido. The confiscated small plastic
sachet marked “GPN” and the request were brought by PO2 Barrameda to the PNP Crime Laboratory
in Camp Crame, Quezon City and was received by P/Insp. Stella Garciano Ebuen (P/Insp. Ebuen) for
examination. P/Insp. Ebuen conducted a laboratory examination on the 0.03 gram of white crystalline
substance found inside the plastic sachet marked “GPN” which tested positive for methylamphetamine
hydrochloride. This finding is contained in Chemistry Report No. D-1002-03.18 During trial, and based
on the marking he placed, PO2 Barrameda identified the seized item as the very same sachet he bought
and recovered from appellant. He also identified appellant to be the same person who sold the
seized shabu to him and the plastic sachet marked “GPN” that contained the dangerous drug.
Considering this sequence of events, there is no doubt that the sachet marked “GPN” submitted for
laboratory examination and found positive for shabu was the same one sold to the poseur-buyer during
the buy-bust operation and the very same item presented during the trial as the corpus delicti. No
irregularity was shown to have attended the chain of custody of the shabu. Its identity, integrity and
probative value were preserved and kept intact by the police officers.
All told, there is no reason to disturb the findings that appellant is guilty beyond reasonable doubt of
violation of Section 5, Article II of RA 9165 as well as the penalty imposed upon her. However, it
must be added that appellant is not eligible for parole.19chanroblesvirtuallawlibrary
WHEREFORE, the August 25, 2010 Decision of the Court of Appeals in CA-G.R. CR-H.C. No.
02318 is AFFIRMED with the MODIFICATION that appellant Gloria Nepomuceno y Pedraza shall
not be eligible for parole.
SO ORDERED.
G.R. No. 184789, February 23, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. BEVERLY
ALAGARME Y CITOY, Accused-Appellant.
DECISION
BERSAMIN, J.:
The importance of the State establishing a preserved chain of custody in every criminal prosecution for
the illegal sale of dangerous drugs cannot be understated. The accused cannot be pronounced guilty of
the offense if all the links of the chain of custody of the drug subject of the illegal sale - the corpus
delicti itself- are not shown. The reason is that the drug presented as evidence at the trial is not shown
beyond reasonable doubt that it was the drug subject of the illegal sale.chanroblesvirtuallawlibrary
The Case
Under review is the decision promulgated on May 28, 2008,1 whereby the Court of Appeals (CA)
affirmed the judgment rendered on September 15, 2006 in Criminal Case No. 05-568 and Criminal
Case No. 05-569 by the Regional Trial Court (RTC), Branch 64, in Makati City2 finding the appellant
guilty beyond reasonable doubt of violations of Section 5 and Section 11, Article II of Republic Act
No. 9165 (Comprehensive Dangerous Drugs Act of 2002).
Antecedents
The information in Criminal Case No. 05-568 charged the appellant with violation of Section 5, Article
II of Republic Act No. 9165, viz:chanRoblesvirtualLawlibrary
That on or about the 14th day of March, 2005, in the City of Makati, Metro Manila, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, without the necessary
license or prescription and without being authorized by law, did then and there willfully, unlawfully
and feloniously sell, deliver and give away P200.00 worth of Methyl amphetamine Hydrochloride
(Shabu) weighing zero point zero three (0.03) gram, a dangerous drug.
CONTRARY TO LAW.3cralawred
cralawlawlibrary
while the information in Criminal Case No. 05-569 alleged violation of Section 11, Article II of
Republic Act No. 9165, as follows:chanRoblesvirtualLawlibrary
That on or about the 14th day of March, 2005, in the City of Makati Metro Manila, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, not being lawfully
authorized to possess and/or use regulated drugs and without any license or proper prescription, did
then and there willfully, unlawfully and feloniously have in her possession, custody and control
Methylamphetamine Hydrochloride (Shabu) weighing zero point fifteen (0.15) gram, which is a
dangerous drug, in violation of the aforesaid law.
CONTRARY TO LAW.4cralawred
cralawlawlibrary
The appellant pleaded not guilty to both informations.5cralawred
Version of the Prosecution
At the trial, the State presented as witnesses poseur buyer PO1 Percival Mendoza, and Makati Anti-
Drug Abuse Council (MADAC) Operative Miguel Castillo.
The police and MADAC operatives apprehended the appellant during a buy-bust operation conducted
on Guiho Street, Barangay Cembo, Makati City at around 4:40 p.m. on March 14, 2005.6 The buy-bust
team had been formed with prior coordination with the Philippine Drug Enforcement Agency (PDEA)
after P/Insp. Marietto Valerio, the Action Officer of the Station Anti-Illegal Drugs Special Operations
Task Force (SAID-SOTF), had received information from a concerned citizen about the
appellant,7 whose name was on the police watch list, engaging in the illegal sale of drugs.8 The buy-
bust money, which consisted of two P100.00 bills marked with C4, the acronym for Cluster 4 of the
MAD AC demarcating the area of operation,9 was handed over to POl Mendoza as the designated
poseur-buyer.10 The buy-bust team and the confidential informant then proceeded to the target area on
board a Toyota Revo.11 The informant and POl Mendoza alighted from the Toyota Revo upon reaching
Guiho Street to await the arrival of the appellant.12 When she finally arrived, the informant introduced
POl Mendoza to her as someone in need of shabu.13 She asked POl Mendoza how much he wanted to
buy.14 The latter replied: Katorse long po.15 She asked for the payment; hence, POl Mendoza gave her
the marked bills.16 Upon receiving the marked bills, she went into an alley and returned shortly
thereafter with two plastic sachets containing suspected shabu.17 Picking one of the plastic sachets, POl
Mendoza tucked it in his right front secret pocket, which was the pre-arranged signal to alert the rest of
the buy-bust team about the consummation of the sale.18 At the same time, POl Mendoza held her by
the hand to arrest her.19 Upon seeing the pre-arranged signal, the rest of the buy-bust team, including
MAD AC Operative Castillo, rushed forward, and assisted POl Mendoza in apprehending her. After
apprising her of her constitutional rights, POl Mendoza asked her to empty her pockets, and when she
complied, he recovered the buy-bust money from her.20 He also recovered the other plastic sachet from
her right hand.21cralawred
POl Mendoza required the appellant to board the Toyota Revo. It was inside the vehicle where he
marked the plastic sachets with his initials PCM for the sachet subject of the sale, and PCM-1 for the
sachet recovered from her right hand.22cralawred
The buy-bust team brought the appellant and the confiscated items to the office of the SAID-SOTF for
documentation and investigation.23 The team later brought her and the confiscated items to the PNP
Crime Laboratory for testing and examination.24 Her urine sample and the white crystalline substances
contained in the two plastic sachets tested positive for methylamphetamine hydrochloride, otherwise
known as shabu.25cralawred
Version of the Defense
The appellant was the lone witness of the Defense.
The appellant denied the charges, and insisted that she had been the victim of a frame-up. According to
her, she was cleaning the house of Gona Gonzales at No. 94 Guiho Street, Barangay Cembo, Makati
City, for whom she worked as househelper.26 She later on went out to buy rice and on her way to the
store, two men approached and announced her that they were able to buy shabu from her.27 One of the
men poked his gun at her. They then brought her to the basketball court, where they frisked and
ordered her to bring out the shabu.28 They recovered money amounting to P180.00 from her.29 They
asked if she knew anyone selling shabu, but she answered them in the negative.30 They brought her to
the MADAC office where she remained for a day.31 She was later taken to the PNP Crime Laboratory
for drug testing. She admitted using shabu only once, a year prior to her arrest.32cralawred
Judgment of the RTC
On September 15, 2006, the RTC convicted the appellant of the two offenses charged,
ruling:chanRoblesvirtualLawlibrary
WHEREFORE, in view of the foregoing judgment is rendered as follows:
1. In Criminal Case No. 05-568, the Court finds accused BEVERLY ALAGARME y CITOY GUILTY
beyond reasonable doubt of the offense of Violation of Section 5, Article II, Republic Act No. 9165
and sentences her to suffer LIFE IMPRISONMENT and to pay a fine of FIVE HUNDRED
THOUSAND (P500,000.00) PESOS.
2. In Criminal Case No. 05-569, the Court finds the accused BEVERLY ALAGARME y CITOY
GUILTY beyond reasonable doubt of the offense of Violation of Section 11, Article II, Republic Act
No. 9165 and sentences her to suffer the indeterminate imprisonment of Twelve (12) years and one (1)
day, as minimum to Fourteen (14) years, as maximum, and to pay a fine of THREE HUNDRED
THOUSAND (P300,000.00) PESOS.
The period during which the accused was under detention shall be considered in her favor pursuant to
existing rules.
The Branch Clerk of Court is directed to submit to the Philippine Drug Enforcement Agency (PDEA)
the two (2) plastic sachets of shabu with a combined weight of zero point eighteen (0.18) gram for said
agency's appropriate disposition.
SO ORDERED.33cralawred
cralawlawlibrary
Decision of the CA
The appellant appealed to the CA, contending that the Prosecution's patent non-compliance with the
requirements under Section 21 of Republic Act No. 9165 warranted her acquittal.
On May 28, 2008, the CA affirmed the conviction of the appellant,34 holding that the integrity and
evidentiary value of the confiscated items had been safeguarded notwithstanding the Prosecution's
failure to comply with the requirements prescribed under Section 21 of Republic Act No. 9165; and
that her mere denial and unsubstantiated defenses did not overcome the presumption of regularity of
the buy-bust operation over.chanroblesvirtuallawlibrary
Issue
Did the CA err in finding the appellant guilty beyond reasonable doubt of the violations of Section 2
and Section 5, Article II of Republic Act No. 9165 charged?
Ruling
After careful examination of the records, we acquit the appellant because of the State's failure to prove
her guilt beyond reasonable doubt.
In every prosecution for the illegal sale of dangerous drugs, the presentation of the drugs as evidence in
court is material,35 because the identity of the drugs seized should be established beyond any
reasonable doubt. What is more, the fact that the substance bought during the buy-bust operation is the
same substance offered in court should be proven. The preservation of the chain of custody of the
drugs seized performs the function of ensuring that unnecessary doubts attending the identity of the
evidence are removed.36cralawred
Section 21(1) of Republic Act No. 9165 lays down the procedure to be followed in the seizure and
ensuing custody of the seized dangerous drugs, viz.:chanRoblesvirtualLawlibrary
Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. - The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and essential
chemicals, as well as instruments/paraphernalia and/or laboratory equipment so confiscated, seized
and/or surrendered, for proper disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy
thereof;ChanRoblesVirtualawlibrary
x x x xcralawlawlibrary
Section 21 (a), Article II of the Implementing Rules and Regulations (IRR) of Republic Act No. 9165,
states:chanRoblesvirtualLawlibrary
xxxx
(a) The apprehending office/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the
search warrant is served; or at the nearest  police station or  at  the  nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items;ChanRoblesVirtualawlibrary
x x x xcralawlawlibrary

The foregoing procedure underscores the value of preserving the chain of custody in relation to the
dangerous drugs. To give effect to the procedure, the Dangerous Drugs Board (DDB), which is the
policy-making and strategy-formulating body in the planning and formulation of policies and programs
on drug prevention and control tasked to develop and adopt a comprehensive, integrated, unified and
balanced national drug abuse prevention and control strategy,37 has defined chain of custody involving
the dangerous drugs and other substances in Section l(b) of DDB Regulation No. 1, Series of
200238 thusly:chanRoblesvirtualLawlibrary
b. "Chain of Custody" means the duly recorded authorized movements and custody of seized drugs
or controlled chemicals or plant sources of dangerous drugs or laboratory equipment of each
stage, from the time of seizure/confiscation to receipt in the forensic laboratory to safekeeping to
presentation in court for destruction. Such record of movements and custody of seized item shall
include the identity and signature of the person who held temporary custody of the seized item, the
date and time when such transfer of custody were made in the course of safekeeping and use in court as
evidence, and the final disposition; (Emphasis supplied)cralawlawlibrary
With this concern for the due recording of the authorized movement and custody of the seized drugs or
controlled chemicals or plant sources of dangerous drugs or laboratory equipment, the presentation as
evidence in court of the dangerous drugs subject of the illegal sale is material in every prosecution for
the illegal sale of dangerous drugs.39 This materiality derives from the dangerous drugs being
themselves the corpus delicti. Indeed, proof of the corpus delicti is essential in every judgment of
conviction.40 Without proof of the corpus delicti, there is uncertainty about whether the crime really
transpired or not. To eliminate the uncertainty, the Prosecution should account for every link in the
chain of custody; otherwise, the crime is not established beyond reasonable doubt. In other words, the
Prosecution does not comply with the indispensable requirement of proving the violation of Section 5
of Republic Act No. 9165 either when the dangerous drugs are missing or when there are substantial
gaps in the chain of custody of the seized dangerous drugs that raise doubts about the authenticity of
the evidence presented in court.41cralawred
A reading of the record indicates that the buy-bust team did not observe the procedures laid down by
Republic Act No. 9165 and its IRR. The marking of the seized drugs or other related items
immediately upon seizure from the accused is crucial in proving the chain of custody because it is the
starting point in the custodial link. The marking upon seizure serves a two-fold function, the first being
to give to succeeding handlers of the specimens a reference, and the second being to separate the
marked evidence from the corpus of all other similar or related evidence from the time of seizure from
the accused until their disposition at the end of criminal proceedings, thereby obviating switching,
"planting," or contamination of evidence. 42 This requirement of marking as laid down by the law was
not complied with. Firstly, PO1 Mendoza simply stated that he did the marking of the confiscated
items with his initials inside the Toyota Revo. Although the appellant was also inside the Toyota Revo
at that time,43 he did not state if his marking was done within the view of the appellant, or within the
view of any representative from the media, Department of Justice or any elected public official.
Secondly, both he and MADAC Operative Castillo did not indicate if any media or DOJ representative
or elected public official had been present during the buy-bust operation and when the drugs were
recovered from the appellant at the scene of the apprehension. The law unequivocally required such
presence. Thirdly, there was also no showing of any inventory of the confiscated items being
undertaken or prepared. The lack of the inventory was confirmed by the absence of any certificate of
inventory being formally offered as evidence by the Prosecution.44 Lastly, the Prosecution did not
produce any photographs taken of the sachets of shabu immediately following their seizure.
The last paragraph of Section 21 (a), Article II of the IRR of Republic Act No. 9165 provides a saving
mechanism to ensure that not every case of non-compliance with the safeguards to preserve the chain
of custody will irretrievably prejudice the Prosecution's case against the accused. However, in order for
such saving mechanism to apply, the Prosecution must first recognize the lapse or lapses in the
prescribed procedures and then explain the lapse or lapses.45 Here, however, the Prosecution did not
bother to show that a media representative, DOJ representative or elected public official had been
notified of the buy-bust operation or, assuming that the DOJ representative or public official had been
so priorly informed, the lawmen did not explain why none of such representatives was around to
witness the actual marking of the evidence. Indeed, the Prosecution did not even try to show that the
application of the saving mechanism provided in Section 21 (a), Article II of the IRR of Republic Act
No. 9165 would be justified. Under the circumstances, the identification of the seized evidence in court
during the trial became ambiguous and unreliable, rendering the proof of the links in the chain of
custody of the corpus delicti unworthy of belief.
Where the State did not establish a preserved chain of custody of the dangerous drugs according to the
statutory procedure for doing so, we have no need to review the claim of the appellant about her being
framed up on trumped-up charges. In view of the presumption of her innocence, she did not need to
explain her arrest for the crimes charged against her. The presumption should be overcome only by
strong evidence of her guilt.
WHEREFORE, the Court REVERSES and SETS ASIDE the decision promulgated on May 28,
2008 by the Court of Appeals; ACQUITS appellant BEVERLY ALAGARME y CITOY on the
ground of the failure of the Prosecution to establish her guilt beyond reasonable doubt;
and ORDERS her IMMEDIATE RELEASE from the Correctional Institute for Women of the
Bureau of Corrections, unless she is confined for another lawful cause.
The Director of the Correctional Institute for Women of the Bureau of Corrections is directed to
implement this decision and to report to this Court the compliance within 10 days from receipt hereof.
SO ORDERED.cralawlawlibrary
G.R. No. 189296, March 11, 2015
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RECTO ANGNGAO Y MAKAY AND
ROBERT CARLIN Y PECDASEN, ACCUSED, RECTO ANGNGAO Y MAKAY, Accused-
Appellant.
DECISION
BERSAMIN, J.:
The State bears the burden of establishing the chain of custody of the dangerous drugs confiscated
during a buy-bust operation. The evidence of the chain of custody must meet the test of proof beyond
reasonable doubt.
The Case
In its decision promulgated on November 28, 2008,1 the Court of Appeals (CA) affirmed the
conviction of Recto Angngao y Makay aka Amboy under the judgment rendered on December 14,
2006 by the Regional Trial Court, Branch 61 (RTC), in Baguio City for the illegal sale of 250 grams of
marijuana resin or hashish (Criminal Case Nos. 22317-R), and for the illegal possession of 500
milliliters of hashish oil (Criminal Case Nos. 22318-R), and sentencing him in each case to life
imprisonment and to pay a fine of P500,000.00.2
Hence, this appeal.
Antecedents
According to the CA, the established antecedent facts are as follows:
On 23 November 2003, SPO4 Marquez Madlon, member of the Philippine Drug Enforcement Agency
in the Cordillera Autonomous Region (PDEA-CAR), received a call on his cellular phone from a caller
who identified himself as Amboy. Amboy, who turned out to be appellant Recto Angngao y Makay,
was asking for the whereabouts of a certain Jun Buguias, from whom he allegedly got SPO4 Madlon’s
number. Recalling that Buguias was one of those arrested by the PDEA-CAR for selling marijuana
hashish, SPO4 Madlon took interest in the caller and made up a story by telling him that he was also
waiting for Buguias to deliver to him his order of marijuana hashish. Believing SPO4 Madlon’s story,
appellant disclosed that he had marijuana resin which was supposed to be delivered to Buguias.
Appellant likewise proposed that SPO4 Madlon should deal with him directly since Buguias is (sic)
nowhere to be found. Appellant offered SPO4 Madlon to sell two hundred fifty (250) grams of
marijuana resin for Fifty Thousand Pesos (P50,000.00) and one (1) liter of marijuana hashish oil for
One Hundred Fifty Thousand Pesos (P150,000.00). He agreed to deliver them to SPO4 Madlon on the
same day, between 7:30 and 8:30 in the evening at the Petron Gasoline Station in Baguio General
Hospital along Marcos Highway.
Forthwith, SPO4 Madlon reported his conversation with appellant to his superior, Police Supt. Danilo
Flordeliza, Regional Director of PDEA-CAR.
Acting on SPO4 Madlon’s report, P/Supt Flordeliza conducted a briefing for a buy-bust operation. A
buy-bust team was thereafter formed with Police Senior Inspector Edgar Apalla as the team leader,
SPO4 Arthur Lucas as the back-up guard, SPO2 Cabili Agbayani as the seizing officer, Police Officer
Akia as the arresting officer and SPO4 Madlon as the poseur buyer. The group brought with them the
buy-bust money consisting of ten (10) Five Hundred (P500.00) peso bills, amounting to Five thousand
Pesos (P5,000.00), mixed with one (1) bundle of boodle money.
Around 7:15 in the evening, SPO4 Madlon proceeded to the target area on board a rented Tamaraw FX
Taxi, while the rest of the police operatives used another vehicle. Upon arriving at the Petron Gasoline
Station, SPO4 Madlon called up appellant and informed him that he was already at the area waiting for
him.
After waiting for a while, SPO4 Madlon noticed a tamaraw FX Taxi at the vicinity of the gasoline
station. A man with a backpack alighted from the vehicle. He was with another man and he seemed to
be looking for somebody. To make sure that it was appellant, SPO4 Madlon dialed appellant’s
cellphone number. The man, who turned out to be appellant, answered the call. SPO4 Madlon therefore
instructed him to meet him at the Pancake House located within the vicinity of the Petron gasoline
Station.
SPO4 Madlon sat and waited outside the Pancake House. Thereafter, appellant arrived and introduced
his companion, who was later identified as appellant’s co-accused Robert Carlin y Pecdasen. Carlin sat
beside SPO4 Madlon while appellant took a seat opposite SPO4 Madlon. SPO4 Madlon then inquired
about their transaction and asked appellant if he could get a discount on the price of the marijuana
resin. Appellant refused. SPO4 Madlon then told appellant that he wanted to inspect the marijuana
resin and check if it was of good quality. Appellant was at first hesitant but later on prevailed upon to
bring out a brick of marijuana resin from his backpack. He showed it to SPO4 Madlon, who after
confirming that it was indeed marijuana resin, took out the buy-bust money and gave it to Carlin.
Carlin, who, all the while was merely observing the transaction, handed over the money to appellant.
Thereafter, SPO4 Madlon stood up, as a pre-arranged signal to the police operatives that the
transaction had been completed.
The back-up police officers, who were strategically positioned from a seeing distance, rushed to the aid
of SPO4 Madlon and arrested appellant and Carlin. Upon frisking appellant, the police operatives
recovered from him the buy-bust money and a bottle of dark-green viscous liquid suspected to be
marjuana hashish oil. The confiscated items were marked with the initials “MKM” representing the
initials of SPO4 Marquez Kilit Madlon, “CJA” for SPO2 Cabili Julian Agbayani, “AAL” for SPO4
Arthur Apil Lucas and “DEA” for Police Officer Daniel Esteban Akia.3
The confiscated substances, when brought to the Benguet Provincial Crime Laboratory Office in
Baguio City for processing and identification, tested positive for marijuana, a dangerous drug. The
brick of marijuana resin weighed 251.02 grams, while the bottle containing the dark green glutinous
substance contained 450 milliliters of marijuana hashish oil.4
The Office of the City Prosecutor of Baguio City filed in the RTC two informations against Angngao
and Robert Carlin y Pecdasen, charging them with the illegal sale of marijuana resin and illegal
possession of marijuana hashish oil in violation of Republic Act No. 9165 (Comprehensive
Dangerous Drugs Act of 2002).
During the trial, Angngao denied the accusations, clarifying that he had been working as a construction
worker in Quirino Hill, Baguio City at the time, and that on the day of the arrest, was visiting his
cousin who had been confined at the Baguio City General Hospital; and that he was then suddenly
accosted and arrested by police officers in the Pancake House near the hospital where he was having a
snack.5
For his part, Carlin, also denying the charges, insisted that he did not know Angngao; that he was only
accompanying a townmate who visited a friend confined at the Baguio City General Hospital; that after
coming from the hospital, he and his friend had gone to the Pancake House to eat when a commotion
occurred inside the restaurant caused by police officers arresting a customer, who turned out to be
Angngao; and that the policemen then turned to him and arrested him allegedly for being the cohort of
Angngao.6
Judgment of the RTC
On December 14, 2006,7 the RTC convicted Angngao but acquitted Carlin, viz.:
WHEREFORE, judgment is rendered in Criminal Case No. 22317-R finding the accused Recto
Angngao y Makay GUILTY beyond reasonable doubt and he is hereby sentenced to suffer Life
Imprisonment and to pay a fine of P500,000.00 and the costs, and Criminal Case No. 22318-R finding
the accused Recto Angngao y Makay likewise GUILTY beyond reasonable doubt and he is hereby
sentenced to suffer Life Imprisonment and to pay a fine of P500,000.00 and the costs.
The accused Roberty (sic) Carlin is ACQUITTED on grounds of reasonable doubt and is ORDERED
RELEASED from custody unless otherwise being held lawfully for some other offense requiring
continued detention.
SO ORDERED.8
Decision of the CA
On November 28, 2008,9 the CA promulgated its assailed judgment affirming the conviction of
Angngao handed down by the RTC, to wit:
WHEREFORE, the Decision of the Regional Trial Court of Baguio City, Branch 61, dated 14
December 2006, in Criminal Cases Nos. 22317-R and 22318-R, is AFFIRMED.
SO ORDERED.
Issues
In this appeal, Angngao claims that the CA:10
I.
x x x GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY BEYOND
REASONABLE DOUBT OF THE CRIMES CHARGED.
II
x x x GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT DESPITE THE
PROSECUTIONS’S FAILURE TO ESTABLISH THE CHAIN OF CUSTODY OF THE ALLEGED
CONFISCATED DRUGS.
In the appellee’s brief filed in the CA, which the Office of the Solicitor General (OSG) adopted in this
appeal, the State seeks the affirmance of the decision of the CA by insisting that the police officers
who comprised the entrapment team were entitled to the presumption of the regularity of the
performance of their official duty.
Ruling of the Court
The appeal is meritorious.
To ensure a conviction for the illegal sale of dangerous drugs, the following elements constituting the
crime must be present, namely: (a) the identities of the buyer and seller, the object of the sale, and the
consideration; and (b) the delivery of the thing sold and the payment for the thing. Such prosecution
for the sale of illegal drugs requires more than the hasty presentation of evidence to prove each element
of the crime. The presentation of the drugs as evidence in court is indispensable in every prosecution
for the illegal sale of dangerous drugs because the drugs are the corpus delicti of the crime.11 As such,
the State should establish beyond doubt the identity of the dangerous drugs by showing that the
dangerous drugs offered in court as evidence were the same substances bought during the buy-bust
operation.12 This requirement is complied with by ensuring that the custody of the seized drugs from
the time of confiscation until presentation in court is safeguarded under what is referred to as the chain
of custody by Republic Act No. 9165, whose objective is to remove unnecessary doubts concerning the
identity of the evidence.13
Should the State not definitively establish that the dangerous drugs presented in court were the very
same substances actually recovered from the accused, the criminal prosecution for drug pushing should
fail because the guilt of the accused was not established beyond reasonable doubt.14 According
to People v. Catalan,15 the Prosecution does not comply with the indispensable requirement of proving
the violation of Section 5 of Republic Act No. 9165 if the dangerous drugs are missing, or if there are
substantial gaps in the chain of custody of the seized dangerous drugs that raise doubts about the
authenticity of the evidence presented in court. Indeed, the non-presentation of the dangerous drugs
that constitute the corpus delicti would render the conviction unfounded.
As the means for the establishment of the chain of custody, Section 21 (1) of R.A. No. 9165 provides
thus:
(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused
or the person/s from whom such items were confiscated and/or seized, or his/her representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy thereof.
Complementing Section 21 (1) of R.A. No. 9165 is the following guideline under the Implementing
Rules and Regulations (IRR) of R.A. No. 9165, to wit:
(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately
after seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ), and
any elected public official who shall be required to sign the copies of the inventory and be given a copy
thereof: Provided, that the physical inventory and photograph shall be conducted at the place where the
search warrant is served; or at the nearest police station or at the nearest office of the apprehending
officer/team, whichever is practicable, in case of warrantless seizures; Provided, further, that non-
compliance with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending officer/team, shall not
render void and invalid such seizures of and custody over said items;
The manner and timing of the marking of the seized drugs or related items in accordance with the
foregoing statutory rules are crucial in proving the chain of custody. The marking by the arresting
officer of the drugs, being the starting point in the custodial link, should be made immediately upon the
seizure, or, if that is not possible, as close to the time and place of the seizure as practicable under the
obtaining circumstances. This immediate marking is essential because the succeeding handlers of the
drugs would use the markings as their reference to the seizure, and because it further serves to
segregate the marked seized drugs from all other evidence from the time and point of seizure until the
drugs are disposed of at the end of the criminal proceedings. The deliberate taking of these identifying
steps is statutorily aimed at obviating switching, “planting” or contamination of the evidence. 16 Verily, later on in the police station. In fact, the RTC did not advert to any markings at all. Although the CA
the preservation of the chain of custody vis-à-vis the drugs ensures the integrity of the evidence noted that the drugs were marked with the initials of the apprehending police officers, the
incriminating the accused, and fulfills the element of relevancy as a requisite for the admissibility of circumstances attendant to such markings, like when and where the markings were done, were not
the evidence. sufficiently revealed. In particular, SPO4 Madlon, SPO4 Lucas and SPO2 Agbayani did not indicate
whether the seized items had been marked right away following the confiscation, or later on in the
The Court accepts that “while the chain of custody should ideally be perfect, in reality it is not, ‘as it is police station, as the following excerpts of their testimonies show:
almost always impossible to obtain an unbroken chain.’”17 This limitation on the chain of custody is
well recognized in Section 21 of R.A. No. 9165’s IRR, which states that non-compliance with the PROSECUTOR [CATRAL]
rules’ requirements under justifiable grounds shall not render void and invalid such seizures of and Q: As far as Amboy is concerned, what items were retrieved from him?
custody over said items as long as the integrity and evidentiary value of the seized items are properly [SPO4 MADLON]
preserved by the apprehending officer/team. In resolving drug-related offenses, therefore, the courts A: The marijuana hashish together with 1 liter marijuana hash oil, sir.
should deem to be essential “the preservation of the integrity and the evidentiary value of the seized xxxx
items, as the same would be utilized in the determination of the guilt or innocence of the accused.” 18 Q: So after you have already effected the arrest and the search was made in the persons of the
accused, what happen (sic) next?
The conviction would have been watertight. SPO4 Madlon, who acted as the poseur-buyer in the buy- A: We prepared for physical examination request, for chemical analysis of the confiscated
bust operation, succeeded in purchasing from the appellant the brick of marijuana resin weighing dangerous drugs from the suspect, request for drug test, the inventory of the evidences (sic)
251.02 grams, more or less, for a total consideration of P50,000.00. The payment was received by the confiscated on the suspect and our Affidavit of Arrest, sir.22
appellant through Carlin. The ensuing physical search conducted on the appellant further yielded the xxxx
marijuana hash oil. The elements constituting the crime of illegal sale of dangerous drugs were Q: Actually who among you conducted the search in the person of the 2 accused?
seemingly established. [SPO4 LUCAS]
A: SPO2 Agbayani, sir.
However, the conviction must have to be undone. The integrity of the evidence presented – the corpus xxx
delicti no less – became suspicious by the mysterious silence of the record on what transpired after the Q: And after that what happen (sic) next?
transaction. On its part, the RTC, after reliving the buy-bust operation, uncharacteristically jumped to A: We proceeded in our office, sir.
the conclusion that the accused was guilty as charged by declaring that “the prosecution was able to Q: And at your office what happen (sic)?
establish these elements [of illegal sale of dangerous drugs] beyond moral certainty,” 19 and that the A: For documentation that’s the time we were able to identify the suspect as Recto Angngao
accused “was validly searched by the police officers after his lawful arrest and same yielded and Robert Carlin, sir.23
approximately one-half liter of the potent dangerous drug hash oil or resin.”20 In the same breath, the xxxx
RTC rejected the accused’s denial and alibi as inherently weak defenses. 21 In turn, the CA devoted Q: There are markings here, CJA, what does that represent?
little, if any, discussion on the chain of custody vis-à-vis the seized drugs. [SPO2 AGBAYANI]
A: My initials, Sir.
Such treatment by the two lower courts of a matter as essential to the conviction as the chain of Q: Who placed that?
custody is not surprising. An examination of the record indicates that no testimony on the links in the A: I was the one, Sir.
chain of custody from the time the drugs were confiscated up to the time they were offered as evidence Q: How about this MKM?
in court was given by the arresting lawmen and the others who could have handled the drugs. This A: Marquez K. Madlon, Sir.
omission deprived the lower courts of the means of knowing the details as to every person who Q: How about AEL?
touched the drugs, as to how and from whom the drugs were received, as to where the drugs were at A: Arthur E. Lucas, Sir.
any given point in that interval, and as to what happened to the drugs while in the possession of each Q: How about DEA?
handler, including the relative condition in which the drugs were received and the state in which they A: Daniel E. Akia, Sir.
were delivered to the next links in the chain. It is quite notable that the officers who served as the only Q: How about this entry?
witnesses to the buy-bust operation neither described the precautions taken to ensure that there had A: That is during the arrest of the suspect, Sir.24
been no change in the condition of the drugs nor specified that there was no opportunity for any person xxxx
not in the chain to have possession of the drugs.
Other than the response of SPO2 Agbayani to the question pertaining to the date appearing on the
To be more specific, the assailed decisions of both the RTC and the CA do not show that the arresting markings, nothing shows how such markings were obtained and the circumstances surrounding that
lawmen had marked the seized drugs immediately upon confiscation at the site of the arrest, or even important link in the chain. The members of the buy-bust team did not even mention in the Joint
Affidavit of Arrest or in the Affidavit of Poseur-Buyer that they had marked the drugs.
The Prosecution cannot avoid confronting the issue of the broken chain of custody by embellishing its
case with the presumption of regularity. This presumption, which is not conclusive, vanishes upon the
slightest hint or taint of irregularity.25 It stands only when nothing suggests that the law enforcers
involved deviated from the standard conduct of official duty as provided for in the law. But where, like
here, the official act in question is irregular on its face, the presumption does not arise as a matter of
course.26 As such, the non-conformity with the requirements for preserving the chain of custody on the
part of the arresting lawmen closed the door to the application of the presumption of regularity.
There were other indicia of non-conformity with the requirements. It is beyond dispute, for one, that no
photograph was taken of the recovered items for documentation purposes. It was also not shown why,
despite the requirement of the law itself, no representative from the media, from the Department of
Justice, or any elective official was present to serve as a witness during the arrest. The Prosecution’s
testimonial evidence is actually bereft of the showing of the efforts undertaken by the law enforcers to
see to the presence of any of such representatives during the operation against the appellant from his
apprehension until the seizure of the drugs.
It is true that Section 21 of the IRR of R.A. No. 9165 only requires a substantial compliance with the
requirements of markings and photographing instead of an absolute or literal compliance. Hence, an
accused can still be held guilty provided that a justifiable ground for excusing the non-compliance with
the requirements has been satisfactorily established by the Prosecution.27
Such justifiable ground is wanting here. SPO4 Madlon and the rest of the buy-bust team tendered no
explanation for the non-compliance. They were required to render sufficient reasons for their non-
compliance during the trial; otherwise, the persons they charged would be acquitted on the ground of
reasonable doubt.28 Yet, they even seemed unaware that such requirements existed at all. We are aghast
at their dismissive treatment of the requirements.
There is no question that the State had the responsibility to explain the lapses in the procedures taken
to preserve the chain of custody of the dangerous drugs. Without the explanation by the State, the
evidence of the corpus delicti became unreliable, and the acquittal of the accused should follow on the
ground that his guilt had not been shown beyond reasonable doubt.29 Absent the justification by the
arresting lawmen for their non-compliance with the requirement of an intact chain of custody, the trial
court and the CA did not fairly convict the appellant in whose favor the safeguards have been erected
by the law. As the Court well stated in People v. Relato:30
Statutory rules on preserving the chain of custody of confiscated prohibited drugs and related items are
designed to ensure the integrity and reliability of the evidence to be presented against the accused.
Their observance is the key to the successful prosecution of illegal possession or illegal sale of
prohibited drugs.
Consequently, we reverse the conviction of the appellant for possession of or for the sale of illegal
drugs under R.A. No. 9165 for failure to prove his guilt beyond reasonable doubt.
WHEREFORE, the Court REVERSES and SETS ASIDE the November 28, 2008 decision of the
Court of Appeals affirming the conviction of Recto Angngao y Makay by the Regional Trial Court,
Branch 61, in Baguio City for the illegal sale of 250 grams of marijuana resin or hashish (Criminal
Case Nos. 22317-R), and for the illegal possession of 500 milliliters of hashish oil (Criminal Case Nos.
22318-R); and ACQUITS him of the offenses charged based on reasonable doubt.
The Director of the Bureau of Prisons is ORDERED to IMMEDIATELY RELEASE Recto
Angngao y Makay from custody upon receipt hereof, unless he is being held for some other lawful
cause.
G.R. No. 209212
PEOPLE OF THE PHILIPPINES, Plaintiff and Appellee,
vs.
ROMEL SAPITULA Y PACULAN, Accused-Appellant.
RESOLUTION
PEREZ, J.:
Before us for review is the Decision1 of the Court of Appeals (CA) in CA G.R. CR.-H.C. No. 05186
elated 19 February 2013 which dismissed the appeal of accused-appellant Romel Sapitula y Paculan
and affirmed with modification the Judgment2 of the Regional Trial Court (RTC) of Agoo, La Union,
Branch 31, in Criminal Case No. A-6013 finding accused-appellant guilty beyond reasonable doubt of
attempted sale of a dangerous drug in violation of Section 5 in relation to Section 26 of Republic Act
(R.A.) No. 9165, otherwise known as the Comprehensive Dangerous Drugs Act of 2002.
Accused-appellant was charged with violation of Section 5, Article II of R.A. No. 9165. The
accusatory portion of the Information reads as follows:
That on or about the 16th day of June 2011, in the Municipality of Sto. Tomas, Province of La Union,
Philippines and within the jurisdiction of this Honorable Court, the above named accused, without
authority of law, did then and there, wilfully, unlawfully and knowingly, for and in consideration of the
amount of Three Hundred (Php 300.00) Pesos, sell, convey, deliver and give away to a PO3 Ardie
Gayo Palabay one (1) heat sealed plastic sachet containing shabu with a weight of zero point zero nine
hundred forty six (0.0946) gram, a dangerous and prohibited drug.
Contrary to the provision of Section 5, Art. 2 of R.A. 9165.3
At his arraignment, accused-appellant pleaded not guilty. Trial ensued.
The prosecution presented as witnesses Police Senior Inspector Diosdado Gagaoin (PSI Gagaoin),
Police Officer 3 Ardie Palabay (PO3 Palabay), Police Inspector Maria Theresa Amor Manuel (PI
Manuel), PO3 Emmanuel Pimentel, Jr., and PSI Bedalyn Antonio (PSI Antonio), whose testimonies
sought to establish the following facts:
Acting on a tip from a confidential informant that accused-appellant sells shabu, PSI Gagaoin
instructed PO3 Palabay to conduct a surveillance and casing operation on him. Upon verification of
accused-appellant’s involvement in illegal drug activities, PO3 Palabay and his drug asset made a test-
buy operation on 14 June 2011, which yielded a purchase of Three Hundred Peso (P300.00) worth
of shabu from accused-appellant. Thereafter, PSI Gagaoin headed and organized a buy-bust team
composed of PO3 Palabay as poseur-buyer, PO3 Arnel Gravidez as one of the arresting officers and
SPO3 Armando Eisma and PO2 Roger Malag as perimeter security. Six (6) pieces of P50.00 bills were
prepared as marked money on which PO3 Palabay placed a marking of "A."4
At four o’clock in the afternoon of 16 June 2011, the buy-bust team proceeded to Barangay
Ambitacay. PO3 Palabay had already been in communication via short message system (SMS) with
accused-appellant regarding the amount of shabu to be purchased. It had also been agreed via SMS
that they would meet at Ambitacay crossing at six o’clock in the evening.5
At the crossing, at half past five o’clock in the afternoon when PO3 Palabay noticed accused-appellant
coming his way, he disembarked from the tricycle in which he had been waiting. He approached
accused-appellant who immediately handed to him a heat-sealed plastic sachet containing a white
crystalline substance; and PO3 Palabay, in exchange, gave accused-appellant the marked money.
Accused-appellant then counted the money while PO3 Palabay placed the sachet in his pocket and
removed his cap to signal the arrest to the other police officers. Accused-appellant attempted to flee but
was subsequently overcome and handcuffed by the other officers. PO3 Palabay informed accused-
appellant of his constitutional rights; took a photograph of the latter as well as the area and the plastic
sachet which he marked "AJP-1-11." He also made an inventory of the marked money and the seized
plastic sachet in the presence of the Barangay Captain and another witness.6
Accused-appellant was thereafter brought to the police station. There, PO3 Palabay executed an
affidavit of arrest, an affidavit of poseur-buyer and a request for laboratory examination. Then, he
brought accused-appellant and the seized items to the crime laboratory, received by PSI
Antonio.7 Chemistry Report No. D-030-2011 signed by PI Manuel as Forensic Chemist found the
seized plastic sachet positive for the presence of Methamphetamine hydrochloride or shabu.8
Accused-appellant, as the lone witness for the defense, testified that on 16 June 2011, on his way home
with his wife and child after a day of ferrying passengers in his tricycle, a male person and his
companion flagged him down. The man asked accused-appellant to get down from his tricycle and
thereafter, drew out a gun and introduced himself as a policeman. Accused-appellant tried to run away
from him but two (2) other persons blocked his way and handcuffed him. These two forced him to hold
something and when accused-appellant refused, they rubbed it onto his hands. Thereafter, a patrol car
arrived and he was brought to the police station.9
On 5 August 2011, the RTC rendered judgment finding accused-appellant guilty of attempted sale of a
dangerous drug. The dispositive portion of the RTC Decision reads:
The accused is found to have attempted to sell .0946 gram of methamphetamine hydrochloride beyond
reasonable doubt.1âwphi1 The court only found that he attempted to sell.
However, there is a catch provided in Section 26 of R.A. 9165 which prescribes the same penalty as
that provided in Section 5 in case of unlawful acts that are enumerated in the aforesaid Section 26, thus
the penalty for attempt or conspiracy to commit violations thereof as provided in Section 26 is the
same as that provided in Section 5. HOC QUIDEM PER QUAM DURUM EST, SED ITA LEX
ESCRIPTA EST or DURA LEX SED LEX is invoked.
Hence, accused Romel Sapitula is sentenced to life imprisonment and is ordered to pay a fine of Five
Hundred Thousand Pesos (Php 500.000.00) for attempting to sell less than one gram of
methamphetamine hydrochloride "shabu."
The penalty is harsh but that is the law on the matter. Less than one gram of "shabu" and wham! One
has to spend one’s life in prison.
But that is the reality. Not an illusion.
So it is best to avoid drugseverytime.
The drug subject of this case is confiscated in favor of the government.10
Accused-appellant filed a Notice of Appeal on 10 August 2011.11 On 19 February 2013, the CA
rendered the assailed judgment affirming with modification the trial court’s decision. The CA found
accused-appellant guilty of the crime charged, or violation of Section 5, Article II of R.A. 9165. The
CA ruled that the sale of a dangerous drug was consummated as there had been an exchange of money
and the sachet of shabu between PO3 Palabay and accused-appellant.
Accused-appellant appealed his conviction before this Court. In a Resolution12 dated 04 December
2013, accused-appellant and the Office of the Solicitor General (OSG) were asked to file their
respective supplemental briefs if they so desired. Both parties manifested that they will no longer file
supplemental briefs as their arguments in their respective briefs are already sufficient. 13
Upon review of the records, the Court affirms the conviction of accused-appellant.
The Court agrees with the CA finding that, contrary to the accused-appellant’s assertion, the trial court
sufficiently stated the factual and legal bases for its disposition of the case. In convicting accused-
appellant, the trial court explained that it gave credence to the testimonies of the police officers
pursuant to the presumption of regularity in the performance of their official duties and absent any
showing of ill-motive to plant evidence against accused-appellant. 14 The trial court also stated that it
found accusedappellant’s testimony partly incredulous.15
The Court, however, upholds the CA’s ruling that the crime of sale of a dangerous drug, in this
case shabu, was consummated; different from the trial court’s ruling that the crime had been
committed only at its attempted stage. In so holding, the trial court stated that "[w]hen he realized the
trap he was about to backout in the sale. Nevertheless, the penalty is the same."16 This Court disagrees.
In every prosecution for illegal sale of shabu, the following elements must be sufficiently proved: (1)
the identity of the buyer and the seller, the object of the sale and the consideration; and (2) the delivery
of the thing sold and the payment therefor.17
The Court finds that all elements for illegal sale were duly established with accused-appellant having
been caught in flagrante delicto selling shabu through a buy-bust operation conducted by the buy-bust
team of PO3 Palabay.
PO3 Palabay, who acted as the poseur buyer, testified that accused-appellant handed to him the plastic
sachet containing the prohibited drug in exchange for Three Hundred Pesos (P300.00), thus:
Q: And at about what time was that when you waited at that waiting shed?
A: Around 5:30 in the afternoon, sir.
Q: And what happened after that?
A: While waiting I noticed the suspect approaching, sir.
Q: So from where did he come home (sic)?
A: From the road leading to barangay Pongpong, sir.
Q: And when you saw him approaching what did you do if any?
A: I immediately disembark from the tricycle, sir.
xxxx
Q: When you alighted from the tricycle where did you go?
A: I immediately approached him also, sir.
Q: And what happened when you approached him, what did you tell him or what happened?
A: He immediately handed to me the heat sealed plastic sachet containing white crystalline substance
and then afterwards I in hand also the marked money, sir.
Q: He did not ask how much are you buying?
A: He asked already through text, sir.
Q: And where did you put the sachet that was handed to you?
A: I put in my pocket, sir.
Q: You mentioned you handed the money to the subject, what did the subject do if any?
A: After he received the money, he counted the money, sir.
Q: And while he was counting the money what did you do next?
A: After counting the money, I frisked him, I said stop and I showed my badge as an identification that
I am a police but then he tried to run towards east direction, sir.
Q: By the way was there any a pre-arranged signal made by you with your Chief of Police?
A: Yes, sir.
Q: What is your pre-arranged signal?
A: When I removed my bull cup, sir.
Q: What does that indicate?
A: As a sign that the arrest shall be made by the arresting officers, sir.18
This testimony was corroborated by PSI Gagaoin who was strategically posted within the perimeter of
the target area.19 The result of the laboratory examination confirmed the presence of methamphetamine
hydrochloride or shabu on the white crystalline substance inside the plastic sachet received from the
accused-appellant. The delivery of the illicit drug to the poseur-buyer and the receipt by the seller of
the marked money successfully consummated the buy-bust transaction. 20
Accused-appellant’s denial of the charges and assertion of a frame-up, uncorroborated by any positive
testimony of the people who were allegedly with him during the incident, are indeed incredulous
juxtaposed with the positive evidence for his prosecution. Besides, as adequately explained by PSI
Antonio, the absence of ultraviolet (UV) powder on accused-appellant’s palms (although the dorsal
parts of accused-appellant’s hands tested positive for UV powder presence) may have been a result of
perspiration, wiping or rubbing the hand on a hard object.21 Thus, this matter does not completely
negate accused-appellant’s culpability as he so asserts.
This Court has, time and again, deferred to the trial court’s factual findings and evaluation of the
credibility of witnesses, especially when affirmed by the CA, in the absence of any clear showing that
the trial court overlooked or misconstrued cogent facts and circumstances that would justify altering or
revising such findings and evaluation. The trial court’s determination proceeds from its first-hand
opportunity to observe the demeanor of the witnesses, their conduct and attitude under grilling
examination; the trial court is in a unique position to assess the witnesses’ credibility and to appreciate
their truthfulness, honesty and candor.22 And in the instant case, accused-appellant has not projected
any strong and compelling reasons to sway the Court into rejecting or revising such factual findings
and evaluation in his favor.
We now come to accused-appellant’s contention that the procedure for the custody and disposition of
confiscated drugs as provided in Section 21 of R.A. No. 9165, was not complied with as the police
officers had not conducted an inventory of the plastic sachet of shabu and the same had not been
photographed in the presence of accused-appellant and representatives from the media and the
Department of Justice.23
First, it must be underscored that this issue was only brought up on appeal and was never raised before
the trial court.1âwphi1 Nevertheless, a review of PO3 Palabay’s testimony shows that the inventory
and photograph requirements had been met, thus:
Q: And after the subject was handcuff, what transpired next?
A: After we handcuff the subject, we photographed the suspect, we photographed the area, we
photographed also the evidence and I marked there with the presence of the Barangay Chairman and
the concerned citizens in the area and then I prepared also the inventory in their presence, sir. 24
More importantly, the integrity and evidentiary value of the seized items were duly preserved as the
chain of custody remained intact.
The Court has ruled in People v. Enriquez,25that the links that must be established in the chain of
custody in a buy-bust situation are: first, the seizure and marking, if practicable, of the illegal drug
recovered from the accused by the apprehending officer; second, the turnover of the illegal drug seized
by the apprehending officer to the investigating officer; third, the turnover by the investigating officer
of the illegal drug to the forensic chemist for laboratory examination; and fourth, the turnover and
submission of the marked illegal drug seized from the forensic chemist to the court.
In the case at bar, PO3 Palabay, the poseur buyer, positively testified that he placed in his pocket the
plastic sachet of shabu handed to him by accused-appellant. At the time of arrest, he photographed
accused-appellant, the area and the sachet of shabu, marked the same and conducted the inventory
before the Barangay Chairman and another witness. PO3 Palabay further testified that he brought
accused-appellant and the sachet of shabu to the police station, and there, executed affidavits of arrest
and of the poseur buyer and made a request for laboratory examination. PO3 Palabay then took
accused-appellant and the sachet of shabu to the crime laboratory and the latter was received by PSI
Antonio. Chemistry Report No. D-030-2011 signed by PI Manuel as Forensic Chemist and PSI
Antonio as Administering Officer confirmed that the sachet is positive for the presence
of methamphetamine hydrochloride.26 And finally, in open court, PO3 Palabay opened the envelope
from the Forensic Chemist and identified its contents as the same sachet of shabu he had purchased
from accused-appellant.27 The same was offered in evidence and marked as Exhibit "A."28
All told, it has been established by proof beyond reasonable doubt that accused-appellant
sold shabu. Section 5, Article. II of R.A. No. 9165, states that the penalty of life imprisonment to death
and fine ranging from P500,000.00 to P1,000,000.00 shall be imposed upon any person who, unless
authorized by law, shall sell, trade, ad.minister, dispense, deliver, give away to another, distribute,
dispatch in transit or transpmi any dangerous drug, including any and all species of opium ·poppy
regardless of the quantity and purity involved. Thus, the CA correctly imposed the penalty of life
imprisonment and the fine of P500,000.00.
WHEREFORE, the Decision dated 19 February 2013 of the Court of Appeals in CA G.R. CR.-H.C.
No. 05186, affirming with modification the conviction of accused-appellant Rome! Sapitula y Paculan
by the Regional Trial Court of Agoo, La Union, Branch 31, for violation of Section 5, Article II of
Republic Act No. 9165 and sentencing him to suffer the penalty of life imprisonment and to pay a fine
of P500,000.00 is hereby AFFIRMED.
SO ORDERED.
EOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. BRANDON DELA CRUZ AND JAMES
FRANCIS BAUTISTA, Accused-Appellants.
DECISION
PERLAS-BERNABE, J.:
Assailed in this ordinary appeal1 is the Decision2 dated October 9, 2015 of the Court of Appeals (CA)
in CA-G.R. CR-HC No. 06576, which affirmed the Decision3 dated November 25, 2013 of the
Regional Trial Court of Bambang, Nueva Vizcaya, Branch 37 (RTC) in Crim. Case No. 3156 finding
accused-appellants Brandon Dela Cruz (Dela Cruz) and James Francis Bautista (Bautista; collectively,
accused-appellants) guilty beyond reasonable doubt of the crime of Illegal Sale of Dangerous Drugs,
defined and penalized under Section 5, Article II of Republic Act No. (RA) 9165,4 otherwise known as
the "Comprehensive Dangerous Drugs Act of 2002."
The Facts
This case stemmed from an Information5 filed before the RTC charging accused-appellants of the
crime of Illegal Sale of Dangerous Drugs. The prosecution alleged that at around five (5) o'clock in the
afternoon of August 1, 2012, members of the Bambang Police Station successfully implemented a buy-
bust operation against accused-appellants, during which 0.029 gram of white crystalline substance was
recovered from them. The police officers then took accused-appellants and the seized item to the police
station where the marking, inventory, and photography were done in the presence of Municipal
Councilor Gregorio B. Alias, Jr. (Allas) and Conrad Gaffuy (Gaffuy), an employee of the Department
of Justice (DOJ). The seized item was then brought to the crime laboratory where, after examination,
the contents thereof tested positive for methamphetamine hydrochloride or shabu, a dangerous drug.6
In defense, accused-appellants denied the accusation against them and instead averred that at the time
of the alleged incident, Dela Cruz was drinking with his friends in a hut inside their compound while
Bautista was repairing Dela Cruzs motorcycle when, suddenly, armed men in civilian clothes alighted
from two (2) cars parked at their gate and pointed guns at them. They claimed that these men searched
their house and arrested them, and when asked by Bautista's mother-in-law7 about the charges against
them, one of the armed men brought out a small plastic sachet from his belt bag and answered that
accused-appellants were selling drugs.8
In a Decision9 dated November 25, 2013, the RTC found accused-appellants guilty beyond reasonable
doubt of the crime charged, and accordingly, sentenced them to suffer the penalty of life imprisonment
and to pay a fine of P500,000.00.10 The RTC held that the prosecution was able to establish all the
elements of the crime charged, as accused-appellants sold a sachet containing 0.029 gram of shabu to
IO1 Nelmar Benazir C. Bugalon, which was later on presented to the court for identification.
Moreover, the RTC ruled that there was substantial compliance with the chain of custody rule as it was
shown, inter alia, that the conduct of the marking and photography were done at the police station and
witnessed by an elected official and a representative of the DOJ in the presence of the accused-
appellants.11 Aggrieved, accused-appellants appealed to the CA.12
In a Decision13 dated October 9, 2015, the CA affirmed in toto the RTC ruling.14 It held that the
prosecution had established beyond reasonable doubt all the elements of the crime charged. The CA
ruled that the absence of a media representative in the inventory, marking, and photography of the
seized item did not affect the integrity of the corpus delicti, as a DOJ representative and an elected
municipal councilor were present to witness the same.15
Hence, this appeal seeking that accused-appellants' conviction be overturned.
The Issue Before the Court
The issue for the Court's resolution is whether or not the CA correctly upheld accused-appellants'
conviction for the crime charged.
The Court's Ruling
The appeal is meritorious.
In cases for Illegal Sale and/or Illegal Possession of Dangerous Drugs under RA 9165,16 it is essential
that the identity of the dangerous drug be established with moral certainty, considering that the
dangerous drug itself forms an integral part of the corpus delicti of the crime.17 Failing to prove the
integrity of the corpus delicti renders the evidence for the State insufficient to prove the guilt of the
accused beyond reasonable doubt and, hence, warrants an acquittal.18
To establish the identity of the dangerous drug with moral certainty, the prosecution must be able to
account for each link of the chain of custody from the moment the drugs are seized up to their
presentation in court as evidence of the crime.19 As part of the chain of custody procedure, the law
requires, inter alia, that the marking, physical inventory, and photography of the seized items be
conducted immediately after seizure and confiscation of the same. In this regard, case law recognizes
that "marking upon immediate confiscation contemplates even marking at the nearest police station or
office of the apprehending team."20 Hence, the failure to immediately mark the confiscated items at the
place of arrest neither renders them inadmissible in evidence nor impairs the integrity of the seized
drugs, as the conduct of marking at the nearest police station or office of the apprehending team is
sufficient compliance with the rules on chain of custody.21
The law further requires that the said inventory and photography be done in the presence of the
accused or the person from whom the items were seized, or his representative or counsel, as well as
certain required witnesses, namely: (a) if prior to the amendment of RA 9165 by RA 10640,22 a
representative from the media AND the DOJ, and any elected public official;23 or (b) if after the
amendment of RA 9165 by RA 10640, an elected public official and a representative of the National
Prosecution Service OR the media.24 The law requires the presence of these witnesses primarily "to
ensure the establishment of the chain of custody and remove any suspicion of switching, planting, or
contamination of evidence."25
As a general rule, compliance with the chain of custody procedure is strictly enjoined as the same has
been regarded "not merely as a procedural technicality but as a matter of substantive law." 26 This is
because "[t]he law has been crafted by Congress as safety precautions to address potential police
abuses, especially considering that the penalty imposed may be life imprisonment." 27
Nonetheless, the Court has recognized that due to varying field conditions, strict compliance with the
chain of custody procedure may not always be possible.28 As such, the failure of the apprehending team
to strictly comply with the same would not ipso facto render the seizure and custody over the items as
void and invalid, provided that the prosecution satisfactorily proves that: (a) there is a justifiable
ground for noncompliance; and (b) the integrity and evidentiary value of the seized items are properly
preserved.29 The foregoing is based on the saving clause found in Section 21 (a),30 Article II of the
Implementing Rules and Regulations (IRR) of RA 9165, which was later adopted into the text of RA
10640.31 It should, however, be emphasized that for the saving clause to apply, the prosecution must
duly explain the reasons behind the procedural lapses,32 and that the justifiable ground for non-
compliance must be proven as a fact, because the Court cannot presume what these grounds are or that
they even exist.33
Anent the witness requirement, non-compliance may be permitted if the prosecution proves that the
apprehending officers exerted genuine and sufficient efforts to secure the presence of such witnesses,
albeit they eventually failed to appear. While the earnestness of these efforts must be examined on a
case-to-case basis, the overarching objective is for the Court to be convinced that the failure to comply
was reasonable under the given circumstances.34 Thus, mere statements of unavailability, absent actual
serious attempts to contact the required witnesses, are unacceptable as justified grounds for non-
compliance.35 These considerations arise from the fact that police officers are ordinarily given
sufficient time - beginning from the moment they have received the information about the activities of
the accused until the time of his arrest - to prepare for a buy-bust operation and consequently, make the
necessary arrangements beforehand, knowing fully well that they would have to strictly comply with
the chain of custody rule.36
Notably, the Court, in People v. Miranda,37 issued a definitive reminder to prosecutors when dealing
with drugs cases. It implored that "[since] the [procedural] requirements are clearly set forth in the law,
the State retains the positive duty to account for any lapses in the chain of custody of the drugs/items
seized from the accused, regardless of whether or not the defense raises the same in the proceedings a
quo; otherwise, it risks the possibility of having a conviction overturned on grounds that go into the
evidence's integrity and evidentiary value, albeit the same are raised only for the first time on appeal,
or even not raised, become apparent upon further review."38
After an examination of the records, the Court finds that the prosecution failed to comply with the
above-described procedure since the inventory and photography of the seized item were not conducted
in the presence of a media representative. As evinced by the Inventory of Seized
Properties/Items,39 only Allas (an elected public official) and Gaffuy (a representative from the DOJ)
were present to witness these activities. Although the prosecution in its Pre-Trial Brief 40 averred that
"[n]o media representatives were present despite efforts x x x to secure their presence," 41 nothing else
on record appears to substantiate the same. Indeed, this general averment, without more, cannot be
accepted as a proper justification to excuse non-compliance with the law. As earlier discussed,
prevailing jurisprudence requires the prosecution to account for the absence of any of the required
witnesses by presenting a justifiable reason therefor or, at the very least, by showing that genuine and
sufficient efforts were exerted by the apprehending officers to secure their presence. Clearly, these
standards were not observed in this case.
Thus, in view of this unjustified deviation from the chain of custody rule, the Court is constrained to
conclude that the integrity and evidentiary value of the item purportedly seized from accused-
appellants were compromised, which consequently warrants their acquittal.
WHEREFORE, the appeal is GRANTED. The Decision dated October 9, 2015 of the Court of
Appeals in CA-G.R. CR-HC No. 06576 is hereby REVERSED and SET ASIDE. Accordingly,
accused-appellants Brandon Dela Cruz and James Francis Bautista are ACQUITTED of the crime
charged. The Director of the Bureau of Corrections is ordered to cause their immediate release, unless
they are being lawfully held in custody for any other reason.
G.R. No. 225780, December 03, 2018 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v.
JAYSON TORIO Y PARAGAS @ "BABALU," Accused-Appellant.
FIRST DIVISION
G.R. No. 225780, December 03, 2018
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JAYSON TORIO Y PARAGAS @
"BABALU," Accused-Appellant.
DECISION
DEL CASTILLO, J.:
This resolves the appeal filed by Jayson Torio y Paragas, alias "Babalu" (appellant), assailing the
September 29, 2015 Decision1 of the Court of Appeals (CA) in CA-G.R. CR-HC No. 06473 which
affirmed the October 22, 2013 Joint Judgment2 of the Regional Trial Court (RTC) of Lingayen,
Pangasinan, Branch 69, in Criminal Case Nos. L-9632 and L-9633 finding him guilty beyond
reasonable doubt of illegal sale and possession of dangerous drugs as defined and penalized
respectively under Sections 5 and 11, Article II of Republic Act (RA) No. 9165, otherwise known as
the Comprehensive Dangerous Drugs Act of 2002.
Appellant was charged with illegal possession and sale of dangerous drugs under two separate
Informations which read:
Criminal Case No. L-9632
[Illegal Possession of Dangerous Drugs]
That on or about 4:00 o'clock in the afternoon of December 18, 2012, along Primicias St., Brgy.
Poblacion, Lingayen, Pangasinan, and within the jurisdiction of this Honorable Court, [the above-
named accused], did then and there wil[l]fully, unlawfully[,] and feloniously have in his possession,
control[,] and custody one (1) heat-sealed plastic sachet containing methamphetamine hydrochloride,
otherwise known as "shabu", without any necessary license or authority to possess the same.
Contrary to Section 11, Article II of R.A. No. 9165.3
Criminal Case No. L-9633
[Illegal Sale of Dangerous Drugs]
That on or about 4:00 o'clock in the afternoon of December 18, 2012, at Primicias St., Poblacion,
Lingayen, Pangasinan and within the jurisdiction of this Honorable Court, the above-named accused,
did then and there wil[l]fully, unlawfully[,] and feloniously sell methamphetamine hydrochloride
(shabu), a dangerous drug, to a civilian asset who acted as a poseur-buyer, without any lawful
authority.
Contrary to Section 5, Article II of R.A. No. 9165.4
Appellant was arraigned for illegal possession and sale of dangerous drugs on two separate dates. In
both instances, appellant pleaded not guilty.5
Version of the Prosecution
The prosecution presented the testimonies of the Chief Intelligence Officer of Lingayen, Pangasinan,
SPO1 Marday Delos Santos (SPO1 Delos Santos) and Forensic Chemist Police Senior Inspector Myrna
Malojo-Todeño (PSI Malojo-Todeño). Their narrations were synthesized as follows:
On December 18, 2012, SPO1 Delos Santos received a text message from a civilian asset informing
him of an upcoming transaction of drugs involving the appellant at Primicias St., Barangay Poblacion,
Lingay, Pangasinan. SPO1 Delos Santos informed his Chief of Police about the tip.
A briefing was immediately conducted where a buy-bust team was formed composed of SPO1 De los
Santos as the team leader, PO1 Jethiel Vidal (PO1 Vidal) as the arresting officer, the civilian asset as
the poseur-buyer, and Barangay Kagawads Edward Cuesta (Kagawad Cuesta) and Michael Angelo
Disini (Kagawad Disini) as witnesses. SPO1 De los Santos informed the Philippine Drug Enforcement
Agency (PDEA) of the buy-bust operation. SPO1 De los Santos then gave the civilian asset a P500.00
bill with serial number AEO86542 and marked with his initials "MDS."
The buy-bust team proceeded to the target area. The civilian asset waited for the appellant while the
rest of the team positioned themselves about five to six meters away. Appellant arrived riding his
tricycle and stopped in front of the civilian asset. The drug transaction then took place. Appellant
handed to the civilian asset a plastic sachet suspected to contain shabu while the latter handed the
P500.00 marked money. After the exchange, the civilian asset raised his left hand, which was the pre-
arranged signal for the buy-bust team that the sale of drugs had been consummated.
The buy-bust team quickly arrested appellant. SPO1 Delos Santos and PO1 Vidal introduced
themselves as police officers and informed appellant of his constitutional rights. The civilian asset
handed the plastic sachet to SPO1 Delos Santos. Appellant was then subjected to a body search where
the marked money and another transparent sachet suspected to contain shabu were recovered.
Immediately thereafter, SPO1 Delos Santos marked the sachet subject of the sale with the initials
"MDS1" and the sachet recovered from appellant's possession with "MDS2." Kagawad Cuesta
and Kagawad Disini were present during the arrest and confiscation. The members of the buy-bust
team were not able to invite members of the media since the operation was sudden and to avoid
leakage of the impending operation.
After the marking of the sachets of suspected shabu, SPO1 Delos Santos prepared the confiscation
receipt. Photographs were taken at the police station showing the appellant with the confiscated terns
and marked money. An inventory was also conducted. Afterwards, SPO1 Delos Santos brought
appellant, together with the sachets recovered from him and the requests for examination, to the
Provincial Crime Laboratory.
PSI Malojo-Todeño received the requests for examination and the sachets of shabu marked as MDS1
and MDS2. After examination, the sachet marked as MDS1 was found positive of containing 0.022
gram of methamphetamine hydrochloride or shabu, while the sachet marked as MDS2 likewise tested
positive of containing 0.125 gram of shabu.6 After the examination, PSI Malojo-Todeño placed both
sachets inside a sealed white envelope and turned it over to the evidence custodian. She retrieved the
envelope only after she was summoned by the court.
Version of the Defense
For his defense, appellant denied the accusation against him and claimed that he was framed-up.
Appellant alleged that a person, who turned out to be the civilian asset, boarded his tricycle and told
him to go to Primicias Street. On the way, appellant noticed a car following his tricycle. When they
arrived at Primicias Street, five to six police officers got out of the car and proceeded to arrest him and
brought him to the police station where he was interrogated. Later on, SPO1 Delos Santos and PO1
Vidal brought him back to Primicias Street where Kagawad Cuesta and Kagawad Disini were waiting.
The police officers then took pictures of him inside the tricycle. SPO1 Delos Santos pulled out a sachet
from his own pocket and asked appellant to point at it while being photographed. Thereafter, he was
brought back to the police station.
Appellant further testified that he had a misunderstanding with SPO1 Delos Santos in the past when
the latter suspected him of robbery. However, no case was filed against appellant then since there was
no complainant.
Ruling of the Regional Trial Court
On October 22, 2013, the RTC of Lingayen, Pangasinan, Branch 69 rendered a Joint Judgment finding
appellant guilty beyond reasonable doubt of illegal sale and possession of shabu. The RTC upheld the
presumption of regularity in the performance of duties of the police officers over appellant's
unsubstantiated claim of frame-up. Further, the RTC held that the failure to present the poseur-buyer
was not fatal to the prosecution's case since SPO1 Delos Santos also witnessed the transaction.
The dispositive portion of the RTC's Joint Judgment reads:
WHEREFORE, premises considered, the Court finds the accused Jayson Torio GUILTY beyond
reasonable doubt in both cases and is hereby imposed with the following penalties, viz:
(a) Life imprisonment and is likewise ordered to pay a fine in the amount of Php500,000.00 in Crim.
Case No. L-9633 for Violation of Sec. 5[,] Article II of R.A. 9165 and;
(b) Penalty of 14 years 8 months and one day to 17 years, 4 months of reclusion temporal and he is
also directed to pay a fine in the amount of Php300,000.00 for Violation of Sec. 11[,] Article II of R.A.
9165 in Crim. Case No. L-9632.
SO ORDERED.7
Aggrieved by the RTC's judgment, appellant appealed to the CA. In his Brief for the Accused-
Appellant,8 appellant assigned the following errors of the RTC:
I
THE COURT A QUO GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY
BEYOND REASONABLE DOUBT FOR VIOLATION OF SECTIONS 5 AND 11, ARTICLE II OF
REPUBLIC ACT NO. 9165.
II
THE COURT A QUO GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT
NOTWITHSTANDING THE PROSECUTION'S FAILURE TO PROVE WITH CERTAINTY THE
CORPUS DELICTI OF THE OFFENSES CHARGED.9
Ruling of the Court of Appeals
On September 29, 2015, the CA affirmed the RTC's judgment and held as follows:
WHEREFORE, the instant appeal is DENIED. The October 22, 2013 Joint Judgment of the Regional
Trial Court, Branch 69, Lingayen, Pangasinan in the consolidated Crim. Case Nos. L-9632 and L-9633
is hereby AFFIRMED.
SO ORDERED.10
Dissatisfied with the CA's Decision, appellant filed a Notice of Appeal 11 dated October 22, 2015
manifesting his intention to appeal the CA Decision.
Hence, this appeal.
Issue

The issue in this case is whether appellant was guilty of illegal sale and possession of shabu.
According to appellant, the RTC erred in convicting him of the offenses charged in view of the
prosecution's failure to prove the identity of the civilian asset who acted as the poseur-buyer. Appellant
also claims that the prosecution failed to establish an unbroken chain of custody of the seized drugs.
Finally, appellant argues that the presumption of regularity in the performance of official duty cannot
prevail over the presumption of his innocence.
Our Ruling
The Court finds the appeal meritorious and hereby acquits the appellant for failure of the prosecution
to justify the arresting officers' non compliance with the three-witness rule under Section 2112 of RA
9165.
To secure a conviction for illegal sale of dangerous drugs under Section 5, Article II of RA 9165, it is
necessary that the prosecution duly prove the identities of the buyer and the seller, the delivery of the
drugs, and the payment in consideration thereof.13 On the other hand, in cases where an accused is
charged with illegal possession of dangerous drugs under Section 11, Article II of RA 9165, the
prosecution must establish the following elements: "(a) the accused was in possession of dangerous
drugs; (b) such possession was not authorized by law[;] and (c) the accused was freely and consciously
aware of being in possession of dangerous drugs."14 In both cases, it is essential that the identity of the
dangerous drug be established with moral certainty since the drug itself forms an integral part of
the corpus delicti of the crime.15 Thus, to remove any doubt or uncertainty on the identity and integrity
of the seized drug on account of the possibility of switching, "planting," or contamination of evidence,
the prosecution must be able to show an unbroken chain of custody and account for each link in the
chain from the moment the drugs are seized until its presentation in court as evidence of the crime.
RA 9165 requires that the marking, physical inventory, and taking of photograph of the seized items be
conducted immediately after seizure and confiscation of the same. The said law further requires that
the physical inventory and taking of photograph of the seized items be done in the presence of the
accused or the person from whom the items were seized, or his representative or counsel, as well as
certain required witnesses, namely: (a) if prior to the amendment of RA 9165 by RA 10640,16 any
elected public official, a representative from the media AND the Department of Justice (DOJ);17 or (b)
if after the amendment of RA 9165 by RA 10640, any elected public official and a representative from
either the National Prosecution Service OR the media.18
enactment of RA 10640 in 2014, the physical inventory and taking of photograph of the seized items
must be witnessed by the following persons: (a) any elected public official; (b) a DOJ representative;
and (c) a media representative. However, while SPO1 De los Santos marked the seized items in the
presence of Kagawad Cuesta and Kagawad Disini, the prosecution failed to establish that the physical
inventory and taking of photograph were made in the presence of the appellant or his representative, as
well as representatives from the DOJ and media. In fact, the members of the buy-bust team deliberately
did not invite members of the media to avoid leakage of the impending operation. 22 Thus, it is clear that
the arresting officers did not comply with the rule requiring the presence of representatives from both
the DOJ and the media.
In view of the foregoing, the Court is constrained to acquit the appellant for failure of the prosecution
to provide a justifiable reason for the non-compliance with the chain of custody rule thereby creating
doubt as to the integrity and evidentiary value of the seized drugs.
WHEREFORE, the appeal is GRANTED. The Decision dated September 29, 2015 of the Court of
Appeals in CA-G.R. CR-HC No. 06473 is hereby REVERSED and SET ASIDE. Accordingly,
appellant Jayson Torio y Paragas is ACQUITTED of the charges of violation of Sections 5 and 11,
Article II of Republic Act No. 9165 for failure of the prosecution to prove his guilt beyond reasonable
doubt. He is ordered to be immediately released from detention, unless he is being lawfully held in
custody for any other reason.
Let a copy of this Decision be furnished the Director of the Bureau of Corrections, Muntinlupa City for
immediate implementation and who is then directed to report to this Court the action he has taken
within five days from his receipt of this Decision.
SO ORDERED.

In People v. Macapundag,19 the Court held that "the procedure in Section 21 of RA 9165 is a matter of
substantive law, and cannot be brushed aside as a simple procedural technicality; or worse, ignored as
an impediment to the conviction of illegal drug suspects." While this rule is not without exceptions, it
is incumbent upon the prosecution to satisfactorily prove that (a) there is justifiable ground for non-
compliance with the chain of custody rule; and (b) the integrity and evidentiary value of the seized
items are properly preserved.20 For the saving clause to apply, the prosecution must duly explain the
reasons behind the procedural lapses.21 Moreover, non-compliance with the three-witness rule may be
excused provided the prosecution proves that the arresting officers exerted genuine efforts to secure the
presence of such witnesses, albeit they eventually failed to appear.

In this case, since the buy-bust operation against appellant was conducted in 2012, or prior to the