Republic of the Philippines trial court was affirmed in toto by the Court of Appeals in a decision
SUPREME COURT promulgated on August 17, 1987, a copy of which was received by
Manila
THIRD DIVISION
G.R. No. 80718 January 29, 1988
FELIZA P. DE ROY and VIRGILIO RAMOS, petitioners,
vs.
COURT OF APPEALS and LUIS BERNAL, SR., GLENIA BERNAL,
LUIS BERNAL, JR., HEIRS OF MARISSA BERNAL, namely,
GLICERIA DELA CRUZ BERNAL and LUIS BERNAL,
SR., respondents.
RESOLUTION
CORTES, J.:
This special civil action for certiorari seeks to declare null and void two (2) resolutions of the Special
First Division of the Court of Appeals in the case of Luis Bernal, Sr., et al. v. Felisa Perdosa De Roy, et
al., CA-G.R. CV No. 07286. The first resolution promulgated on 30 September 1987 denied petitioners'
motion for extension of time to file a motion for reconsideration and directed entry of judgment since
the decision in said case had become final; and the second Resolution dated 27 October 1987 denied
petitioners' motion for reconsideration for having been filed out of time.
At the outset, this Court could have denied the petition outright for not
being verified as required by Rule 65 section 1 of the Rules of Court.
However, even if the instant petition did not suffer from this defect, this
Court, on procedural and substantive grounds, would still resolve to deny
it.
The facts of the case are undisputed. The firewall of a burned-out
building owned by petitioners collapsed and destroyed the tailoring shop
occupied by the family of private respondents, resulting in injuries to
private respondents and the death of Marissa Bernal, a daughter. Private
respondents had been warned by petitioners to vacate their shop in view
of its proximity to the weakened wall but the former failed to do so. On the
basis of the foregoing facts, the Regional Trial Court. First Judicial
Region, Branch XXXVIII, presided by the Hon. Antonio M. Belen,
rendered judgment finding petitioners guilty of gross negligence and
awarding damages to private respondents. On appeal, the decision of the
petitioners on August 25, 1987. On September 9, 1987, the last day of
the fifteen-day period to file an appeal, petitioners filed a motion for
extension of time to file a motion for reconsideration, which was
eventually denied by the appellate court in the Resolution of September
30, 1987. Petitioners filed their motion for reconsideration on September
24, 1987 but this was denied in the Resolution of October 27, 1987.
This Court finds that the Court of Appeals did not commit a grave abuse
of discretion when it denied petitioners' motion for extension of time to file
a motion for reconsideration, directed entry of judgment and denied their
motion for reconsideration. It correctly applied the rule laid down
in Habaluyas Enterprises, Inc. v. Japzon, [G.R. No. 70895, August 5,
1985,138 SCRA 461, that the fifteen-day period for appealing or for filing
a motion for reconsideration cannot be extended. In its Resolution
denying the motion for reconsideration, promulgated on July 30, 1986
(142 SCRA 208), this Court en banc restated and clarified the rule, to wit:
Beginning one month after the promulgation of this Resolution, the rule
shall be strictly enforced that no motion for extension of time to file a
motion for reconsideration may be filed with the Metropolitan or Municipal
Trial Courts, the Regional Trial Courts, and the Intermediate Appellate
Court. Such a motion may be filed only in cases pending with the
Supreme Court as the court of last resort, which may in its sound
discretion either grant or deny the extension requested. (at p. 212)
Lacsamana v. Second Special Cases Division of the intermediate
Appellate Court, [G.R. No. 73146-53, August 26, 1986, 143 SCRA 643],
reiterated the rule and went further to restate and clarify the modes and
periods of appeal.
Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept. 15,
1986,144 SCRA 161],stressed the prospective application of said rule,
and explained the operation of the grace period, to wit:
In other words, there is a one-month grace period from
the promulgation on May 30, 1986 of the Court's
Resolution in the clarificatory Habaluyas case, or up to
June 30, 1986, within which the rule barring extensions of
time to file motions for new trial or reconsideration is, as
yet, not strictly enforceable.
 Since petitioners herein filed their motion for extension on WHEREFORE, in view of the foregoing, the Court Resolved to DENY the
February 27, 1986, it is still within the grace period, which instant petition for lack of merit.
expired on June 30, 1986, and may still be allowed.
Fernan (Chairman), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
This grace period was also applied in Mission v. Intermediate Appellate
Court [G.R. No. 73669, October 28, 1986, 145 SCRA 306].]

In the instant case, however, petitioners' motion for extension of time was
filed on September 9, 1987, more than a year after the expiration of the
grace period on June 30, 1986. Hence, it is no longer within the coverage
of the grace period. Considering the length of time from the expiration of
the grace period to the promulgation of the decision of the Court of
Appeals on August 25, 1987, petitioners cannot seek refuge in the
ignorance of their counsel regarding said rule for their failure to file a
motion for reconsideration within the reglementary period.

Petitioners contend that the rule enunciated in the Habaluyas case

should not be made to apply to the case at bar owing to the non-
publication of the Habaluyas decision in the Official Gazette as of the
time the subject decision of the Court of Appeals was promulgated.
Contrary to petitioners' view, there is no law requiring the publication of
Supreme Court decisions in the Official Gazette before they can be
binding and as a condition to their becoming effective. It is the bounden
duty of counsel as lawyer in active law practice to keep abreast of
decisions of the Supreme Court particularly where issues have been
clarified, consistently reiterated, and published in the advance reports of
Supreme Court decisions (G. R. s) and in such publications as the
Supreme Court Reports Annotated (SCRA) and law journals.

This Court likewise finds that the Court of Appeals committed no grave
abuse of discretion in affirming the trial court's decision holding petitioner
liable under Article 2190 of the Civil Code, which provides that "the
proprietor of a building or structure is responsible for the damage
resulting from its total or partial collapse, if it should be due to the lack of
necessary repairs.

Nor was there error in rejecting petitioners argument that private

respondents had the "last clear chance" to avoid the accident if only they
heeded the. warning to vacate the tailoring shop and , therefore,
petitioners prior negligence should be disregarded, since the doctrine of
"last clear chance," which has been applied to vehicular accidents, is
inapplicable to this case.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 46623 December 7, 1939
MARCIAL KASILAG, petitioner,
vs.
RAFAELA RODRIGUEZ, URBANO ROQUE, SEVERO MAPILISAN and
IGNACIO DEL ROSARIO, respondents.
Luis M. Kasilag for petitioner.
Fortunato de Leon for respondents.
IMPERIAL, J.:
This is an appeal taken by the defendant-petitioner from the decision of
the Court of Appeals which modified that rendered by the court of First
Instance of Bataan in civil case No. 1504 of said court and held: that the
contract Exhibit "1" is entirely null and void and without effect; that the
plaintiffs-respondents, then appellants, are the owners of the disputed
land, with its improvements, in common ownership with their brother
Gavino Rodriguez, hence, they are entitled to the possession thereof;
that the defendant-petitioner should yield possession of the land in their
favor, with all the improvements thereon and free from any lien; that the
plaintiffs-respondents jointly and severally pay to the defendant-petitioner
the sum of P1,000 with interest at 6 percent per annum from the date of
the decision; and absolved the plaintiffs-respondents from the cross-
complaint relative to the value of the improvements claimed by the
defendant-petitioner. The appealed decision also ordered the registrar of
deeds of Bataan to cancel certificate of title No. 325, in the name of the
deceased Emiliana Ambrosio and to issue in lieu thereof another
certificate of title in favor of the plaintiffs-respondents and their brother
Gavino Rodriguez, as undivided owners in equal parts, free of all liens
and incumbrances except those expressly provided by law, without
special pronouncement as to the costs.
The respondents, children and heirs of the deceased Emiliana Ambrosio,
commenced the aforesaid civil case to the end that they recover from the
petitioner the possession of the land and its improvements granted by
way of homestead to Emiliana Ambrosio under patent No. 16074 issued
on January 11, 1931, with certificate of title No. 325 issued by the
registrar of deeds of Bataan on June 27, 1931 in her favor, under section
122 of Act No. 496, which land was surveyed and identified in the
cadastre of the municipality of Limay, Province of Bataan, as lot No. 285;
that the petitioner pay to them the sum of P650 being the approximate
value of the fruits which he received from the land; that the petitioner sign
all the necessary documents to transfer the land and its possession to the
respondents; that he petitioner be restrained, during the pendency of the
case, from conveying or encumbering the land and its improvements; that
the registrar of deeds of Bataan cancel certificate of title No. 325 and
issue in lieu thereof another in favor of the respondents, and that the
petitioner pay the costs of suit.
The petitioner denied in his answer all the material allegations of the
complaint and by way of special defense alleged that he was in
possession of the land and that he was receiving the fruits thereof by
virtue of a mortgage contract, entered into between him and the
deceased Emiliana Ambrosio on May 16, 1932, which was duly ratified by
a notary public; and in counterclaim asked that the respondents pay him
the sum of P1,000 with 12 per cent interest per annum which the
deceased owed him and that, should the respondents be declared to
have a better right to the possession of the land, that they be sentenced
to pay him the sum of P5,000 as value of all the improvements which he
introduced upon the land. lawphil.net
On May 16, 1932 Emiliana Ambrosio, in life, and the petitioner executed
the following public deed:
"This agreement, made and entered into this 16th day of May, 1932, by
and between Emiliana Ambrosio, Filipino, of legal age, widow and
resident of Limay, Bataan, P.L., hereinafter called the party of the first
part, and Marcial Kasilag, Filipino, of legal age, married to Asuncion
Roces, and resident at 312 Perdigon Street, Manila, P.L., hereinafter
called party of the second part.
WITNESSETH: That the parties hereto hereby covenant and
agree to and with each other as follows:
 ARTICLE I. That the party of the first part is the absolute
registered owner of a parcel of land in the barrio of Alngan,
municipality of Limay, Province of Bataan, her title thereto being
evidenced by homestead certificate of title No. 325 issued by the
Bureau of Lands on June 11, 1931, said land being lot No. 285 of
the Limay Cadastre, General Land Registration Office Cadastral
Record No. 1054, bounded and described as follows:
Beginning at point marked 1 on plan E-57394, N. 84º 32' W. 614.82 m.
from B.B.M. No. 3, thence N. 66º 35' E. 307.15 m. to point "2"; S. 5º 07'
W. to point "5"; S.6º 10' E. 104.26 m. to point "4"; S. 82º 17' W. to point
"5"; S. 28º 53' W. 72.26 m. to point "6"; N. 71º 09' W. to point "7"; N. 1º
42' E. 173.72 m. to point 1, point of beginning, "Containing an area of
6.7540 hectares. "Points 1,2,6 and 7, B.L.; points 3,4 and 5, stakes;
points 4, 5 and 6 on bank of Alangan River. "Bounded on the North, by
property claimed by Maria Ambrosio; on the East, by Road; on the South,
by Alangan River and property claimed by Maxima de la Cruz; and on the
West, by property claimed by Jose del Rosario. "Bearing true. Declination
0º 51' E. "Surveyed under authority of sections 12-22, Act No. 2874 and
in accordance with existing regulations of the Bureau of Lands, by
Mamerto Jacinto, public land surveyor, on July 8, 1927 and approved on
February 25, 1931.
ARTICLE II. That the improvements on the above described land
consist of the following:
Four (4) mango trees, fruit bearing: one hundred ten (110) hills of
bamboo trees; one (1) tamarind and six (6) boñga trees.
ARTICLE III. That the assessed value of the land is P940 and the
assessed value of the improvements is P860, as evidenced by
tax declaration No. 3531 of the municipality of Limay, Bataan.
ARTICLE IV. That for and in consideration of the sum of one
thousand pesos (P1,000) Philippine currency, paid by the party of
second part to the party of the first part, receipt whereof is hereby
acknowledged, the party of the first part hereby encumbers and
hypothecates, by way of mortgage, only the improvements
described in Articles II and III hereof, of which improvements the
party of the first part is the absolute owner.
ARTICLE V. That the condition of said mortgage is such that if
the party of the first part shall well and truly pay, or cause to paid
to the party of the second part, his heirs, assigns, or executors,
on or before the 16th day of November, 1936, or four and one-
half (4½) years after date of the execution of this instrument, the
aforesaid sum of one thousand pesos (P1,000) with interest at 12
per cent per annum, then said mortgage shall be and become null
and void; otherwise the same shall be and shall remain in full
force and effect, and subject to foreclosure in the manner and
form provided by law for the amount due thereunder, with costs
and also attorney's fees in the event of such foreclosure. lawphil.net
ARTICLE VI. That the party of the first part shall pay all taxes and
assessments which are or may become due on the above
described land and improvements during the term of this
agreement.
ARTICLE VII. That within thirty (30) days after date of execution
of this agreement, the party of the first part shall file a motion
before the Court of First Instance at Balanga, Bataan, P. I.,
requesting cancellation of Homestead Certificate of Title No. 325
referred to in Article I hereof and the issuance, in lieu thereof, of a
certificate of title under the provisions of Land Registration Act
No. 496, as amended by Act 3901.
ARTICLE III. It if further agreed that if upon the expiration of the
period of time (4½) years stipulated in this mortgage, the
mortgagor should fail to redeem this mortgage, she would
execute a deed of absolute sale of the property herein described
for the same amount as this mortgage, including all unpaid
interests at the rate of 12 per cent per annum, in favor of the
mortgagee.
ARTICLE IX. That in the event the contemplated motion under
Article VII hereof is not approved by the Court, the foregoing
contract of sale shall automatically become null and void, and the
mortgage stipulated under Article IV and V shall remain in full
force and effect.
In testimony whereof, the parties hereto have hereunto set their
hands the day and year first herein before written.
(Sgd.) MARCIAL KASILAG
(Sgd.) EMILIANA AMBROSIO
 Signed in the presence of:
(Sgd.) ILLEGIBLE
(Sgd.) GAVINO RODRIGUEZ.
PHILIPPINE ISLANDS } ss.
BALANGA, BATAAN } ss.
Before me this day personally appeared Emiliana Ambrosio
without cedula by reason of her sex, to me known and known to
me to be the person who signed the foregoing instrument, and
acknowledged to me that she executed the same as her free and
voluntary act and deed.
I hereby certify that this instrument consists of three (3) pages
including this page of the acknowledgment and that each page
thereof is signed by the parties to the instrument and the
witnesses in their presence and in the presence of each other,
and that the land treated in this instrument consists of only one
parcel.
In witness whereof I have hereunto set my hand and affixed my
notarial seal, this 16th day of May, 1932.
(Sgd.) NICOLAS NAVARRO
Notary Public
My commission expires December 31, 1933.
Doc. No. 178
Page 36 of my register
Book No. IV
One year after the execution of the aforequoted deed, that is, in 1933, it
came to pass that Emiliana Ambrosio was unable to pay the stipulated
interests as well as the tax on the land and its improvements. For this
reason, she and the petitioner entered into another verbal contract
whereby she conveyed to the latter the possession of the land on
condition that the latter would not collect the interest on the loan, would
attend to the payment of the land tax, would benefit by the fruits of the
land, and would introduce improvements thereon. By virtue of this verbal
contract, the petitioner entered upon the possession of the land, gathered
the products thereof, did not collect the interest on the loan, introduced
improvements upon the land valued at P5,000, according to him and on
May 22, 1934 the tax declaration was transferred in his name and on
March 6, 1936 the assessed value of the land was increased from P1,020
to P2,180.
After an analysis of the conditions of Exhibit "1" the Court of Appeals
came to the conclusion and so held that the contract entered into by and
between the parties, set out in the said public deed, was one of absolute
purchase and sale of the land and its improvements. And upon this ruling
it held null and void and without legal effect the entire Exhibit 1 as well as
the subsequent verbal contract entered into between the parties,
ordering, however, the respondents to pay to the petitioner, jointly and
severally, the loan of P1,000 with legal interest at 6 per cent per annum
from the date of the decision. In this first assignment of error the
petitioner contends that the Court of Appeals violated the law in holding
that Exhibit 1 is an absolute deed of sale of the land and its
improvements and that it is void and without any legal effect.
The cardinal rule in the interpretation of contracts is to the effect that the
intention of the contracting parties should always prevail because their
will has the force of law between them. Article 1281 of the Civil Code
consecrates this rule and provides, that if the terms of a contract are clear
and leave no doubt as to the intention of the contracting parties, the literal
sense of its stipulations shall be followed; and if the words appear to be
contrary to the evident intention of the contracting parties, the intention
shall prevail. The contract set out in Exhibit 1 should be interpreted in
accordance with these rules. As the terms thereof are clear and leave no
room for doubt, it should be interpreted according to the literal meaning of
its clauses. The words used by the contracting parties in Exhibit 1 clearly
show that they intended to enter into the principal contract of loan in the
amount of P1,000, with interest at 12 per cent per annum, and into the
accessory contract of mortgage of the improvements on the land
acquired as homestead, the parties having moreover, agreed upon the
pacts and conditions stated in the deed. In other words, the parties
entered into a contract of mortgage of the improvements on the land
acquired as homestead, to secure the payment of the indebtedness for
P1,000 and the stipulated interest thereon. In clause V the parties
stipulated that Emiliana Ambrosio was to pay, within four and a half
years, or until November 16, 1936, the debt with interest thereon, in
which event the mortgage would not have any effect; in clause VI the
parties agreed that the tax on the land and its improvements, during the
existence of the mortgage, should be paid by the owner of the land; in
clause VII it was covenanted that within thirty days from the date of the
contract, the owner of the land would file a motion in the Court of First
Instance of Bataan asking that certificate of title No. 325 be cancelled and
that in lieu thereof another be issued under the provisions of the Land
Registration Act No. 496, as amended by Act No. 3901; in clause VIII the
parties agreed that should Emiliana Ambrosio fail to redeem the
mortgage within the stipulated period of four years and a half, she would
execute an absolute deed of sale of the land in favor of the mortgagee,
the petitioner, for the same amount of the loan of P1,000 including unpaid
interest; and in clause IX it was stipulated that in case the motion to be
presented under clause VII should be disapproved by the Court of First
Instance of Bataan, the contract of sale would automatically become void
and the mortgage would subsist in all its force.
Another fundamental rule in the interpretation of contracts, not less
important than those indicated, is to the effect that the terms, clauses and
conditions contrary to law, morals and public order should be separated
from the valid and legal contract and when such separation can be made
because they are independent of the valid contract which expresses the
will of the contracting parties. Manresa, commenting on article 1255 of
the Civil Code and stating the rule of separation just mentioned, gives his
views as follows:
On the supposition that the various pacts, clauses or conditions
are valid, no difficulty is presented; but should they be void, the
question is as to what extent they may produce the nullity of the
principal obligation. Under the view that such features of the
obligation are added to it and do not go to its essence, a criterion
based upon the stability of juridical relations should tend to
consider the nullity as confined to the clause or pact suffering
therefrom, except in case where the latter, by an established
connection or by manifest intention of the parties, is inseparable
from the principal obligation, and is a condition, juridically
speaking, of that the nullity of which it would also occasion.
(Manresa, Commentaries on the Civil Code, Volume 8, p. 575.)
The same view prevails in the Anglo-American law, as condensed in the
following words:
Where an agreement founded on a legal consideration contains
several promises, or a promise to do several things, and a part
only of the things to be done are illegal, the promises which can
be separated, or the promise, so far as it can be separated, from
the illegality, may be valid. The rule is that a lawful promise made
for a lawful consideration is not invalid merely because an
unlawful promise was made at the same time and for the same
consideration, and this rule applies, although the invalidity is due
to violation of a statutory provision, unless the statute expressly
or by necessary implication declares the entire contract void. . . .
(13 C. J., par. 470, p. 512; New York Cent. etc. R. Co. v. Gray,
239 U.S., 583; 60 Law ed., 451; U.S. v. Mora, 97 U.S., 413, 24
Law. ed., 1017; U.S. v. Hodson, 10 Wall, 395; 19 Law ed. 937;
Gelpcke v. Dubuque, 1 Wall. 175, 17 Law ed., 520; U.S. v.
Bradly, 10 Pet. 343, 9 Law. ed., 448; Borland v. Prindle, 144 Fed
713; Western Union Tel. Co. v. Kansas Pac. R. Co., 4 Fed., 284;
Northern Pac. R. Co. v. U.S., 15 Ct. Cl., 428.)
Addressing ourselves now to the contract entered into by the parties, set
out in Exhibit 1, we stated that the principal contract is that of loan and
the accessory that of mortgage of the improvements upon the land
acquired as a homestead. There is no question that the first of these
contract is valid as it is not against the law. The second, or the mortgage
of the improvements, is expressly authorized by section 116 of Act No.
2874, as amended by section 23 of Act No. 3517, reading:
SEC. 116. Except in favor of the Government or any of its
branches, units or institutions, or legally constituted banking
corporations, lands acquired under the free patent or homestead
provisions shall not be subject to encumbrance or alienation from
the date of the approval of the application and for a term of five
years from and after the date of issuance of the patent or grant,
nor shall they become liable to the satisfaction of any debt
contracted prior to the expiration of said period; but the
improvements or crops on the land may be mortgaged or pledged
to qualified persons, associations, or corporations.
It will be recalled that by clause VIII of Exhibit 1 the parties agreed that
should Emiliana Ambrosio fail to redeem the mortgage within the
stipulated period of four and a half years, by paying the loan together with
interest, she would execute in favor of the petitioner an absolute deed of
sale of the land for P1,000, including the interest stipulated and owing.
The stipulation was verbally modified by the same parties after the
expiration of one year, in the sense that the petitioner would take
possession of the land and would benefit by the fruits thereof on condition
that he would condone the payment of interest upon the loan and he
would attend to the payment of the land tax. These pacts made by the
parties independently were calculated to alter the mortgage a contract
clearly entered into, converting the latter into a contract of antichresis.
(Article 1881 of the Civil Code.) The contract of antichresis, being a real
encumbrance burdening the land, is illegal and void because it is legal
and valid.
The foregoing considerations bring us to the conclusion that the first
assignment of error is well-founded and that error was committed in
holding that the contract entered into between the parties was one of
absolute sale of the land and its improvements and that Exhibit 1 is null
and void. In the second assignment of error the petitioner contends that
the Court of Appeals erred in holding that he is guilty of violating the
Public Land Act because he entered into the contract, Exhibit 1. The
assigned error is vague and not specific. If it attempts to show that the
said document is valid in its entirety, it is not well-founded because we
have already said that certain pacts thereof are illegal because they are
prohibited by section 116 of Act No. 2874, as amended.
In the third assignment of error the petitioner insists that his testimony, as
to the verbal agreement entered into between him and Emiliana
Ambrosio, should have been accepted by the Court of Appeals; and in
the fourth and last assignment of error the same petitioner contends that
the Court of Appeals erred in holding that he acted in bad faith in taking
possession of the land and in taking advantage of the fruits thereof,
resulting in the denial of his right to be reimbursed for the value of the
improvements introduced by him.
We have seen that subsequent to the execution of the contract, Exhibit 1,
the parties entered into another verbal contract whereby the petitioner
was authorized to take possession of the land, to receive the fruits
thereof and to introduce improvements thereon, provided that he would
renounce the payment of stipulated interest and he would assume
payment of the land tax. The possession by the petitioner and his receipt
of the fruits of the land, considered as integral elements of the contract of
antichresis, are illegal and void agreements because, as already stated,
the contract of antichresis is a lien and such is expressly prohibited by
section 116 of Act No. 2874, as amended. The Court of Appeals held that
the petitioner acted in bad faith in taking possession of the land because
he knew that the contract he made with Emiliana Ambrosio was an
absolute deed of sale and, further, that the latter could not sell the land
because it is prohibited by section 116. The Civil Code does not
expressly define what is meant by bad faith, but section 433 provides that
"Every person who is unaware of any flaw in his title, or in the manner of
its acquisition, by which it is invalidated, shall be deemed a possessor in
good faith"; and provides further, that "Possessors aware of such flaw are
deemed possessors in bad faith". Article 1950 of the same Code,
covered by Chapter II relative to prescription of ownership and other real
rights, provides, in turn, that "Good faith on the part of the possessor
consists in his belief that the person from whom he received the thing
was the owner of the same, and could transmit the title thereto." We do
not have before us a case of prescription of ownership, hence, the last
article is not squarely in point. In resume, it may be stated that a person
is deemed a possessor in bad faith when he knows that there is a flaw in
his title or in the manner of its acquisition, by which it is invalidated.
Borrowing the language of Article 433, the question to be answered is
whether the petitioner should be deemed a possessor in good faith
because he was unaware of any flaw in his title or in the manner of its
acquisition by which it is invalidated. It will be noted that ignorance of the
flaw is the keynote of the rule. From the facts found established by the
Court of Appeals we can neither deduce nor presume that the petitioner
was aware of a flaw in his title or in the manner of its acquisition, aside
from the prohibition contained in section 116. This being the case, the
question is whether good faith may be premised upon ignorance of the
laws. Manresa, commenting on article 434 in connection with the
preceding article, sustains the affirmative. He says:
"We do not believe that in real life there are not many cases of good faith
founded upon an error of law. When the acquisition appears in a public
document, the capacity of the parties has already been passed upon by
competent authority, and even established by appeals taken from final
judgments and administrative remedies against the qualification of
registrars, and the possibility of error is remote under such
circumstances; but, unfortunately, private documents and even verbal
agreements far exceed public documents in number, and while no one
should be ignorant of the law, the truth is that even we who are called
upon to know and apply it fall into error not infrequently. However, a
clear, manifest, and truly unexcusable ignorance is one thing, to which
undoubtedly refers article 2, and another and different thing is possible
and excusable error arising from complex legal principles and from the
interpretation of conflicting doctrines.
But even ignorance of the law may be based upon an error of
fact, or better still, ignorance of a fact is possible as to the
capacity to transmit and as to the intervention of certain persons,
 compliance with certain formalities and appreciation of certain
acts, and an error of law is possible in the interpretation of
doubtful doctrines. (Manresa, Commentaries on the Spanish Civil
Code. Volume IV, pp. 100, 101 and 102.)
According to this author, gross and inexcusable ignorance of law may not
be the basis of good faith, but possible, excusable ignorance may be
such basis. It is a fact that the petitioner is not conversant with the laws
because he is not a lawyer. In accepting the mortgage of the
improvements he proceeded on the well-grounded belief that he was not
violating the prohibition regarding the alienation of the land. In taking
possession thereof and in consenting to receive its fruits, he did not
know, as clearly as a jurist does, that the possession and enjoyment of
the fruits are attributes of the contract of antichresis and that the latter, as
a lien, was prohibited by section 116. These considerations again bring
us to the conclusion that, as to the petitioner, his ignorance of the
provisions of section 116 is excusable and may, therefore, be the basis of
his good faith. We do not give much importance to the change of the tax
declaration, which consisted in making the petitioner appear as the owner
of the land, because such an act may only be considered as a sequel to
the change of possession and enjoyment of the fruits by the petitioner, to
about which we have stated that the petitioner's ignorance of the law is
possible and excusable. We, therefore, hold that the petitioner acted in
good faith in taking possession of the land and enjoying its fruits.
The petitioner being a possessor in good faith within the meaning of
article 433 of the Civil Code and having introduced the improvements
upon the land as such, the provisions of article 361 of the same Code are
applicable; wherefore, the respondents are entitled to have the
improvements and plants upon indemnifying the petitioner the value
thereof which we fix at P3,000, as appraised by the trial court; or the
respondents may elect to compel the petitioner to have the land by
paying its market value to be fixed by the court of origin.
The respondents also prayed in their complaint that the petitioner be
compelled to pay them the sum of P650, being the approximate value of
the fruits obtained by the petitioner from the land. The Court of Appeals
affirmed the judgment of the trial court denying the claim or indemnity for
damages, being of the same opinion as the trial court that the
respondents may elect to compel the petitioner to have the land. The
Court of Appeals affirmed the judgment of the trial court that the
respondents have not established such damages. Under the verbal
contract between the petitioner and the deceased Emiliana Ambrosio,
during the latter's lifetime, the former would take possession of the land
and would receive the fruits of the mortgaged improvements on condition
that he would no longer collect the stipulated interest and that he would
attend to the payment of the land tax. This agreement, at bottom, is
tantamount to the stipulation that the petitioner should apply the value of
the fruits of the land to the payment of stipulated interest on the loan of
P1,000 which is, in turn, another of the elements characterizing the
contract of antichresis under article 1881 of the Civil Code. It was not
possible for the parties to stipulate further that the value of the fruits be
also applied to the payment of the capital, because the truth was that
nothing remained after paying the interest at 12% per annum. This
interest, at the rate fixed, amounted to P120 per annum, whereas the
market value of the fruits obtainable from the land hardly reached said
amount in view of the fact that the assessed value of said improvements
was, according to the decision, P860. To this should be added the fact
that, under the verbal agreement, from the value of the fruits had to be
taken a certain amount to pay the annual land tax. We mention these
data here to show that the petitioner is also not bound to render an
accounting of the value of the fruits of the mortgaged improvements for
the reason stated that said value hardly covers the interest earned by the
secured indebtednes.
For all the foregoing considerations, the appealed decision is reversed,
and we hereby adjudge: (1) that the contract of mortgage of the
improvements, set out in Exhibit 1, is valid and binding; (2) that the
contract of antichresis agreed upon verbally by the parties is a real
incumbrance which burdens the land and, as such, is a null and without
effect; (3) that the petitioner is a possessor in good faith; (4) that the
respondents may elect to have the improvements introduced by the
petitioner by paying the latter the value thereof, P3,000, or to compel the
petitioner to buy and have the land where the improvements or plants are
found, by paying them its market value to be filed by the court of origin,
upon hearing the parties; (5) that the respondents have a right to the
possession of the land and to enjoy the mortgaged improvements; and
(6) that the respondents may redeem the mortgage of the improvements
by paying to the petitioner within three months the amount of P1,000,
without interest, as that stipulated is set off by the value of the fruits of the
mortgaged improvements which petitioner received, and in default thereof
the petitioner may ask for the public sale of said improvements for the
purpose of applying the proceeds thereof to the payment of his said
credit. Without special pronouncement as to the costs in all instances. So
ordered.
Diaz, J., concur.
 
 
 
Separate Opinions
VILLA-REAL, J., concurring and dissenting:
According to the contract entered into May 16, 1932, between Emiliana
Ambrosio, in life, and the petitioner Marcial Kasilag, the first, in
consideration of the sum of P1,000 given to her by the second,
constituted a mortgage on the improvements only of the land which she
acquired by way of homestead. The improvements which she mortgaged
consisted of four fruit bearing mango trees, one hundred ten hills of
bamboo trees, 1 tamarind tree and 6 betelnut trees, the assessed value
of which was P660. The condition of the loan were that if the mortgagor
should pay the mortgage on November 16, 1936, that is, four and a half
years after the execution of the deed, said sum of P1,000 with interest
thereon at 12% per annum, the aforesaid mortgage would become null
and void, otherwise it would remain in full force and effect and would b
subject to foreclosure in the manner provided by law; that the mortgagor
would pay all the land tax on the land and its improvements during the
duration of the contract; and that if after the expiration of the said period
of four and a half years the mortgagor should fail to redeem the
mortgage, she would execute in favor of the mortgage an absolute deed
of sale of the property described in the contract for the same sum of
P1,000 plus interest due and unpaid at the rate of 12 per cent per annum.
The principal rule in the interpretation of contracts is that "If the terms of a
contract are clear and leave no doubt as to the intention of the
contracting parties, the literal sense of its stipulations shall be followed. If
the words appear to be contrary to the evident intention of the contracting
parties, the intention shall prevail" (article 1281, Civil Cod). "In order to
judge as to the intention of the contracting parties, attention must be paid
principally to their conduct at the time of making the contract and
subsequently thereto." (Article 1282.)
Now, then what is the true nature of the contract entered into between the
parties by virtue of the deed of sale executed by them on May 16, 1932?
The Court of Appeals held that it is an absolute deed of sale of a land
with a homestead certificate of title, under the guise of a loan secured by
a mortgage upon its improvements in order to go around the prohibition
contained in section 116 of Act No. 2874, as amended by section 23 of
Act No. 3517.
Closely examined, the only clauses of the contract which may lead to the
conclusion that it is one of the sale are those which state that if at the
expiration of the period of four years and a half the mortgagor should fail
to pay the amount of the loan plus interest due and unpaid at the rate of
12 per cent per annum, she would execute in favor of the mortgagee a
deed of absolute sale of the land whose improvements were mortgaged
for the amount of the loan and the interest owing. It will be seen that the
sale would not be made until after the lapse of four and a half years from
the execution of the deed, if the mortgagor should fail or should not wish
to redeem the mortgaged improvements. Consequently, the obligation
contracted by said mortgagor was no more than a conditional promise to
sell. Now, then, is this a promise to sell valid? Like any other onerous,
consensual and mutually binding contract, that of promise to sell requires
for its legal existence and validity the concurrence of consent,
consideration and subject-matter. The contract before us dos not show
what is the cause or consideration for such promise to sell. Assuming that
it was the economic impotence of the mortgagor to redeem the
mortgaged improvements, before she could be compelled to comply with
her obligation to sell, there is need to wait until she should fail of funds or
to abandonment. The cause will come into being only upon the
happening of said event after the four and half years and only then will
the said contract of promise to sell have juridical existence. The P1,000
and its interest, should the mortgagor fail to redeem the improvements
upon the maturity of the indebtedness, would be the consideration of the
sale; because the promise to sell is a contract different and distinct from
that of sale and each requires a consideration for its existence and
validity.
The terms of the contract are clear and explicit and do not leave room for
doubt that the intention of the contracting parties was to constitute a
mortgage on the improvements of the land in litigation to secure the
payment of the loan for P1,000, within interest thereon at 12 per cent per
annum. It cannot be said that this contract is simulated because the
assessed value of the improvements is P860 only. It is well known that
rural properties are valued for assessment purposes not less than half of
their market value. The true value of the said improvements may
therefore be P1,720, and the mortgagee may have considered that
adequate. Moreover, the petitioner could not have the property whose
improvements were mortgaged to him the property whose improvements
were mortgaged to him even should the mortgagor default in the payment
of interest. He could only have the mortgaged improvements in case of
foreclosure should he bid therefor at the sale. Neither could the
mortgagor sell the same property to the mortgagee, even after the
expiration of five years from the issuance of the homestead certificate of
title, for then the sale would be in satisfaction of an obligation contracted
during the five years, which is prohibited by the oft-mentioned section 116
of Act No. 2874, as amended by section 23 of Act No. 3517. The fact that
after one year the contracting parties had novated the contract of loan
secured by a mortgagee, converting the same into a contract of anti-
chresis because of the mortgagor's failure to pay the accrued interest,
does not show that they intended to enter into a contract of sale, because
the conversion in this case of the contract of loan secured by a mortgage
into one of antichresis was accidental, due to the mortgagor's default in
the payment of unpaid interest for the first year. if the parties' intention
from the beginning had been to sell the property, the mortgagee would
have immediately entered upon the possession of the land instead of
waiting until after the expiration of one year. The transfer of the Torrens
certificate of title to the homestead by the original owner to the mortgagee
in 1934 was only a consequence of the conversion of the mortgage loan
into an anti-chretic loan, the parties having such a transfer. The setting off
of the interest on the debt against the fruits of the property given in
antichresis finds authority in article 1885 of the of the Civil Code. There
is, therefore, no ambiguity in the terms of the contract warranting the
search outside its four corners for the true intention of the contracting
parties other than that of entering into a contract of loan secured by the
said improvements. If the true intention of the contracting parties, as
clearly gathered from the terms of the contract, was to enter into a
contract, was to enter into a contract of loan secured by a mortgage upon
the improvements, although they should convert it into a contract of
antichresis after one year and although after the maturity of the loan with
interest they may wish to convert it into one of absolute sale — both
conversions being illegal and, hence, void, — 8 the original intention of
entering into a contract of loan secured by a mortgagee upon the
improvements would prevail, the said contract of loan being the only one
legal and valid, and the petitioner having acted in good faith in making it.
The verbal contract of antichresis, entered into by the petitioner Marcial
Kasilag and Emiliana Ambrosio, being null and void ab initio and without
any legal effect because it is in violation of the express prohibition of
section 116 of Act No. 2874 as amended by section 23 of Act No. 3517,
(article 4 of the Civil Code), the contracting parties should restore to each
other the things which have been the subject-matter of the contract,
together with their fruits, and the price paid therefor, together with
interest, pursuant to Article 1303 of the same Code. Marcial Kasilag,
therefore, should return to Emiliana Ambrosio or to her heirs the
possession of the homestead and the improvements thereon with its
fruits, and Emiliana Ambrosio or her heirs should pay him the sum of
P1,000, being the amount of the loan, plus interest due and unpaid.
As to the improvements introduced upon the land by the petitioner,
having done so with the knowledge and consent of its owner Emiliana
Ambrosio, the former acted in good faith, and under article 361 of the
Civil Code, the owner of the land may have the said improvements upon
paying the indemnity provided in articles 453 and 454, or may compel the
said Marcial Kasilag, who introduced the said improvements, to pay the
price of the land. If the herein respondents, as heirs of Emiliana
Ambrosio, do not wish or are unable to pay for said improvements, and
Marcial Kasilag does not wish or is unable to pay the land, said petitioner
would lose his right of intention over the same (Bernardo vs. Batalan, 37
Off. G., No. 74, p. 1382), provided that he may remove the improvements
which he had introduced in good faith.
In view of the foregoing, I concur in the majority opinion except insofar as
it holds that the interest is set off against the fruits of the mortgaged
improvements, because as a result of the nullity of the contract of
antichresis the petitioner should return to the respondents the products of
the mortgaged improvements, and the latter should pay to the petitioner
the amount of the loan plus interest due and unpaid at the rate of 12 per
cent per annum from the date of the contract until fully paid.
LAUREL, J., concurring in the result:
On August 27, 1918, Emiliana Ambrosio put in a homestead application
for lot No. 285 of the Limay cadastre, Province of Bataan. After complying
with the requisite legal formalities, she obtained therefor homestead
patent No. 16074, the same having been recorded in the Registry of
Deeds of Bataan on Juner 26, 1931. On May 16, 1932, she entered with
the herein petitioner, Marcial Kasilag, into a contract, Exhibit 1, inserted in
the foregoing majority opinion.
Sometime in 1933, or a year after the execution of the aforequoted and
land taxes, whereupon, the mortgage, Marcial Kasilag, and the
mortgagor, Emiliana Ambrosio, verbally agreed that the former would pay
the land taxes and waive the unpaid interest, enter into the possession of
the property in question, introducing improvements thereon, and
thereafter be reimbursed for the value of such improvements. Under this
verbal pact, Kasilag went into possession of the property, planted it with
the fruit trees allegedly valued at P5,000, and on May 22, 1934, declared
the same for taxation purposes. In 1934 the original homesteader,
Emiliana Rodriguez, Severo Mapilisan, Ignacio del Rosario and Gavino
Rodriguez.
On May 16, 1936, the said heirs, with the exception Gavino Rodriguez
who testified for the defendant, sued Marcial Kasilag in the Court of First
Instance of Bataan to recover the possession of the aforesaid property
belonging to their mother. For answer, the defendant put in as was in
good faith with the knowledge and tolerance of the plaintiffs, a
counterclaim for P1,000 representing the loan to the deceased
homesteader with stipulated interest there on, and a recoupment for
P5,000 allegedly the value of the improvements he had introduced upon
the land. On the issues thus joined, the trial court gave judgment for the
defendant couched in the following language:
Resuming all that has been said above, the court find and
declares that the deed of combined mortgage and sale executed
by Emiliana Ambrosio in favor of the defendant Marcial Kasilag
and dated May 16, 1932, is null and void as a contract for a future
conveyance or sale of the homestead, but valid as an equitable
mortgage on the improvements for the sum of P1,000; and that
the possession of the homestead by the defendant Marcial
Kasilag by virtue of said contract or by virtue of any other
agreement is null and void, but that the making of the
improvements thereon by him, which the court finds to be valued
at P3,000, by virtue of the verbal agreement entered into after the
executing of the original instrument of mortgage, was in good
faith, entitling the said Marcial Kasilag to be reimbursed of their
actual value, the above-mentioned amount. Wherefore, let
judgment be entered declaring that the plaintiffs are entitled to the
possession as owners of the homestead subject of the present
suit, lot No. 285 of the Limay cadastral survey, subject to an
encumbrance of the improvements for the sum of P1,000 in favor
of the defendant, ordering the defendant deliver unto the plaintiffs
in turn to pay unto the defendant jointly and severally, as heirs of
their deceased mother Rafaela Rodriguez the sum of P3,000,
value of the improvements introduced on said homestead by
defendant. Let there be no pronouncement as to costs." On
appeal by the plaintiffs, the Third Division of the Court of Appeals
reached a different result and modified the judgment of the trial
court as follows:
Wherefore, the appealed judgment is hereby modified by
declaring that the contract, Exhibit "1", is entirely null and void;
that the plaintiffs and appellants are the owners of the lot in
question together with all the improvements thereon in common
with their brother, Gavino Rodriguez, and are, therefore, entitled
to the possession thereof; ordering the defendant and appellee to
vacate and deliver the possession of the aforementioned plaintiffs
and appellants free from any encumbrance; requiring latter,
however, to pay jointly and severally to the said appellee the sum
of P1,000 with the interest thereon at the rate of 6 per cent per
annum from and including the date this decision becomes final;
and absolving the said plaintiffs and appellants from the cross-
complaint with respect to the value of the improvements claimed
by the appellee.
It is further ordered that the register of deeds of Bataan cancel
the certificate of title No. 325 in the name of the deceased,
Emiliana Ambrosio, and issue in lieu thereof anew certificate of
title in favor of the herein plaintiffs and appellants and their
brother, Gavino Rodriguez, as owners pro indiviso and in equal
shares free from any lien or encumbrance except those expressly
provided by law.
Without special pronouncement as to the costs.
The case is before us on petition for certiorari which was given due
course, filed by defendant-appellee, Marcial Kasilag, now petitioner,
against plaintiffs-appellants, Rafaela Rodriguez and others, now
respondents. The burden of petitioner's case is condensed in the
following assignments of error:
The Honorable Court of Appeals erred:
I. In having interpreted that document Exhibit "1" is an absolute
sale and declared it entirely null and void, and in not having
interpreted and declared that it is a deed of combined mortgage
and future sale which, if void as a contract for future conveyance
of the homestead in question is, however, valid as an equitable
mortgage on the improvements thereof for the sum of P1,000
loaned by petitioner Marcial Kasilag to the homestead owner
Emiliana Ambrosio.
 II. In holding that the petitioner was guilty of the violation of the
public land law for having entered into said contract Exhibit "1".
III. In not giving probative value to the uncontradicted testimony of
the petitioner Marcial Kasilag that he was expressly authorized by
the homestead owner Emiliana Ambrosio to introduction by him of
improvements therein by virtue of the verbal agreement entered
into after the execution of the original instrument of mortgage was
in good faith, entitling him to reimbursed of the actual value of
improvements he introduced.
Boiled down to the fundamentals, there are only two propositions which
stands to be resolved in this appeal: (1) What is the legal nature of the
agreement, Exhibit 1, entered into by and between the parties? and (2) Is
Marcial Kasilag guilty of bad faith in entering upon the possession of the
homestead, paying the land tax and introducing improvements thereon?
The numerous adjudications in controversies of this nature will show that
each case must be decided in the light of the attendant circumstances
and the situation of the parties which, upon the whole, mark its character.
However, for the purpose of ascertaining the manner and extent to which
persons have intended to be found by their written agreements, the safe
criterion, the time honored test, is their contention which is intimately
woven into the instrument itself. It is true that resort to extrinsic evidence
is imperative when the contract is ambiguos and is susceptible of
divergent interpretations; nevertheless, the primary obligation of the
courts is to discover the intention of the contracting parties, as it is
expressed by the language of the document itself. We are not authorized
to make a contract for the parties.
In the trial court as in the Court of Appeals, the discussion centered on
the nature and validity of the document, Exhibit 1. This is the correct
approach. The Court of Appeals, however, rejected the conclusion of the
trial court that it is an absolute deed of sale which is null and void in its
entirely because it is banned by section 116, as amended of the Public
land Act. The ruling is now assailed by the petitioner. I share petitioner's
view that the deed is not what it was construed to be by the Court of
Appeals.
From Article I to III thereof is a description of the homestead and the
improvements existing thereon. By its Article IV the homesteader,
Emiliana Ambrosio, "encumbers and hipothecates, by way of mortgage,
only the improvements described in Articles II and III" under the
conditions set out in Articles V, VI and VII. Its closing Articles VIII and IX,
particularly relied upon by the Court of Appeals, speak, not of a present
deed of absolute sale, but of one to be executed "upon the expiration of
the period of time (4½ years) stipulated in the mortgage" if "the mortgagor
should fail to redeem this mortgage". In other words, the redemption of
the mortgage by the payment of the loan may bring about the frustration
of contemplated sale, hence, to hold unqualifiedly that the whole of
Exhibit 1, or even a part thereof, is an absolute deed of sale would be to
do violence to the terms of the document it self.
Still other tokens drive home the same conviction. The intimation by the
Court of Appeals that the petitioner "know, therefore, that the land subject
of the patent could not be alienated by express prohibition of law," is an
argument that the petitioner could not have brazenly disregarded the law
by intending Exhibit 1 to be an absolute deed of sale. Its further
observation that "the stipulation under article VIII of the contract, Exhibit
'1' . . . clearly indicates that there was nothing left to be done except the
execution of the deed of absolute sale," is a concession that no such sale
has yet been executed. Finally it will be recalled that under Article VII of
Exhibit 1, "within thirty (30) days after date of execution of this agreement
the party of the first part shall file a motion before the Court of First
Instance of Balanga, Bataan, P.I., requesting cancellation of homestead
certificate of title No. 325 referred to in Article 1 hereof and the issuance,
in lieu thereof, of a certificate of title under the provisions of Land
Registration Act 496, as amended by Act 3901." And by its Article IX it
provides "That in the event the contemplated motion under Article VII
hereof is not approved by the Court, the foregoing contract of sale shall
automatically become null and void." (Underlining is mine.) We have
nothing in the record to show that the required motion was filed within
thirty days or thereafter, by Emiliana Ambrosio in life, or by her
successors-in-interest after her death. Indeed, Homestead Certificate of
Title No. 325, sought to be substituted by another through the said
motion, still stands. It is, evident, therefore, that the projected sale has
and may never come into being, because under Article IX of Exhibit 1, it
became automatically null and void. This view, incidentally, precludes
further consideration of the validity or invalidity of the sale clause of
Exhibit 1, as it will purely academic to dwell upon the nature and effect of
a contract that has passed out of existence in the contemplation of the
parties.
Having reached the conclusion, upon its plain language and unequivocal
import, that Exhibit 1 is essentially and fundamentally a mortgage upon
the improvements found on the questioned homestead, with a conditional
clause for the future sale of said homestead and improvements which
has become a "dead twig" still attached to a living tree because the
condition has never been performed, I would, under Articles 1281 and
1283 of the Civil Code, be otherwise content in resting our decision of this
aspect of the case on this interpretation. But I do not propose to so limit
my inquiry in view of the fact that the Court of Appeals points to
contemporaneous and subsequent circumstances, beyond the four
corners of the document, Exhibit 1, allegedly revelatory of petitioner's
concealed but evident intention to circumvent the law. I may state, at the
outset, that these circumstances are fairly susceptible of legitimate
explanations. The appealed decision could not conceive of a man, of
petitioner's intelligence, who "would accept improvements valued at only
P860 as security for the payment of a larger amount of P1,000." But we
are concerned with an assessed valuation which is not always nor even
frequently the value that it can command in the market. To ignore this is
to live in monastic seclusion. The appealed decision would imply from the
fact that petitioner subsequently paid the land taxes and from the further
fact that Emiliana never paid stipulated interest on the one thousand-
peso loan, that Exhibit 1 was meant to vest absolute title irretrievably in
the petitioner. It could hardly be supposed at the time of the execution of
Exhibit 1 that the homesteader would fail to make these payments, nor
does it seem just to draw from these circumstances, induced by
Emiliana's own neglect, deductions unfavorable to the petitioner. That the
petitioner went upon the possession of the questioned property is not
proof that he was even already the would-be owner thereof, for as
elsewhere stated, the said possession came practically at the suggestion
of or at least with the consent of Emiliana Ambrosio as a result of her
failure to live up to her part of the bargain. Finally, the Court of Appeals
asked: "If the real purpose was to mortgage the improvements only as
specified in article IV of the contract, why is it that in article VIII thereof it
was provided that in case of failure to redeem the alleged mortgage the
grantor would be required to execute a de of absolute sale of the property
described therein for the same amount of the mortgage in favor of the
grantee, and not of" the improvements only'?" The precaution which the
petitioner took to have the sale clause of Exhibit I so phrased that the
said sale would not be affected until after the expiration of the five-year
period prohibited by law, at which time the alienation of the homestead
would then have been perfectly legitimate, may not be without
significance to show petitioner's respect for and intention to be on the
side of the law. The very mention of the word "sale" in the document in
question argues against any attempt at concealment, for if the said
document was intended as a cover and cloak of an illegal alienation, then
the reference to the contract of sale therein was illtimed and foolhardy.
The question next at hand is whether or not the mortgage constituted
upon the improvement's of the homestead is valid. It is, under express
provisions of section 116 of the Public Land Act, before and after its
amendment, reading pertinently that "the improvements or crops on the
land may be mortgaged or pledged to qualified persons, associations, or
corporations." I find no occasion to dispute this legislative policy however
mistaken it may be. It is sufficient to observe that what the law permits
may be done. Upon the other hand, I find no occasion to test the legality
of the sale provisions of Exhibit 1, as I have heretofore said, this question
is, in my opinion, moot. Moreover, the petitioner, technically, is barred
from raising this question, as he did not appeal from and, therefore,
abided by the decision of the trial court which outlawed this sale clause
as violative of the provisions of section 116 of the Public Land Act. This
part of the decision of the trial court was affirmed by the Court of Appeals
when the latter struck down Exhibit 1 in its entirety and, even now,
petitioner does not complain against the destruction of Exhibit 1 with
respect to its sale clause. In other words, counsel for petitioner concedes
all along that the said sale clause may be properly legislated out. As the
mortgage provisions of Exhibit 1 are independent of and severable from
the rest thereof, the same are perfectly enforceable. Where a part of the
contract is perfectly valid and separable from the rest, the valid portion
should not be avoided. (Ollendorf vs. Abrahamson, 38 Phil., 585.)
The question yet to be answered is whether the petitioner's possession of
the question homestead was in good faith so as to entitle him to
reimbursement for improvements introduced upon the land. The basis of
petitioner's possession was a verbal agreement with the original
homesteader whereby, for failure of the latter to comply with her
obligations to pay land taxes and stipulated interest on the loan, the
former assumed the said obligations for the privilege of going into
possession of the property, introducing improvements thereon, and
thereafter being reimbursed for the value of such improvements. The
petitioner did enter upon such possession, planted the land to fruit trees
valued at P5,000, according to him, and P3,000, according to the trial
judge. It should be stated, in passing, that the Court of Appeals was
unable to belie this verbal agreement, although it was of the opinion "that
the trial court erred in giving probative value to the testimony of the
appellee with reference to the alleged verbal agreement". Its reason for
the opinion is not because the testimony is untrue, but because even if it
were true, "it only tends to corroborate the allegation that he acted in bad
faith when he took possession of the property and made improvements
thereon, because then he knew full well that the homestead owner could
not enter into an agreement involving the future final and absolute
alienation of the homestead in his favor." As the said opinion and the
reason back of it does not involve a question of strict fact, it is in our
power to inquire into its soundness. The weakness of the argument lies,
first, in its, (a) inconsistency and (b) in the misconception of the legal
principle involved: inconsistency, because it considers entry of
possession, payment of land tax as facts tending to show the real
character of the transaction and as evidencing bad faith on the part of the
petitioner, but at the same time it improperly rejects the verbal agreement
by which such facts are established. It is clear that we cannot directly
reject the verbal agreement between the parties in so fat as it is favorable
to the petitioner. The misconception proceeds from the erroneous legal
conclusion that, upon the facts, the good faith is attributable to the
petitioner alone and that Ambrosio was not to be blamed for the
prohibited alienation of the homestead, as I shall presently proceed to
discuss.
In holding that the petitioner was a possessor in bad faith, the decision
sought to be reviewed first laid down the premise that such possession is
banned by law at least for five years from the issuance of patent (section
116, Public Land Act), assumed that the petitioner had knowledge of
such law, and then drew the conclusion that the petitioner was aware of
the illegality of his possession. We think that the assumption and
conclusion are precipitate. As observed in the foregoing majority opinion-
citing Manresa-knowledge of a legal provision does not necessarily mean
knowledge of its true meaning and scope, or of the interpretation which
the courts may place upon it. In this particular case, what section 116 of
the Public Land Act prohibits is the "incumbrance or alienation" of land
acquired thereunder within the period prescribed therein. We may
concede, as assumed by the appealed decision, that the petitioner was
cognizant of said section 116, but this is not saying that petitioner knew
that his possession came under the phrase "incumbrance or alienation"
prohibited by law, and that the petitioner, therefore, knew that his
possession was illegal. The import of the phrase "incumbrance or
alienation" is a subject upon which "men of reason may reasonably
differ," in the same way that we ourselves have differed in the
deliberation of this case. It is not correct to assume that the petitioner had
knowledge of the illegality of his possession. The contrary assumption,
namely, that petitioner had no idea of such illegality, would have been
more in accord with the experience of everyday, for petitioner would not
have invested money and labor in the land and assumed obligations
incumbent upon the homesteader if he had even the least suspicion that
all his efforts would count for nothing and would in the end entangle him
in a mild scandal. As possession in bad faith does not necessarily mean
possession illegal under the law, it being necessary that the possessor be
aware of such illegality, it follows that the petitioner's possession of the
homestead of the respondents was in good faith. (Art. 433, Civil Code.)
"Good faith is always presumed, and the burden of proving bad faith on
the part of the possessor rests upon the person alleging it" (article 434,
Civil Code.) As a bona fide possessor, and it being unquestioned that the
improvements introduced by him upon the land redounded to its benefit,
the petitioner is by law entitled to be paid for the value of such
improvements in the amount of P3,000, as found by the trial judge.
"Useful expenditures shall be paid the possessor in good faith with the
same right of retention, the person who has defeated him in his
possession having the option of refunding the amount of such
expenditures or paying him the increase in value which the thing has
acquired by reason thereof." ( Article 453, 2nd par., Civil Code). The
reimbursement in this particular case is the more in order in view of the
express undertaking of respondent's predecessor-in-interest to pay
therefor.
Even the equities of the case militate against the respondents and in
favor of the petitioner. There is a concession that the petitioner's
possession was neither imposed upon nor wrested from the
homesteader; on the contrary, it came about by virtue of a mutual
agreement whereby the said homesteader and the herein respondents
were spared the burden of paying for land taxes and stipulated interest
and extended the benefit of having their land improved on condition that
they pay the value of such improvements upon redeeming the land. We
also have uncontradicted fact that P400 of the one thousand-peso loan
were given to the herein respondents and the balance kept by their
mother. They may not reap and retain these benefits at the same time
repudiate and go back upon contractual obligations solemnly entered
into.
But let grant that the contract, Exhibit 1, is one of absolute sale, as found
by the Court of Appeals, what then? As the land could not be alienated
for five years from the date of the issuance of the patent, the sale was
illegal and void because it was entered into in violation of section 116 of
the Public Land Act, as amended. By whom was the law violated?
Certainly, not by Kasilag alone but by Ambrosio as well. Both are
presumed to know the law, and we cannot justly charge Kasilag alone
with that knowledge on the alleged reason that Kasilag is rich and
Ambrosio is poor. Neither can we proceed on the bare assumption that
because Exhibit 1 was written in English it was prepared by Kasilag as if
he were the only English-speaking person in the Province of Bataan
where the document was executed. Are we already living in the midst of a
communistic society that we shall have to incline invariably the balance in
favor of a litigant who happens to be well-to-do, regardless of the merits
of the case? And to this end, shall we, by a series of assumptions and
deductions, impute to a party malice aforethought dishonesty and bad
faith, in entering into a transaction made in the open sun, publicly
recorded and whose effectiveness was even conditioned by the approval
of a court of justice? If so, then I dare say that we have not profited by the
admonition of Aristotle in his Metaphysics centuries ago that "justice is a
virtue of the soul which discards party, friendship and sentiment and is
therefore always represented as blind." There is a charm in rhetoric but
its value in cool judicial reasoning is nil.
And if — as we are confidently told — we should relax the legal principle
with reference to Ambrosio, because she was "poor and ignorant," I am
reluctant to believe that she was ignorant of the condition against the
alienation inserted in all homestead patents, and my knowledge of the
Public Land Law, of the activities of the Department and bureau charged
with the administration of public lands, gives me just the contrary
impression. Every homestead patent contains that condition. Circulars
and instructions and general information have been issued in pursuance
with law. (Sec. 5, Act No. 2874; see also sec. 5, Comonwealth Act No.
141.) I must presume that the Government and its officials charged with
the administration of public lands have complied with the law and their
duties in this connection, and I cannot believe that Ambrosio, when she
alienated the property, was unaware of the legal prohibition. Under the
circumstances, then, it is reasonable to conclude that on the hypothesis
that the document, Exhibit 1, was a contract of absolute sale between
Kasilag and Ambrosio, both of them were guilty of infraction of the law. If
this is correct, what is the legal situation of the parties?
Justinian, who, by his Corpus Juris Civiles, still speaks through practically
all the civil codes of Continental Europe, considers both as having acted
in good faith. "Realmente," bluntly observes Manresa, "si los dos que se
encuentran en lucha sobre la propiedad han provocado el conflicto por
su voluntad; a ciencia y paciencia del dueno del suelo, ante cuya vista
las obras se han ejecutado, y con conciencia, por parte del que edifica o
planta, de que el terreno no es suyo, no hay razon alguna que abone
derecho preferente en favor de ninguno de los dos; deben, por tanto,
tratarse como si los dos hubiesen obrado de buena fe; la mala fe del uno
extingue y neutraliza, en justa reciprocidad, la del otro." (Manresa,
Codigo Civil segunda edicion Tomo III pag. 203.) Article 364 of our Civil
Code then comes into play. "Where there has been bad faith, not only on
the part of the person who built, sewed, or planted on another's land, but
also on the part of the owner of the latter, the rights of both shall be the
same as if they had acted in good faith. Bad faith on the part of the owner
is deemed to exist whenever the act has been done in his presence, with
his knowledge and tolerance, and without opposition on his part." ( Article
364, Civil Code; see also arts. 1303, 1306 ibid.) The codal section is
evidently based upon the vulnerable maxim of equity that one who comes
into equity must come with clean hands. A court which seeks to enforce
on the part of the defendant uprightness, fairness, and conscientiousness
also insists that, if relief is to be granted, it must be to a plaintiff whose
conduct is not inconsistent with the standards he seeks to have applied to
his adversary.
Fundamenta justitiae sunt, ut ne cui noceatur, deinde ut communi
serviatur. I therefore concur in the result.
CONCEPCION, J., dissenting:
In view of the findings of fact of the Court of Appeals, which are final
according to law, I dissent from the majority opinion as to the legal
denomination of the contract really entered into by the petitioners and the
now deceased Emiliana Ambrosio.
The facts according to the decision of the Court of Appeals are as
follows:
On August 27, 1918, the deceased Emiliana Ambrosio applied for
the land in question as a homestead, now known as lot No. 285
of the Limay cadastral survey of Bataan, and the application was
approved on September 10, 1919. A final proof was submitted on
November 10, 1927 which was approved on October 17, 1929.
The homestead patent No. 16074 and homestead certificate of
title No. 325 were issued in favor of the applicant on June 11,
1931 which were recorded on June 26, 1931 in the office of
registrar of deeds in accordance with the provisions of section
122 of Act 496.
"On or about May 16, 1932, the homestead owner, Emiliana Ambrosio
offered to sell the property to the defendant and appellee, Marcial
Kasilag. The latter, upon examining her title found that it was a
homestead patent and knew, therefore, that the land subject of the patent
could not be alienated by express prohibition of law, so he devised a
means by which the proposed sale might not appear in any document
and had the patentee, Emiliana Ambrosio, execute a public instrument,
Exhibit '1', purporting to be a mere mortgage of the improvements
thereon consisting of four mango trees, fruit bearing; 110 hills of bamboo
trees, 1 tamarind, and 6 boñga trees, with the assessed value of P860, in
consideration of the sum of P1,000 alleged to have been loaned by the
said Kasilag to the said patentee, Emiliana Ambrosio. It was expressly
stipulated in that document that the aforementioned amount should be
paid within four and a half years from the date of the instrument (May 16,
1932), the condition being that if she would fail to redeem the alleged
mortgage at the expiration of the stipulated period, she would execute a
deed of absolute sale of the property therein described for the same
amount of the alleged mortgage (P1,000) including all unpaid interest at
the rate of 12 per cent per annum in favor of the alleged mortgagee. It
was further stipulated therein that the said Emiliana should pay all the
taxes and assessment which might become due on the land and
improvements during the term of the agreement and that within thirty
days after the date of the execution thereof she should file a motion
before the Court of First Instance of Bataan requesting the cancellation of
the homestead certificate No. 325 above referred to and the issuance in
lieu thereof a certificate of title under the provisions of the Land
Registration Act 496, as amended by Act 3901.
The lot in question was originally declared for land tax purposes
in the name of the homestead (owner) Emiliana Ambrosio, and
assessed at P1,020 in 1933; but on May 22, 1934, the tax
declaration was transferred in the name of the appellee, Marcial
Kasilag, and on March 6, 1936 the assessed value was raised to
P2,180.
Emiliana, however, never paid any interest on the alleged loan of
P1,000 or paid taxes on the land since the execution of the
contract.
The evidence further discloses that the appellant entered upon
the actual possession of the land and had been holding the same
up to the present time, having planted various kinds of fruit trees
valued according to him at P5,000, and collected the products
thereof for his own exclusive benefit.
Relying upon the foregoing facts, the majority contends that the contract
executed by the parties was one of mortgage, as per Exhibit 1, with a
promise to sell the land in question. I cannot hold to these rulings of the
majority, because the nature of the contract of mortgage is inconsistent
with the idea that the creditor should immediately enter upon a
possession of the mortgaged land; that he should pay the land tax; that
he should accept as security something whose values does not cover the
amount of the loan sought to be secured, for in this case the supposed
loan was P1,000, and what were mortgaged were only the improvements
consisting of 4 mango trees, 110 hills of bamboo trees, 1 tamarind tree
and 6 betelnut trees, assessed at P860.
I believe that the contract which the parties intended to execute is a
promise to sell the land, for which reason Ambrosio retained the right of
ownership of the land and its improvements while the deed of the
promised sale had not been executed. Under the terms of the deed
Exhibit 1, Kasilag could not be considered the owner of the land, nor
could he execute any act promised upon the assumption of ownership,
nor could he alienate the same as he had no title to it. But the parties, in
consideration of the fact that Kasilag paid in advance the price of the land
and assumed the obligation to pay the tax thereon, which Ambrosio could
not pay, agreed that Kasilag may enter upon the enjoyment of the land
until the promise to sell is converted in fact into an absolute sale by the
execution of the corresponding deed by Ambrosio. It was stipulated,
however, that if the sale is not approved by the Court, Kasilag would
collect the amount of P1,000 paid him as a mortgage credit, with all the
interest due and payable.
Under these circumstances, the conclusion of law that Kasilag acted in
bad faith is not supported by the established facts.
Wherefore, the plaintiffs are bound to comply with the contract as heirs of
Ambrosio, by executing in favor of Kasilag the deed of sale of the land,
but should the sale, for any reason, be not approved, Kasilag may collect
the amount of P1,000 with all the interest thereon, and may execute the
judgment obtained by him upon the land and all its improvements,
deducting, however, in his favor the value of the improvements which he
introduced upon the land in good faith.
In view of the foregoing, I am of the opinion that the decision of the Court
of Appeals should be reversed and that another should be entered
against the respondents, requiring them to execute the deed of sale of
the land in favor of the petitioner, provided that if the sale, for any reason,
be not approved by the court, the petitioner may execute his credit upon
the land and all its improvements, after deducting the value of the
improvements introduced by him upon the land.
MORAN, J., dissenting:
According to section 116 of Act No. 2874, as amended by section 23 of
Act No. 3517, "lands acquired under the free patent or homestead
provisions shall not be subject to encumbrance or alienation from the
date of the approval of the application and for a term of five years from
and after the date of issuance of the patent or grant, nor shall they
become liable to the satisfaction of any debt contracted prior to the
expiration of said period."
About June 11, 1931, homestead patent No. 16074 was issued to
Emiliana Ambrosio, now deceased. On May 16, 1932 Emiliana Ambrosio
offered the sale of the said homestead to the herein petitioner, Marcial
Kasilag, and in view of the above-quoted legal prohibition, the parties
executed the document Exhibit 1, copied in the majority decision. The
heirs of Emiliana Ambrosio filed a complaint for the annulment of the
contract in the Court of First Instance of Bataan, and from the judgment
rendered by said court an appeal was taken to the Court of Appeals,
which held that the true contract between the parties is one of absolute
sale, wherefore, it is null and void under the already cited legal
prohibition. Marcial Kasilag comes to this court on certiorari, and this
court reverses the decision of the Court of Appeals.
The only question is as to the true contract between the parties at the
time of the execution of the deed Exhibit 1; Kasilag contends that the
contract is that set out in the document Exhibit 1, that is, a mortgage of
the improvements of the homestead to secure a loan of one thousand
pesos given to Emiliana Ambrosio; and the latter's heirs, in turn, contend
that the contract is one of the absolute sale of the homestead, wherefore,
it is null and void. The findings of the Court of Appeals are as follows:
The pertinent facts as disclosed by the evidence of record are as
follows:
On August 27, 1918 the deceased, Emiliana Ambrosio, applied
for the land in question as a homestead, not known as Lot No.
285 of the Limay cadastral survey of Bataan, and the application
was approved on September 10, 1919. A final proof was
submitted on November 10, 1927 which was approved on
October 17, 1929. The homestead patent No. 16074 and
homestead certificate of title No. 325 were issued in favor of the
applicant on June 11, 1931 which were recorded on June 26,
1931 in the office of the register of deeds in accordance with the
provisions of Section 122 of Act No. 496.
On or about May 16, 1932, the homestead owner Emiliana
Ambrosio offered to sell the property to the defendant and
appellee, Marcial Kasilag. The latter, upon examining her title
found that it was a homestead patent and knew, therefore, that
the land subject of the patent could not be alienated by express
prohibition of law, so he devised means by which the proposed
sale might not appear in any document and had the patentee,
Emiliana Ambrosio, execute a public instrument, Exhibit 1,
purporting to be a mere mortgage of the improvements thereon
consisting of four mango trees, fruit bearing; one hundred ten hills
of bamboo trees, one thousand and six boñga trees, with the
assessed value of P860, in consideration of the sum of P1,000
alleged to have been loaned by the said Kasilag to the said
patentee Emiliana Ambrosio. It was expressly stipulated in that
document that the aforementioned amount should be paid within
four and a half years from the date of the instrument (May 16,
1932), the condition being that if she failed to redeem the alleged
mortgage at the expiration of the stipulated period, she would
execute a deed of absolute sale of the property therein described
for the same amount of the alleged mortgage (P1,000) including
all unpaid interest at the rate of 12 per cent per annum in favor of
the alleged mortgagee. It was further stipulated therein that the
said Emiliana should pay all the taxes and assessment which
might become due on the land and improvements during the term
of the agreement and that within thirty days after the date of the
execution thereof she should file a motion before the Court of
First Instance of Bataan requesting the cancellation of the
homestead certificate No. 325 above referred to and the issuance
in lieu thereof of a certificate of title under the provisions of the
Land Registration Act No. 496, as amended by Act No. 3901.
The lot in question was originally declared for land tax purposes
in the name of the homestead owner, Emiliana Ambrosio, and
assessed at P1,020 in 1933; but on May 22, 1934, the tax
declaration was transferred in the name of the appellee, Marcial
Kasilag, and on March 6, 1936 the assessed value was raised to
P2,180.
Emiliana, however, never paid any interest on the alleged loan of
P1,000 or paid taxes on the land since the execution of the
contract.
The evidence further discloses that the appellee entered upon the
actual possession of the land and had been holding the same up
to the present time, having planted various kinds of fruit trees
valued according to him at P5,000, and collected the products
thereof for his own exclusive benefit.
Construing the contract, Exhibit 1, in the light of all the foregoing
facts and circumstances under which it was executed in relation
to the subsequent acts of the contracting parties, we are led to
the inescapable conclusion that their real intention was to execute
an agreement of absolute sale of the homestead together with the
improvements thereon. The stipulation concerning an alleged
mortgage in the instrument is a mere devise to circumvent the law
which expressly prohibits the alienation or encumbrance of the
homestead during the period of five years from the date of the
issuance of the homestead patent. (Sec. 116 of Act No. 2874 as
amended by Act No. 3517.)
It is inconceivable, and, therefore, we refuse to believe that the
appellee, Marcial Kasilag, being an intelligent man far above the
average, would accept improvements valued at only P860 as
security for the payment of a larger amount of P1,000, the alleged
loan. We entertain no doubt that at the time the execution of the
contract, Exhibit 1, the appellee knew that the homestead owner,
Emiliana Ambrosio, a poor ignorant woman, was badly in need of
money and that she was determined to dispose of and alienate
definitely her homestead, as evidenced by the fact testified to by
Gavino Rodriguez as witness for the said appellee that she
actually offered to sell the land to the latter. He also knew that
she would not be able to pay back to him such a large amount
with interest of 12 per cent per annum because she had no other
income except what she would derive from the homestead. Under
such circumstances, there is reason to believe that she was no
longer concerned with the form in which the contract would be
drawn, as long as could obtain the amount of P1,000 which was
agreeable to her as the price of the homestead she offered to sell
to the appellee. This conclusion is supported in part by the
subsequent action of Emiliana in not paying any interest on the
alleged loan of P1,000 or the land taxes thereon since the
execution of the contract and by the action of the appellee in
declaring the land for tax purposes in his own name as owner
thereof, notwithstanding that he had no interest in the land, as he
alleged, except in the improvements only.
The contract of absolute sale was consummated, because the
grantor, Emiliana, received full payment of the purchase price
disguised as a loan of P1,000 and placed the grantee, Marcial
Kasilag, in absolute possession and control of the land conveyed
to him with all the improvements thereon. The stipulation under
article VIII of the contract, Exhibit I, to the effect that the grantor
would execute a deed of absolute sale of the property herein
described for the said amount of this mortgage including all
unpaid interest at the rate of 12 per cent per annum in favor of the
mortgagee', clearly indicates that there was nothing left to be
done except the execution of the deed of absolute sale, which is
merely a matter of form in contracts of this nature, which was
postponed until after the expiration of four and a half years
because by that time the period of five years within which the
property could not be alienated nor encumbered in any way, as
provided by section 116 of Act No. 2874 as amended by Act No.
3517, supra, would have already expired. If the real purpose was
to mortgage the improvements only as specified in article VIII
thereof it was provided that in case of failure to redeem the
alleged mortgage the grantor would be required to execute a
deed of absolute sale of the property described therein for the
same amount of the mortgage in favor of the grantee, and not of
'the improvements only'? It is clear, therefore, that the real
contract under Exhibit 1, was one of absolute sale and not a
mortgage with future sale.
In other words, although the document Exhibit 1 states that it is a
mortgage of the improvements, with a stipulation regarding a future sale
of the land in case of failure to comply with the mortgage obligations, in
reality the true contract between the parties is one of absolute sale in the
light of the circumstances of the case, among them the following:
First, Emiliana Ambrosio offered the sale, not the mortgage, of her
homestead to Marcial Kasilag, and it is a fact found established by the
Court of Appeals that she was agreeable to the sum of one thousand
pesos as the price of the sale offered by her. If this is so, it is unlikely that
Kasilag would refuse the offer of sale of the homestead and would accept
in lieu thereof a simple mortgage of the improvements, for the same sum
of one thousand pesos;
Second. In the deed it is stipulated that, if at the expiration of the period
of four and a half years, the debtor should fail to redeem the mortgage,
she would execute in favor of the creditor, Marcial Kasilag, a deed of
absolute sale not only of the mortgaged improvements but also of the
land for the same amount of the loan of one thousand pesos. This magic
conversion of the mortgage of the improvements into an absolute sale of
the land at the expiration of four and a half years and without any
additional consideration can only mean that the two contracts are one
and the same thing, and that the first has been availed of to go around
the legal prohibition. The scheme is very obvious, and to make any
attempt to reconcile it with good faith is simply to fall into it.
The mortgage of the improvements could not have been intended
because the supposed loan which it guaranteed was the same price of
the stipulated sale to be later executed, and further because Kasilag
knew, according to the findings of fact of the Court of Appeals, that
Emiliana Ambrosio was a poor and ignorant woman who was not in a
position to return to one thousand pesos;
Third. Kasilag had always considered the contract as one of sale of the
land and not as a mortgage of the improvements, because he put the tax
declaration of the land in his name, paid the corresponding land tax, took
possession of the land, received the fruits thereof for his exclusive use,
and introduced thereon permanent improvements, one of them being a
summer house, all of which were valued at about five thousand pesos. It
is not an attribute of a contract of mortgage that the creditor should take
possession of the mortgaged property, or that he should pay the taxes
thereon. Kasilag would not spend five thousand pesos for permanent
improvements if he knew that his possession was precarious.
Fourth. In the document it is stipulated that the debtor would pay interest,
but she did not pay any, and the alleged mortgage was not foreclosed
thereby, which shows that the stipulation was nothing but a ruse.
Fifth. The deed Exhibit 1 was drawn by Kasilag, because it is in English,
and the other party is a poor and ignorant woman, wherefore, all doubts
and uncertainties arising therefrom should be resolved against Kasilag. It
is to noted that in this document are phrases indicative of the real
contract between the parties. For instance: in clause IV the
word paid and not loaned is used in referring to the loan of one thousand
pesos; and clause IX of the document states "the foregoing contract of
sale."
Under all these circumstances, the irresistible conclusion is that the real
contract between the parties is an absolute sale, and that the contract of
mortgage was made to appear in the document Exhibit 1 for the sole
purpose of defeating the legal prohibition. Nevertheless, the majority of
this Court, brushing aside the findings of fact made by the Court of
Appeals without stating its reasons therefor, holds as to the document
Exhibit 1, that "as the terms thereof are clear and leave no room for
doubt, it should be interpreted according to the literal meaning of its
clauses." I have already shown in speaking of the second circumstance,
that the context itself of the document Exhibit 1 discloses strong tokens
that the contract between the parties was one of the sale and not of
mortgage. Moreover, the rule relied upon by the majority is only
applicable in the absence of any allegation that the document does not
express the real contract between the parties. Under section 285, No. 1,
of Act No. 190, a document, however clear its conditions may be, may
and should be rejected when it is alleged and shown by
evidence aliunde that it does not express the true intent of the parties.
We have often considered as document, by its terms a contract of
absolute sale, as one of mortgage because it has been so alleged and
established by convincing oral evidence. (Cuyugan vs. Santos, 34 Phil.,
100; Villa vs. Santiago, 38 Phil., 157; Laureano vs. Kilayco, 34 Phil., 148;
Cuyugan vs. Santos, 39 Phil., 970; Rodriguez vs. Pamintuan, 37 Phil.,
876; see also Manalo vs. Gueco, 42 Phil., 925; Gatmaitan vs.
Nepumuceno, 42 Phil., 295.)
The majority decision does not only pass over the findings of fact made
by the Court of Appeals, but further, gives weight to certain facts which
said court finds not to have been established. For instance, we have the
following passages the majority decision:
One year after the execution of the aforequoted deed, that is, in 1933, it
came to pass that Emiliana Ambrosio was unable to pay the stipulated
interest as well as the tax on the land and its improvements. For this
reason, she and the petitioner entered into another verbal contract
whereby she conveyed to the latter the possession of the land on
condition that the latter would not collect the interest on the loan, would
attend to the payment of the land tax, would benefit by the fruits of the
land, and would introduce improvements thereon. . . . .
. . . This stipulation was verbally modified by the same parties
after the expiration of one year, in the sense that the petitioner
would take possession of the land and would benefit by the fruits
thereof on condition that he would condone the payment of
interest upon the loan and he would attend to the payment of the
land tax. . . . .
These two paragraphs state as an established fact the supposed verbal
contract between the parties which Kasilag tried to prove by his
testimony. However, the Court of Appeals expressly held: "We believe,
however, that the trial court erred in giving probative value to the
testimony of the appellee (Marcial Kasilag) with reference to the alleged
verbal agreement with the deceased, Emiliana Ambrosio, and based
thereon the conclusion that the appellee acted in good faith," (Words in
parenthesis are mine.)
Rule 47, paragraph (b), of our Rules, provides expressly that in appeals
to this court on certiorari, "only questions of law may be raised and must
be distinctly set forth." And we have held in various decisions that in
passing upon the legal conclusions of the Court of Appeals, we shall
abide by the findings of fact of said court.
I, moreover, find certain ambiguities in the majority decision, for while it
states on the one hand that the verbal contract had for its purpose the
"alteration of the mortgage contract clearly entered into, converting the
latter into a contract of antichresis," (underscoring mine) thereby implying
that the mortgage contract was abandoned by the parties and ceased to
exist, in the dispositive part of its decision, the majority holds that the
mortgage of the improvements is valid and binding, and gives to the
respondents the right to "redeem the mortgage of the improvements by
paying to the petitioner within three months the amount of P1,000 . . . ."
It, therefore, requires compliance with a contract that has ceased to exist.
While on the one hand the majority states that the aforesaid verbal
contract is one of antichresis and that it is void, on the other hand, it gives
force thereto by holding that the interest on the loan of one thousand
pesos is sufficiently "set off by the value of the fruits of the mortgaged
improvements which the petitioner received." And, furthermore, why
should the interest be set off against the fruits of the improvements only
and not against those of the entire land? And if the verbal contract of
antichresis is void, why is Kasilag not required to render an accounting of
the fruits of the land received by him which may exceed the total amount
of interest, taxes and even the principal itself?
The majority states that Kasilag, in taking possessions of the homestead,
receiving its fruits and introducing improvements thereon, did so under
the void contract of antichresis, and did so in good faith as he was
excusably unaware of the legal provision which prohibits the incumbrance
of the homestead within the period of five years. Whether Kasilag was
aware or unaware of the legal prohibition is again a factual question
resolved by the Court of Appeals as follows: "the appellee ( Marcial
Kasilag) was also aware of these provisions which were incorporated in
the homestead patent shown to him at the beginning of the transaction"
(Words in parenthesis are mine). I do not understand how we can disturb
this factual finding.
I found, moreover, that in the majority decision it is ordered that, if the
heirs of Emiliana Ambrosio cannot pay the value of the permanent
improvements introduced by Marcial Kasilag, the latter may have the
homestead by paying to them its price in the market. The improvements
were appraised by the trial court at three thousand pesos, and as the
heirs of Emiliana Ambrosio probably inherited nothing from the latter but
poverty, they will eventually be unable to pay the said amount and, in the
last analysis, will lose the homestead of their mother. The practical effect,
therefore, of the majority decision is that the heirs of Emiliana Ambrosio
will be deprived of the homestead by virtue of a void antichretic obligation
contracted by her within the period of five years from the granting of the
homestead. And this, at least, is in violation of the spirit of section 116 of
the Homestead Act.
I have other reasons which I need not set out to bring this dissent to a
close. But before I conclude, I should like to state that the Homestead Act
has been enacted for the welfare and protection of the poor. The law
gives a needy citizen a piece of land where he may build a modest house
for himself and family and plant what is necessary for subsistence and for
the satisfaction of life's other needs. The right of the citizens to their
homes and to the things necessary for their subsistence is as vital as the
right to life itself. They have a right to live with a certain degree of comfort
as become human beings, and the State which looks after the welfare of
the people's happiness is under a duty to safeguard the satisfaction of
this vital right. Moreover, a man with a home and a means of subsistence
is a lover of peace and order and will profess affection for his country,
whereas one without a home and in penury is not only a social parasite
but also a dangerous element in the social order. The Homestead Act at
once aims at the promotion of wholesome and happy citizenship and the
wiping out of the germs of social discontent found everywhere.
Considering the social and economic ends of the Homestead Act, the
courts should exercise supreme care and strict vigilance towards faithful
compliance with all its benign provisions and against the defeat, directly
or indirectly, of its highly commendable purposes. And it is my firm
conviction that where, as in the present case, a rich and clever man
attempts to wrest a homestead granted to a poor and ignorant woman,
the slightest tokens of illegality should be enough to move the courts to
apply the strong arm of the law.
I dissent from the majority decision and vote for the affirmance of the
decision of the Court of Appeals.
AVANCEÑA, C.J., dissenting:
I concur in this dissenting opinion of Justice Moran.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-68385 May 12, 1989
ILDEFONSO O. ELEGADO, as Ancillary Administrator of the Testate
Estate of the late WARREN TAYLOR GRAHAM, petitioner
vs.
HON. COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL
REVENUE respondents.
Agrava, Lucero & Gineta for petitioners.
The Office of the Solictor General for public respondents.
CRUZ, J.:
What the petitioner presents as a rather complicated problem is in reality
a very simple question from the viewpoint of the Solicitor General. We
agree with the latter. There is actually only one issue to be resolved in
this action. That issue is whether or not the respondent Court of Tax
Appeals erred in dismissing the petitioner's appeal on grounds of
jurisdiction and lack of a cause of action.
Appeal from what? That indeed is the question.
But first the facts.
On March 14, 1976, Warren Taylor Graham, an American national
formerly resident in the Philippines, died in Oregon, U.S.A.   As he left
1
certain shares of stock in the Philippines, his son, Ward Graham, filed an
estate tax return on September 16, 1976, with the Philippine Revenue
Representative in San Francisco, U.S.A.  2
On the basis of this return, the respondent Commissioner of Internal
Revenue assessed the decedent's estate an estate tax in the amount of
P96,509.35 on February 9, 1978.  This assessment was protested on
3
March 7, 1978, by the law firm of Bump, Young and Walker on behalf of
the estate .   The protest was denied by the Commissioner on July 7,
4
1978.  No further action was taken by the estate in pursuit of that protest.
5
Meanwhile, on January 18, 1977, the decedent's will had been admitted
to probate in the Circuit Court of Oregon   Ward Graham, the designated
6
executor, then appointed Ildefonso Elegado, the herein petitioner, as his
attorney-in-fact for the allowance of the will in the Philippines.
7
Pursuant to such authority, the petitioner commenced probate
proceedings in the Court of First Instance of Rizal.   The will was allowed
8
on December 18, 1978, with the petitioner as ancillary administrator.   As
9
such, he filed a second estate tax return with the Bureau of Internal
Revenue on June 4, 1980. 10
On the basis of this second return, the Commissioner imposed an
assessment on the estate in the amount of P72,948.87.  This was
11
protested on behalf of the estate by the Agrava, Lucero and Gineta Law
Office on August 13, 1980. 12
While this protest was pending, the Commissioner filed in the probate
proceedings a motion for the allowance of the basic estate tax of
P96,509.35 as assessed on February 9, 1978.  He said that this liability
13
had not yet been paid although the assessment had long become final
and executory.
The petitioner regarded this motion as an implied denial of the protest
filed on August 13, 1980, against the second assessment of
P72,948.87.  On this understanding, he filed on September 15, 1981, a
14
petition for review with the Court of Tax Appeals challenging the said
assessment.  15
The Commissioner did not immediately answer (in fact, as the petitioner
stressed, no answer was filed during a delay of 195 days) and in the end
instead cancelled the protested assessment in a letter to the decedent's
estate dated March 31, 1982.  This cancellation was notified to the Court
16
of Tax Appeals in a motion to dismiss on the ground that the protest had
become moot and academic. 17
The motion was granted and the petition dismissed on April 25,
1984.  The petitioner then came to this Court on certiorari under Rule 45
18
of the Rules of Court.
The petitioner raises three basic questions, to wit, (1) whether the shares
of stocks left by the decedent should be treated as his exclusive, and not
conjugal, property; (2) whether the said stocks should be assessed as of
the time of the owner's death or six months thereafter; and (3) whether
the appeal filed with the respondent court should be considered moot and
academic.
We deal first with the third issue as it is decisive of this case.
In the letter to the decedent's estate dated March 31, 1982, the
Commissioner of Internal Revenue wrote as follows:
Estate of WARREN T. GRAHAM c/o Mr. ILDEFENSO O. ELEGADO
Ancillary Administrator Philex Building cor. Brixton & Fairlane Sts. Pasig,
Metro Manila
Sir:
This is with regard to the estate of the late WARREN
TAYLOR GRAHAM, who died a resident of Oregon,
U.S.A. on March 14, 1976. It appears that two (2) letters
of demand were issued by this Bureau. One is for the
amount of P96,509.35 based on the first return filed, and
the other in the amount of P72,948.87, based on the
second return filed.
It appears that the first assessment of P96,509.35 was
issued on February 9, 1978 on the basis of the estate tax
return filed on September 16, 1976. The said assessment
was, however, protested in a letter dated March 7, 1978
but was denied on July 7, 1978. Since no appeal was
made within the regulatory period, the same has become
final.
In view thereof, it is requested that you settle the
aforesaid assessment for P96,509.35 within fifteen (15)
days upon receipt hereof to the Receivable Accounts
Division, this Bureau, BIR National Office Building,
Diliman, Quezon City. The assessment for P72,949.57
dated July 3, 1980, referred to above is hereby cancelled.
Very truly yours,
(SGD.) RUBEN B. ANCHETA Acting Commissioner  19
It is obvious from the express cancellation of the second assessment for
P72,948.87 that the petitioner had been deprived of a cause of action as
it was precisely from this assessment that he was appealing.
In its decision, the Court of Tax Appeals said that the petition questioning
the assessment of July 3, 1980, was "premature" since the protest to the
assessment had not yet been resolved.  As a matter of fact it had: the
20
said assessment had been cancelled by virtue of the above-quoted letter.
The respondent court was on surer ground, however, when it followed
with the finding that the said cancellation had rendered the petition moot
and academic. There was really no more assessment to review.
The petitioner argues that the issuance of the second assessment on
July 3, 1980, had the effect of canceling the first assessment of February
9, 1978, and that the subsequent cancellation of the second assessment
did not have the effect of automatically reviving the first. Moreover, the
first assessment is not binding on him because it was based on a return
filed by foreign lawyers who had no knowledge of our tax laws or access
to the Court of Tax Appeals.
The petitioner is clutching at straws.
It is noted that in the letter of July 3, 1980, imposing the second
assessment of P72,948.87, the Commissioner made it clear that "the
aforesaid amount is considered provisional only based on the estate tax
return filed subject to investigation by this Office for final determination of
the correct estate tax due from the estate. Any amount that may be found
due after said investigation will be assessed and collected later."   It is
21
illogical to suggest that a provisional assessment can supersede an
earlier assessment which had clearly become final and executory.
The second contention is no less flimsy. The petitioner cannot be serious
when he argues that the first assessment was invalid because the foreign
lawyers who filed the return on which it was based were not familiar with
our tax laws and procedure. Is the petitioner suggesting that they are
excused from compliance therewith because of their ignorance?
If our own lawyers and taxpayers cannot claim a similar preference If indeed the Commissioner of Internal Revenue committed an error in the
because they are not allowed to claim a like ignorance, it stands to computation of the estate tax, as the petitioner insists, that error can no
reason that foreigners cannot be any less bound by our own laws in our longer be rectified because the original assessment has long become
own country. A more obvious and shallow discrimination than that final and executory. If that assessment was not challenged on time and in
suggested by the petitioner is indeed difficult to find. accordance with the prescribed procedure, that error — for error it was —
was committed not by the respondents but by the decedent's estate itself
But the most compelling consideration in this case is the fact that the first which the petitioner represents. So how can he now complain.
assessment is already final and executory and can no longer be
questioned at this late hour. The assessment was made on February 9, WHEREFORE, the petition is DENIED, with costs against the petitioner.
1978. It was protested on March 7, 1978. The protest was denied on July It is so ordered,
7, 1978. As no further action was taken thereon by the decedent's estate,
there is no question that the assessment has become final and Narvasa (Chairman), Griño-Aquino and Medialdea, JJ., concur.
executory.
 
In fact, the law firm that had lodged the protest appears to have accepted
its denial. In his motion with the probate court, the respondent
Commissioner stressed that "in a letter dated January 29, 1980, the
Estate of Warren Taylor Graham thru the aforesaid foreign law firm
informed claimant that they have paid said tax liability thru the Agrava,
Velarde, Lucero and Puno, Philippine law firm of 313 Buendia Avenue
Ext., Makati, Metro Manila that initiated the instant ancillary proceedings"
although he added that such payment had not yet been received.  This22

letter was an acknowledgment by the estate of the validity and finality of

the first assessment. Significantly, it has not been denied by the
petitioner.

In view of the finality of the first assessment, the petitioner cannot now
raise the question of its validity before this Court any more than he could
have done so before the Court of Tax Appeals. What the estate of the
decedent should have done earlier, following the denial of its protest on
July 7, 1978, was to appeal to the Court of Tax Appeals within the
reglementary period of 30 days after it received notice of said denial. It
was in such appeal that the petitioner could then have raised the first two
issues he now raises without basis in the present petition.

The question of whether or not the shares of stock left by the decedent
should be considered conjugal property or belonging to him alone is
immaterial in these proceedings. So too is the time at which the
assessment of these shares of stock should have been made by the BIR.
These questions were not resolved by the Court of Tax Appeals because
it had no jurisdiction to act on the petitioner's appeal from an assessment
that had already been cancelled. The assessment being no longer
controversial or reviewable, there was no justification for the respondent
court to rule on the petition except to dismiss it.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 18081             March 3, 1922
IN THE MATTER OF THE ESTATE OF CHEONG BOO, deceased.
MORA ADONG, petitioner-appellant,
vs.
CHEONG SENG GEE, opponent-appellant.
Kincaid, Perkins & Kincaid and P. J. Moore for petitioner-appellant.
Carlos A. Sobral for opponent-appellant.
MALCOLM, J.:
The two question presented for determination by these appeals may be
framed as follows: Is a marriage contracted in China and proven mainly
by an alleged matrimonial letter, valid in the Philippines? Are the
marriage performed in the Philippines according to the rites of the
Mohammedan religion valid? As the decision of the Supreme Court on
the last point will affect marriages consummated by not less than one
hundred and fifty thousand Moros who profess the Mohammedan faith,
the transcendental importance of the cause can be realized. We
proposed to give to the subject the serious consideration which it
deserves.
Cheong Boo, a native of China, died intestate in Zamboanga, Philippine
Islands, on August 5, 1919. He left property worth nearly P100,000. The
estate of the deceased was claimed, on the one hand, by Cheong Seng
Gee, who alleged that he was a legitimate child by a marriage contracted
by Cheong Boo with Tan Dit in China in 1895. The estate was claimed,
on the other hand, by the Mora Adong who alleged that she had been
lawfully married to Cheong Boo in 1896 in Basilan, Philippine Islands,
and her daughters, Payang, married to Cheng Bian Chay, and Rosalia
Cheong Boo, unmarried.
The conflicting claims to the estate of Cheong Boo were ventilated in the
Court of First Instance of Zamboanga. The trial judge, the Honorable
Quirico Abeto, after hearing the evidence presented by both sides,
reached the conclusion, with reference to the allegations of Cheong Seng
Gee, that the proof did not sufficiently establish the Chinese marriage, but
that because Cheong Seng Gee had been admitted to the Philippine
Islands as the son of the deceased, he should share in the estate as a
natural child. With reference to the allegations of the Mora Adong and her
daughters Payang and Rosalia, the trial judge reached the conclusion
that the marriage between the Mora Adong and the deceased had been
adequately proved but that under the laws of the Philippine Islands it
could not be held to be a lawful marriage; accordingly, the daughters
Payang and Rosalia would inherit as natural children. The order of the
trial judge, following these conclusions, was that there should be a
partition of the property of the deceased Cheong Boo between the natural
children, Cheong Seng Gee, Payang, and Rosalia.
From the judgment of the Judge of First Instance both parties perfected
appeals. As to the facts, we can say that we agree in substance with the
findings of the trial court. As to the legal issues submitted for decision by
the numerous assignments of error, these can best be resolved under
two heads, namely: (1) The validity of the Chinese marriage; and (2) the
validity of the Mohammedan marriage.
1. Validity of the Chinese Marriage
The theory advanced on behalf of the claimant Cheong Seng Gee was
that Cheong Boo was married in the city of Amoy, China, during the
second moon of the twenty-first year of the Emperor Quang Su, or,
according to the modern count, on February 16, 1985, to a young lady
named Tan Dit. Witnesses were presented who testified to having been
present at the marriage ceremony. There was also introduced in
evidence a document in Chinese which in translation reads as follows:
One Your nephew, Tan Chao,
hundred respecfully answers the
years of venerable Chiong Ing,
life and father of the bridegroom,
health for accepting his offer of
both. marriage, and let this
document serve as proof of
the acceptance of said
marriage which is to be
celebrated during the merry
 season of the flowers.
I take advantage of this
occasion to wish for your
and the spouses much
happiness, a long life, and
prolific issue, as noble and
great as that which you
brought forth. I consider the
marriage of your son Boo
with my sister Lit Chia as a
mandate of God and I hope
that they treat each other
with great love and mutual
courtesy and that both they
and their parents be very
happy.
Given during the second
moon of the twenty-first
year of the reign of the
Emperor Quang Su.
Cheong Boo is said to have remained in China for one year and four
months after his marriage during which time there was born to him and
his wife a child named Cheong Seng Gee. Cheong Boo then left China
for the Philippine Islands and sometime thereafter took to himself a
concubine Mora by whom he had two children. In 1910, Cheong Boo was
followed to the Philippines by Cheong Seng Gee who, as appears from
documents presented in evidence, was permitted to land in the Philippine
Islands as the son of Cheong Boo. The deceased, however, never
returned to his native hearth and seems never to have corresponded with
his Chinese wife or to have had any further relations with her except once
when he sent her P10.
The trial judge found, as we have said, that the proof did not sustain the
allegation of the claimant Cheong Seng Gee, that Cheong Boo had
married in China. His Honor noted a strong inclination on the part of the
Chinese witnesses, especially the brother of Cheong Boo, to protect the
interests of the alleged son, Cheong Seng Gee, by overstepping the
limits of truthfulness. His Honor also noted that reliable witnesses stated
that in the year 1895, when Cheong Boo was supposed to have been in
China, he was in reality in Jolo, in the Philippine Islands. We are not
disposed to disturb this appreciation of fact by the trial court. The
immigration documents only go to show the relation of parent and child
existing between the deceased Cheong Boo and his son Cheong Seng
Gee and do not establish the marriage between the deceased and the
mother of Cheong Seng Gee.
Section IV of the Marriage Law (General Order No. 68) provides that "All
marriages contracted without these Islands, which would be valid by the
laws of the country in which the same were contracted, are valid in these
Islands." To establish a valid foreign marriage pursuant to this comity
provision, it is first necessary to prove before the courts of the Islands the
existence of the foreign law as a question of fact, and it is then necessary
to prove the alleged foreign marriage by convincing evidence.
As a case directly in point is the leading one of Sy Joc
Lieng vs. Encarnacion ([1910]), 16 Phil., 137; [1913], 228 U.S., 335).
Here, the courts of the Philippines and the Supreme Court of the United
States were called upon to decide, as to the conflicting claims to the
estate of a Chinese merchant, between the descendants of an alleged
Chinese marriage and the descendants of an alleged Philippine marriage.
The Supreme Courts of the Philippine Islands and the United States
united in holding that the Chinese marriage was not adequately proved.
The legal rule was stated by the United States Supreme Court to be this:
A Philippine marriage, followed by forty years of uninterrupted marital life,
should not be impugned and discredited, after the death of the husband
and administration of his estate, though an alleged prior Chinese
marriage, "save upon proof so clear, strong, and unequivocal as to
produce a moral conviction of the existence of such impediment."
Another case in the same category is that of Son Cui vs. Guepangco
([1912], 22 Phil., 216).
In the case at bar there is no competent testimony as to what the laws of
China in the Province of Amoy concerning marriage were in 1895. As in
the Encarnacion case, there is lacking proof so clear, strong, and
unequivocal as to produce a moral conviction of the existence of the
alleged prior Chinese marriage. Substitute twenty-three years for forty
years and the two cases are the same.
The lower court allowed the claimant, Cheong Seng Gee, the
testamentary rights of an acknowledged natural child. This finding finds
some support in Exhibit 3, the affidavit of Cheong Boo before the
American Vice-Consul at Sandakan, British North Borneo. But we are not
called upon to make a pronouncement on the question, because the
oppositor-appellant indicates silent acquiescence by assigning no error.
2. Validity of the Mohammedan Marriage
The biographical data relating to the Philippine odyssey of the Chinaman
Cheong Boo is fairly complete. He appears to have first landed on
Philippine soil sometime prior to the year 1896. At least, in the year las
mentioned, we find him in Basilan, Philippine Islands. There he was
married to the Mora Adong according to the ceremonies prescribed by
the book on marriage of the Koran, by the Mohammedan Iman (priest)
Habubakar. That a marriage ceremony took place is established by one
of the parties to the marriage, the Mora Adong, by the Iman who
solemnized the marriage, and by other eyewitnesses, one of whom was
the father of the bride, and another, the chief of the rancheria, now a
municipal councilor. The groom complied with Quranic law by giving to
the bride a dowry of P250 in money and P250 in goods.
The religious rites began with the bride and groom seating themselves in
the house of the father of the bride, Marahadja Sahibil. The Iman read
from the Koran. Then the Iman asked the parents if they had any
objection to the marriage. The marital act was consummated by the
groom entering the woman's mosquito net.
From the marriage day until the death of Cheong Boo, twenty-three years
later, the Chinaman and the Mora Adong cohabited as husband and wife.
To them were born five children, two of whom, Payang and Rosalia, are
living. Both in his relations with Mora Adong and with third persons during
his lifetime, Cheong Boo treated Adong as his lawful wife. He admitted
this relationship in several private and public documents. Thus, when
different legal documents were executed, including decrees of
registration, Cheong Boo stated that he was married to the Mora Adong
while as late as 1918, he gave written consent to the marriage of his
minor daughter, Payang.
Notwithstanding the insinuation of counsel for the Chinese appellant that
the custom is prevalent among the Moros to favor in their testimony, a
relative or friend, especially when they do not swear on the Koran to tell
the truth, it seems to us that proof could not be more convincing of the
fact that a marriage was contracted by the Chinaman Cheong Boo and
the Mora Adong, according to the ceremonies of the Mohammedan
religion.
It is next incumbent upon us to approach the principal question which we
announced in the very beginning of this decision, namely, Are the
marriages performed in the Philippines according to the rites of the
Mohammedan religion valid? Three sections of the Marriage Law
(General Order No. 68) must be taken into consideration.
Section V of the Marriage Law provides that "Marriage may be
solemnized by either a judge of any court inferior to the Supreme Court,
justice of the peace, or priest or minister of the Gospel of any
denomination . . ." Counsel, failing to take account of the word "priest,"
and only considering the phrase "minister of the Gospel of any
denomination" would limit the meaning of this clause to ministers of the
Christian religion. We believe this is a strained interpretation. "Priest,"
according to the lexicographers, means one especially consecrated to the
service of a divinity and considered as the medium through whom
worship, prayer, sacrifice, or other service is to be offered to the being
worshipped, and pardon, blessing, deliverance, etc., obtained by the
worshipper, as a priest of Baal or of Jehovah; a Buddhist priest. "Minister
of the Gospel" means all clergymen of every denomination and faith. A
"denomination" is a religious sect having a particular name.
(Haggin vs. Haggin [1892], 35 Neb., 375; In re Reinhart, 9 O. Dec., 441;
Hale vs. Everett [1868], 53 N. H. 9.) A Mohammedan Iman is a "priest or
minister of the Gospel," and Mohammedanism is a "denomination," within
the meaning of the Marriage Law.
The following section of the Marriage Law, No. VI, provides that "No
particular form for the ceremony of marriage is required, but the parties
must declare, in the presence of the person solemnizing the marriage,
that they take each other as husband and wife." The law is quite correct
in affirming that no precise ceremonial is indispensable requisite for the
creation of the marriage contract. The two essentials of a valid marriage
are capacity and consent. The latter element may be inferred from the
ceremony performed, the acts of the parties, and habit or repute. In this
instance, there is no question of capacity. Nor do we think there can exist
any doubt as to consent. While it is true that during the Mohammedan
ceremony, the remarks of the priest were addressed more to the elders
than to the participants, it is likewise true that the Chinaman and the Mora
woman did in fact take each other to be husband and wife and did
thereafter live together as husband and wife. (Travers vs. Reinhardt
[1907], 205 U.S., 423.
It would be possible to leave out of view altogether the two sections of the
Marriage Law which have just been quoted and discussed. The particular
portion of the law which, in our opinion, is controlling, is section IX,
reading as follows: "No marriage heretofore solemnized before any
person professing to have authority therefor shall be invalid for want of
such authority or on account of any informality, irregularity, or omission, if
it was celebrated with the belief of the parties, or either of them, that he
had authority and that they have been lawfully married."
The trial judge in construing this provision of law said that he did not
believe that the legislative intention in promulgating it was to validate
marriages celebrated between Mohammedans. To quote the judge:
This provisions relates to marriages contracted by virtue of the
provisions of the Spanish law before revolutionary authorized to
solemnized marriages, and it is not to be presumed that the
legislator intended by this law to validate void marriages
celebrated during the Spanish sovereignty contrary to the laws
which then governed.
What authority there is for this statement, we cannot conceive. To our
mind, nothing could be clearer than the language used in section IX. Note
for a moment the all embracing words found in this section:
"No marriage" — Could more inclusive words be found? "Heretofore
solemnized" — Could any other construction than that of retrospective
force be given to this phrase? "Before any person professing to have
authority therefor shall be invalid for want of such authority" — Could
stronger language than this be invoked to announce legislative intention?
"Or on account of any informality, irregularity, or omission" — Could the
legislative mind frame an idea which would more effectively guard the
marriage relation against technicality? "If it was celebrated with the belief
of the parties, or either of them, that he had authority and that they have
been lawfully married" — What was the purpose of the legislator here, if it
was not to legalize the marriage, if it was celebrated by any person who
thought that he had authority to perform the same, and if either of the
parties thought that they had been married? Is there any word or hint of
any word which would restrict the curative provisions of section IX of the
Marriage Law to Christian marriages? By what system of mental
gymnastics would it be possible to evolve from such precise language the
curious idea that it was restricted to marriages performed under the
Spanish law before the revolutionary authorities?
In view of the importance of the question, we do not desire to stop here
but would ascertain from other sources the meaning and scope of
Section IX of General Order No. 68.
The purpose of the government toward the Mohammedan population of
the Philippines has, time and again, been announced by treaty, organic
law, statutory law, and executive proclamation. The Treaty of Paris in its
article X, provided that "The inhabitants of the territories over which Spain
relinquishes or cedes her sovereignty shall be secured Instructions to the
Philippine Commission imposed on every branch of the Government of
the Philippine Islands the inviolable rule "that no law shall be made
respecting an establishment of religion or prohibiting the free exercise
thereof, and that the free exercise and enjoyment of religious profession
and worship, without discrimination or preference, shall forever be
allowed ... That no form of religion and no minister of religion shall be
forced upon any community or upon any citizen of the Islands; that, upon
the other hand, no minister of religion shall be interfered with or molested
in following his calling, and that the separation between state and church
shall be real, entire, and absolute." The notable state paper of President
McKinley also enjoined the Commission, "to bear in mind that the
Government which they are establishing is designed . . . for the
happiness, peace, and prosperity of the people of the Philippine Islands"
and that, therefore, "the measures adopted should be made to conform to
their customs, their habits, and even their prejudices. . . . The Philippine
Bill and the Jones Law reproduced the main constitutional provisions
establishing religious toleration and equality.
Executive and legislative policy both under Spain and the United States
followed in the same path. For instance, in the Treaty of April 30, 1851,
entered into by the Captain General of the Philippines and the Sultan of
Sulu, the Spanish Government guaranteed "with all solemnity to the
Sultan and other inhabitants of Sulu the free exercise of their religion,
with which it will not interfere in the slightest way, and it will also respect
their customs." (See further Decree of the Governor-General of January
14, 1881.) For instance, Act No. 2520 of the Philippine Commission,
section 3, provided that "Judges of the Court of First Instance and
justices of the peace deciding civil cases in which the parties are
Mohammedans or pagans, when such action is deemed wise, may
modify the application of the law of the Philippine Islands, except laws of
the United States applicable to the Philippine Islands, taking into account
local laws and customs. . . ." (See further Act No. 787, sec. 13 [ j]; Act
No. 1283, sec. 6 [b]; Act No. 114 of the Legislative Council amended and
approved by the Philippine Commission; Cacho vs. Government of the
United States [1914], 28 Phil., 616.) Various responsible officials have so
oft announced the purpose of the Government not to interfere with the
customs of the Moros, especially their religious customs, as to make
quotation of the same superfluous.
The retrospective provisions of the Philippine Marriage Law undoubtedly
were inspired by the governmental policy in the United States, with
regard to the marriages of the Indians, the Quakers, and the Mormons.
The rule as to Indians marriages is, that a marriage between two Indians
entered into according to the customs and laws of the people at a place
where such customs and laws are in force, must be recognized as a valid
marriage. The rule as to the Society of Quakers is, that they will be left to
their own customs and that their marriages will be recognized although
they use no solemnization. The rule as to Mormon marriages is that the
sealing ceremony entered into before a proper official by members of that
Church competent to contract marriage constitutes a valid marriage.
The basis of human society throughout the civilized world is that of
marriage. Marriage in this jurisdiction is not only a civil contract, but, it is a
new relation, an institution in the maintenance of which the public is
deeply interested. Consequently, every intendment of the law leans
toward legalizing matrimony. Persons dwelling together in apparent
matrimony are presumed, in the absence of any counter-presumption or
evidence special to the case, to be in fact married. The reason is that
such is the common order of society, and if the parties were not what
they thus hold themselves out as being, they would be living in the
constant violation of decency and of law. A presumption established by
our Code of Civil Procedure is "that a man and woman deporting
themselves as husband and wife have entered into a lawful contract of
marriage.:" (Sec. 334, No. 28.) Semper praesumitur pro matrimonio —
Always presume marriage. (U. S. vs. Villafuerte and Rabano [1905], 4
Phil., 476; Son Cui vs. Guepangco, supra; U.S. vs. Memoracion and Uri
[1916], 34 Phil., 633; Teter vs. Teter [1884], 101 Ind., 129.)
Section IX of the Marriage Law is in the nature of a curative provision
intended to safeguard society by legalizing prior marriages. We can see
no substantial reason for denying to the legislative power the right to
remove impediments to an effectual marriage. If the legislative power can
declare what shall be valid marriages, it can render valid, marriages
which, when they took place, were against the law. Public policy should
aid acts intended to validate marriages and should retard acts intended to
invalidate marriages. (Coghsen vs. Stonington [1822], 4 Conn, 209;
Baity vs. Cranfill [1884], 91 N. C., 273.)
The courts can properly incline the scales of their decisions in favors of
that solution which will mot effectively promote the public policy. That is
the true construction which will best carry legislative intention into effect.
And here the consequences, entailed in holding that the marriage of the
Mora Adong and the deceased Cheong Boo, in conformity with the
Mohammedan religion and Moro customs, was void, would be far
reaching in disastrous result. The last census shows that there are at
least one hundred fifty thousand Moros who have been married
according to local custom. We then have it within our power either to
nullify or to validate all of these marriages; either to make all of the
children born of these unions bastards or to make them legitimate; either
to proclaim immorality or to sanction morality; either to block or to
advance settled governmental policy. Our duty is a obvious as the law is
plain.
In moving toward our conclusion, we have not lost sight of the decisions
of this court in the cases of United States vs. Tubban ([1915]), 29 Phil.,
434) and United States vs. Verzola ([1916, 33 Phil., 285). We do not,
however, believe these decisions to be controlling. In the first place,
these were criminal actions and two Justice dissented.. In the second
place, in the Tubban case, the marriage in question was a tribal marriage
of the Kalingas, while in the Verzola case, the marriage had been
performed during the Spanish regime by a lieutenant of the Guardia Civil.
In neither case, in deciding as to whether or not the accused should be
given the benefit of the so-called unwritten law, was any consideration
given to the provisions of section IX of General Order No. 68. We are free
to admit that, if necessary, we would unhesitatingly revoke the doctrine
announced in the two cases above mentioned.
We regard the evidence as producing a moral conviction of the existence
of the Mohammedan marriage. We regard the provisions of section IX of
the Marriage law as validating marriages performed according to the rites
of the Mohammedan religion.
There are other questions presented in the various assignments of error
which it is unnecessary to decide. In resume, we find the Chinese
marriage not to be proved and that the Chinaman Cheong Seng Gee has
only the rights of a natural child, and we find the Mohammedan marriage
to be proved and to be valid, thus giving to the widow and the legitimate
children of this union the rights accruing to them under the law.
Judgment is reversed in part, and the case shall be returned to the lower
court for a partition of the property in accordance with this decision, and
for further proceedings in accordance with law. Without special findings
as to costs in this instance, it is so ordered.
Araullo, C.J., Johnson, Street, Avanceña, Villamor, Ostrand, Johns and
Romualdez, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 194538               November 27, 2013
MORETO MIRALLOSA and all persons claiming rights and interests
under him, Petitioner,
vs.
CARMEL DEVELOPMENT INC., Respondent.
DECISION
SERENO, CJ:
This is an appeal by way of a Petition for Review on Certiorari  dated 6
1
December 2010 assailing the Decision  and Resolution  of the Court of
2 3
Appeals CA) in C.A.-G.R. SP No. 105190, which reversed the
Decision  and Order  of the Regional Trial Court RTC), Branch 121,
4 5
Caloocan City in Civil Case No. C-22018. The RTC had reversed the
Decision  of the Metropolitan Trial Court MeTC), Branch 52, Caloocan
6
City in Civil Case No. 03-27114, ordering petitioner to vacate the subject
property in this case for ejectment.
The antecedent facts are as follows:
Respondent Carmel Development, Inc. was the registered owner of a
Caloocan property known as the Pangarap Village located at Barrio
Makatipo, Caloocan City.  The property has a total land area of 156
7
hectares and consists of three parcels of land registered in the name of
Carmel Farms, Inc. under Transfer Certificate of Title (TCT) Nos. (62603)
15634, (62605) 15632 and (64007) 15807.  The lot that petitioner
8
presently occupies is Lot No. 32, Block No. 73 covered by the titles
above-mentioned. 9
On 14 September 1973, President Ferdinand Marcos issued Presidential
Decree No. 293 (P.D. 293),  which invalidated the titles of respondent
10
and declared them open for disposition to the members of the
Malacañang Homeowners Association, Inc. (MHAI), to wit:
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines, and
pursuant to Proclamation 1081, dated September 21, 1972 and General
Order No. 1 dated September 22, 1972 do hereby order and decree that
any and all sales contracts between the Government and the original
purchasers, are hereby cancelled, and those between the latter and the
subsequent transferees, and any and all transfers thereafter, covering
lots 979, 981, 982, 985, 988, 989, 990, 991-new, 1226, 1228, 1230, and
980-C-2 (LRC PSD-1730), all of Tala Estate, Caloocan City are hereby
declared invalid and null and void ab initio as against the Government;
that Transfer Certificates of Title Nos. 62603, 6204, 6205, covering lots 1,
2, and 3., PCS-4383, all in the name of Carmel Farms, Inc., which are a
consolidation and subdivision survey of the lots hereinbefore
enumerated, are declared invalid and considered cancelled as against
the Government; and that said lots are declared open for disposition and
sale to the members of the Malacañang Homeowners Association, Inc.,
the present bona fide occupants thereof, pursuant to Commonwealth Act
No. 32, as amended. (Emphasis supplied)
By virtue of P.D. 293, a Memorandum  was inscribed on the last page of
11
respondent’s title, as follows:
Memorandum – Pursuant to Presidential Decree No. 293, this Certificate
of Title is declared invalid and null and void ab initio and considered
cancelled as against the government and the property described herein is
declared open for disposition and sale to the members of the Malacañang
Homeowners Association, Inc.
On the basis of P.D. 293, petitioner’s predecessor-in-interest, Pelagio M.
Juan, a member of the MHAI, occupied Lot No. 32 and subsequently built
houses there.  On the other hand, respondent was constrained to allow
12
the members of MHAI to also occupy the rest of Pangarap Village. 13
On 29 January 1988, the Supreme Court promulgated Roman Tuason
and Remedio V. Tuason, Attorney-in-fact, Trinidad S. Viado v. The
Register of Deeds, Caloocan City, Ministry of Justice and the National
Treasurer  (Tuason), which declared P.D. 293 as unconstitutional and
14
void ab initio in all its parts. The dispositive portion is herein quoted as
follows:
WHEREFORE, Presidential Decree No. 293 is declared to be
unconstitutional and void ab initio in all its parts. The public respondents
are commanded to cancel the inscription on the titles of the petitioners
and the petitioners in intervention of the memorandum declaring their
titles null and void and declaring the property therein respectively
described open for disposition and sale to the members of the
Malacañang Homeowners Association, Inc. to do whatever else is
needful to restore the titles to full effect and efficacy; and henceforth to
refrain, cease and desist from implementing any provision or part of said
Presidential Decree No. 293. No pronouncement as to costs.
On 17 February 1988, the Register of Deeds then cancelled the
Memorandum inscripted on respondent’s title,  eventually restoring
15
respondent’s ownership of the entire property. Meanwhile, sometime in
1995, petitioner took over Lot No. 32 by virtue of an Affidavit executed by
Pelagio M. Juan in his favor.16
As a consequence of Tuason, respondent made several oral demands on
petitioner to vacate the premises, but to no avail.  A written demand letter
17
which was sent sometime in April 2002 also went unheeded. 18
On 14 January 2003, respondent filed a Complaint for Unlawful
Detainer  before the MeTC. After due hearing on 9 November 2007, the
19
trial court rendered a Decision  in the following manner:
20
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiff and against the defendant, in the following manner:
1. Ordering the defendant to vacate the subject property located
at Lot No. 32, Block 73, Gregorio Araneta Ave., Makatipo,
Caloocan City, together with all persons claiming right under her;
2. To pay the sum of ₱10,000.00 as Attorney’s fees;
3. To pay the costs of suit.
SO ORDERED. (Emphases in the original)
In so ruling, the trial court stated that respondent was the registered
owner of the property until its title was voided by P.D. 293.  It had no
21
alternative but to allow petitioner’s occupancy of the premises.  Since the
22
latter’s occupation was only by mere tolerance of respondent, petitioner
was necessarily bound by an implied promise that he would vacate the
property upon demand.  Failure to do so would render him liable for
23
unlawful detainer.
Aggrieved, petitioner appealed to the RTC. On 30 April 2008, it rendered
a Decision  reversing the findings of the MTC, as follows:
24
WHEREFORE, premises considered, the decision appealed from is
hereby REVERSED AND SET ASIDE and the complaint is accordingly
DISMISSED. With costs against plaintiff-appellee.
SO ORDERED. (Emphasis in the original)
In the opinion of the RTC, respondent’s Complaint did not make out a
case for unlawful detainer.  It maintained that respondent’s supposed
25
acts of tolerance must have been present right from the start of
petitioner’s possession.  Since the possession was sanctioned by the
26
issuance of P.D. 293, and respondent’s tolerance only came after the law
was declared unconstitutional, petitioner thus exercised possession
under color of title.  This fact necessarily placed the Complaint outside
27
the category of unlawful detainer. 28
On 24 September 2008, respondent appealed to the CA.  The appellate
29
court rendered a Decision  on 25 May 2010, the dispositive portion of
30
which states:
WHEREFORE, in view of the foregoing, the petition is GRANTED. The
assailed decision dated April 30, 2008 of the RTC (Branch 121) of
Caloocan City in Civil Case No. C-22018 is REVERSED and SET ASIDE
and the Decision dated November 9, 2007 of the MTC (Branch 52) of
Caloocan City in Civil Case No. 03-27114 is hereby REINSTATED.
SO ORDERED. (Emphases in the original)
In disposing of the issues, the CA observed that petitioner’s arguments
could not be upheld.  The question of whether tolerance had been
31
exercised before or after the effectivity of P.D. 293 would only matter if
what was at issue was the timeliness of the Complaint or whether the
Complaint was one for unlawful detainer or forcible entry.  Since the
32
Complaint specifically alleged that the possession of respondent was by
petitioner’s tolerance, and that respondent’s dispossession had not lasted
for more than one year, it then follows that the MeTC rightly acquired
jurisdiction over the Complaint. 33
Moreover, with the determination of who was the lawful and registered
owner of the property in question, the owner necessarily enjoyed or had a
better right to the possession and enjoyment there.  Hence, petitioner
34
had no right to the continued possession of the property. 35
Neither could he be considered a builder in good faith who could avail
himself of the benefits under Article 448 of the Civil Code.  From the
36
moment P.D. 293 was declared unconstitutional and the title to the
property restored to respondent, petitioner could no longer claim good
faith.  Thus, as provided under Article 449, petitioner loses what he
37
would be building, planting, or sowing without right of indemnity from that
time.38
On 25 May 2010, petitioner filed a Motion for Reconsideration, but it was
denied in a Resolution  issued by the CA on 15 October 2010. Hence,
39
the instant Petition.
On 2 May 2011, respondent filed a Comment  on the Petition for Review;
40
and on 17 May 2011, petitioner filed a Reply. 41
ISSUES
From the foregoing, we reduce the issues to the following:
1. Whether or not the MeTC had jurisdiction over the case;
2. Whether or not Tuason may be applied here, despite petitioner
not being a party to the case; and
3. Whether or not petitioner is a builder in good faith.
THE COURT’S RULING
We shall discuss the issues seriatim.
The MeTC rightly exercised
jurisdiction, this case being one of
unlawful detainer.
Petitioner alleges that the MeTC had no jurisdiction over the subject
matter, because respondent had filed the Complaint beyond the one-year
prescriptive period for ejectment cases. Despite losing ownership and
possession of the property as early as 14 September 1973 when P.D.
293 took effect, respondent allegedly still failed to take the necessary
action to recover it. 42
Petitioner also insists that tolerance had not been present from the start
of his possession of the property, as respondent extended its tolerance
only after P.D. 293 was declared unconstitutional.  This situation
43
necessarily placed respondent’s cause of action outside the category of
unlawful detainer  Consequently, the presence of an ownership dispute
44
should have made this case either an accion publiciana or an accion
reivindicatoria. 45
Unfortunately, petitioner’s contentions are without merit. The MeTC
rightly exercised jurisdiction, this case being one of unlawful detainer.
An action for unlawful detainer exists when a person unlawfully withholds
possession of any land or building against or from a lessor, vendor,
vendee or other persons, after the expiration or termination of the right to
hold possession by virtue of any contract, express or implied.  Here,
46
possession by a party was originally legal, as it was permitted by the
other party on account of an express or implied contract between
them.  However, the possession became illegal when the other party
47
demanded that the possessor vacate the subject property because of the
expiration or termination of the right to possess under the contract, and
the possessor refused to heed the demand. 48
The importance of making a demand cannot be overemphasized, as it is
jurisdictional in nature.  The one-year prescriptive period for filing a case
49
for unlawful detainer is tacked from the date of the last demand, the
reason being that the other party has the right to waive the right of action
based on previous demands and to let the possessor remain on the
premises for the meantime. 50
In this case, it is clear from the facts that what was once a legal
possession of petitioner, emanating from P.D. 293, later became illegal
by the pronouncement in Tuason that the law was unconstitutional. While
it is established that tolerance must be present at the start of the
possession,  it must have been properly tacked after P.D. 293 was
51
invalidated. At the time the decree was promulgated, respondent had no
option but to allow petitioner and his predecessor-in-interest to enter the
property. This is not the "tolerance" envisioned by the law. As explained
in Tuason, the decree "was not as claimed a licit instance of the
application of social justice principles or the exercise of police power. It
was in truth a disguised, vile stratagem deliberately resorted to favor a
few individuals, in callous and disdainful disregard of the rights of others.
It was in reality a taking of private property without due process and
without compensation whatever, from persons relying on the
indefeasibility of their titles in accordance with and as explicitly
guaranteed by law." 52
When respondent sent petitioner a demand letter in April 2002 and
subsequently filed the Complaint in January 2003, it did so still within the
one-year prescriptive period imposed by the rules. It matters not whether
there is an ownership issue that needs to be resolved, for as we have
previously held, a determination of the matter would only be provisional.
In Heirs of Ampil v. Manahan,  we said:
53
In an unlawful detainer case, the physical or material possession of the
property involved, independent of any claim of ownership by any of the
parties, is the sole issue for resolution. But where the issue of ownership
is raised, the courts may pass upon said issue in order to determine who
has the right to possess the property. This adjudication, however, is only
an initial determination of ownership for the purpose of settling the issue
of possession, the issue of ownership being inseparably linked thereto.
As such, the lower court’s adjudication of ownership in the ejectment
case is merely provisional and would not bar or prejudice an action
between the same parties involving title to the property.
Tuason may be applied despite
petitioner not being a party to that
case, because an unconstitutional
law produces no effect and confers
no right upon any person.
Petitioner argues that respondent has no cause of action against him,
because under the doctrine of operative fact and the doctrine of res inter
alios judicatae nullum aliis praejudicium faciunt, petitioner should not be
prejudiced by Tuason; the declaration of the unconstitutionality of P.D.
293 should not affect the rights of other persons not party to the case. 54
Again, petitioner’s argument deserves scant consideration. In declaring a
law null and void, the real issue is whether the nullity should have
prospective, not retroactive, application.  Republic v. Court of Appeals  is
55 56
instructive on the matter:
The strict view considers a legislative enactment which is declared
unconstitutional as being, for all legal intents and purposes, a total nullity,
and it is deemed as if had never existed. x x x.
A judicial declaration of invalidity, it is also true, may not necessarily
obliterate all the effects and consequences of a void act occurring prior to
such a declaration. Thus, in our decisions on the moratorium laws, we
have been constrained to recognize the interim effects of said laws prior
to their declaration of unconstitutionality, but there we have likewise been
unable to simply ignore strong considerations of equity and fair play. x x
x.
As a general rule, a law declared as unconstitutional produces no effect
whatsoever and confers no right on any person. It matters not whether
the person is a party to the original case, because "not only the parties
but all persons are bound by the declaration of unconstitutionality, which
means that no one may thereafter invoke it nor may the courts be
permitted to apply it in subsequent cases. It is, in other words, a total
nullity."  Thus, petitioner’s invocation of the doctrine of res inter alios
57
judicatae nullum aliis praejudicium faciunt cannot be countenanced. We
have categorically stated that the doctrine does not apply when the party
concerned is a "successor in interest by title subsequent to the
commencement of the action, or the action or proceeding is in rem, the
judgment in which is binding against him."  While petitioner may not have
58
been a party to Tuason, still, the judgment is binding on him because the
declaration of P.D. 293 as a nullity partakes of the nature of an in rem
proceeding.
Neither may petitioner avail himself of the operative fact doctrine, which
recognizes the interim effects of a law prior to its declaration of
unconstitutionality.  The operative fact doctrine is a rule of equity. As
59
such, it must be applied as an exception to the general rule that an
unconstitutional law produces no effects.  The doctrine is applicable
60
when a declaration of unconstitutionality will impose an undue burden on
those who have relied on the invalid law,  but it can never be invoked to
61
validate as constitutional an unconstitutional act. 62
In this case, petitioner could not be said to have been unduly burdened
by reliance on an invalid law. Petitioner merely anchored his right over
the property to an Affidavit allegedly issued by Pelagio M. Juan, a
member of the MHIA, authorizing petitioner to occupy the
same.  However, this Affidavit was executed only sometime in 1995, or
63
approximately seven years after the Tuason case was promulgated.  At 64
the time petitioner built the structures on the premises, he ought to have
been aware of the binding effects of the Tuason case and the subsequent
unconstitutionality of P.D. 293. These circumstances necessarily remove
him from the ambit of the operative fact doctrine.
Petitioner may not be deemed to be a builder in good faith. Petitioner also
argues that he is a builder in good faith for want of knowledge of any
infirmity in the promulgation of P.D. 293.  Being a builder in good faith, he
65
believes that he is entitled to the reimbursement of his useful expenses
and that he has a right to retain possession of the premises, pending
reimbursement of the value of his improvements to be proven during trial,
in accordance with Article 545 of the Civil Code. 66
Pursuant to Section 13 Article VIII of the Constitution, I certify that the
conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
MARIA LOURDES P. A. SERENO
Chief Justice

Upon perusal of the records, however, we hold that petitioner is not a

builder in good faith. A builder in good faith is one who builds with the
belief that the land he is building on is his, or that by some title one has
the right to build thereon, and is ignorant of any defect or flaw in his
title.  Since petitioner only started occupying the property sometime in
67

1995 (when his predecessor-in-interest executed an Affidavit in his favor),

or about seven years after Tuason was promulgated, he should have
been aware of the binding effect of that ruling. Since all judicial decisions
form part of the law of the land, its existence should be on one hand, x x
x matter of mandatory judicial notice; on the other, ignorantia. legis non
excusat.  He thus loses whatever he has built on the property, without
68

right to indemnity, in accordance with Article 449 of the Civil Code.69

WHEREFORE, the Petition for Review on Certiorari is hereby

DISMISSED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 105190 are AFFIRMED.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Chief Justice, Chairperson

WE CONCUR:

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

CERTIFICATION
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 157547               February 23, 2011
HEIRS OF EDUARDO SIMON, Petitioners,
vs.
ELVIN* CHAN AND THE COURT OF APPEALS, Respondent.
DECISION
BERSAMIN, J.:
There is no independent civil action to recover the civil liability arising
from the issuance of an unfunded check prohibited and punished under
Batas Pambansa Bilang 22 (BP 22).
Antecedents
On July 11, 1997, the Office of the City Prosecutor of Manila filed in the
Metropolitan Trial Court of Manila (MeTC) an information charging the
late Eduardo Simon (Simon) with a violation of BP 22, docketed as
Criminal Case No. 275381 entitled People v. Eduardo Simon. The
accusatory portion reads:
That sometime in December 1996 in the City of Manila, Philippines, the
said accused, did then and there willfully, unlawfully and feloniously make
or draw and issue to Elvin Chan to apply on account or for value
Landbank Check No. 0007280 dated December 26, 1996 payable to
cash in the amount of ₱336,000.00 said accused well knowing that at the
time of issue she/he/they did not have sufficient funds in or credit with the
drawee bank for payment of such check in full upon its presentment,
which check when presented for payment within ninety (90) days from the
date thereof was subsequently dishonored by the drawee bank for
Account Closed and despite receipt of notice of such dishonor, said
accused failed to pay said Elvin Chan the amount of the check or to make
arrangement for full payment of the same within five (5) banking days
after receiving said notice.
CONTRARY TO LAW. 1
More than three years later, or on August 3, 2000, respondent Elvin Chan
commenced in the MeTC in Pasay City a civil action for the collection of
the principal amount of ₱336,000.00, coupled with an application for a
writ of preliminary attachment (docketed as Civil Case No. 915-00). 2 He
alleged in his complaint the following:
xxx
2. Sometime in December 1996 defendant employing fraud,
deceit, and misrepresentation encashed a check dated December
26, 1996 in the amount of ₱336,000.00 to the plaintiff assuring
the latter that the check is duly funded and that he had an existing
account with the Land Bank of the Philippines, xerox copy of the
said check is hereto attached as Annex "A";
3. However, when said check was presented for payment the
same was dishonored on the ground that the account of the
defendant with the Land Bank of the Philippines has been closed
contrary to his representation that he has an existing account with
the said bank and that the said check was duly funded and will be
honored when presented for payment;
4. Demands had been made to the defendant for him to make
good the payment of the value of the check, xerox copy of the
letter of demand is hereto attached as Annex "B", but despite
such demand defendant refused and continues to refuse to
comply with plaintiff’s valid demand;
5. Due to the unlawful failure of the defendant to comply with the
plaintiff’s valid demands, plaintiff has been compelled to retain the
services of counsel for which he agreed to pay as reasonable
attorney’s fees the amount of ₱50,000.00 plus additional amount
of ₱2,000.00 per appearance.
ALLEGATION IN SUPPORT OF PRAYER
FOR PRELIMINARY ATTACHMENT
6. The defendant as previously alleged has been guilty of fraud in
contracting the obligation upon which this action is brought and
that there is no sufficient security for the claims sought in this
action which fraud consist in the misrepresentation by the
defendant that he has an existing account and sufficient funds to
 cover the check when in fact his account was already closed at
the time he issued a check;
7. That the plaintiff has a sufficient cause of action and this action
is one which falls under Section 1, sub-paragraph (d), Rule 57 of
the Revised Rules of Court of the Philippines and the amount due
the plaintiff is as much as the sum for which the plaintiff seeks the
writ of preliminary attachment;
8. That the plaintiff is willing and able to post a bond conditioned
upon the payment of damages should it be finally found out that
the plaintiff is not entitled to the issuance of a writ of preliminary
attachment.3
On August 9, 2000, the MeTC in Pasay City issued a writ of preliminary
attachment, which was implemented on August 17, 2000 through the
sheriff attaching a Nissan vehicle of Simon.4
On August 17, 2000, Simon filed an urgent motion to dismiss with
application to charge plaintiff’s attachment bond for damages, 5 pertinently
averring:
xxx
On the ground of litis pendentia, that is, as a consequence of the
pendency of another action between the instant parties for the same
cause before the Metropolitan Trial Court of Manila, Branch X (10)
entitled "People of the Philippines vs. Eduardo Simon", docketed thereat
as Criminal Case No. 275381-CR, the instant action is dismissable under
Section 1, (e), Rule 16, 1997 Rules of Civil Procedure, xxx
xxx
While the instant case is civil in nature and character as
contradistinguished from the said Criminal Case No. 915-00 in the
Metropolitan Trial Court of Manila, Branch X (10), the basis of the instant
civil action is the herein plaintiff’s criminal complaint against defendant
arising from a charge of violation of Batas Pambansa Blg. 22 as a
consequence of the alleged dishonor in plaintiff’s hands upon
presentment for payment with drawee bank a Land Bank Check No.
0007280 dated December 26, 1996 in the amount of ₱336,000- drawn
allegedly issued to plaintiff by defendant who is the accused in said case,
a photocopy of the Criminal information filed by the Assistant City
Prosecutor of Manila on June 11, 1997 hereto attached and made
integral part hereof as Annex "1".
It is our understanding of the law and the rules, that, "when a criminal
action is instituted, the civil action for recovery of civil liability arising from
the offense charged is impliedly instituted with the criminal action, unless
the offended party expressly waives the civil action or reserves his right
to institute it separately xxx.
On August 29, 2000, Chan opposed Simon’s urgent motion to dismiss
with application to charge plaintiff’s attachment bond for damages,
stating:
1. The sole ground upon which defendant seeks to dismiss
plaintiff’s complaint is the alleged pendency of another action
between the same parties for the same cause, contending among
others that the pendency of Criminal Case No. 275381-CR
entitled "People of the Philippines vs. Eduardo Simon" renders
this case dismissable;
2. The defendant further contends that under Section 1, Rule 111
of the Revised Rules of Court, the filing of the criminal action, the
civil action for recovery of civil liability arising from the offense
charged is impliedly instituted with the criminal action which the
plaintiff does not contest; however, it is the submission of the
plaintiff that an implied reservation of the right to file a civil action
has already been made, first, by the fact that the information for
violation of B.P. 22 in Criminal Case No. 2753841 does not at all
make any allegation of damages suffered by the plaintiff nor is
there any claim for recovery of damages; on top of this the
plaintiff as private complainant in the criminal case, during the
presentation of the prosecution evidence was not represented at
all by a private prosecutor such that no evidence has been
adduced by the prosecution on the criminal case to prove
damages; all of these we respectfully submit demonstrate an
effective implied reservation of the right of the plaintiff to file a
separate civil action for damages;
3. The defendant relies on Section 3 sub-paragraph (a) Rule 111
of the Revised Rules of Court which mandates that after a
criminal action has been commenced the civil action cannot be
instituted until final judgment has been rendered in the criminal
action; however, the defendant overlooks and conveniently failed
to consider that under Section 2, Rule 111 which provides as
follows:
In the cases provided for in Articles 31, 32, 33, 34 and 2177 of
the Civil Code of the Philippines, an independent civil action
entirely separate and distinct from the criminal action, may be
brought by the injured party during the pendency of criminal case
provided the right is reserved as required in the preceding
section. Such civil action shall proceed independently of the
criminal prosecution, and shall require only a preponderance of
evidence.
In as much as the case is one that falls under Art. 33 of the Civil
Code of the Philippines as it is based on fraud, this action
therefore may be prosecuted independently of the criminal action;
4. In fact we would even venture to state that even without any
reservation at all of the right to file a separate civil action still the
plaintiff is authorized to file this instant case because the plaintiff
seeks to enforce an obligation which the defendant owes to the
plaintiff by virtue of the negotiable instruments law. The plaintiff in
this case sued the defendant to enforce his liability as drawer in
favor of the plaintiff as payee of the check. Assuming the
allegation of the defendant of the alleged circumstances relative
to the issuance of the check, still when he delivered the check
payable to bearer to that certain Pedro Domingo, as it was
payable to cash, the same may be negotiated by delivery by who
ever was the bearer of the check and such negotiation was valid
and effective against the drawer;
5. Indeed, assuming as true the allegations of the defendant
regarding the circumstances relative to the issuance of the check
it would be entirely impossible for the plaintiff to have been aware
that such check was intended only for a definite person and was
not negotiable considering that the said check was payable to
bearer and was not even crossed;
6. We contend that what cannot be prosecuted separate and
apart from the criminal case without a reservation is a civil action
arising from the criminal offense charged. However, in this instant
case since the liability of the defendant are imposed and the
rights of the plaintiff are created by the negotiable instruments
law, even without any reservation at all this instant action may still
be prosecuted;
7. Having this shown, the merits of plaintiff’s complaint the
application for damages against the bond is totally without any
legal support and perforce should be dismissed outright. 6
On October 23, 2000, the MeTC in Pasay City granted Simon’s urgent
motion to dismiss with application to charge plaintiff’s attachment bond
for damages,7 dismissing the complaint of Chan because:
xxx
After study of the arguments of the parties, the court resolves to GRANT
the Motion to Dismiss and the application to charge plaintiff’s bond for
damages.
For "litis pendentia" to be a ground for the dismissal of an action, the
following requisites must concur: (a) identity of 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 (2) 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. xxx
A close perusal of the herein complaint denominated as "Sum of Money"
and the criminal case for violation of BP Blg. 22 would readily show that
the parties are not only identical but also the cause of action being
asserted, which is the recovery of the value of Landbank Check No.
0007280 in the amount of ₱336,000.00. In both civil and criminal cases,
the rights asserted and relief prayed for, the reliefs being founded on the
same facts, are identical.
Plaintiff’s claim that there is an effective implied waiver of his right to
pursue this civil case owing to the fact that there was no allegation of
damages in BP Blg. 22 case and that there was no private prosecutor
during the presentation of prosecution evidence is unmeritorious. It is
basic that when a complaint or criminal Information is filed, even without
any allegation of damages and the intention to prove and claim them, the
offended party has the right to prove and claim for them, unless a waiver
or reservation is made or unless in the meantime, the offended party has
instituted a separate civil action. xxx The over-all import of the said
provision conveys that the waiver which includes indemnity under the
Revised Penal Code, and damages arising under Articles 32, 33, and 34
of the Civil Code must be both clear and express. And this must be
logically so as the primordial objective of the Rule is to prevent the
offended party from recovering damages twice for the same act or
omission of the accused.
Indeed, the evidence discloses that the plaintiff did not waive or made a
reservation as to his right to pursue the civil branch of the criminal case
for violation of BP Blg. 22 against the defendant herein. To the
considered view of this court, the filing of the instant complaint for sum of
money is indeed legally barred. The right to institute a separate civil
action shall be made before the prosecution starts to present its evidence
and under circumstances affording the offended party a reasonable
opportunity to make such reservation. xxx
Even assuming the correctness of the plaintiff’s submission that the
herein case for sum of money is one based on fraud and hence falling
under Article 33 of the Civil Code, still prior reservation is required by the
Rules, to wit:
"In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil
Code of the Philippines, an independent civil action entirely separate and
distinct from the criminal action, may be brought by the injured party
during the pendency of criminal case provided the right is reserved as
required in the preceding section. Such civil action shall proceed
independently of the criminal prosecution, and shall require only a
preponderance of evidence."
xxx
WHEREFORE, premises considered, the court resolves to:
1. Dismiss the instant complaint on the ground of "litis pendentia";
2. Dissolve/Lift the Writ of Attachment issued by this court on
August 14, 2000;
3. Charge the plaintiff’s bond the amount of ₱336,000.00 in favor
of the defendant for the damages sustained by the latter by virtue
of the implementation of the writ of attachment;
4. Direct the Branch Sheriff of this Court to RESTORE with
utmost dispatch to the defendant’s physical possession the
vehicle seized from him on August 16, 2000; and
5. Direct the plaintiff to pay the defendant the sum of ₱5,000.00
by way of attorney’s fees.
SO ORDERED.
Chan’s motion for reconsideration was denied on December 20,
2000,8 viz:
Considering that the plaintiff’s arguments appear to be a mere repetition
of his previous submissions, and which submissions this court have
already passed upon; and taking into account the inapplicability of the
ratio decidendi in the Tactaquin vs. Palileo case which the plaintiff cited
as clearly in that case, the plaintiff therein expressly made a reservation
to file a separate civil action, the Motion for Reconsideration is DENIED
for lack of merit.
SO ORDERED.
On July 31, 2001, the Regional Trial Court (RTC) in Pasay City upheld
the dismissal of Chan’s complaint, disposing:9
WHEREFORE, finding no error in the appealed decision, the same is
hereby AFFIRMED in toto.
SO ORDERED.
On September 26, 2001, Chan appealed to the Court of Appeals (CA) by
petition for review,10 challenging the propriety of the dismissal of his
complaint on the ground of litis pendentia.
In his comment, 11 Simon countered that Chan was guilty of bad faith and
malice in prosecuting his alleged civil claim twice in a manner that caused
him (Simon) utter embarrassment and emotional sufferings; and that the
dismissal of the civil case because of the valid ground of litis pendentia
based on Section 1 (e), Rule 16 of the 1997 Rules of Civil Procedure was
warranted.
On June 25, 2002, the CA promulgated its assailed
decision,12 overturning the RTC, viz:
xxx
As a general rule, an offense causes two (2) classes of injuries. The first
is the social injury produced by the criminal act which is sought to be
repaired through the imposition of the corresponding penalty, and the
second is the personal injury caused to the victim of the crime which
injury is sought to be compensated through indemnity which is also civil
in nature. Thus, "every person criminally liable for a felony is also civilly
liable."
The offended party may prove the civil liability of an accused arising from
the commission of the offense in the criminal case since the civil action is
either deemed instituted with the criminal action or is separately
instituted.
Rule 111, Section 1 of the Revised Rules of Criminal Procedure, which
became effective on December 1, 2000, provides that:
(a) When a criminal action is instituted, the civil action for the recovery of
civil liability arising from the offense charged shall be deemed instituted
with the criminal action unless the offended party waives the civil action,
reserves the right to institute it separately or institute the civil action prior
to the criminal action.
Rule 111, Section 2 further states:
After the criminal action has been commenced, the separate civil action
arising therefrom cannot be instituted until final judgment has been
entered in the criminal action.
However, with respect to civil actions for recovery of civil liability under
Articles 32, 33, 34 and 2176 of the Civil Code arising from the same act
or omission, the rule has been changed.
In DMPI Employees Credit Association vs. Velez, the Supreme Court
pronounced that only the civil liability arising from the offense charged is
deemed instituted with the criminal action unless the offended party
waives the civil action, reserves his right to institute it separately, or
institutes the civil action prior to the criminal action. Speaking through
Justice Pardo, the Supreme Court held:
"There is no more need for a reservation of the right to file the
independent civil action under Articles 32, 33, 34 and 2176 of the Civil
Code of the Philippines. The reservation and waiver referred to refers
only to the civil action for the recovery of the civil liability arising from the
offense charged. This does not include recovery of civil liability under
Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising
from the same act or omission which may be prosecuted separately
without a reservation".
Rule 111, Section 3 reads:
Sec. 3. When civil action may proceed independently. In the cases
provided in Articles 32, 33, 34, and 2176 of the Civil Code of the
Philippines, the independent civil action may be brought by the offended
party. It shall proceed independently of the criminal action and shall
require only a preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or omission
charged in the criminal action.
The changes in the Revised Rules on Criminal Procedure pertaining to
independent civil actions which became effective on December 1, 2000
are applicable to this case.
Procedural laws may be given retroactive effect to actions pending and
undetermined at the time of their passage. There are no vested rights in
the rules of procedure. xxx
Thus, Civil Case No. CV-94-124, an independent civil action for damages
on account of the fraud committed against respondent Villegas under
Article 33 of the Civil Code, may proceed independently even if there was
no reservation as to its filing."
It must be pointed that the abovecited case is similar with the instant suit.
The complaint was also brought on allegation of fraud under Article 33 of
the Civil Code and committed by the respondent in the issuance of the
check which later bounced. It was filed before the trial court, despite the
pendency of the criminal case for violation of BP 22 against the
respondent. While it may be true that the changes in the Revised Rules
on Criminal Procedure pertaining to independent civil action became
effective on December 1, 2000, the same may be given retroactive
application and may be made to apply to the case at bench, since
procedural rules may be given retroactive application. There are no
vested rights in the rules of procedure.
In view of the ruling on the first assigned error, it is therefore an error to
adjudge damages in favor of the petitioner.
WHEREFORE, the petition is hereby GRANTED. The Decision dated
July 13, 2001 rendered by the Regional Trial Court of Pasay City, Branch
108 affirming the dismissal of the complaint filed by petitioner is hereby
REVERSED and SET ASIDE. The case is hereby REMANDED to the
trial court for further proceedings.
SO ORDERED.
On March 14, 2003, the CA denied Simon’s motion for reconsideration. 13
Hence, this appeal, in which the petitioners submit that the CA
erroneously premised its decision on the assessment that the civil case
was an independent civil action under Articles 32, 33, 34, and 2176 of the
Civil Code; that the CA’s reliance on the ruling in DMPI Employees Credit
Cooperative Inc. v. Velez14 stretched the meaning and intent of the ruling,
and was contrary to Sections 1 and 2 of Rule 111 of the Rules of Criminal
Procedure; that this case was a simple collection suit for a sum of money,
precluding the application of Section 3 of Rule 111 of the Rules of
Criminal Procedure.15
In his comment,16 Chan counters that the petition for review should be
denied because the petitioners used the wrong mode of appeal; that his
cause of action, being based on fraud, was an independent civil action;
and that the appearance of a private prosecutor in the criminal case did
not preclude the filing of his separate civil action.
Issue
The lone issue is whether or not Chan’s civil action to recover the amount
of the unfunded check (Civil Case No. 915-00) was an independent civil
action.
Ruling
The petition is meritorious.
A
Applicable Law and Jurisprudence on the
Propriety of filing a separate civil action based on BP 22
The Supreme Court has settled the issue of whether or not a violation of
BP 22 can give rise to civil liability in Banal v. Judge Tadeo, Jr.,17 holding:
xxx
Article 20 of the New Civil Code provides:
Every person who, contrary to law, wilfully or negligently causes damage
to another, shall indemnify the latter for the same.
Regardless, therefore, of whether or not a special law so provides,
indemnification of the offended party may be had on account of the
damage, loss or injury directly suffered as a consequence of the wrongful
act of another. The indemnity which a person is sentenced to pay forms
an integral part of the penalty imposed by law for the commission of a
crime (Quemel v. Court of Appeals, 22 SCRA 44, citing Bagtas v. Director
of Prisons, 84 Phil 692). Every crime gives rise to a penal or criminal
action for the punishment of the guilty party, and also to civil action for the
restitution of the thing, repair of the damage, and indemnification for the
losses (United States v. Bernardo, 19 Phil 265).
xxx
Civil liability to the offended party cannot thus be denied. The payee of
the check is entitled to receive the payment of money for which the
worthless check was issued. Having been caused the damage, she is
entitled to recompense.
Surely, it could not have been the intendment of the framers of Batas
Pambansa Blg. 22 to leave the offended private party defrauded and
empty-handed by excluding the civil liability of the offender, giving her
only the remedy, which in many cases results in a Pyrrhic victory, of
having to file a separate civil suit. To do so may leave the offended party
unable to recover even the face value of the check due her, thereby
unjustly enriching the errant drawer at the expense of the payee. The
protection which the law seeks to provide would, therefore, be brought to
naught.
xxx
However, there is no independent civil action to recover the value of a
bouncing check issued in contravention of BP 22. This is clear from Rule
111 of the Rules of Court, effective December 1, 2000, which relevantly
provides:
Section 1. Institution of criminal and civil actions. - (a) When a criminal
action is instituted, the civil action for the recovery of civil liability arising
from the offense charged shall be deemed instituted with the criminal
action unless the offended party waives the civil action, reserves the right
to institute it separately or institutes the civil action prior to the criminal
action.
The reservation of the right to institute separately the civil action shall be
made before the prosecution starts presenting its evidence and under
circumstances affording the offended party a reasonable opportunity to
make such reservation.
When the offended party seeks to enforce civil liability against the
accused by way of moral, nominal, temperate, or exemplary damages
without specifying the amount thereof in the complaint or information, the
filing fees therefor shall constitute a first lien on the judgment awarding
such damages.
Where the amount of damages, other than actual, is specified in the
complaint or information, the corresponding filing fees shall be paid by
the offended party upon the filing thereof in court.
Except as otherwise provided in these Rules, no filing fees shall be
required for actual damages.
No counterclaim, cross-claim or third-party complaint may be filed by the
accused in the criminal case, but any cause of action which could have
been the subject thereof may be litigated in a separate civil action. (1a)
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be
deemed to include the corresponding civil action. No reservation to file
such civil action separately shall be allowed.18
Upon filing of the aforesaid joint criminal and civil actions, the offended
party shall pay in full the filing fees based on the amount of the check
involved, which shall be considered as the actual damages claimed.
Where the complaint or information also seeks to recover liquidated,
moral, nominal, temperate or exemplary damages, the offended party
shall pay the filing fees based on the amounts alleged therein. If the
amounts are not so alleged but any of these damages are subsequently
awarded by the court, the filing fees based on the amount awarded shall
constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof has not
yet commenced, it may be consolidated with the criminal action upon
application with the court trying the latter case. If the application is
granted, the trial of both actions shall proceed in accordance with section
2 of the Rule governing consolidation of the civil and criminal actions.
Section 3. When civil action may proceed independently. – In the cases
provided in Articles 32, 33, 34 and 2176 of the Civil Code of the
Philippines, the independent civil action may be brought by the offended
party. It shall proceed independently of the criminal action and shall
require only a preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or omission
charged in the criminal action.
The aforequoted provisions of the Rules of Court, even if not yet in effect
when Chan commenced Civil Case No. 915-00 on August 3, 2000, are
nonetheless applicable. It is axiomatic that the retroactive application of
procedural laws does not violate any right of a person who may feel
adversely affected, nor is it constitutionally objectionable. The reason is
simply that, as a general rule, no vested right may attach to, or arise
from, procedural laws.19 Any new rules may validly be made to apply to
cases pending at the time of their promulgation, considering that no party
to an action has a vested right in the rules of procedure, 20 except that in
criminal cases, the changes do not retroactively apply if they permit or
require a lesser quantum of evidence to convict than what is required at
the time of the commission of the offenses, because such retroactivity
would be unconstitutional for being ex post facto under the Constitution.21
Moreover, the application of the rule would not be precluded by the
violation of any assumed vested right, because the new rule was adopted
from Supreme Court Circular 57-97 that took effect on November 1,
1997.
Supreme Court Circular 57-97 states:
Any provision of law or Rules of Court to the contrary notwithstanding, the
following rules and guidelines shall henceforth be observed in the filing
and prosecution of all criminal cases under Batas Pambansa Blg. 22
which penalizes the making or drawing and issuance of a check without
funds or credit:
1. The criminal action for violation of Batas Pambansa Blg. 22
shall be deemed to necessarily include the corresponding civil
action, and no reservation to file such civil action separately shall
be allowed or recognized.22
2. Upon the filing of the aforesaid joint criminal and civil actions,
the offended party shall pay in full the filing fees based upon the
amount of the check involved which shall be considered as the
actual damages claimed, in accordance with the schedule of fees
in Section 7 (a) and Section 8 (a), Rule 141 of the Rules of Court
as last amended by Administrative Circular No. 11-94 effective
August 1, 1994. Where the offended party further seeks to
enforce against the accused civil liability by way of liquidated,
moral, nominal, temperate or exemplary damages, he shall pay
the corresponding filing fees therefor based on the amounts
thereof as alleged either in the complaint or information. If not so
alleged but any of these damages are subsequently awarded by
the court, the amount of such fees shall constitute a first lien on
the judgment.
3. Where the civil action has heretofore been filed separately and
trial thereof has not yet commenced, it may be consolidated with
the criminal action upon application with the court trying the latter
case. If the application is granted, the trial of both actions shall
proceed in accordance with the pertinent procedure outlined in
Section 2 (a) of Rule 111 governing the proceedings in the
actions as thus consolidated.
4. This Circular shall be published in two (2) newspapers of
general circulation and shall take effect on November 1, 1997.
The reasons for issuing Circular 57-97 were amply explained in Hyatt
Industrial Manufacturing Corporation v. Asia Dynamic Electrix
Corporation,23 thus:
xxx
We agree with the ruling of the Court of Appeals that upon filing of the
criminal cases for violation of B.P. 22, the civil action for the recovery of
the amount of the checks was also impliedly instituted under Section 1(b)
of Rule 111 of the 2000 Rules on Criminal Procedure. Under the present
revised Rules, the criminal action for violation of B.P. 22 shall be deemed
to include the corresponding civil action. The reservation to file a
separate civil action is no longer needed. The Rules provide:
Section 1. Institution of criminal and civil actions. —
(a) x x x
(b) The criminal action for violation of Batas Pambansa Blg. 22
shall be deemed to include the corresponding civil action. No
reservation to file such civil action separately shall be allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended
party shall pay in full the filing fees based on the amount of the check
involved, which shall be considered as the actual damages claimed.
Where the complaint or information also seeks to recover liquidated,
moral, nominal, temperate or exemplary damages, the offended party
shall pay additional filing fees based on the amounts alleged therein. If
the amounts are not so alleged but any of these damages are
subsequently awarded by the court, the filing fees based on the amount
awarded shall constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof has not
yet commenced, it may be consolidated with the criminal action upon
application with the court trying the latter case. If the application is
granted, the trial of both actions shall proceed in accordance with section
2 of this Rule governing consolidation of the civil and criminal actions.
1avvphi1
The foregoing rule was adopted from Circular No. 57-97 of this Court. It
specifically states that the criminal action for violation of B.P. 22 shall be
deemed to include the corresponding civil action. It also requires the
complainant to pay in full the filing fees based on the amount of the check
involved. Generally, no filing fees are required for criminal cases, but
because of the inclusion of the civil action in complaints for violation of
B.P. 22, the Rules require the payment of docket fees upon the filing of
the complaint. This rule was enacted to help declog court dockets which
are filled with B.P. 22 cases as creditors actually use the courts as
collectors. Because ordinarily no filing fee is charged in criminal cases for
actual damages, the payee uses the intimidating effect of a criminal
charge to collect his credit gratis and sometimes, upon being paid, the
trial court is not even informed thereof. The inclusion of the civil action in
the criminal case is expected to significantly lower the number of cases
filed before the courts for collection based on dishonored checks. It is Aptness of the dismissal of the civil action
also expected to expedite the disposition of these cases. Instead of
instituting two separate cases, one for criminal and another for civil, only on the ground of litis pendentia
a single suit shall be filed and tried. It should be stressed that the policy
laid down by the Rules is to discourage the separate filing of the civil Did the pendency of the civil action in the MeTC in Manila (as the civil
action. The Rules even prohibit the reservation of a separate civil action, aspect in Criminal Case No. 275381) bar the filing of Civil Case No. 915-
which means that one can no longer file a separate civil case after the 00 in the MeTC in Pasay City on the ground of litis pendentia?
criminal complaint is filed in court. The only instance when separate
proceedings are allowed is when the civil action is filed ahead of the
For litis pendentia to be successfully invoked as a bar to an action, the
criminal case. Even then, the Rules encourage the consolidation of the
concurrence of the following requisites is necessary, namely: (a) there
civil and criminal cases. We have previously observed that a separate
must be identity of parties or at least such as represent the same interest
civil action for the purpose of recovering the amount of the dishonored
in both actions; (b) there must be identity of rights asserted and reliefs
checks would only prove to be costly, burdensome and time-consuming
prayed for, the reliefs being founded on the same facts; and, (c) the
for both parties and would further delay the final disposition of the case.
identity in the two cases should be such that the judgment that may be
This multiplicity of suits must be avoided. Where petitioners’ rights may
rendered in one would, regardless of which party is successful, amount to
be fully adjudicated in the proceedings before the trial court, resort to a
res judicata in respect of the other. Absent the first two requisites, the
separate action to recover civil liability is clearly unwarranted. In view of
possibility of the existence of the third becomes nil. 28
this special rule governing actions for violation of B.P. 22, Article 31 of the
Civil Code cited by the trial court will not apply to the case at bar. 24
A perusal of Civil Case No. 01-0033 and Criminal Case No. 275381
ineluctably shows that all the elements of litis pendentia are attendant.
The CA’s reliance on DMPI Employees Credit Association v. Velez 25 to
First of all, the parties in the civil action involved in Criminal Case No.
give due course to the civil action of Chan independently and separately
275381 and in Civil Case No. 915-00, that is, Chan and Simon, are the
of Criminal Case No. 275381 was unwarranted. DMPI Employees, which
same. Secondly, the information in Criminal Case No. 275381 and the
involved a prosecution for estafa, is not on all fours with this case, which
complaint in Civil Case No. 915-00 both alleged that Simon had issued
is a prosecution for a violation of BP 22. Although the Court has ruled that
Landbank Check No. 0007280 worth ₱336,000.00 payable to "cash,"
the issuance of a bouncing check may result in two separate and distinct
thereby indicating that the rights asserted and the reliefs prayed for, as
crimes of estafa and violation of BP 22,26 the procedures for the recovery
well as the facts upon which the reliefs sought were founded, were
of the civil liabilities arising from these two distinct crimes are different
identical in all respects. And, thirdly, any judgment rendered in one case
and non-interchangeable. In prosecutions of estafa, the offended party
would necessarily bar the other by res judicata; otherwise, Chan would
may opt to reserve his right to file a separate civil action, or may institute
be recovering twice upon the same claim.
an independent action based on fraud pursuant to Article 33 of the Civil
Code,27 as DMPI Employees has allowed. In prosecutions of violations of
BP 22, however, the Court has adopted a policy to prohibit the It is clear, therefore, that the MeTC in Pasay City properly dismissed Civil
reservation or institution of a separate civil action to claim the civil liability Case No. 915-00 on the ground of litis pendentia through its decision
arising from the issuance of the bouncing check upon the reasons dated October 23, 2000; and that the RTC in Pasay City did not err in
delineated in Hyatt Industrial Manufacturing Corporation, supra. affirming the MeTC.

To repeat, Chan’s separate civil action to recover the amount of the
check involved in the prosecution for the violation of BP 22 could not be
independently maintained under both Supreme Court Circular 57-97 and
the aforequoted provisions of Rule 111 of the Rules of Court,
notwithstanding the allegations of fraud and deceit.
Wherefore, we grant the petition for review on certiorari, and, accordingly,
we reverse and set aside the decision promulgated by the Court of
Appeals on June 25, 2002. We reinstate the decision rendered on
October 23, 2000 by the Metropolitan Trial Court, Branch 45, in Pasay
City.

B Costs of suit to be paid by the respondent.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

ARTURO D. BRION**
Associate Justice
Acting Chairperson

ROBERTO A. ABAD*** MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

ATTESTATION

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

ARTURO D. BRION
Associate Justice
Acting Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairperson’s Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
 
G.R. No. 102330 November 25, 1998
TERESITA C. FRANCISCO, petitioner,
vs.
HON. COURT OF APPEALS; and CONCHITA EVANGELISTA and Her
Husband SIMEON EVANGELISTA; ARACELI F. MARILLA and Her
Husband FREDDY MARILLA; ANTONIO V. FRANCISCO; and
EUSEBIO FRANCISCO, respondents.
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse respondent
appellate court's decision  promulgated on October 7, 1991, affirming in
1
toto the judgment of the Regional Trial Court which ruled,  thus:
2
WHEREFORE, premises considered, this Court renders
judgment in favor of the defendants and against the
plaintiff, as follows:
1) Ordering the dismissal of the Complaint
with costs against the plaintiff;
2) Declaring the defendant Eusebio
Francisco the administrator of the
properties described in paragraph eight
(8) of the Complaint; and
3) Sentencing the plaintiff to pay the
defendants the sum of P10,000.00 as and
for attorney's fees.
SO ORDERED.
Petitioner is the legal wife of private respondent Eusebio Francisco
(Eusebio) by his second marriage. Private respondents Conchita
Evangelista, Araceli F. Marilla and Antonio Francisco are children of
Eusebio by his first marriage.
Petitioner alleges that since their marriage on February 10, 1962, she
and Eusebio have acquired the following: (1) a sari-sari store, a
residential house and lot, and an apartment house, all situated at Col. S.
Cruz St., Barangay Balite, Rodriguez (formerly Montalban), Rizal, and;
(2) a house and lot at Barrio San Isidro, Rodriguez, Rizal. Petitioner
further avers that these properties were administered by Eusebio until he
was invalidated on account of tuberculosis, heart disease and cancer,
thereby, rendering him unfit to administer them. Petitioner also claims
that private respondents succeeded in convincing their father to sign a
general power of attorney which authorized Conchita Evangelista to
administer the house and lot together with the apartments situated in
Rodriguez, Rizal.
On August 31, 1988, petitioner filed a suit for damages and for annulment
of said general power of attorney, and thereby enjoining its enforcement.
Petitioner also sought to be declared as the administratrix of the
properties in dispute. In due course, the trial court rendered judgment in
favor of private respondents. It held that the petitioner failed to adduce
proof that said properties were acquired during the existence of the
second conjugal partnership, or that they pertained exclusively to the
petitioner. Hence, the court ruled that those properties belong exclusively
to Eusebio, and that he has the capacity to administer them.
On appeal, the Court of Appeals affirmed in toto the decision of the trial
court. Hence, this petition.
Petitioner raised the following errors allegedly committed by the appellate
court:
FIRST ASSIGNMENT OF ERROR
RESPONDENT COURT ERRED IN APPLYING
ARTICLES 160 AND 158, UNDER TITLE VI OF THE
(NEW) CIVIL CODE BECAUSE SAID TITLE, TOGETHER
WITH THE OTHERS, HAVE (SIC) ALREADY BEEN
REPEALED BY ARTICLE 253 OF THE FAMILY CODE.
SECOND ASSIGNMENT OF ERROR
 RESPONDENT COURT FURTHER ERRED IN NOT
APPLYING ARTICLE 124 OF THE FAMILY CODE.  3
But in her reply, petitioner posed the sole issue "whether or not Article
116 of the Family Code applies to this case because Article 253 of the
same Code [which] expressly repeals Arts. 158 and 160 of the Civil
Code" 4
To our mind, the crucial issue in this petition is whether or not the
appellate court committed reversible error in affirming the trial court's
ruling that the properties, subject matter of controversy, are not conjugal
but the capital properties of Eusebio exclusively.
Indeed, Articles 158  and 160  of the New Civil Code have been repealed
5 6
by the Family Code of the Philippines which took effect on August 3,
1988. The aforecited articles fall under Title VI, Book I of the New Civil
Code which was expressly repealed by Article 254  (not Article 253 as
7 petitioner failed to refute the testimony of Eusebio that he inherited the
alleged by petitioner in her petition and reply) of the Family Code.
Nonetheless, we cannot invoke the new law in this case without impairing
prior vested rights pursuant to Article 256  in relation to Article
8 a possessor only as it was not yet registered in his name.
105  (second paragraph) of the Family Code. Accordingly, the repeal of
9
Articles 158 and 160 of the New Civil Code does not operate to prejudice
or otherwise affect rights which have become vested or accrued while the
said provisions were in force.   Hence, the rights accrued and vested
10
while the cited articles were in effect survive their repeal.   We shall
11
therefore resolve the issue of the nature of the contested properties
based on the provisions of the New Civil Code.
Petitioner contends that the subject properties are conjugal, thus, she
should administer these on account of the incapacity of her husband. On
the other hand, private respondents maintain that the assets in
controversy claimed by petitioner as "conjugal" are capital properties of
Eusebio exclusively as these were acquired by the latter either through
inheritance or through his industry prior to his second marriage.
Moreover, they stress that Eusebio is not incapacitated contrary to
petitioner's allegation.
We find petitioner's contention lacks merit, as hereafter elucidated.
Art. 160 of the New Civil Code provides that "all property of the marriage
is presumed to belong to the conjugal partnership, unless it be proved
that it pertains exclusively to the husband or to the wife". However, the
party who invokes this presumption must first prove that the property in
controversy was acquired during the marriage.   Proof of
12
acquisition during the coverture is a condition sine qua non for the
operation of the presumption in favor of the conjugal partnership.   The
13
party who asserts this presumption must first prove said time element.
Needless to say, the presumption refers only to the property acquired
during the marriage and does not operate when there is no showing as to
when property alleged to be conjugal was acquired.   Moreover, this
14
presumption in favor of conjugality is rebuttable, but only with strong,
clear and convincing evidence; there must be a strict proof of exclusive
ownership of one of the spouses.  15
In this case, petitioner failed to adduce ample evidence to show that the
properties which she claimed to be conjugal were acquired during her
marriage with Eusebio.
With respect to the land at Col. Cruz St., Balite, Rodriguez, Rizal,
same from his parents. Interestingly, petitioner even admitted that
Eusebio brought into their marriage the said land, albeit in the concept of
Whether Eusebio succeeded to the property prior or subsequent to his
second marriage is inconsequential. The property should be regarded as
his own exclusively, as a matter of law, pursuant to Article 148  of the
16
New Civil Code.
Essentially, property already owned by a spouse prior to the marriage,
and brought to the marriage, is considered his or her separate
property.   Acquisitions by lucrative title refers to properties acquired
17
gratuitously and include those acquired by either spouse during the
marriage by inheritance, devise, legacy, or donation.   Hence, even if it
18
be assumed that Eusebio's acquisition by succession of the land took
place during his second marriage, the land would still be his "exclusive
property" because it was acquired by him, "during the marriage, by
lucrative title." 
19
As regards the house, apartment and sari-sari store, private respondents
aver that these properties were either constructed or established by their
father during his first marriage. On the other hand, petitioner insists that
the said assets belong to conjugal partnership. In support of her claim,
petitioner relied on the building permits for the house and the apartment,
with her as the applicant although in the name of Eusebio. She also
invoked the business license for the sari-sari store issued in her name
alone.
It must be emphasized that the aforementioned documents in no way
prove that the improvements were acquired during the second marriage.
And the fact that one is the applicant or licensee is not determinative of
the issue as to whether or not the property is conjugal or not. As the
appellate court aptly noted:
. . . . And the mere fact that plaintiff-appellant [petitioner
herein] is the licensee of the sari-sari store (Exhibit "F-3";
Exhibit "G", pp. 44-47, Record) or is the supposed
applicant for a building permit does not establish that
these improvements were acquired during her marriage
with Eusebio Francisco, especially so when her exhibits
("D-1", "E", "E-I", "T", "T-1", "T-2", "U", "U-l" and "U-2"; pp.
38-40; 285-290, Record; TSN, January 17, 1989, page 6-
7) are diametrically opposed to her pretense as they all
described Eusebio Francisco as the owner of the
structures (Article 1431, New Civil Code; Section 4. Rule
129, Revised Rules on Evidence).
Neither is it plausible to argue that the sari-sari store
constructed on the land of Eusebio Francisco has thereby
become conjugal for want of evidence to sustain the
proposition that it was constructed at the expense of their
partnership (second paragraph, Article 158, New Civil
Code). Normally, this absence of evidence on the source
of funding will call for the application of the presumption
under Article 160 of the New Civil Code that the store is
really conjugal but it cannot be so in this particular case
again, by reason of the dearth in proof that it was erected
during the alleged second marriage (5 Sanchez Roman
840-841; 9 Manresa; cited in Civil Code of the Philippines
by Tolentino, Volume 1, 1983 Edition, page
421).20
Regarding the property at San Isidro, Rodriguez, Rizal, private
respondents assert that their father purchased it during the lifetime of
their mother. In contrast, petitioner claims ownership over said property in
as much as the title thereto is registered in the name of "Eusebio
Francisco, married to Teresita Francisco."
It must be stressed that the certificate of title upon which petitioner
anchors her claim is inadequate. The fact that the land was registered in
the name of "Eusebio Francisco, married to Teresita Francisco", is no
proof that the property was acquired during the spouses coverture.
Acquisition of title and registration thereof are two different acts.   It is
21
well settled that registration does not confer title but merely confirms one
already existing.   The phrase "married to" preceding "Teresita
22
Francisco" is merely descriptive of the civil status of Eusebio Francisco.  23
In the light of the foregoing circumstances, the appellate court cannot be
said to have been without valid basis in affirming the lower court's ruling
that the properties in controversy belong exclusively to Eusebio.
Now, insofar as the administration of the subject properties is concerned,
it follows that Eusebio shall retain control thereof considering that the
assets are exclusively his capital.   Even assuming for the sake of
24
argument that the properties are conjugal, petitioner cannot administer
themn inasmuch as Eusebio is not incapacitated. Contrary to the
allegation of petitioner, Eusebio, as found by the lower court, is not
suffering from serious illness so as to impair his fitness to administer his
properties. That he is handicapped due to a leg injury sustained in a
bicycle accident, allegedly aggravated when petitioner pushed him to the
ground in one of their occasional quarrels, did not render him, in the
Court's view, incapacitated to perform acts of administration over his own
properties.
WHEREFORE, petition is hereby DENIED. The Decision of the Court of
Appeals is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Davide, Jr., Bellosillo, Vitug and Panganiban, JJ., concur.
 FIRST DIVISION
G.R. No. 141959               September 29, 2000
JUANITA NARZOLES, PERLITA GUTIERREZ, MYLENE GERONAGA,
LETICIA M. FORNAL, ARNEL DIMALIBOT, MARITES SAGUID, IRENE
MARCENE, ABRAM GERONAGA, ROLANDO LU, MARIBETH
HERNANDEZ, CORAZON AGARAP, PATRICIA ROSARIO,
BERNADETTE LU, ANGELES MANGUL and JOSEFINA
MARTE, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, EASTERN MINDORO
INSTITUTE OF TECHNOLOGY AND SCIENCES (EMITS), AND MR.
MARCIAL S. SEMILLA, respondents.
RESOLUTION
KAPUNAN, J.:
Section 4, rule 65, as amended by Circular No. 39-98, provides that the
60-day period for filing a petition for certiorari shall be interrupted by the
filing of a motion for reconsideration or new trial. In the event of the denial
of the motion, the petitioner only has the remaining period within which to
file the petition. Does the amendment apply to cases where the motion
for reconsideration was filed before the amendment although the petition
was filed after the amendment took effect? This is the question originally
raised by the instant petition.
From the adverse decision of the Labor Arbiter dismissing their complaint
for illegal dismissal, petitioner-employees appealed to the National Labor
Relations Commission. The NLRC modified the decision of the Labor
Arbiter and ordered respondents to reinstate petitioners "but without
backwages." Petitioners received the NLRC decision on 23 July 1998,
and filed a motion for reconsideration on 3 August 1998. (The last day for
filing said motion was on 2 August 1998, a Sunday.)
On September 1, 1998, the amendment to Section 4, Rule 65 took effect
per Circular No. 39-98. The amendment added another paragraph to said
Section, and reads:
If the petitioner had filed a motion for new trial or reconsideration in due
time after notice of said judgment, order, or resolution the period herein
fixed shall be interrupted. If the motion is denied, the aggrieved party may
file the petition within the remaining period, but which shall not be less
than five (5) days in any event, reckoned from notice of such denial. No
extension of time to file the petition shall be granted except for the most
compelling reason and in no case to exceed fifteen (15) days.
Previous to the amendment, Section 4, Rule 65 provided in the lone
paragraph that "(t)he petition may be filed not later than sixty (60) days
from notice of the judgment, order or resolution sought to be assailed in
the Supreme Court."
On 19 October 1998, petitioners received a copy of the NLRC Resolution
denying their motion for reconsideration. Petitioners filed a petition
for certiorari in this Court on 17 December 1998. The Court referred the
case to the Court of Appeals pursuant to the ruling in St. Martin Funeral
Homes vs. NLRC. 1
Acting on the petition, the court of appeals denied the same for late filing.
Apparently, the CA applied Section 4, Rule 65, as amended by Circular
No. 39-98, in computing the period for the filing of the petition
for certiorari. It held:
The reglementary period to file petition for certiorari is sixty (60) days
from notice of the accrual of the cause for certiorari (Sec. 4, Rule 65,
1997 Rules of Civil Procedure).
Petitioner's last day to file their petition for certiorari is December 8, 1998.
The petition was filed before the Honorable Supreme Court on December
17, 1998. Consequently, this court hereby RESOLVES TO DISMISS the
petition for having been filed beyond the reglementary period. 2
Their motion for reconsideration having been denied by the CA,
petitioners filed the present petition for review.
There is no question that the amendments brought about by Circular No.
39-98, which took effect on September 1, 1998, were already in force,
and therefore applicable when petitioners filed their petition. Statutes
regulating the procedure of the courts are applicable to actions pending
and undetermined at the time of their passage. Procedural laws are
retroactive in that sense. No vested rights attach to procedural
3 
laws. Consequently, the CA, in accordance with Circular No. 39-98,
4 
correctly deducted the 16 days (the fifteenth day was a Sunday) it took
for petitioners to file their motion for reconsideration from the 60-day
reglementary period. As petitioners only had the remaining period of 44
days from 19 October 1998, when it received a copy of the resolution
denying reconsideration, to file the petition for certiorari, or until 8
December 1998, the filing of the petition on 17 December 1998 was nine
(9) days too late.
Petitioners, however, claim exception to the retroactive application of
Circular No. 39-98 since it would work injustice to them. We do not deem
5 
it necessary to rule on this contention in view of further amendments to
Section 4, Rule 65.
The Court has observed that Circular No. 39-98 has generated
tremendous confusion resulting in the dismissal of numerous cases for
late filing. This may have been because, historically, i.e., even before the
1997 revision to the Rules of Civil Procedure, a party had a fresh period
from receipt of the order denying the motion for reconsideration to file a
petition for certiorari. Were it not for the amendments brought about by
Circular No. 39-98, the cases so dismissed would have been resolved on
the merits. Hence, the Court deemed it wise to revert to the old rule
allowing a party a fresh 60-day period from notice of the denial of the
motion for reconsideration to file a petition for certiorari. Earlier this year,
the Court resolved, in A.M. No. 00-2-03-SC, to further amend Section 4,
Rule 65 to read as follows:
Sec. 4. When and were petition filed. - The petition shall be filed not later
than sixty (60) days from notice of the judgment, order or resolution. In
case a motion for reconsideration or new trial is timely filed, whether such
motion is required or not, the sixty (60) day period shall be counted from
notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts
or omissions of a lower court or of a corporation, board, officer or person,
in the Regional Trial Court exercising jurisdiction over the territorial area
as defined by the Supreme Court. It may also be filed in the Court of
Appeals whether or not the same is in aid of its appellate jurisdiction, or in
the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves
the acts or omissions of a quasi-judicial agency, unless otherwise
provided by law or these rules, the petition shall be filed in and
cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for
compelling reason and in no case exceeding fifteen (15)
days.  [Underscoring supplied.]
1âwphi1
The latest amendments took effect on September 1, 2000, following its
publication in the Manila Bulletin on august 4, 2000 and in the Philippine
Daily Inquirer on August 7, 2000, two newspapers of general circulation.
In view of its purpose, the Resolution further amending Section 4, Rule
65 can only be described as curative in nature, and the principles
governing curative statutes are applicable.
Curative statutes are enacted to cure defects in a prior law or to validate
legal proceedings which would otherwise be void for want of conformity
with certain legal requirements. They are intended to supply defects,
6 
abridge superfluities and curb certain evils. They are intended to enable
persons to carry into effect that which they have designed or intended,
but has failed of expected legal consequence by reason of some
statutory disability or irregularity in their own action. They make valid that
which, before the enactment of the statute was invalid. Their purpose is
to give validity to acts done that would have been invalid under existing
laws, as if existing laws have been complied with. Curative statutes,
7 
therefore, by their very essence, are retroactive. 8
Accordingly, while the Resolution states that the same "shall take effect
on September 1, 2000, following its publication in two (2) newspapers of
general circulation," its retroactive application cannot be denied. In short,
the filing of the petition for certiorari in this Court on 17 December 1998 is
deemed to be timely, the same having been made within the 60-day
period provided under the curative Resolution. We reach this conclusion
bearing in mind that the substantive aspects of this case involves the
rights and benefits, even the livelihood, of petitioner-employees.
As regards the contention of respondents that the case ought to be
dismissed, considering that only three of the fifteen petitioners verified the
petition for certiorari originally filed in this Court, the same is best
resolved by the Court of Appeals, where the records of the case remain.
IN VIEW OF THE FOREGOING, the Court Resolved to GIVE DUE
COURSE to, and GRANT, the petition. The case is hereby REMANDED
to the Court of Appeals for further proceedings.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ.,
concur.
 Republic of the Philippines
SUPREME COURT
Baguio
FIRST DIVISION
G.R. No. 167057               April 11, 2012
NERWIN INDUSTRIES CORPORATION, Petitioner,
vs.
PNOC-ENERGY DEVELOPMENT CORPORATION, and ESTER R.
GUERZON, Chairman, Bids and Awards Committee, Respondents.
DECISION
BERSAMIN, J.:
Republic Act No. 8975 expressly prohibits any court, except the Supreme
1 
Court, from issuing any temporary restraining order (TRO), preliminary
injunction, or preliminary mandatory injunction to restrain, prohibit or
compel the Government, or any of its subdivisions or officials, or any
person or entity, whether public or private, acting under the Government’s
direction, from: (a) acquiring, clearing, and developing the right-of-way,
site or location of any National Government project; (b) bidding or
awarding of a contract or project of the National Government; (c)
commencing, prosecuting, executing, implementing, or operating any
such contract or project; (d) terminating or rescinding any such contract
or project; and (e) undertaking or authorizing any other lawful activity
necessary for such contract or project.
Accordingly, a Regional Trial Court (RTC) that ignores the statutory
prohibition and issues a TRO or a writ of preliminary injunction or
preliminary mandatory injunction against a government contract or project
acts contrary to law.
Antecedents
The following antecedents are culled from the assailed decision of the
Court of Appeals (CA) promulgated on October 22, 2004, viz:2 
In 1999, the National Electrification Administration ("NEA") published an
invitation to pre-qualify and to bid for a contract, otherwise known as IPB
No. 80, for the supply and delivery of about sixty thousand (60,000)
pieces of woodpoles and twenty thousand (20,000) pieces of crossarms
needed in the country’s Rural Electrification Project. The said contract
consisted of four (4) components, namely: PIA, PIB and PIC or
woodpoles and P3 or crossarms, necessary for NEA’s projected
allocation for Luzon, Visayas and Mindanao. In response to the said
invitation, bidders, such as private respondent [Nerwin], were required to
submit their application for eligibility together with their technical
proposals. At the same time, they were informed that only those who
would pass the standard pre-qualification would be invited to submit their
financial bids.
Following a thorough review of the bidders’ qualifications and eligibility,
only four (4) bidders, including private respondent [Nerwin], qualified to
participate in the bidding for the IPB-80 contract. Thereafter, the qualified
bidders submitted their financial bids where private respondent [Nerwin]
emerged as the lowest bidder for all schedules/components of the
contract. NEA then conducted a pre-award inspection of private
respondent’s [Nerwin’s] manufacturing plants and facilities, including its
identified supplier in Malaysia, to determine its capability to supply and
deliver NEA’s requirements.
In the Recommendation of Award for Schedules PIA, PIB, PIC and P3 -
IBP No. 80 [for the] Supply and Delivery of Woodpoles and Crossarms
dated October 4, 2000, NEA administrator Conrado M. Estrella III
recommended to NEA’s Board of Directors the approval of award to
private respondent [Nerwin] of all schedules for IBP No. 80 on account of
the following:
a. Nerwin is the lowest complying and responsive bidder;
b. The price difference for the four (4) schedules between the bid
of Nerwin Industries (lowest responsive and complying bidder)
and the second lowest bidder in the amount of $1.47 million for
the poles and $0.475 million for the crossarms, is deemed
substantial and extremely advantageous to the government. The
price difference is equivalent to 7,948 pcs. of poles and 20.967
pcs. of crossarms;
c. The price difference for the three (3) schedules between the
bids of Nerwin and the Tri-State Pole and Piling, Inc.
approximately in the amount of $2.36 million for the poles and
$0.475 million for the crossarms are equivalent to additional
12.872 pcs. of poles and 20.967 pcs. of crossarms; and
 d. The bidder and manufacturer are capable of supplying the
woodpoles and specified in the bid documents and as based on
the pre-award inspection conducted.
However, on December 19, 2000, NEA’s Board of Directors passed
Resolution No. 32 reducing by 50% the material requirements for IBP No.
80 "given the time limitations for the delivery of the materials, xxx, and
with the loan closing date of October 2001 fast approaching". In turn, it
resolved to award the four (4) schedules of IBP No. 80 at a reduced
number to private respondent [Nerwin]. Private respondent [Nerwin]
protested the said 50% reduction, alleging that the same was a ploy to
accommodate a losing bidder.
On the other hand, the losing bidders Tri State and Pacific Synnergy
appeared to have filed a complaint, citing alleged false or falsified
documents submitted during the pre-qualification stage which led to the
award of the IBP-80 project to private respondent [Nerwin].
Thus, finding a way to nullify the result of the previous bidding, NEA
officials sought the opinion of the Government Corporate Counsel who,
among others, upheld the eligibility and qualification of private respondent
[Nerwin]. Dissatisfied, the said officials attempted to seek a revision of the
earlier opinion but the Government Corporate Counsel declared anew
that there was no legal impediment to prevent the award of IPB-80
contract to private respondent [Nerwin]. Notwithstanding, NEA allegedly
held negotiations with other bidders relative to the IPB-80 contract,
prompting private respondent [Nerwin] to file a complaint for specific
performance with prayer for the issuance of an injunction, which
injunctive application was granted by Branch 36 of RTC-Manila in Civil
Case No. 01102000.
In the interim, PNOC-Energy Development Corporation purporting to be
under the Department of Energy, issued Requisition No. FGJ 30904R1 or
an invitation to pre-qualify and to bid for wooden poles needed for its
Samar Rural Electrification Project ("O-ILAW project").
Upon learning of the issuance of Requisition No. FGJ 30904R1 for the O-
ILAW Project, Nerwin filed a civil action in the RTC in Manila, docketed
as Civil Case No. 03106921 entitled Nerwin Industries Corporation v.
PNOC-Energy Development Corporation and Ester R. Guerzon, as
Chairman, Bids and Awards Committee, alleging that Requisition No.
FGJ 30904R1 was an attempt to subject a portion of the items covered
by IPB No. 80 to another bidding; and praying that a TRO issue to enjoin
respondents’ proposed bidding for the wooden poles.
Respondents sought the dismissal of Civil Case No. 03106921, stating
that the complaint averred no cause of action, violated the rule that
government infrastructure projects were not to be subjected to TROs,
contravened the mandatory prohibition against non-forum shopping, and
the corporate president had no authority to sign and file the complaint. 3
On June 27, 2003, after Nerwin had filed its rejoinder to respondents’
reply, the RTC granted a TRO in Civil Case No. 03106921. 4
On July 30, 2003, the RTC issued an order, as follows:
5 
WHEREFORE, for the foregoing considerations, an order is hereby
issued by this Court:
1. DENYING the motion to consolidate;
2. DENYING the urgent motion for reconsideration;
3. DISQUALIFYING Attys. Michael A. Medado, Datu Omar S.
Sinsuat and Mariano H. Paps from appearing as counsel for the
defendants;
4. DECLARING defendants in default;
5. GRANTING the motion for issuance of writ of preliminary
injunction.
Accordingly, let a writ of preliminary injunction issue enjoining the
defendant PNOC-EDC and its Chairman of Bids and Awards Committee
Esther R. Guerzon from continuing the holding of the subject bidding
upon the plaintiffs filing of a bond in the amount of ₱200,000.00 to
answer for any damage or damages which the defendants may suffer
should it be finally adjudged that petitioner is not entitled thereto, until
final determination of the issue in this case by this Court.
This order shall become effective only upon the posting of a bond by the
plaintiffs in the amount of ₱200,000.00.
Let a copy of this order be immediately served on the defendants and
strict compliance herein is enjoined. Furnish the Office of the Government
Corporate Counsel copy of this order.
SO ORDERED.
Respondents moved for the reconsideration of the order of July 30, 2003,
and also to set aside the order of default and to admit their answer to the
complaint.
On January 13, 2004, the RTC denied respondents’ motions for
reconsideration, to set aside order of default, and to admit answer. 6 considering that it is also one for damages.
Thence, respondents commenced in the Court of Appeals (CA) a special
civil action for certiorari (CA-GR SP No. 83144), alleging that the RTC
had thereby committed grave abuse of discretion amounting to lack or
excess of jurisdiction in holding that Nerwin had been entitled to the
issuance of the writ of preliminary injunction despite the express
prohibition from the law and from the Supreme Court; in issuing the TRO
in blatant violation of the Rules of Court and established jurisprudence; in
declaring respondents in default; and in disqualifying respondents’
counsel from representing them. 7
On October 22, 2004, the CA promulgated its decision, to wit:
8 
WHEREFORE, the petition is GRANTED. The assailed Orders dated July
30 and December 29, 2003 are hereby ANNULED and SET ASIDE.
Accordingly, Civil Case No. 03106921, private respondent’s complaint for
issuance of temporary restraining order/writ of preliminary injunction
before Branch 37 of the Regional Trial Court of Manila, is DISMISSED for
lack of merit.
SO ORDERED.
Nerwin filed a motion for reconsideration, but the CA denied the motion
on February 9, 2005. 9
Issues
Hence, Nerwin appeals, raising the following issues:
I. Whether or not the CA erred in dismissing the case on the basis
of Rep. Act 8975 prohibiting the issuance of temporary restraining
orders and preliminary injunctions, except if issued by the
Supreme Court, on government projects.
II. Whether or not the CA erred in ordering the dismissal of the
entire case on the basis of Rep. Act 8975 which prohibits the
issuance only of a preliminary injunction but not injunction as a
final remedy.
III. Whether or not the CA erred in dismissing the case
Ruling
The petition fails.
In its decision of October 22, 2004, the CA explained why it annulled and
set aside the assailed orders of the RTC issued on July 20, 2003 and
December 29, 2003, and why it altogether dismissed Civil Case No.
03106921, as follows:
It is beyond dispute that the crux of the instant case is the propriety of
respondent Judge’s issuance of a preliminary injunction, or the earlier
TRO, for that matter.
Respondent Judge gravely abused his discretion in entertaining an
application for TRO/preliminary injunction, and worse, in issuing a
preliminary injunction through the assailed order enjoining petitioners’
sought bidding for its O-ILAW Project. The same is a palpable violation of
RA 8975 which was approved on November 7, 2000, thus, already
existing at the time respondent Judge issued the assailed Orders dated
July 20 and December 29, 2003.
Section 3 of RA 8975 states in no uncertain terms, thus:
Prohibition on the Issuance of temporary Restraining Order, Preliminary
Injunctions and Preliminary Mandatory Injunctions. – No court, except the
Supreme Court, shall issue any temporary restraining order, preliminary
injunction or preliminary mandatory injunction against the government, or
any of its subdivisions, officials, or any person or entity, whether public or
private, acting under the government’s direction, to restrain, prohibit or
compel the following acts:
 xxx
(b) Bidding or awarding of contract/project of the national
government as defined under Section 2 hereof;
xxx
This prohibition shall apply in all cases, disputes or controversies
instituted by a private party, including but not limited to cases filed by
bidders or those claiming to have rights through such bidders involving
such contract/project. This prohibition shall not apply when the matter is
of extreme urgency involving a constitutional issue, such that unless a
temporary restraining order is issued, grave injustice and irreparable
injury will arise. xxx
The said proscription is not entirely new. RA 8975 merely supersedes PD
1818 which earlier underscored the prohibition to courts from issuing
restraining orders or preliminary injunctions in cases involving
infrastructure or National Resources Development projects of, and public
utilities operated by, the government. This law was, in fact, earlier upheld
to have such a mandatory nature by the Supreme Court in an
administrative case against a Judge.
Moreover, to bolster the significance of the said prohibition, the Supreme
Court had the same embodied in its Administrative Circular No. 11-2000
which reiterates the ban on issuance of TRO or writs of Preliminary
Prohibitory or Mandatory Injunction in cases involving Government
Infrastructure Projects. Pertinent is the ruling in National Housing
Authority vs. Allarde "As regards the definition of infrastructure projects,
the Court stressed in Republic of the Phil. vs. Salvador Silverio and Big
Bertha Construction: The term ‘infrastructure projects’ means
‘construction, improvement and rehabilitation of roads, and bridges,
railways, airports, seaports, communication facilities, irrigation, flood
control and drainage, water supply and sewerage systems, shore
protection, power facilities, national buildings, school buildings, hospital
buildings and other related construction projects that form part of the
government capital investment."
Thus, there is nothing from the law or jurisprudence, or even from the
facts of the case, that would justify respondent Judge’s blatant disregard
of a "simple, comprehensible and unequivocal mandate (of PD 1818)
prohibiting the issuance of injunctive writs relative to government
infrastructure projects." Respondent Judge did not even endeavor,
although expectedly, to show that the instant case falls under the single
exception where the said proscription may not apply, i.e., when the
matter is of extreme urgency involving a constitutional issue, such that
unless a temporary restraining order is issued, grave injustice and
irreparable injury will arise.
Respondent Judge could not have legally declared petitioner in default
because, in the first place, he should not have given due course to
private respondent’s complaint for injunction. Indubitably, the assailed
orders were issued with grave abuse of discretion amounting to lack or
excess of jurisdiction.
Perforce, this Court no longer sees the need to resolve the other grounds
proffered by petitioners.
10
The CA’s decision was absolutely correct. The RTC gravely abused its
discretion, firstly, when it entertained the complaint of Nerwin against
respondents notwithstanding that Nerwin was thereby contravening the
express provisions of Section 3 and Section 4 of Republic Act No. 8975
for its seeking to enjoin the bidding out by respondents of the O-ILAW
Project; and, secondly, when it issued the TRO and the writ of preliminary
prohibitory injunction.
Section 3 and Section 4 of Republic Act No. 8975 provide:
Section 3. Prohibition on the Issuance of Temporary Restraining Orders,
Preliminary Injunctions and Preliminary Mandatory Injunctions. – No
court, except the Supreme Court, shall issue any temporary restraining
order, preliminary injunction or preliminary mandatory injunction against
the government, or any of its subdivisions, officials or any person or
entity, whether public or private, acting under the government’s direction,
to restrain, prohibit or compel the following acts:
(a) Acquisition, clearance and development of the right-of-way
and/or site or location of any national government project;
(b) Bidding or awarding of contract/project of the national
government as defined under Section 2 hereof;
(c) Commencement, prosecution, execution, implementation,
operation of any such contract or project;
(d) Termination or rescission of any such contract/project; and
 (e) The undertaking or authorization of any other lawful activity
necessary for such contract/project.
This prohibition shall apply in all cases, disputes or controversies
instituted by a private party, including but not limited to cases filed by
bidders or those claiming to have rights through such bidders involving
such contract/project. This prohibition shall not apply when the matter is
of extreme urgency involving a constitutional issue, such that unless a
temporary restraining order is issued, grave injustice and irreparable
injury will arise. The applicant shall file a bond, in an amount to be fixed
by the court, which bond shall accrue in favor of the government if the
court should finally decide that the applicant was not entitled to the relief
sought.
If after due hearing the court finds that the award of the contract is null
and void, the court may, if appropriate under the circumstances, award
the contract to the qualified and winning bidder or order a rebidding of the
same, without prejudice to any liability that the guilty party may incur
under existing laws.
Section 4. Nullity of Writs and Orders. - Any temporary restraining order,
preliminary injunction or preliminary mandatory injunction issued in
violation of Section 3 hereof is void and of no force and effect.
The text and tenor of the provisions being clear and unambiguous,
nothing was left for the RTC to do except to enforce them and to exact
upon Nerwin obedience to them. The RTC could not have been unaware
of the prohibition under Republic Act No. 8975 considering that the Court
had itself instructed all judges and justices of the lower courts, through
Administrative Circular No. 11-2000, to comply with and respect the
prohibition against the issuance of TROs or writs of preliminary
prohibitory or mandatory injunction involving contracts and projects of the
Government.
It is of great relevance to mention at this juncture that Judge Vicente A.
Hidalgo, the Presiding Judge of Branch 37 of the RTC, the branch to
which Civil Case No. 03106921 had been raffled, was in fact already
found administratively liable for gross misconduct and gross ignorance of
the law as the result of his issuance of the assailed TRO and writ of
preliminary prohibitory injunction. The Court could only fine him in the
amount of ₱40,000.00 last August 6, 2008 in view of his intervening
retirement from the service. That sanction was meted on him in A.M. No.
RTJ-08-2133 entitled Sinsuat v. Hidalgo, where this Court stated:
11 
The Court finds that, indeed, respondent is liable for gross misconduct.
As the CA explained in its above-stated Decision in the petition for
certiorari, respondent failed to heed the mandatory ban imposed by P.D.
No. 1818 and R.A. No. 8975 against a government infrastructure project,
which the rural electrification project certainly was. He thereby likewise
obstinately disregarded this Court’s various circulars enjoining courts
from issuing TROs and injunctions against government infrastructure
projects in line with the proscription under R.A. No.
8975. Apropos are Gov. Garcia v. Hon. Burgos and National Housing
Authority v. Hon. Allarde wherein this Court stressed that P.D. No. 1818
expressly deprives courts of jurisdiction to issue injunctive writs against
the implementation or execution of a government infrastructure project.
Reiterating the prohibitory mandate of P.D. No. 1818, the Court in Atty.
Caguioa v. Judge Laviña faulted a judge for grave misconduct for issuing
a TRO against a government infrastructure project thus:
xxx It appears that respondent is either feigning a misunderstanding of
the law or openly manifesting a contumacious indifference thereto. In any
case, his disregard of the clear mandate of PD 1818, as well as of the
Supreme Court Circulars enjoining strict compliance therewith,
constitutes grave misconduct and conduct prejudicial to the proper
administration of justice. His claim that the said statute is inapplicable to
his January 21, 1997 Order extending the dubious TRO is but a contrived
subterfuge to evade administrative liability.
In resolving matters in litigation, judges should endeavor
assiduously to ascertain the facts and the applicable laws.
Moreover, they should exhibit more than just a cursory
acquaintance with statutes and procedural rules. Also, they are
expected to keep abreast of and be conversant with the rules and
the circulars which the Supreme Court has adopted and which
affect the disposition of cases before them.
Although judges have in their favor the presumption of regularity and
good faith in the performance of their judicial functions, a blatant
disregard of the clear and unmistakable terms of the law obviates
this presumption and renders them susceptible to administrative
sanctions. (Emphasis and underscoring supplied)
The pronouncements in Caguioa apply as well to respondent.
The questioned acts of respondent also constitute gross ignorance of the
law for being patently in disregard of simple, elementary and well-known
rules which judges are expected to know and apply properly.
IN FINE, respondent is guilty of gross misconduct and gross
ignorance of the law, which are serious charges under Section 8 of Rule
140 of the Rules of Court. He having retired from the service, a fine in the
amount of ₱40,000 is imposed upon him, the maximum amount fixed
under Section 11 of Rule 140 as an alternative sanction to dismissal or
suspension. 12
Even as the foregoing outcome has rendered any further treatment and
discussion of Nerwin’s other submissions superfluous and unnecessary,
the Court notes that the RTC did not properly appreciate the real nature
and true purpose of the injunctive remedy. This failing of the RTC
presses the Court to use this decision to reiterate the norms and
parameters long standing jurisprudence has set to control the issuance of
TROs and writs of injunction, and to now insist on conformity to them by
all litigants and lower courts. Only thereby may the grave misconduct
committed in Civil Case No. 03106921 be avoided. 1âwphi1
A preliminary injunction is an order granted at any stage of an action or
proceeding prior to the judgment or final order, requiring a party or a
court, agency or person, to refrain from a particular act or acts. It is an
13  demanded, however, for, as the Court has held in Saulog v. Court of
ancillary or preventive remedy resorted to by a litigant to protect or
preserve his rights or interests during the pendency of the case. As such,
it is issued only when it is established that:
(a) 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; or
(b) The commission, continuance or non-performance of the act
or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) 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.14
The existence of a right to be protected by the injunctive relief is
indispensable. In City Government of Butuan v. Consolidated
Broadcasting System (CBS), Inc., the Court elaborated on this
15 
requirement, viz:
As with all equitable remedies, injunction must be issued only at the
instance of a party who possesses sufficient interest in or title to the right
or the property sought to be protected. It is proper only when the
applicant appears to be entitled to the relief demanded in the complaint,
which must aver the existence of the right and the violation of the right, or
whose averments must in the minimum constitute a prima facie showing
of a right to the final relief sought. Accordingly, the conditions for the
issuance of the injunctive writ are: (a) that the right to be protected exists
prima facie; (b) that the act sought to be enjoined is violative of that right;
and (c) that there is an urgent and paramount necessity for the writ to
prevent serious damage. An injunction will not issue to protect a right not
in esse, or a right which is merely contingent and may never arise; or to
restrain an act which does not give rise to a cause of action; or to prevent
the perpetration of an act prohibited by statute. Indeed, a right, to be
protected by injunction, means a right clearly founded on or granted by
law or is enforceable as a matter of law. 16
Conclusive proof of the existence of the right to be protected is not
Appeals, it is enough that:
17 
xxx for the court to act, there must be an existing basis of facts
affording a present right which is directly threatened by an act
sought to be enjoined. And while a clear showing of the right
claimed is necessary, its existence need not be conclusively
established. In fact, the evidence to be submitted to justify preliminary
injunction at the hearing thereon need not be conclusive or complete but
need only be a "sampling" intended merely to give the court an idea of
the justification for the preliminary injunction pending the decision of the
case on the merits. This should really be so since our concern here
involves only the propriety of the preliminary injunction and not the
merits of the case still pending with the trial court.
Thus, to be entitled to the writ of preliminary injunction, the private
respondent needs only to show that it has the ostensible right to the
final relief prayed for in its complaint xxx. 18
In this regard, the Rules of Court grants a broad latitude to the trial courts RENATO C. CORONA
considering that conflicting claims in an application for a provisional writ Chief Justice
more often than not involve and require a factual determination that is not Chairperson
the function of the appellate courts. Nonetheless, the exercise of such
19 

discretion must be sound, that is, the issuance of the writ, though TERESITA J. LEONARDO-DE
discretionary, should be upon the grounds and in the manner provided by ARTURO D. BRION*
CASTRO
law. When that is done, the exercise of sound discretion by the issuing Associate Justice
Associate Justice
20 

court in injunctive matters must not be interfered with except when there
is manifest abuse. 21
MARTIN S. VILLARAMA, JR.
Associate Justice
Moreover, judges dealing with applications for the injunctive relief ought
to be wary of improvidently or unwarrantedly issuing TROs or writs of
CERTIFICATION
injunction that tend to dispose of the merits without or before trial.
Granting an application for the relief in disregard of that tendency is
judicially impermissible, for it is never the function of a TRO or
22 
Pursuant to Section 13, Article VIII of the Constitution, I certify that the
preliminary injunction to determine the merits of a case, or to decide
23 
conclusions in the above Decision had been reached in consultation
controverted facts. It is but a preventive remedy whose only mission is to
24 
before the case was assigned to the writer of the opinion of the Court’s
prevent threatened wrong, further injury, and irreparable harm or
25  26  27 
Division.
injustice until the rights of the parties can be settled. Judges should thus
28 

look at such relief only as a means to protect the ability of their courts to RENATO C. CORONA
render a meaningful decision. Foremost in their minds should be to
29  Chief Justice
guard against a change of circumstances that will hamper or prevent the
granting of proper reliefs after a trial on the merits. It is well worth
30 

remembering that the writ of preliminary injunction should issue only to

prevent the threatened continuous and irremediable injury to the
applicant before the claim can be justly and thoroughly studied and
adjudicated. 31

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals;

and ORDERS petitioner to pay the costs of suit.

The Court Administrator shall disseminate this decision to the lower

courts for their guidance.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:
 FIRST DIVISION
G.R. No. 137873       April 20, 2001
D. M. CONSUNJI, INC., petitioner,
vs.
COURT OF APPEALS and MARIA J. JUEGO, respondents.
KAPUNAN, J.:
At around 1:30 p.m., November 2, 1990, Jose Juego, a construction
worker of D. M. Consunji, Inc., fell 14 floors from the Renaissance Tower,
Pasig City to his death.
PO3 Rogelio Villanueva of the Eastern Police District investigated the
tragedy and filed a report dated November 25, 1990, stating that:
x x x. [The] [v]ictim was rushed to [the] Rizal Medical Center in
Pasig, Metro Manila where he was pronounced dead on arrival
(DOA) by the attending physician, Dr. Errol de Yzo[,] at around
2:15 p.m. of the same date.
Investigation disclosed that at the given time, date and place,
while victim Jose A. Juego together with Jessie Jaluag and Delso
Destajo [were] performing their work as carpenter[s] at the
elevator core of the 14th floor of the Tower D, Renaissance Tower
Building on board a [p]latform made of channel beam (steel)
measuring 4.8 meters by 2 meters wide with pinulid plywood
flooring and cable wires attached to its four corners and hooked
at the 5 ton chain block, when suddenly, the bolt or pin which was
merely inserted to connect the chain block with the [p]latform, got
loose xxx causing the whole [p]latform assembly and the victim to
fall down to the basement of the elevator core, Tower D of the
building under construction thereby crushing the victim of death,
save his two (2) companions who luckily jumped out for safety.
It is thus manifest that Jose A. Juego was crushed to death when
the [p]latform he was then on board and performing work, fell.
And the falling of the [p]latform was due to the removal or getting
loose of the pin which was merely inserted to the connecting
points of the chain block and [p]latform but without a safety lock.1
On May 9, 1991, Jose Juego’s widow, Maria, filed in the Regional Trial
Court (RTC) of Pasig a complaint for damages against the deceased’s
employer, D.M. Consunji, Inc. The employer raised, among other
defenses, the widow’s prior availment of the benefits from the State
Insurance Fund.
After trial, the RTC rendered a decision in favor of the widow Maria
Juego. The dispositive portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered ordering defendant
to pay plaintiff, as follows:
1. P50,000.00 for the death of Jose A. Juego.
2. P10,000.00 as actual and compensatory damages.
3. P464,000.00 for the loss of Jose A. Juego’s earning
capacity.
4. P100,000.00 as moral damages.
5. P20,000.00 as attorney’s fees, plus the costs of suit.
SO ORDERED. 2
On appeal by D. M. Consunji, the Court of Appeals (CA) affirmed the
decision of the RTC in toto.
D. M. Consunji now seeks the reversal of the CA decision on the
following grounds:
 THE APPELLATE COURT ERRED IN HOLDING THAT
THE POLICE REPORT WAS ADMISSIBLE EVIDENCE
OF THE ALLEGED NEGLIGENCE OF PETITIONER.
 THE APPELLATE COURT ERRED IN HOLDING THAT
THE DOCTRINE OF RES IPSA LOQUITOR [sic] IS
APPLICABLE TO PROVE NEGLIGENCE ON THE PART
OF PETITIONER.
  THE APPELLATE COURT ERRED IN HOLDING THAT
PETITIONER IS PRESUMED NEGLIGENT UNDER
ARTICLE 2180 OF THE CIVIL CODE, AND
 THE APPELLATE COURT ERRED IN HOLDING THAT
RESPONDENT IS NOT PRECLUDED FROM
RECOVERING DAMAGES UNDER THE CIVIL CODE.
Petitioner maintains that the police report reproduced above is hearsay
and, therefore, inadmissible. The CA ruled otherwise. It held that said
report, being an entry in official records, is an exception to the hearsay
rule.
The Rules of Court provide that a witness can testify only to those facts
which he knows of his personal knowledge, that is, which are derived
from his perception. A witness, therefore, may not testify as what he
4 
merely learned from others either because he was told or read or heard
the same. Such testimony is considered hearsay and may not be
received as proof of the truth of what he has learned. 5 This is known as
the hearsay rule.
Hearsay is not limited to oral testimony or statements; the general rule
that excludes hearsay as evidence applies to written, as well as oral
statements.6
The theory of the hearsay rule is that the many possible deficiencies,
suppressions, sources of error and untrustworthiness, which lie
underneath the bare untested assertion of a witness, may be best
brought to light and exposed by the test of cross-examiantion. 7 The
hearsay rule, therefore, excludes evidence that cannot be tested by
cross-examination.8
The Rules of Court allow several exceptions to the rule, 9 among which
are entries in official records. Section 44, Rule 130 provides:
Entries in official records made in the performance of his duty
made in the performance of his duty by a public officer of the
Philippines, or by a person in the performance of a duty specially
enjoined by law are prima facie evidence of the facts therein
stated.
In Africa, et al. vs. Caltex (Phil.), Inc., et al., this Court, citing the work of
10 
Chief Justice Moran, enumerated the requisites for admissibility under the
above rule:
(a) that the entry was made by a public officer or by another
person specially enjoined by law to do so;
3
(b) that it was made by the public officer in the performance of his
duties, or by such other person in the performance of a duty
specially enjoined by law; and
(c) that the public officer or other person had sufficient knowledge
of the facts by him stated, which must have been acquired by him
personally or through official information.
The CA held that the police report meets all these requisites. Petitioner
contends that the last requisite is not present.
The Court notes that PO3 Villanueva, who signed the report in question,
also testified before the trial court. In Rodriguez vs. Court of
Appeals, which involved a Fire Investigation Report, the officer who
11 
signed the fire report also testified before the trial court. This Court held
that the report was inadmissible for the purpose of proving the truth of the
statements contained in the report but admissible insofar as it constitutes
part of the testimony of the officer who executed the report.
x x x. Since Major Enriquez himself took the witness stand and
was available for cross-examination, the portions of the report
which were of his personal knowledge or which consisted of his
perceptions and conclusions were not hearsay. The rest of the
report, such as the summary of the statements of the parties
based on their sworn statements (which were annexed to the
Report) as well as the latter, having been included in the first
purpose of the offer [as part of the testimony of Major Enriquez],
may then be considered as independently relevant
statements which were gathered in the course of the investigation
and may thus be admitted as such, but not necessarily to prove
the truth thereof. It has been said that:
"Where regardless of the truth or falsity of a statement,
the fact that it has been made is relevant, the hearsay rule
does not apply, but the statement may be shown.
Evidence as to the making of such statement is not
 secondary but primary, for the statement itself may
constitute a fact in issue, or be circumstantially relevant
as to the existence of such a fact."
When Major Enriquez took the witness stand, testified for
petitioners on his Report and made himself available for cross-
examination by the adverse party, the Report, insofar as it proved
that certain utterances were made (but not their truth), was
effectively removed from the ambit of the aforementioned Section
44 of Rule 130. Properly understood, this section does away with
the testimony in open court of the officer who made the official
record, considers the matter as an exception to the hearsay rule
and makes the entries in said official record admissible in
evidence as prima facie evidence of the facts therein stated. The
underlying reasons for this exceptionary rule are necessity and
trustworthiness, as explained in Antillon v. Barcelon.
The litigation is unlimited in which testimony by officials is
daily needed; the occasions in which the officials would
be summoned from his ordinary duties to declare as a
witness are numberless. The public officers are few in
whose daily work something is not done in which
testimony is not needed from official sources. Were there
no exception for official statements, hosts of officials
would be found devoting the greater part of their time to
attending as witnesses in court or delivering deposition
before an officer. The work of administration of
government and the interest of the public having business
with officials would alike suffer in consequence. For these
reasons, and for many others, a certain verity is accorded
such documents, which is not extended to private
documents. (3 Wigmore on Evidence, Sec. 1631).
The law reposes a particular confidence in public officers
that it presumes they will discharge their several trusts
with accuracy and fidelity; and, therefore, whatever acts
they do in discharge of their duty may be given in
evidence and shall be taken to be true under such a
degree of caution as to the nature and circumstances of
each case may appear to require.
It would have been an entirely different matter if Major Enriquez
was not presented to testify on his report. In that case the
applicability of Section 44 of Rule 143 would have been ripe for
determination, and this Court would have agreed with the Court of
Appeals that said report was inadmissible since the
aforementioned third requisite was not satisfied. The statements
given by the sources of information of Major Enriquez failed to
qualify as "official information," there being no showing that, at
the very least, they were under a duty to give the statements for
record.
Similarly, the police report in this case is inadmissible for the purpose of
proving the truth of the statements contained therein but is admissible
insofar as it constitutes part of the testimony of PO3 Villanueva.
In any case, the Court holds that portions of PO3 Villanueva’s testimony
which were of his personal knowledge suffice to prove that Jose Juego
indeed died as a result of the elevator crash. PO3 Villanueva had seen
Juego’s remains at the morgue, making the latter’s death beyond
12 
dispute. PO3 Villanueva also conducted an ocular inspection of the
premises of the building the day after the incident and saw the platform
13 
for himself. He observed that the platform was crushed and that it was
14  15 
totally damaged. PO3 Villanueva also required Garcia and Fabro to bring
16 
the chain block to the police headquarters. Upon inspection, he noticed
that the chain was detached from the lifting machine, without any pin or
bolt.17
What petitioner takes particular exception to is PO3 Villanueva’s
testimony that the cause of the fall of the platform was the loosening of
the bolt from the chain block. It is claimed that such portion of the
testimony is mere opinion. Subject to certain exceptions, the opinion of a
18 
witness is generally not admissible. 19
Petitioner’s contention, however, loses relevance in the face of the
application of res ipsa loquitur by the CA. The effect of the doctrine is to
warrant a presumption or inference that the mere fall of the elevator was
a result of the person having charge of the instrumentality was negligent.
As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the
law of negligence which recognizes that prima facie negligence may be
established without direct proof and furnishes a substitute for specific
proof of negligence.20
The concept of res ipsa loquitur has been explained in this wise:
While negligence is not ordinarily inferred or presumed, and while
the mere happening of an accident or injury will not generally give
 rise to an inference or presumption that it was due to negligence
on defendant’s part, under the doctrine of res ipsa loquitur, which
means, literally, the thing or transaction speaks for itself, or in one
jurisdiction, that the thing or instrumentality speaks for itself, the
facts or circumstances accompanying an injury may be such as to
raise a presumption, or at least permit an inference of negligence
on the part of the defendant, or some other person who is
charged with negligence.
x x x where it is shown that the thing or instrumentality which
caused the injury complained of was under the control or
management of the defendant, and that the occurrence resulting
in the injury was such as in the ordinary course of things would
not happen if those who had its control or management used
proper care, there is sufficient evidence, or, as sometimes stated,
reasonable evidence, in the absence of explanation by the
defendant, that the injury arose from or was caused by the
defendant’s want of care.21
One of the theoretical based for the doctrine is its necessity, i.e., that
necessary evidence is absent or not available. 22
The res ipsa loquitur doctrine is based in part upon the theory that
the defendant in charge of the instrumentality which causes the
injury either knows the cause of the accident or has the best
opportunity of ascertaining it and that the plaintiff has no such
knowledge, and therefore is compelled to allege negligence in
general terms and to rely upon the proof of the happening of the
accident in order to establish negligence. The inference which the
doctrine permits is grounded upon the fact that the chief evidence
of the true cause, whether culpable or innocent, is practically
accessible to the defendant but inaccessible to the injured
person.
It has been said that the doctrine of res ipsa loquitur furnishes a
bridge by which a plaintiff, without knowledge of the cause,
reaches over to defendant who knows or should know the cause,
for any explanation of care exercised by the defendant in respect
of the matter of which the plaintiff complains. The res ipsa loquitur
doctrine, another court has said, is a rule of necessity, in that it
proceeds on the theory that under the peculiar circumstances in
which the doctrine is applicable, it is within the power of the
defendant to show that there was no negligence on his part, and
direct proof of defendant’s negligence is beyond plaintiff’s power.
Accordingly, some court add to the three prerequisites for the
application of the res ipsa loquitur doctrine the further
requirement that for the res ipsa loquitur doctrine to apply, it must
appear that the injured party had no knowledge or means of
knowledge as to the cause of the accident, or that the party to be
charged with negligence has superior knowledge or opportunity
for explanation of the accident. 23
The CA held that all the requisites of res ipsa loquitur are present in the
case at bar:
There is no dispute that appellee’s husband fell down from the
14th floor of a building to the basement while he was working with
appellant’s construction project, resulting to his death. The
construction site is within the exclusive control and management
of appellant. It has a safety engineer, a project superintendent, a
carpenter leadman and others who are in complete control of the
situation therein. The circumstances of any accident that would
occur therein are peculiarly within the knowledge of the appellant
or its employees. On the other hand, the appellee is not in a
position to know what caused the accident. Res ipsa loquitur is a
rule of necessity and it applies where evidence is absent or not
readily available, provided the following requisites are present: (1)
the accident was of a kind which does not ordinarily occur unless
someone is negligent; (2) the instrumentality or agency which
caused the injury was under the exclusive control of the person
charged with negligence; and (3) the injury suffered must not
have been due to any voluntary action or contribution on the part
of the person injured. x x x.
No worker is going to fall from the 14th floor of a building to the
basement while performing work in a construction site unless
someone is negligent[;] thus, the first requisite for the application
of the rule of res ipsa loquitur is present. As explained earlier, the
construction site with all its paraphernalia and human resources
that likely caused the injury is under the exclusive control and
management of appellant[;] thus[,] the second requisite is also
present. No contributory negligence was attributed to the
appellee’s deceased husband[;] thus[,] the last requisite is also
present. All the requisites for the application of the rule of res ipsa
loquitur are present, thus a reasonable presumption or inference
of appellant’s negligence arises. x x x.24
Petitioner does not dispute the existence of the requisites for the
application of res ipsa loquitur, but argues that the presumption or
inference that it was negligent did not arise since it "proved that it
exercised due care to avoid the accident which befell respondent’s
husband."
Petitioner apparently misapprehends the procedural effect of the doctrine.
As stated earlier, the defendant’s negligence is presumed or
inferred when the plaintiff establishes the requisites for the application
25 
of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all
the elements, the burden then shifts to defendant to explain. The 26 
presumption or inference may be rebutted or overcome by other evidence
and, under appropriate circumstances disputable presumption, such as
that of due care or innocence, may outweigh the inference. It is not for
27 
the defendant to explain or prove its defense to prevent the presumption
or inference from arising. Evidence by the defendant of say, due care,
comes into play only after the circumstances for the application of the
doctrine has been established. 1âwphi1.nêt
In any case, petitioner cites the sworn statement of its leadman
Ferdinand Fabro executed before the police investigator as evidence of
its due care. According to Fabro’s sworn statement, the company
enacted rules and regulations for the safety and security of its workers.
Moreover, the leadman and the bodegero inspect the chain block before
allowing its use.
It is ironic that petitioner relies on Fabro’s sworn statement as proof of its
due care but, in arguing that private respondent failed to prove
negligence on the part of petitioner’s employees, also assails the same
statement for being hearsay.
Petitioner is correct. Fabro’s sworn statement is hearsay and
inadmissible. Affidavits are inadmissible as evidence under the hearsay
rule, unless the affiant is placed on the witness stand to testify
thereon. The inadmissibility of this sort of evidence is based not only on
28 
the lack of opportunity on the part of the adverse party to cross-examine
the affiant, but also on the commonly known fact that, generally, an
affidavit is not prepared by the affiant himself but by another who uses his
own language in writing the affiant’s statements which may either be
omitted or misunderstood by the one writing them. Petitioner, therefore,
29 
cannot use said statement as proof of its due care any more than private
respondent can use it to prove the cause of her husband’s death.
Regrettably, petitioner does not cite any other evidence to rebut the
inference or presumption of negligence arising from the application of res
ipsa loquitur, or to establish any defense relating to the incident.
Next, petitioner argues that private respondent had previously availed of
the death benefits provided under the Labor Code and is, therefore,
precluded from claiming from the deceased’s employer damages under
the Civil Code.
Article 173 of the Labor Code states:
Article 173. Extent of liability. – Unless otherwise provided, the
liability of the State Insurance Fund under this Title shall be
exclusive and in place of all other liabilities of the employer to the
employee, his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents. The
payment of compensation under this Title shall not bar the
recovery of benefits as provided for in Section 699 of the Revised
Administrative Code, Republic Act Numbered Eleven hundred
sixty-one, as amended, Republic Act Numbered Six hundred ten,
as amended, Republic Act Numbered Forty-eight hundred sixty-
four as amended, and other laws whose benefits are
administered by the System or by other agencies of the
government.
The precursor of Article 173 of the Labor Code, Section 5 of the
Workmen’s Compensation Act, provided that:
Section 5. Exclusive right to compensation. – The rights and
remedies granted by this Act to an employee by reason of a
personal injury entitling him to compensation shall exclude all
other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws because of said
injury x x x.
Whether Section 5 of the Workmen’s Compensation Act allowed recovery
under said Act as well as under the Civil Code used to be the subject of
conflicting decisions. The Court finally settled the matter in Floresca
vs.Philex Mining Corporation, which involved a cave-in resulting in the
30 
death of the employees of the Philex Mining Corporation. Alleging that
the mining corporation, in violation of government rules and regulations,
failed to take the required precautions for the protection of the
employees, the heirs of the deceased employees filed a complaint
against Philex Mining in the Court of First Instance (CFI). Upon motion of
Philex Mining, the CFI dismissed the complaint for lack of jurisdiction.
The heirs sought relief from this Court.
Addressing the issue of whether the heirs had a choice of remedies,
majority of the Court En Banc, following the rule in Pacaña vs. Cebu
31  dated October 19, 1967 only x x x.
Autobus Company, held in the affirmative.
WE now come to the query as to whether or not the injured
employee or his heirs in case of death have a right of selection or
choice of action between availing themselves of the worker’s right
under the Workmen’s Compensation Act and suing in the regular
courts under the Civil Code for higher damages (actual, moral
and exemplary) from the employers by virtue of the negligence or
fault of the employers or whether they may avail themselves
cumulatively of both actions, i.e., collect the limited compensation
under the Workmen’s Compensation Act and sue in addition for
damages in the regular courts.
In disposing of a similar issue, this Court in Pacaña vs. Cebu
Autobus Company, 32 SCRA 442, ruled that an injured worker
has a choice of either to recover from the employer the fixed
amounts set by the Workmen’s Compensation Act or to prosecute
an ordinary civil action against the tortfeasor for higher damages
but he cannot pursue both courses of action simultaneously.
[Underscoring supplied.]
Nevertheless, the Court allowed some of the petitioners in said case to
proceed with their suit under the Civil Code despite having availed of the
benefits provided under the Workmen’s Compensation Act. The Court
reasoned:
With regard to the other petitioners, it was alleged by Philex in its
motion to dismiss dated May 14, 1968 before the court a quo, that
the heirs of the deceased employees, namely Emerito Obra,
Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino
submitted notices and claims for compensation to the Regional
Office No. 1 of the then Department of Labor and all of them have
been paid in full as of August 25, 1967, except Saturnino
Martinez whose heirs decided that they be paid in installments x x
x. Such allegation was admitted by herein petitioners in their
opposition to the motion to dismiss dated may 27, 1968 x x x in
the lower court, but they set up the defense that the claims were
filed under the Workmen’s Compensation Act before they learned
of the official report of the committee created to investigate the
accident which established the criminal negligence and violation
of law by Philex, and which report was forwarded by the Director
of Mines to then Executive Secretary Rafael Salas in a letter
WE hold that although the other petitioners had received the
benefits under the Workmen’s Compensation Act, such my not
preclude them from bringing an action before the regular court
because they became cognizant of the fact that Philex has been
remiss in its contractual obligations with the deceased miners
only after receiving compensation under the Act. Had petitioners
been aware of said violation of government rules and regulations
by Philex, and of its negligence, they would not have sought
redress under the Workmen’s Compensation Commission which
awarded a lesser amount for compensation. The choice of the
first remedy was based on ignorance or a mistake of fact, which
nullifies the choice as it was not an intelligent choice. The case
should therefore be remanded to the lower court for further
proceedings. However, should the petitioners be successful in
their bid before the lower court, the payments made under the
Workmen’s Compensation Act should be deducted from the
damages that may be decreed in their favor. [Underscoring
supplied.]
The ruling in Floresca providing the claimant a choice of remedies was
reiterated in Ysmael Maritime Corporation vs. Avelino, Vda. De Severo
32 
vs. Feliciano-Go, and Marcopper Mining Corp. vs. Abeleda. In the last
33  34 
case, the Court again recognized that a claimant who had been paid
under the Act could still sue under the Civil Code. The Court said:
In the Robles case, it was held that claims for damages sustained
by workers in the course of their employment could be filed only
under the Workmen’s Compensation Law, to the exclusion of all
further claims under other laws. In Floresca, this doctrine was
abrogated in favor of the new rule that the claimants may invoke
either the Workmen’s Compensation Act or the provisions of the
Civil Code, subject to the consequence that the choice of one
remedy will exclude the other and that the acceptance of
compensation under the remedy chosen will preclude a claim for
additional benefits under the other remedy. The exception is
where a claimant who has already been paid under the
Workmen’s Compensation Act may still sue for damages under
 the Civil Code on the basis of supervening facts or developments
occurring after he opted for the first remedy. (Underscoring
supplied.)
Here, the CA held that private respondent’s case came under the
exception because private respondent was unaware of petitioner’s
negligence when she filed her claim for death benefits from the State
Insurance Fund. Private respondent filed the civil complaint for damages
after she received a copy of the police investigation report and the
Prosecutor’s Memorandum dismissing the criminal complaint against
petitioner’s personnel. While stating that there was no negligence
attributable to the respondents in the complaint, the prosecutor
nevertheless noted in the Memorandum that, "if at all," the "case is civil in
nature." The CA thus applied the exception in Floresca:
x x x We do not agree that appellee has knowledge of the alleged
negligence of appellant as early as November 25, 1990, the date
of the police investigator’s report. The appellee merely executed
her sworn statement before the police investigator concerning her
personal circumstances, her relation to the victim, and her
knowledge of the accident. She did not file the complaint for
"Simple Negligence Resulting to Homicide" against appellant’s
employees. It was the investigator who recommended the filing of
said case and his supervisor referred the same to the
prosecutor’s office. This is a standard operating procedure for
police investigators which appellee may not have even known.
This may explain why no complainant is mentioned in the
preliminary statement of the public prosecutor in her
memorandum dated February 6, 1991, to wit: "Respondent
Ferdinand Fabro x x x are being charged by complainant of
"Simple Negligence Resulting to Homicide." It is also possible
that the appellee did not have a chance to appear before the
public prosecutor as can be inferred from the following statement
in said memorandum: "Respondents who were notified pursuant
to Law waived their rights to present controverting evidence," thus
there was no reason for the public prosecutor to summon the
appellee. Hence, notice of appellant’s negligence cannot be
imputed on appellee before she applied for death benefits under
ECC or before she received the first payment therefrom. Her
using the police investigation report to support her complaint filed
on May 9, 1991 may just be an afterthought after receiving a copy
of the February 6, 1991 Memorandum of the Prosecutor’s Office
dismissing the criminal complaint for insufficiency of evidence,
stating therein that: "The death of the victim is not attributable to
any negligence on the part of the respondents. If at all and as
shown by the records this case is civil in nature." (Underscoring
supplied.) Considering the foregoing, We are more inclined to
believe appellee’s allegation that she learned about appellant’s
negligence only after she applied for and received the benefits
under ECC. This is a mistake of fact that will make this case fall
under the exception held in the Floresca ruling. 35
The CA further held that not only was private respondent ignorant of the
facts, but of her rights as well:
x x x. Appellee [Maria Juego] testified that she has reached only
elementary school for her educational attainment; that she did not
know what damages could be recovered from the death of her
husband; and that she did not know that she may also recover
more from the Civil Code than from the ECC. x x x.36
Petitioner impugns the foregoing rulings. It contends that private
respondent "failed to allege in her complaint that her application and
receipt of benefits from the ECC were attended by ignorance or mistake
of fact. Not being an issue submitted during the trial, the trial court had no
authority to hear or adjudicate that issue."
Petitioner also claims that private respondent could not have been
ignorant of the facts because as early as November 28, 1990, private
respondent was the complainant in a criminal complaint for "Simple
Negligence Resulting to Homicide" against petitioner’s employees. On
February 6, 1991, two months before the filing of the action in the lower
court, Prosecutor Lorna Lee issued a resolution finding that, although
there was insufficient evidence against petitioner’s employees, the case
was "civil in nature." These purportedly show that prior to her receipt of
death benefits from the ECC on January 2, 1991 and every month
thereafter, private respondent also knew of the two choices of remedies
available to her and yet she chose to claim and receive the benefits from
the ECC.
When a party having knowledge of the facts makes an election between
inconsistent remedies, the election is final and bars any action, suit, or
proceeding inconsistent with the elected remedy, in the absence of fraud
by the other party. The first act of election acts as a bar. Equitable in
37 
nature, the doctrine of election of remedies is designed to mitigate
possible unfairness to both parties. It rests on the moral premise that it is
fair to hold people responsible for their choices. The purpose of the
doctrine is not to prevent any recourse to any remedy, but to prevent a
double redress for a single wrong.38
The choice of a party between inconsistent remedies results in
a waiver by election. Hence, the rule in Floresca that a claimant cannot
simultaneously pursue recovery under the Labor Code and prosecute an
ordinary course of action under the Civil Code. The claimant, by his
choice of one remedy, is deemed to have waived the other.
Waiver is the intentional relinquishment of a known right.39
[It] is an act of understanding that presupposes that a party has
knowledge of its rights, but chooses not to assert them. It must be
generally shown by the party claiming a waiver that the person
against whom the waiver is asserted had at the time knowledge,
actual or constructive, of the existence of the party’s rights or of
all material facts upon which they depended. Where one lacks
knowledge of a right, there is no basis upon which waiver of it can
rest. Ignorance of a material fact negates waiver, and waiver
cannot be established by a consent given under a mistake or
misapprehension of fact.
A person makes a knowing and intelligent waiver when that
person knows that a right exists and has adequate knowledge
upon which to make an intelligent decision.
Waiver requires a knowledge of the facts basic to the exercise of
the right waived, with an awareness of its consequences. That a
waiver is made knowingly and intelligently must be illustrated on
the record or by the evidence. 40
That lack of knowledge of a fact that nullifies the election of a remedy is
the basis for the exception in Floresca.
It is in light of the foregoing principles that we address petitioner’s
contentions.
Waiver is a defense, and it was not incumbent upon private respondent,
as plaintiff, to allege in her complaint that she had availed of benefits from
the ECC. It is, thus, erroneous for petitioner to burden private respondent
with raising waiver as an issue. On the contrary, it is the defendant who
ought to plead waiver, as petitioner did in pages 2-3 of its
Answer; otherwise, the defense is waived. It is, therefore, perplexing for
41  does not excuse his or her compliance with the laws. The rule
petitioner to now contend that the trial court had no jurisdiction over the
issue when petitioner itself pleaded waiver in the proceedings before the
trial court.
Does the evidence show that private respondent knew of the facts that
led to her husband’s death and the rights pertaining to a choice of
remedies?
It bears stressing that what negates waiver is lack of knowledge or a
mistake of fact. In this case, the "fact" that served as a basis for nullifying
the waiver is the negligence of petitioner’s employees, of which private
respondent purportedly learned only after the prosecutor issued a
resolution stating that there may be civil liability. In Floresca, it was
the negligence of the mining corporation and its violation of government
rules and regulations. Negligence, or violation of government rules and
regulations, for that matter, however, is not a fact, but a conclusion of
law, over which only the courts have the final say. Such a conclusion
binds no one until the courts have decreed so. It appears, therefore, that
the principle that ignorance or mistake of fact nullifies a waiver has been
misapplied in Floresca and in the case at bar.
In any event, there is no proof that private respondent knew that her
husband died in the elevator crash when on November 15, 1990 she
accomplished her application for benefits from the ECC. The police
investigation report is dated November 25, 1990, 10 days after the
accomplishment of the form. Petitioner filed the application in her behalf
on November 27, 1990.
There is also no showing that private respondent knew of the remedies
available to her when the claim before the ECC was filed. On the
contrary, private respondent testified that she was not aware of her rights.
Petitioner, though, argues that under Article 3 of the Civil Code,
ignorance of the law excuses no one from compliance therewith. As
judicial decisions applying or interpreting the laws or the Constitution form
part of the Philippine legal system (Article 8, Civil Code), private
respondent cannot claim ignorance of this Court’s ruling
in Floresca allowing a choice of remedies.
The argument has no merit. The application of Article 3 is limited to
mandatory and prohibitory laws. This may be deduced from the
42 
language of the provision, which, notwithstanding a person’s ignorance,
in Floresca allowing private respondent a choice of remedies is neither
mandatory nor prohibitory. Accordingly, her ignorance thereof cannot be
held against her.

Finally, the Court modifies the affirmance of the award of damages. The
records do not indicate the total amount private respondent ought to
receive from the ECC, although it appears from Exhibit "K" that she
43 

received P3,581.85 as initial payment representing the accrued pension

from November 1990 to March 1991. Her initial monthly pension,
according to the same Exhibit "K," was P596.97 and present total
monthly pension was P716.40. Whether the total amount she will
eventually receive from the ECC is less than the sum of P644,000.00 in
total damages awarded by the trial court is subject to speculation, and the
case is remanded to the trial court for such determination. Should the trial
court find that its award is greater than that of the ECC, payments already
received by private respondent under the Labor Code shall be deducted
from the trial court'’ award of damages. Consistent with our ruling
in Floresca, this adjudication aims to prevent double compensation.

WHEREFORE, the case is REMANDED to the Regional Trial Court of

Pasig City to determine whether the award decreed in its decision is more
than that of the ECC. Should the award decreed by the trial court be
greater than that awarded by the ECC, payments already made to private
respondent pursuant to the Labor Code shall be deducted therefrom. In
all other respects, the Decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

Davide, Jr., Puno, Pardo, and Ynares-Santiago, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
SPECIAL SECOND DIVISION
G.R. No. 151258               December 1, 2014
ARTEMIO VILLAREAL, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
x-----------------------x
G.R. No. 154954
PEOPLE OF THE PHILIPPINES, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS, ANTONIO MARIANO
ALMEDA, DALMACIO LIM, JR., JUNEL ANTHONY AMA, ERNESTO
JOSE MONTECILLO, VINCENT TECSON, ANTONIO GENERAL,
SANTIAGO RANADA III, NELSON VICTORINO, JAIME MARIA
FLORES II, ZOSIMO MENDOZA, MICHAEL MUSNGI, VICENTE
VERDADERO, ETIENNE GUERRERO, JUDE FERNANDEZ, AMANTE
PURISIMA II, EULOGIO SABBAN, PERCIVAL D. BRIGOLA, PAUL
ANGELO SANTOS, JONAS KARL B. PEREZ, RENATO BANTUG, JR.,
ADEL ABAS, JOSEPH LLEDO, and RONAN DE
GUZMAN, Respondents.
x-----------------------x
G.R. No. 155101
FIDELITO DIZON, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
x-----------------------x
G.R. Nos. 178057 & 178080
GERARDA H. VILLA, Petitioner,
vs.
MANUEL LORENZO ESCALONA II, MARCUS JOEL CAPELLAN
RAMOS, CRISANTO CRUZ SARUCA, JR., and ANSELMO
ADRIANO, Respondents.
RESOLUTION
SERENO, CJ:
We are asked to revisit our Decision in the case involving the death of
Leonardo "Lenny" Villa due to fraternity hazing. While there is nothing
new in the arguments raised by the parties in their respective Motions for
Clarification or Reconsideration, we find a few remaining matters needing
to be clarified and resobed. Sorne oJ' these matters include the effect of
our Decision on the finality of the Court of Appeals judgments insofar as
respondents Antonio Mariano A!meda (Almeda), June] Anthony D. Arna
(Arna), Renato Bantug, Jr. (Bantug), and Vincent Tecson (Tecson) are
concerned; the question of who are eligible to seek probation; and the
issue of the validity of the probation proceedings and the concomitant
orders of a court that allegedly had no jurisdiction over the case.
Before the Court are the respective Motions for Reconsideration or
Clarification filed by petitioners People of the Philippines, through the
Office of the Solicitor General (OSG), and Gerarda H. Villa (Villa); and by
respondents Almeda, Ama, Bantug, and Tecson (collectively, Tecson et
al.) concerning the Decision of this Court dated 1 February 2012.  The
1
Court modified the assailed judgments  of the Court of Appeals (CA) in
2
CA-G.R. CR No. 15520 and found respondents Fidelito Dizon (Dizon),
Almeda, Ama, Bantug, and Tecson guilty beyond reasonable doubt of the
crime of reckless imprudence resulting in homicide. The modification had
the effect of lowering the criminal liability of Dizon from the crime of
homicide, while aggravating the verdict against Tecson et al. from slight
physical injuries. The CA Decision itself had modified the Decision of the
Caloocan City Regional Trial Court (RTC) Branch 121 finding all of the
accused therein guilty of the crime of homicide.3
Also, we upheld another CA Decision  in a separate but related case
4
docketed as CA-G.R. S.P. Nos. 89060 & 90153 and ruled that the CA did
not commit grave abuse of discretion when it dismissed the criminal case
against Manuel Escalona II (Escalona), Marcus Joel Ramos (Ramos),
Crisanto Saruca, Jr. (Saruca), and Anselmo Adriano (Adriano) on the
ground that their right to speedy trial was violated. Reproduced below is
the dispositive portion of our Decision:5
WHEREFORE, the appealed Judgmentin G.R. No. 155101 finding
petitioner Fidelito Dizon guilty of homicide is hereby MODIFIED and SET
ASIDE IN PART. The appealed Judgment in G.R. No. 154954 – finding
Antonio Mariano Almeda, Junel Anthony Ama, Renato Bantug, Jr., and
Vincent Tecson guilty of the crime of slight physical injuries – is also
MODIFIED and SET ASIDE IN PART. Instead, Fidelito Dizon, Antonio
Mariano Almeda, Junel Anthony Ama, Renato Bantug, Jr., and Vincent
Tecson are found GUILTY beyond reasonable doubt of reckless
imprudence resulting in homicide defined and penalized under Article 365
in relation to Article 249 of the Revised Penal Code. They are hereby
sentenced to suffer an indeterminate prison term of four (4) months and
one (1) day of arresto mayor, as minimum, to four (4) years and two (2)
months of prision correccional, as maximum. In addition, accused are
ORDERED jointly and severally to pay the heirs of Lenny Villa civil
indemnity ex delicto in the amount of 50,000, and moral damages in the
amount of 1,000,000, plus legal interest on all damages awarded at the
rate of 12% from the date of the finality of this Decision until satisfaction.
Costs de oficio.
The appealed Judgment in G.R. No. 154954, acquitting Victorino et al., is
hereby AFFIRMED. The appealed Judgments in G.R. Nos. 178057 &
178080, dismissing the criminal case filed against Escalona, Ramos,
Saruca, and Adriano, are likewise AFFIRMED. Finally, pursuant to Article
89(1) of the Revised Penal Code, the Petition in G.R. No. 151258 is
hereby dismissed, and the criminal case against Artemio Villareal
deemed CLOSED and TERMINATED.
Let copies of this Decision be furnished to the Senate President and the
Speaker of the House of Representatives for possible consideration of
the amendment of the Anti-Hazing Law to include the fact of intoxication
and the presence of non-resident or alumni fraternity members during
hazing as aggravating circumstances that would increase the applicable
penalties.
SO ORDERED.
To refresh our memories, we quote the factual antecedents surrounding
the present case: 6
In February 1991, seven freshmen law students of the Ateneo de Manila
University School of Law signified their intention to join the Aquila Legis
Juris Fraternity (Aquila Fraternity). They were Caesar "Bogs" Asuncion,
Samuel "Sam" Belleza, Bienvenido "Bien" Marquez III, Roberto Francis
"Bert" Navera, Geronimo "Randy" Recinto, Felix Sy, Jr., and Leonardo
"Lenny" Villa (neophytes).
On the night of 8 February 1991, the neophytes were met by some
members of the Aquila Fraternity (Aquilans) at the lobby of the Ateneo
Law School. They all proceeded to Rufo’s Restaurant to have dinner.
Afterwards, they went to the house of Michael Musngi, also an Aquilan,
who briefed the neophytes on what to expect during the initiation rites.
The latter were informed that there would be physical beatings, and that
they could quit at any time. Their initiation rites were scheduled to last for
three days. After their "briefing," they were brought to the Almeda
Compound in Caloocan City for the commencement of their initiation.
Even before the neophytes got off the van, they had already received
threats and insults from the Aquilans. As soon as the neophytes alighted
from the van and walked towards the pelota court of the Almeda
compound, some of the Aquilans delivered physical blows to them. The
neophytes were then subjected to traditional forms of Aquilan "initiation
rites." These rites included the "Indian Run," which required the
neophytes to run a gauntlet of two parallel rows of Aquilans, each row
delivering blows to the neophytes; the "Bicol Express," which obliged the
neophytes to sit on the floor with their backs against the wall and their
legs outstretched while the Aquilans walked, jumped, or ran over their
legs; the "Rounds," in which the neophytes were held at the back of their
pants by the "auxiliaries" (the Aquilans charged with the duty of lending
assistance to neophytes during initiation rites), while the latter were being
hit with fist blows on their arms or withknee blows on their thighs by two
Aquilans; and the "Auxies’ Privilege Round," in which the auxiliaries were
given the opportunity to inflict physical pain on the neophytes. During this
time, the neophytes were also indoctrinated with the fraternity principles.
They survived their first day of initiation.
On the morning of their second day – 9 February 1991 – the neophytes
were made to present comic plays and to play rough basketball. They
were also required to memorize and recite the Aquila Fraternity’s
principles. Whenever they would give a wrong answer, they would be hit
on their arms or legs. Late in the afternoon, the Aquilans revived the
initiation rites proper and proceeded to torment them physically and
psychologically. The neophytes were subjected to the same manner of
hazing that they endured on the first day of initiation. After a few hours, 7. Renato Bantug, Jr. (Bantug)
the initiation for the day officially ended.
8. Nelson Victorino (Victorino)
After a while, accused non-resident or alumni fraternity members Fidelito
Dizon (Dizon) and Artemio Villareal (Villareal) demanded that the rites be 9. Eulogio Sabban (Sabban)
reopened. The head of initiation rites, Nelson Victorino (Victorino), initially
refused. Upon the insistence of Dizon and Villareal, however, he 10. Joseph Lledo (Lledo)
reopened the initiation rites. The fraternity members, including Dizon and
Villareal, then subjected the neophytes to "paddling" and to additional
11. Etienne Guerrero (Guerrero)
rounds of physical pain. Lenny received several paddle blows, one of
which was so strong it sent him sprawling to the ground. The neophytes
heard him complaining of intense pain and difficulty in breathing. After 12. Michael Musngi (Musngi)
their last session of physical beatings, Lenny could no longer walk. He
had to be carried by the auxiliaries to the carport. Again, the initiation for 13. Jonas Karl Perez (Perez)
the day was officially ended, and the neophytes started eating dinner.
They then slept at the carport. 14. Paul Angelo Santos (Santos)

After an hour of sleep, the neophytes were suddenly roused by Lenny’s 15. Ronan de Guzman (De Guzman)
shivering and incoherent mumblings.  Initially, Villareal and Dizon
1avvphi1

dismissed these rumblings, as they thought he was just overacting. When 16. Antonio General (General)
they realized, though, that Lenny was really feeling cold, some of the
Aquilans started helping him. They removed his clothes and helped him 17. Jaime Maria Flores II (Flores)
through a sleeping bag to keep him warm. When his condition worsened,
the Aquilans rushed him to the hospital. Lenny was pronounced dead on 18. Dalmacio Lim, Jr. (Lim)
arrival.
19. Ernesto Jose Montecillo (Montecillo)
Consequently, a criminal case for homicide was filed against the following
35 Aquilans:
20. Santiago Ranada III (Ranada)
In Criminal Case No. C-38340(91)
21. Zosimo Mendoza (Mendoza)
1. Fidelito Dizon (Dizon)
22. Vicente Verdadero (Verdadero)
2. Artemio Villareal (Villareal)
23. Amante Purisima II (Purisima)
3. Efren de Leon (De Leon)
24. Jude Fernandez (J. Fernandez)
4. Vincent Tecson (Tecson)
25. Adel Abas (Abas)
5. Junel Anthony Ama (Ama)
26. Percival Brigola (Brigola)
6. Antonio Mariano Almeda (Almeda)
In Criminal Case No. C-38340
 1. Manuel Escalona II (Escalona)
2. Crisanto Saruca, Jr. (Saruca)
3. Anselmo Adriano (Adriano)
4. Marcus Joel Ramos (Ramos)
5. Reynaldo Concepcion (Concepcion)
6. Florentino Ampil (Ampil)
7. Enrico de Vera III (De Vera)
8. Stanley Fernandez (S. Fernandez)
9. Noel Cabangon (Cabangon)
Twenty-six of the accused Aquilans in Criminal Case No. C-38340(91)
were jointly tried. On the other hand, the trial against the remaining nine
accused in Criminal Case No. C-38340 was held in abeyance due to
certain matters that had to be resolved first.
On 8 November 1993, the trial court rendered judgment in Criminal Case
No. C-38340(91), holding the 26 accused guilty beyond reasonable doubt
of the crime of homicide, penalized with reclusion temporal under Article
249 of the Revised Penal Code. A few weeks after the trial court
rendered its judgment, or on 29 November 1993, Criminal Case No. C-
38340 against the remaining nine accused commenced anew.
On 10 January 2002, the CAin (CA-G.R. No. 15520) set aside the finding
of conspiracy by the trial court in Criminal Case No. C-38340(91) and
modified the criminal liability of each of the accused according to
individual participation. Accused De Leon had by then passed away, so
the following Decision applied only to the remaining 25 accused, viz:
1. Nineteen of the accused-appellants– Victorino, Sabban, Lledo,
Guerrero, Musngi, Perez, De Guzman, Santos, General, Flores,
Lim, Montecillo, Ranada, Mendoza, Verdadero, Purisima,
Fernandez, Abas, and Brigola (Victorino et al.) – were
acquitted,as their individual guilt was not established by proof
beyond reasonable doubt.
2. Four of the accused-appellants– Vincent Tecson, Junel
Anthony Ama, Antonio Mariano Almeda, and Renato Bantug, Jr.
(Tecson et al.) – were found guilty of the crime of slight physical
injuriesand sentenced to 20 days of arresto menor. They were
also ordered to jointly pay the heirs of the victim the sum of
₱30,000 as indemnity.
3. Two of the accused-appellants– Fidelito Dizonand Artemio
Villareal– were found guilty beyond reasonable doubt of the crime
of homicide under Article 249 of the Revised Penal Code. Having
found no mitigating or aggravating circumstance, the CA
sentenced them to an indeterminate sentence of 10 years of
prision mayor to 17 years of reclusion temporal. They were also
ordered to indemnify, jointly and severally, the heirs of Lenny Villa
in the sum of ₱50,000 and to pay the additional amount of
₱1,000,000 by way of moral damages.
On 5 August 2002, the trial court in Criminal Case No. 38340 dismissed
the charge against accused Concepcion on the ground of violation of his
right to speedy trial. Meanwhile, on different dates between the years
2003 and 2005, the trial court denied the respective Motions to Dismiss of
accused Escalona, Ramos, Saruca, and Adriano. On 25 October 2006,
the CA in CA-G.R. SP Nos. 89060 & 90153 reversed the trial court’s
Orders and dismissed the criminal case against Escalona, Ramos,
Saruca, and Adriano on the basis of violation of their right to speedy trial.
From the aforementioned Decisions, the five (5) consolidated Petitions
were individually brought before this Court. (Citations omitted)
Motion for Partial Reconsideration
filed by Petitioner Gerarda H. Villa
Petitioner Villa filed the present Motion for Partial Reconsideration  in
7
connection with G.R. Nos. 178057 & 178080 (Villa v. Escalona) asserting
that the CA committed grave abuse of discretion when it dismissed the
criminal case against Escalona, Ramos,Saruca, and Adriano (collectively,
Escalona et al.) in its assailed Decision and Resolution.  Villa reiterates
8
her previous arguments that the right to speedy trial of the accused was
not violated, since they had failed to assert that right within a reasonable
period of time. She stresses that, unlike their co-accused Reynaldo
Concepcion, respondents Escalona et al.did not timely invoke their right
to speedy trial during the time that the original records and pieces of
evidence were unavailable. She again emphasizes that the prosecution
cannot be faulted entirely for the lapse of 12 years from the arraignment
until the initial trial, as there were a number of incidents attributable to the
accused themselves that caused the delay of the proceedings. She then
insists that we apply the balancing test in determining whether the right to
speedy trial of the accused was violated.
Motion for Reconsideration filed by the OSG
The OSG, in its Motion for Reconsideration  of G.R. Nos. 155101 (Dizon
9 discharged them from probation and declared the criminal case against
v. People) and 154954 (People v. Court of Appeals), agrees with the
findings of this Court that accused Dizon and Tecson et al. had neither
the felonious intent to kill (animus interficendi) nor the felonious intent to
injure (animus iniuriandi) Lenny Villa. In fact, it concedes that the mode in
which the accused committed the crime was through fault (culpa).
However, it contends that the penalty imposed should have been
equivalent to that for deceit (dolo) pursuant to Article 249 (Homicide) of
the Revised Penal Code. It argues that the nature and gravity of the
imprudence or negligence attributable to the accused was so gross that it
shattered the fine distinction between dolo and culpaby considering the
act as one committed with malicious intent. It maintains that the accused
conducted the initiation rites in such a malevolent and merciless manner
that it clearly endangered the lives of the initiates and was thus
equivalent to malice aforethought.
With respect to the 19 other accused, or Victorino et al., the OSG asserts
that their acquittal may also be reversed despite the rule on double
jeopardy, as the CA also committed grave abuse of discretion in issuing
its assailed Decision (CA-G.R. No. 15520). The OSG insists that
Victorino et al. should have been similarly convicted like their other co-
accused Dizon, Almeda, Ama, Bantug, and Tecson, since the former also
participated in the hazing of Lenny Villa, and their actions contributed to
his death.
Motions for Clarification or Reconsideration of Tecson et al.
Respondents Tecson et al.,  filed their respective motions pertaining to
10
G.R. No. 154954 (People v. Court of Appeals). They essentially seek a
clarification as to the effect of our Decision insofar as their criminal
liability and service of sentence are concerned. According to
respondents, they immediately applied for probation after the CA
rendered its Decision (CAG.R. No. 15520) lowering their criminal liability
from the crime of homicide, which carries a non-probationable sentence,
to slight physical injuries, which carries a probationable sentence. Tecson
et al.contend that, as a result, they have already been discharged from
their criminal liability and the cases against them closed and terminated.
This outcome was supposedly by virtue of their Applications for Probation
on various dates in January 2002  pursuant to Presidential Decree No.
11
968, as amended, otherwise known as the Probation Law. They argue
that Branch 130 of Caloocan City Regional Trial Court (RTC) had already
granted their respective Applications for Probation on 11 October
2002  and, upon their completion of the terms and conditions thereof,
12
them terminated on various dates in April 2003. 13
To support their claims, respondents attached  certified true copies of
14
their respective Applications for Probation and the RTC Orders granting
these applications, discharging them from probation, and declaring the
criminal case against them terminated. Thus, they maintain that the
Decision in CA-G.R. No. 15520 had already lapsed into finality, insofar as
they were concerned, whenthey waived their right to appeal and applied
for probation.
ISSUES
I. Whether the CA committed grave abuse of discretion
amounting to lack or excess of jurisdiction when it dismissed the
case against Escalona, Ramos, Saruca, and Adriano for violation
of their right to speedy trial
II. Whether the penalty imposed on Tecson et al. should have
corresponded to that for intentional felonies
III. Whether the completion by Tecson et al. of the terms and
conditions of their probation discharged them from their criminal
liability, and closed and terminated the cases against them
DISCUSSION
Findings on the Motion for Partial Reconsideration of
Petitioner Gerarda H. Villa
As regards the first issue, we take note that the factual circumstances
and legal assertions raised by petitioner Villa in her Motion for Partial
Reconsideration concerning G.R. Nos. 178057 & 178080 have already
been thoroughly considered and passed uponin our deliberations, which
led to our Decision dated 1 February 2012. We emphasize that in light of
the finding of violation of the right of Escalona et al. to speedy trial, the
CA’s dismissal of the criminal case against them amounted to an
acquittal,  and that any appeal or reconsideration thereof would result in
15
a violation of their right against double jeopardy.  Though we have
16
recognized that the acquittal of the accused may be challenged where
there has been a grave abuse of discretion,  certiorari would lie if it is
17
convincingly established that the CA’s Decision dismissing the case was
attended by a whimsical or capricious exercise of judgment equivalent to
lack of jurisdiction. It must be shown that the assailed judgment
constitutes "a patent and gross abuse of discretion amounting to an
evasion of a positive duty or to a virtual refusal to perform a duty imposed
by law or toact in contemplation of law; an exercise of power in an
arbitrary and despotic manner by reason of passion and hostility; or a
blatant abuse of authority to a point so grave and so severe as to deprive
the court of its very power to dispense justice."  Thus, grave abuse of
18
discretion cannot be attributed to a court simply because it allegedly
misappreciated the facts and the evidence. 19
We have taken a second look at the court records, the CA Decision, and
petitioner’s arguments and found no basis to rule that the CA gravely
abused its discretion in concluding that the right to speedy trial of the
accused was violated. Its findings were sufficiently supported by the
records of the case and grounded in law. Thus, we deny the motion of
petitioner Villa with finality.
Ruling on the Motion for Reconsideration filed by the OSG
We likewise deny with finality the Motion for Reconsideration filed by the
OSG with respect to G.R. Nos. 155101 (Dizon v. People) and 154954
(People v. Court of Appeals). Many of the arguments raised therein are
essentially a mere rehash of the earlier grounds alleged in its original
Petition for Certiorari.
Furthermore, we cannot subscribe to the OSG’s theory that even if the
act complained of was born of imprudence or negligence, malicious intent
can still be appreciated on account of the gravity of the actions of the
accused. We emphasize that the finding of a felony committed by means
of culpa is legally inconsistent with that committed by means of dolo.
Culpable felonies involve those wrongs done as a result of an act
performed without malice or criminal design. The Revised Penal Code
expresses thusly:
ARTICLE 365. Imprudence and Negligence. — Any person who, by
reckless imprudence, shall commit any act which, had it been intentional,
would constitute a grave felony, shall suffer the penalty of arresto
mayorin its maximum period toprisión correccional in its medium period; if
it would have constituted a less grave felony, the penalty of arresto mayor
in its minimum and medium periods shall be imposed.
Any person who, by simple imprudence or negligence, shall commit an
act which would otherwise constitute a grave felony, shall suffer the
penalty of arresto mayorin its medium and maximum periods; if it would
have constituted a less serious felony, the penalty of arresto mayor in its
minimum period shall be imposed.
xxxx
Reckless imprudence consists in voluntary, but without malice, doing or
falling to do an act from which material damage results by reason of
inexcusable lack of precaution on the part of the person performing or
failing to perform suchact, taking into consideration his employment or
occupation, degree of intelligence, physical condition and other
circumstances regarding persons, time and place.
Simple imprudence consists in the lack of precaution displayed in those
cases in which the damage impending to be caused is not immediate nor
the danger clearly manifest. (Emphases supplied)
On the other hand, intentional felonies concern those wrongs in which a
deliberate malicious intent to do an unlawful act is present. Below is our
exhaustive discussion on the matter:  Our Revised Penal Code belongs
20
tothe classical school of thought. x x x The identity of mens rea– defined
as a guilty mind, a guilty or wrongful purpose or criminal intent – is the
predominant consideration. Thus, it is not enough to do what the law
prohibits. In order for an intentional felony to exist, it is necessary that the
act be committed by means of doloor "malice."
The term "dolo" or "malice" is a complex idea involving the elements of
freedom, intelligence, and intent. x x x x The element of intent – on which
this Court shall focus – is described as the state of mind accompanying
an act, especially a forbidden act. It refers to the purpose of the mind and
the resolve with which a person proceeds.It does not refer to mere will,
for the latter pertains to the act, while intentconcerns the result of the act.
While motive is the "moving power" that impels one to action for a definite
result, intent is the "purpose" of using a particular means to produce the
result. On the other hand, the term "felonious"means, inter alia,
malicious, villainous, and/or proceeding from an evil heart or
purpose.With these elements taken together, the requirement of intent in
intentional felony must refer to malicious intent, which is a vicious and
malevolent state of mind accompanying a forbidden act. Stated
otherwise, intentional felony requires the existence of dolus malus– that
the act or omission be done "willfully," "maliciously," "with deliberate evil
intent," and "with malice aforethought." The maxim is actus non facit
reum, nisi mens sit rea– a crime is not committed if the mind of the
person performing the act complained of is innocent. As is required of the
other elements of a felony, the existence of malicious intent must be
proven beyond reasonable doubt.
xxxx
The presence of an initial malicious intent to commit a felony is thus a
vital ingredient in establishing the commission of the intentional felony of
homicide. Being mala in se, the felony of homicide requires the existence
of malice or dolo immediately before or simultaneously with the infliction
of injuries. Intent to kill – or animus interficendi– cannot and should not be
inferred, unless there is proof beyond reasonable doubt of such intent.
Furthermore, the victim’s death must not have been the product of
accident, natural cause, or suicide. If death resulted from an act executed
without malice or criminal intent – but with lack of foresight, carelessness,
or negligence – the act must be qualified as reckless or simple
negligence or imprudence resulting in homicide.
xxxx
In order to be found guilty ofany of the felonious acts under Articles 262
to 266 of the Revised Penal Code, the employment of physical injuries
must be coupled with dolus malus. As an act that is mala in se, the
existence of malicious intent is fundamental, since injury arises from the
mental state of the wrongdoer – iniuria ex affectu facientis consistat. If
there is no criminal intent, the accused cannot be found guilty of an
intentional felony. Thus, incase of physical injuries under the Revised
Penal Code, there must be a specific animus iniuriandi or malicious
intention to do wrong against the physical integrity or wellbeing of a
person, so as to incapacitate and deprive the victim of certain bodily
functions. Without proof beyond reasonable doubt of the required animus
iniuriandi, the overt act of inflicting physical injuries per semerely satisfies
the elements of freedom and intelligence in an intentional felony. The
commission of the act does not, in itself, make a man guilty unless his
intentions are.
Thus, we have ruled in a number of instances that the mere infliction of
physical injuries, absentmalicious intent, does not make a person
automatically liable for an intentional felony.x x x.
xxxx
The absence of malicious intent does not automatically mean, however,
that the accused fraternity members are ultimately devoid of criminal
liability. The Revised Penal Code also punishes felonies that are
committed by means of fault (culpa). According to Article 3 thereof, there
is fault when the wrongful act results from imprudence, negligence, lack
of foresight, or lack of skill.
Reckless imprudence or negligence consists of a voluntary act done
without malice, from which an immediate personal harm, injury or
material damage results by reason of an inexcusable lack of precaution
or advertence on the part of the person committing it. In this case, the
danger is visible and consciously appreciated by the actor. In contrast,
simple imprudence or negligence comprises an act done without grave
fault, from which an injury or material damage ensues by reason of a
mere lack of foresight or skill. Here, the threatened harm is not
immediate, and the danger is not openly visible.
The test for determining whether or not a person is negligent in doing an
act is as follows: Would a prudent man in the position of the person to
whom negligence is attributed foresee harm to the person injured as a
reasonable consequence of the course about to be pursued? If so, the
law imposes on the doer the duty to take precaution against the
mischievous resultsof the act. Failure to do so constitutes negligence.
As we held in Gaid v. People, for a person to avoid being charged with
recklessness, the degree of precaution and diligence required varies with
the degree of the danger involved. If, on account of a certain line of
conduct, the danger of causing harm to another person is great, the
individual who chooses to follow that particular course of conduct is
bound to be very careful, inorder to prevent or avoid damage or injury. In
contrast, if the danger is minor, not much care is required. It is thus
possible that there are countless degrees of precaution or diligence that
may be required of an individual, "from a transitory glance of care to the
most vigilant effort." The duty of the person to employ more or less
degree of care will depend upon the circumstances of each particular
case. (Emphases supplied, citations omitted)
We thus reiterate that the law requires proof beyond reasonable doubt of
the existence of malicious intent or dolus malus before an accused can
be adjudged liable for committing an intentional felony.
Since the accused were found to have committed a felony by means of
culpa, we cannot agree with the argument of the OSG. It contends that
the imposable penalty for intentional felony can also be applied to the
present case on the ground that the nature of the imprudence or
negligence of the accused was so gross that the felony already amounted
to malice. The Revised Penal Code has carefully delineated the
imposable penalties as regards felonies committed by means of culpaon
the one hand and felonies committed by means of doloon the other in the
context of the distinctions it has drawn between them. The penalties
provided in Article 365 (Imprudence and Negligence) are mandatorily
applied if the death of a person occurs as a result of the imprudence or
negligence of another. Alternatively, the penalties outlined in Articles 246
to 261 (Destruction of Life) are automatically invoked if the death was a
result of the commission of a forbidden act accompanied by a malicious
intent. These imposable penalties are statutory, mandatory, and not
subjectto the discretion of the court. We have already resolved – and the
OSG agrees – that the accused Dizon and Tecson et al. had neither
animus interficendi nor animus iniuriandi in inflicting physical pain on
Lenny Villa. Hence, we rule that the imposable penalty is what is
applicable to the crime of reckless imprudence resulting in homicide as
defined and penalized under Article 365 of the Revised Penal Code.
Ruling on the Motions for Clarification or Reconsideration
filed by Tecson et al.
We clarify, however, the effect of our Decision in light of the motions of
respondents Tecson et al. vis-à-vis G.R. No. 154954 (People v. Court of
Appeals).
The finality of a CA decision will not
bar the state from seeking the
annulment of the judgment via a
Rule 65 petition.
In their separate motions,  respondents insist that the previous verdict of
21
the CA finding them guilty of slight physical injuries has already lapsed
into finality as a result of their respective availments of the probation
program and their ultimate discharge therefrom. Hence, they argue that
they can no longer be convicted of the heavier offense of reckless
imprudence resulting in homicide.  Respondents allude to our Decision in
22
Tan v. People  to support their contention that the CA judgment can no
23
longer be reversed or annulled even by this Court.
The OSG counters  that the CA judgment could not have attained finality,
24
as the former had timely filed with this Court a petition for certiorari. It
argues that a Rule 65 petition is analogous to an appeal, or a motion for
new trial or reconsideration, in that a petition for certiorarialso prevents
the case from becoming final and executory until after the matter is
ultimately resolved.
Indeed, Rule 120 of the Rules of Court speaks of the finality of a criminal
judgment once the accused applies for probation, viz:
SECTION 7. Modification of judgment. — A judgment of convictionmay,
upon motion of the accused, be modified or set aside before it becomes
final or before appeal is perfected. Except where the death penalty is
imposed, a judgment becomes finalafter the lapse of the period for
perfecting an appeal, or whenthe sentence has been partially or totally
satisfied or served, or when the accusedhas waived in writing his right to
appeal, or has applied for probation. (7a) (Emphases supplied)
Coupled with Section 7 of Rule 117  and Section 1 of Rule 122,  it can
25 26
be culled from the foregoing provisions that only the accused may appeal
the criminal aspect of a criminal case, especially if the relief being sought
is the correction or review of the judgment therein. This rule was
instituted in order to give life to the constitutional edict  against putting a
27
person twice in jeopardy of punishment for the same offense. It is beyond
contention that the accused would be exposed to double jeopardy if the
state appeals the criminal judgment in order to reverse an acquittal or
even to increase criminal liability. Thus, the accused’s waiver of the right
to appeal – as when applying for probation – makes the criminal
judgment immediately final and executory. Our explanation in People v.
Nazareno is worth reiterating: 28
Further prosecution via an appeal from a judgment of acquittal is likewise
barred because the government has already been afforded a complete
opportunity to prove the criminal defendant’s culpability; after failing to
persuade the court to enter a final judgment of conviction, the underlying
reasons supporting the constitutional ban on multiple trials applies and
becomes compelling. The reason is not only the defendant’s already
established innocence at the first trial where he had been placed in peril
of conviction, but also the same untoward and prejudicial consequences
of a second trial initiated by a government who has at its disposal all the
powers and resources of the State.
Unfairness and prejudice would necessarily result, as the government
would then be allowed another opportunity to persuade a second trier of
the defendant’s guilt while strengthening any weaknesses that had
attended the first trial, all in a process where the government’s power and
resources are once again employed against the defendant’s individual
means. That the second opportunity comesvia an appeal does not make
the effects any less prejudicial by the standards of reason, justice and
conscience. (Emphases supplied, citations omitted)
It must be clarified, however, that the finality of judgment evinced in
Section 7 of Rule 120 does not confer blanket invincibility on criminal
judgments. We have already explained in our Decision that the rule on
double jeopardy is not absolute, and that this rule is inapplicable to cases
in which the state assails the very jurisdiction of the court that issued the
criminal judgment.  The reasoning behind the exception is articulated in
29
Nazareno, from which we quote: 30
In such instance, however, no review of facts and law on the merits, in
the manner done in an appeal, actually takes place; the focus of the
review is on whether the judgment is per sevoid on jurisdictional grounds,
i.e., whether the verdict was rendered by a court that had no jurisdiction;
or where the court has appropriate jurisdiction, whether it acted with
grave abuse of discretion amounting to lack or excess of jurisdiction. In
other words, the review is on the question of whether there has been a
validly rendered decision, not on the question of the decision’s error or
correctness. Under the exceptional nature of a Rule 65 petition, the
burden — a very heavy one — is on the shoulders of the party asking for
the review to show the presence of a whimsical or capricious exercise of
judgment equivalent to lack of jurisdiction; or of a patent and gross abuse
of discretion amounting to an evasion of a positive duty or a virtual refusal
to perform a duty imposed by law or to act in contemplation of law; or to
an exercise of power in an arbitrary and despotic manner by reason of
passion and hostility. (Emphases supplied, citations omitted) While this
Court’s Decision in Tan may have created an impression of the
unassailability of a criminal judgment as soon as the accused applies for
probation, we point out that what the state filed therein was a mere
motion for the modification of the penalty, and not a Rule 65 petition. A
petition for certiorari is a special civil action that is distinct and separate
from the main case. While in the main case, the core issue is whether the
accused is innocent or guilty of the crime charged, the crux of a Rule 65
petition is whether the court acted (a) without or in excess of its
jurisdiction; or (b) with grave abuse of discretion amounting to lack or
excess of jurisdiction. Hence, strictly speaking, there is nomodification of
judgment in a petition for certiorari, whose resolution does not call for a
re-evaluation of the merits of the case in order to determine the ultimate
criminal responsibility of the accused. In a Rule 65 petition, any resulting
annulment of a criminal judgment is but a consequence of the finding of
lack of jurisdiction.
In view thereof, we find that the proper interpretation of Section 7 of Rule
120 must be that it is inapplicable and irrelevant where the court’s
jurisdiction is being assailed through a Rule 65 petition. Section 7 of Rule
120 bars the modification of a criminal judgment only if the appeal
brought before the court is in the nature of a regular appeal under Rule
41, or an appeal by certiorari under Rule 45, and if that appeal would put
the accused in double jeopardy. As it is, we find no irregularity in the
partial annulment of the CA Decision in CA-G.R. No. 15520 in spite of its
finality, as the judgment therein was issued with grave abuse of discretion
amounting to lack or excess of jurisdiction.
The orders of Caloocan City RTC
Branch 130 have no legal effect, as
they were issued without jurisdiction.
First, Tecson et al. filed their Applications for Probation with the wrong
court. Part and parcel of our criminal justice system is the authority or
jurisdiction of the court to adjudicate and decide the case before it.
Jurisdiction refers to the power and capacity of the tribunal to hear, try,
and decide a particular case or matter before it.  That power and capacity
31
includes the competence to pronounce a judgment, impose a
punishment,  and enforce or suspend  the execution of a sentencein
32 33
accordance with law.
The OSG questions  the entire proceedings involving the probation
34
applications of Tecson et al. before Caloocan City RTC Branch 130.
Allegedly, the trial court did not have competence to take cognizance of
the applications, considering that it was not the court of origin of the
criminal case. The OSG points out that the trial court that originally
rendered the Decision in Criminal Case No. C-38340(91) was Branch 121
of the Caloocan City RTC.
The pertinent provision of the Probation Law is hereby quoted for
reference:
SEC. 4. Grant of Probation. — Subject to the provisions of this Decree,
the trial court may, after it shall have convicted and sentenced a
defendant, and upon application by said defendant within the period for
perfecting an appeal, suspend the execution of the sentence and place
the defendant on probation for such period and upon such terms and
conditions as it may deem best; Provided, That no application for
probation shall be entertained or granted if the defendant has perfected
the appeal from the judgment of conviction. x x x x (Emphases supplied)
It is obvious from the foregoing provision that the law requires that an
application for probation be filed withthe trial court that convicted and
sentenced the defendant, meaning the court of origin. Here, the trial court
that originally convicted and sentenced Tecson et al.of the crime of
homicide was Branch 121 – not Branch 130 – of the Caloocan City
RTC.  Neither the judge of Branch 130 in his Orders nor Tecson et al.in
35
their pleadings have presented any explanation or shown any special
authority that would clarify why the Applications for Probation had not
been filed with or taken cognizance of by Caloocan City RTC Branch 121.
While we take note that in a previous case, the CA issued a Decision
ordering the inhibition of Branch 121 Judge Adoracion G. Angeles from
hearing and deciding Criminal Case No. C-38340(91), the ruling was
made specifically applicable to the trial of petitioners therein, i.e. accused
Concepcion, Ampil, Adriano, and S. Fernandez. 36
Tecson et al. thus committed a fatal error when they filed their probation
applications with Caloocan City RTC Branch 130, and not with Branch
121. We stress that applicants are not at liberty to choose the forum in
which they may seek probation, as the requirement under Section 4 of
the Probation law is substantive and not merely procedural. Considering,
therefore, that the probation proceedings were premised on an
unwarranted exercise of authority, we find that Caloocan City RTC
Branch 130 never acquired jurisdiction over the case.
Second, the records of the casewere still with the CA when Caloocan City
RTC Branch 130 granted the probation applications. Jurisdiction over a
case is lodged with the court in which the criminal action has been
properly instituted.  If a party appeals the trial court’s judgment or final
37
order,  jurisdiction is transferred to the appellate court. The execution of
38
the decision is thus stayed insofar as the appealing party is
concerned.  The court of origin then loses jurisdiction over the entire
39
case the moment the other party’s time to appeal has expired.  Any
40
residual jurisdiction of the court of origin shall cease – including the
authority to order execution pending appeal – the moment the complete
records of the case are transmitted to the appellate court.  Consequently,
41
it is the appellate court that shall have the authority to wield the power to
hear, try, and decide the case before it, as well as to enforce its decisions
and resolutions appurtenant thereto. That power and authority shall
remain with the appellate court until it finally disposes of the case.
Jurisdiction cannot be ousted by any subsequent event, even if the
nature of the incident would have prevented jurisdiction from attaching in
the first place.
According to Article 78 of the Revised Penal Code, "[n]o penalty shall be
executed except by virtue of a final judgment." A judgment of a court
convicting or acquitting the accused of the offense charged becomes final
under any of the following conditions among others:  after the lapse of
42
the period for perfecting an appeal; when the accused waives the right to
appeal; upon the grant of a withdrawal ofan appeal; when the sentence
has already been partially or totally satisfied or served; or when the
accused applies for probation. When the decision attains finality, the
judgment or final order is entered in the book of entries of judgments.  If
43
the case was previously appealed to the CA, a certified true copy of the
judgment or final order must be attached to the original record, which
shall then be remanded to the clerk of the court from which the appeal
was taken.  The court of origin then reacquires jurisdiction over the case
44
for appropriate action. It is during this time that the court of origin may
settle the matter of the execution of penalty or the suspension of the
execution thereof,  including the convicts’ applications for probation.
45 46
A perusal of the case records reveals that the CA had not yet
relinquished its jurisdiction over the case when Caloocan City RTC
Branch 130 took cognizance of the Applications for Probation of Tecson
et al. It shows that the accused filed their respective applications  while a
47
motion for reconsideration was still pending before the CA  and the
48
records were still with that court.  The CA settled the motion only upon
49
issuing the Resolution dated 30 August 2002 denying it, or about seven
months after Tecson et al. had filed their applications with the trial
court.  In September 2002, or almost a month before the promulgation of
50
the RTC Order dated 11 October 2002 granting the probation
applications,  the OSG had filed Manifestations of Intent to File Petition
51
for Certiorari with the CA  and this Court.  Ultimately, the OSG assailed
52 53
the CA judgments by filing before this Court a Petition for Certiorari on 25
November 2002.  We noted the petition and then required respondents to
54
file a comment thereon.  After their submission of further pleadings and
55
motions, we eventually required all parties to file their consolidated
memoranda.  The records of the case remained with the CA until they
56
were elevated to this Court in 2008. 57
For the foregoing reasons, we find that RTC Branch 130 had no
jurisdiction to act on the probation applications of Tecson et al. It had
neither the power nor the authority to suspend their sentence, place them
on probation, order their final discharge, and eventually declare the case
against them terminated. This glaring jurisdictional faux pasis a clear
evidence of either gross ignorance of the law oran underhanded one-
upmanship on the part of RTC Branch 130 or Tecson et al., or both – to
which this Court cannot give a judicial imprimatur.
In any event, Tecson et al. were ineligible to seek probation at the time
they applied for it. Probation  is a special privilege granted by the state to
58
penitent qualified offenders who immediately admit their liability and thus
renounce their right to appeal. In view of their acceptance of their fate
and willingness to be reformed, the state affords them a chance to avoid
the stigma of an incarceration recordby making them undergo
rehabilitation outside of prison. Some of the major purposes of the law
are to help offenders to eventually develop themselves into law-abiding
and self respecting individuals, as well as to assist them in their
reintegration with the community.
It must be reiterated that probation is not a right enjoyed by the accused.
Rather, it is an act of grace orclemency conferred by the state. In
Francisco v. Court of Appeals,  this Court explained thus:
59
It is a special prerogative granted by law to a person or group of persons
not enjoyed by others or by all. Accordingly, the grant of probation rests
solely upon the discretion of the court which is to be exercised primarily
for the benefit of organized society, and only incidentally for the benefit of
the accused. The Probation Law should not therefore be permitted to
divest the state or its government of any of the latter’s prerogatives, rights
or remedies, unless the intention of the legislature to this end is clearly
expressed, and no person should benefit from the terms of the law who is
not clearly within them. (Emphases supplied)
The OSG questions the validity of the grant of the probation applications
of Tecson et al.  It points out that when they appealed to the CA their
60
homicide conviction by the RTC, they thereby made themselves ineligible
to seek probation pursuant to Section 4 of Presidential Decree No. 968
(the Probation Law).
We refer again to the full text ofSection 4 of the Probation Law as follows:
SEC. 4. Grant of Probation. — Subject to the provisions of this Decree,
the trial court may, after it shall have convicted and sentenced a
defendant, and upon application by said defendant within the period for
perfecting an appeal, suspend the execution of the sentence and place
the defendant on probation for such period and upon such terms and
conditions as it may deem best; Provided, That no application for
probation shall be entertained or granted if the defendant has perfected
the appeal from the judgment of conviction.
Probation may be granted whether the sentence imposes a term of
imprisonment or a fine only. An application for probation shall be filed
with the trial court. The filing of the application shall be deemed a waiver
of the right to appeal.
An order granting or denying probation shall not be appealable.
(Emphases supplied)
Indeed, one of the legal prerequisites of probation is that the offender
must not have appealed the conviction.  In the 2003 case Lagrosa v.
61
Court of Appeals,  this Court was faced with the issue of whether a
62
convict may still apply for probation even after the trial court has imposed
a non probationable verdict, provided that the CA later on lowers the
original penalty to a sentence within the probationable limit. In that case,
the trial court sentenced the accused to a maximum term of eight years of
prisión mayor, which was beyond the coverage of the Probation Law.
They only became eligible for probation after the CA reduced the
maximum term of the penalty imposed to 1 year, 8 months and 21 days
of prisión correccional.
In deciding the case, this Court invoked the reasoning in Francisco and
ruled that the accused was ineligiblefor probation, since they had filed an
appeal with the CA. In Francisco, we emphasized that Section 4 of the
Probation Law offers no ambiguity and does not provide for any
distinction, qualification, or exception. What is clearis that all offenders
who previously appealed their cases, regardless of their reason for
appealing, are disqualified by the law from seeking probation.
Accordingly, this Court enunciated in Lagrosathat the accused are
disallowed from availing themselves of the benefits of probation if they
obtain a genuine opportunity to apply for probation only on appeal as a
result of the downgrading of their sentence from non-probationable to
probationable.
While Lagrosa was promulgated three months after Caloocan City RTC
Branch 130 issued its various Orders discharging Tecson et al. from
probation, the ruling in Lagrosa, however, was a mere reiteration of the
reasoning of this Court since the 1989 case Llamado v. Court of
Appeals  and Francisco. The Applications for Probation of Tecson et al.,
63
therefore, should not have been granted by RTC Branch 130, as they had
appealed their conviction to the CA. We recall that respondents were
originally found guilty of homicide and sentenced to suffer 14 years, 8
months, and 1 day of reclusion temporal as maximum. Accordingly, even
if the CA later downgraded their conviction to slight physical injuries and
sentenced them to 20 days of arresto menor, which made the sentence
fall within probationable limits for the first time, the RTC should have
nonetheless found them ineligible for probation at the time.
The actions of the trial court must thus be adjudged as an arbitrary and
despotic use of authority, so gross that it divested the court of its very
power to dispense justice. As a consequence, the RTC Orders granting
the Applications for Probation of Tecson et al. and thereafter discharging
them from their criminal liability must be deemed to have been issued
with grave abuse of discretion amounting to lack or excess of jurisdiction.
Whether for lack of jurisdiction orfor grave abuse of discretion, amounting
to lack or excess of jurisdiction, we declare all orders, resolutions, and
judgments of Caloocan City RTC Branch 130 in relation to the probation
applications of Tecson et al. null and void for having been issued without
jurisdiction. We find our pronouncement in Galman v.
Sandiganbayan  applicable, viz:
64
A void judgment is, in legal effect, no judgment at all. By it no rights are
divested. Through it, no rights can be attained. Being worthless, all
proceedings founded upon it are equally worthless. It neither binds nor
bars anyone. All acts performed under it and all claims flowing out of it
are void. (Emphasis supplied)
The ultimate discharge of Tecson et
al. from probation did not totally
extinguish their criminal liability.
Accused Bantug asserts  that, in any event, their criminal liability has
65
already been extinguished as a result of their discharge from probation
and the eventual termination of the criminal case against them by
Caloocan City RTC Branch 130. To support his argument, he cites the
following provision of the Revised Penal Code:
ARTICLE 89. How Criminal Liability is Totally Extinguished. — Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and
as to pecuniary penalties, liability therefor is extinguished only
when the death of the offender occurs before final judgment.
2. By service of the sentence.
3. By amnesty, which completely extinguishes the penalty and all
its effects.
4. By absolute pardon.
5. By prescription of the crime.
6. By prescription of the penalty.
7. By the marriage of the offended woman, as provided in article
344 of this Code. (Emphasis supplied)
As previously discussed, a void judgment cannot be the source of legal
rights; legally speaking, it is as if no judgment had been rendered at all.
Considering our annulment of the Orders of Caloocan City RTC Branch
130 in relation to the probation proceedings, respondents cannot claim
benefits that technically do not exist.
In any event, Tecson et al.cannot invoke Article89 of the Revised Penal
Code, as we find it inapplicable to this case. One of the hallmarks of the
Probation Law is precisely to "suspend the execution of the
sentence,"  and not to replace the original sentence with another, as we
66
pointed out in our discussion in Baclayon v. Mutia: 67
An order placing defendant on "probation" is not a "sentence" but is
rather in effect a suspension of the imposition of sentence. It is not a final
judgment but is rather an "interlocutory judgment"in the nature of a
conditional order placing the convicted defendant under the supervision
of the court for his reformation, to be followed by a final judgment of
discharge, if the conditions of the probation are complied with, or by a
final judgment of sentence if the conditions are violated. (Emphases
supplied)
Correspondingly, the criminal liability of Tecson et al.remains.
In light of our recent Decision in
Colinares v. People, Tecson et al.
may now reapply for probation.
Very recently, in Colinares v. People,  we revisited our ruling in
68
Franciscoand modified our pronouncements insofar as the eligibility for
probation of those who appeal their conviction is concerned. Through a
majority vote of 9-6, the Court En Bancin effect abandoned Lagrosaand
settled the following once and for all:69
Secondly, it is true that under the probation law the accused who appeals
"from the judgment of conviction" is disqualified from availing himself of
the benefits of probation. But, as it happens, two judgments of conviction
have been meted out to Arnel: one, a conviction for frustrated homicide
by the regional trial court,now set aside; and, two, a conviction for
attempted homicide by the Supreme Court.
If the Court chooses to go by the dissenting opinion’s hard position, it will
apply the probation law on Arnel based on the trial court’s annulled
judgment against him. He will not be entitled to probation because of the
severe penalty that such judgment imposed on him. More, the Supreme
Court’s judgment of conviction for a lesser offense and a lighter penalty
will also have to bend over to the trial court’s judgment — even if this has
been found in error. And, worse, Arnel will now also be made to pay for
the trial court’s erroneous judgment with the forfeiture of his right to apply
for probation. Ang kabayo ang nagkasala, ang hagupit ay sa kalabaw(the
horse errs, the carabao gets the whip). Where is justice there?
The dissenting opinion also expresses apprehension that allowing Arnel
to apply for probation would dilute the ruling of this Court in Francisco v.
Court of Appealsthat the probation law requires that an accused must not
have appealed his conviction before he can avail himself of probation.
But there is a huge difference between Franciscoand this case.
xxxx
Here, however, Arnel did not appeal from a judgment that would have
allowed him to apply for probation. He did not have a choice between
appeal and probation. Hewas not in a position to say, "By taking this
appeal, I choose not to apply for probation." The stiff penalty that the trial
court imposed on him denied him that choice. Thus, a ruling that would
allow Arnel to now seek probation under this Court’s greatly diminished
penalty will not dilute the sound ruling in Francisco. It remains that those
who will appeal from judgments of conviction, when they have the option
to try for probation, forfeit their right to apply for that privilege.
xxxx
In a real sense, the Court’s finding that Arnel was guilty, not of frustrated
homicide, but only of attempted homicide, is an original conviction that for
the first time imposes on him a probationable penalty. Had the RTC done
him right from the start, it would have found him guilty of the correct
offense and imposed on him the right penalty of two years and four
months maximum. This would have afforded Arnel the right to apply for
probation.
The Probation Law never intended to deny an accused his right to
probation through no fault of his. The underlying philosophy of probation
is one of liberality towards the accused. Such philosophy is not served by
a harsh and stringent interpretation of the statutory provisions. As Justice
Vicente V. Mendoza said in his dissent in Francisco, the Probation Law
must not be regarded as a mere privilege to be given to the accused only
where it clearly appears he comes within its letter; to do so would be to
disregard the teaching in many cases that the Probation Law should be
applied in favor of the accused not because it is a criminal law but to
achieve its beneficent purpose.
xxxx
At any rate, what is clear is that, had the RTC done what was right and
imposed on Arnel the correct penalty of two years and four months
maximum, he would havehad the right to apply for probation. No one
could say with certainty that he would have availed himself of the right
had the RTC doneright by him. The idea may not even have crossed his
mind precisely since the penalty he got was not probationable.
The question in this case is ultimately one of fairness.  Is it fair to deny
1âwphi1
Arnel the right to apply for probation when the new penalty that the Court
imposes on him is, unlike the one erroneously imposed by the trial court,
subject to probation? (Emphases supplied)
In our Decision, we set aside the RTC and the CA judgments and found
Tecson et al.ultimately liable for the crime of reckless imprudence
resulting in homicide. Pursuant to Article 365 of the Revised Penal Code,
the offense is punishable by arresto mayor in its maximum period (from 4
months and 1 day to 6 months) to prisión correccional in its medium
period (from 2 years, 4 months, and 1 day to 4 years and 2 months).
Considering that the new ruling in Colinares is more favorable to Tecson
et al., we rule that they are now eligible to apply for probation. Since
Fidelito Dizon (Dizon) was convicted of the same crime, we hereby clarify
that Dizon is also eligible for probation.
While we cannot recognize the validityof the Orders of RTC Branch 130,
which granted the Applications for Probation, we cannot disregard the
fact that Tecson et al. have fulfilled the terms and conditions of their
previous probation program and have eventually been discharged
therefrom. Thus, should they reapply for probation, the trial court may, at
its discretion, consider their antecedent probation service in resolving
whether to place them under probation at this time and in determining the
terms, conditions, and period thereof.
Final clarificatory matters
We now take this opportunity to correct an unintentional typographical
error in the minimum term of the penalty imposed on the accused Dizon
and Tecson et al. While this issue was not raised by any of the parties
before us, this Court deems it proper to discuss the matter ex proprio
motuin the interest of justice. In the first paragraph of the dispositive
portion of our Decision dated 1 February 2012, the fourth sentence reads
as follows:
They are hereby sentenced to suffer anindeterminate prison term of four
(4) months and one (1) day of arresto mayor, as minimum, to four (4)
years and two (2) months of prisión correccional, as maximum.
As we had intended to impose on the accused the maximum term of the
"penalty next lower" than that prescribed by the Revised Penal Code for
the offense of reckless imprudence resulting in homicide, in accordance
with the Indeterminate Sentence Law (ISL),  the phrase "and one (1)
70
day," which had been inadvertently added, must be removed.
Consequently, in the first paragraph of the dispositive portion, the fourth
sentence should now read as follows:
They are hereby sentenced to suffer anindeterminate prison term of four
(4) months of arresto mayor, as minimum, to four (4) years and two (2)
months of prisión correccional, as maximum. In this instance, we further
find it important to clarify the accessory penalties inherent to the principal
penalty imposed on Dizon and Tecson et al.
By operation of Articles 40 to 45 and 73 of the Revised Penal Code, a
corresponding accessory penalty automatically attaches every time a
court lays down a principal penalty outlined in Articles 25 and 27
thereof.  The applicable accessory penalty is determined by using as
71
reference the principal penaltyimposed by the court before the prison
sentence is computed in accordance with the ISL.  This determination is
72
made in spite of the two classes ofpenalties mentioned in an
indeterminate sentence. It must be emphasized that the provisions on the
inclusion of accessory penalties specifically allude to the actual
"penalty"  imposed, not to the "prison sentence"  set by a court. We
73 74
believe that the ISL did not intend to have the effect of imposing on the
convict two distinct sets of accessory penalties for the same
offense.  The two penalties are only relevant insofar as setting the
75
minimum imprisonment period is concerned, after which the convict may
apply for parole and eventually seek the shortening of the prison term. 76
Under Article 365 of the Revised Penal Code, the prescribed penalty for
the crime of reckless imprudence resulting in homicide is arresto mayor in
its maximum period to prisión correccionalin its medium period. As this
provision grants courts the discretion tolay down a penalty without regard
to the presence of mitigating and aggravating circumstances, the
imposable penaltymust also be within the aforementioned range.  Hence,
77
before applying the ISL, we ultimately imposed on Dizon and Tecson et
al. the actual (straight) penalty  of four years and two months of prisión
78
correccional.  Pursuant to Article 43 of the Revised Penal Code, the
79
penalty of prisión correccional automatically carries with it  the following
80
accessory penalties: ARTICLE 43. Prisión Correccional— Its accessory
penalties. — The penalty of prisión correccional shall carry with it that of
suspension from public office, from the right tofollow a profession or
calling, and that of perpetual special disqualification from the right of
suffrage, if the duration of said imprisonment shall exceed eighteen
months. The offender shall suffer the disqualification provided in this
article although pardoned as to the principal penalty, unless the same
shall have been expressly remitted in the pardon.
The duration of their suspension shall be the same as that of their
principal penalty sans the ISL; that is, for four years and two months  or
81
until they have served their sentence in accordance with law. Their
suspension takes effect immediately, once the judgment of conviction
becomes final. 82
We further point out that if the length of their imprisonment exceeds 18
months, they shall furthermore suffer a perpetual special disqualification
from the right of suffrage. Under Article 32 of the RevisedPenal Code, if
this accessory penalty attaches, it shall forever deprive them of the
exercise of their right (a) to vote in any popular election for any public
office; (b) to be elected to that office; and (c) to hold any public
office.  Any public office that they may be holding becomes vacant upon
83
finality of the judgment.  The aforementioned accessory penalties can
84
only be wiped out if expressly remitted in a pardon. 85
Of course, the aforementioned accessory penalties are without prejudice
to a grant of probation, shouldthe trial court find them eligible therefor. As
we explained in Baclayon,  the grant of probation suspends the execution
86
of the principal penalty of imprisonment, as well as that of the accessory
penalties. We have reiterated this point in Moreno v. Commission on
Elections: 87
In Baclayon v. Mutia, the Court declared that an order placing defendant
on probation is not a sentence but is rather, in effect, a suspension of the
imposition of sentence. We held that the grant of probation to petitioner
suspended the imposition of the principal penalty of imprisonment, as
well as the accessory penalties of suspension from public office and from
the right to follow a profession or calling, and that of perpetual special
disqualification from the right of suffrage. We thus deleted from the order
granting probation the paragraph which required that petitioner refrain
from continuing with her teaching profession.
Applying this doctrine to the instant case, the accessory penalties of
suspension from public office, from the right to follow a profession or
calling, and that of perpetual special disqualification from the right of
suffrage, attendant to the penalty of arresto mayor in its maximum period
to prision correccional in its minimum period imposed upon Moreno were
similarly suspended upon the grant of probation.
It appears then that during the period of probation, the probationer is not
even disqualified from running for a public office because the accessory
penalty of suspension from public office is put on hold for the duration of
the probation. x x x x. During the period of probation, the probationer
does not serve the penalty imposed upon him by the court but is merely
required to comply with all the conditions prescribed in the probation
order.
WHEREFORE, premises considered, the Motion for Partial
Reconsideration of petitioner Gerarda H. Villa in connection with G.R.
Nos. 178057 & 178080 is hereby DENIED. The Motion for
Reconsideration filed by the Office of the Solicitor General concerning
G.R. Nos. 155101 and 154954 is also DENIED.
The respective Motions for Clarification or Reconsideration of Antonio
Mariano Almeda, Junel Anthony D. Arna, Renato Bantug, Jr., and Vincent
Tecson are likewise DENIED. In light of the finding that Caloocan City
Regional Trial Court Branch 130 acted without or in excess of its
jurisdiction in taking cognizance of the aforementioned Applications for
Probation, we hereby ANNUL the entire probation proceedings and SET
ASIDE all orders, resolutions, or judgments issued in connection thereto.
We, however, CLARIFY that Antonio Mariano Almeda, Junel Anthony D.
Arna, Renato Bantug, Jr., Vincent Tecson, and Fidelito Dizon are eligible
to apply or reapply for probation in view of our recent ruling in Colinares
v. People of the Philippines,  without prejudice to their remaining civil
88
liability, if any.
Furthermore, we issue a CORRECTION of the dispositive portion of our
Decision dated 1 February 2012 and hereby delete the phrase "and one
(1) day" located in the fourth sentence of the first paragraph thereof. The
sentence shall now read as follows: "They are hereby sentenced to suffer
an indeterminate prison term of four (4) months of arresto mayor, as
minimum, to four (4) years and two (2) months of prisi6n correccional, as
maximum."
SO ORDERED.
MARIA LOURDES P.A. SERENO
Chief Justice
WE CONCUR:
ANTONIO T. CARPIO
Senior Associate Justice
Chairperson
MARTIN S. VILLARAMA, JR.* JOSE PORTUGAL PEREZ
Associate Justice Associate Justice
BIENVENIDO L. REYES
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice
 THIRD DIVISION
G.R. No. 154598             August 16, 2004
IN THE MATTER OF APPLICATION FOR THE ISSUANCE OF A WRIT
OF HABEAS CORPUS
RICHARD BRIAN THORNTON for and in behalf of the minor child
SEQUEIRA JENNIFER DELLE FRANCISCO THORNTON, petitioner,
vs.
ADELFA FRANCISCO THORNTON, respondent.
DECISION
CORONA, J.:
This is a petition to review, under Rule 45 of the Rules of Court, the July
5, 2002 resolution of the Court of Appeals, Sixteenth Division, in CA G.R.
1 
SP No. 70501 dismissing the petition for habeas corpus on the grounds
of lack of jurisdiction and lack of substance. The dispositive portion read:
2 
WHEREFORE, the Court DISMISSES the petition for habeas
corpus on the grounds that: a) this Court has no jurisdiction over
the subject matter of the petition; and b) the petition is not
sufficient in substance.
Petitioner, an American, and respondent, a Filipino, were married on
August 28, 1998 in the Catholic Evangelical Church at United Nations
Avenue, Manila. A year later, respondent gave birth to a baby girl whom
they named Sequeira Jennifer Delle Francisco Thornton.
However, after three years, respondent grew restless and bored as a
plain housewife. She wanted to return to her old job as a "guest relations
officer" in a nightclub, with the freedom to go out with her friends. In fact,
whenever petitioner was out of the country, respondent was also often
out with her friends, leaving her daughter in the care of the househelp.
Petitioner admonished respondent about her irresponsibility but she
continued her carefree ways. On December 7, 2001, respondent left the
family home with her daughter Sequiera without notifying her husband.
She told the servants that she was bringing Sequiera to Purok Marikit,
Sta. Clara, Lamitan, Basilan Province.
Petitioner filed a petition for habeas corpus in the designated Family
Court in Makati City but this was dismissed, presumably because of the
allegation that the child was in Basilan. Petitioner then went to Basilan to
ascertain the whereabouts of respondent and their daughter. However,
he did not find them there and the barangay office of Sta. Clara, Lamitan,
Basilan, issued a certification that respondent was no longer residing
3 
there.
Petitioner gave up his search when he got hold of respondent’s cellular
phone bills showing calls from different places such as Cavite, Nueva
Ecija, Metro Manila and other provinces. Petitioner then filed another
petition for habeas corpus, this time in the Court of Appeals which could
issue a writ of habeas corpus enforceable in the entire country.
However, the petition was denied by the Court of Appeals on the ground
that it did not have jurisdiction over the case. It ruled that since RA 8369
(The Family Courts Act of 1997) gave family courts exclusive original
jurisdiction over petitions for habeas corpus, it impliedly repealed RA
7902 (An Act Expanding the Jurisdiction of the Court of Appeals) and
Batas Pambansa 129 (The Judiciary Reorganization Act of 1980):
Under Sec. 9 (1), BP 129 (1981) the Intermediate Appellate Court
(now Court of Appeals) has jurisdiction to issue a writ of habeas
corpus whether or not in aid of its appellate jurisdiction. This
conferment of jurisdiction was re-stated in Sec. 1, RA 7902
(1995), an act expanding the jurisdiction of this Court. This
jurisdiction finds its procedural expression in Sec. 1, Rule 102 of
the Rules of Court.
In 1997, RA 8369 otherwise known as Family Courts Act was
enacted. It provides:
Sec. 5. Jurisdiction of Family Court. – The Family Courts
shall have exclusive original jurisdiction to hear and
decide the following cases:
xxx       xxx       xxx
 b. Petition for guardianship, custody of children,
habeas corpus in relation to the latter.
The vital question is, did RA 8369 impliedly repeal BP 129 and
RA 7902 insofar as the jurisdiction of this Court to issue writ of
habeas corpus in custody of minor cases is concerned? The
simple answer is, yes, it did, because there is no other meaning
of the word "exclusive" than to constitute the Family Court as the
sole court which can issue said writ. If a court other than the
Family Court also possesses the same competence, then the
jurisdiction of the former is not exclusive but concurrent – and
such an interpretation is contrary to the simple and clear wording
of RA 8369.
Petitioner argues that unless this Court assumes jurisdiction over
a petition for habeas corpus involving custody of minors, a
respondent can easily evade the service of a writ of habeas
corpus on him or her by just moving out of the region over which
the Regional Trial Court issuing the writ has territorial jurisdiction.
That may be so but then jurisdiction is conferred by law. In the
absence of a law conferring such jurisdiction in this Court, it
cannot exercise it even if it is demanded by expediency or
necessity.
Whether RA 8369 is a good or unwise law is not within the
authority of this Court – or any court for that matter – to
determine. The enactment of a law on jurisdiction is within the
exclusive domain of the legislature. When there is a perceived
defect in the law, the remedy is not to be sought form the courts
but only from the legislature.
The only issue before us therefore is whether the Court of Appeals has
jurisdiction to issue writs of habeas corpus in cases involving custody of
minors in the light of the provision in RA 8369 giving family courts
exclusive original jurisdiction over such petitions.
In his comment, the Solicitor General points out that Section 20 of the
Rule on Custody of Minors and Writ of Habeas Corpus in Relation to
Custody of Minors (A.M. No. 03-04-04-SC, effective May 15, 2003) has
rendered the issue moot. Section 20 of the rule provides that a petition for
habeas corpus may be filed in the Supreme Court, Court of Appeals, or
4 
with any of its members and, if so granted, the writ shall be enforceable
anywhere in the Philippines. 5
The petition is granted.
The Court of Appeals should take cognizance of the case since there is
nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas
corpus involving the custody of minors.
The Court of Appeals opines that RA 8369 impliedly repealed RA 7902
and BP 129 since, by giving family courts exclusive jurisdiction over
habeas corpus cases, the lawmakers intended it to be the sole court
which can issue writs of habeas corpus. To the court a quo, the word
"exclusive" apparently cannot be construed any other way.
We disagree with the CA’s reasoning because it will result in an iniquitous
situation, leaving individuals like petitioner without legal recourse in
obtaining custody of their children. Individuals who do not know the
whereabouts of minors they are looking for would be helpless since they
cannot seek redress from family courts whose writs are enforceable only
in their respective territorial jurisdictions. Thus, if a minor is being
transferred from one place to another, which seems to be the case here,
the petitioner in a habeas corpus case will be left without legal remedy.
This lack of recourse could not have been the intention of the lawmakers
when they passed the Family Courts Act of 1997. As observed by the
Solicitor General:
Under the Family Courts Act of 1997, the avowed policy of the
State is to "protect the rights and promote the welfare of children."
The creation of the Family Court is geared towards addressing
three major issues regarding children’s welfare cases, as
expressed by the legislators during the deliberations for the law.
The legislative intent behind giving Family Courts exclusive and
original jurisdiction over such cases was to avoid further clogging
of regular court dockets, ensure greater sensitivity and
specialization in view of the nature of the case and the parties, as
well as to guarantee that the privacy of the children party to the
case remains protected.
The primordial consideration is the welfare and best interests of the child.
We rule therefore that RA 8369 did not divest the Court of Appeals and
the Supreme Court of their jurisdiction over habeas corpus cases
involving the custody of minors. Again, to quote the Solicitor General:
To allow the Court of Appeals to exercise jurisdiction over the
petition for habeas corpus involving a minor child whose
 whereabouts are uncertain and transient will not result in one of
the situations that the legislature seeks to avoid. First, the welfare
of the child is paramount. Second, the ex parte nature of habeas
corpus proceedings will not result in disruption of the child’s
privacy and emotional well-being; whereas to deprive the
appellate court of jurisdiction will result in the evil sought to be
avoided by the legislature: the child’s welfare and well being will
be prejudiced.
This is not the first time that this Court construed the word "exclusive"
as not foreclosing resort to another jurisdiction. As correctly cited by the
Solicitor General, in Floresca vs. Philex Mining Corporation, the heirs of
6 
miners killed in a work-related accident were allowed to file suit in the
regular courts even if, under the Workmen’s Compensation Act, the
Workmen’s Compensation Commissioner had exclusive jurisdiction over
such cases.
We agree with the observations of the Solicitor General that:
While Floresca involved a cause of action different from the case
at bar. it supports petitioner’s submission that the word
"exclusive" in the Family Courts Act of 1997 may not connote
automatic foreclosure of the jurisdiction of other courts over
habeas corpus cases involving minors. In the same manner that
the remedies in the Floresca case were selective, the jurisdiction
of the Court of Appeals and Family Court in the case at bar is
concurrent. The Family Court can issue writs of habeas corpus
enforceable only within its territorial jurisdiction. On the other
hand, in cases where the territorial jurisdiction for the
enforcement of the writ cannot be determined with certainty, the
Court of Appeals can issue the same writ enforceable throughout
the Philippines, as provided in Sec. 2, Rule 102 of the Revised
Rules of Court, thus:
The Writ of Habeas Corpus may be granted by the
Supreme Court, or any member thereof, on any day and
at any time, or by the Court of Appeals or any member
thereof in the instances authorized by law, and if so
granted it shall be enforceable anywhere in the
Philippines, and may be made returnable before the court
or any member thereof, or before a Court of First
Instance, or any judge thereof for hearing and decision on
the merits. It may also be granted by a Court of First
Instance, or a judge thereof, on any day and at any time,
and returnable before himself, enforceable only within his
judicial district. (Emphasis supplied)
In ruling that the Commissioner’s "exclusive" jurisdiction did not foreclose
resort to the regular courts for damages, this Court, in the
same Floresca case, said that it was merely applying and giving effect to
the constitutional guarantees of social justice in the 1935 and 1973
Constitutions and implemented by the Civil Code. It also applied the well-
established rule that what is controlling is the spirit and intent, not the
letter, of the law:
"Idolatrous reverence" for the law sacrifices the human being.
The spirit of the law insures man’s survival and ennobles him. In
the words of Shakespeare, "the letter of the law killeth; its spirit
giveth life."
xxx       xxx       xxx
It is therefore patent that giving effect to the social justice
guarantees of the Constitution, as implemented by the provisions
of the New Civil Code, is not an exercise of the power of law-
making, but is rendering obedience to the mandates of the
fundamental law and the implementing legislation
aforementioned.
Language is rarely so free from ambiguity as to be incapable of being
used in more than one sense. Sometimes, what the legislature actually
had in mind is not accurately reflected in the language of a statute, and
its literal interpretation may render it meaningless, lead to absurdity,
injustice or contradiction. In the case at bar, a literal interpretation of the
7 
word "exclusive" will result in grave injustice and negate the policy "to
protect the rights and promote the welfare of children" under the
8 
Constitution and the United Nations Convention on the Rights of the
Child. This mandate must prevail over legal technicalities and serve as
the guiding principle in construing the provisions of RA 8369.
Moreover, settled is the rule in statutory construction that implied repeals
are not favored:
The two laws must be absolutely incompatible, and a clear finding
thereof must surface, before the inference of implied repeal may
be drawn. The rule is expressed in the maxim, interpretare et
concordare leqibus est optimus interpretendi, i.e., every statute
 must be so interpreted and brought into accord with other laws as One final note. Requiring the serving officer to search for the child all over
to form a uniform system of jurisprudence. The fundament is that the country is not an unreasonable availment of a remedy which the
the legislature should be presumed to have known the existing Court of Appeals cited as a ground for dismissing the petition. As
laws on the subject and not have enacted conflicting statutes. explained by the Solicitor General: 10

Hence, all doubts must be resolved against any implied repeal,

and all efforts should be exerted in order to harmonize and give
effect to all laws on the subject."
9
The provisions of RA 8369 reveal no manifest intent to revoke the
jurisdiction of the Court of Appeals and Supreme Court to issue writs of
habeas corpus relating to the custody of minors. Further, it cannot be
said that the provisions of RA 8369, RA 7092 and BP 129 are absolutely
incompatible since RA 8369 does not prohibit the Court of Appeals and
the Supreme Court from issuing writs of habeas corpus in cases involving
the custody of minors. Thus, the provisions of RA 8369 must be read in
harmony with RA 7029 and BP 129 ― that family courts have concurrent
jurisdiction with the Court of Appeals and the Supreme Court in petitions for
habeas corpus where the custody of minors is at issue.
That the serving officer will have to "search for the child all over
the country" does not represent an insurmountable or
unreasonable obstacle, since such a task is no more different
from or difficult than the duty of the peace officer in effecting a
warrant of arrest, since the latter is likewise enforceable
anywhere within the Philippines.
WHEREFORE, the petition is hereby GRANTED. The petition for habeas
corpus in CA-G.R.-SP-No. 70501 is
hereby REINSTATED and REMANDED to the Court of Appeals,
Sixteenth Division.
SO ORDERED.

In any case, whatever uncertainty there was has been settled with the Panganiban,, J., Chairman, and Carpio Morales, JJ., concur.
adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Sandoval-Gutierrez, on leave.
Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of
the rule provides that:

Section 20. Petition for writ of habeas corpus.- A verified petition

for a writ of habeas corpus involving custody of minors shall be
filed with the Family Court. The writ shall be enforceable within its
judicial region to which the Family Court belongs.

xxx       xxx       xxx

The petition may likewise be filed with the Supreme Court, Court

of Appeals, or with any of its members and, if so granted, the writ
shall be enforceable anywhere in the Philippines. The writ may be
made returnable to a Family Court or to any regular court within
the region where the petitioner resides or where the minor may
be found for hearing and decision on the merits. (Emphasis Ours)

From the foregoing, there is no doubt that the Court of Appeals and
Supreme Court have concurrent jurisdiction with family courts in habeas
corpus cases where the custody of minors is involved.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-30061 February 27, 1974
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellees,
vs.
JOSE JABINAL Y CARMEN, defendant-appellant.
Office of the Solicitor General Felix V. Makasiar and Solicitor Antonio M.
Martinez for plaintiff-appellee.
Pedro Panganiban y Tolentino for defendant-appellant
ANTONIO, J.:p
Appeal from the judgment of the Municipal Court of Batangas (provincial capital), Batangas, in Criminal
Case No. 889, finding the accused guilty of the crime of Illegal Possession of Firearm and Ammunition
and sentencing him to suffer an indeterminate penalty ranging from one (1) year and one (1) day to two
(2) years imprisonment, with the accessories provided by law, which raises in issue the validity of his
conviction based on a retroactive application of Our ruling in People v. Mapa.1
The complaint filed against the accused reads:
That on or about 9:00 o'clock, p.m., the 5th day of
September, 1964, in the poblacion, Municipality of
Batangas, Province of Batangas, Philippines, and within
the jurisdiction of this Honorable Court, the above-named
accused, a person not authorized by law, did then and
there wilfully, unlawfully and feloniously keep in his
possession, custody and direct control a revolver Cal. .22,
RG8 German Made with one (1) live ammunition and four
(4) empty shells without first securing the necessary
permit or license to possess the same.
At the arraignment on September 11, 1964, the accused entered a plea
of not guilty, after which trial was accordingly held.
The accused admitted that on September 5, 1964, he was in possession
of the revolver and the ammunition described in the complaint, without
the requisite license or permit. He, however, claimed to be entitled to
exoneration because, although he had no license or permit, he had an
appointment as Secret Agent from the Provincial Governor of Batangas
and an appointment as Confidential Agent from the PC Provincial
Commander, and the said appointments expressly carried with them the
authority to possess and carry the firearm in question.
Indeed, the accused had appointments from the above-mentioned
officials as claimed by him. His appointment from Governor Feliciano
Leviste, dated December 10, 1962, reads:
Reposing special trust and confidence in your civic spirit,
and trusting that you will be an effective agent in the
detection of crimes and in the preservation of peace and
order in the province of Batangas, especially with respect
to the suppression of trafficking in explosives, jueteng,
illegal cockfighting, cattle rustling, robbery and the
detection of unlicensed firearms, you are hereby
appointed a SECRET AGENT of the undersigned, the
appointment to take effect immediately, or as soon as you
have qualified for the position. As such Secret Agent, your
duties shall be those generally of a peace officer and
particularly to help in the preservation of peace and order
in this province and to make reports thereon to me once
or twice a month. It should be clearly understood that any
abuse of authority on your part shall be considered
sufficient ground for the automatic cancellation of your
appointment and immediate separation from the service.
In accordance with the decision of the Supreme Court in
G.R. No. L-12088 dated December 23, 1959, you will
have the right to bear a firearm, particularly described
below, for use in connection with the performance of your
duties.
By virtue hereof, you may qualify and enter upon the
performance of your duties by taking your oath of office
and filing the original thereof with us.
Very truly yours,
(Sgd.) FELICIANO LEVISTE
Provincial Governor
FIREARM AUTHORIZED TO CARRY:
Kind: — ROHM-Revolver
Make: — German
SN: — 64
Cal:— .22
On March 15, 1964, the accused was also appointed by the PC
Provincial Commander of Batangas as Confidential Agent with duties to
furnish information regarding smuggling activities, wanted persons, loose
firearms, subversives and other similar subjects that might affect the
peace and order condition in Batangas province, and in connection with
these duties he was temporarily authorized to possess a ROHM revolver,
Cal. .22 RG-8 SN-64, for his personal protection while in the performance
of his duties.
The accused contended before the court a quo that in view of his above-
mentioned appointments as Secret Agent and Confidential Agent, with
authority to possess the firearm subject matter of the prosecution, he was
entitled to acquittal on the basis of the Supreme Court's decision
in People vs. Macarandang  and People vs. Lucero.  The trial court, while
2 3
conceding on the basis of the evidence of record the accused had really
been appointed Secret Agent and Confidential Agent by the Provincial
Governor and the PC Provincial Commander of Batangas, respectively,
with authority to possess and carry the firearm described in the
complaint, nevertheless held the accused in its decision dated December
27, 1968, criminally liable for illegal possession of a firearm and
ammunition on the ground that the rulings of the Supreme Court in the
cases of Macarandang and Lucero were reversed and abandoned
in People vs. Mapa, supra. The court considered as mitigating
circumstances the appointments of the accused as Secret Agent and
Confidential Agent.
Let us advert to Our decisions in People v. Macarandang, supra, People
v. Lucero, supra, and People v. Mapa, supra. In Macarandang, We
reversed the trial court's judgment of conviction against the accused
because it was shown that at the time he was found to possess a certain
firearm and ammunition without license or permit, he had an appointment
from the Provincial Governor as Secret Agent to assist in the
maintenance of peace and order and in the detection of crimes, with
authority to hold and carry the said firearm and ammunition. We therefore
held that while it is true that the Governor has no authority to issue any
firearm license or permit, nevertheless, section 879 of the Revised
Administrative Code provides that "peace officers" are exempted from the
requirements relating to the issuance of license to possess firearms; and
Macarandang's appointment as Secret Agent to assist in the
maintenance of peace and order and detection of crimes, sufficiently
placed him in the category of a "peace officer" equivalent even to a
member of the municipal police who under section 879 of the Revised
Administrative Code are exempted from the requirements relating to the
issuance of license to possess firearms. In Lucero, We held that under
the circumstances of the case, the granting of the temporary use of the
firearm to the accused was a necessary means to carry out the lawful
purpose of the batallion commander to effect the capture of a Huk leader.
In Mapa, expressly abandoning the doctrine in Macarandang, and by
implication, that in Lucero, We sustained the judgment of conviction on
the following ground:
The law is explicit that except as thereafter specifically
allowed, "it shall be unlawful for any person to ... possess
any firearm, detached parts of firearms or ammunition
therefor, or any instrument or implement used or intended
to be used in the manufacture of firearms, parts of
firearms, or ammunition." (Sec. 878, as amended by
Republic Act No. 4, Revised Administrative Code.) The
next section provides that "firearms and ammunition
regularly and lawfully issued to officers, soldiers, sailors,
or marines [of the Armed Forces of the Philippines], the
Philippine Constabulary, guards in the employment of the
Bureau of Prisons, municipal police, provincial governors,
lieutenant governors, provincial treasurers, municipal
treasurers, municipal mayors, and guards of provincial
prisoners and jails," are not covered "when such firearms
are in possession of such officials and public servants for
use in the performance of their official duties." (Sec. 879,
Revised Administrative Code.)
The law cannot be any clearer. No provision is made for a
secret agent. As such he is not exempt. ... .
It will be noted that when appellant was appointed Secret Agent by the
Provincial Government in 1962, and Confidential Agent by the Provincial
Commander in 1964, the prevailing doctrine on the matter was that laid
down by Us in People v. Macarandang (1959) and People v.
Lucero (1958). Our decision in People v. Mapa reversing the aforesaid
doctrine came only in 1967. The sole question in this appeal is: Should
appellant be acquitted on the basis of Our rulings
in Macarandang and Lucero, or should his conviction stand in view of the
complete reversal of the Macarandang and Lucero doctrine in Mapa? The
Solicitor General is of the first view, and he accordingly recommends
reversal of the appealed judgment.
Decisions of this Court, although in themselves not laws, are
nevertheless evidence of what the laws mean, and this is the reason why
under Article 8 of the New Civil Code "Judicial decisions applying or
interpreting the laws or the Constitution shall form a part of the legal
system ... ." The interpretation upon a law by this Court constitutes, in a
way, a part of the law as of the date that law originally passed, since this
Court's construction merely establishes the contemporaneous legislative
intent that law thus construed intends to effectuate. The settled rule
supported by numerous authorities is a restatement of legal maxim "legis
interpretatio legis vim obtinet" — the interpretation placed upon the
written law by a competent court has the force of law. The doctrine laid
down in Lucero and Macarandang was part of the jurisprudence, hence
of the law, of the land, at the time appellant was found in possession of
the firearm in question and when he arraigned by the trial court. It is true
that the doctrine was overruled in the Mapa case in 1967, but when a
doctrine of this Court is overruled and a different view is adopted, the new
doctrine should be applied prospectively, and should not apply to parties
who had relied on the old doctrine and acted on the faith thereof. This is
especially true in the construction and application of criminal laws, where
it is necessary that the punishability of an act be reasonably foreseen for
the guidance of society.

It follows, therefore, that considering that appellant conferred his

appointments as Secret Agent and Confidential Agent and authorized to
possess a firearm pursuant to the prevailing doctrine enunciated
in Macarandang and Lucero, under which no criminal liability would
attach to his possession of said firearm in spite of the absence of a
license and permit therefor, appellant must be absolved. Certainly,
appellant may not be punished for an act which at the time it was done
was held not to be punishable.

WHEREFORE, the judgment appealed from is hereby reversed, and

appellant is acquitted, with costs de oficio.

Zaldivar (Chairman), Barredo, Fernandez and Aquino, JJ., concur.

Fernando, J., took no part.

 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 162155               August 28, 2007
COMMISSIONER OF INTERNAL REVENUE and ARTURO V.
PARCERO in his official capacity as Revenue District Officer of
Revenue District No. 049 (Makati), Petitioners,
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.
DECISION
CORONA, J.:
This petition for review on certiorari 1 seeks to set aside the August 1,
2003 decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 64782
and its February 9, 2004 resolution denying reconsideration. 3
On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown
Property Group, Inc., applied for the refund or credit of income tax
respondent paid in 1997. In Yap's letter to petitioner revenue district
officer Arturo V. Parcero of Revenue District No. 049 (Makati) of the
Bureau of Internal Revenue (BIR),4 he explained that the increase in the
cost of labor and materials and difficulty in obtaining financing for projects
and collecting receivables caused the real estate industry to
slowdown.5 As a consequence, while business was good during the first
quarter of 1997, respondent suffered losses amounting to ₱71,879,228
that year.6
According to Yap, because respondent suffered losses, it was not liable
for income taxes.7 Nevertheless, respondent paid its quarterly corporate
income tax and remitted creditable withholding tax from real estate sales
to the BIR in the total amount of ₱26,318,398.32.8 Therefore, respondent
was entitled to tax refund or tax credit. 9
On May 13, 1999, revenue officer Elizabeth Y. Santos required
respondent to submit additional documents to support its
claim.10 Respondent complied but its claim was not acted upon. Thus, on
April 14, 2000, it filed a petition for review11 in the Court of Tax Appeals
(CTA).
On December 15, 2000, the CTA dismissed the petition as it was filed
beyond the two-year prescriptive period for filing a judicial claim for tax
refund or tax credit.12 It invoked Section 229 of the National Internal
Revenue Code (NIRC):
Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit
or proceeding shall be maintained in any court for the recovery of any
national internal revenue tax hereafter alleged to have been erroneously
or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, or of any sum alleged to have been
excessively or in any manner wrongfully collected, until a claim for refund
or credit has been duly filed with the Commissioner; but such suit or
proceeding may be maintained, whether or not such tax, penalty, or sum
has been paid under protest or duress.
In any case, no such suit or proceeding shall be filed after the
expiration of two (2) years from the date of payment of the tax or
penalty regardless of any supervening cause that may arise after
payment: Provided, however, That the Commissioner may, even without
a claim therefor, refund or credit any tax, where on the face of the return
upon which payment was made, such payment appears clearly to have
been erroneously paid. (emphasis supplied)
The CTA found that respondent filed its final adjusted return on April 14,
1998. Thus, its right to claim a refund or credit commenced on that date. 13
The tax court applied Article 13 of the Civil Code which states:
Art. 13. When the law speaks of years, months, days or nights, it shall be
understood that years are of three hundred sixty-five days each;
months, of thirty days; days, of twenty-four hours, and nights from sunset
to sunrise.
If the months are designated by their name, they shall be computed by
the number of days which they respectively have.
In computing a period, the first day shall be excluded, and the last
included. (emphasis supplied)
Thus, according to the CTA, the two-year prescriptive period under
Section 229 of the NIRC for the filing of judicial claims was equivalent to
730 days. Because the year 2000 was a leap year, respondent's petition,
which was filed 731 days14 after respondent filed its final adjusted return,
was filed beyond the reglementary period.15
Respondent moved for reconsideration but it was denied. 16 Hence, it filed
an appeal in the CA.17
On August 1, 2003, the CA reversed and set aside the decision of the
CTA.18 It ruled that Article 13 of the Civil Code did not distinguish between
a regular year and a leap year. According to the CA:
The rule that a year has 365 days applies, notwithstanding the fact that a
particular year is a leap year.19
In other words, even if the year 2000 was a leap year, the periods
covered by April 15, 1998 to April 14, 1999 and April 15, 1999 to April 14,
2000 should still be counted as 365 days each or a total of 730 days. A
statute which is clear and explicit shall be neither interpreted nor
construed.20
Petitioners moved for reconsideration but it was denied. 21 Thus, this
appeal.
Petitioners contend that tax refunds, being in the nature of an exemption,
should be strictly construed against claimants. 22 Section 229 of the NIRC
should be strictly applied against respondent inasmuch as it has been
consistently held that the prescriptive period (for the filing of tax refunds
and tax credits) begins to run on the day claimants file their final adjusted
returns.23 Hence, the claim should have been filed on or before April 13,
2000 or within 730 days, reckoned from the time respondent filed its final
adjusted return.
The conclusion of the CA that respondent filed its petition for review in
the CTA within the two-year prescriptive period provided in Section 229 of
the NIRC is correct. Its basis, however, is not.
The rule is that the two-year prescriptive period is reckoned from the filing
of the final adjusted return.24 But how should the two-year prescriptive
period be computed?
As already quoted, Article 13 of the Civil Code provides that when the law
speaks of a year, it is understood to be equivalent to 365 days.
In National Marketing Corporation v. Tecson,25 we ruled that a year is
equivalent to 365 days regardless of whether it is a regular year or a leap
year.26
However, in 1987, EO27 292 or the Administrative Code of 1987 was
enacted. Section 31, Chapter VIII, Book I thereof provides:
Sec. 31. Legal Periods. — "Year" shall be understood to be twelve
calendar months; "month" of thirty days, unless it refers to a specific
calendar month in which case it shall be computed according to the
number of days the specific month contains; "day", to a day of twenty-four
hours and; "night" from sunrise to sunset. (emphasis supplied)
A calendar month is "a month designated in the calendar without regard
to the number of days it may contain." 28 It is the "period of time running
from the beginning of a certain numbered day up to, but not including, the
corresponding numbered day of the next month, and if there is not a
sufficient number of days in the next month, then up to and including the
last day of that month."29 To illustrate, one calendar month from
December 31, 2007 will be from January 1, 2008 to January 31, 2008;
one calendar month from January 31, 2008 will be from February 1, 2008
until February 29, 2008.30
A law may be repealed expressly (by a categorical declaration that the
law is revoked and abrogated by another) or impliedly (when the
provisions of a more recent law cannot be reasonably reconciled with the
previous one).31 Section 27, Book VII (Final Provisions) of the
Administrative Code of 1987 states:
Sec. 27. Repealing clause. — All laws, decrees, orders, rules and
regulation, or portions thereof, inconsistent with this Code are hereby
repealed or modified accordingly.
A repealing clause like Sec. 27 above is not an express repealing clause
because it fails to identify or designate the laws to be abolished. 32 Thus,
the provision above only impliedly repealed all laws inconsistent with the
Administrative Code of 1987. 1avvphi1
Implied repeals, however, are not favored. An implied repeal must have
been clearly and unmistakably intended by the legislature. The test is
whether the subsequent law encompasses entirely the subject matter of   10th calendar January 15, to February
the former law and they cannot be logically or reasonably reconciled. 33 month 1999 14, 1999
  11th calendar February to March 14,
Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of
month 15, 1999 1999
the Administrative Code of 1987 deal with the same subject matter — the
computation of legal periods. Under the Civil Code, a year is   12th calendar March 15, to April 14,
equivalent to 365 days whether it be a regular year or a leap year. Under month 1999 1999
the Administrative Code of 1987, however, a year is composed of 12 Year 13th calendar April 15, to May 14,
calendar months. Needless to state, under the Administrative Code of 2 month 1999 1999
1987, the number of days is irrelevant.
  14th calendar May 15, to June 14,
month 1999 1999
There obviously exists a manifest incompatibility in the manner of
computing legal periods under the Civil Code and the Administrative   15th calendar June 15, to July 14,
Code of 1987. For this reason, we hold that Section 31, Chapter VIII, month 1999 1999
Book I of the Administrative Code of 1987, being the more recent law,   16th calendar July 15, to August 14,
governs the computation of legal periods. Lex posteriori derogat priori. month 1999 1999

Applying Section 31, Chapter VIII, Book I of the Administrative Code of   17th calendar August 15, to September
1987 to this case, the two-year prescriptive period (reckoned from the month 1999 14, 1999
time respondent filed its final adjusted return34 on April 14, 1998)   18th calendar September to October 14,
consisted of 24 calendar months, computed as follows: month 15, 1999 1999
  19th calendar October 15, to November
Year 1st calendar April 15, to May 14, month 1999 14, 1999
1 month 1998 1998
  20th calendar November to December
  2nd calendar May 15, to June 14, month 15, 1999 14, 1999
month 1998 1998
  21st calendar December to January 14,
  3rd calendar June 15, to July 14, month 15, 1999 2000
month 1998 1998
  22nd calendar January 15, to February
  4th calendar July 15, to August 14, month 2000 14, 2000
month 1998 1998
  23rd calendar February to March 14,
  5th calendar August 15, to September month 15, 2000 2000
month 1998 14, 1998
  24th calendar March 15, to April 14,
  6th calendar September to October 14, month 2000 2000
month 15, 1998 1998
  7th calendar October 15, to November We therefore hold that respondent's petition (filed on April 14, 2000) was
month 1998 14, 1998 filed on the last day of the 24th calendar month from the day respondent
  8th calendar November to December filed its final adjusted return. Hence, it was filed within the reglementary
month 15, 1998 14, 1998 period.

  9th calendar December to January 14, Accordingly, the petition is hereby DENIED. The case is REMANDED to
month 15, 1998 1999 the Court of Tax Appeals which is ordered to expeditiously proceed to
hear C.T.A. Case No. 6113 entitled Primetown Property Group, Inc. v.
Commissioner of Internal Revenue and Arturo V. Parcero.

No costs.

SO ORDERED.

RENATO C. CORONA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice
Chairperson

ANGELINA SANDOVAL-
ADOLFO S. AZCUNA
GUTIERREZ
Associate Justice
Associate Justice

CANCIO C. GARCIA
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.

REYNATO S. PUNO
Chief Justice

EN BANC

G.R. No. L-19671           November 29, 1965

PASTOR B. TENCHAVEZ, plaintiff-appellant,
vs.
VICENTA F. ESCAÑO, ET AL., defendants-appellees.
I. V. Binamira & F. B. Barria for plaintiff-appellant.
Jalandoni & Jarnir for defendants-appellees.
REYES, J.B.L., J.:
Direct appeal, on factual and legal questions, from the judgment of the
Court of First Instance of Cebu, in its Civil Case No. R-4177, denying the
claim of the plaintiff-appellant, Pastor B. Tenchavez, for legal separation
and one million pesos in damages against his wife and parents-in-law,
the defendants-appellees, Vicente, Mamerto and Mena, 1 all surnamed
"Escaño," respectively.2
The facts, supported by the evidence of record, are the following:
Missing her late afternoon classes on 24 February 1948 in the University
of San Carlos, Cebu City, where she was then enrolled as a second year
student of commerce, Vicenta Escaño, 27 years of age (scion of a well-
to-do and socially prominent Filipino family of Spanish ancestry and a
"sheltered colegiala"), exchanged marriage vows with Pastor Tenchavez,
32 years of age, an engineer, ex-army officer and of undistinguished
stock, without the knowledge of her parents, before a Catholic chaplain,
Lt. Moises Lavares, in the house of one Juan Alburo in the said city. The
marriage was the culmination of a previous love affair and was duly
registered with the local civil register.
Vicenta's letters to Pastor, and his to her, before the marriage, indicate
that the couple were deeply in love. Together with a friend, Pacita Noel,
their matchmaker and go-between, they had planned out their marital
future whereby Pacita would be the governess of their first-born; they
started saving money in a piggy bank. A few weeks before their secret
marriage, their engagement was broken; Vicenta returned the
engagement ring and accepted another suitor, Joseling Lao. Her love for
Pastor beckoned; she pleaded for his return, and they reconciled. This
time they planned to get married and then elope. To facilitate the
elopement, Vicenta had brought some of her clothes to the room of
Pacita Noel in St. Mary's Hall, which was their usual trysting place.
Although planned for the midnight following their marriage, the elopement
did not, however, materialize because when Vicente went back to her
classes after the marriage, her mother, who got wind of the intended
nuptials, was already waiting for her at the college. Vicenta was taken
home where she admitted that she had already married Pastor. Mamerto
and Mena Escaño were surprised, because Pastor never asked for the
hand of Vicente, and were disgusted because of the great scandal that
the clandestine marriage would provoke (t.s.n., vol. III, pp. 1105-06). The
following morning, the Escaño spouses sought priestly advice. Father
Reynes suggested a recelebration to validate what he believed to be an
invalid marriage, from the standpoint of the Church, due to the lack of
authority from the Archbishop or the parish priest for the officiating
chaplain to celebrate the marriage. The recelebration did not take place,
because on 26 February 1948 Mamerto Escaño was handed by a maid,
whose name he claims he does not remember, a letter purportedly
coming from San Carlos college students and disclosing an amorous
relationship between Pastor Tenchavez and Pacita Noel; Vicenta
translated the letter to her father, and thereafter would not agree to a new
marriage. Vicenta and Pastor met that day in the house of Mrs. Pilar
Mendezona. Thereafter, Vicenta continued living with her parents while
Pastor returned to his job in Manila. Her letter of 22 March 1948 (Exh.
"M"), while still solicitous of her husband's welfare, was not as endearing
as her previous letters when their love was aflame.
Vicenta was bred in Catholic ways but is of a changeable disposition, and
Pastor knew it. She fondly accepted her being called a "jellyfish." She
was not prevented by her parents from communicating with Pastor (Exh.
"1-Escaño"), but her letters became less frequent as the days passed. As
of June, 1948 the newlyweds were already estranged (Exh. "2-Escaño").
Vicenta had gone to Jimenez, Misamis Occidental, to escape from the
scandal that her marriage stirred in Cebu society. There, a lawyer filed for
her a petition, drafted by then Senator Emmanuel Pelaez, to annul her
marriage. She did not sign the petition (Exh. "B-5"). The case was
dismissed without prejudice because of her non-appearance at the
hearing (Exh. "B-4").
On 24 June 1950, without informing her husband, she applied for a
passport, indicating in her application that she was single, that her
purpose was to study, and she was domiciled in Cebu City, and that she
intended to return after two years. The application was approved, and
she left for the United States. On 22 August 1950, she filed a verified
complaint for divorce against the herein plaintiff in the Second Judicial
District Court of the State of Nevada in and for the County of Washoe, on
the ground of "extreme cruelty, entirely mental in character." On 21
October 1950, a decree of divorce, "final and absolute", was issued in
open court by the said tribunal.
In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of
Cebu to annul their daughter's marriage to Pastor (Exh. "D"). On 10
September 1954, Vicenta sought papal dispensation of her marriage
(Exh. "D"-2).
On 13 September 1954, Vicenta married an American, Russell Leo
Moran, in Nevada. She now lives with him in California, and, by him, has
begotten children. She acquired American citizenship on 8 August 1958.
But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a
complaint in the Court of First Instance of Cebu, and amended on 31 May
1956, against Vicenta F. Escaño, her parents, Mamerto and Mena
Escaño, whom he charged with having dissuaded and discouraged
Vicenta from joining her husband, and alienating her affections, and
against the Roman Catholic Church, for having, through its Diocesan
Tribunal, decreed the annulment of the marriage, and asked for legal
separation and one million pesos in damages. Vicenta claimed a valid
divorce from plaintiff and an equally valid marriage to her present
husband, Russell Leo Moran; while her parents denied that they had in
any way influenced their daughter's acts, and counterclaimed for moral
damages.
The appealed judgment did not decree a legal separation, but freed the
plaintiff from supporting his wife and to acquire property to the exclusion
of his wife. It allowed the counterclaim of Mamerto Escaño and Mena
Escaño for moral and exemplary damages and attorney's fees against
the plaintiff-appellant, to the extent of P45,000.00, and plaintiff resorted
directly to this Court.
The appellant ascribes, as errors of the trial court, the following:
1. In not declaring legal separation; in not holding defendant
Vicenta F. Escaño liable for damages and in dismissing the
complaint;.
2. In not holding the defendant parents Mamerto Escano and the
heirs of Doña Mena Escaño liable for damages;.
3 In holding the plaintiff liable for and requiring him to pay the
damages to the defendant parents on their counterclaims; and.
4. In dismissing the complaint and in denying the relief sought by
the plaintiff.
That on 24 February 1948 the plaintiff-appellant, Pastor Tenchavez, and
the defendant-appellee, Vicenta Escaño, were validly married to each
other, from the standpoint of our civil law, is clearly established by the
record before us. Both parties were then above the age of majority, and
otherwise qualified; and both consented to the marriage, which was
performed by a Catholic priest (army chaplain Lavares) in the presence of
competent witnesses. It is nowhere shown that said priest was not duly
authorized under civil law to solemnize marriages.
The chaplain's alleged lack of ecclesiastical authorization from the parish
priest and the Ordinary, as required by Canon law, is irrelevant in our civil
law, not only because of the separation of Church and State but also
because Act 3613 of the Philippine Legislature (which was the marriage
law in force at the time) expressly provided that —
SEC. 1. Essential requisites. Essential requisites for marriage are
the legal capacity of the contracting parties and consent.
(Emphasis supplied)
The actual authority of the solemnizing officer was thus only a formal
requirement, and, therefore, not essential to give the marriage civil
effects,3 and this is emphasized by section 27 of said marriage act, which
provided the following:
SEC. 27. Failure to comply with formal requirements. No
marriage shall be declared invalid because of the absence of one
or several of the formal requirements of this Act if, when it was
performed, the spouses or one of them believed in good faith that
the person who solemnized the marriage was actually
empowered to do so, and that the marriage was perfectly legal.
The good faith of all the parties to the marriage (and hence the validity of
their marriage) will be presumed until the contrary is positively proved
(Lao vs. Dee Tim, 45 Phil. 739, 745; Francisco vs. Jason, 60 Phil. 442,
448). It is well to note here that in the case at bar, doubts as to the
authority of the solemnizing priest arose only after the marriage, when
Vicenta's parents consulted Father Reynes and the archbishop of Cebu.
Moreover, the very act of Vicenta in abandoning her original action for
annulment and subsequently suing for divorce implies an admission that
her marriage to plaintiff was valid and binding.
Defendant Vicenta Escaño argues that when she contracted the marriage
she was under the undue influence of Pacita Noel, whom she charges to
have been in conspiracy with appellant Tenchavez. Even granting, for
argument's sake, the truth of that contention, and assuming that Vicenta's
consent was vitiated by fraud and undue influence, such vices did not
render her marriage ab initio void, but merely voidable, and the marriage
remained valid until annulled by a competent civil court. This was never
done, and admittedly, Vicenta's suit for annulment in the Court of First
Instance of Misamis was dismissed for non-prosecution.
It is equally clear from the record that the valid marriage between Pastor
Tenchavez and Vicenta Escaño remained subsisting and undissolved
under Philippine law, notwithstanding the decree of absolute divorce that
the wife sought and obtained on 21 October 1950 from the Second
Judicial District Court of Washoe County, State of Nevada, on grounds of
"extreme cruelty, entirely mental in character." At the time the divorce
decree was issued, Vicenta Escaño, like her husband, was still a Filipino
citizen.4 She was then subject to Philippine law, and Article 15 of the Civil
Code of the Philippines (Rep. Act No. 386), already in force at the time,
expressly provided:
Laws relating to family rights and duties or to the status, condition
and legal capacity of persons are binding upon the citizens of the
Philippines, even though living abroad.
The Civil Code of the Philippines, now in force, does not admit absolute
divorce, quo ad vinculo matrimonii; and in fact does not even use that
term, to further emphasize its restrictive policy on the matter, in contrast
to the preceding legislation that admitted absolute divorce on grounds of
adultery of the wife or concubinage of the husband (Act 2710). Instead of
divorce, the present Civil Code only provides for legal separation (Title
IV, Book 1, Arts. 97 to 108), and, even in that case, it expressly
prescribes that "the marriage bonds shall not be severed" (Art. 106,
subpar. 1).
For the Philippine courts to recognize and give recognition or effect to a
foreign decree of absolute divorce betiveen Filipino citizens could be a
patent violation of the declared public policy of the state, specially in view
of the third paragraph of Article 17 of the Civil Code that prescribes the
following:
Prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, policy and good
customs, shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in
a foreign country.
Even more, the grant of effectivity in this jurisdiction to such foreign
divorce decrees would, in effect, give rise to an irritating and scandalous
discrimination in favor of wealthy citizens, to the detriment of those
members of our polity whose means do not permit them to sojourn
abroad and obtain absolute divorces outside the Philippines.
From this point of view, it is irrelevant that appellant Pastor Tenchavez
should have appeared in the Nevada divorce court. Primarily because the
policy of our law cannot be nullified by acts of private parties (Civil
Code,Art. 17, jam quot.); and additionally, because the mere appearance
of a non-resident consort cannot confer jurisdiction where the court
originally had none (Area vs. Javier, 95 Phil. 579).
From the preceding facts and considerations, there flows as a necessary
consequence that in this jurisdiction Vicenta Escaño's divorce and
second marriage are not entitled to recognition as valid; for her previous
union to plaintiff Tenchavez must be declared to be existent and
undissolved. It follows, likewise, that her refusal to perform her wifely
duties, and her denial of consortium and her desertion of her husband
constitute in law a wrong caused through her fault, for which the husband
is entitled to the corresponding indemnity (Civil Code, Art. 2176). Neither
an unsubstantiated charge of deceit nor an anonymous letter charging
immorality against the husband constitute, contrary to her claim,
adequate excuse. Wherefore, her marriage and cohabitation with Russell
Leo Moran is technically "intercourse with a person not her husband"
from the standpoint of Philippine Law, and entitles plaintiff-appellant
Tenchavez to a decree of "legal separation under our law, on the basis of
adultery" (Revised Penal Code, Art. 333).
The foregoing conclusions as to the untoward effect of a marriage after
an invalid divorce are in accord with the previous doctrines and rulings of
this court on the subject, particularly those that were rendered under our
laws prior to the approval of the absolute divorce act (Act 2710 of the
Philippine Legislature). As a matter of legal history, our statutes did not
recognize divorces a vinculo before 1917, when Act 2710 became
effective; and the present Civil Code of the Philippines, in disregarding
absolute divorces, in effect merely reverted to the policies on the subject
prevailing before Act 2710. The rulings, therefore, under the Civil Code of
1889, prior to the Act above-mentioned, are now, fully applicable. Of
these, the decision in Ramirez vs. Gmur, 42 Phil. 855, is of particular
interest. Said this Court in that case:
 As the divorce granted by the French Court must be ignored, it
results that the marriage of Dr. Mory and Leona Castro,
celebrated in London in 1905, could not legalize their relations;
and the circumstance that they afterwards passed for husband
and wife in Switzerland until her death is wholly without legal
significance. The claims of the very children to participate in the
estate of Samuel Bishop must therefore be rejected. The right to
inherit is limited to legitimate, legitimated and acknowledged
natural children. The children of adulterous relations are wholly
excluded. The word "descendants" as used in Article 941 of the
Civil Code cannot be interpreted to include illegitimates born
of adulterous relations. (Emphasis supplied)
Except for the fact that the successional rights of the children, begotten
from Vicenta's marriage to Leo Moran after the invalid divorce, are not
involved in the case at bar, the Gmur case is authority for the proposition
that such union is adulterous in this jurisdiction, and, therefore, justifies
an action for legal separation on the part of the innocent consort of the
first marriage, that stands undissolved in Philippine law. In not so
declaring, the trial court committed error.
True it is that our ruling gives rise to anomalous situations where the
status of a person (whether divorced or not) would depend on the territory
where the question arises. Anomalies of this kind are not new in the
Philippines, and the answer to them was given in Barretto vs. Gonzales,
58 Phil. 667:
The hardship of the existing divorce laws in the Philippine Islands
are well known to the members of the Legislature. It is the duty of
the Courts to enforce the laws of divorce as written by Legislature
if they are constitutional. Courts have no right to say that such
laws are too strict or too liberal. (p. 72)
The appellant's first assignment of error is, therefore, sustained.
However, the plaintiff-appellant's charge that his wife's parents, Dr.
Mamerto Escaño and his wife, the late Doña Mena Escaño, alienated the
affections of their daughter and influenced her conduct toward her
husband are not supported by credible evidence. The testimony of Pastor
Tenchavez about the Escaño's animosity toward him strikes us to be
merely conjecture and exaggeration, and are belied by Pastor's own
letters written before this suit was begun (Exh. "2-Escaño" and "Vicenta,"
Rec. on App., pp. 270-274). In these letters he expressly apologized to
the defendants for "misjudging them" and for the "great unhappiness"
caused by his "impulsive blunders" and "sinful pride," "effrontery and
audacity" [sic]. Plaintiff was admitted to the Escaño house to visit and
court Vicenta, and the record shows nothing to prove that he would not
have been accepted to marry Vicente had he openly asked for her hand,
as good manners and breeding demanded. Even after learning of the
clandestine marriage, and despite their shock at such unexpected event,
the parents of Vicenta proposed and arranged that the marriage be
recelebrated in strict conformity with the canons of their religion upon
advice that the previous one was canonically defective. If no
recelebration of the marriage ceremony was had it was not due to
defendants Mamerto Escaño and his wife, but to the refusal of Vicenta to
proceed with it. That the spouses Escaño did not seek to compel or
induce their daughter to assent to the recelebration but respected her
decision, or that they abided by her resolve, does not constitute in law an
alienation of affections. Neither does the fact that Vicenta's parents sent
her money while she was in the United States; for it was natural that they
should not wish their daughter to live in penury even if they did not concur
in her decision to divorce Tenchavez (27 Am. Jur. 130-132).
There is no evidence that the parents of Vicenta, out of improper motives,
aided and abetted her original suit for annulment, or her subsequent
divorce; she appears to have acted independently, and being of age, she
was entitled to judge what was best for her and ask that her decisions be
respected. Her parents, in so doing, certainly cannot be charged with
alienation of affections in the absence of malice or unworthy motives,
which have not been shown, good faith being always presumed until the
contrary is proved.
SEC. 529. Liability of Parents, Guardians or Kin. — The law
distinguishes between the right of a parent to interest himself in
the marital affairs of his child and the absence of rights in a
stranger to intermeddle in such affairs. However, such distinction
between the liability of parents and that of strangers is only in
regard to what will justify interference. A parent isliable for
alienation of affections resulting from his own malicious conduct,
as where he wrongfully entices his son or daughter to leave his or
her spouse, but he is not liable unless he acts maliciously, without
justification and from unworthy motives. He is not liable where he
acts and advises his child in good faith with respect to his child's
marital relations in the interest of his child as he sees it, the
marriage of his child not terminating his right and liberty to
interest himself in, and be extremely solicitous for, his child's
welfare and happiness, even where his conduct and advice
 suggest or result in the separation of the spouses or the obtaining any improper conduct in the whole deplorable affair. This Court,
of a divorce or annulment, or where he acts under mistake or therefore, reduces the damages awarded to P5,000 only.
misinformation, or where his advice or interference are indiscreet
or unfortunate, although it has been held that the parent is liable Summing up, the Court rules:
for consequences resulting from recklessness. He may in good
faith take his child into his home and afford him or her protection (1) That a foreign divorce between Filipino citizens, sought and decreed
and support, so long as he has not maliciously enticed his child after the effectivity of the present Civil Code (Rep. Act 386), is not entitled
away, or does not maliciously entice or cause him or her to stay to recognition as valid in this jurisdiction; and neither is the marriage
away, from his or her spouse. This rule has more frequently been contracted with another party by the divorced consort, subsequently to
applied in the case of advice given to a married daughter, but it is the foreign decree of divorce, entitled to validity in the country;
equally applicable in the case of advice given to a son.
(2) That the remarriage of divorced wife and her co-habitation with a
Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial person other than the lawful husband entitle the latter to a decree of legal
or social discrimination and with having exerted efforts and pressured her separation conformably to Philippine law;
to seek annulment and divorce, unquestionably caused them unrest and
anxiety, entitling them to recover damages. While this suit may not have
(3) That the desertion and securing of an invalid divorce decree by one
been impelled by actual malice, the charges were certainly reckless in the
consort entitles the other to recover damages;
face of the proven facts and circumstances. Court actions are not
established for parties to give vent to their prejudices or spleen.
(4) That an action for alienation of affections against the parents of one
consort does not lie in the absence of proof of malice or unworthy
In the assessment of the moral damages recoverable by appellant Pastor
motives on their part.
Tenchavez from defendant Vicente Escaño, it is proper to take into
account, against his patently unreasonable claim for a million pesos in
damages, that (a) the marriage was celebrated in secret, and its failure WHEREFORE, the decision under appeal is hereby modified as follows;
was not characterized by publicity or undue humiliation on appellant's
part; (b) that the parties never lived together; and (c) that there is (1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of
evidence that appellant had originally agreed to the annulment of the legal separation from defendant Vicenta F. Escaño;
marriage, although such a promise was legally invalid, being against
public policy (cf. Art. 88, Civ. Code). While appellant is unable to remarry (2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-
under our law, this fact is a consequence of the indissoluble character of appellant Tenchavez the amount of P25,000 for damages and attorneys'
the union that appellant entered into voluntarily and with open eyes rather fees;
than of her divorce and her second marriage. All told, we are of the
opinion that appellant should recover P25,000 only by way of moral (3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto
damages and attorney's fees. Escaño and the estate of his wife, the deceased Mena Escaño, P5,000
by way of damages and attorneys' fees.
With regard to the P45,000 damages awarded to the defendants, Dr.
Mamerto Escaño and Mena Escaño, by the court below, we opine that Neither party to recover costs.
the same are excessive. While the filing of this unfounded suit must have
wounded said defendants' feelings and caused them anxiety, the same Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Regala, Makalintal,
could in no way have seriously injured their reputation, or otherwise Bengzon, J.P. and Zaldivar, JJ., concur.
prejudiced them, lawsuits having become a common occurrence in
present society. What is important, and has been correctly established in
the decision of the court below, is that said defendants were not guilty of
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-68470 October 8, 1985
ALICE REYES VAN DORN, petitioner,
vs.
HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch CX,
Regional Trial Court of the National Capital Region Pasay City and
RICHARD UPTON respondents.
MELENCIO-HERRERA, J.:\
In this Petition for certiorari and Prohibition, petitioner Alice Reyes Van Dorn seeks to set aside the
Orders, dated September 15, 1983 and August 3, 1984, in Civil Case No. 1075-P, issued by
respondent Judge, which denied her Motion to Dismiss said case, and her Motion for Reconsideration
of the Dismissal Order, respectively.
The basic background facts are that petitioner is a citizen of the
Philippines while private respondent is a citizen of the United States; that
they were married in Hongkong in 1972; that, after the marriage, they
established their residence in the Philippines; that they begot two children
born on April 4, 1973 and December 18, 1975, respectively; that the
parties were divorced in Nevada, United States, in 1982; and that
petitioner has re-married also in Nevada, this time to Theodore Van Dorn.
Dated June 8, 1983, private respondent filed suit against petitioner in
Civil Case No. 1075-P of the Regional Trial Court, Branch CXV, in Pasay
City, stating that petitioner's business in Ermita, Manila, (the Galleon
Shop, for short), is conjugal property of the parties, and asking that
petitioner be ordered to render an accounting of that business, and that
private respondent be declared with right to manage the conjugal
property. Petitioner moved to dismiss the case on the ground that the
cause of action is barred by previous judgment in the divorce
proceedings before the Nevada Court wherein respondent had
acknowledged that he and petitioner had "no community property" as of
June 11, 1982. The Court below denied the Motion to Dismiss in the
mentioned case on the ground that the property involved is located in the
Philippines so that the Divorce Decree has no bearing in the case. The
denial is now the subject of this certiorari proceeding.
Generally, the denial of a Motion to Dismiss in a civil case is interlocutory
and is not subject to appeal. certiorari and Prohibition are neither the
remedies to question the propriety of an interlocutory order of the trial
Court. However, when a grave abuse of discretion was patently
committed, or the lower Court acted capriciously and whimsically, then it
devolves upon this Court in a certiorari proceeding to exercise its
supervisory authority and to correct the error committed which, in such a
case, is equivalent to lack of jurisdiction.   Prohibition would then lie since
1
it would be useless and a waste of time to go ahead with the
proceedings.   Weconsider the petition filed in this case within the
2
exception, and we have given it due course.
For resolution is the effect of the foreign divorce on the parties and their
alleged conjugal property in the Philippines.
Petitioner contends that respondent is estopped from laying claim on the
alleged conjugal property because of the representation he made in the
divorce proceedings before the American Court that they had no
community of property; that the Galleon Shop was not established
through conjugal funds, and that respondent's claim is barred by prior
judgment.
For his part, respondent avers that the Divorce Decree issued by the
Nevada Court cannot prevail over the prohibitive laws of the Philippines
and its declared national policy; that the acts and declaration of a foreign
Court cannot, especially if the same is contrary to public policy, divest
Philippine Courts of jurisdiction to entertain matters within its jurisdiction.
For the resolution of this case, it is not necessary to determine whether
the property relations between petitioner and private respondent, after
their marriage, were upon absolute or relative community property, upon
complete separation of property, or upon any other regime. The pivotal
fact in this case is the Nevada divorce of the parties.
The Nevada District Court, which decreed the divorce, had obtained
jurisdiction over petitioner who appeared in person before the Court
during the trial of the case. It also obtained jurisdiction over private
respondent who, giving his address as No. 381 Bush Street, San
Francisco, California, authorized his attorneys in the divorce case, Karp &
Gradt Ltd., to agree to the divorce on the ground of incompatibility in the
understanding that there were neither community property nor community
obligations.   As explicitly stated in the Power of Attorney he executed in
3
favor of the law firm of KARP & GRAD LTD., 336 W. Liberty, Reno,
Nevada, to represent him in the divorce proceedings:
xxx xxx xxx
You are hereby authorized to accept service of Summons,
to file an Answer, appear on my behalf and do an things
necessary and proper to represent me, without further
contesting, subject to the following:
1. That my spouse seeks a divorce on the ground of
incompatibility.
2. That there is no community of property to be
adjudicated by the Court.
3. 'I'hat there are no community obligations to be
adjudicated by the court.
xxx xxx xxx  4
There can be no question as to the validity of that Nevada divorce in any
of the States of the United States. The decree is binding on private
respondent as an American citizen. For instance, private respondent
cannot sue petitioner, as her husband, in any State of the Union. What he
is contending in this case is that the divorce is not valid and binding in
this jurisdiction, the same being contrary to local law and public policy.
It is true that owing to the nationality principle embodied in Article 15 of
the Civil Code,   only Philippine nationals are covered by the policy
5
to change the existing status or domestic relation of
husband and wife, and to free them both from the bond.
The marriage tie when thus severed as to one party,
ceases to bind either. A husband without a wife, or a wife
without a husband, is unknown to the law. When the law
provides, in the nature of a penalty. that the guilty party
shall not marry again, that party, as well as the other, is
still absolutely freed from the bond of the former marriage.
Thus, pursuant to his national law, private respondent is no longer the
husband of petitioner. He would have no standing to sue in the case
below as petitioner's husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own country's Court, which
validly exercised jurisdiction over him, and whose decision he does not
repudiate, he is estopped by his own representation before said Court
from asserting his right over the alleged conjugal property.
To maintain, as private respondent does, that, under our laws, petitioner
has to be considered still married to private respondent and still subject to
a wife's obligations under Article 109, et. seq. of the Civil Code cannot be
just. Petitioner should not be obliged to live together with, observe
respect and fidelity, and render support to private respondent. The latter
should not continue to be one of her heirs with possible rights to conjugal
property. She should not be discriminated against in her own country if
the ends of justice are to be served.
WHEREFORE, the Petition is granted, and respondent Judge is hereby
ordered to dismiss the Complaint filed in Civil Case No. 1075-P of his
Court.
Without costs.

SO ORDERED.
against absolute divorces the same being considered contrary to our
concept of public police and morality. However, aliens may obtain
divorces abroad, which may be recognized in the Philippines, provided Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., De la Fuente and
they are valid according to their national law.   In this case, the divorce in
6 Patajo, JJ., concur.
Nevada released private respondent from the marriage from the
standards of American law, under which divorce dissolves the marriage.  
As stated by the Federal Supreme Court of the United States in Atherton
vs. Atherton, 45 L. Ed. 794, 799:

The purpose and effect of a decree of divorce from the

bond of matrimony by a court of competent jurisdiction are
 THIRD DIVISION
[G.R. NO. 149177 : November 23, 2007]
KAZUHIRO HASEGAWA and NIPPON ENGINEERING
CONSULTANTS CO., LTD., Petitioners, v. MINORU
KITAMURA, Respondent.
DECISION
NACHURA, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45
of the Rules of Court assailing the April 18, 2001 Decision1 of the
Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25,
2001 Resolution2 denying the motion for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co.,
Ltd. (Nippon), a Japanese consultancy firm providing technical and
management support in the infrastructure projects of foreign
governments,3 entered into an Independent Contractor Agreement
(ICA) with respondent Minoru Kitamura, a Japanese national
permanently residing in the Philippines.4 The agreement provides that
respondent was to extend professional services to Nippon for a year
starting on April 1, 1999.5 Nippon then assigned respondent to work
as the project manager of the Southern Tagalog Access Road (STAR)
Project in the Philippines, following the company's consultancy
contract with the Philippine Government.6
When the STAR Project was near completion, the Department of
Public Works and Highways (DPWH) engaged the consultancy
services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler
Road Improvement (BBRI) Project.7 Respondent was named as the
project manager in the contract's Appendix 3.1.8
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's
general manager for its International Division, informed respondent
that the company had no more intention of automatically renewing his
ICA. His services would be engaged by the company only up to the
substantial completion of the STAR Project on March 31, 2000, just in
time for the ICA's expiry.9
Threatened with impending unemployment, respondent, through his
lawyer, requested a negotiation conference and demanded that he be
assigned to the BBRI project. Nippon insisted that respondent's
contract was for a fixed term that had already expired, and refused to
negotiate for the renewal of the ICA.10
As he was not able to generate a positive response from the
petitioners, respondent consequently initiated on June 1, 2000 Civil
Case No. 00-0264 for specific performance and damages with the
Regional Trial Court of Lipa City.11
For their part, petitioners, contending that the ICA had been perfected
in Japan and executed by and between Japanese nationals, moved to
dismiss the complaint for lack of jurisdiction. They asserted that the
claim for improper pre-termination of respondent's ICA could only be
heard and ventilated in the proper courts of Japan following the
principles of lex loci celebrationis and lex contractus.12
In the meantime, on June 20, 2000, the DPWH approved Nippon's
request for the replacement of Kitamura by a certain Y. Kotake as
project manager of the BBRI Project.13
On June 29, 2000, the RTC, invoking our ruling in Insular Government
v. Frank14 that matters connected with the performance of contracts
are regulated by the law prevailing at the place of
performance,15 denied the motion to dismiss.16 The trial court
subsequently denied petitioners' motion for
reconsideration,17 prompting them to file with the appellate court, on
August 14, 2000, their first Petition for Certiorari under Rule 65
[docketed as CA-G.R. SP No. 60205].18 On August 23, 2000, the CA
resolved to dismiss the petition on procedural grounds'for lack of
statement of material dates and for insufficient verification and
certification against forum shopping.19 An Entry of Judgment was later
issued by the appellate court on September 20, 2000.20
Aggrieved by this development, petitioners filed with the CA, on
September 19, 2000, still within the reglementary period,
a second Petition for Certiorari under Rule 65 already stating therein
the material dates and attaching thereto the proper verification and
certification. This second petition, which substantially raised the same
issues as those in the first, was docketed as CA-G.R. SP No. 60827.21
Ruling on the merits of the second petition, the appellate court
rendered the assailed April 18, 2001 Decision22 finding no grave
abuse of discretion in the trial court's denial of the motion to dismiss.
The CA ruled, among others, that the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the
pleadings was the validity of the written agreement put in issue. The
CA thus declared that the trial court was correct in applying instead
the principle of lex loci solutionis.23
Petitioners' motion for reconsideration was subsequently denied by
the CA in the assailed July 25, 2001 Resolution.24
Remaining steadfast in their stance despite the series of denials,
petitioners instituted the instant Petition for Review
on Certiorari25 imputing the following errors to the appellate court:
A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE TRIAL COURT VALIDLY EXERCISED
JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE
THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE
PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN
TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE
JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO
THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF
RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL
LAWS.26
The pivotal question that this Court is called upon to resolve is
whether the subject matter jurisdiction of Philippine courts in civil
cases for specific performance and damages involving contracts
executed outside the country by foreign nationals may be assailed on
the principles of lex loci celebrationis, lex contractus, the "state of the
most significant relationship rule," or forum non conveniens.
However, before ruling on this issue, we must first dispose of the
procedural matters raised by the respondent.
Kitamura contends that the finality of the appellate court's decision in
CA-G.R. SP No. 60205 has already barred the filing of the second
petition docketed as CA-G.R. SP No. 60827 (fundamentally raising
the same issues as those in the first one) and the instant Petition for
Review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on
account of the petition's defective certification of non-forum shopping,
it was a dismissal without prejudice.27 The same holds true in the CA's
dismissal of the said case due to defects in the formal requirement of
verification28 and in the other requirement in Rule 46 of the Rules of
Court on the statement of the material dates.29 The dismissal being
without prejudice, petitioners can re-file the petition, or file a second
petition attaching thereto the appropriate verification and certification
as they, in fact did and stating therein the material dates, within the
prescribed period30 in Section 4, Rule 65 of the said Rules.31
The dismissal of a case without prejudice signifies the absence of a
decision on the merits and leaves the parties free to litigate the matter
in a subsequent action as though the dismissed action had not been
commenced. In other words, the termination of a case not on the
merits does not bar another action involving the same parties, on the
same subject matter and theory.32
Necessarily, because the said dismissal is without prejudice and has
no res judicataeffect, and even if petitioners still indicated in the
verification and certification of the second certiorari petition that the
first had already been dismissed on procedural grounds,33 petitioners
are no longer required by the Rules to indicate in their certification of
non-forum shopping in the instant Petition for Review of the
second certiorari petition, the status of the aforesaid first petition
before the CA. In any case, an omission in the certificate of non-forum
shopping about any event that will not constitute res judicata and litis
pendentia, as in the present case, is not a fatal defect. It will not
warrant the dismissal and nullification of the entire proceedings,
considering that the evils sought to be prevented by the said
certificate are no longer present.34
The Court also finds no merit in respondent's contention that petitioner
Hasegawa is only authorized to verify and certify, on behalf of Nippon,
the certiorari petition filed with the CA and not the instant petition.
True, the Authorization35 dated September 4, 2000, which is attached
to the second certiorari petition and which is also attached to the
instant Petition for Review, is limited in scope its wordings indicate
that Hasegawa is given the authority to sign for and act on behalf of
the company only in the petition filed with the appellate court, and that
authority cannot extend to the instant Petition for Review .36 In a
plethora of cases, however, this Court has liberally applied the Rules
or even suspended its application whenever a satisfactory explanation
and a subsequent fulfillment of the requirements have been
made.37 Given that petitioners herein sufficiently explained their
misgivings on this point and appended to their Reply38 an updated
Authorization39 for Hasegawa to act on behalf of the company in the
instant petition, the Court finds the same as sufficient compliance with
the Rules.
However, the Court cannot extend the same liberal treatment to the
defect in the verification and certification. As respondent pointed out,
and to which we agree, Hasegawa is truly not authorized to act on
behalf of Nippon in this case. The aforesaid September 4, 2000
Authorization and even the subsequent August 17, 2001 Authorization
were issued only by Nippon's president and chief executive officer, not
by the company's board of directors. In not a few cases, we have
ruled that corporate powers are exercised by the board of directors;
thus, no person, not even its officers, can bind the corporation, in the
absence of authority from the board.40 Considering that Hasegawa
verified and certified the petition only on his behalf and not on behalf
of the other petitioner, the petition has to be denied pursuant
to Loquias v. Office of the Ombudsman.41 Substantial compliance will
not suffice in a matter that demands strict observance of the
Rules.42 While technical rules of procedure are designed not to
frustrate the ends of justice, nonetheless, they are intended to effect
the proper and orderly disposition of cases and effectively prevent the
clogging of court dockets.43
Further, the Court has observed that petitioners incorrectly filed a
Rule 65 petition to question the trial court's denial of their motion to
dismiss. It is a well-established rule that an order denying a motion to
dismiss is interlocutory, and cannot be the subject of the extraordinary
Petition for Certiorari or mandamus. The appropriate recourse is to file
an answer and to interpose as defenses the objections raised in the
motion, to proceed to trial, and, in case of an adverse decision, to
elevate the entire case by appeal in due course.44 While there are
recognized exceptions to this rule,45 petitioners' case does not fall
among them.
This brings us to the discussion of the substantive issue of the case.
Asserting that the RTC of Lipa City is an inconvenient forum,
petitioners question its jurisdiction to hear and resolve the civil case
for specific performance and damages filed by the respondent. The
ICA subject of the litigation was entered into and perfected in Tokyo,
Japan, by Japanese nationals, and written wholly in the Japanese
language. Thus, petitioners posit that local courts have no substantial
relationship to the parties46 following the [state of the] most significant
relationship rule in Private International Law.47
The Court notes that petitioners adopted an additional but different
theory when they elevated the case to the appellate court. In the
Motion to Dismiss48 filed with the trial court, petitioners never
contended that the RTC is an inconvenient forum. They merely
argued that the applicable law which will determine the validity or
invalidity of respondent's claim is that of Japan, following the
principles of lex loci celebrationis and lex contractus.49 While not
abandoning this stance in their petition before the appellate court,
petitioners on certiorari significantly invoked the defense of forum non
conveniens.50 On Petition for Review before this Court, petitioners
dropped their other arguments, maintained the forum non
conveniens defense, and introduced their new argument that the
applicable principle is the [state of the] most significant relationship
rule.51
Be that as it may, this Court is not inclined to deny this petition merely
on the basis of the change in theory, as explained in Philippine Ports
Authority v. City of Iloilo.52 We only pointed out petitioners'
inconstancy in their arguments to emphasize their incorrect assertion
of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts problems, three
consecutive phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to these
phases are the following questions: (1) Where can or should litigation
be initiated? (2) Which law will the court apply? and (3) Where can the
resulting judgment be enforced?53
Analytically, jurisdiction and choice of law are two distinct
concepts.54 Jurisdiction considers whether it is fair to cause a
defendant to travel to this state; choice of law asks the further
question whether the application of a substantive law which will
determine the merits of the case is fair to both parties. The power to
exercise jurisdiction does not automatically give a state constitutional
authority to apply forum law. While jurisdiction and the choice of
the lex fori will often coincide, the "minimum contacts" for one do not
always provide the necessary "significant contacts" for the
other.55 The question of whether the law of a state can be applied to a
transaction is different from the question of whether the courts of that
state have jurisdiction to enter a judgment.56
In this case, only the first phase is at issue jurisdiction. ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Jurisdiction, however, has various aspects. For a court to validly
exercise its power to adjudicate a controversy, it must have
jurisdiction over the plaintiff or the petitioner, over the defendant or the
respondent, over the subject matter, over the issues of the case and,
in cases involving property, over the res or the thing which is the
subject of the litigation.57 In assailing the trial court's jurisdiction
herein, petitioners are actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is
conferred by the sovereign authority which establishes and organizes
the court. It is given only by law and in the manner prescribed by
law.58 It is further determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to all or some of the
claims asserted therein.59 To succeed in its motion for the dismissal of
an action for lack of jurisdiction over the subject matter of the
claim,60 the movant must show that the court or tribunal cannot act on
the matter submitted to it because no law grants it the power to
adjudicate the claims.61
In the instant case, petitioners, in their motion to dismiss, do not claim
that the trial court is not properly vested by law with jurisdiction to hear
the subject controversy for, indeed, Civil Case No. 00-0264 for
specific performance and damages is one not capable of pecuniary
estimation and is properly cognizable by the RTC of Lipa City.62 What
they rather raise as grounds to question subject matter jurisdiction are
the principles of lex loci celebrationis and lex contractus, and the
"state of the most significant relationship rule."
The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the "law of the place of the
ceremony"63 or the law of the place where a contract is made.64 The
doctrine of lex contractus or lex loci contractus means the "law of the
place where a contract is executed or to be performed."65 It controls
the nature, construction, and validity of the contract66 and it may
pertain to the law voluntarily agreed upon by the parties or the law
intended by them either expressly or implicitly.67 Under the "state of
the most significant relationship rule," to ascertain what state law to
apply to a dispute, the court should determine which state has the
most substantial connection to the occurrence and the parties. In a
case involving a contract, the court should consider where the
contract was made, was negotiated, was to be performed, and the
domicile, place of business, or place of incorporation of the
parties.68 This rule takes into account several contacts and evaluates
them according to their relative importance with respect to the
particular issue to be resolved.69
Since these three principles in conflict of laws make reference to the
law applicable to a dispute, they are rules proper for the second
phase, the choice of law.70 They determine which state's law is to be
applied in resolving the substantive issues of a conflicts
problem.71 Necessarily, as the only issue in this case is that of
jurisdiction, choice-of-law rules are not only inapplicable but also not
yet called for.
Further, petitioners' premature invocation of choice-of-law rules is
exposed by the fact that they have not yet pointed out any conflict
between the laws of Japan and ours. Before determining which law
should apply, first there should exist a conflict of laws situation
requiring the application of the conflict of laws rules.72 Also, when the
law of a foreign country is invoked to provide the proper rules for the
solution of a case, the existence of such law must be pleaded and
proved.73
It should be noted that when a conflicts case, one involving a foreign
element, is brought before a court or administrative agency, there are
three alternatives open to the latter in disposing of it: (1) dismiss the
case, either because of lack of jurisdiction or refusal to assume
jurisdiction over the case; (2) assume jurisdiction over the case and
apply the internal law of the forum; or (3) assume jurisdiction over the
case and take into account or apply the law of some other State or
States.74 The court's power to hear cases and controversies is derived
from the Constitution and the laws. While it may choose to recognize
laws of foreign nations, the court is not limited by foreign sovereign
law short of treaties or other formal agreements, even in matters
regarding rights provided by foreign sovereigns.75

Neither can the other ground raised, forum non conveniens,76 be used

to deprive the trial court of its jurisdiction herein. First, it is not a
proper basis for a motion to dismiss because Section 1, Rule 16 of the
Rules of Court does not include it as a ground.77 Second, whether a
suit should be entertained or dismissed on the basis of the said
doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court.78 In this case, the
RTC decided to assume jurisdiction. Third, the propriety of dismissing
a case based on this principle requires a factual determination; hence,
this conflicts principle is more properly considered a matter of
defense.79

Accordingly, since the RTC is vested by law with the power to

entertain and hear the civil case filed by respondent and the grounds
raised by petitioners to assail that jurisdiction are inappropriate, the
trial and appellate courts correctly denied the petitioners' motion to
dismiss.

WHEREFORE, premises considered, the Petition for Review

on Certiorari is DENIED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 184081               June 19, 2009
GLOBAL HOLIDAY OWNERSHIP CORPORATION, Petitioner,
vs.
METROPOLITAN BANK & TRUST COMPANY, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the March 31, 2008
Decision1 of the Court of Appeals in CA-G.R. SP No. 97287, which
annulled and set aside the July 26, 2006 and October 6, 2006 Orders of
the Regional Trial Court of Makati, Branch 146, granting petitioner’s
prayer for a writ of preliminary injunction in Civil Case No. 06-549 and
directed the judge to dissolve the said writ. Also assailed is the August 7,
2008 Resolution2 denying the motion for reconsideration.
The facts as found by the appellate court are as follows:
Global Holiday Ownership Corporation (Global for short) obtained on
various dates several loans from x x x Metrobank in the total principal
amount of P5,700,000.00 secured by a real estate mortgage over a
condominium unit under Condominium Certificate of Title No. 29774 of
the Registry of Deeds for Makati City. Upon default in the payment of the
loan, x x x Global requested for a restructuring of its loan in the total
principal amount of P6,375,000.00 as of September 3, 2001. (Metrobank)
acceded to its request.
As x x x Global defaulted anew in the payment of its loan, it requested for
another restructuring which was likewise granted by the bank. Hence, a
Debt Settlement Agreement was executed by the parties on November
15, 2001 detailing a schedule of payment of the principal obligation of
P6,375,000.00 within a 3-year period up to August 19, 2004 as well (sic)
the interest on the principal, payable quarterly based on the prevailing
market rates beginning December 2, 2001 and every 90 days thereafter,
without need of notice or demand, the full payment of which shall be on
or before August 29, 2002.
xxxx
Global failed to comply with the terms and conditions of the Debt
Settlement Agreement. Despite demands made upon it for payment on
December 22, 2005 and May 18, 2006, it still failed and refused to pay
(Metrobank) the loans which are all past due.
Thus on May 22, 2006, (Metrobank) requested the Clerk of Court of the
RTC of Makati City to cause the sale at public auction of CCT No. 29774
pursuant to Act 3135 as amended. The sale was scheduled on July 10,
2006 at 10:00 a.m. per notice of sheriff’s sale.
Four (4) days before the date of the auction sale or on July 6, 2006, x x x
Global filed the instant complaint for annulment of extrajudicial
foreclosure proceedings, damages and injunction with application for
TRO and/or writ of preliminary injunction. Respondent judge granted
Global’s application for temporary restraining order on July 7, 2006 and
set the prayer for a writ of preliminary injunction for hearing on July 14,
2006. After hearing, respondent judge issued an Order on July 26, 2006
granting Global’s application for a writ of preliminary injunction.
(Metrobank) moved to reconsider this Order but respondent judge denied
the motion in the Order dated October 6, 2006. 3
Metrobank filed a petition for certiorari before the Court of Appeals
arguing that Global is not entitled to injunctive relief because it has not
shown that it had a legal right that must be protected. Metrobank thus
prayed that the trial court’s issuances dated July 26, 2006 and October 6,
2006 be annulled and set aside.
(Metrobank) stresses that in view of x x x Global’s admission that it failed
to pay its loan, the latter has definitely no right in esse to be protected as
it was clearly provided in the deed of real estate mortgage and in the
Debt Settlement Agreement that the mortgage can be foreclosed by
(Metrobank) in case of default.
(Metrobank) contends that x x x Global’s claim of not having been notified
of the foreclosure proceedings is debunked by the Certification issued by
the Makati Central Post Office dated August 2, 2006 stating that a copy of
the notice of sheriff sale was sent to Global and was received by it on
June 23, 2006. Moreover, (Metrobank’s) several demand letters to x x x
Global urging it to pay its overdue account with a warning that in case of
failure to do, actions to protect the bank’s interests will be initiated, more
than satisfies the requirement of notice. Additionally, (Metrobank)
emphasizes that Sec. 14 of the real estate mortgage was already
superseded by Sec. 5 of the Debt Settlement Agreement whereby Global
waived its right to be personally notified in case of default.
(Metrobank) argues that no personal notice of the extrajudicial
foreclosure is even required as said proceeding is an action in rem where
only notice by publication and posting is necessary to bind the interested
parties, citing Bobanan vs. Court of Appeals, G.R. No. 111654, April 18,
1996. The law itself, Act No. 3135, does not require personal notice to the
mortgagor. Only notice by publication and posting are required. Likewise,
(Metrobank) points to Administrative Matter No. 99-10-05-0 dated
February 26, 2002 (Re: Procedure in the Extrajudicial Foreclosure of
Mortgage) wherein the Supreme Court acknowledged that personal
notice to the debtor-mortgagor in case of extrajudicial foreclosure of real
estate mortgage is not required by Act No. 3135 as the addition of such
requirement can only make the proceedings cumbersome.
For its part, x x x Global avers that after it defaulted in its quarterly
payment under the Debt Settlement Agreement, (Metrobank) informed it
on May 30, 2003 that its account is being considered for transfer to a
Special Purpose Vehicle under the SPV Act of 2002. Within the period
given to signify its conformity to the plan, x x x Global wrote (Metrobank)
on July 4, 2003 informing (Metrobank) that it is (sic) amenable to its
proposal to transfer the loan to a special purpose vehicle company.
Instead of transferring its account to a SPV Company, (Metrobank)
decided to proceed with the extrajudicial foreclosure of the mortgaged
property with the sheriff setting the auction sale on July 10, 2006. Such
being the case, there is nothing that can be ascribed in the July 26, 2006
Order of respondent judge that could be considered whimsical,
capricious, arbitrary and despotic, x x x Global asserts.
Mere failure to pay a secured obligation, according to Global, does not
give the mortgagee bank the unbridled right to foreclose the mortgage,
more so in this case when the interest rate on a loan is unilaterally
imposed or increased by (Metrobank) without Global’s consent, in
violation of mutuality of contract. Besides, there is already a perfected
contract between (Metrobank) and x x x Global to transfer the latter’s
account to a special purpose vehicle company.
Finally, x x x Global claimed that it has not waived its right to be notified
of the foreclosure when it executed the Debt Settlement Agreement. The
statement "without need of demand" in the debt settlement agreement
refers to the payment of the principal and interest, which is different from
notice of extrajudicial foreclosure that is required to be given to a
mortgagor.4
In the assailed March 31, 2008 Decision, the Court of Appeals granted
Metrobank’s petition and set aside the July 26, 2006 and October 6, 2006
orders of the trial court, with a directive to dissolve the writ of preliminary
injunction it issued. The appellate court found that Global had no legal
right to an injunction; that Metrobank had the undeniable right to
foreclose on the real estate mortgage in view of Global’s default in the
settlement of its obligation to the bank; that Global had not shown any
legal justification to enjoin it from enforcing this right; that it is not required
that Global be personally informed of the foreclosure of its mortgaged
property, since personal notice is not necessary; the applicable law – Act
31355 – requires only notice by publication and posting; that under
Administrative Matter No. 99-10-05-06 in relation to Act 3135, as
amended, personal notice to the debtor-mortgagor in case of extrajudicial
foreclosure of real estate mortgage is not required; and that by declaring
that the foreclosure proceedings were defective and null and void, the
trial court’s issuances granting Global’s prayer for a writ of preliminary
injunction constituted a premature disposition of the case on its merits, a
pre-judgment that went beyond the nature of the proceeding then being
taken, which was merely for the issuance of a writ of preliminary
injunction.7
Global moved to reconsider the decision, however, it was denied by the
Court of Appeals in the assailed August 7, 2008 Resolution.
Hence, this petition by Global raising the following as errors:
First Assigned Error:
The Honorable Court of Appeals (erred in) ruling x x x that personal
notice to the debtor-mortgagor of the extrajudicial foreclosure is not
necessary despite the parties’ stipulation in their Real Estate Mortgage
contract requiring personal notice thereof x x x.
Second Assigned Error:
The Honorable Court of Appeals seriously erred in its interpretation and
application of Supreme Court Administrative Matter No. 99-10-05-0 dated
February 26, 2002 that in extrajudicial foreclosure of real estate
mortgage, personal notice to the debtor-mortgagor is not necessary.
Third Assigned Error:
The Honorable Court of Appeals erred in applying the superseded case
of Cortez v. Intermediate Appellate Court (G.R. No. 73678, July 21, 1989)
in support of its ruling that the parties’ stipulation in their Real Estate
Mortgage contract requiring all correspondence relative to the mortgage
to be sent at the mortgagor’s given address is a mere expression of
"general intent" which cannot prevail over the parties’ "specific intent" to
apply the provisions of Act 3135 in the extrajudicial foreclosure of the
mortgage as the same is contrary to subsequent rulings of the Supreme
Court.
Fourth Assigned Error
The Honorable Court of Appeals erred in relying on the cases of BPI
Family Savings Bank, Inc. v. Veloso, 436 SCRA 1; China Banking
Corporation v. CA, 265 SCRA 327; and Selegna Mgnt. & Devt. Corp. v.
UCPB, G.R. No. 165662, May 3, 2006, to support its findings that
petitioner has no clear legal right to be protected, since the trial court’s
issuance of the injunctive writ was founded on the mortgagee’s non-
compliance with the stipulated personal notice to the mortgagor.
Fifth Assigned Error
The Honorable Court of Appeals’ ruling that there was no perfected
contract to transfer petitioner’s account to a Special Purpose Vehicle
despite its finding that respondent MBTC made a proposal thereon to
GHOC is contrary to the provision of Article 1319 of the Civil Code of the
Philippines since there was unqualified acceptance of the proposal.
Sixth Assigned Error
The Honorable Court of Appeals erroneously ruled that petitioner was
personally notified of the foreclosure proceedings as evidenced by the
Certification of the Clerk of Court of Makati RTC when such Certification
is non-existent in the records of the case.
Seventh Assigned Error
The Honorable Court of Appeals erred in denying petitioner’s Motion for
Reconsideration despite the apparent falsified Certification submitted by
respondent thru its Comment to the motion.
Eighth Assigned Error
The Honorable Court of Appeals seriously erred in finding that the grant
by the trial court of the injunctive writ is completely without justification
and in grave abuse of its discretion.
The issues for resolution are: whether Metrobank’s failure to serve
personal notice upon Global of the foreclosure proceedings renders the
same null and void; and whether the trial court properly issued a writ of
injunction to prevent Metrobank from proceeding with the scheduled
auction sale of Global’s condominium unit.
We grant the petition.
Paragraph 14 of the real estate mortgage contract states that:
All correspondence relative to this mortgage, including demand letters,
summonses, subpoenas or notifications of any judicial or extra-judicial
actions shall be sent to the Mortgagor at the address hereinabove given
or at the address that may hereafter be given in writing by the Mortgagor
to the Mortgagee, and the mere act of sending any correspondence by
mail or by personal delivery to the said address shall be valid and
effective notice to the Mortgagor for all legal purposes, and the fact that
any communication is not actually received by the Mortgagor, or that it
has been returned unclaimed to the Mortgagee, or that no person was
found at the address given, or that the address is fictitious, or cannot be
located, shall not excuse or relieve the Mortgagor from the effect of such
notice.8
This specific provision in the parties’ real estate mortgage agreement is
the same provision involved in the case of Metropolitan Bank and Trust
Company v. Wong,9 where the Court made the following pronouncement:
It is bad enough that the mortgagor has no choice but to yield his
property in a foreclosure proceeding. It is infinitely worse, if prior thereto,
he was denied of his basic right to be informed of the impending loss of
his property. This is another instance when law and morals echo the
same sentiment. 1awphi1
xxxx
Thus, disregarding all factual issues which petitioner interjected in his
petition, the only crucial legal queries in this case are: first, is personal
notice to respondent a condition sine qua non to the validity of the
foreclosure proceedings? and, second, is petitioner’s non-compliance
with the posting requirement under Section 3, Act No. 3135 fatal to the
validity of the foreclosure proceedings?
In resolving the first query, we resort to the fundamental principle that a
contract is the law between the parties and, that absent any showing that
its provisions are wholly or in part contrary to law, morals, good customs,
public order, or public policy, it shall be enforced to the letter by the
courts. Section 3, Act No. 3135 reads:
"Sec. 3. Notice shall be given by posting notices of the sale for not less
than twenty days in at least three public places of the municipality or city
where the property is situated, and if such property is worth more than
four hundred pesos, such notice shall also be published once a week for
at least three consecutive weeks in a newspaper of general circulation in
the municipality and city."
The Act only requires (1) the posting of notices of sale in three public
places, and (2) the publication of the same in a newspaper of general
circulation. Personal notice to the mortgagor is not necessary.
Nevertheless, the parties to the mortgage contract are not precluded from
exacting additional requirements. In this case, petitioner and respondent
in entering into a contract of real estate mortgage, agreed inter alia:
"all correspondence relative to this mortgage, including demand letters,
summonses, subpoenas, or notifications of any judicial or extra-judicial
action shall be sent to the MORTGAGOR at 40-42 Aldeguer St., Iloilo
City, or at the address that may hereafter be given in writing by the
MORTGAGOR to the MORTGAGEE."
Precisely, the purpose of the foregoing stipulation is to apprise
respondent of any action which petitioner might take on the subject
property, thus according him the opportunity to safeguard his rights.
When petitioner failed to send the notice of foreclosure sale to
respondent, he committed a contractual breach sufficient to render the
foreclosure sale on November 23, 1981 null and void.10 (Emphasis
supplied)
We do not see how a different outcome could have been expected in the
present case which involves the same contractual provision as that in the
abovementioned case – not to mention the same mortgagee. In cases
subsequent to Wong, we sustained the same principle: that personal
notice to the mortgagor in extrajudicial foreclosure proceedings is not
necessary, unless stipulated. 11
If respondent wanted to rid itself of the effects of the Court’s
pronouncement in Wong, considering that it was a party to the case and
knows firsthand about the Court’s disposition, it should have caused the
deletion of Paragraph 14 from all its subsequent standard form real
estate mortgage agreements, or if not, modified the provision or the
contracts accordingly. A modification of the mortgage contract on this
point, with respect to Global, would not have been difficult; an addendum
would have sufficed.
Taking from Wong, we must interpret Paragraph 14 of the parties’
mortgage contract as one having been made for the benefit of the
mortgagor, and one which Metrobank knowingly incorporated into the
agreement. Having been in the business of banking since 1962 – or for
more than forty years now – it certainly had the knowledge, experience
and the resources to correct any perceived oversight it was guilty of
making in the past with respect to its contracts. Although we do not view
Paragraph 14 to be one such oversight; as we have declared in Wong,
the purpose of said stipulation is benign: to apprise the mortgagor of any
action which Metrobank might take on the subject property, thus
according him the opportunity to safeguard his rights. We cannot allow
Metrobank to disavow its solemn covenant with Global, to turn its back on
a contract which it prepared on its own, without the intervention of the
other party. A party should not, after having its opportunity to enjoy the
benefits of an agreement, be allowed to later disown the arrangement
when the terms thereof ultimately would prove to operate against its
hopeful expectations.12
The business of banking is imbued with public interest. It carries with it a
fiduciary duty that requires high standards of integrity and
performance.13 Our decision in Wong was not a mere declaration of what
the law is on a given point; its underlying message is our
acknowledgment that banks must play a compassionate role amidst
these changing times. That in the wake of huge profits being made from
their operations, all that is required is for them to inform the borrower of
the impending loss of his property when their covenants require it. This is
a valid argument when viewed within the context of the principle that any
attempt to vest ownership of the encumbered property in the mortgagee
without proper observance of the requirements of law is against public
policy.14
Paragraph 14 is clear that "all correspondence relative to this mortgage,
including demand letters, summonses, subpoenas or notifications of any
judicial or extrajudicial actions shall be sent to the mortgagor at the
address hereinabove given or at the address that may hereafter be given
in writing by (it)." It must be recalled that the principal object of a notice of
sale in a foreclosure of mortgage is not so much to notify the mortgagor
as to inform the public generally of the nature and condition of the
property to be sold, and of the time, place, and terms of the sale. Notices
are given to secure bidders and prevent a sacrifice of the property.
Clearly, the statutory requirements of posting and publication are
mandated, not for the mortgagor’s benefit, but for the public or third
persons.15 Taking this into context, the stipulation in the mortgage
agreement requiring notice to the mortgagor of extrajudicial actions to be
taken operates as a contractual undertaking for the latter’s sole benefit,
such that the mortgagee is mandated to strictly abide by the same.
Metrobank claims that Cortes v. Intermediate Appellate Court 16 should be
applied in the resolution of the present controversy. In said case, the
Court held:
But in pleading their case, petitioners invoke paragraph 10 of the Deed of
Mortgage (vide, p. 28, Rollo) which provides:
"10. All correspondence relative to this mortgage, including demand
letters, summons, subpoenas, or notification of any judicial or
extrajudicial action, shall be sent to the Mortgagor at _________ or at the
address that may hereafter be given in writing by the Mortgagor to the
Mortgagee."
While the above stipulation points to a place (which, notably was clearly
stated) where all correspondence relative to the mortgage are to be sent,
it does not specifically require that personal notice of foreclosure sale be
given to petitioner. The said paragraph 10 presumes that a specific
correspondence is made but does not definitely require which
correspondence must be made. It would, therefore, be erroneous to say
that notice of extrajudicial foreclosure to the petitioners is required for
such is not the clear intention of the parties, and, thus, may not be
pursued. (Rule 130, Section 10).
But even if the contrary were true, the sending of "All correspondence
relative to this mortgage . . . " to the petitioners may only be deemed, at
the most, as an expression of a general intent. As such, it may not prevail
against the parties' specific intent that Act No. 3135 be the controlling law
between them. This is so since "a particular intent will control a general
one that is inconsistent with it." (Rule 130, Sec. 10). It is clear from the
Deed of Mortgage that the Mortgagee Bank (DBP) may, under any of the
specific circumstances enumerated, proceed to "foreclose this mortgage .
. . extrajudicially under Act No. 3135, as amended." (p. 28, Rollo). Having
invoked the said Act, it shall "govern the manner in which the sale and
redemption shall be effected" (Sec. 1, Act 3135). And as already shown
earlier Act 3135 does not require personal notice of the foreclosure sale
to the mortgagor. Incidentally, it was found by the trial court that notices
of the foreclosure sale were duly posted and published in accordance
with law. As such, petitioners are in estoppel; they cannot now deny that
they were not informed of the said sale.17 (Emphasis supplied) lawphil.net
But what is stated in Cortes no longer applies in light of the Court’s
rulings in Wong and all the subsequent cases, which have been
consistent. Cortes has never been cited in subsequent rulings of the
Court, nor has the doctrine therein ever been reiterated. Its doctrinal
value has been diminished by the policy enunciated in Wong and the
subsequent cases; that is, that in addition to Section 3 of Act 3135, the
parties may stipulate that personal notice of foreclosure proceedings may
be required. Act 3135 remains the controlling law, but the parties may
agree, in addition to posting and publication, to include personal notice to
the mortgagor, the non-observance of which renders the foreclosure
proceedings null and void, since the foreclosure proceedings become an
illegal attempt by the mortgagee to appropriate the property for itself.
Thus, we restate: the general rule is that personal notice to the mortgagor
in extrajudicial foreclosure proceedings is not necessary, and posting and
publication will suffice. Sec. 3 of Act 3135 governing extra-judicial
foreclosure of real estate mortgages, as amended by Act 4118, requires
only posting of the notice of sale in three public places and the
publication of that notice in a newspaper of general circulation.
The exception is when the parties stipulate that personal notice is
additionally required to be given the mortgagor. Failure to abide by the
general rule, or its exception, renders the foreclosure proceedings null
and void.18
Global’s right to be furnished with personal notice of the extrajudicial
foreclosure proceedings has been established. Thus, to continue with the
extrajudicial sale without proper notice would render the proceedings null
and void; injunction is proper to protect Global’s rights and to prevent
unnecessary injury that would result from the conduct of an irregular sale.
It is beyond question that a writ of preliminary injunction is issued to
prevent an extrajudicial foreclosure, upon a clear showing of a violation of
the mortgagor’s unmistakable right. 19 The trial court was thus correct in
granting an injunction.
Metrobank’s reliance on Ardiente v. Provincial Sheriff 20 is misplaced. The
cited case is merely a reiteration of the general rule, since the parties
therein did not stipulate in their mortgage agreement that personal notice
of judicial or extrajudicial actions shall be furnished the mortgagor.
Neither can the circumstance that Global received a notice of sheriff’s
sale from the Office of the Clerk of Court of the Regional Trial Court of
Makati City cure the defect occasioned by Metrobank’s violation of its
covenant under the mortgage agreement. As already stated, the object of
a notice of sale in a foreclosure of mortgage is not for the mortgagor’s
benefit, but for the public or third persons; on the other hand, the
undertaking in a mortgage deed to notify the mortgagor of all judicial or
extrajudicial actions relative to the mortgage is especially for the
mortgagor’s benefit, so that he may safeguard his rights.
Under the parties’ Debt Settlement Agreement,  Global’s obligation was
21
reduced (Metrobank waived the penalties incurred), but the agreement
carried a proviso that if such reduced obligation was not timely settled
and Global defaulted on two consecutive amortizations, Metrobank shall
be entitled to treat Global’s obligation as outstanding, impose a penalty at
the rate of 18% per annum, and/or foreclose on the real estate mortgage,
without need of demand. According to Metrobank, this provision in the
Debt Settlement Agreement resulted in a waiver by Global of the required
personal notice under Paragraph 14 of the mortgage contract.
We disagree. Demand here relates to the principal obligation, which shall
become due and demandable and shall incur interest and penalties
without need of informing Global, were the conditions of the Debt
Settlement Agreement not observed. It does not relieve Metrobank of its
obligation under Paragraph 14 of the Mortgage Contract, which is a
separate agreement, distinct and apart from the Debt Settlement
Agreement. As we have said, only an addendum or modification of the
mortgage agreement can relieve Metrobank of the adverse effects of
Paragraph 14.
Given the merits of the case, we are not at this point inclined to dismiss
the petition, on respondent’s argument that there was a defective
verification and certification accompanying the present petition. We can
simply require petitioner to submit proof of its President Pedro P.
Diomampo’s authority to sign the petition in its behalf, but we no longer
see the need to do the same at this late stage. Under the parties’
mortgage agreement, Global was formerly named Diomampo Industries,
Inc.;22 certainly, we have been equally less rigid in previous cases. 23
We agree with the appellate court that Metrobank had every right to
choose whether to foreclose on the mortgage or to transfer Global’s
account to a special purpose vehicle. In this respect, Global has no right
to interfere. Besides, what Metrobank conveyed to Global about
transferring the latter’s account to a special purpose vehicle was that it
was merely considering such move; eventually, it wrote Global of its
decision not to exercise the option, and proceed with foreclosure of the
mortgage instead. In the first place, whether Global’s account could
qualify for transfer to a special purpose vehicle is not for the latter to
determine; under the Special Purpose Vehicle Act of 2002, 24 the decision
belongs to the appropriate regulatory authority.
Penultimately, we do not subscribe to Metrobank’s argument that the
foreclosure proceedings should continue, since Global is not without
adequate protective remedy, like annotation of lis pendens, participating
in the auction sale, or redemption. Annotation of lis pendens is
unnecessary, since the issue may now be resolved at this point;
participating in null and void foreclosure proceedings is no valid option,
just as well as redeeming the property following a void auction sale.
Finally, the granting of the writ of preliminary injunction would not in effect
dispose of the main case without trial. The granting of the writ would only
enjoin the foreclosure of the mortgage for lack of personal notice, and the
status quo would be maintained. It does not prevent Metrobank from
foreclosing on the mortgage after giving personal notice. The only lesson
to be learned from the present case is that the law must be followed to
the letter; no shortcuts are allowed. 25
WHEREFORE, the petition is GRANTED. The March 31, 2008 Decision
and August 7, 2008 Resolution of the Court of Appeals in CA-G.R. SP
No. 97287 are hereby ANNULLED and SET ASIDE. The July 26, 2006
and October 6, 2006 Orders of the Regional Trial Court of Makati, Branch
146 are REINSTATED and AFFIRMED.
SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

MINITA V. CHICO-NAZARIO
Associate Justice

PRESBITERO J. VELASCO, ANTONIO EDUARDO B.

JR. NACHURA
Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice

ATTESTATION

I attest that the conclusions in the above decision were reached in

consultation before the case was assigned to the writer of the opinion of
the Court’s Division.

CONSUELO YNARES-SANTIAGO
Associate Justice Chairperson, Third Division

CERTIFICATION

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

REYNATO S. PUNO
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17396             May 30, 1962
CECILIO PE, ET AL., plaintiffs-appellants,
vs.
ALFONSO PE, defendant-appellee.
Cecilio L. Pe for and in his own behalf as plaintiff-appellant.
Leodegario L. Mogol for defendant-appellee.
BAUTISTA ANGELO, J.:
Plaintiffs brought this action before the Court of First Instance of Manila to
recover moral, compensatory, exemplary and corrective damages in the
amount of P94,000.00 exclusive of attorney's fees and expenses of
litigation.
Defendant, after denying some allegations contained in the complaint, set
up as a defense that the facts alleged therein, even if true, do not
constitute a valid cause of action.
After trial, the lower court, after finding that defendant had carried on a
love affair with one Lolita Pe, an unmarried woman, being a married man
himself, declared that defendant cannot be held liable for moral damages
it appearing that plaintiffs failed to prove that defendant, being aware of
his marital status, deliberately and in bad faith tried to win Lolita's
affection. So it rendered decision dismissing the complaint. 1äwphï1.ñët
Plaintiffs brought this case on appeal before this Court on the ground that
the issues involved are purely of law.
The facts as found by the trial court are: Plaintiffs are the parents,
brothers and sisters of one Lolita Pe. At the time of her disappearance on
April 14, 1957, Lolita was 24 years old and unmarried. Defendant is a
married man and works as agent of the La Perla Cigar and Cigarette
Factory. He used to stay in the town of Gasan, Marinduque, in connection
with his aforesaid occupation. Lolita was staying with her parents in the
same town. Defendant was an adopted son of a Chinaman named Pe
Beco, a collateral relative of Lolita's father. Because of such fact and the
similarity in their family name, defendant became close to the plaintiffs
who regarded him as a member of their family. Sometime in 1952,
defendant frequented the house of Lolita on the pretext that he wanted
her to teach him how to pray the rosary. The two eventually fell in love
with each other and conducted clandestine trysts not only in the town of
Gasan but also in Boac where Lolita used to teach in a barrio school.
They exchanged love notes with each other the contents of which reveal
not only their infatuation for each other but also the extent to which they
had carried their relationship. The rumors about their love affairs reached
the ears of Lolita's parents sometime, in 1955, and since then defendant
was forbidden from going to their house and from further seeing Lolita.
The plaintiffs even filed deportation proceedings against defendant who is
a Chinese national. The affair between defendant and Lolita continued
nonetheless.
Sometime in April, 1957, Lolita was staying with her brothers and sisters
at their residence at 54-B España Extension, Quezon City. On April 14,
1957, Lolita disappeared from said house. After she left, her brothers and
sisters checked up her thing and found that Lolita's clothes were gone.
However, plaintiffs found a note on a crumpled piece of paper inside
Lolita's aparador. Said note, written on a small slip of paper
approximately 4" by 3" in size, was in a handwriting recognized to be that
of defendant's. In English it reads:
Honey, suppose I leave here on Sunday night, and that's 13th of
this month and we will have a date on the 14th, that's Monday
morning at 10 a.m.
Reply
Love
The disappearance of Lolita was reported to the police authorities and the
NBI but up to the present there is no news or trace of her whereabouts.
The present action is based on Article 21 of the New Civil Code which
provides:
Any person who wilfully causes loss or injury to another in a
manner which is contrary to morals, good customs or public
policy shall compensate the latter for the damage.
There is no doubt that the claim of plaintiffs for damages is based on the WHEREFORE, the decision appealed from is reversed. Defendant is
fact that defendant, being a married man, carried on a love affair with hereby sentenced to pay the plaintiffs the sum of P5,000.00 as damages
Lolita Pe thereby causing plaintiffs injury in a manner contrary to morals, and P2,000.00 as attorney's fees and expenses of litigations. Costs
good customs and public policy. But in spite of the fact that plaintiffs have against appellee.
clearly established that in illicit affair was carried on between defendant
and Lolita which caused great damage to the name and reputation of Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and
plaintiffs who are her parents, brothers and sisters, the trial court Dizon, JJ., concur.
considered their complaint not actionable for the reason that they failed to
prove that defendant deliberately and in bad faith tried to win Lolita's
affection Thus, the trial court said: "In the absence of proof on this point,
the court may not presume that it was the defendant who deliberately
induced such relationship. We cannot be unmindful of the uncertainties
and sometimes inexplicable mysteries of the human emotions. It is a
possibility that the defendant and Lolita simply fell in love with each other,
not only without any desire on their part, but also against their better
judgment and in full consciousness of what it will bring to both of them.
This is specially so with respect to Lolita, being an unmarried woman,
falling in love with defendant who is a married man."

We disagree with this view. The circumstances under which defendant

tried to win Lolita's affection cannot lead, to any other conclusion than
that it was he who, thru an ingenious scheme or trickery, seduced the
latter to the extent of making her fall in love with him. This is shown by
the fact that defendant frequented the house of Lolita on the pretext that
he wanted her to teach him how to pray the rosary. Because of the
frequency of his visits to the latter's family who was allowed free access
because he was a collateral relative and was considered as a member of
her family, the two eventually fell in love with each other and conducted
clandestine love affairs not only in Gasan but also in Boac where Lolita
used to teach in a barrio school. When the rumors about their illicit affairs
reached the knowledge of her parents, defendant was forbidden from
going to their house and even from seeing Lolita. Plaintiffs even filed
deportation proceedings against defendant who is a Chinese national.
Nevertheless, defendant continued his love affairs with Lolita until she
disappeared from the parental home. Indeed, no other conclusion can be
drawn from this chain of events than that defendant not only deliberately,
but through a clever strategy, succeeded in winning the affection and love
of Lolita to the extent of having illicit relations with her. The wrong he has
caused her and her family is indeed immeasurable considering the fact
that he is a married man. Verily, he has committed an injury to Lolita's
family in a manner contrary to morals, good customs and public policy as
contemplated in Article 21 of the new Civil Code.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-18630      December 17, 1966
APOLONIO TANJANCO, petitioner,
vs.
HON. COURT OF APPEALS and ARACELI SANTOS, respondents.
P. Carreon and G. O. Veneracion, Jr. for petitioner.
Antonio V. Bonoan for respondents.
REYES, J.B.L., J.:
Appeal from a decision of the Court of Appeals (in its Case No. 27210-R)
revoking an order of the Court of First Instance of Rizal (in Civil Case No.
Q-4797) dismissing appellant's action for support and damages.
The essential allegations of the complaint are to the effect that, from
December, 1957, the defendant (appellee herein), Apolonio Tanjanco,
courted the plaintiff, Araceli Santos, both being of adult age; that
"defendant expressed and professed his undying love and affection for
plaintiff who also in due time reciprocated the tender feelings"; that in
consideration of defendant's promise of marriage plaintiff consented and
acceded to defendant's pleas for carnal knowledge; that regularly until
December 1959, through his protestations of love and promises of
marriage, defendant succeeded in having carnal access to plaintiff, as a
result of which the latter conceived a child; that due to her pregnant
condition, to avoid embarrassment and social humiliation, plaintiff had to
resign her job as secretary in IBM Philippines, Inc., where she was
receiving P230.00 a month; that thereby plaintiff became unable to
support herself and her baby; that due to defendant's refusal to marry
plaintiff, as promised, the latter suffered mental anguish, besmirched
reputation, wounded feelings, moral shock, and social humiliation. The
prayer was for a decree compelling the defendant to recognize the
unborn child that plaintiff was bearing; to pay her not less than P430.00 a
month for her support and that of her baby, plus P100,000.00 in moral
and exemplary damages, plus P10,000.00 attorney's fees.
Upon defendant's motion to dismiss, the court of first instance dismissed
the complaint for failure to state a cause of action.
Plaintiff Santos duly appealed to the Court of Appeals, and the latter
ultimately decided the case, holding with the lower court that no cause of
action was shown to compel recognition of a child as yet unborn, nor for
its support, but decreed that the complaint did state a cause of action for
damages, premised on Article 21 of the Civil Code of the Philippines,
prescribing as follows:
ART. 21. Any person who wilfully causes loss or injury to another
in a manner that is contrary to morals, good customs or public
policy shall compensate the latter for the damage.
The Court of Appeals, therefore, entered judgment setting aside the
dismissal and directing the court of origin to proceed with the case.
Defendant, in turn, appealed to this Court, pleading that actions for
breach of a promise to marry are not permissible in this jurisdiction, and
invoking the rulings of this Court in Estopa vs. Piansay, L-14733,
September 30, 1960; Hermosisima vs. Court of Appeals, L-14628,
January 29, 1962; and De Jesus vs. SyQuia, 58 Phil. 886.
We find this appeal meritorious.
In holding that the complaint stated a cause of action for damages, under
Article 21 above mentioned, the Court of Appeals relied upon and quoted
from the memorandum submitted by the Code Commission to the
Legislature in 1949 to support the original draft of the Civil Code.
Referring to Article 23 of the draft (now Article 21 of the Code), the
Commission stated:
But the Code Commission has gone farther than the sphere of
wrongs defined or determined by positive law. Fully sensible that
there are countless gaps in the statutes, which leave so many
victims of moral wrongs helpless, even though they have actually
suffered material and moral injury, the Commission has deemed it
necessary, in the interest of justice, to incorporate in the
proposed Civil Code the following rule:
"ART. 23. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good
 customs or public policy shall compensate the latter for
the damage."
An example will illustrate the purview of the foregoing norm: "A"
seduces the nineteen-year old daughter of "X". A promise of
marriage either has not been made, or can not be proved. The
girl becomes pregnant. Under the present laws, there is no crime,
as the girl is above eighteen years of age. Neither can any civil
action for breach of promise of marriage be filed. Therefore,
though the grievous moral wrong has been committed, and
though the girl and her family have suffered incalculable moral
damage, she and her parents cannot bring any action for
damages. But under the proposed article, she and her parents
would have such a right of action.
The Court of Appeals seems to have overlooked that the example set
forth in the Code Commission's memorandum refers to a tort upon a
minor who has been seduced. The essential feature is seduction, that in
law is more than mere sexual intercourse, or a breach of a promise of
marriage; it connotes essentially the idea of deceit, enticement, superior
power or abuse of confidence on the part of the seducer to which the
woman has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs.
Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that —
To constitute seduction there must in all cases be some sufficient
promise or inducement and the woman must yield because of the
promise or other inducement. If she consents merely from carnal
lust and the intercourse is from mutual desire, there is no
seduction (43 Cent. Dig. tit. Seduction, par. 56). She must be
induced to depart from the path of virtue by the use of some
species of arts, persuasions and wiles, which are calculated to
have and do have that effect, and which result in her ultimately
submitting her person to the sexual embraces of her seducer (27
Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the enticement,
persuasion or deception is the essence of the injury; and a mere
proof of intercourse is insufficient to warrant a recover.
Accordingly it is not seduction where the willingness arises out of
sexual desire or curiosity of the female, and the defendant merely
affords her the needed opportunity for the commission of the act.
It has been emphasized that to allow a recovery in all such cases
would tend to the demoralization of the female sex, and would be
a reward for unchastity by which a class of adventuresses would
be swift to profit." (47 Am. Jur. 662)
Bearing these principles in mind, let us examine the complaint. The
material allegations there are as follows:
I. That the plaintiff is of legal age, single, and residing at 56 South
E. Diliman, Quezon City, while defendant is also of legal age,
single and residing at 525 Padre Faura, Manila, where he may be
served with summons;
II. That the plaintiff and the defendant became acquainted with
each other sometime in December, 1957 and soon thereafter, the
defendant started visiting and courting the plaintiff;
III. That the defendant's visits were regular and frequent and in
due time the defendant expressed and professed his undying
love and affection for the plaintiff who also in due time
reciprocated the tender feelings;
IV. That in the course of their engagement, the plaintiff and the
defendant as are wont of young people in love had frequent
outings and dates, became very close and intimate to each other
and sometime in July, 1958, in consideration of the defendant's
promises of marriage, the plaintiff consented and acceded to the
former's earnest and repeated pleas to have carnal knowledge
with him;
V. That subsequent thereto and regularly until about July, 1959
except for a short period in December, 1958 when the defendant
was out of the country, the defendant through his protestations of
love and promises of marriage succeeded in having carnal
knowledge with the plaintiff;
VI. That as a result of their intimate relationship, the plaintiff
started conceiving which was confirmed by a doctor sometime in
July, 1959;
 VII. That upon being certain of her pregnant condition, the plaintiff
informed the defendant and pleaded with him to make good his
promises of marriage, but instead of honoring his promises and
righting his wrong, the defendant stopped and refrained from
seeing the plaintiff since about July, 1959 has not visited the
plaintiff and to all intents and purposes has broken their
engagement and his promises.

Over and above the partisan allegations, the facts stand out that for one
whole year, from 1958 to 1959, the plaintiff-appellee, a woman of adult
age, maintained intimate sexual relations with appellant, with repeated
acts of intercourse. Such conduct is incompatible with the idea of
seduction. Plainly there is here voluntariness and mutual passion; for had
the appellant been deceived, had she surrendered exclusively because of
the deceit, artful persuasions and wiles of the defendant, she would not
have again yielded to his embraces, much less for one year, without
exacting early fulfillment of the alleged promises of marriage, and would
have cut chart all sexual relations upon finding that defendant did not
intend to fulfill his promises. Hence, we conclude that no case is made
under Article 21 of the Civil Code, and no other cause of action being
alleged, no error was committed by the Court of First Instance in
dismissing the complaint.

Of course, the dismissal must be understood as without prejudice to

whatever actions may correspond to the child of the plaintiff against the
defendant-appellant, if any. On that point, this Court makes no
pronouncement, since the child's own rights are not here involved.

FOR THE FOREGOING REASONS, the decision of the Court of Appeals

is reversed, and that of the Court of First Instance is affirmed. No costs.

Concepcion, C.J., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P.,

Zaldivar, Sanchez and Castro, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-14628             September 30, 1960
FRANCISCO HERMOSISIMA, petitioner,
vs.
THE HON. COURT OF APPEALS, ET AL., respondents.
Regino Hermosisima for petitioner.
F.P. Gabriel, Jr. for respondents.
CONCEPCION, J.:
An appeal by certiorari, taken by petitioner Francisco Hermosisima, from
a decision of Court of Appeals modifying that of the Court of First
Instance of Cebu.
On October 4, 1954, Soledad Cagigas, hereinafter referred to as
complaint, filed with said of her child, Chris Hermosisima, as natural child
and moral damages for alleged breach of promise. Petitioner admitted
the paternity of child and expressed willingness to support the latter, but
denied having ever promised to marry the complainant. Upon her motion,
said court ordered petitioner, on October 27, 1954, to pay, by way of
alimony pendente lite, P50.00 a month, which was, on February 16,
1955, reduced to P30.00 a month. In due course, later on, said court
rendered a decision the dispositive part of which reads:
WHEREFORE, judgment is hereby rendered, declaring the child,
Chris Hermosisima, as the natural daughter of defendant, and
confirming the order pendente lite, ordering defendant to pay to
the said child, through plaintiff, the sum of thirty pesos (P30.00),
payable on or before the fifth day of every month sentencing
defendant to pay to plaintiff the sum of FOUR THOUSAND FIVE
HUNDRED PESOS (P4,500.00) for actual and compensatory
damages; the sum of FIVE THOUSAND PESOS (P5,000.00) as
moral damages; and the further sum of FIVE HUNDRED PESOS
(P500.00) as attorney's fees for plaintiff, with costs against
defendant.
On appeal taken by petitioner, the Court of Appeals affirmed this
decision, except as to the actual and compensatory damages and the
moral damages, which were increased to P5,614.25 and P7,000.00,
respectively.
The main issue before us is whether moral damages are recoverable,
under our laws, for breach of promise to marry. The pertinent facts are:
Complainant Soledad Cagigas, was born in July 1917. Since 1950,
Soledad then a teacher in the Sibonga Provincial High School in Cebu,
and petitioner, who was almost ten (10) years younger than she, used to
go around together and were regarded as engaged, although he had
made no promise of marriage prior thereto. In 1951, she gave up
teaching and became a life insurance underwriter in the City of Cebu,
where intimacy developed among her and the petitioner, since one
evening in 1953, when after coming from the movies, they had sexual
intercourse in his cabin on board M/V "Escaño," to which he was then
attached as apprentice pilot. In February 1954, Soledad advised
petitioner that she was in the family way, whereupon he promised to
marry her. Their child, Chris Hermosisima, was born on June 17, 1954, in
a private maternity and clinic. However, subsequently, or on July 24,
1954, defendant married one Romanita Perez. Hence, the present action,
which was commenced on or about October 4, 1954.
Referring now to the issue above referred to, it will be noted that the Civil
Code of Spain permitted the recovery of damages for breach to marry.
Article 43 and 44 of said Code provides:
ART. 43. A mutual promise of marriage shall not give rise to an
obligation to contract marriage. No court shall entertain any
complaint by which the enforcement of such promise is sought.
ART. 44. If the promise has been in a public or private instrument
by an adult, or by a minor with the concurrence of the person
whose consent is necessary for the celebration of the marriage,
or if the banns have been published, the one who without just
cause refuses to marry shall be obliged to reimburse the other for
the expenses which he or she may have incurred by reason of
the promised marriage.
The action for reimbursement of expenses to which the foregoing
article refers must be brought within one year, computed from the
day of the refusal to celebrate the marriage.
Inasmuch as these articles were never in force in the Philippines, this
Court ruled in De Jesus vs. Syquia (58 Phil., 866), that "the action for
breach of promises to marry has no standing in the civil law, apart from
the right to recover money or property advanced . . . upon the faith of
such promise". The Code Commission charged with the drafting of the
Proposed Civil Code of the Philippines deem it best, however, to change
the law thereon. We quote from the report of the Code Commission on
said Proposed Civil Code:
Articles 43 and 44 the Civil Code of 1889 refer to the promise of
marriage. But these articles are not enforced in the Philippines.
The subject is regulated in the Proposed Civil Code not only as to
the aspect treated of in said articles but also in other particulars. It
is advisable to furnish legislative solutions to some questions that
might arise relative to betrothal. Among the provisions proposed
are: That authorizing the adjudication of moral damages, in case
of breach of promise of marriage, and that creating liability for
causing a marriage engagement to be broken.
1awphîl.nèt
Accordingly, the following provisions were inserted in said Proposed Civil
Code, under Chapter I, Title III, Book I thereof:
Art. 56. A mutual promise to marry may be made expressly or
impliedly.
Art. 57. An engagement to be married must be agreed directly by
the future spouses.
Art. 58. A contract for a future marriage cannot, without the
consent of the parent or guardian, be entered into by a male
between the ages of sixteen and twenty years or by a female
between the ages of sixteen and eighteen years. Without such
consent of the parents or guardian, the engagement to marry
cannot be the basis of a civil action for damages in case of
breach of the promise.
Art. 59. A promise to marry when made by a female under the
age of fourteen years is not civilly actionable, even though
approved by the parent or guardian.
Art. 60. In cases referred to in the proceeding articles, the
criminal and civil responsibility of a male for seduction shall not
be affected.
Art. 61. No action for specific performance of a mutual promise to
marry may be brought.
Art. 62. An action for breach of promise to marry may be brought
by the aggrieved party even though a minor without the
assistance of his parent or guardian. Should the minor refuse to
bring suit, the parent or guardian may institute the action.
Art. 63. Damages for breach of promise to marry shall include not
only material and pecuniary losses but also compensation for
mental and moral suffering.
Art. 64. Any person, other than a rival, the parents, guardians and
grandparents, of the affianced parties, who cause a marriage
engagement to be broken shall be liable for damages, both
material and moral, to the engaged person who is rejected.
Art. 65. In case of breach of promise to marry, the party breaking
the engagement shall be obliged to return what he or she has
received from the other as gift on account of the promise of the
marriage.
These article were, however, eliminated in Congress. The reason therefor
are set forth in the report of the corresponding Senate Committee, from
which we quote:
The elimination of this Chapter is proposed. That breach of promise to
marry is not actionable has been definitely decide in the case of De
Jesus vs. Syquia, 58 Phil., 866. The history of breach of promise suit in
the United States and in England has shown that no other action lends
itself more readily to abuse by designing women and unscrupulous men.
It is this experience which has led to the abolition of the rights of action in
the so-called Balm suit in many of the American States.
See statutes of:
Florida 1945 — pp. 1342 — 1344
Maryland 1945 — pp. 1759 — 1762
Nevada 1943 — p. 75
Maine 1941 — pp. 140 — 141
New Hampshire 1941 — p. 223
California 1939 — p. 1245
Massachusetts 1938 — p. 326
 Indiana 1936 — p. 1009
Michigan 1935 — p. 201
New York 1935
Pennsylvania p. 450
The Commission perhaps though that it has followed the more
progression trend in legislation when it provided for breach of
promise to marry suits. But it is clear that the creation of such
causes of action at a time when so many States, in consequence
of years of experience are doing away with them, may well prove
to be a step in the wrong direction. (Congressional Record, Vol.
IV, No. 79, Thursday, May 19, 1949, p. 2352.)
The views thus expressed were accepted by both houses of Congress. In
the light of the clear and manifest intent of our law making body not to
sanction actions for breach of promise to marry, the award of moral
damages made by the lower courts is, accordingly, untenable. The Court
of Appeals said award:
The court of first instance sentenced petitioner to pay the following: (1) a
monthly pension of P30.00 for the support of the child: (2) P4,500,
representing the income that complainant had allegedly failed to earn
during her pregnancy and shortly after the birth of the child, as actual and
compensation damages; (3) P5,000, as moral damages; and (4)
P500.00, as attorney's fees. The Court of Appeals added to the second
item the sum of P1,114.25 — consisting of P144.20, for hospitalization
and medical attendance, in connection with the parturiation, and the
balance representing expenses incurred to support the child — and
increased the moral damages to P7,000.00.
With the elimination of this award for damages, the decision of the Court
of Appeals is hereby affirmed, therefore, in all other respects, without
special pronouncement as to cost in this instance. It is so ordered.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L.,
Barrera, Gutierrez David, Paredes and Dizon, JJ., concur.

Moreover, it appearing that because of defendant-appellant's

seduction power, plaintiff-appellee, overwhelmed by her love for
him finally yielded to his sexual desires in spite of her age and
self-control, she being a woman after all, we hold that said
defendant-appellant is liable for seduction and, therefore, moral
damages may be recovered from him under the provision of
Article 2219, paragraph 3, of the new Civil Code.

Apart from the fact that the general tenor of said Article 2219, particularly
the paragraphs preceding and those following the one cited by the Court
of Appeals, and the language used in said paragraph strongly indicates
that the "seduction" therein contemplated is the crime punished as such
in Article as such in Article 337 and 338 of the Revised Penal Code,
which admittedly does not exist in the present case, we find ourselves
unable to say that petitioner is morally guilty of seduction, not only
because he is approximately ten (10) years younger than the complainant
— who around thirty-six (36) years of age, and as highly enlightened as a
former high school teacher and a life insurance agent are supposed to be
— when she became intimate with petitioner, then a mere apprentice
pilot, but, also, because, the court of first instance found that,
complainant "surrendered herself" to petitioner because, "overwhelmed
by her love" for him, she "wanted to bind" "by having a fruit of their
engagement even before they had the benefit of clergy."
 G.R. No. 97336 February 19, 1993
GASHEM SHOOKAT BAKSH, petitioner,
vs.
HON. COURT OF APPEALS and MARILOU T.
GONZALES, respondents.
Public Attorney's Office for petitioner.
Corleto R. Castro for private respondent.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court
seeking to review and set aside the Decision  of the respondent Court of
1
Appeals in CA-G.R. CV No. 24256 which affirmed in toto the 16 October
1939 Decision of Branch 38 (Lingayen) of the Regional Trial Court (RTC)
of Pangasinan in Civil Case No. 16503. Presented is the issue of whether
or not damages may be recovered for a breach of promise to marry on
the basis of Article 21 of the Civil Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without the assistance of
counsel, filed with the aforesaid trial court a complaint  for damages
2
against the petitioner for the alleged violation of their agreement to get
married. She alleges in said complaint that: she is twenty-two (22) years
old, single, Filipino and a pretty lass of good moral character and
reputation duly respected in her community; petitioner, on the other hand,
is an Iranian citizen residing at the Lozano Apartments, Guilig, Dagupan
City, and is an exchange student taking a medical course at the Lyceum
Northwestern Colleges in Dagupan City; before 20 August 1987, the
latter courted and proposed to marry her; she accepted his love on the
condition that they would get married; they therefore agreed to get
married after the end of the school semester, which was in October of
that year; petitioner then visited the private respondent's parents in
Bañaga, Bugallon, Pangasinan to secure their approval to the marriage;
sometime in 20 August 1987, the petitioner forced her to live with him in
the Lozano Apartments; she was a virgin before she began living with
him; a week before the filing of the complaint, petitioner's attitude towards
her started to change; he maltreated and threatened to kill her; as a result
of such maltreatment, she sustained injuries; during a confrontation with
a representative of the barangay captain of Guilig a day before the filing
of the complaint, petitioner repudiated their marriage agreement and
asked her not to live with him anymore and; the petitioner is already
married to someone living in Bacolod City. Private respondent then
prayed for judgment ordering the petitioner to pay her damages in the
amount of not less than P45,000.00, reimbursement for actual expenses
amounting to P600.00, attorney's fees and costs, and granting her such
other relief and remedies as may be just and equitable. The complaint
was docketed as Civil Case No. 16503.
In his Answer with Counterclaim,  petitioner admitted only the personal
3
circumstances of the parties as averred in the complaint and denied the
rest of the allegations either for lack of knowledge or information sufficient
to form a belief as to the truth thereof or because the true facts are those
alleged as his Special and Affirmative Defenses. He thus claimed that he
never proposed marriage to or agreed to be married with the private
respondent; he neither sought the consent and approval of her parents
nor forced her to live in his apartment; he did not maltreat her, but only
told her to stop coming to his place because he discovered that she had
deceived him by stealing his money and passport; and finally, no
confrontation took place with a representative of the barangay captain.
Insisting, in his Counterclaim, that the complaint is baseless and
unfounded and that as a result thereof, he was unnecessarily dragged
into court and compelled to incur expenses, and has suffered mental
anxiety and a besmirched reputation, he prayed for an award of
P5,000.00 for miscellaneous expenses and P25,000.00 as moral
damages.
After conducting a pre-trial on 25 January 1988, the trial court issued a
Pre-Trial Order  embodying the stipulated facts which the parties had
4
agreed upon, to wit:
1. That the plaintiff is single and resident (sic) of Bañaga,
Bugallon, Pangasinan, while the defendant is single,
Iranian citizen and resident (sic) of Lozano Apartment,
Guilig, Dagupan City since September 1, 1987 up to the
present;
2. That the defendant is presently studying at Lyceum
Northwestern, Dagupan City, College of Medicine, second
year medicine proper;
3. That the plaintiff is (sic) an employee at Mabuhay
Luncheonette , Fernandez Avenue, Dagupan City since
 July, 1986 up to the present and a (sic) high school
graduate;
4. That the parties happened to know each other when
the manager of the Mabuhay Luncheonette, Johhny
Rabino introduced the defendant to the plaintiff on August
3, 1986.
After trial on the merits, the lower court, applying Article 21 of the Civil
Code, rendered on 16 October 1989 a decision  favoring the private
5
respondent. The petitioner was thus ordered to pay the latter damages
and attorney's fees; the dispositive portion of the decision reads:
IN THE LIGHT of the foregoing consideration, judgment is
hereby rendered in favor of the plaintiff and against the
defendant.
1. Condemning (sic) the defendant to pay the plaintiff the
sum of twenty thousand (P20,000.00) pesos as moral
damages.
2. Condemning further the defendant to play the plaintiff
the sum of three thousand (P3,000.00) pesos as atty's
fees and two thousand (P2,000.00) pesos at (sic) litigation
expenses and to pay the costs.
3. All other claims are denied. 6
The decision is anchored on the trial court's findings and conclusions that
(a) petitioner and private respondent were lovers, (b) private respondent
is not a woman of loose morals or questionable virtue who readily
submits to sexual advances, (c) petitioner, through machinations, deceit
and false pretenses, promised to marry private respondent, d) because of
his persuasive promise to marry her, she allowed herself to be
deflowered by him, (e) by reason of that deceitful promise, private
respondent and her parents — in accordance with Filipino customs and
traditions — made some preparations for the wedding that was to be held
at the end of October 1987 by looking for pigs and chickens, inviting
friends and relatives and contracting sponsors, (f) petitioner did not fulfill
his promise to marry her and (g) such acts of the petitioner, who is a
foreigner and who has abused Philippine hospitality, have offended our
sense of morality, good customs, culture and traditions. The trial court
gave full credit to the private respondent's testimony because, inter alia,
she would not have had the temerity and courage to come to court and
expose her honor and reputation to public scrutiny and ridicule if her
claim was false.
7
The above findings and conclusions were culled from the detailed
summary of the evidence for the private respondent in the foregoing
decision, digested by the respondent Court as follows:
According to plaintiff, who claimed that she was a virgin at
the time and that she never had a boyfriend before,
defendant started courting her just a few days after they
first met. He later proposed marriage to her several times
and she accepted his love as well as his proposal of
marriage on August 20, 1987, on which same day he
went with her to her hometown of Bañaga, Bugallon,
Pangasinan, as he wanted to meet her parents and
inform them of their relationship and their intention to get
married. The photographs Exhs. "A" to "E" (and their
submarkings) of defendant with members of plaintiff's
family or with plaintiff, were taken that day. Also on that
occasion, defendant told plaintiffs parents and brothers
and sisters that he intended to marry her during the
semestral break in October, 1987, and because plaintiff's
parents thought he was good and trusted him, they
agreed to his proposal for him to marry their daughter,
and they likewise allowed him to stay in their house and
sleep with plaintiff during the few days that they were in
Bugallon. When plaintiff and defendant later returned to
Dagupan City, they continued to live together in
defendant's apartment. However, in the early days of
October, 1987, defendant would tie plaintiff's hands and
feet while he went to school, and he even gave her
medicine at 4 o'clock in the morning that made her sleep
the whole day and night until the following day. As a result
of this live-in relationship, plaintiff became pregnant, but
defendant gave her some medicine to abort the fetus. Still
plaintiff continued to live with defendant and kept
reminding him of his promise to marry her until he told her
that he could not do so because he was already married
to a girl in Bacolod City. That was the time plaintiff left
defendant, went home to her parents, and thereafter
consulted a lawyer who accompanied her to the barangay
captain in Dagupan City. Plaintiff, her lawyer, her
godmother, and a barangay tanod sent by the barangay
 captain went to talk to defendant to still convince him to
marry plaintiff, but defendant insisted that he could not do
so because he was already married to a girl in Bacolod
City, although the truth, as stipulated by the parties at the
pre-trial, is that defendant is still single.
Plaintiff's father, a tricycle driver, also claimed that after
defendant had informed them of his desire to marry
Marilou, he already looked for sponsors for the wedding,
started preparing for the reception by looking for pigs and
chickens, and even already invited many relatives and
friends to the forthcoming wedding.  8
Petitioner appealed the trial court's decision to the respondent Court of
Appeals which docketed the case as CA-G.R. CV No. 24256. In his
Brief,  he contended that the trial court erred (a) in not dismissing the
9 working and where defendant first proposed marriage to
case for lack of factual and legal basis and (b) in ordering him to pay
moral damages, attorney's fees, litigation expenses and costs.
On 18 February 1991, respondent Court promulgated the challenged
decision   affirming in toto the trial court's ruling of 16 October 1989. In
10
sustaining the trial court's findings of fact, respondent Court made the
following analysis:
First of all, plaintiff, then only 21 years old when she met
defendant who was already 29 years old at the time, does
not appear to be a girl of loose morals. It is uncontradicted
that she was a virgin prior to her unfortunate experience
with defendant and never had boyfriend. She is, as
described by the lower court, a barrio lass "not used and
accustomed to trend of modern urban life", and certainly
would (sic) not have allowed
"herself to be deflowered by the defendant if there was no
persuasive promise made by the defendant to marry her."
In fact, we agree with the lower court that plaintiff and
defendant must have been sweethearts or so the plaintiff
must have thought because of the deception of
defendant, for otherwise, she would not have allowed
herself to be photographed with defendant in public in so
(sic) loving and tender poses as those depicted in the
pictures Exhs. "D" and "E". We cannot believe, therefore,
defendant's pretense that plaintiff was a nobody to him
except a waitress at the restaurant where he usually ate.
Defendant in fact admitted that he went to plaintiff's
hometown of Bañaga, Bugallon, Pangasinan, at least
thrice; at (sic) the town fiesta on February 27, 1987 (p. 54,
tsn May 18, 1988), at (sic) a beach party together with the
manager and employees of the Mabuhay Luncheonette
on March 3, 1987 (p. 50, tsn id.), and on April 1, 1987
when he allegedly talked to plaintiff's mother who told him
to marry her daughter (pp. 55-56, tsn id.). Would
defendant have left Dagupan City where he was involved
in the serious study of medicine to go to plaintiff's
hometown in Bañaga, Bugallon, unless there was (sic)
some kind of special relationship between them? And this
special relationship must indeed have led to defendant's
insincere proposal of marriage to plaintiff, communicated
not only to her but also to her parents, and (sic) Marites
Rabino, the owner of the restaurant where plaintiff was
her, also knew of this love affair and defendant's proposal
of marriage to plaintiff, which she declared was the
reason why plaintiff resigned from her job at the
restaurant after she had accepted defendant's proposal
(pp. 6-7, tsn March 7, 1988).
Upon the other hand, appellant does not appear to be a
man of good moral character and must think so low and
have so little respect and regard for Filipino women that
he openly admitted that when he studied in Bacolod City
for several years where he finished his B.S. Biology
before he came to Dagupan City to study medicine, he
had a common-law wife in Bacolod City. In other words,
he also lived with another woman in Bacolod City but did
not marry that woman, just like what he did to plaintiff. It is
not surprising, then, that he felt so little compunction or
remorse in pretending to love and promising to marry
plaintiff, a young, innocent, trustful country girl, in order to
satisfy his lust on her. 
11
and then concluded:
In sum, we are strongly convinced and so hold that it was
defendant-appellant's fraudulent and deceptive
protestations of love for and promise to marry plaintiff that
made her surrender her virtue and womanhood to him
and to live with him on the honest and sincere belief that
he would keep said promise, and it was likewise these
 (sic) fraud and deception on appellant's part that made
plaintiff's parents agree to their daughter's living-in with
him preparatory to their supposed marriage. And as these
acts of appellant are palpably and undoubtedly against
morals, good customs, and public policy, and are even
gravely and deeply derogatory and insulting to our
women, coming as they do from a foreigner who has been
enjoying the hospitality of our people and taking
advantage of the opportunity to study in one of our
institutions of learning, defendant-appellant should indeed
be made, under Art. 21 of the Civil Code of the
Philippines, to compensate for the moral damages and
injury that he had caused plaintiff, as the lower court
ordered him to do in its decision in this case. 12
Unfazed by his second defeat, petitioner filed the instant petition on 26
March 1991; he raises therein the single issue of whether or not Article
21 of the Civil Code applies to the case at bar. 13
It is petitioner's thesis that said Article 21 is not applicable because he
had not committed any moral wrong or injury or violated any good custom
or public policy; he has not professed love or proposed marriage to the
private respondent; and he has never maltreated her. He criticizes the
trial court for liberally invoking Filipino customs, traditions and culture,
and ignoring the fact that since he is a foreigner, he is not conversant
with such Filipino customs, traditions and culture. As an Iranian Moslem,
he is not familiar with Catholic and Christian ways. He stresses that even
if he had made a promise to marry, the subsequent failure to fulfill the
same is excusable or tolerable because of his Moslem upbringing; he
then alludes to the Muslim Code which purportedly allows a Muslim to
take four (4) wives and concludes that on the basis thereof, the trial court
erred in ruling that he does not posses good moral character. Moreover,
his controversial "common law life" is now his legal wife as their marriage
had been solemnized in civil ceremonies in the Iranian Embassy. As to
his unlawful cohabitation with the private respondent, petitioner claims
that even if responsibility could be pinned on him for the live-in
relationship, the private respondent should also be faulted for consenting
to an illicit arrangement. Finally, petitioner asseverates that even if it was
to be assumed arguendo that he had professed his love to the private
respondent and had also promised to marry her, such acts would not be
actionable in view of the special circumstances of the case. The mere
breach of promise is not actionable.  14
On 26 August 1991, after the private respondent had filed her Comment
to the petition and the petitioner had filed his Reply thereto, this Court
gave due course to the petition and required the parties to submit their
respective Memoranda, which they subsequently complied with.
As may be gleaned from the foregoing summation of the petitioner's
arguments in support of his thesis, it is clear that questions of fact, which
boil down to the issue of the credibility of witnesses, are also raised. It is
the rule in this jurisdiction that appellate courts will not disturb the trial
court's findings as to the credibility of witnesses, the latter court having
heard the witnesses and having had the opportunity to observe closely
their deportment and manner of testifying, unless the trial court had
plainly overlooked facts of substance or value which, if considered, might
affect the result of the case. 
15
Petitioner has miserably failed to convince Us that both the appellate and
trial courts had overlooked any fact of substance or values which could
alter the result of the case.
Equally settled is the rule that only questions of law may be raised in a
petition for review on certiorari under Rule 45 of the Rules of Court. It is
not the function of this Court to analyze or weigh all over again the
evidence introduced by the parties before the lower court. There are,
however, recognized exceptions to this rule. Thus, in Medina
vs. Asistio, Jr.,   this Court took the time, again, to enumerate these
16
exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures (Joaquin v. Navarro,
93 Phil. 257 [1953]); (2) When the inference made is
manifestly mistaken, absurb or impossible (Luna v.
Linatok, 74 Phil. 15 [1942]); (3) Where there is a grave
abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]);
(4) When the judgment is based on a misapprehension of
facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are
conflicting (Casica v. Villaseca, L-9590 Ap. 30, 1957;
unrep.) (6) When the Court of Appeals, in making its
findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellate and
appellee (Evangelista v. Alto Surety and Insurance Co.,
 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to
those of the trial court (Garcia v. Court of Appeals, 33
SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA
593 [1986]); (8) When the findings of fact are conclusions
without citation of specific evidence on which they are
based (Ibid.,); (9) When the facts set forth in the petition
as well as in the petitioners main and reply briefs are not
disputed by the respondents (Ibid.,); and (10) The finding
of fact of the Court of Appeals is premised on the
supposed absence of evidence and is contradicted by the
evidence on record (Salazar v. Gutierrez, 33 SCRA 242
[1970]).
Petitioner has not endeavored to joint out to Us the existence of any of
the above quoted exceptions in this case. Consequently, the factual
findings of the trial and appellate courts must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not an
actionable wrong.   Congress deliberately eliminated from the draft of the
17
New Civil Code the provisions that would have made it so. The reason
therefor is set forth in the report of the Senate Committees on the
Proposed Civil Code, from which We quote:
The elimination of this chapter is proposed. That breach
of promise to marry is not actionable has been definitely
decided in the case of De Jesus vs. Syquia.   The history
18
of breach of promise suits in the United States and in
England has shown that no other action lends itself more
readily to abuse by designing women and unscrupulous
men. It is this experience which has led to the abolition of
rights of action in the so-called Heart Balm suits in many
of the American states. . . . 
19
Article 2176 of the Civil Code, which defines a quasi-delict thus:
This notwithstanding, the said Code contains a provision, Article 21,
which is designed to expand the concept of torts or quasi-delict in this
jurisdiction by granting adequate legal remedy for the untold number of
moral wrongs which is impossible for human foresight to specifically
enumerate and punish in the statute books.  20
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than the
sphere of wrongs defined or determined by positive law.
Fully sensible that there are countless gaps in the
statutes, which leave so many victims of moral wrongs
helpless, even though they have actually suffered
material and moral injury, the Commission has deemed it
necessary, in the interest of justice, to incorporate in the
proposed Civil Code the following rule:
Art. 23. Any person who wilfully causes
loss or injury to another in a manner that
is contrary to morals, good customs or
public policy shall compensate the latter
for the damage.
An example will illustrate the purview of the foregoing
norm: "A" seduces the nineteen-year old daughter of "X".
A promise of marriage either has not been made, or can
not be proved. The girl becomes pregnant. Under the
present laws, there is no crime, as the girl is above
nineteen years of age. Neither can any civil action for
breach of promise of marriage be filed. Therefore, though
the grievous moral wrong has been committed, and
though the girl and family have suffered incalculable
moral damage, she and her parents cannot bring action
for damages. But under the proposed article, she and her
parents would have such a right of action.
Thus at one stroke, the legislator, if the forgoing rule is
approved, would vouchsafe adequate legal remedy for
that untold number of moral wrongs which it is impossible
for human foresight to provide for specifically in the
statutes. 
21
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.
 is limited to negligent acts or omissions and excludes the notion
of willfulness or intent. Quasi-delict, known in Spanish legal
treatises as culpa aquiliana, is a civil law concept while torts is an
Anglo-American or common law concept. Torts is much broader
than culpa aquiliana because it includes not only negligence, but
international criminal acts as well such as assault and battery,
false imprisonment and deceit. In the general scheme of the
Philippine legal system envisioned by the Commission
responsible for drafting the New Civil Code, intentional and
malicious acts, with certain exceptions, are to be governed by the
Revised Penal Code while negligent acts or omissions are to be
covered by Article 2176 of the Civil Code.   In between these
22
opposite spectrums are injurious acts which, in the absence of
Article 21, would have been beyond redress. Thus, Article 21 fills
that vacuum. It is even postulated that together with Articles 19
and 20 of the Civil Code, Article 21 has greatly broadened the
scope of the law on civil wrongs; it has become much more
supple and adaptable than the Anglo-American law on torts.  23
In the light of the above laudable purpose of Article 21, We are of the
opinion, and so hold, that where a man's promise to marry is in fact the
proximate cause of the acceptance of his love by a woman and his
representation to fulfill that promise thereafter becomes the proximate
cause of the giving of herself unto him in a sexual congress, proof that he
had, in reality, no intention of marrying her and that the promise was only
a subtle scheme or deceptive device to entice or inveigle her to accept
him and to obtain her consent to the sexual act, could justify the award of
damages pursuant to Article 21 not because of such promise to marry but
because of the fraud and deceit behind it and the willful injury to her
honor and reputation which followed thereafter. It is essential, however,
that such injury should have been committed in a manner contrary to
morals, good customs or public policy.
In the instant case, respondent Court found that it was the petitioner's
"fraudulent and deceptive protestations of love for and promise to marry
plaintiff that made her surrender her virtue and womanhood to him and to
live with him on the honest and sincere belief that he would keep said
promise, and it was likewise these fraud and deception on appellant's
part that made plaintiff's parents agree to their daughter's living-in with
him preparatory to their supposed marriage."   In short, the private
24
respondent surrendered her virginity, the cherished possession of every
single Filipina, not because of lust but because of moral seduction — the
kind illustrated by the Code Commission in its example earlier adverted
to. The petitioner could not be held liable for criminal seduction punished
under either Article 337 or Article 338 of the Revised Penal Code
because the private respondent was above eighteen (18) years of age at
the time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be
applied in a breach of promise to marry where the woman is a victim of
moral seduction. Thus, in Hermosisima vs. Court of Appeals,  this Court
25
denied recovery of damages to the woman because:
. . . we find ourselves unable to say that petitioner
is morally guilty of seduction, not only because he is
approximately ten (10) years younger than the
complainant — who was around thirty-six (36) years of
age, and as highly enlightened as a former high school
teacher and a life insurance agent are supposed to be —
when she became intimate with petitioner, then a mere
apprentice pilot, but, also, because the court of first
instance found that, complainant "surrendered herself" to
petitioner because, "overwhelmed by her love" for him,
she "wanted to bind" him by having a fruit of their
engagement even before they had the benefit of clergy.
In Tanjanco vs. Court of Appeals,   while this Court likewise hinted at
26
possible recovery if there had been moral seduction, recovery was
eventually denied because We were not convinced that such seduction
existed. The following enlightening disquisition and conclusion were
made in the said case:
The Court of Appeals seem to have overlooked that the
example set forth in the Code Commission's
memorandum refers to a tort upon a minor who had
been seduced. The essential feature is seduction, that in
law is more than mere sexual intercourse, or a breach of
a promise of marriage; it connotes essentially the idea of
deceit, enticement, superior power or abuse of confidence
on the part of the seducer to which the woman has
yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs.
Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that —
To constitute seduction there must in all
cases be some sufficient promise or
 inducement and the woman must yield
because of the promise or other
inducement. If she consents merely from
carnal lust and the intercourse is from
mutual desire, there is no seduction (43
Cent. Dig. tit. Seduction, par. 56) She
must be induced to depart from the path of
virtue by the use of some species of arts,
persuasions and wiles, which are
calculated to have and do have that effect,
and which result in her person to
ultimately submitting her person to the
sexual embraces of her seducer (27 Phil.
123).
And in American Jurisprudence we find:
On the other hand, in an action by the
woman, the enticement, persuasion or
deception is the essence of the injury; and
a mere proof of intercourse is insufficient
to warrant a recovery.
Accordingly it is not seduction where the
willingness arises out of sexual desire of
curiosity of the female, and the defendant
merely affords her the needed opportunity
for the commission of the act. It has been
emphasized that to allow a recovery in all
such cases would tend to the
demoralization of the female sex, and
would be a reward for unchastity by which
a class of adventuresses would be swift to
profit. (47 Am. Jur. 662)
xxx xxx xxx
Over and above the partisan allegations, the fact stand
out that for one whole year, from 1958 to 1959, the
plaintiff-appellee, a woman of adult age, maintain intimate
sexual relations with appellant, with repeated acts of
intercourse. Such conduct is incompatible with the idea of
seduction. Plainly there is here voluntariness and mutual
passion; for had the appellant been deceived, had she
surrendered exclusively because of the deceit, artful
persuasions and wiles of the defendant, she would not
have again yielded to his embraces, much less for one
year, without exacting early fulfillment of the alleged
promises of marriage, and would have cut short all sexual
relations upon finding that defendant did not intend to
fulfill his defendant did not intend to fulfill his promise.
Hence, we conclude that no case is made under article 21
of the Civil Code, and no other cause of action being
alleged, no error was committed by the Court of First
Instance in dismissing the complaint.  27
In his annotations on the Civil Code,   Associate Justice Edgardo L.
28
Paras, who recently retired from this Court, opined that in a breach of
promise to marry where there had been carnal knowledge, moral
damages may be recovered:
. . . if there be criminal or moral seduction, but not if the
intercourse was due to mutual lust. (Hermosisima vs.
Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-
14733, Sept. 30, 1960; Batarra vs. Marcos, 7 Phil. 56
(sic); Beatriz Galang vs. Court of Appeals, et al., L-17248,
Jan. 29, 1962). (In other words, if the CAUSE be the
promise to marry, and the EFFECT be the carnal
knowledge, there is a chance that there was criminal or
moral seduction, hence recovery of moral damages will
prosper. If it be the other way around, there can be no
recovery of moral damages, because here mutual lust has
intervened). . . .
together with "ACTUAL damages, should there be any, such as
the expenses for the wedding presentations (See Domalagon v.
Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino   is also of the same persuasion:
29
It is submitted that the rule in Batarra vs. Marcos,   still
30
subsists, notwithstanding the incorporation of the present
article  in the Code. The example given by the Code
31
Commission is correct, if there was seduction, not
necessarily in the legal sense, but in the vulgar sense of
 deception. But when the sexual act is accomplished
without any deceit or qualifying circumstance of abuse of
authority or influence, but the woman, already of age, has
knowingly given herself to a man, it cannot be said that
there is an injury which can be the basis for indemnity.
But so long as there is fraud, which is characterized by
willfulness (sic), the action lies. The court, however, must
weigh the degree of fraud, if it is sufficient to deceive the
woman under the circumstances, because an act which
would deceive a girl sixteen years of age may not
constitute deceit as to an experienced woman thirty years
of age. But so long as there is a wrongful act and a
resulting injury, there should be civil liability, even if the
act is not punishable under the criminal law and there
should have been an acquittal or dismissal of the criminal
case for that reason.
We are unable to agree with the petitioner's alternative proposition to the
effect that granting, for argument's sake, that he did promise to marry the
private respondent, the latter is nevertheless also at fault. According to
him, both parties are in pari delicto; hence, pursuant to Article 1412(1) of
the Civil Code and the doctrine laid down in Batarra vs. Marcos,   the 32
private respondent cannot recover damages from the petitioner. The
latter even goes as far as stating that if the private respondent had
"sustained any injury or damage in their relationship, it is primarily
because of her own doing,   for:
33
. . . She is also interested in the petitioner as the latter will
become a doctor sooner or later. Take notice that she is a
plain high school graduate and a mere employee . . .
(Annex "C") or a waitress (TSN, p. 51, January 25, 1988)
in a luncheonette and without doubt, is in need of a man
who can give her economic security. Her family is in dire
need of financial assistance. (TSN, pp. 51-53, May 18,
1988). And this predicament prompted her to accept a
proposition that may have been offered by the petitioner.  34
These statements reveal the true character and motive of the petitioner. It
is clear that he harbors a condescending, if not sarcastic, regard for the
private respondent on account of the latter's ignoble birth, inferior
educational background, poverty and, as perceived by him, dishonorable
employment. Obviously then, from the very beginning, he was not at all
moved by good faith and an honest motive. Marrying with a woman so
circumstances could not have even remotely occurred to him. Thus, his
profession of love and promise to marry were empty words directly
intended to fool, dupe, entice, beguile and deceive the poor woman into
believing that indeed, he loved her and would want her to be his life's
partner. His was nothing but pure lust which he wanted satisfied by a
Filipina who honestly believed that by accepting his proffer of love and
proposal of marriage, she would be able to enjoy a life of ease and
security. Petitioner clearly violated the Filipino's concept of morality and
brazenly defied the traditional respect Filipinos have for their women. It
can even be said that the petitioner committed such deplorable acts in
blatant disregard of Article 19 of the Civil Code which directs every
person to act with justice, give everyone his due and observe honesty
and good faith in the exercise of his rights and in the performance of his
obligations.
No foreigner must be allowed to make a mockery of our laws, customs
and traditions.
The pari delicto rule does not apply in this case for while indeed, the
private respondent may not have been impelled by the purest of
intentions, she eventually submitted to the petitioner in sexual congress
not out of lust, but because of moral seduction. In fact, it is apparent that
she had qualms of conscience about the entire episode for as soon as
she found out that the petitioner was not going to marry her after all, she
left him. She is not, therefore, in pari delicto with the petitioner. Pari
delicto means "in equal fault; in a similar offense or crime; equal in guilt
or in legal fault."   At most, it could be conceded that she is merely in
35
delicto.
Equity often interferes for the relief of the less guilty of the
parties, where his transgression has been brought about
by the imposition of undue influence of the party on whom
the burden of the original wrong principally rests, or where
his consent to the transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud,   We declared:
37
Appellants likewise stress that both parties being at fault,
there should be no action by one against the other (Art.
1412, New Civil Code). This rule, however, has been
interpreted as applicable only where the fault on both
sides is, more or less, equivalent. It does not apply where
 one party is literate or intelligent and the other one is not.
(c.f. Bough vs. Cantiveros, 40 Phil. 209).

We should stress, however, that while We find for the private respondent,
let it not be said that this Court condones the deplorable behavior of her
parents in letting her and the petitioner stay together in the same room in
their house after giving approval to their marriage. It is the solemn duty of
parents to protect the honor of their daughters and infuse upon them the
higher values of morality and dignity.

WHEREFORE, finding no reversible error in the challenged decision, the

instant petition is hereby DENIED, with costs against the petitioner.

SO ORDERED.

Feliciano, Bidin, Romero and Melo, JJ., concur.

Gutierrez, Jr., J., is on leave.

 G.R. No. 78911-25 December 11, 1987
CHARMINA B. BANAL, petitioner, vs.
THE HON. TOMAS V. TADEO, JR., Presiding Judge, RTC-Quezon
City, Branch 105 and Rosario Claudia respondents.
GUTIERREZ, JR., J.:
This is a petition for certiorari to review and set aside the orders of the
respondent Regional Trial Court, Branch 105, Quezon City dated (1) 8
January 1987 which rejected the appearance of Atty. Nicolito L. Bustos
as private prosecutor in Criminal Cases Nos. Q-40909 to Q-40913 where
respondent Rosario Claudio is the accused for violation of Batas
Pambansa Blg. 22; and (2) 31 March 1987 which denied the petitioner's
motion for reconsideration of the order dated 8 January 1987; and for
mandamus to allow Atty. Bustos to enter his appearance as private
prosecutor in the aforestated criminal cases.
It appears that fifteen (15) separate informations for violation of Batas
Pambansa Blg. 22 or the Bouncing Checks Law, docketed as Criminal
Cases Nos. 40909-40913, were filed against respondent Claudio before
the Regional Trial Court of Quezon City and originally assigned to Branch
84.
The presiding judge of Branch 84 inhibited himself when respondent
Claudio, through counsel, filed a petition for recuse dated May 19,1986.
The cases were re-raffled and consequently assigned on June 25, 1986
to Branch 105 which was then presided over by Judge Johnico G.
Serquina
During these proceedings, respondent Claudio was finally arraigned on
November 20, 1986 where she pleaded not guilty to the charges. Pre-trial
was then set on January 8, 1987.
In the meantime Judge Tomas V. Tadeo, Jr. replaced Judge Serquina as
presiding judge of Branch 105.
On January 8, 1987, the respondent court issued an order rejecting the
appearance of Atty. Nicolito L. Bustos as private prosecutor on the
ground that the charge is for the violation of Batas Pambansa Blg. 22
which does not provide for any civil liability or indemnity and hence, "it is
not a crime against property but public order."
The petitioner, through counsel filed a motion for reconsideration of the
order dated 8 January 1987 on March 10, 1987.
Respondent Claudio filed her opposition to the motion for reconsideration
on March 25, 1987.
In an order dated 31 March 1987, the respondent court denied
petitioner's motion for reconsideration.
Hence, this petition questioning the orders of the respondent Court.
The issue to be resolved is whether or not the respondent Court acted
with grave abuse of discretion or in excess of its jurisdiction in rejecting
the appearance of a private prosecutor.
The respondents make capital of the fact that Batas Pambansa Blg. 22
punishes the act of knowingly issuing worthless checks as an offense
against public order. As such, it is argued that it is the State and the
public that are the principal complainants and, therefore, no civil
indemnity is provided for by Batas Pambansa Blg. 22 for which a private
party or prosecutor may intervene.
On the other hand, the petitioner, relying on the legal axiom that "Every
man criminally liable is also civilly liable," contends that indemnity may be
recovered from the offender regardless of whether or not Batas
Pambansa Blg. 22 so provides.
A careful study of the concept of civil liability allows a solution to the issue
in the case at bar.
Generally, the basis of civil liability arising from crime is the fundamental
postulate of our law that "Every man criminally liable is also civilly liable"
(Art. 100, The Revised Penal Code). Underlying this legal principle is the
traditional theory that when a person commits a crime he offends two
entities namely ( 1) the society in which he lives in or the political entity
called the State whose law he had violated; and (2) the individual
member of that society whose person, right, honor, chastity or property
was actually or directly injured or damaged by the same punishable act or
omission. However, this rather broad and general provision is among the
most complex and controversial topics in criminal procedure. It can be
misleading in its implications especially where the same act or omission
may be treated as a crime in one instance and as a tort in another or
where the law allows a separate civil action to proceed independently of
the course of the criminal prosecution with which it is intimately
intertwined. Many legal scholars treat as a misconception or fallacy the
generally accepted notion that, the civil liability actually arises from the
crime when, in the ultimate analysis, it does not. While an act or omission
is felonious because it is punishable by law, it gives rise to civil liability
not so much because it is a crime but because it caused damage to
another. Viewing things pragmatically, we can readily see that what gives
rise to the civil liability is really the obligation and the moral duty of
everyone to repair or make whole the damage caused to another by
reason of his own act or omission, done intentionally or negligently,
whether or not the same be punishable by law. In other words, criminal
liability will give rise to civil liability only if the same felonious act or
omission results in damage or injury to another and is the direct and
proximate cause thereof. Damage or injury to another is evidently the
foundation of the civil action. Such is not the case in criminal actions for,
to be criminally liable, it is enough that the act or omission complained of
is punishable, regardless of whether or not it also causes material
damage to another. (See Sangco, Philippine Law on Torts and Damages,
1978, Revised Edition, pp. 246-247).
Article 20 of the New Civil Code provides:
Every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for
the same.
Regardless, therefore, of whether or not a special law so provides,
indemnification of the offended party may be had on account of the
damage, loss or injury directly suffered as a consequence of the wrongful
act of another. The indemnity which a person is sentenced to pay forms
an integral part of the penalty imposed by law for the commission of a
crime (Quemel v. Court of Appeals, 22 SCRA 44, citing Bagtas v. Director
of Prisons, 84 Phil. 692). Every crime gives rise to a penal or criminal
action for the punishment of the guilty party, and also to civil action for the
restitution of the thing, repair of the damage, and indemnification for the
losses. (United States v. Bernardo, 19 Phil. 265).
Indeed one cannot disregard the private party in the case at bar who
suffered the offenses committed against her. Not only the State but the
petitioner too is entitled to relief as a member of the public which the law
seeks to protect. She was assured that the checks were good when she
parted with money, property or services. She suffered with the State
when the checks bounced.
In Lozano v. Hon. Martinez (G.R. No. 63419, December 18, 1986) and
the cases consolidated therewith, we held that "The effects of a worthless
check transcend the private interests of the parties directly involved in the
transaction and touch the interests of the community at large." Yet, we
too recognized the wrong done to the private party defrauded when we
stated therein that "The mischief it creates is not only a wrong to the
payee or the holder, but also an injury to the public."
Civil liability to the offended private party cannot thus be denied, The
payee of the check is entitled to receive the payment of money for which
the worthless check was issued. Having been caused the damage, she is
entitled to recompense.
Surely, it could not have been the intendment of the framers of Batas
Pambansa Big. 22 to leave the offended private party defrauded and
empty- handed by excluding the civil liability of the offender, giving her
only the remedy, which in many cases results in a Pyrrhic victory, of
having to file a separate civil suit. To do so, may leave the offended party
unable to recover even the face value of the check due her, thereby
unjustly enriching the errant drawer at the expense of the payee. The
protection which the law seeks to provide would, therefore, be brought to
naught.
The petitioner's intervention in the prosecution of Criminal Cases 40909
to 40913 is justified not only for the protection of her interests but also in
the interest of the speedy and inexpensive administration of justice
mandated by the Constitution (Section 16, Article III, Bill of Rights,
Constitution of 1987). A separate civil action for the purpose would only
prove to be costly, burdensome, and time-consuming for both parties and
further delay the final disposition of the case. This multiplicity of suits
must be avoided. Where petitioner's rights may be fulIy adjudicated in the
proceedings before the trial court, resort t o a separate action to recover
civil liability is clearly unwarranted.
WHEREFORE the petition is hereby GRANTED. The respondent court is
ordered to permit the intervention of a private prosecutor in behalf of
petitioner Charmina B. Banal, in the prosecution of the civil aspect of
Criminasl Cases Nos. 40909 to 40913. The temporary restraining order
issued by this court a quo for further proceedings. This decision is
immediately executory.
SO ORDERED. Fernan (Chairman), Feliciano, Bidin and Cortes, JJ.,
concur.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
 
G.R. No. 97336 February 19, 1993
GASHEM SHOOKAT BAKSH, petitioner,
vs.
HON. COURT OF APPEALS and MARILOU T.
GONZALES, respondents.
Public Attorney's Office for petitioner.
Corleto R. Castro for private respondent.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court
seeking to review and set aside the Decision  of the respondent Court of
1
Appeals in CA-G.R. CV No. 24256 which affirmed in toto the 16 October
1939 Decision of Branch 38 (Lingayen) of the Regional Trial Court (RTC)
of Pangasinan in Civil Case No. 16503. Presented is the issue of whether
or not damages may be recovered for a breach of promise to marry on
the basis of Article 21 of the Civil Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without the assistance of
counsel, filed with the aforesaid trial court a complaint  for damages
2 damages.
against the petitioner for the alleged violation of their agreement to get
married. She alleges in said complaint that: she is twenty-two (22) years
old, single, Filipino and a pretty lass of good moral character and
reputation duly respected in her community; petitioner, on the other hand,
is an Iranian citizen residing at the Lozano Apartments, Guilig, Dagupan
City, and is an exchange student taking a medical course at the Lyceum
Northwestern Colleges in Dagupan City; before 20 August 1987, the
latter courted and proposed to marry her; she accepted his love on the
condition that they would get married; they therefore agreed to get
married after the end of the school semester, which was in October of
that year; petitioner then visited the private respondent's parents in
Bañaga, Bugallon, Pangasinan to secure their approval to the marriage;
sometime in 20 August 1987, the petitioner forced her to live with him in
the Lozano Apartments; she was a virgin before she began living with
him; a week before the filing of the complaint, petitioner's attitude towards
her started to change; he maltreated and threatened to kill her; as a result
of such maltreatment, she sustained injuries; during a confrontation with
a representative of the barangay captain of Guilig a day before the filing
of the complaint, petitioner repudiated their marriage agreement and
asked her not to live with him anymore and; the petitioner is already
married to someone living in Bacolod City. Private respondent then
prayed for judgment ordering the petitioner to pay her damages in the
amount of not less than P45,000.00, reimbursement for actual expenses
amounting to P600.00, attorney's fees and costs, and granting her such
other relief and remedies as may be just and equitable. The complaint
was docketed as Civil Case No. 16503.
In his Answer with Counterclaim,  petitioner admitted only the personal
3
circumstances of the parties as averred in the complaint and denied the
rest of the allegations either for lack of knowledge or information sufficient
to form a belief as to the truth thereof or because the true facts are those
alleged as his Special and Affirmative Defenses. He thus claimed that he
never proposed marriage to or agreed to be married with the private
respondent; he neither sought the consent and approval of her parents
nor forced her to live in his apartment; he did not maltreat her, but only
told her to stop coming to his place because he discovered that she had
deceived him by stealing his money and passport; and finally, no
confrontation took place with a representative of the barangay captain.
Insisting, in his Counterclaim, that the complaint is baseless and
unfounded and that as a result thereof, he was unnecessarily dragged
into court and compelled to incur expenses, and has suffered mental
anxiety and a besmirched reputation, he prayed for an award of
P5,000.00 for miscellaneous expenses and P25,000.00 as moral
After conducting a pre-trial on 25 January 1988, the trial court issued a
Pre-Trial Order  embodying the stipulated facts which the parties had
4
agreed upon, to wit:
1. That the plaintiff is single and resident (sic) of Bañaga,
Bugallon, Pangasinan, while the defendant is single,
Iranian citizen and resident (sic) of Lozano Apartment,
 Guilig, Dagupan City since September 1, 1987 up to the
present;
2. That the defendant is presently studying at Lyceum
Northwestern, Dagupan City, College of Medicine, second
year medicine proper;
3. That the plaintiff is (sic) an employee at Mabuhay
Luncheonette , Fernandez Avenue, Dagupan City since
July, 1986 up to the present and a (sic) high school
graduate;
4. That the parties happened to know each other when
the manager of the Mabuhay Luncheonette, Johhny
Rabino introduced the defendant to the plaintiff on August
3, 1986.
After trial on the merits, the lower court, applying Article 21 of the Civil
Code, rendered on 16 October 1989 a decision  favoring the private
5 the time and that she never had a boyfriend before,
respondent. The petitioner was thus ordered to pay the latter damages
and attorney's fees; the dispositive portion of the decision reads:
IN THE LIGHT of the foregoing consideration, judgment is
hereby rendered in favor of the plaintiff and against the
defendant.
1. Condemning (sic) the defendant to pay the plaintiff the
sum of twenty thousand (P20,000.00) pesos as moral
damages.
2. Condemning further the defendant to play the plaintiff
the sum of three thousand (P3,000.00) pesos as atty's
fees and two thousand (P2,000.00) pesos at (sic) litigation
expenses and to pay the costs.
3. All other claims are denied. 6
The decision is anchored on the trial court's findings and conclusions that
(a) petitioner and private respondent were lovers, (b) private respondent
is not a woman of loose morals or questionable virtue who readily
submits to sexual advances, (c) petitioner, through machinations, deceit
and false pretenses, promised to marry private respondent, d) because of
his persuasive promise to marry her, she allowed herself to be
deflowered by him, (e) by reason of that deceitful promise, private
respondent and her parents — in accordance with Filipino customs and
traditions — made some preparations for the wedding that was to be held
at the end of October 1987 by looking for pigs and chickens, inviting
friends and relatives and contracting sponsors, (f) petitioner did not fulfill
his promise to marry her and (g) such acts of the petitioner, who is a
foreigner and who has abused Philippine hospitality, have offended our
sense of morality, good customs, culture and traditions. The trial court
gave full credit to the private respondent's testimony because, inter alia,
she would not have had the temerity and courage to come to court and
expose her honor and reputation to public scrutiny and ridicule if her
claim was false.7
The above findings and conclusions were culled from the detailed
summary of the evidence for the private respondent in the foregoing
decision, digested by the respondent Court as follows:
According to plaintiff, who claimed that she was a virgin at
defendant started courting her just a few days after they
first met. He later proposed marriage to her several times
and she accepted his love as well as his proposal of
marriage on August 20, 1987, on which same day he
went with her to her hometown of Bañaga, Bugallon,
Pangasinan, as he wanted to meet her parents and
inform them of their relationship and their intention to get
married. The photographs Exhs. "A" to "E" (and their
submarkings) of defendant with members of plaintiff's
family or with plaintiff, were taken that day. Also on that
occasion, defendant told plaintiffs parents and brothers
and sisters that he intended to marry her during the
semestral break in October, 1987, and because plaintiff's
parents thought he was good and trusted him, they
agreed to his proposal for him to marry their daughter,
and they likewise allowed him to stay in their house and
sleep with plaintiff during the few days that they were in
Bugallon. When plaintiff and defendant later returned to
Dagupan City, they continued to live together in
defendant's apartment. However, in the early days of
October, 1987, defendant would tie plaintiff's hands and
feet while he went to school, and he even gave her
medicine at 4 o'clock in the morning that made her sleep
the whole day and night until the following day. As a result
of this live-in relationship, plaintiff became pregnant, but
 defendant gave her some medicine to abort the fetus. Still
plaintiff continued to live with defendant and kept
reminding him of his promise to marry her until he told her
that he could not do so because he was already married
to a girl in Bacolod City. That was the time plaintiff left
defendant, went home to her parents, and thereafter
consulted a lawyer who accompanied her to the barangay
captain in Dagupan City. Plaintiff, her lawyer, her
godmother, and a barangay tanod sent by the barangay
captain went to talk to defendant to still convince him to
marry plaintiff, but defendant insisted that he could not do
so because he was already married to a girl in Bacolod
City, although the truth, as stipulated by the parties at the
pre-trial, is that defendant is still single.
Plaintiff's father, a tricycle driver, also claimed that after
defendant had informed them of his desire to marry
Marilou, he already looked for sponsors for the wedding,
started preparing for the reception by looking for pigs and
chickens, and even already invited many relatives and
friends to the forthcoming wedding.  8
Petitioner appealed the trial court's decision to the respondent Court of
Appeals which docketed the case as CA-G.R. CV No. 24256. In his
Brief,  he contended that the trial court erred (a) in not dismissing the
9 working and where defendant first proposed marriage to
case for lack of factual and legal basis and (b) in ordering him to pay
moral damages, attorney's fees, litigation expenses and costs.
On 18 February 1991, respondent Court promulgated the challenged
decision   affirming in toto the trial court's ruling of 16 October 1989. In
10
sustaining the trial court's findings of fact, respondent Court made the
following analysis:
First of all, plaintiff, then only 21 years old when she met
defendant who was already 29 years old at the time, does
not appear to be a girl of loose morals. It is uncontradicted
that she was a virgin prior to her unfortunate experience
with defendant and never had boyfriend. She is, as
described by the lower court, a barrio lass "not used and
accustomed to trend of modern urban life", and certainly
would (sic) not have allowed
"herself to be deflowered by the defendant if there was no
persuasive promise made by the defendant to marry her."
In fact, we agree with the lower court that plaintiff and
defendant must have been sweethearts or so the plaintiff
must have thought because of the deception of
defendant, for otherwise, she would not have allowed
herself to be photographed with defendant in public in so
(sic) loving and tender poses as those depicted in the
pictures Exhs. "D" and "E". We cannot believe, therefore,
defendant's pretense that plaintiff was a nobody to him
except a waitress at the restaurant where he usually ate.
Defendant in fact admitted that he went to plaintiff's
hometown of Bañaga, Bugallon, Pangasinan, at least
thrice; at (sic) the town fiesta on February 27, 1987 (p. 54,
tsn May 18, 1988), at (sic) a beach party together with the
manager and employees of the Mabuhay Luncheonette
on March 3, 1987 (p. 50, tsn id.), and on April 1, 1987
when he allegedly talked to plaintiff's mother who told him
to marry her daughter (pp. 55-56, tsn id.). Would
defendant have left Dagupan City where he was involved
in the serious study of medicine to go to plaintiff's
hometown in Bañaga, Bugallon, unless there was (sic)
some kind of special relationship between them? And this
special relationship must indeed have led to defendant's
insincere proposal of marriage to plaintiff, communicated
not only to her but also to her parents, and (sic) Marites
Rabino, the owner of the restaurant where plaintiff was
her, also knew of this love affair and defendant's proposal
of marriage to plaintiff, which she declared was the
reason why plaintiff resigned from her job at the
restaurant after she had accepted defendant's proposal
(pp. 6-7, tsn March 7, 1988).
Upon the other hand, appellant does not appear to be a
man of good moral character and must think so low and
have so little respect and regard for Filipino women that
he openly admitted that when he studied in Bacolod City
for several years where he finished his B.S. Biology
before he came to Dagupan City to study medicine, he
had a common-law wife in Bacolod City. In other words,
he also lived with another woman in Bacolod City but did
not marry that woman, just like what he did to plaintiff. It is
not surprising, then, that he felt so little compunction or
remorse in pretending to love and promising to marry
plaintiff, a young, innocent, trustful country girl, in order to
satisfy his lust on her. 
11
 and then concluded:
In sum, we are strongly convinced and so hold that it was
defendant-appellant's fraudulent and deceptive
protestations of love for and promise to marry plaintiff that
made her surrender her virtue and womanhood to him
and to live with him on the honest and sincere belief that
he would keep said promise, and it was likewise these
(sic) fraud and deception on appellant's part that made
plaintiff's parents agree to their daughter's living-in with
him preparatory to their supposed marriage. And as these
acts of appellant are palpably and undoubtedly against
morals, good customs, and public policy, and are even
gravely and deeply derogatory and insulting to our
women, coming as they do from a foreigner who has been
enjoying the hospitality of our people and taking
advantage of the opportunity to study in one of our
institutions of learning, defendant-appellant should indeed
be made, under Art. 21 of the Civil Code of the
Philippines, to compensate for the moral damages and
injury that he had caused plaintiff, as the lower court
ordered him to do in its decision in this case. 
12
Unfazed by his second defeat, petitioner filed the instant petition on 26
March 1991; he raises therein the single issue of whether or not Article
21 of the Civil Code applies to the case at bar. 
13
It is petitioner's thesis that said Article 21 is not applicable because he
had not committed any moral wrong or injury or violated any good custom
or public policy; he has not professed love or proposed marriage to the
private respondent; and he has never maltreated her. He criticizes the
trial court for liberally invoking Filipino customs, traditions and culture,
and ignoring the fact that since he is a foreigner, he is not conversant
with such Filipino customs, traditions and culture. As an Iranian Moslem,
he is not familiar with Catholic and Christian ways. He stresses that even
if he had made a promise to marry, the subsequent failure to fulfill the
same is excusable or tolerable because of his Moslem upbringing; he
then alludes to the Muslim Code which purportedly allows a Muslim to
take four (4) wives and concludes that on the basis thereof, the trial court
erred in ruling that he does not posses good moral character. Moreover,
his controversial "common law life" is now his legal wife as their marriage
had been solemnized in civil ceremonies in the Iranian Embassy. As to
his unlawful cohabitation with the private respondent, petitioner claims
that even if responsibility could be pinned on him for the live-in
relationship, the private respondent should also be faulted for consenting
to an illicit arrangement. Finally, petitioner asseverates that even if it was
to be assumed arguendo that he had professed his love to the private
respondent and had also promised to marry her, such acts would not be
actionable in view of the special circumstances of the case. The mere
breach of promise is not actionable.  14
On 26 August 1991, after the private respondent had filed her Comment
to the petition and the petitioner had filed his Reply thereto, this Court
gave due course to the petition and required the parties to submit their
respective Memoranda, which they subsequently complied with.
As may be gleaned from the foregoing summation of the petitioner's
arguments in support of his thesis, it is clear that questions of fact, which
boil down to the issue of the credibility of witnesses, are also raised. It is
the rule in this jurisdiction that appellate courts will not disturb the trial
court's findings as to the credibility of witnesses, the latter court having
heard the witnesses and having had the opportunity to observe closely
their deportment and manner of testifying, unless the trial court had
plainly overlooked facts of substance or value which, if considered, might
affect the result of the case. 
15
Petitioner has miserably failed to convince Us that both the appellate and
trial courts had overlooked any fact of substance or values which could
alter the result of the case.
Equally settled is the rule that only questions of law may be raised in a
petition for review on certiorari under Rule 45 of the Rules of Court. It is
not the function of this Court to analyze or weigh all over again the
evidence introduced by the parties before the lower court. There are,
however, recognized exceptions to this rule. Thus, in Medina
vs. Asistio, Jr.,   this Court took the time, again, to enumerate these
16
exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures (Joaquin v. Navarro,
93 Phil. 257 [1953]); (2) When the inference made is
manifestly mistaken, absurb or impossible (Luna v.
Linatok, 74 Phil. 15 [1942]); (3) Where there is a grave
abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]);
(4) When the judgment is based on a misapprehension of
 facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are
conflicting (Casica v. Villaseca, L-9590 Ap. 30, 1957;
unrep.) (6) When the Court of Appeals, in making its
findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellate and
appellee (Evangelista v. Alto Surety and Insurance Co.,
103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to
those of the trial court (Garcia v. Court of Appeals, 33
SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA
593 [1986]); (8) When the findings of fact are conclusions
without citation of specific evidence on which they are
based (Ibid.,); (9) When the facts set forth in the petition
as well as in the petitioners main and reply briefs are not
disputed by the respondents (Ibid.,); and (10) The finding
of fact of the Court of Appeals is premised on the
supposed absence of evidence and is contradicted by the
evidence on record (Salazar v. Gutierrez, 33 SCRA 242
[1970]).
Petitioner has not endeavored to joint out to Us the existence of any of
the above quoted exceptions in this case. Consequently, the factual
findings of the trial and appellate courts must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not an
actionable wrong.   Congress deliberately eliminated from the draft of the
17
New Civil Code the provisions that would have made it so. The reason
therefor is set forth in the report of the Senate Committees on the
Proposed Civil Code, from which We quote:
The elimination of this chapter is proposed. That breach
of promise to marry is not actionable has been definitely
decided in the case of De Jesus vs. Syquia.   The history
18
of breach of promise suits in the United States and in
England has shown that no other action lends itself more
readily to abuse by designing women and unscrupulous
men. It is this experience which has led to the abolition of
rights of action in the so-called Heart Balm suits in many
of the American states. . . . 
19
This notwithstanding, the said Code contains a provision, Article 21,
which is designed to expand the concept of torts or quasi-delict in this
jurisdiction by granting adequate legal remedy for the untold number of
moral wrongs which is impossible for human foresight to specifically
enumerate and punish in the statute books.  20
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than the
sphere of wrongs defined or determined by positive law.
Fully sensible that there are countless gaps in the
statutes, which leave so many victims of moral wrongs
helpless, even though they have actually suffered
material and moral injury, the Commission has deemed it
necessary, in the interest of justice, to incorporate in the
proposed Civil Code the following rule:
Art. 23. Any person who wilfully causes
loss or injury to another in a manner that
is contrary to morals, good customs or
public policy shall compensate the latter
for the damage.
An example will illustrate the purview of the foregoing
norm: "A" seduces the nineteen-year old daughter of "X".
A promise of marriage either has not been made, or can
not be proved. The girl becomes pregnant. Under the
present laws, there is no crime, as the girl is above
nineteen years of age. Neither can any civil action for
breach of promise of marriage be filed. Therefore, though
the grievous moral wrong has been committed, and
though the girl and family have suffered incalculable
moral damage, she and her parents cannot bring action
for damages. But under the proposed article, she and her
parents would have such a right of action.
Thus at one stroke, the legislator, if the forgoing rule is
approved, would vouchsafe adequate legal remedy for
that untold number of moral wrongs which it is impossible
for human foresight to provide for specifically in the
statutes. 
21
Article 2176 of the Civil Code, which defines a quasi-delict thus:
 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.
is limited to negligent acts or omissions and excludes the notion
of willfulness or intent. Quasi-delict, known in Spanish legal
treatises as culpa aquiliana, is a civil law concept while torts is an
Anglo-American or common law concept. Torts is much broader
than culpa aquiliana because it includes not only negligence, but
international criminal acts as well such as assault and battery,
false imprisonment and deceit. In the general scheme of the
Philippine legal system envisioned by the Commission
responsible for drafting the New Civil Code, intentional and
malicious acts, with certain exceptions, are to be governed by the
Revised Penal Code while negligent acts or omissions are to be
covered by Article 2176 of the Civil Code.   In between these
22
opposite spectrums are injurious acts which, in the absence of
Article 21, would have been beyond redress. Thus, Article 21 fills
that vacuum. It is even postulated that together with Articles 19
and 20 of the Civil Code, Article 21 has greatly broadened the
scope of the law on civil wrongs; it has become much more
supple and adaptable than the Anglo-American law on torts.  23
In the light of the above laudable purpose of Article 21, We are of the
opinion, and so hold, that where a man's promise to marry is in fact the
proximate cause of the acceptance of his love by a woman and his
representation to fulfill that promise thereafter becomes the proximate
cause of the giving of herself unto him in a sexual congress, proof that he
had, in reality, no intention of marrying her and that the promise was only
a subtle scheme or deceptive device to entice or inveigle her to accept
him and to obtain her consent to the sexual act, could justify the award of
damages pursuant to Article 21 not because of such promise to marry but
because of the fraud and deceit behind it and the willful injury to her
honor and reputation which followed thereafter. It is essential, however,
that such injury should have been committed in a manner contrary to
morals, good customs or public policy.
In the instant case, respondent Court found that it was the petitioner's
"fraudulent and deceptive protestations of love for and promise to marry
plaintiff that made her surrender her virtue and womanhood to him and to
live with him on the honest and sincere belief that he would keep said
promise, and it was likewise these fraud and deception on appellant's
part that made plaintiff's parents agree to their daughter's living-in with
him preparatory to their supposed marriage."   In short, the private
24
respondent surrendered her virginity, the cherished possession of every
single Filipina, not because of lust but because of moral seduction — the
kind illustrated by the Code Commission in its example earlier adverted
to. The petitioner could not be held liable for criminal seduction punished
under either Article 337 or Article 338 of the Revised Penal Code
because the private respondent was above eighteen (18) years of age at
the time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be
applied in a breach of promise to marry where the woman is a victim of
moral seduction. Thus, in Hermosisima vs. Court of Appeals,  this Court
25
denied recovery of damages to the woman because:
. . . we find ourselves unable to say that petitioner
is morally guilty of seduction, not only because he is
approximately ten (10) years younger than the
complainant — who was around thirty-six (36) years of
age, and as highly enlightened as a former high school
teacher and a life insurance agent are supposed to be —
when she became intimate with petitioner, then a mere
apprentice pilot, but, also, because the court of first
instance found that, complainant "surrendered herself" to
petitioner because, "overwhelmed by her love" for him,
she "wanted to bind" him by having a fruit of their
engagement even before they had the benefit of clergy.
In Tanjanco vs. Court of Appeals,   while this Court likewise hinted at
26
possible recovery if there had been moral seduction, recovery was
eventually denied because We were not convinced that such seduction
existed. The following enlightening disquisition and conclusion were
made in the said case:
The Court of Appeals seem to have overlooked that the
example set forth in the Code Commission's
memorandum refers to a tort upon a minor who had
been seduced. The essential feature is seduction, that in
law is more than mere sexual intercourse, or a breach of
a promise of marriage; it connotes essentially the idea of
deceit, enticement, superior power or abuse of confidence
on the part of the seducer to which the woman has
yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs.
Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that —
To constitute seduction there must in all
cases be some sufficient promise or
inducement and the woman must yield
because of the promise or other
inducement. If she consents merely from
carnal lust and the intercourse is from
mutual desire, there is no seduction (43
Cent. Dig. tit. Seduction, par. 56) She
must be induced to depart from the path of
virtue by the use of some species of arts,
persuasions and wiles, which are
calculated to have and do have that effect,
and which result in her person to
ultimately submitting her person to the
sexual embraces of her seducer (27 Phil.
123).
And in American Jurisprudence we find:
On the other hand, in an action by the
woman, the enticement, persuasion or
deception is the essence of the injury; and
a mere proof of intercourse is insufficient
to warrant a recovery.
Accordingly it is not seduction where the
willingness arises out of sexual desire of
curiosity of the female, and the defendant
merely affords her the needed opportunity
for the commission of the act. It has been
emphasized that to allow a recovery in all
such cases would tend to the
demoralization of the female sex, and
would be a reward for unchastity by which
a class of adventuresses would be swift to
profit. (47 Am. Jur. 662)
xxx xxx xxx
Over and above the partisan allegations, the fact stand
out that for one whole year, from 1958 to 1959, the
plaintiff-appellee, a woman of adult age, maintain intimate
sexual relations with appellant, with repeated acts of
intercourse. Such conduct is incompatible with the idea of
seduction. Plainly there is here voluntariness and mutual
passion; for had the appellant been deceived, had she
surrendered exclusively because of the deceit, artful
persuasions and wiles of the defendant, she would not
have again yielded to his embraces, much less for one
year, without exacting early fulfillment of the alleged
promises of marriage, and would have cut short all sexual
relations upon finding that defendant did not intend to
fulfill his defendant did not intend to fulfill his promise.
Hence, we conclude that no case is made under article 21
of the Civil Code, and no other cause of action being
alleged, no error was committed by the Court of First
Instance in dismissing the complaint.  27
In his annotations on the Civil Code,   Associate Justice Edgardo L.
28
Paras, who recently retired from this Court, opined that in a breach of
promise to marry where there had been carnal knowledge, moral
damages may be recovered:
. . . if there be criminal or moral seduction, but not if the
intercourse was due to mutual lust. (Hermosisima vs.
Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-
14733, Sept. 30, 1960; Batarra vs. Marcos, 7 Phil. 56
(sic); Beatriz Galang vs. Court of Appeals, et al., L-17248,
Jan. 29, 1962). (In other words, if the CAUSE be the
promise to marry, and the EFFECT be the carnal
knowledge, there is a chance that there was criminal or
moral seduction, hence recovery of moral damages will
prosper. If it be the other way around, there can be no
recovery of moral damages, because here mutual lust has
intervened). . . .
together with "ACTUAL damages, should there be any, such as
the expenses for the wedding presentations (See Domalagon v.
Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino   is also of the same persuasion:
29
 It is submitted that the rule in Batarra vs. Marcos,   still30
subsists, notwithstanding the incorporation of the present
article  in the Code. The example given by the Code
31
Commission is correct, if there was seduction, not
necessarily in the legal sense, but in the vulgar sense of
deception. But when the sexual act is accomplished
without any deceit or qualifying circumstance of abuse of
authority or influence, but the woman, already of age, has
knowingly given herself to a man, it cannot be said that
there is an injury which can be the basis for indemnity.
But so long as there is fraud, which is characterized by
willfulness (sic), the action lies. The court, however, must
weigh the degree of fraud, if it is sufficient to deceive the
woman under the circumstances, because an act which
would deceive a girl sixteen years of age may not
constitute deceit as to an experienced woman thirty years
of age. But so long as there is a wrongful act and a
resulting injury, there should be civil liability, even if the
act is not punishable under the criminal law and there
should have been an acquittal or dismissal of the criminal
case for that reason.
We are unable to agree with the petitioner's alternative proposition to the
effect that granting, for argument's sake, that he did promise to marry the
private respondent, the latter is nevertheless also at fault. According to
him, both parties are in pari delicto; hence, pursuant to Article 1412(1) of
the Civil Code and the doctrine laid down in Batarra vs. Marcos,   the 32
private respondent cannot recover damages from the petitioner. The
latter even goes as far as stating that if the private respondent had
"sustained any injury or damage in their relationship, it is primarily
because of her own doing,   for:
33
. . . She is also interested in the petitioner as the latter will
become a doctor sooner or later. Take notice that she is a
plain high school graduate and a mere employee . . .
(Annex "C") or a waitress (TSN, p. 51, January 25, 1988)
in a luncheonette and without doubt, is in need of a man
who can give her economic security. Her family is in dire
need of financial assistance. (TSN, pp. 51-53, May 18,
1988). And this predicament prompted her to accept a
proposition that may have been offered by the petitioner.  34
These statements reveal the true character and motive of the petitioner. It
is clear that he harbors a condescending, if not sarcastic, regard for the
private respondent on account of the latter's ignoble birth, inferior
educational background, poverty and, as perceived by him, dishonorable
employment. Obviously then, from the very beginning, he was not at all
moved by good faith and an honest motive. Marrying with a woman so
circumstances could not have even remotely occurred to him. Thus, his
profession of love and promise to marry were empty words directly
intended to fool, dupe, entice, beguile and deceive the poor woman into
believing that indeed, he loved her and would want her to be his life's
partner. His was nothing but pure lust which he wanted satisfied by a
Filipina who honestly believed that by accepting his proffer of love and
proposal of marriage, she would be able to enjoy a life of ease and
security. Petitioner clearly violated the Filipino's concept of morality and
brazenly defied the traditional respect Filipinos have for their women. It
can even be said that the petitioner committed such deplorable acts in
blatant disregard of Article 19 of the Civil Code which directs every
person to act with justice, give everyone his due and observe honesty
and good faith in the exercise of his rights and in the performance of his
obligations.
No foreigner must be allowed to make a mockery of our laws, customs
and traditions.
The pari delicto rule does not apply in this case for while indeed, the
private respondent may not have been impelled by the purest of
intentions, she eventually submitted to the petitioner in sexual congress
not out of lust, but because of moral seduction. In fact, it is apparent that
she had qualms of conscience about the entire episode for as soon as
she found out that the petitioner was not going to marry her after all, she
left him. She is not, therefore, in pari delicto with the petitioner. Pari
delicto means "in equal fault; in a similar offense or crime; equal in guilt
or in legal fault."   At most, it could be conceded that she is merely in
35
delicto.
Equity often interferes for the relief of the less guilty of the
parties, where his transgression has been brought about
by the imposition of undue influence of the party on whom
the burden of the original wrong principally rests, or where
his consent to the transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud,   We declared:
37
 Appellants likewise stress that both parties being at fault,
there should be no action by one against the other (Art.
1412, New Civil Code). This rule, however, has been
interpreted as applicable only where the fault on both
sides is, more or less, equivalent. It does not apply where
one party is literate or intelligent and the other one is not.
(c.f. Bough vs. Cantiveros, 40 Phil. 209).

We should stress, however, that while We find for the private respondent,
let it not be said that this Court condones the deplorable behavior of her
parents in letting her and the petitioner stay together in the same room in
their house after giving approval to their marriage. It is the solemn duty of
parents to protect the honor of their daughters and infuse upon them the
higher values of morality and dignity.

WHEREFORE, finding no reversible error in the challenged decision, the

instant petition is hereby DENIED, with costs against the petitioner.

SO ORDERED.

Feliciano, Bidin, Romero and Melo, JJ., concur.

Gutierrez, Jr., J., is on leave.


Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 150157             January 25, 2007
MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES,
INC., Petitioners,
vs.
MODESTO CALAUNAN, Respondent.
DECISION
CHICO-NAZARIO, J.:
Assailed before Us is the decision1 of the Court of Appeals in CA-G.R. CV
No. 55909 which affirmed in toto the decision2 of the Regional Trial Court
(RTC) of Dagupan City, Branch 42, in Civil Case No. D-10086, finding
petitioners Mauricio Manliclic and Philippine Rabbit Bus Lines, Inc.
(PRBLI) solidarily liable to pay damages and attorney’s fees to
respondent Modesto Calaunan.
The factual antecedents are as follows:
The vehicles involved in this case are: (1) Philippine Rabbit Bus No. 353
with plate number CVD-478, owned by petitioner PRBLI and driven by
petitioner Mauricio Manliclic; and (2) owner-type jeep with plate number
PER-290, owned by respondent Modesto Calaunan and driven by
Marcelo Mendoza.
At around 6:00 to 7:00 o’clock in the morning of 12 July 1988, respondent
Calaunan, together with Marcelo Mendoza, was on his way to Manila
from Pangasinan on board his owner-type jeep. The Philippine Rabbit
Bus was likewise bound for Manila from Concepcion, Tarlac. At
approximately Kilometer 40 of the North Luzon Expressway in Barangay
Lalangan, Plaridel, Bulacan, the two vehicles collided. The front right side
of the Philippine Rabbit Bus hit the rear left side of the jeep causing the
latter to move to the shoulder on the right and then fall on a ditch with
water resulting to further extensive damage. The bus veered to the left
and stopped 7 to 8 meters from point of collision.
Respondent suffered minor injuries while his driver was unhurt. He was
first brought for treatment to the Manila Central University Hospital in
Kalookan City by Oscar Buan, the conductor of the Philippine Rabbit Bus,
and was later transferred to the Veterans Memorial Medical Center.
By reason of such collision, a criminal case was filed before the RTC of
Malolos, Bulacan, charging petitioner Manliclic with Reckless Imprudence
Resulting in Damage to Property with Physical Injuries, docketed as
Crim. Case No. 684-M-89. Subsequently on 2 December 1991,
respondent filed a complaint for damages against petitioners Manliclic
and PRBLI before the RTC of Dagupan City, docketed as Civil Case No.
D-10086. The criminal case was tried ahead of the civil case. Among
those who testified in the criminal case were respondent Calaunan,
Marcelo Mendoza and Fernando Ramos.
In the civil case (now before this Court), the parties admitted the
following:
1. The parties agreed on the capacity of the parties to sue and be
sued as well as the venue and the identities of the vehicles
involved;
2. The identity of the drivers and the fact that they are duly
licensed;
3. The date and place of the vehicular collision;
4. The extent of the injuries suffered by plaintiff Modesto
Calaunan and the existence of the medical certificate;
5. That both vehicles were going towards the south; the private
jeep being ahead of the bus;
6. That the weather was fair and the road was well paved and
straight, although there was a ditch on the right side where the
jeep fell into.3
When the civil case was heard, counsel for respondent prayed that the
transcripts of stenographic notes (TSNs)4 of the testimonies of
respondent Calaunan, Marcelo Mendoza and Fernando Ramos in the
criminal case be received in evidence in the civil case in as much as
these witnesses are not available to testify in the civil case.
Francisco Tuliao testified that his brother-in-law, respondent Calaunan,
left for abroad sometime in November, 1989 and has not returned since
then. Rogelio Ramos took the stand and said that his brother, Fernando
Ramos, left for Amman, Jordan, to work. Rosalia Mendoza testified that
her husband, Marcelo Mendoza, left their residence to look for a job. She
narrated that she thought her husband went to his hometown in Panique,
Tarlac, when he did not return after one month. She went to her
husband’s hometown to look for him but she was informed that he did not
go there.1awphil.net
The trial court subpoenaed the Clerk of Court of Branch 8, RTC, Malolos,
Bulacan, the court where Criminal Case No. 684-M-89 was tried, to bring
the TSNs of the testimonies of respondent Calaunan, 5 Marcelo
Mendoza6 and Fernando Ramos7 in said case, together with other
documentary evidence marked therein. Instead of the Branch Clerk of
Court, it was Enrique Santos Guevara, Court Interpreter, who appeared
before the court and identified the TSNs of the three afore-named
witnesses and other pertinent documents he had brought. 8 Counsel for
respondent wanted to mark other TSNs and documents from the said
criminal case to be adopted in the instant case, but since the same were
not brought to the trial court, counsel for petitioners compromised that
said TSNs and documents could be offered by counsel for respondent as
rebuttal evidence.
For the defendants, petitioner Manliclic and bus conductor Oscar Buan
testified. The TSN9 of the testimony of Donato Ganiban, investigator of
the PRBLI, in Criminal Case No. 684-M-89 was marked and allowed to
be adopted in the civil case on the ground that he was already dead.
Respondent further marked, among other documents, as rebuttal
evidence, the TSNs10 of the testimonies of Donato Ganiban, Oscar Buan
and petitioner Manliclic in Criminal Case No. 684-M-89.
The disagreement arises from the question: Who is to be held liable for
the collision?
Respondent insists it was petitioner Manliclic who should be liable while
the latter is resolute in saying it was the former who caused the smash
up.
The versions of the parties are summarized by the trial court as follows:
The parties differed only on the manner the collision between the two (2)
vehicles took place. According to the plaintiff and his driver, the jeep was
cruising at the speed of 60 to 70 kilometers per hour on the slow lane of
the expressway when the Philippine Rabbit Bus overtook the jeep and in
the process of overtaking the jeep, the Philippine Rabbit Bus hit the rear
of the jeep on the left side. At the time the Philippine Rabbit Bus hit the
jeep, it was about to overtake the jeep. In other words, the Philippine
Rabbit Bus was still at the back of the jeep when the jeep was hit.
Fernando Ramos corroborated the testimony of the plaintiff and Marcelo
Mendoza. He said that he was on another jeep following the Philippine
Rabbit Bus and the jeep of plaintiff when the incident took place. He said,
the jeep of the plaintiff overtook them and the said jeep of the plaintiff was
followed by the Philippine Rabbit Bus which was running very fast. The
bus also overtook the jeep in which he was riding. After that, he heard a
loud sound. He saw the jeep of the plaintiff swerved to the right on a
grassy portion of the road. The Philippine Rabbit Bus stopped and they
overtook the Philippine Rabbit Bus so that it could not moved (sic),
meaning they stopped in front of the Philippine Rabbit Bus. He testified
that the jeep of plaintiff swerved to the right because it was bumped by
the Philippine Rabbit bus from behind.
Both Mauricio Manliclic and his driver, Oscar Buan admitted that the
Philippine Rabbit Bus bumped the jeep in question. However, they
explained that when the Philippine Rabbit bus was about to go to the left
lane to overtake the jeep, the latter jeep swerved to the left because it
was to overtake another jeep in front of it. Such was their testimony
before the RTC in Malolos in the criminal case and before this Court in
the instant case. [Thus, which of the two versions of the manner how the
collision took place was correct, would be determinative of who between
the two drivers was negligent in the operation of their respective
vehicles.]11
Petitioner PRBLI maintained that it observed and exercised the diligence
of a good father of a family in the selection and supervision of its
employee, specifically petitioner Manliclic.
On 22 July 1996, the trial court rendered its decision in favor of
respondent Calaunan and against petitioners Manliclic and PRBLI. The
dispositive portion of its decision reads:
WHEREFORE, judgment is rendered in favor of the plaintiff and against
the defendants ordering the said defendants to pay plaintiff jointly and
solidarily the amount of P40,838.00 as actual damages for the towing as
well as the repair and the materials used for the repair of the jeep in
question; P100,000.00 as moral damages and another P100,000.00 as
exemplary damages and P15,000.00 as attorney’s fees, including
appearance fees of the lawyer. In addition, the defendants are also to pay
costs.12
Petitioners appealed the decision via Notice of Appeal to the Court of
Appeals.13
In a decision dated 28 September 2001, the Court of Appeals, finding no
reversible error in the decision of the trial court, affirmed it in all
respects.14
Petitioners are now before us by way of petition for review assailing the
decision of the Court of Appeals. They assign as errors the following:
I
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
AFFIRMING THE TRIAL COURT’S QUESTIONABLE ADMISSION IN
EVIDENCE OF THE TSN’s AND OTHER DOCUMENTS PRESENTED
IN THE CRIMINAL CASE.
II
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
AFFIRMING THE TRIAL COURT’S RELIANCE ON THE VERSION OF
THE RESPONDENT ON HOW THE ACCIDENT SUPPOSEDLY
OCCURRED.
III
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
AFFIRMING THE TRIAL COURT’S UNFAIR DISREGARD OF HEREIN
PETITIONER PRBL’s DEFENSE OF EXERCISE OF DUE DILIGENCE
IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEES.
IV
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
AFFIRMING THE TRIAL COURT’S QUESTIONABLE AWARD OF
DAMAGES AND ATTORNEY’S FEE.
With the passing away of respondent Calaunan during the pendency of
this appeal with this Court, we granted the Motion for the Substitution of
Respondent filed by his wife, Mrs. Precila Zarate Vda. De Calaunan, and
children, Virgilio Calaunan, Carmelita Honeycomb, Evelyn Calaunan,
Marko Calaunan and Liwayway Calaunan. 15
In their Reply to respondent’s Comment, petitioners informed this Court
of a Decision16 of the Court of Appeals acquitting petitioner Manliclic of
the charge17 of Reckless Imprudence Resulting in Damage to Property
with Physical Injuries attaching thereto a photocopy thereof.
On the first assigned error, petitioners argue that the TSNs containing the
testimonies of respondent Calaunan, 18 Marcelo Mendoza19 and Fernando
Ramos20 should not be admitted in evidence for failure of respondent to
comply with the requisites of Section 47, Rule 130 of the Rules of Court.
For Section 47, Rule 13021 to apply, the following requisites must be
satisfied: (a) the witness is dead or unable to testify; (b) his testimony or
deposition was given in a former case or proceeding, judicial or
administrative, between the same parties or those representing the same
interests; (c) the former case involved the same subject as that in the
present case, although on different causes of action; (d) the issue
testified to by the witness in the former trial is the same issue involved in
the present case; and (e) the adverse party had an opportunity to cross-
examine the witness in the former case.22
Admittedly, respondent failed to show the concurrence of all the
requisites set forth by the Rules for a testimony given in a former case or
proceeding to be admissible as an exception to the hearsay rule.
Petitioner PRBLI, not being a party in Criminal Case No. 684-M-89, had
no opportunity to cross-examine the three witnesses in said case. The
criminal case was filed exclusively against petitioner Manliclic, petitioner
PRBLI’s employee. The cases dealing with the subsidiary liability of
employers uniformly declare that, strictly speaking, they are not parties to
the criminal cases instituted against their employees. 23
Notwithstanding the fact that petitioner PRBLI was not a party in said
criminal case, the testimonies of the three witnesses are still admissible
on the ground that petitioner PRBLI failed to object on their admissibility.
It is elementary that an objection shall be made at the time when an
alleged inadmissible document is offered in evidence; otherwise, the
objection shall be treated as waived, since the right to object is merely a
privilege which the party may waive. Thus, a failure to except to the
evidence because it does not conform to the statute is a waiver of the
provisions of the law. Even assuming ex gratia argumenti that these
documents are inadmissible for being hearsay, but on account of failure
to object thereto, the same may be admitted and considered as sufficient
to prove the facts therein asserted.24 Hearsay evidence alone may be
insufficient to establish a fact in a suit but, when no objection is made
thereto, it is, like any other evidence, to be considered and given the
importance it deserves.25
In the case at bar, petitioner PRBLI did not object to the TSNs containing
the testimonies of respondent Calaunan, Marcelo Mendoza and
Fernando Ramos in the criminal case when the same were offered in
evidence in the trial court. In fact, the TSNs of the testimonies of
Calaunan and Mendoza were admitted by both petitioners. 26 Moreover,
petitioner PRBLI even offered in evidence the TSN containing the
testimony of Donato Ganiban in the criminal case. If petitioner PRBLI
argues that the TSNs of the testimonies of plaintiff’s witnesses in the
criminal case should not be admitted in the instant case, why then did it
offer the TSN of the testimony of Ganiban which was given in the criminal
case? It appears that petitioner PRBLI wants to have its cake and eat it
too. It cannot argue that the TSNs of the testimonies of the witnesses of
the adverse party in the criminal case should not be admitted and at the
same time insist that the TSN of the testimony of the witness for the
accused be admitted in its favor. To disallow admission in evidence of the
TSNs of the testimonies of Calaunan, Marcelo Mendoza and Fernando
Ramos in the criminal case and to admit the TSN of the testimony of
Ganiban would be unfair.
We do not subscribe to petitioner PRBLI’s argument that it will be denied
due process when the TSNs of the testimonies of Calaunan, Marcelo
Mendoza and Fernando Ramos in the criminal case are to be admitted in
the civil case. It is too late for petitioner PRBLI to raise denial of due
process in relation to Section 47, Rule 130 of the Rules of Court, as a
ground for objecting to the admissibility of the TSNs. For failure to object
at the proper time, it waived its right to object that the TSNs did not
comply with Section 47.
In Mangio v. Court of Appeals,27 this Court, through Associate Justice
Reynato S. Puno,28 admitted in evidence a TSN of the testimony of a
witness in another case despite therein petitioner’s assertion that he
would be denied due process. In admitting the TSN, the Court ruled that
the raising of denial of due process in relation to Section 47, Rule 130 of
the Rules of Court, as a ground for objecting to the admissibility of the
TSN was belatedly done. In so doing, therein petitioner waived his right to
object based on said ground.
Petitioners contend that the documents in the criminal case should not
have been admitted in the instant civil case because Section 47 of Rule
130 refers only to "testimony or deposition." We find such contention to
be untenable. Though said section speaks only of testimony and
deposition, it does not mean that documents from a former case or
proceeding cannot be admitted. Said documents can be admitted they
being part of the testimonies of witnesses that have been admitted.
Accordingly, they shall be given the same weight as that to which the
testimony may be entitled.29
On the second assigned error, petitioners contend that the version of
petitioner Manliclic as to how the accident occurred is more credible than
respondent’s version. They anchor their contention on the fact that
petitioner Manliclic was acquitted by the Court of Appeals of the charge of
Reckless Imprudence Resulting in Damage to Property with Physical
Injuries.
To be resolved by the Court is the effect of petitioner Manliclic’s acquittal
in the civil case.
From the complaint, it can be gathered that the civil case for damages
was one arising from, or based on, quasi-delict.30 Petitioner Manliclic was
sued for his negligence or reckless imprudence in causing the collision,
while petitioner PRBLI was sued for its failure to exercise the diligence of
a good father in the selection and supervision of its employees,
particularly petitioner Manliclic. The allegations read:
"4. That sometime on July 12, 1988 at around 6:20 A.M. plaintiff
was on board the above-described motor vehicle travelling at a
moderate speed along the North Luzon Expressway heading
South towards Manila together with MARCELO MENDOZA, who
was then driving the same;
"5. That approximately at kilometer 40 of the North Luzon
Express Way, the above-described motor vehicle was suddenly
bumped from behind by a Philippine Rabbit Bus with Body No.
353 and with plate No. CVD 478 then being driven by one
 Mauricio Manliclic of San Jose, Concepcion, Tarlac, who was
then travelling recklessly at a very fast speed and had apparently
lost control of his vehicle;
"6. That as a result of the impact of the collision the above-
described motor vehicle was forced off the North Luzon Express
Way towards the rightside where it fell on its driver’s side on a
ditch, and that as a consequence, the above-described motor
vehicle which maybe valued at EIGHTY THOUSAND PESOS
(P80,000) was rendered a total wreck as shown by pictures to be
presented during the pre-trial and trial of this case;
"7. That also as a result of said incident, plaintiff sustained bodily
injuries which compounded plaintiff’s frail physical condition and
required his hospitalization from July 12, 1988 up to and until July
22, 1988, copy of the medical certificate is hereto attached as
Annex "A" and made an integral part hereof;
"8. That the vehicular collision resulting in the total wreckage of
the above-described motor vehicle as well as bodily (sic)
sustained by plaintiff, was solely due to the reckless imprudence
of the defendant driver Mauricio Manliclic who drove his
Philippine Rabbit Bus No. 353 at a fast speed without due regard
or observance of existing traffic rules and regulations;
"9. That defendant Philippine Rabbit Bus Line Corporation failed
to exercise the diligence of a good father of (sic) family in the
selection and supervision of its drivers; x x x"31
Can Manliclic still be held liable for the collision and be found negligent
notwithstanding the declaration of the Court of Appeals that there was an
absence of negligence on his part?
In exonerating petitioner Manliclic in the criminal case, the Court of
Appeals said:
To the following findings of the court a quo, to wit: that accused-appellant
was negligent "when the bus he was driving bumped the jeep from
behind"; that "the proximate cause of the accident was his having driven
the bus at a great speed while closely following the jeep"; x x x
We do not agree.
The swerving of Calaunan’s jeep when it tried to overtake the vehicle in
front of it was beyond the control of accused-appellant.
xxxx
Absent evidence of negligence, therefore, accused-appellant cannot be
held liable for Reckless Imprudence Resulting in Damage to Property
with Physical Injuries as defined in Article 365 of the Revised Penal
Code.32
From the foregoing declaration of the Court of Appeals, it appears that
petitioner Manliclic was acquitted not on reasonable doubt, but on the
ground that he is not the author of the act complained of which is based
on Section 2(b) of Rule 111 of the Rules of Criminal Procedure which
reads:
(b) Extinction of the penal action does not carry with it extinction of the
civil, unless the extinction proceeds from a declaration in a final judgment
that the fact from which the civil might arise did not exist.
In spite of said ruling, petitioner Manliclic can still be held liable for the
mishap. The afore-quoted section applies only to a civil action arising
from crime or ex delicto and not to a civil action arising from quasi-delict
or culpa aquiliana. The extinction of civil liability referred to in Par. (e) of
Section 3, Rule 111 [now Section 2 (b) of Rule 111], refers exclusively to
civil liability founded on Article 100 of the Revised Penal Code, whereas
the civil liability for the same act considered as a quasi-delict only and not
as a crime is not extinguished even by a declaration in the criminal case
that the criminal act charged has not happened or has not been
committed by the accused.33
A quasi-delict or culpa aquiliana is a separate legal institution under the
Civil Code with a substantivity all its own, and individuality that is entirely
apart and independent from a delict or crime – a distinction exists
between the civil liability arising from a crime and the responsibility for
quasi-delicts or culpa extra-contractual. The same negligence causing
damages may produce civil liability arising from a crime under the Penal
Code, or create an action for quasi-delicts or culpa extra-contractual
under the Civil Code.34 It is now settled that acquittal of the accused, even
if based on a finding that he is not guilty, does not carry with it the
extinction of the civil liability based on quasi delict. 35
In other words, if an accused is acquitted based on reasonable doubt on
his guilt, his civil liability arising from the crime may be proved by
preponderance of evidence only. However, if an accused is acquitted on
the basis that he was not the author of the act or omission complained of
(or that there is declaration in a final judgment that the fact from which the
civil might arise did not exist), said acquittal closes the door to civil liability
based on the crime or ex delicto. In this second instance, there being no
crime or delict to speak of, civil liability based thereon or ex delicto is not
possible. In this case, a civil action, if any, may be instituted on grounds
other than the delict complained of.
As regards civil liability arising from quasi-delict or culpa aquiliana, same
will not be extinguished by an acquittal, whether it be on ground of
reasonable doubt or that accused was not the author of the act or
omission complained of (or that there is declaration in a final judgment
that the fact from which the civil liability might arise did not exist). The
responsibility arising from fault or negligence in a quasi-delict is entirely
separate and distinct from the civil liability arising from negligence under
the Penal Code.36 An acquittal or conviction in the criminal case is entirely
irrelevant in the civil case37 based on quasi-delict or culpa aquiliana.
Petitioners ask us to give credence to their version of how the collision
occurred and to disregard that of respondent’s. Petitioners insist that
while the PRBLI bus was in the process of overtaking respondent’s jeep,
the latter, without warning, suddenly swerved to the left (fast) lane in
order to overtake another jeep ahead of it, thus causing the collision.
As a general rule, questions of fact may not be raised in a petition for
review. The factual findings of the trial court, especially when affirmed by
the appellate court, are binding and conclusive on the Supreme
Court.38 Not being a trier of facts, this Court will not allow a review thereof
unless:
(1) the conclusion is a finding grounded entirely on speculation, surmise
and conjecture; (2) the inference made is manifestly mistaken; (3) there is
grave abuse of discretion; (4) the judgment is based on a
misapprehension of facts; (5) the findings of fact are conflicting; (6) the
Court of Appeals went beyond the issues of the case and its findings are
contrary to the admissions of both appellant and appellees; (7) the
findings of fact of the Court of Appeals are contrary to those of the trial
court; (8) said findings of fact are conclusions without citation of specific
evidence on which they are based; (9) the facts set forth in the petition as
well as in the petitioner's main and reply briefs are not disputed by the
respondents; and (10) the findings of fact of the Court of Appeals are
premised on the supposed absence of evidence and contradicted by the
evidence on record.39
After going over the evidence on record, we do not find any of the
exceptions that would warrant our departure from the general rule. We
fully agree in the finding of the trial court, as affirmed by the Court of
Appeals, that it was petitioner Manliclic who was negligent in driving the
PRBLI bus which was the cause of the collision. In giving credence to the
version of the respondent, the trial court has this say:
x x x Thus, which of the two versions of the manner how the collision took
place was correct, would be determinative of who between the two
drivers was negligent in the operation of their respective vehicle.
In this regard, it should be noted that in the statement of Mauricio
Manliclic (Exh. 15) given to the Philippine Rabbit Investigator CV
Cabading no mention was made by him about the fact that the driver of
the jeep was overtaking another jeep when the collision took place. The
allegation that another jeep was being overtaken by the jeep of Calaunan
was testified to by him only in Crim. Case No. 684-M-89 before the
Regional Trial Court in Malolos, Bulacan and before this Court. Evidently,
it was a product of an afterthought on the part of Mauricio Manliclic so
that he could explain why he should not be held responsible for the
incident. His attempt to veer away from the truth was also apparent when
it would be considered that in his statement given to the Philippine Rabbit
Investigator CV Cabading (Exh. 15), he alleged that the Philippine Rabbit
Bus bumped the jeep of Calaunan while the Philippine Rabbit Bus was
behind the said jeep. In his testimony before the Regional Trial Court in
Malolos, Bulacan as well as in this Court, he alleged that the Philippine
Rabbit Bus was already on the left side of the jeep when the collision took
place. For this inconsistency between his statement and testimony, his
explanation regarding the manner of how the collision between the jeep
and the bus took place should be taken with caution. It might be true that
in the statement of Oscar Buan given to the Philippine Rabbit Investigator
CV Cabading, it was mentioned by the former that the jeep of plaintiff was
in the act of overtaking another jeep when the collision between the latter
jeep and the Philippine Rabbit Bus took place. But the fact, however, that
his statement was given on July 15, 1988, one day after Mauricio
Manliclic gave his statement should not escape attention. The one-day
difference between the giving of the two statements would be significant
enough to entertain the possibility of Oscar Buan having received legal
advise before giving his statement. Apart from that, as between his
statement and the statement of Manliclic himself, the statement of the
latter should prevail. Besides, in his Affidavit of March 10, 1989, (Exh.
14), the unreliability of the statement of Oscar Buan (Exh. 13) given to CV
Cabading rear its "ugly head" when he did not mention in said affidavit
that the jeep of Calaunan was trying to overtake another jeep when the
collision between the jeep in question and the Philippine Rabbit bus took
place.
xxxx
If one would believe the testimony of the defendant, Mauricio Manliclic,
and his conductor, Oscar Buan, that the Philippine Rabbit Bus was
already somewhat parallel to the jeep when the collision took place, the
point of collision on the jeep should have been somewhat on the left side
thereof rather than on its rear. Furthermore, the jeep should have fallen
on the road itself rather than having been forced off the road. Useless,
likewise to emphasize that the Philippine Rabbit was running very fast as
testified to by Ramos which was not controverted by the defendants. 40
Having ruled that it was petitioner Manliclic’s negligence that caused the
smash up, there arises the juris tantum presumption that the employer is
negligent, rebuttable only by proof of observance of the diligence of a
good father of a family.41 Under Article 218042 of the New Civil Code,
when an injury is caused by the negligence of the employee, there
instantly arises a presumption of law that there was negligence on the
part of the master or employer either in the selection of the servant or
employee, or in supervision over him after selection or both. The liability
of the employer under Article 2180 is direct and immediate; it is not
conditioned upon prior recourse against the negligent employee and a
prior showing of the insolvency of such employee. Therefore, it is
incumbent upon the private respondents to prove that they exercised the
diligence of a good father of a family in the selection and supervision of
their employee.43
In the case at bar, petitioner PRBLI maintains that it had shown that it
exercised the required diligence in the selection and supervision of its
employees, particularly petitioner Manliclic. In the matter of selection, it
showed the screening process that petitioner Manliclic underwent before
he became a regular driver. As to the exercise of due diligence in the
supervision of its employees, it argues that presence of ready
investigators (Ganiban and Cabading) is sufficient proof that it exercised
the required due diligence in the supervision of its employees.
In the selection of prospective employees, employers are required to
examine them as to their qualifications, experience and service records.
In the supervision of employees, the employer must formulate standard
operating procedures, monitor their implementation and impose
disciplinary measures for the breach thereof. To fend off vicarious liability,
employers must submit concrete proof, including documentary evidence,
that they complied with everything that was incumbent on them. 44
In Metro Manila Transit Corporation v. Court of Appeals, 45 it was
explained that:
Due diligence in the supervision of employees on the other hand,
includes the formulation of suitable rules and regulations for the guidance
of employees and the issuance of proper instructions intended for the
protection of the public and persons with whom the employer has
relations through his or its employees and the imposition of necessary
disciplinary measures upon employees in case of breach or as may be
warranted to ensure the performance of acts indispensable to the
business of and beneficial to their employer. To this, we add that actual
implementation and monitoring of consistent compliance with said rules
should be the constant concern of the employer, acting through
dependable supervisors who should regularly report on their supervisory
functions.
In order that the defense of due diligence in the selection and supervision
of employees may be deemed sufficient and plausible, it is not enough to
emptily invoke the existence of said company guidelines and policies on
hiring and supervision. As the negligence of the employee gives rise to
the presumption of negligence on the part of the employer, the latter has
the burden of proving that it has been diligent not only in the selection of
employees but also in the actual supervision of their work. The mere
allegation of the existence of hiring procedures and supervisory policies,
without anything more, is decidedly not sufficient to overcome such
presumption.
We emphatically reiterate our holding, as a warning to all employers, that
"the formulation of various company policies on safety without showing
that they were being complied with is not sufficient to exempt petitioner
from liability arising from negligence of its employees. It is incumbent
upon petitioner to show that in recruiting and employing the erring driver
the recruitment procedures and company policies on efficiency and safety
were followed." x x x.
The trial court found that petitioner PRBLI exercised the diligence of a good.49 The amount awarded by the trial court must, likewise, be lowered
good father of a family in the selection but not in the supervision of its to P50,000.00.50 The award of P15,000.00 for attorney’s fees and
employees. It expounded as follows: expenses of litigation is in order and authorized by law. 51

From the evidence of the defendants, it seems that the Philippine Rabbit WHEREFORE, premises considered, the instant petition for review is
Bus Lines has a very good procedure of recruiting its driver as well as in DENIED. The decision of the Court of Appeals in CA-G.R. CV No. 55909
the maintenance of its vehicles. There is no evidence though that it is as is AFFIRMED with the MODIFICATION that (1) the award of moral
good in the supervision of its personnel. There has been no iota of damages shall be reduced to P50,000.00; and (2) the award of
evidence introduced by it that there are rules promulgated by the bus exemplary damages shall be lowered to P50,000.00. Costs against
company regarding the safe operation of its vehicle and in the way its petitioners.
driver should manage and operate the vehicles assigned to them. There
is no showing that somebody in the bus company has been employed to SO ORDERED.
oversee how its driver should behave while operating their vehicles
without courting incidents similar to the herein case. In regard to MINITA V. CHICO-NAZARIO
supervision, it is not difficult to observe that the Philippine Rabbit Bus Associate Justice
Lines, Inc. has been negligent as an employer and it should be made
responsible for the acts of its employees, particularly the driver involved
WE CONCUR:
in this case.
CONSUELO YNARES-SANTIAGO
We agree. The presence of ready investigators after the occurrence of
Associate Justice
the accident is not enough to exempt petitioner PRBLI from liability
Chairperson
arising from the negligence of petitioner Manliclic. Same does not comply
with the guidelines set forth in the cases above-mentioned. The presence
of the investigators after the accident is not enough supervision. Regular MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.
supervision of employees, that is, prior to any accident, should have been Associate Justice Asscociate Justice
shown and established. This, petitioner failed to do. The lack of
supervision can further be seen by the fact that there is only one set of ATTESTATION
manual containing the rules and regulations for all the drivers of
PRBLI. 46 How then can all the drivers of petitioner PRBLI know and be I attest that the conclusions in the above Decision were reached in
continually informed of the rules and regulations when only one manual is consultation before the case was assigned to the writer of the opinion of
being lent to all the drivers? the Court’s Division.

For failure to adduce proof that it exercised the diligence of a good father
of a family in the selection and supervision of its employees, petitioner
PRBLI is held solidarily responsible for the damages caused by petitioner
Manliclic’s negligence.
We now go to the award of damages. The trial court correctly awarded
the amount of P40,838.00 as actual damages representing the amount
paid by respondent for the towing and repair of his jeep. 47 As regards the
awards for moral and exemplary damages, same, under the
circumstances, must be modified. The P100,000.00 awarded by the trial
court as moral damages must be reduced to P50,000.00.48 Exemplary
damages are imposed by way of example or correction for the public
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairperson’s Attestation, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO ORTEGA, JR., RICARDO CELESTINO, REALINGO alias
Chief Justice "KAMLON", JOHN DOE alias TATO, and FOURTEEN
(14) RICARDO DOES of the crime of GRAVE
COERCION, committed as follows:

That on or about February 8, 1964 at around 9:00 o'clock

in the morning, in the municipality of Jose Panganiban,
province of Camarines Norte, Philippines, and within the
jurisdiction of this Honorable Court, the above- named
Republic of the Philippines accused, Roy Padilla, Filomeno Galdones, Pepito
SUPREME COURT Bedenia, Yolly Rico, David Bermundo, Villanoac, Roberto
Manila Rosales, Villania, Romeo Garrido, Jose Ortega, Jr.,
Ricardo Celestino, Realingo alias Kamlon, John Doe alias
EN BANC Tato, and Fourteen Richard Does, by confederating and
mutually helping one another, and acting without any
G.R. No. L-39999 May 31, 1984 authority of law, did then and there wilfully, unlawfully, and
feloniously, by means of threats, force and violence
prevent Antonio Vergara and his family to close their stall
ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and
located at the Public Market, Building No. 3, Jose
JOSE FARLEY BEDENIA, petitioners,
Panganiban, Camarines Norte, and by subsequently
vs.
forcibly opening the door of said stall and thereafter
COURT OF APPEALS, respondent.
brutally demolishing and destroying said stall and the
furnitures therein by axes and other massive instruments,
Sisenando Villaluz, Sr. for petitioners. and carrying away the goods, wares and merchandise, to
the damage and prejudice of the said Antonio Vergara
The Solicitor General for respondent. and his family in the amount of P30,000.00 in concept of
actual or compensatory and moral damages, and further
the sum of P20,000.00 as exemplary damages.

GUTIERREZ, JR., J.: That in committing the offense, the accused took

This is a petition for review on certiorari of a Court of Appeals' decision
which reversed the trial court's judgment of conviction and acquitted the
petitioners of the crime of grave coercion on the ground of reasonable
doubt but inspite of the acquittal ordered them to pay jointly and severally
the amount of P9,000.00 to the complainants as actual damages.
The petitioners were charged under the following information:
advantage of their public positions: Roy Padilla, being the
incumbent municipal mayor, and the rest of the accused
being policemen, except Ricardo Celestino who is a
civilian, all of Jose Panganiban, Camarines Norte, and
that it was committed with evident premeditation.
The Court of First Instance of Camarines Norte, Tenth Judicial District
rendered a decision, the dispositive portion of which states that:

The undersigned Fiscal accused ROY PADILLA,
FILOMENO GALDONES, PEPITO BEDENIA, YOLLY
RICO, DAVID BERMUNDO, VILLANOAC, ROBERTO
ROSALES, VILLANIA, ROMEO GARRIDO, JOSE
IN VIEW OF THE FOREGOING, the Court finds the accused Roy Padilla,
Filomeno Galdonez, Ismael Gonzalgo and Jose Parley Bedenia guilty
beyond reasonable doubt of the crime of grave coercion, and hereby
imposes upon them to suffer an imprisonment of FIVE (5) months and
One (1) day; to pay a fine of P500.00 each; to pay actual and
compensatory damages in the amount of P10,000.00; moral damages in ... appellants' acquittal was based on reasonable doubt
the amount of P30,000.00; and another P10,000.00 for exemplary whether the crime of coercion was committed, not on
damages, jointly and severally, and all the accessory penalties provided facts that no unlawful act was committed; as their taking
for by law; and to pay the proportionate costs of this proceedings. the law into their hands, destructing (sic) complainants'
properties is unlawful, and, as evidence on record
The accused Federico Realingo alias 'Kamlon', David established that complainants suffered actual damages,
Bermundo, Christopher Villanoac, Godofredo Villania, the imposition of actual damages is correct.
Romeo Garrido, Roberto Rosales, Ricardo Celestino and
Jose Ortega, are hereby ordered acquitted on grounds of Consequently, the petitioners filed this special civil action, contending
reasonable doubt for their criminal participation in the that:
crime charged.
I
The petitioners appealed the judgment of conviction to the Court of
Appeals. They contended that the trial court's finding of grave coercion THE COURT OF APPEALS COMMITTED A GRAVE
was not supported by the evidence. According to the petitioners, the town ERROR OF LAW OR GRAVELY ABUSED ITS
mayor had the power to order the clearance of market premises and the DISCRETION IN IMPOSING UPON PETITIONERS
removal of the complainants' stall because the municipality had enacted PAYMENT OF DAMAGES TO COMPLAINANTS AFTER
municipal ordinances pursuant to which the market stall was a nuisance ACQUITTING PETITIONERS OF THE CRIME
per se. The petitioners stated that the lower court erred in finding that the CHARGED FROM WHICH SAID LIABILITY AROSE.
demolition of the complainants' stall was a violation of the very directive
of the petitioner Mayor which gave the stall owners seventy two (72) II
hours to vacate the market premises. The petitioners questioned the
imposition of prison terms of five months and one day and of accessory
THE COURT OF APPEALS ERRED IN HOLDING IN ITS
penalties provided by law. They also challenged the order to pay fines of
RESOLUTION DATED DECEMBER 26, 1974 THAT
P500.00 each, P10,000.00 actual and compensatory damages,
SINCE APPELLANTS' ACQUITTAL WAS BASED ON
P30,000.00 moral damages, P10,000.00 exemplary damages, and the
REASONABLE DOUBT, NOT ON FACTS THAT NO
costs of the suit.
UNLAWFUL ACT WAS COMMITTED, THE IMPOSITION
OF ACTUAL DAMAGES IS CORRECT.
The dispositive portion of the decision of the respondent Court of Appeals
states:
III
WHEREFORE, we hereby modify the judgment appealed
THE COURT OF APPEALS COMMITTED A LEGAL
from in the sense that the appellants are acquitted on
INCONSISTENCY, IF NOT PLAIN JUDICIAL ERROR, IN
ground of reasonable doubt. but they are ordered to pay
HOLDING IN ITS APPEALED RESOLUTION THAT
jointly and severally to complainants the amount of
PETITIONERS COMMITTED AN UNLAWFUL ACT,
P9,600.00, as actual damages.
THAT IS TAKING THE LAW INTO THEIR HANDS,
DESTRUCTING (sic) 'COMPLAINANTS' PROPERTIES',
The petitioners filed a motion for reconsideration contending that the AFTER HOLDING IN ITS MAIN DECISION OF
acquittal of the defendants-appellants as to criminal liability results in the NOVEMBER 6,1974 THAT THE ACTS FOR WHICH
extinction of their civil liability. The Court of Appeals denied the motion THEY WERE CHARGED DID NOT CONSTITUTE
holding that: GRAVE COERCION AND THEY WERE NOT CHARGED
OF ANY OTHER CRIME.
xxx xxx xxx
 IV
THE COURT OF APPEALS ERRED IN ORDERING THE
PETITIONERS HEREIN, APPELLANTS IN CA-G.R. NO.
13456CR, JOINTLY AND SEVERALLY, TO PAY
COMPLAINANTS P9,600.00 IN SUPPOSED ACTUAL
DAMAGES.
The issue posed in the instant proceeding is whether or not the
respondent court committed a reversible error in requiring the petitioners
to pay civil indemnity to the complainants after acquitting them from the
criminal charge.
Petitioners maintain the view that where the civil liability which is included
in the criminal action is that arising from and as a consequence of the
criminal act, and the defendant was acquitted in the criminal case, (no
civil liability arising from the criminal case), no civil liability arising from
the criminal charge could be imposed upon him. They cite precedents to
the effect that the liability of the defendant for the return of the amount
received by him may not be enforced in the criminal case but must be
raised in a separate civil action for the recovery of the said amount
(People v. Pantig, 97 Phil. 748; following the doctrine laid down in Manila
Railroad Co. v. Honorable Rodolfo Baltazar, 49 O.G. 3874; Pueblo contra
Abellera, 69 Phil. 623; People v. Maniago 69 Phil. 496; People v.
Miranda, 5 SCRA 1067; Aldaba v. Elepafio 116 Phil. 457). In the case
before us, the petitioners were acquitted not because they did not commit
the acts stated in the charge against them. There is no dispute over the
forcible opening of the market stall, its demolition with axes and other
instruments, and the carting away of the merchandize. The petitioners
were acquitted because these acts were denominated coercion when
they properly constituted some other offense such as threat or malicious
mischief.
The respondent Court of Appeals stated in its decision:
For a complaint to prosper under the foregoing provision,
the violence must be employed against the person, not
against property as what happened in the case at bar. ...
xxx xxx xxx
The next problem is: May the accused be convicted of an
offense other than coercion?
From all appearances, they should have been prosecuted
either for threats or malicious mischief. But the law does
not allow us to render judgment of conviction for either of
these offenses for the reason that they were not indicted
for, these offenses. The information under which they
were prosecuted does not allege the elements of either
threats or malicious mischief. Although the information
mentions that the act was by means of threats', it does
not allege the particular threat made. An accused person
is entitled to be informed of the nature of the acts imputed
to him before he can be made to enter into trial upon a
valid information.
We rule that the crime of grave coercion has not been
proved in accordance with law.
While appellants are entitled to acquittal they
nevertheless are liable for the actual damages suffered by
the complainants by reason of the demolition of the stall
and loss of some of their properties. The extinction of the
penal action does not carry with it that of the civil, unless
the extinction proceeds from a declaration in a final
judgment that the fact from which the civil might arise did
not exist. (Rule 111, Sec. 3 (c), Rev. Rules of Court;
Laperal v. Aliza, 51 OG.R. 1311, People v. Velez, 44 OG.
1811). In the instant case, the fact from which the civil
might arise, namely, the demolition of the stall and loss of
the properties contained therein; exists, and this is not
denied by the accused. And since there is no showing
that the complainants have reserved or waived their right
to institute a separate civil action, the civil aspect therein
is deemed instituted with the criminal action. (Rule 111,
Sec. 1, Rev. Rules of Court).
xxx xxx xxx
Section 1 of Rule 111 of the Rules of Court states the fundamental
proposition that when a criminal action is instituted, the civil action for
recovery of civil liability arising from the offense charged is impliedly
instituted with it. There is no implied institution when the offended party
expressly waives the civil action or reserves his right to institute it
separately. (Morte Sr. v. Alvizo, Jr., 101 SCRA 221).
The extinction of the civil action by reason of acquittal in the criminal case
refers exclusively to civil liability ex delicto founded on Article 100 of the
Revised Penal Code. (Elcano v. Hill, 77 SCRA 98; Virata v. Ochoa, 81
SCRA 472). In other words, the civil liability which is also extinguished
upon acquittal of the accused is the civil liability arising from the act as a
crime.
As easily as 1942, the Supreme Court speaking through Justice Jorge
Bocobo in Barredo v. Garcia, et at. 73 Phil. 607 laid down the rule that
the same punishable act or omission can create two kinds of civil
liabilities against the accused and, where provided by law, his employer.
'There is the civil liability arising from the act as a crime and the liability
arising from the same act as a quasi-delict. Either one of these two types
of civil liability may be enforced against the accused, However, the
offended party cannot recover damages under both types of liability. For
instance, in cases of criminal negligence or crimes due to reckless
imprudence, Article 2177 of the Civil Code provides:
Responsibility for fault or negligence under the preceding
article is entirely separate and distinct from the civil
liability arising from negligence under the Penal Code. But
the plaintiff cannot recover damages twice for the same
act or omission of the defendant.
Section 3 (c) of Rule 111 specifically provides that:
Sec. 3. Other civil actions arising from offenses. — In all
cases not included in the preceding section the following
rules shall be observed:
xxx xxx xxx
xxx xxx xxx
(c) Extinction of the penal action does not carry with it
extinction of the civil, unless the extinction proceeds from
a declaration in a final judgment that the fact from which
the civil might arise did not exist. In other cases, the
person entitled to the civil action may institute it in the
Jurisdiction and in the manner provided by law against
the person who may be liable for restitution of the thing
and reparation or indemnity for the damage suffered.
The judgment of acquittal extinguishes the liability of the accused for
damages only when it includes a declaration that the facts from which the
civil might arise did not exist. Thus, the civil liability is not extinguished by
acquittal where the acquittal is based on reasonable doubt (PNB v.
Catipon, 98 Phil. 286) as only preponderance of evidence is required in
civil cases; where the court expressly declares that the liability of the
accused is not criminal but only civil in nature (De Guzman v. Alvia, 96
Phil. 558; People v. Pantig, supra) as, for instance, in the felonies of
estafa, theft, and malicious mischief committed by certain relatives who
thereby incur only civil liability (See Art. 332, Revised Penal Code); and,
where the civil liability does not arise from or is not based upon the
criminal act of which the accused was acquitted (Castro v. Collector of
Internal Revenue, 4 SCRA 1093; See Regalado, Remedial Law
Compendium, 1983 ed., p. 623). Article 29 of the Civil Code also provides
that:
When the accused in a criminal prosecution is acquitted
on the ground that his guilt has not been proved beyond
reasonable doubt, a civil action for damages for the same
act or omission may be instituted. Such action requires
only a preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a bond
to answer for damages in case the complaint should be
found to be malicious.
If in a criminal case the judgment of acquittal is based
upon reasonable doubt, the court shall so declare. In the
absence of any declaration to that effect, it may be
inferred from the text of the decision whether or not the
acquittal is due to that ground.
More recently, we held that the acquittal of the defendant in the criminal
case would not constitute an obstacle to the filing of a civil case based on
the same acts which led to the criminal prosecution:
... The finding by the respondent court that he spent said
sum for and in the interest of the Capiz Agricultural and
Fishery School and for his personal benefit is not a
declaration that the fact upon which Civil Case No. V-
3339 is based does not exist. The civil action barred by
such a declaration is the civil liability arising from the
offense charged, which is the one impliedly instituted with
the criminal action. (Section 1, Rule III, Rules of Court.)
Such a declaration would not bar a civil action filed
 against an accused who had been acquitted in the
criminal case if the criminal action is predicated on factual
or legal considerations other than the commission of the
offense charged. A person may be acquitted of
malversation where, as in the case at bar, he could show
that he did not misappropriate the public funds in his
possession, but he could be rendered liable to restore
said funds or at least to make a proper accounting thereof
if he shall spend the same for purposes which are not
authorized nor intended, and in a manner not permitted
by applicable rules and regulations. (Republic v. Bello,
120 SCRA 203)
There appear to be no sound reasons to require a separate civil action to
still be filed considering that the facts to be proved in the civil case have
already been established in the criminal proceedings where the accused
was acquitted. Due process has been accorded the accused. He was, in
fact, exonerated of the criminal charged. The constitutional presumption
of innocence called for more vigilant efforts on the part of prosecuting
attorneys and defense counsel, a keener awareness by all witnesses of
the serious implications of perjury, and a more studied consideration by
the judge of the entire records and of applicable statutes and precedents.
To require a separate civil action simply because the accused was
acquitted would mean needless clogging of court dockets and
unnecessary duplication of litigation with all its attendant loss of time,
effort, and money on the part of all concerned.
The trial court found the following facts clearly established by the
evidence adduced by both the prosecution and the defense:
xxx xxx xxx
(9) In the morning of February 8, 1964, then Chief
Galdones, complying with the instructions contained in
said Memorandum No. 32 of the Mayor, and upon seeing
that Antonio Vergara had not vacated the premises in
question, with the aid of his policemen, forced upon the
store or stall and ordered the removal of the goods inside
the store of Vergara, at the same time taking inventory of
the goods taken out, piled them outside in front of the
store and had it cordoned with a rope, and after all the
goods were taken out from the store, ordered the
demolition of said stall of Antonio Vergara. Since then up
to the trial of this case, the whereabouts of the goods
taken out from the store nor the materials of the
demolished stall have not been made known.
The respondent Court of Appeals made a similar finding that:
On the morning of February 8th, because the said
Vergaras had not up to that time complied with the order
to vacate, the co-accused Chief of Police Galdones and
some members of his police force, went to the market
and, using ax, crowbars and hammers, demolished the
stall of the Vergaras who were not present or around, and
after having first inventoried the goods and merchandise
found therein, they had them brought to the municipal
building for safekeeping. Inspite of notice served upon the
Vergaras to take possession of the goods and
merchandise thus taken away, the latter refused to do so.
The loss and damage to the Vergaras as they evaluated
them were:
Cost of stall construction P1,300.00
Value of furniture and
equipment
judgment destroyed
300.00
Value of goods and equipment
taken 8,000.00
P9,600.00
It is not disputed that the accused demolished the grocery
stall of the complainants Vergaras and carted away its
contents. The defense that they did so in order to abate
what they considered a nuisance per se is untenable,
This finds no support in law and in fact. The couple has
been paying rentals for the premises to the government
which allowed them to lease the stall. It is, therefore,
farfetched to say that the stall was a nuisance per se
which could be summarily abated.
The petitioners, themselves, do not deny the fact that they caused the
destruction of the complainant's market stall and had its contents carted
away. They state:
On February 8, 1964, despite personal pleas on Vergaras
by the Mayor to vacate the passageways of Market
Building No. 3, the Vergaras were still in the premises, so
the petitioners Chief of Police and members of the Police
Force of Jose Panganiban, pursuant to the Mayor' 6
directives, demolished the store of the Vergaras, made an
inventory of the goods found in said store, and brought
these goods to the municipal building under the custody
of the Municipal Treasurer, ...
The only supposed obstacle is the provision of Article 29 of the Civil
Code, earlier cited, that "when the accused in a criminal prosecution is
acquitted on the ground that his guilt has not been proved beyond
reasonable doubt, a civil action for damages for the same act or omission
may be instituted." According to some scholars, this provision of
substantive law calls for a separate civil action and cannot be modified by
a rule of remedial law even in the interests of economy and simplicity and
following the dictates of logic and common sense.
As stated by retired Judge J. Cezar Sangco:
... if the Court finds the evidence sufficient to sustain the
civil action but inadequate to justify a conviction in the
criminal action, may it render judgment acquitting the
accused on reasonable doubt, but hold him civilly liable
nonetheless? An affirmative answer to this question would
be consistent with the doctrine that the two are distinct
and separate actions, and win (a) dispense with the
reinstituting of the same civil action, or one based on
quasi-delict or other independent civil action, and of
presenting the same evidence: (b) save the injured party
unnecessary expenses in the prosecution of the civil
action or enable him to take advantage of the free
services of the fiscal; and (c) otherwise resolve the
unsettling implications of permitting the reinstitution of a
separate civil action whether based on delict, or quasi-
delict, or other independent civil actions.
... But for the court to be able to adjudicate in the manner
here suggested, Art. 29 of the Civil Code should be
amended because it clearly and expressly provides that
the civil action based on the same act or omission may
only be instituted in a separate action, and therefore, may
not inferentially be resolved in the same criminal action.
To dismiss the civil action upon acquittal of the accused
and disallow the reinstitution of any other civil action,
would likewise render, unjustifiably, the acquittal on
reasonable doubt without any significance, and would
violate the doctrine that the two actions are distinct and
separate.
In the light of the foregoing exposition, it seems evident
that there is much sophistry and no pragmatism in the
doctrine that it is inconsistent to award in the same
proceedings damages against the accused after
acquitting him on reasonable doubt. Such doctrine must
recognize the distinct and separate character of the two
actions, the nature of an acquittal on reasonable doubt,
the vexatious and oppressive effects of a reservation or
institution of a separate civil action, and that the injured
party is entitled to damages not because the act or
omission is punishable but because he was damaged or
injured thereby (Sangco, Philippine Law on Torts and
Damages, pp. 288-289).
We see no need to amend Article 29 of the Civil Code in order to allow a
court to grant damages despite a judgment of acquittal based on
reasonable doubt. What Article 29 clearly and expressly provides is a
remedy for the plaintiff in case the defendant has been acquitted in a
criminal prosecution on the ground that his guilt has not been proved
beyond reasonable doubt. It merely emphasizes that a civil action for
damages is not precluded by an acquittal for the same criminal act or
omission. The Civil Code provision does not state that the remedy can be
availed of only in a separate civil action. A separate civil case may be
filed but there is no statement that such separate filing is the only and
exclusive permissible mode of recovering damages.
There is nothing contrary to the Civil Code provision in the rendition of a
judgment of acquittal and a judgment awarding damages in the same
criminal action. The two can stand side by side. A judgment of acquittal
operates to extinguish the criminal liability. It does not, however,
extinguish the civil liability unless there is clear showing that the act from
which civil liability might arise did not exist.
A different conclusion would be attributing to the Civil Code a trivial
requirement, a provision which imposes an uncalled for burden before
one who has already been the victim of a condemnable, yet non-criminal,
act may be accorded the justice which he seeks.
We further note the rationale behind Art. 29 of the Civil Code in arriving at
the intent of the legislator that they could not possibly have intended to
make it more difficult for the aggrieved party to recover just compensation
by making a separate civil action mandatory and exclusive:
The old rule that the acquittal of the accused in a criminal
case also releases him from civil liability is one of the
most serious flaws in the Philippine legal system. It has
given rise to numberless instances of miscarriage of
justice, where the acquittal was due to a reasonable
doubt in the mind of the court as to the guilt of the
accused. The reasoning followed is that inasmuch as the
civil responsibility is derived from the the criminal offense,
when the latter is not proved, civil liability cannot be
demanded.
A separate civil action may be warranted where additional facts have to
be established or more evidence must be adduced or where the criminal
case has been fully terminated and a separate complaint would be just as
efficacious or even more expedient than a timely remand to the trial court
where the criminal action was decided for further hearings on the civil
aspects of the case. The offended party may, of course, choose to file a
separate action. These do not exist in this case. Considering moreover
the delays suffered by the case in the trial, appellate, and review stages,
it would be unjust to the complainants in this case to require at this time a
separate civil action to be filed.
With this in mind, we therefore hold that the respondent Court of Appeals
did not err in awarding damages despite a judgment of acquittal.
WHEREFORE, we hereby AFFIRM the decision of the respondent Court
of Appeals and dismiss the petition for lack of merit.
SO ORDERED.
Fernando, C.J., Teehankee, Makasiar, Guerrero, Abad Santos,
Melencio- Herrera, Plana, Escolin, Relova and De la Fuente, JJ., concur.
Aquino, J., concur in the result.

This is one of those cases where confused thinking leads De Castro, J., took no part.
to unfortunate and deplorable consequences. Such
reasoning fails to draw a clear line of demarcation
Concepcion, Jr. J., is on leave.
between criminal liability and civil responsibility, and to
determine the logical result of the distinction. The two
liabilities are separate and distinct from each other. One
affects the social order and the other, private rights. One
is for the punishment or correction of the offender while
the other is for reparation of damages suffered by the
aggrieved party... it is just and proper that, for the
purposes of the imprisonment of or fine upon the
accused, the offense should be proved beyond
reasonable doubt. But for the purpose of indemnifying the
complaining party, why should the offense also be proved
beyond reasonable doubt? Is not the invasion or violation
of every private right to be proved only by preponderance
of evidence? Is the right of the aggrieved person any less
private because the wrongful act is also punishable by the
criminal law? (Code Commission, pp. 45-46).
 Sec. 3. Other civil actions arising from offenses. — In all
cases not included in the preceding section the following
rules shall be observed:

(a) Criminal and civil actions arising from the same

offense may be instituted separately, but after the criminal
action has been commenced the civil action can not be
instituted until final judgment has been rendered in the
Republic of the Philippines criminal action. ...
SUPREME COURT
Manila According to the respondent judge, "under the foregoing Sec. 3 (a), Rule
111, New Rules of Court, the instant civil action may be instituted only
SECOND DIVISION after final judgment has been rendered in the criminal action." (Rollo, p.
33.)
G.R. No. L-51183 December 21, 1983
The instant petition which seeks to set aside the order of the respondent
CARMEN L. MADEJA, petitioner, judge granting the defendant's motion to dismiss Civil Case No. 141 is
vs. highly impressed with merit.
HON. FELIX T. CARO and EVA ARELLANO-JAPZON, respondents.
Section 2, Rule 111 of the Rules of Court in relation to Article 33 of the
Ernesto P. Miel for petitioner. Civil Code is the applicable provision. The two enactments are quoted
hereinbelow: têñ.£îhqwâ£

Gorgonio T. Alvarez for respondents.

ABAD SANTOS, J.: ñé+.£ªwph!1
In Criminal Case No. 75-88 of the defunct Court of First Instance of
Eastern Samar, DR. EVA A. JAPZON is accused of homicide through
reckless imprudence for the death of Cleto Madeja after an
appendectomy. The complaining witness is the widow of the deceased,
Carmen L. Madeja. The information states that: "The offended party
Carmen L. Madeja reserving her right to file a separate civil action for
damages." (Rollo, p. 36.)
The criminal case still pending, Carmen L. Madeja sued Dr. Eva A.
Japzon for damages in Civil Case No. 141 of the same court. She alleged
that her husband died because of the gross negligence of Dr. Japzon.
The respondent judge granted the defendant's motion to dismiss which
motion invoked Section 3(a) of Rule 111 of the Rules of Court which
reads:têñ.£îhqwâ£
There are at least two things about Art. 33 of the Civil Code which are
worth noting, namely:
Sec. 2. Independent civil action. — In the cases provided
for in Articles 31,32, 33, 34 and 2177 of the Civil Code of
the Philippines, an independent civil action entirely
separate and distinct from the criminal action, may be
brought by the injured party during the pendency of the
criminal case, provided the right is reserved as required in
the preceding section. Such civil action shall proceed
independently of the criminal prosecution, and shall
require only a preponderance of evidence." (Rule 111,
Rules of Court.)
Art. 33. In cases of defamation, fraud, and physical
injuries, a civil action for damages, entirely separate and
distinct from the criminal action, may be brought by the
injured party. Such civil action shall proceed
independently of the criminal prosecution, and shall
require only a preponderance of evidence. (Civil Code,)
1. The civil action for damages which it allows to be instituted is ex-
delicto. This is manifest from the provision which uses the expressions
"criminal action" and "criminal prosecution." This conclusion is supported
by the comment of the Code Commission, thus: têñ.£îhqwâ£
The underlying purpose of the principle under
consideration is to allow the citizen to enforce his rights in
a private action brought by him, regardless of the action of
the State attorney. It is not conducive to civic spirit and to
individual self-reliance and initiative to habituate the
citizens to depend upon the government for the
vindication of their own private rights. It is true that in
many of the cases referred to in the provision cited, a
criminal prosecution is proper, but it should be
remembered that while the State is the complainant in the
criminal case, the injured individual is the one most
concerned because it is he who has suffered directly. He
should be permitted to demand reparation for the wrong
which peculiarly affects him. (Report, p. 46.)
And Tolentino says: têñ.£îhqwâ£
The general rule is that when a criminal action is
instituted, the civil action for recovery of civil liability
arising from the offense charged is impliedly instituted
with the criminal action, unless the offended party
reserves his right to institute it separately; and after a
criminal action has been commenced, no civil action
arising from the same offense can be prosecuted. The
present articles creates an exception to this rule when the
offense is defamation, fraud, or physical injuries, In these
cases, a civil action may be filed independently of the
criminal action, even if there has been no reservation
made by the injured party; the law itself in this article
makes such reservation; but the claimant is not given the
right to determine whether the civil action should be
scheduled or suspended until the criminal action has
been terminated. The result of the civil action is thus
independent of the result of the civil action." (I Civil Code,
p. 144 [1974.])
2. The term "physical injuries" is used in a generic sense. It is not the
crime of physical injuries defined in the Revised Penal Code. It includes
not only physical injuries but consummated, frustrated and attempted
homicide. têñ.£îhqwâ£
The Article in question uses the words 'defamation', 'fraud'
and 'physical injuries.' Defamation and fraud are used in
their ordinary sense because there are no specific
provisions in the Revised Penal Code using these terms
as means of offenses defined therein, so that these two
terms defamation and fraud must have been used not to
impart to them any technical meaning in the laws of the
Philippines, but in their generic sense. With this apparent
circumstance in mind, it is evident that the terms 'physical
injuries' could not have been used in its specific sense as
a crime defined in the Revised Penal Code, for it is
difficult to believe that the Code Commission would have
used terms in the same article-some in their general and
another in its technical sense. In other words, the term
'physical injuries' should be understood to mean bodily
injury, not the crime of physical injuries, bacause the
terms used with the latter are general terms. In any case
the Code Commission recommended that the civil action
for physical injuries be similar to the civil action for assault
and battery in American Law, and this recommendation
must hove been accepted by the Legislature when it
approved the article intact as recommended. If the intent
has been to establish a civil action for the bodily harm
received by the complainant similar to the civil action for
assault and battery, as the Code Commission states, the
civil action should lie whether the offense committed is
that of physical injuries, or frustrated homicide, or
attempted homicide, or even death," (Carandang vs.
Santiago, 97 Phil. 94, 96-97 [1955].)
Corpus vs. Paje, L-26737, July 31, 1969, 28 SCRA 1062, which states
that reckless imprudence or criminal negligence is not included in Article
33 of the Civil Code is not authoritative. Of eleven justices only nine took
part in the decision and four of them merely concurred in the result.
In the light of the foregoing, it is apparent that the civil action against Dr.
Japzon may proceed independently of the criminal action against her.
WHEREFORE, the petition is hereby granted; the order dismissing Civil
Case No. 141 is hereby set aside; no special pronouncement as to costs.
SO ORDERED. 1äwphï1.ñët Taxi and Yuson, 86 Phil. 1. See Formento vs. CA, L-26442, August
29,1969,29 SCRA 437).
Makasiar (Chairman), Concepcion, Jr., Guerrero, De Castro and Escolin,
JJ., concur The term "physical injuries" in article 33 of the Civil Code includes death
and may give rise to an independent civil action (Dyogi vs. Yatco, 100
Separate Opinions Phil. 1095).

  The rule in Corpus vs. Paje, L-26737, July 31, 1969, 28 SCRA 1062, that
reckless imprudence is not included in article 33 of the Civil Code, is not
AQUINO, J., concurring: authoritative doctrine because it was concurred in by only five Justices.
Four Justices concurred in the result.
I concur. Death due to a negligent act may be a delict or quasi-delict. It
may create a civil action based on article 100 of the Penal Code or an
action based on culpa aquiliana under article 2176 of the Civil Code.
These alternatives are assumed in article 2177 of the Civil Code "but the
plaintiff cannot recover twice for the same act or omission of the
defendant" (Barredo vs. Garcia, 73 Phil. 607 and Sudario vs. Acro
Taxi and Yuson, 86 Phil. 1. See Formento vs. CA, L-26442, August
29,1969,29 SCRA 437).

The term "physical injuries" in article 33 of the Civil Code includes death
and may give rise to an independent civil action (Dyogi vs. Yatco, 100
Phil. 1095).

The rule in Corpus vs. Paje, L-26737, July 31, 1969, 28 SCRA 1062, that
reckless imprudence is not included in article 33 of the Civil Code, is not
authoritative doctrine because it was concurred in by only five Justices.
Four Justices concurred in the result.

Separate Opinions

AQUINO, J., concurring:

I concur. Death due to a negligent act may be a delict or quasi-delict. It

may create a civil action based on article 100 of the Penal Code or an
action based on culpa aquiliana under article 2176 of the Civil Code.
These alternatives are assumed in article 2177 of the Civil Code "but the
plaintiff cannot recover twice for the same act or omission of the
defendant" (Barredo vs. Garcia, 73 Phil. 607 and Sudario vs. Acro

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
GR. No. 101236 January 30, 1992
JULIANA P. YAP, petitioner,
vs.
MARTIN PARAS and ALFREDO D. BARCELONA, SR., Judge of the
3rd MTC of Glan Malapatan, South Cotabato, respondents.
Mariano C. Alegarbes for petitioner.
Public Attorney's Office for private respondent.
CRUZ, J.:
This is still another dispute between brother and sister over a piece of
property they inherited from their parents. The case is complicated by the
circumstance that the private respondent's counsel in this petition is the
son of the judge, the other respondent, whose action is being questioned.
Petitioner Juliana P. Yap was the sister of private respondent Martin
Paras.*
On October 31, 1971, according to Yap, Paras sold to her his share in the
intestate estate for P300.00. The sale was evidenced by a private
document. Nineteen years later, on May 2, 1990, Paras sold the same
property to Santiago Saya-ang for P5,000.00. This was evidenced by a
notarized Deed of Absolute Sale.
When Yap learned of the second sale, she filed a complaint for estafa
against Paras and Saya-ang with the Office of the Provincial Prosecutor
of General Santos City.   On the same date, she filed a complaint for the
1
nullification of the said sale with the Regional Trial Court of General
Santos City. 2
After investigation, the Provincial Prosecutor instituted a criminal
complaint for estafa against Paras with the Municipal Circuit Trial Court of
Glan-Malapatan, South Cotabato, presided by Judge Alfredo D.
Barcelona, Sr.
On April 17, 1991, before arraignment of the accused, the trial
judge motu proprio issued an order dismissing the criminal case on the
ground that:
. . . after a careful scrutiny of the statements of
complainant, Juliana P. Yap and of the respondent Martin
Paras and his witnesses, the Court holds and maintained
(sic) that there is a prejudicial question to a civil action,
which must be ventilated in the proper civil court. In the
case of Ras vs. Rasul, 100 SCRA 125, the Supreme
Court had already made a pronouncement that "a criminal
action for Estafa for alleged double sale of property is a
prejudicial question to a civil action for nullity of the
alleged Deed of Sale and defense of the alleged vendors
of forgeries of their signatures to the Deed." 
3
The Petitioner moved for reconsideration, which was denied on April 30,
1990. She then came to this Court for relief in this special civil action
for certiorari.
The Court could have referred this petition to the Court of Appeals, which
has concurrent jurisdiction under BP 129, but decided to resolve the case
directly in view of the peculiar circumstances involved.
The petitioner's contention is that where there is a prejudicial question in
a civil case, the criminal action may not be dismissed but only
suspended. Moreover, this suspension may not be done motu proprio by
the judge trying the criminal case but only upon petition of the defendant
in accordance with the Rules of Court. It is also stressed that a reversal
of the order of dismissal would not bar the prosecution of the accused
under the double jeopardy rule because he has not yet been arraigned.
The Court notes that the counsel for private respondent Paras who filed
the comment in his behalf is the son and namesake of Judge Barcelona.
Atty. Alfredo L. Barcelona, Jr. is employed in the Public Attorney's Office.
He has made it of record that he was not the counsel of Paras at the time
the questioned order of dismissal was issued by his father. He thus
impliedly rejects the charge of bias against his father.
Perhaps out of filial loyalty, Atty. Barcelona suggests there may have
been a basis for the order in view of the alleged double sale of the
property which was being litigated in the regional trial court. He
concedes, however, that the order may have been premature and that it
could not have been issued motu proprio. Agreeing that double jeopardy
would not attach because of the lack of arraignment, he asks that his
Comment be considered a motion for the suspension of the criminal
action on the ground of prejudicial question.
The Court has deliberated on the issues and finds that the respondent
judge did indeed commit grave abuse of discretion in motu
proprio issuing the order of dismissal.
Section 6, Rule 111 of the 1985 Rules on Criminal Procedure as
amended by this Court on July 7, 1988, provides as follows:
Sec. 6. Suspension by reason of prejudicial question. — A
petition for suspension of the criminal action based upon
the pendency of a prejudicial question in a civil action may
be filed in the office of the fiscal or the court conducting
the preliminary investigation. When the criminal action
has been filed in court for trial, the petition to suspend
shall be filed in the same criminal action at any time
before the prosecution rests.
Judge Barcelona's precipitate action is intriguing, to say the least, in light
of the clear provision of the above-quoted rule. The rule is not even new,
being only a rewording of the original provision in the Rules of Court
before they were amended. It plainly says that the suspension may be
made only upon petition and not at the instance of the judge alone, and it
also says suspension, and not dismissal. One also wonders if the person
who notarized the disputed second sale, Notary Public Alexander C.
Barcelona, might be related to the respondent judge.
But more important than the preceding considerations is the trial judge's
misapprehension of the concept of a prejudicial question.
Section 5, Rule 111 of the 1985 Rules on Criminal Procedure as
amended provides:
Sec. 5. Elements of prejudicial question. — The two (2)
essential elements of a prejudicial question are: (a) the
civil action involves an issue similar or intimately related
to the issue raised in the criminal action; and (b) the
resolution of such issue determines whether or not the
criminal action may proceed.
A prejudicial question is defined as that which arises in a case the
resolution of which is a logical antecedent of the issue involved therein,
and the congnizance of which pertains to another tribunal. The prejudicial
question must be determinative of the case before the court but the
jurisdiction to try and resolve the question must be lodged in another
court or tribunal.   It is a question based on a fact distinct and separate
4
from the crime but so intimately connected with it that it determines the
guilt or innocence of the accused.  5
We have held that "for a civil case to be considered prejudicial to a
criminal action as to cause the suspension of the criminal action pending
the determination of the civil action, it must appear not only that the civil
case involves the same facts upon which the criminal prosecution is
based, but also that the resolution of the issues raised in said civil action
would be necessarily determinative of the guilt or innocence of the
accused".  6
It is the issue in the civil action that is prejudicial to the continuation of the
criminal action, not the criminal action that is prejudicial to the civil action.
The excerpt quoted by the respondent judge in his Order does not appear
anywhere in the decision of Ras v. Rasul.   Worse, he has not only
7
misquoted the decision but also wrongly applied it. The facts of that case
are not analogous to those in the case at bar.
In that case, Ras allegedly sold to Pichel a parcel of land which he later
also sold to Martin. Pichel brought a civil action for nullification of the
second sale and asked that the sale made by Ras in his favor be
declared valid. Ras's defense was that he never sold the property to
Pichel and his purported signatures appearing in the first deed of sale
were forgeries. Later, an information for estafa was filed against Ras
based on the same double sale that was the subject of the civil action.
Ras filed a "Motion for Suspension of Action" (that is, the criminal case),
claiming that the resolution of the issues in the civil case would
necessarily be determinative of his guilt or innocence.
Through then Associate Justice Claudio Teehankee, this Court ruled that
a suspension of the criminal action was in order because:
On the basis of the issues raised in both the criminal and
civil cases against petitioner and in the light of the
foregoing concepts of a prejudicial question, there indeed
appears to be a prejudicial question in the case at bar,
considering that petitioner Alejandro Ras' defense (as
defendant) in Civil Case No. 73 of the nullity and forgery
of the alleged prior deed of sale in favor of Luis Pichel
(plaintiff in the civil case and complaining witnesses in the
criminal case) is based on the very same facts which
would be necessarily determinative of petitioner Ras' guilt
or innocence as accused in the criminal case. If the first
alleged sale in favor of Pichel is void or fictitious, then
there would be no double sale and petitioner would be
innocent of the offense charged. A conviction in the
criminal case (if it were allowed to proceed ahead) would
be a gross injustice and would have to be set aside if it
were finally decided in the civil action that indeed the
alleged prior deed of sale was a forgery and spurious.
xxx xxx xxx
The petitioner Alejandro Ras claims in his answer to the
complaint in Civil Case No. 73 that he had never sold the
property in litigation to the plaintiff (Luis Pichel) and that
his signatures in the alleged deed of sale and that of his
wife were forged by the plaintiff. It is, therefore, necessary
that the truth or falsity of such claim be first determined
because if his claim is true, then he did not sell his
property twice and no estafa was committed. The
question of nullity of the sale is distinct and separate from
the crime of estafa (alleged double sale) but so intimately
connected with it that it determines the guilt or innocence
of herein petitioner in the criminal action.
In the Ras case, there was a motion to suspend the criminal action on
the ground that the defense in the civil case — forgery of his signature in
the first deed of sale — had to be threshed out first. Resolution of that
question would necessarily resolve the guilt or innocence of the accused
in the criminal case. By contrast, there was no motion for suspension in
the case at bar; and no less importantly, the respondent judge had not
been informed of the defense Paras was raising in the civil action. Judge
Barcelona could not have ascertained then if the issue raised in the civil
action would determine the guilt or innocence of the accused in the
criminal case.
It is worth remarking that not every defense raised in the civil action will
raise a prejudicial question to justify suspension of the criminal action.
The defense must involve an issue similar or intimately related to the
same issue raised in the criminal action and its resolution should
determine whether or not the latter action may proceed.
The order dismissing the criminal action without a motion for suspension
in accordance with Rule 111, Section 6, of the 1985 Rules on Criminal
Procedure as amended, and even without the accused indicating his
defense in the civil case for the annulment of the second sale, suggests
not only ignorance of the law but also bias on the part of the respondent
judge.
Judge Alfredo D. Barcelona, Sr. is sternly reminded that under the Code
of Judicial Conduct, "a judge shall be faithful to the law and maintain
professional competence" and "should administer justice impartially." He
is hereby reprimanded for his questionable conduct in the case at bar,
with the warning that commission of similar acts in the future will be dealt
with more severely.
WHEREFORE, the petition is GRANTED. The Order issued by Judge
Alfredo D. Barcelona, Sr. dated April 17, 1991, dismissing Criminal Case
No. 1902-G, and the Order dated April 30, 1991, denying the motion for
reconsideration, are REVERSED and SET ASIDE. Criminal Case No.
1902-G is ordered REINSTATED for further proceedings, but to be
assigned to a different judge.
SO ORDERED.
Narvasa, C.J., Griño-Aquino and Medialdea, JJ., concur. It is among this Court's concerns that the Philippines should not acquire
an unbecoming reputation among the manufacturing and trading centers
  of the world as a haven for intellectual pirates imitating and illegally
profiting from trademarks and tradenames which have established
themselves in international or foreign trade.

Before this Court is a petition for certiorari with preliminary injunction filed

by La Chemise Lacoste, S.A., a well known European manufacturer of
clothings and sporting apparels sold in the international market and
bearing the trademarks "LACOSTE" "CHEMISE LACOSTE",
"CROCODILE DEVICE" and a composite mark consisting of the word
Republic of the Philippines "LACOSTE" and a representation of a crocodile/alligator. The petitioner
SUPREME COURT asks us to set aside as null and void, the order of judge Oscar C.
Manila Fernandez, of Branch XLIX, Regional Trial Court, National Capital
Judicial Region, granting the motion to quash the search warrants
FIRST DIVISION previously issued by him and ordering the return of the seized items.

G.R. No. L-63796-97 May 2, 1984 The facts are not seriously disputed. The petitioner is a foreign
corporation, organized and existing under the laws of France and not
LA CHEMISE LACOSTE, S. A., petitioner, doing business in the Philippines, It is undeniable from the records that it
vs. is the actual owner of the abovementioned trademarks used on clothings
HON. OSCAR C. FERNANDEZ, Presiding Judge of Branch XLIX, and other goods specifically sporting apparels sold in many parts of the
Regional Trial Court, National Capital Judicial Region, Manila and world and which have been marketed in the Philippines since 1964, The
GOBINDRAM HEMANDAS, respondents. main basis of the private respondent's case is its claim of alleged prior
registration.
G.R. No. L-65659 May 2l, 1984
In 1975, Hemandas & Co., a duly licensed domestic firm applied for and
GOBINDRAM HEMANDAS SUJANANI, petitioner, was issued Reg. No. SR-2225 (SR stands for Supplemental Register) for
vs. the trademark "CHEMISE LACOSTE & CROCODILE DEVICE" by the
HON. ROBERTO V. ONGPIN, in his capacity as Minister of Trade and Philippine Patent Office for use on T-shirts, sportswear and other
Industry, and HON. CESAR SAN DIEGO, in his capacity as Director garment products of the company. Two years later, it applied for the
of Patents, respondents. registration of the same trademark under the Principal Register. The
Patent Office eventually issued an order dated March 3, 1977 which
states that:
Castillo, Laman, Tan & Pantaleon for petitioners in 63796-97.
xxx xxx xxx
Ramon C. Fernandez for private respondent in 63796-97 and petitioner
in 65659.
... Considering that the mark was already registered in the
Supplemental Register in favor of herein applicant, the
Office has no other recourse but to allow the application,
however, Reg. No. SR-2225 is now being contested in a
GUTIERREZ, JR., J.: Petition for Cancellation docketed as IPC No. 1046, still
 registrant is presumed to be the owner of the mark until
after the registration is declared cancelled.
Thereafter, Hemandas & Co. assigned to respondent Gobindram
Hemandas all rights, title, and interest in the trademark "CHEMISE
LACOSTE & DEVICE".
On November 21, 1980, the petitioner filed its application for registration
of the trademark "Crocodile Device" (Application Serial No. 43242) and
"Lacoste" (Application Serial No. 43241).The former was approved for
publication while the latter was opposed by Games and Garments in Inter
Partes Case No. 1658. In 1982, the petitioner filed a Petition for the
Cancellation of Reg. No. SR-2225 docketed as Inter Partes Case No.
1689. Both cases have now been considered by this Court in Hemandas
v. Hon. Roberto Ongpin (G.R. No. 65659).
On March 21, 1983, the petitioner filed with the National Bureau of
Investigation (NBI) a letter-complaint alleging therein the acts of unfair
competition being committed by Hemandas and requesting their
assistance in his apprehension and prosecution. The NBI conducted an
investigation and subsequently filed with the respondent court two
applications for the issuance of search warrants which would authorize
the search of the premises used and occupied by the Lacoste Sports
Center and Games and Garments both owned and operated by
Hemandas.
The respondent court issued Search Warrant Nos. 83-128 and 83-129 for
violation of Article 189 of the Revised Penal Code, "it appearing to the
satisfaction of the judge after examining under oath applicant and his
witnesses that there are good and sufficient reasons to believe that
Gobindram Hemandas ... has in his control and possession in his
premises the ... properties subject of the offense," (Rollo, pp. 67 and 69)
The NBI agents executed the two search warrants and as a result of the
search found and seized various goods and articles described in the
warrants.
Hemandas filed a motion to quash the search warrants alleging that the
trademark used by him was different from petitioner's trademark and that
pending the resolution of IPC No. 1658 before the Patent Office, any
criminal or civil action on the same subject matter and between the same
parties would be premature.
The petitioner filed its opposition to the motion arguing that the motion to
quash was fatally defective as it cited no valid ground for the quashal of
the search warrants and that the grounds alleged in the motion were
absolutely without merit. The State Prosecutor likewise filed his
opposition on the grounds that the goods seized were instrument of a
crime and necessary for the resolution of the case on preliminary
investigation and that the release of the said goods would be fatal to the
case of the People should prosecution follow in court.
The respondent court was, however, convinced that there was no
probable cause to justify the issuance of the search warrants. Thus, in its
order dated March 22, 1983, the search warrants were recalled and set
aside and the NBI agents or officers in custody of the seized items were
ordered to return the same to Hemandas. (Rollo, p. 25)
The petitioner anchors the present petition on the following issues:
Did respondent judge act with grave abuse of discretion
amounting to lack of jurisdiction,
(i) in reversing the finding of probable cause which he
himself had made in issuing the search warrants, upon
allegations which are matters of defense and as such can
be raised and resolved only upon trial on the merits; and
(ii) in finding that the issuance of the search warrants is
premature in the face of the fact that (a) Lacoste's
registration of the subject trademarks is still pending with
the Patent Office with opposition from Hemandas; and (b)
the subject trademarks had been earlier registered by
Hemandas in his name in the Supplemental Register of
the Philippine Patent Office?
Respondent, on the other hand, centers his arguments on the following
issues:
I
THE PETITIONER HAS NO CAPACITY TO SUE BEFORE PHILIPPINE
COURTS.
II
THE RESPONDENT JUDGE DID NOT COMMIT A GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OF JURISDICTION IN ISSUING
THE ORDER DATED APRIL 22, 1983.
Hemandas argues in his comment on the petition for certiorari that the
petitioner being a foreign corporation failed to allege essential facts
bearing upon its capacity to sue before Philippine courts. He states that
not only is the petitioner not doing business in the Philippines but it also is
not licensed to do business in the Philippines. He also cites the case
of Leviton Industries v. Salvador (114 SCRA 420) to support his
contention The Leviton case, however, involved a complaint for unfair
competition under Section 21-A of Republic Act No. 166 which provides:
Sec. 21 — A. Any foreign corporation or juristic person to
which a mark or tradename has been registered or
assigned under this Act may bring an action hereunder for
infringement, for unfair competition, or false designation of
origin and false description, whether or not it has been
licensed to do business in the Philippines under Act
numbered Fourteen Hundred and Fifty-Nine, as
amended, otherwise known as the Corporation Law, at
the time it brings the complaint; Provided, That the
country of which the said foreign corporation or juristic
person is a citizen, or in which it is domiciled, by treaty,
convention or law, grants a similar privilege to corporate
or juristic persons of the Philippines.
We held that it was not enough for Leviton, a foreign corporation
organized and existing under the laws of the State of New York, United
States of America, to merely allege that it is a foreign corporation. It
averred in Paragraph 2 of its complaint that its action was being filed
under the provisions of Section 21-A of Republic Act No. 166, as
amended. Compliance with the requirements imposed by the abovecited
provision was necessary because Section 21-A of Republic Act No. 166
having explicitly laid down certain conditions in a specific proviso, the
same must be expressly averred before a successful prosecution may
ensue. It is therefore, necessary for the foreign corporation to comply with
these requirements or aver why it should be exempted from them, if such
was the case. The foreign corporation may have the right to sue before
Philippine courts, but our rules on pleadings require that the qualifying
circumstances necessary for the assertion of such right should first be
affirmatively pleaded.
In contradistinction, the present case involves a complaint for violation of
Article 189 of the Revised Penal Code. The Leviton case is not
applicable.
Asserting a distinctly different position from the Leviton argument,
Hemandas argued in his brief that the petitioner was doing business in
the Philippines but was not licensed to do so. To support this argument,
he states that the applicable ruling is the case of Mentholatum Co., Inc. v.
Mangaliman: (72 Phil. 524) where Mentholatum Co. Inc., a foreign
corporation and Philippine-American Drug Co., the former's exclusive
distributing agent in the Philippines filed a complaint for infringement of
trademark and unfair competition against the Mangalimans.
The argument has no merit. The Mentholatum case is distinct from and
inapplicable to the case at bar. Philippine American Drug Co., Inc., was
admittedly selling products of its principal Mentholatum Co., Inc., in the
latter's name or for the latter's account. Thus, this Court held that
"whatever transactions the Philippine-American Drug Co., Inc. had
executed in view of the law, the Mentholatum Co., Inc., did it itself. And,
the Mentholatum Co., Inc., being a foreign doing business in the
Philippines without the license required by Section 68 of the Corporation
Law, it may not prosecute this action for violation of trademark and unfair
competition."
In the present case, however, the petitioner is a foreign corporation not
doing business in the Philippines. The marketing of its products in the
Philippines is done through an exclusive distributor, Rustan Commercial
Corporation The latter is an independent entity which buys and then
markets not only products of the petitioner but also many other products
bearing equally well-known and established trademarks and tradenames.
in other words, Rustan is not a mere agent or conduit of the petitioner.
The rules and regulations promulgated by the Board of Investments
pursuant to its rule-making power under Presidential Decree No. 1789,
otherwise known as the Omnibus Investment Code, support a finding that
the petitioner is not doing business in the Philippines. Rule I, Sec. 1 (g) of
said rules and regulations defines "doing business" as one" which
includes, inter alia:
(1) ... A foreign firm which does business through
middlemen acting on their own names, such as indentors,
commercial brokers or commission merchants, shall not
be deemed doing business in the Philippines. But such
 indentors, commercial brokers or commission merchants
shall be the ones deemed to be doing business in the
Philippines.
(2) Appointing a representative or distributor who is
domiciled in the Philippines, unless said representative or
distributor has an independent status, i.e., it transacts
business in its name and for its account, and not in the
name or for the account of a principal Thus, where a
foreign firm is represented by a person or local company
which does not act in its name but in the name of the
foreign firm the latter is doing business in the Philippines.
xxx xxx xxx
Applying the above provisions to the facts of this case, we find and
conclude that the petitioner is not doing business in the Philippines.
Rustan is actually a middleman acting and transacting business in its own
name and or its own account and not in the name or for the account of
the petitioner.
But even assuming the truth of the private respondent's allegation that
the petitioner failed to allege material facts in its petition relative to
capacity to sue, the petitioner may still maintain the present suit against
respondent Hemandas. As early as 1927, this Court was, and it still is, of
the view that a foreign corporation not doing business in the Philippines
needs no license to sue before Philippine courts for infringement of
trademark and unfair competition. Thus, in Western Equipment and
Supply Co. v. Reyes (51 Phil. 115), this Court held that a foreign
corporation which has never done any business in the Philippines and
which is unlicensed and unregistered to do business here, but is widely
and favorably known in the Philippines through the use therein of its
products bearing its corporate and tradename, has a legal right to
maintain an action in the Philippines to restrain the residents and
inhabitants thereof from organizing a corporation therein bearing the
same name as the foreign corporation, when it appears that they have
personal knowledge of the existence of such a foreign corporation, and it
is apparent that the purpose of the proposed domestic corporation is to
deal and trade in the same goods as those of the foreign corporation.
We further held:
xxx xxx xxx
... That company is not here seeking to enforce any legal
or control rights arising from, or growing out of, any
business which it has transacted in the Philippine Islands.
The sole purpose of the action:
Is to protect its reputation, its corporate name, its
goodwill, whenever that reputation, corporate name or
goodwill have, through the natural development of its
trade, established themselves.' And it contends that its
rights to the use of its corporate and trade name:
Is a property right, a right in rem, which it may assert and
protect against all the world, in any of the courts of the
world-even in jurisdictions where it does not transact
business-just the same as it may protect its tangible
property, real or personal, against trespass, or
conversion. Citing sec. 10, Nims on Unfair Competition
and TradeMarks and cases cited; secs. 21-22, Hopkins
on TradeMarks, Trade Names and Unfair Competition
and cases cited.' That point is sustained by the
authorities, and is well stated in Hanover Star Mining Co.
v. Allen and Wheeler Co. (208 Fed., 513). in which the
syllabus says:
Since it is the trade and not the mark that is to be
protected, a trade-mark acknowledges no territorial
boundaries of municipalities or states or nations, but
extends to every market where the trader's goods have
become known and Identified by the use of the mark.
Our recognizing the capacity of the petitioner to sue is not by any means
novel or precedent setting. Our jurisprudence is replete with cases
illustrating instances when foreign corporations not doing business in the
Philippines may nonetheless sue in our courts. In East Board Navigation
Ltd, v. Ysmael and Co., Inc. (102 Phil. 1), we recognized a right of foreign
corporation to sue on isolated transactions. In General Garments Corp. v.
Director of Patents (41 SCRA 50), we sustained the right of Puritan
Sportswear Corp., a foreign corporation not licensed to do and not doing
business in the Philippines, to file a petition for cancellation of a
trademark before the Patent Office.
More important is the nature of the case which led to this petition. What
preceded this petition for certiorari was a letter complaint filed before the
NBI charging Hemandas with a criminal offense, i.e., violation of Article
189 of the Revised Penal Code. If prosecution follows after the
completion of the preliminary investigation being conducted by the
Special Prosecutor the information shall be in the name of the People of
the Philippines and no longer the petitioner which is only an aggrieved
party since a criminal offense is essentially an act against the State. It is
the latter which is principally the injured party although there is a private
right violated. Petitioner's capacity to sue would become, therefore, of not
much significance in the main case. We cannot snow a possible violator
of our criminal statutes to escape prosecution upon a far-fetched
contention that the aggrieved party or victim of a crime has no standing to
sue.
In upholding the right of the petitioner to maintain the present suit before
our courts for unfair competition or infringement of trademarks of a
foreign corporation, we are moreover recognizing our duties and the
rights of foreign states under the Paris Convention for the Protection of
Industrial Property to which the Philippines and France are parties. We
are simply interpreting and enforcing a solemn international commitment
of the Philippines embodied in a multilateral treaty to which we are a
party and which we entered into because it is in our national interest to do
so.
The Paris Convention provides in part that:
ARTICLE 1
(1) The countries to which the present Convention applies
constitute themselves into a Union for the protection of
industrial property.
(2) The protection of industrial property is concerned with
patents, utility models, industrial designs, trademarks
service marks, trade names, and indications of source or
appellations of origin, and the repression of unfair
competition.
xxx xxx xxx
ARTICLE 2
(2) Nationals of each of the countries of the Union shall as
regards the protection of industrial property, enjoy in all
the other countries of the Union the advantages that their
respective laws now grant, or may hereafter grant, to
nationals, without prejudice to the rights specially
provided by the present Convention. Consequently, they
shall have the same protection as the latter, and the same
legal remedy against any infringement of their rights,
provided they observe the conditions and formalities
imposed upon nationals.
xxx xxx xxx
ARTICLE 6
(1) The countries of the Union undertake, either
administratively if their legislation so permits, or at the
request of an interested party, to refuse or to cancel the
registration and to prohibit the use of a trademark which
constitutes a reproduction, imitation or translation, liable
to create confusion, of a mark considered by the
competent authority of the country of registration or use to
be well-known in that country as being already the mark
of a person entitled to the benefits of the present
Convention and used for Identical or similar goods. These
provisions shall also apply when the essential part of the
mark constitutes a reproduction of any such well-known
mark or an imitation liable to create confusion therewith.
xxx xxx xxx
ARTICLE 8
A trade name shall be protected in all the countries of the
Union without the obligation of filing or registration,
whether or not it forms part of a trademark.
xxx xxx xxx
ARTICLE 10bis
(1) The countries of the Union are bound to assure to
persons entitled to the benefits of the Union effective
protection against unfair competition.
 xxx xxx xxx
ARTICLE 10ter
(1) The countries of the Union undertake to assure to
nationals of the other countries of the Union appropriate
legal remedies to repress effectively all the acts referred
to in Articles 9, 10 and l0bis.
(2) They undertake, further, to provide measures to permit
syndicates and associations which represent the
industrialists, producers or traders concerned and the
existence of which is not contrary to the laws of their
countries, to take action in the Courts or before the
administrative authorities, with a view to the repression of
the acts referred to in Articles 9, 10 and 10bis, in so far as
the law of the country in which protection is claimed
allows such action by the syndicates and associations of
that country.
xxx xxx xxx
ARTICLE 17
Every country party to this Convention undertakes to
adopt, in accordance with its constitution, the measures
necessary to ensure the application of this Convention.
It is understood that at the time an instrument of
ratification or accession is deposited on behalf of a
country; such country will be in a position under its
domestic law to give effect to the provisions of this
Convention. (61 O.G. 8010)
xxx xxx xxx
In Vanity Fair Mills, Inc. v. T Eaton Co. (234 F. 2d 633) the United States
Circuit Court of Appeals had occasion to comment on the extraterritorial
application of the Paris Convention It said that:
[11] The International Convention is essentially a compact
between the various member countries to accord in their
own countries to citizens of the other contracting parties
trademark and other rights comparable to those accorded
their own citizens by their domestic law. The underlying
principle is that foreign nationals should be given the
same treatment in each of the member countries as that
country makes available to its own citizens. In addition,
the Convention sought to create uniformity in certain
respects by obligating each member nation 'to assure to
nationals of countries of the Union an effective protection
against unfair competition.'
[12] The Convention is not premised upon the Idea that
the trade-mark and related laws of each member nation
shall be given extra-territorial application, but on exactly
the converse principle that each nation's law shall have
only territorial application. Thus a foreign national of a
member nation using his trademark in commerce in the
United States is accorded extensive protection here
against infringement and other types of unfair competition
by virtue of United States membership in the Convention.
But that protection has its source in, and is subject to the
limitations of, American law, not the law of the foreign
national's own country. ...
By the same token, the petitioner should be given the same treatment in
the Philippines as we make available to our own citizens. We are
obligated to assure to nationals of "countries of the Union" an effective
protection against unfair competition in the same way that they are
obligated to similarly protect Filipino citizens and firms.
Pursuant to this obligation, the Ministry of Trade on November 20, 1980
issued a memorandum addressed to the Director of the Patents Office
directing the latter:
xxx xxx xxx
... to reject all pending applications for Philippine
registration of signature and other world famous
trademarks by applicants other than its original owners or
users.
The conflicting claims over internationally known
trademarks involve such name brands as Lacoste,
Jordache, Gloria Vanderbilt, Sasson, Fila, Pierre Cardin,
 Gucci, Christian Dior, Oscar de la Renta, Calvin Klein,
Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and
Ted Lapidus.
It is further directed that, in cases where warranted,
Philippine registrants of such trademarks should be asked
to surrender their certificates of registration, if any, to
avoid suits for damages and other legal action by the
trademarks' foreign or local owners or original users.
The memorandum is a clear manifestation of our avowed adherence to a
policy of cooperation and amity with all nations. It is not, as wrongly
alleged by the private respondent, a personal policy of Minister Luis
Villafuerte which expires once he leaves the Ministry of Trade. For a
treaty or convention is not a mere moral obligation to be enforced or not
at the whims of an incumbent head of a Ministry. It creates a legally
binding obligation on the parties founded on the generally accepted
principle of international law of pacta sunt servanda which has been
adopted as part of the law of our land. (Constitution, Art. II, Sec. 3). The
memorandum reminds the Director of Patents of his legal duty to obey
both law and treaty. It must also be obeyed.
Hemandas further contends that the respondent court did not commit
grave abuse of discretion in issuing the questioned order of April 22,
1983.
A review of the grounds invoked by Hemandas in his motion to quash the
search warrants reveals the fact that they are not appropriate for
quashing a warrant. They are matters of defense which should be
ventilated during the trial on the merits of the case. For instance, on the
basis of the facts before the Judge, we fail to understand how he could
treat a bare allegation that the respondent's trademark is different from
the petitioner's trademark as a sufficient basis to grant the motion to
quash. We will treat the issue of prejudicial question later. Granting that
respondent Hemandas was only trying to show the absence of probable
cause, we, nonetheless, hold the arguments to be untenable.
As a mandatory requirement for the issuance of a valid search warrant,
the Constitution requires in no uncertain terms the determination of
probable cause by the judge after examination under oath or affirmation
of the complainant and the witnesses he may produce (Constitution, Art.
IV, Sec. 3). Probable cause has traditionally meant such facts and
circumstances antecedent to the issuance of the warrant that are in
themselves sufficient to induce a cautious man to rely upon them and act
in pursuance thereof (People v. Sy Juco, 64 Phil. 667).
This concept of probable cause was amplified and modified by our ruling
in Stonehill v. Diokno, (20 SCRA 383) that probable cause "presupposes
the introduction of competent proof that the party against whom it is
sought has performed particular acts, or committed specific omissions,
violating a given provision of our criminal laws."
The question of whether or not probable cause exists is one which must
be decided in the light of the conditions obtaining in given situations
(Central Bank v. Morfe, 20 SCRA 507). We agree that there is no general
formula or fixed rule for the determination of the existence of probable
cause since, as we have recognized in Luna v. Plaza (26 SCRA 310), the
existence depends to a large degree upon the finding or opinion of the
judge conducting the examination. However, the findings of the judge
should not disregard the facts before him nor run counter to the clear
dictates of reason. More so it is plain that our country's ability to abide by
international commitments is at stake.
The records show that the NBI agents at the hearing of the application for
the warrants before respondent court presented three witnesses under
oath, sworn statements, and various exhibits in the form of clothing
apparels manufactured by Hemandas but carrying the trademark
Lacoste. The respondent court personally interrogated Ramon Esguerra,
Samuel Fiji, and Mamerto Espatero by means of searching questions.
After hearing the testimonies and examining the documentary evidence,
the respondent court was convinced that there were good and sufficient
reasons for the issuance of the warrant. And it then issued the warrant.
The respondent court, therefore, complied with the constitutional and
statutory requirements for the issuance of a valid search warrant. At that
point in time, it was fully convinced that there existed probable cause. But
after hearing the motion to quash and the oppositions thereto, the
respondent court executed a complete turnabout and declared that there
was no probable cause to justify its earlier issuance of the warrants.
True, the lower court should be given the opportunity to correct its errors,
if there be any, but the rectification must, as earlier stated be based on
sound and valid grounds. In this case, there was no compelling
justification for the about face. The allegation that vital facts were
deliberately suppressed or concealed by the petitioner should have been
assessed more carefully because the object of the quashal was the
return of items already seized and easily examined by the court. The
items were alleged to be fake and quite obviously would be needed as
evidence in the criminal prosecution. Moreover, an application for a
search warrant is heard ex parte. It is neither a trial nor a part of the trial.
Action on these applications must be expedited for time is of the essence.
Great reliance has to be accorded by the judge to the testimonies under
oath of the complainant and the witnesses. The allegation of Hemandas
that the applicant withheld information from the respondent court was
clearly no basis to order the return of the seized items.
Hemandas relied heavily below and before us on the argument that it is
the holder of a certificate of registration of the trademark "CHEMISE
LACOSTE & CROCODILE DEVICE". Significantly, such registration is
only in the Supplemental Register.
A certificate of registration in the Supplemental Register is not prima
facie evidence of the validity of registration, of the registrant's exclusive
right to use the same in connection with the goods, business, or services
specified in the certificate. Such a certificate of registration cannot be
filed, with effect, with the Bureau of Customs in order to exclude from the
Philippines, foreign goods bearing infringement marks or trade names
(Rule 124, Revised Rules of Practice Before the Phil. Pat. Off. in
Trademark Cases; Martin, Philippine Commercial Laws, 1981, Vol. 2,
pp. 513-515).
Section 19-A of Republic Act 166 as amended not only provides for the
keeping of the supplemental register in addition to the principal register
but specifically directs that:
xxx xxx xxx
The certificates of registration for marks and trade names
registered on the supplemental register shall be
conspicuously different from certificates issued for marks
and trade names on the principal register.
xxx xxx xxx
The reason is explained by a leading commentator on Philippine
Commercial Laws:
The registration of a mark upon the supplemental register
is not, as in the case of the principal register, prima facie
evidence of (1) the validity of registration; (2) registrant's
ownership of the mark; and (3) registrant's exclusive right
to use the mark. It is not subject to opposition, although it
may be cancelled after its issuance. Neither may it be the
subject of interference proceedings. Registration on the
supplemental register is not constructive notice of
registrant's claim of ownership. A supplemental register is
provided for the registration of marks which are not
registrable on the principal register because of some
defects (conversely, defects which make a mark
unregistrable on the principal register, yet do not bar them
from the supplemental register.) (Agbayani, II Commercial
Laws of the Philippines, 1978, p. 514, citing Uy Hong Mo
v. Titay & Co., et al., Dec. No. 254 of Director of Patents,
Apr. 30, 1963);
Registration in the Supplemental Register, therefore, serves as notice
that the registrant is using or has appropriated the trademark. By the very
fact that the trademark cannot as yet be entered in the Principal Register,
all who deal with it should be on guard that there are certain defects,
some obstacles which the user must Still overcome before he can claim
legal ownership of the mark or ask the courts to vindicate his claims of an
exclusive right to the use of the same. It would be deceptive for a party
with nothing more than a registration in the Supplemental Register to
posture before courts of justice as if the registration is in the Principal
Register.
The reliance of the private respondent on the last sentence of the Patent
office action on application Serial No. 30954 that "registrant is presumed
to be the owner of the mark until after the registration is declared
cancelled" is, therefore, misplaced and grounded on shaky foundation,
The supposed presumption not only runs counter to the precept
embodied in Rule 124 of the Revised Rules of Practice before the
Philippine Patent Office in Trademark Cases but considering all the facts
ventilated before us in the four interrelated petitions involving the
petitioner and the respondent, it is devoid of factual basis. And even in
cases where presumption and precept may factually be reconciled, we
have held that the presumption is rebuttable, not conclusive, (People v.
Lim Hoa, G.R. No. L10612, May 30, 1958, Unreported). One may be
declared an unfair competitor even if his competing trademark is
registered (Parke, Davis & Co. v. Kiu Foo & Co., et al., 60 Phil. 928; La
Yebana Co. v. Chua Seco & Co., 14 Phil. 534).
By the same token, the argument that the application was premature in
view of the pending case before the Patent Office is likewise without legal
basis.
The proceedings pending before the Patent Office involving IPC Co. 1658
do not partake of the nature of a prejudicial question which must first be
definitely resolved.
Section 5 of Rule 111 of the Rules of Court provides that:
A petition for the suspension of the criminal action based
upon the pendency of a pre-judicial question in a civil
case, may only be presented by any party before or
during the trial of the criminal action.
The case which suspends the criminal prosecution must be a civil case
which is determinative of the innocence or, subject to the availability of
other defenses, the guilt of the accused. The pending case before the
Patent Office is an administrative proceeding and not a civil case. The
decision of the Patent Office cannot be finally determinative of the private
respondent's innocence of the charges against him.
In Flordelis v. Castillo (58 SCRA 301), we held that:
As clearly delineated in the aforecited provisions of the
new Civil Code and the Rules of Court, and as uniformly
applied in numerous decisions of this Court, (Berbari v.
Concepcion, 40 Phil. 837 (1920); Aleria v. Mendoza, 83
Phil. 427 (1949); People v. Aragon, 94 Phil. 357 (1954);
Brito-Sy v. Malate Taxicab & Garage, Inc., 102 Phil 482
(1957); Mendiola v. Macadael, 1 SCRA 593; Benitez v.
Concepcion, 2 SCRA 178; Zapante v. Montesa, 4 SCRA
510; Jimenez v. Averia, 22 SCRA 1380.) In Buenaventura
v. Ocampo (55 SCRA 271) the doctrine of prejudicial
question was held inapplicable because no criminal case
but merely an administrative case and a civil suit were
involved. The Court, however, held that, in view of the
peculiar circumstances of that case, the respondents' suit
for damages in the lower court was premature as it was
filed during the pendency of an administrative case
against the respondents before the POLCOM. 'The
possibility cannot be overlooked,' said the Court, 'that the
POLCOM may hand down a decision adverse to the
respondents, in which case the damage suit will become
unfounded and baseless for wanting in cause of action.')
the doctrine of pre-judicial question comes into play
generally in a situation where a civil action and a criminal
action both penned and there exists in the former an
issue which must be preemptively resolved before the
criminal action may proceed, because howsoever the
issue raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence of
the accused in the criminal case.
In the present case, no civil action pends nor has any been instituted.
What was pending was an administrative case before the Patent Office.
Even assuming that there could be an administrative proceeding with
exceptional or special circumstances which render a criminal prosecution
premature pending the promulgation of the administrative decision, no
such peculiar circumstances are present in this case.
Moreover, we take note of the action taken by the Patents Office and the
Minister of Trade and affirmed by the Intermediate Appellate Court in the
case of La Chemise Lacoste S. A. v. Ram Sadhwani (AC-G.R. No. SP-
13356, June 17, 1983).
The same November 20, 1980 memorandum of the Minister of Trade
discussed in this decision was involved in the appellate court's decision.
The Minister as the "implementing authority" under Article 6bis of the
Paris Convention for the protection of Industrial Property instructed the
Director of Patents to reject applications for Philippine registration of
signature and other world famous trademarks by applicants other than its
original owners or users. The brand "Lacoste" was specifically cited
together with Jordache, Gloria Vanderbilt, Sasson, Fila, Pierre Cardin,
Gucci, Christian Dior, Oscar dela Renta, Calvin Klein, Givenchy, Ralph
Laurence, Geoffrey Beene, Lanvin, and Ted Lapidus. The Director of
Patents was likewise ordered to require Philippine registrants of such
trademarks to surrender their certificates of registration. Compliance by
the Director of Patents was challenged.
The Intermediate Appellate Court, in the La Chemise Lacoste S.A. v.
Sadhwani decision which we cite with approval sustained the power of
the Minister of Trade to issue the implementing memorandum and, after
going over the evidence in the records, affirmed the decision of the
Director of Patents declaring La Chemise Lacoste &A. the owner of the
disputed trademark and crocodile or alligator device. The Intermediate
Appellate Court speaking through Mr. Justice Vicente V. Mendoza stated:
In the case at bar, the Minister of Trade, as 'the
competent authority of the country of registration,' has
found that among other well-known trademarks 'Lacoste'
is the subject of conflicting claims. For this reason,
applications for its registration must be rejected or
refused, pursuant to the treaty obligation of the
Philippines.
Apart from this finding, the annexes to the opposition,
which La Chemise Lacoste S.A. filed in the Patent Office,
show that it is the owner of the trademark 'Lacoste' and
the device consisting of a representation of a crocodile or
alligator by the prior adoption and use of such mark and
device on clothing, sports apparel and the like. La
Chemise Lacoste S.A, obtained registration of these mark
and device and was in fact issued renewal certificates by
the French National Industry Property Office.
xxx xxx xxx
Indeed, due process is a rule of reason. In the case at bar
the order of the Patent Office is based not only on the
undisputed fact of ownership of the trademark by the
appellee but on a prior determination by the Minister of
Trade, as the competent authority under the Paris
Convention, that the trademark and device sought to be
registered by the appellant are well-known marks which
the Philippines, as party to the Convention, is bound to
protect in favor of its owners. it would be to exalt form
over substance to say that under the circumstances, due
process requires that a hearing should be held before the
application is acted upon.
The appellant cites section 9 of Republic Act No. 166,
which requires notice and hearing whenever an
opposition to the registration of a trademark is made. This
provision does not apply, however, to situations covered
by the Paris Convention, where the appropriate
authorities have determined that a well-known trademark
is already that of another person. In such cases, the
countries signatories to the Convention are obliged to
refuse or to cancel the registration of the mark by any
other person or authority. In this case, it is not disputed
that the trademark Lacoste is such a well-known mark
that a hearing, such as that provided in Republic Act No.
166, would be superfluous.
The issue of due process was raised and fully discussed in the appellate
court's decision. The court ruled that due process was not violated.
In the light of the foregoing it is quite plain that the prejudicial question
argument is without merit.
We have carefully gone over the records of all the cases filed in this
Court and find more than enough evidence to sustain a finding that the
petitioner is the owner of the trademarks "LACOSTE", "CHEMISE
LACOSTE", the crocodile or alligator device, and the composite mark of
LACOSTE and the representation of the crocodile or alligator. Any
pretensions of the private respondent that he is the owner are absolutely
without basis. Any further ventilation of the issue of ownership before the
Patent Office will be a superfluity and a dilatory tactic.
The issue of whether or not the trademark used by the private respondent
is different from the petitioner's trade mark is a matter of defense and will
be better resolved in the criminal proceedings before a court of justice
instead of raising it as a preliminary matter in an administrative
proceeding.
The purpose of the law protecting a trademark cannot be
overemphasized. They are to point out distinctly the origin or ownership
of the article to which it is affixed, to secure to him, who has been
instrumental in bringing into market a superior article of merchandise, the
fruit of his industry and skill, and to prevent fraud and imposition (Etepha
v. Director of Patents, 16 SCRA 495).
The legislature has enacted laws to regulate the use of trademarks and
provide for the protection thereof. Modern trade and commerce demands
that depredations on legitimate trade marks of non-nationals including
those who have not shown prior registration thereof should not be
countenanced. The law against such depredations is not only for the
protection of the owner of the trademark but also, and more importantly,
for the protection of purchasers from confusion, mistake, or deception as
to the goods they are buying. (Asari Yoko Co., Ltd. v. Kee Boc, 1 SCRA
1; General Garments Corporation v. Director of Patents, 41 SCRA 50).
The law on trademarks and tradenames is based on the principle of
business integrity and common justice' This law, both in letter and spirit,
is laid upon the premise that, while it encourages fair trade in every way
and aims to foster, and not to hamper, competition, no one, especially a
trader, is justified in damaging or jeopardizing another's business by
fraud, deceipt, trickery or unfair methods of any sort. This necessarily
precludes the trading by one dealer upon the good name and reputation
built up by another (Baltimore v. Moses, 182 Md 229, 34 A (2d) 338).
The records show that the goodwill and reputation of the petitioner's
products bearing the trademark LACOSTE date back even before 1964
when LACOSTE clothing apparels were first marketed in the Philippines.
To allow Hemandas to continue using the trademark Lacoste for the
simple reason that he was the first registrant in the Supplemental
Register of a trademark used in international commerce and not
belonging to him is to render nugatory the very essence of the law on
trademarks and tradenames.
We now proceed to the consideration of the petition in Gobindram
Hemandas Suianani u. Hon. Roberto V Ongpin, et al. (G.R. No. 65659).
Actually, three other petitions involving the same trademark and device
have been filed with this Court.
In Hemandas & Co. v. Intermediate Appellate Court, et al. (G.R. No.
63504) the petitioner asked for the following relief:
IN VIEW OF ALL THE FOREGOING, it is respectfully
prayed (a) that the Resolutions of the respondent Court of
January 3, 1983 and February 24, 1983 be nullified; and
that the Decision of the same respondent Court of June
30, 1983 be declared to be the law on the matter; (b) that
the Director of Patents be directed to issue the
corresponding registration certificate in the Principal
Register; and (c) granting upon the petitioner such other
legal and equitable remedies as are justified by the
premises.
On December 5, 1983, we issued the following resolution:
Considering the allegations contained, issues raised and
the arguments adduced in the petition for review, the
respondent's comment thereon, and petitioner's reply to
said comment, the Court Resolved to DENY the petition
for lack of merit.
The Court further Resolved to CALL the attention of the
Philippine Patent Office to the pendency in this Court of
G.R. No. 563796-97 entitled 'La Chemise Lacoste, S.A. v.
Hon. Oscar C. Fernandez and Gobindram Hemandas'
which was given due course on June 14, 1983 and to the
fact that G.R. No. 63928-29 entitled 'Gobindram
Hemandas v. La Chemise Lacoste, S.A., et al.' filed on
May 9, 1983 was dismissed for lack of merit on
September 12, 1983. Both petitions involve the same
dispute over the use of the trademark 'Chemise Lacoste'.
The second case of Gobindram Hemandas vs. La Chemise Lacoste,
S.A., et al. (G.R. No. 63928-29) prayed for the following:
I. On the petition for issuance of writ of preliminary
injunction, an order be issued after due hearing:
l. Enjoining and restraining respondents Company,
attorneys-in-fact, and Estanislao Granados from further
proceedings in the unfair competition charges pending
with the Ministry of Justice filed against petitioner;
2. Enjoining and restraining respondents Company and its
attorneys-in-fact from causing undue publication in
newspapers of general circulation on their unwarranted
claim that petitioner's products are FAKE pending
proceedings hereof; and
3. Enjoining and restraining respondents Company and its
attorneys-in-fact from sending further threatening letters
to petitioner's customers unjustly stating that petitioner's
products they are dealing in are FAKE and threatening
them with confiscation and seizure thereof.
II. On the main petition, judgment be rendered:
 l. Awarding and granting the issuance of the Writ of
Prohibition, prohibiting, stopping, and restraining
respondents from further committing the acts complained
of;
2. Awarding and granting the issuance of the Writ of
Mandamus, ordering and compelling respondents
National Bureau of Investigation, its aforenamed agents,
and State Prosecutor Estanislao Granados to immediately
comply with the Order of the Regional Trial Court,
National Capital Judicial Region, Branch XLIX, Manila,
dated April 22, 1983, which directs the immediate return
of the seized items under Search Warrants Nos. 83-128
and 83-129;
3. Making permanent any writ of injunction that may have
been previously issued by this Honorable Court in the
petition at bar: and
4. Awarding such other and further relief as may be just
and equitable in the premises.
As earlier stated, this petition was dismissed for lack of merit on
September 12, 1983. Acting on a motion for reconsideration, the Court on
November 23, 1983 resolved to deny the motion for lack of merit and
declared the denial to be final.
Hemandas v. Hon. Roberto Ongpin (G.R. No. 65659) is the third petition.
In this last petition, the petitioner prays for the setting aside as null and
void and for the prohibiting of the enforcement of the following
memorandum of respondent Minister Roberto Ongpin:
MEMORANDUM:
FOR: THE DIRECTOR OF PATENTS
Philippine Patent Office
xxx xxx xxx
Pursuant to Executive Order No. 913 dated 7 October 1983 which
strengthens the rule-making and adjudicatory powers of the Minister of
Trade and Industry and provides inter alia, that 'such rule-making and
adjudicatory powers should be revitalized in order that the Minister of
Trade and Industry can ...apply more swift and effective solutions and
remedies to old and new problems ... such as the infringement of
internationally-known tradenames and trademarks ...'and in view of the
decision of the Intermediate Appellate Court in the case of LA CHEMISE
LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. Sp. No. 13359 (17)
June 1983] which affirms the validity of the MEMORANDUM of then
Minister Luis R. Villafuerte dated 20 November 1980 confirming our
obligations under the PARIS CONVENTION FOR THE PROTECTION
OF INDUSTRIAL PROPERTY to which the Republic of the Philippines is
a signatory, you are hereby directed to implement measures necessary to
effect compliance with our obligations under said convention in general,
and, more specifically, to honor our commitment under Section 6
bis thereof, as follows:
1. Whether the trademark under consideration is well-
known in the Philippines or is a mark already belonging to
a person entitled to the benefits of the CONVENTION,
this should be established, pursuant to Philippine Patent
Office procedures in inter partes and ex parte cases,
according to any of the following criteria or any
combination thereof:
(a) a declaration by the Minister of Trade and Industry
that' the trademark being considered is already well-
known in the Philippines such that permission for its use
by other than its original owner will constitute a
reproduction, imitation, translation or other infringement;
(b) that the trademark is used in commerce
internationally, supported by proof that goods bearing the
trademark are sold on an international scale,
advertisements, the establishment of factories, sales
offices, distributorships, and the like, in different countries,
including volume or other measure of international trade
and commerce;
(c) that the trademark is duly registered in the industrial
property office(s) of another country or countries, taking
into consideration the dates of such registration;
(d) that the trademark has been long established and
obtained goodwill and general international consumer
recognition as belonging to one owner or source;
(e) that the trademark actually belongs to a party claiming
ownership and has the right to registration under the
provisions of the aforestated PARIS CONVENTION.
2. The word trademark, as used in this MEMORANDUM,
shall include tradenames, service marks, logos, signs,
emblems, insignia or other similar devices used for
Identification and recognition by consumers.
3. The Philippine Patent Office shall refuse all applications
for, or cancel the registration of, trademarks which
constitute a reproduction, translation or imitation of a
trademark owned by a person, natural or corporate, who
is a citizen of a country signatory to the PARIS
CONVENTION FOR THE PROTECTION OF
INDUSTRIAL PROPERTY.
4. The Philippine Patent Office shall give due course to
the Opposition in cases already or hereafter filed against
the registration of trademarks entitled to protection
of Section 6 bis of said PARIS CONVENTION as outlined
above, by remanding applications filed by one not entitled
to such protection for final disallowance by the
Examination Division.
5. All pending applications for Philippine registration of
signature and other world famous trademarks filed by
applicants other than their original owners or users shall
be rejected forthwith. Where such applicants have already
obtained registration contrary to the abovementioned
PARIS CONVENTION and/or Philippine Law, they shall
be directed to surrender their Certificates of Registration
to the Philippine Patent Office for immediate cancellation
proceedings.
6. Consistent with the foregoing, you are hereby directed
to expedite the hearing and to decide without delay the
following cases pending before your Office:
1. INTER PARTES CASE NO. 1689-Petition filed by La
Chemise Lacoste, S.A. for the cancellation of Certificate
of Registration No. SR-2225 issued to Gobindram
Hemandas, assignee of Hemandas and Company;
2. INTER PARTES CASE NO. 1658-Opposition filed by
Games and Garments Co. against the registration of the
trademark Lacoste sought by La Chemise Lacoste, S.A.;
3. INTER PARTES CASE NO. 1786-Opposition filed by
La Chemise Lacoste, S.A. against the registration of
trademark Crocodile Device and Skiva sought by one
Wilson Chua.
Considering our discussions in G.R. Nos. 63796-97, we find the petition
in G.R. No. 65659 to be patently without merit and accordingly deny it
due course.
In complying with the order to decide without delay the cases specified in
the memorandum, the Director of Patents shall limit himself to the
ascertainment of facts in issues not resolved by this decision and apply
the law as expounded by this Court to those facts.
One final point. It is essential that we stress our concern at the seeming
inability of law enforcement officials to stem the tide of fake and
counterfeit consumer items flooding the Philippine market or exported
abroad from our country. The greater victim is not so much the
manufacturer whose product is being faked but the Filipino consuming
public and in the case of exportations, our image abroad. No less than
the President, in issuing Executive Order No. 913 dated October 7, 1983
to strengthen the powers of the Minister of Trade and Industry for the
protection of consumers, stated that, among other acts, the dumping of
substandard, imitated, hazardous, and cheap goods, the infringement of
internationally known tradenames and trademarks, and the unfair trade
practices of business firms has reached such proportions as to constitute
economic sabotage. We buy a kitchen appliance, a household tool,
perfume, face powder, other toilet articles, watches, brandy or whisky,
and items of clothing like jeans, T-shirts, neck, ties, etc. — the list is quite
length — and pay good money relying on the brand name as guarantee
of its quality and genuine nature only to explode in bitter frustration and
genuine nature on helpless anger because the purchased item turns out
to be a shoddy imitation, albeit a clever looking counterfeit, of the quality
product. Judges all over the country are well advised to remember that
court processes should not be used as instruments to, unwittingly or
otherwise, aid counterfeiters and intellectual pirates, tie the hands of the
law as it seeks to protect the Filipino consuming public and frustrate
executive and administrative implementation of solemn commitments
pursuant to international conventions and treaties.
WHEREFORE, the petition in G.R. NOS. 63797-97 is hereby GRANTED.
The order dated April 22, 1983 of the respondent regional trial court is
REVERSED and SET ASIDE. Our Temporary Restraining Order dated
April 29, 1983 is ma(i.e. PERMANENT. The petition in G.R. NO. 65659 is
DENIED due course for lack of merit. Our Temporary Restraining Order
dated December 5, 1983 is LIFTED and SET ASIDE, effective
immediately.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Relova and De la
Fuente, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
 
G.R. No. L-32293 January 24, 1974
ROBERTO OCAMPO, petitioner,
vs.
FERNANDO BUENAVENTURA, JOSE VASQUEZ, ADOLFO
BELDEROL, POTENCIANO ADOBAS, JR., and JUDGE MATEO
CANONOY, Court of First Instance of Cebu, respondents.
Rafael D. de la Victoria for petitioner.
Seno, Mendoza and Associates for respondents.
ESGUERRA, J.: 1äwphï1.ñët
Petition for certiorari and prohibition seeking to annul the order
dated June 1, 1970, of respondent Judge Hon. Mateo Canonoy, then
of Branch III, Court of First Instance of Cebu, denying petitioner's
motion to dismiss and/or suspend the trial of its Civil Case No. R-
11320, entitled "Fernando Buenaventura, et al. v. Roberto Ocampo",
including the order denying his motion for reconsideration thereof.
Petitioner further prays this Court to make permanent the
preliminary injunction issued on October 9, 1970, restraining
respondent Judge from further proceeding with Civil Case No. R-
11320.
The records of this case establish the following facts:
On September 11, 1966, respondents Fernando Buenaventura, Jose
Vasquez, Adolfo Belderol and Potenciano Adobes, Jr., all members
of the Cebu Police Department, arrested and detained in the City Jail
of Cebu, Edgar Ocampo (petitioner's son) and Paul, Jade, Cesar and
Julius, all surnamed Ocampo (his nephews), together with one
George Namok (a friend of the Ocampo boys), all minors, for an
alleged violation of Section 1 of Ordinance No. 345 which amended
Ordinance No. 228 fixing curfew hours. This Ordinance penalizes
the "wandering, sauntering or loitering of minors in any street, wood
or alley." Pursuant to said arrest, the City Fiscal of Cebu filed an
information in the city court and the minors were convicted for
violation of the said ordinance. On appeal to the Court of First
Instance, however, Judge Tantuico, on March 3, 1969, noting the
exception under Section 3 of Ordinance 228 which provides:
The provisions of Section 1 hereof shall not be
applicable to minors attending or participating in, or
going home from, purely scholastic functions,
commencement exercises, convocations, educational
and religious programs or in wholesome and decent
assemblage, and during yuletide masses, New Year's
eve and Holy Week cults, during the hours mentioned
therein.
acquitted the accused minors, ruling that since they came from a
birthday party considered as a wholesome and decent assemblage,
the minors fell within the exception and committed no violation of
the ordinance in question.
Meanwhile, petitioner Roberto Ocampo on September 19, 1966, filed
a complaint with the City Mayor's office charging the respondents
policemen with serious misconduct, grave abuse of authority and
commission of a felony. On August 8, 1967, the Mayor issued
Administrative Order No. 157 exonerating the policemen. On March
17, 1969, a complaint was lodged with the Police Commission
(POLCOM) for serious misconduct, abuse of authority and
commission of an act constituting a felony, which administrative
case is still pending up to the present.
On June 4, 1969, respondents herein filed a complaint for damages
against petitioner. On May 22, 1970, petitioner filed a motion to
dismiss and/or suspension of the trial of the case on the merits on
the following grounds: (1) existence of a prejudicial question and (2)
that the action is premature. This motion was denied by respondent
Judge in an order dated June 1, 1970. The petitioner's motion for
reconsideration thereof having been also denied, the instant petition
was filed.
In the meantime respondent Fernando Buenaventura died and he
was substituted herein by his widow, Guillerma Cosca
Buenaventura, and his heirs, Carlos, Cora, Eva Araceli, Fernando,
Jr., Rene Victor, Helen Grace, Flora Vicente, and Jose Adolfo, all
surnamed "Buenaventura".
The main question to be resolved is whether or not the court a
quo abused its discretion in denying petitioner's motion to dismiss
and/or suspend the trial of the case on the merits. The first ground
thereof (prejudicial question) is entirely inapplicable. In accordance
with Article 36 of the Civil Code, a prejudicial question must be
decided before any criminal prosecution based on the same facts
may proceed.  There is no prejudicial question here since there is
<äre||anº•1àw>
no criminal prosecution involved, the petitioner's case before the
POLCOM being administrative in nature and the respondents' case
before the Court of First Instance of Cebu is a simple civil suit for
damages not based on a crime but on alleged harassment by the
petitioner in charging them administratively before the City Mayor
and before the POLCOM. A careful consideration of the record
discloses that the principal issue in the complaint for damages is
the alleged malicious filing of the administrative cases by the
petitioner against the policemen respondents. The determination of
this question is primarily dependent on the outcome of the
administrative case before the POLCOM. The respondents'
complaint for damages is based on their claim that the
administrative case filed against them before the POLCOM is
malicious, unfounded and aimed to harass them. The veracity of
this allegation is not for us to determine, for if We rule and allow the
civil case for damages to proceed on that ground, there is the
possibility that the court a quo in deciding said case might declare
the respondents victims of harassment and thereby indirectly
interfere with the proceedings before the POLCOM. The
respondents' case for damages before the lower court is, therefore,
premature as it was filed during the pendency of the administrative
case against the respondents before the POLCOM. The possibility
cannot be overlooked that the POLCOM may hand down a decision
adverse to the respondents, in which case the damage suit will
become unfounded and baseless for wanting in cause of action. Of
persuasive force is the ruling in William H. Brown vs. Bank Of the
Philippine Islands and Santiago Freixas, 101 Phil. 309, 312, where
this Court said:
... In effect, plaintiff herein seeks to recover damages
upon the ground that the detainer case has been filed,
and is being maintained, maliciously and without
justification; but this pretense affects the merits of
said detainer case. Should final judgment be
eventually rendered in that case in favor of the
plaintiffs therein, such the one rendered in the
municipal court, the validity of the cause of action
said lessors against Brown, would thereby be
conclusively established, and, necessarily, his
contention in the present case would have to be
rejected. Similarly, we can, not sustain the theory of
Brown in the case at bar, without prejudging the issue
in the detainer case, which is still pending: Until final
determination of said case, plaintiff herein cannot,
and does not, have, therefore, a cause of action — if
any, on which we do not express our opinion —
against the herein defendants. In short, the lower
court has correctly held that the present action is
premature and, that, consequently, the complaint
herein does not set for a cause of action against the
defendants.
On the ground that the suit for damages is premature, the trial court,
instead of denying petitioner's motion to dismiss and/or suspend
the trial on the merits, should have held action thereon in abeyance
pending determination of the case before the POLCOM.
Respondents likewise plead res judicata to defeat this action,
contending that the administrative case before the POLCOM should
have been dismissed as it is barred by a prior judgment — that
embodied in the City Mayor's Administrative Order No. 157 —
exonerating herein respondents policemen. The argument is devoid
of merit. A review of the essential requisites of res judicata,  viz: (1)
1
it must have been rendered by a court having jurisdiction of the
subject matter and the parties; (2) the former judgment must be
final; (3) it must be a judgment on the merits; (4) there must be
between the 1st and 2nd actions [a] identity of parties; [b] identity of
subject matter; and [c] identity of cause of action, exposes the
glaring weakness of respondents' contention. On the first requisite
alone, that of jurisdiction, respondents miserably failed to meet the
requirements of the rule invoked. The City Mayor of Cebu was
without jurisdiction to try, hear and decide administrative cases
either under Republic Act No. 557 (An Act Providing For the
Suspension or Removal of the Members of the Provincial Guards,
City Police and Municipal Police by the Provincial Governor, City
Mayor Or Municipal Mayor), or under Republic Act 4864 (An Act
Creating the Police Commission, Amending and Revising the Laws
Relative to the Local Police System, and For Other Purposes).
In Manuel v. De la Fuente, etc., et al.,  this Court said: "Of course, it
2
should not be understood that the City Mayor, for the purpose of
determining whether he should exercise his power of suspension
conferred by Republic Act 557, may not conduct his own
investigation; but this inquiry cannot replace the investigation that
should be conducted under Republic Act No. 557 by the Municipal
Board and which should form the basis for final administrative
action or decision by said Board appealable to the Commissioner of
Civil Service." The Court further said: "... the obvious innovations
introduced by Republic Act No. 557 lie in the fact that the Municipal
Board had been granted the exclusive power to investigate, with the
Mayor being conferred only the power to prefer charges against a
member of the city police ...; that the Municipal Board, not
the Mayor, decides the case; and that the decision may be appealed
to the Commissioner of Civil Service, instead of to the Secretary of
the Interior."  (Emphasis Ours). The power to investigate and decide
3 case on the merits: "... considering that the said
administrative cases involving police service and personnel has been
transferred to the POLCOM.
In the motion to dismiss filed before the Board of Investigators of the
Police Commission,  respondents alleged that the proceedings in the city
4
mayor's office cannot be attacked, invoking for the purpose Section 26 of
the Police Commission Act, to wit:
Section 26. Saving Clause.— All pending administrative
cases involving police service and personnel shall be
absorbed by the Police Commission one hundred days
after the publication of the Police Manual containing rules
and regulations relative to such matters.
The trust of their argument is that the city mayor then had jurisdiction
because his decision was rendered on August 8, 1967, while the Police
Manual was promulgated later on December 30, 1967. But the ruling
in Police Commission v. Hon. Judge Eloy Bello,
et al.  where this Court had occasion to elucidate on the "saving clause"
5
of the POLCOM Act, is relevant to the issue and disposes of the
respondents' argument. This Court said:
Section 26 of the Police Act is, as expressly stated
therein, a mere saving clause, and refers solely to the
administrative cases involving police service and
personnel which were pending at the time of the effectivity
of the Act.
The Police Commission was required to absorb the said
pending cases within 100 days after it shall have
published a Police Manual. The said Section 26 may not
be interpreted to mean that the Board of Investigators of
each city or municipality and the Police Commission
could not legally function to carry into effect the purposes
of the Act until after the lapse of the said 100 days,
because Section 28 provides that '(t)his Act shall take
effect upon its approval.' Since the Act was approved on
September 8, 1966, it became effective immediately on
that date. (Emphasis Ours.)
Lastly respondent Judge in his order in question dated
June 1, 1970, gave the following reason for denying the
motion to dismiss and/or suspension of the trial of the
defendant has already filed his answer, containing special
defenses embodying the grounds stated in the motion to
dismiss and/or suspension of the trial ..., the said motion
to dismiss and/or suspension of trial is hereby denied."
The denial is apparently predicated on the prior filing of
an answer.
As a general rule a motion to dismiss is interposed before the defendant
pleads (Section 1, Rule 16, Rules of Court). However, there is no rule or
law prohibiting the defendant from filing a motion to dismiss after an
answer had been filed. On the contrary, Section 2 of Rule 9, expressly
authorizes the filing of such motion at any stage of the proceedings when
it is based upon failure to state a cause of action,  as in the case at bar
6

where the complaint failed to state a cause of action as alleged by

petitioner in his very motion to dismiss and/or suspension of the trial. The
respondent Judge therefore, erred in denying said motion. The
surrounding circumstance at the time of the filing of said motion
warranted suspension of the trial on the merits.

ACCORDINGLY, the order appealed from, dated June 1, 1970, denying

the motion to dismiss and/or suspension of the trial of the case on the
merits, including the order denying the motion for reconsideration thereof,
is hereby set aside. The hearing of Civil Case R-11320 of the Court of
First Instance of Cebu, Branch III, shall be held in abeyance pending
determination of the administrative case against the respondents before
the POLCOM.

The Court's writ of preliminary injunction dated October 9, 1970,

restraining respondent court from proceeding with the damage suit
against petitioner shall stand until the POLCOM decides the said
administrative case; if it is decided adversely against respondents, the
injunction shall become permanent, while if it is decided in their favor,
then this damage suit may proceed to trial and determination on its merits
by respondent court.

No special pronouncement as to costs.

Makalintal, C.J., Castro, Teehankee, Makasiar and Muñoz Palma, JJ.,

concur.1äwphï1.ñët

 
 On August 26, 1982, Civil Case No. 47466 for the grant of an easement
of right of way was filed by Pacifico Mabasa against Cristino Custodio,
Brigida R. Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina
C. Santos before the Regional Trial Court of Pasig and assigned to
Branch 22 thereof. 2

The generative facts of the case, as synthesized by the trial court and
adopted by the Court of Appeals, are as follows:

Perusing the record, this Court finds that the original plaintiff
Pacifico Mabasa died during the pendency of this case and was
substituted by Ofelia Mabasa, his surviving spouse [and children].

The plaintiff owns a parcel of land with a two-door apartment

erected thereon situated at Interior P. Burgos St., Palingon,
Tipas, Tagig, Metro Manila. The plaintiff was able to acquire said
property through a contract of sale with spouses Mamerto Rayos
Republic of the Philippines and Teodora Quintero as vendors last September 1981. Said
SUPREME COURT property may be described to be surrounded by other
Manila immovables pertaining to defendants herein. Taking P. Burgos
Street as the point of reference, on the left side, going to plaintiff's
SECOND DIVISION property, the row of houses will be as follows: That of defendants
Cristino and Brigido Custodio, then that of Lito and Maria Cristina
G.R. No. 116100             February 9, 1996 Santos and then that of Ofelia Mabasa. On the right side (is) that
of defendant Rosalina Morato and then a Septic Tank (Exhibit
SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO "D"). As an access to P. Burgos Street from plaintiff's property,
and MARIA CRISTINA SANTOS, petitioners, there are two possible passageways. The first passageway is
vs. approximately one meter wide and is about 20 meters distan(t)
COURT OF APPEALS, HEIRS OF PACIFICO C. MABASA and from Mabasa's residence to P. Burgos Street. Such path is
REGIONAL TRIAL COURT OF PASIG, METRO MANILA, BRANCH passing in between the previously mentioned row of houses. The
181, respondents. second passageway is about 3 meters in width and length from
plaintiff Mabasa's residence to P. Burgos Street; it is about 26
DECISION meters. In passing thru said passageway, a less than a meter
wide path through the septic tank and with 5-6 meters in length,
has to be traversed.
REGALADO, J.:
When said property was purchased by Mabasa, there were
This petition for review on certiorari assails the decision of respondent
tenants occupying the remises and who were acknowledged by
Court of Appeals in CA-G.R. CV No. 29115, promulgated on November
plaintiff Mabasa as tenants. However, sometime in February,
10, 1993, which affirmed with modification the decision of the trial court,
1982, one of said tenants vacated the apartment and when
as well as its resolution dated July 8, 1994 denying petitioner's motion for
plaintiff Mabasa went to see the premises, he saw that there had
reconsideration.1

been built an adobe fence in the first passageway making it

narrower in width. Said adobe fence was first constructed by
defendants Santoses along their property which is also along the
 first passageway. Defendant Morato constructed her adobe fence
and even extended said fence in such a way that the entire
passageway was enclosed. (Exhibit "1-Santoses and Custodios,
Exh. "D" for plaintiff, Exhs. "1-C", "1-D" and "1-E") And it was then
that the remaining tenants of said apartment vacated the area.
Defendant Ma. Cristina Santos testified that she constructed said
fence because there was an incident when her daughter was
dragged by a bicycle pedalled by a son of one of the tenants in
said apartment along the first passageway. She also mentioned
some other inconveniences of having (at) the front of her house a
pathway such as when some of the tenants were drunk and
would bang their doors and windows. Some of their footwear
were even lost. . . . (Emphasis in original text; corrections in
3 
parentheses supplied)
On February 27, 1990, a decision was rendered by the trial court, with
this dispositive part:
Accordingly, judgment is hereby rendered as follows:
1) Ordering defendants Custodios and Santoses to give plaintiff
permanent access ingress and egress, to the public street;
2) Ordering the plaintiff to pay defendants Custodios and
Santoses the sum of Eight Thousand Pesos (P8,000) as
indemnity for the permanent use of the passageway.
The parties to shoulder their respective litigation expenses. 4 expressed by the court a quo. These assigned errors, in turn, may be
Not satisfied therewith, therein plaintiff represented by his heirs, herein
private respondents, went to the Court of Appeals raising the sole issue
of whether or not the lower court erred in not awarding damages in their
favor. On November 10, 1993, as earlier stated, the Court of Appeals
rendered its decision affirming the judgment of the trial court with
modification, the decretal portion of which disposes as follows:
WHEREFORE, the appealed decision of the lower court is hereby
AFFIRMED WITH MODIFICATION only insofar as the herein
grant of damages to plaintiffs-appellants. The Court hereby
orders defendants-appellees to pay plaintiffs-appellants the sum
of Sixty Five Thousand (P65,000) Pesos as Actual Damages,
Thirty Thousand (P30,000) Pesos as Moral Damages, and Ten
Thousand (P10,000) Pesos as Exemplary Damages. The rest of
the appealed decision is affirmed to all respects. 5
On July 8, 1994, the Court of Appeals denied petitioner's motion for
reconsideration. Petitioners then took the present recourse to us, raising
6 
two issues, namely, whether or not the grant of right of way to herein
private respondents is proper, and whether or not the award of damages
is in order.
With respect to the first issue, herein petitioners are already barred from
raising the same. Petitioners did not appeal from the decision of the
court a quo granting private respondents the right of way, hence they are
presumed to be satisfied with the adjudication therein. With the finality of
the judgment of the trial court as to petitioners, the issue of propriety of
the grant of right of way has already been laid to rest.
For failure to appeal the decision of the trial court to the Court of Appeals,
petitioners cannot obtain any affirmative relief other than those granted in
the decision of the trial court. That decision of the court below has
become final as against them and can no longer be reviewed, much less
reversed, by this Court. The rule in this jurisdiction is that whenever an
appeal is taken in a civil case, an appellee who has not himself appealed
may not obtain from the appellate court any affirmative relief other than
what was granted in the decision of the lower court. The appellee can
only advance any argument that he may deem necessary to defeat the
appellant's claim or to uphold the decision that is being disputed, and he
can assign errors in his brief if such is required to strengthen the views
considered by the appellate court solely to maintain the appealed
decision on other grounds, but not for the purpose of reversing or
modifying the judgment in the appellee's favor and giving him other
affirmative reliefs. 7
However, with respect to the second issue, we agree with petitioners that
the Court of Appeals erred in awarding damages in favor of private
respondents. The award of damages has no substantial legal basis. A
reading of the decision of the Court of Appeals will show that the award of
damages was based solely on the fact that the original plaintiff, Pacifico
Mabasa, incurred losses in the form of unrealized rentals when the
tenants vacated the leased premises by reason of the closure of the
passageway.
However, the mere fact that the plaintiff suffered losses does not give rise
to a right to recover damages. To warrant the recovery of damages, there
must be both a right of action for a legal wrong inflicted by the defendant,
and damage resulting to the plaintiff therefrom. Wrong without damage,
or damage without wrong, does not constitute a cause of action, since
damages are merely part of the remedy allowed for the injury caused by
a breach or wrong. 8
There is a material distinction between damages and injury. Injury is the
illegal invasion of a legal right; damage is the loss, hurt, or harm which
results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be
damage without injury in those instances in which the loss or harm was
not the result of a violation of a legal duty. These situations are often
called damnum absque injuria. 9
In order that a plaintiff may maintain an action for the injuries of which he
complains, he must establish that such injuries resulted from a breach of
duty which the defendant owed to the plaintiff a concurrence of injury to
the plaintiff and legal responsibility by the person causing it. The
10 
underlying basis for the award of tort damages is the premise that an
individual was injured in contemplation of law. Thus, there must first be
the breach of some duty and the imposition of liability for that breach
before damages may be awarded; it is not sufficient to state that there
should be tort liability merely because the plaintiff suffered some pain and
suffering.
11
Many accidents occur and many injuries are inflicted by acts or omissions
which cause damage or loss to another but which violate no legal duty to
such other person, and consequently create no cause of action in his
favor. In such cases, the consequences must be borne by the injured
person alone. The law affords no remedy for damages resulting from an
act which does not amount to a legal injury or wrong. 12
In other words, in order that the law will give redress for an act causing
damage, that act must be not only hurtful, but wrongful. There must
be damnum et injuria. If, as may happen in many cases, a person
13 
sustains actual damage, that is, harm or loss to his person or property,
without sustaining any legal injury, that is, an act or omission which the
law does not deem an injury, the damage is regarded as damnum
absque injuria.14
In the case at bar, although there was damage, there was no legal injury.
Contrary to the claim of private respondents, petitioners could not be said
to have violated the principle of abuse of right. In order that the principle
of abuse of right provided in Article 21 of the Civil Code can be applied, it
is essential that the following requisites concur: (1) The defendant should
have acted in a manner that is contrary to morals, good customs or public
policy; (2) The acts should be willful; and (3) There was damage or injury
to the plaintiff.
15
The act of petitioners in constructing a fence within their lot is a valid
exercise of their right as owners, hence not contrary to morals, good
customs or public policy. The law recognizes in the owner the right to
enjoy and dispose of a thing, without other limitations than those
established by law. It is within the right of petitioners, as owners, to
16 
enclose and fence their property. Article 430 of the Civil Code provides
that "(e)very owner may enclose or fence his land or tenements by
means of walls, ditches, live or dead hedges, or by any other means
without detriment to servitudes constituted thereon."
At the time of the construction of the fence, the lot was not subject to any
servitudes. There was no easement of way existing in favor of private
respondents, either by law or by contract. The fact that private
respondents had no existing right over the said passageway is confirmed
by the very decision of the trial court granting a compulsory right of way in
their favor after payment of just compensation. It was only that decision
which gave private respondents the right to use the said passageway
after payment of the compensation and imposed a corresponding duty on
petitioners not to interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute right over their
property and their act of fencing and enclosing the same was an act
which they may lawfully perform in the employment and exercise of said
right. To repeat, whatever injury or damage may have been sustained by
private respondents by reason of the rightful use of the said land by
petitioners is damnum absque injuria. 17
A person has a right to the natural use and enjoyment of his own
property, according to his pleasure, for all the purposes to which such
property is usually applied. As a general rule, therefore, there is no cause
of action for acts done by one person upon his own property in a lawful
and proper manner, although such acts incidentally cause damage or an
unavoidable loss to another, as such damage or loss is damnum absque
injuria.  When the owner of property makes use thereof in the general
18 
and ordinary manner in which the property is used, such as fencing or
enclosing the same as in this case, nobody can complain of having been
injured, because the incovenience arising from said use can be
considered as a mere consequence of community life.  19
The proper exercise of a lawful right cannot constitute a legal wrong for
which an action will lie,  although the act may result in damage to
20  Resolution of September 2, 1976, both Petitions were ordered
another, for no legal right has been invaded.  One may use any lawful
21  consolidated.
means to accomplish a lawful purpose and though the means adopted
may cause damage to another, no cause of action arises in the latter's
favor. An injury or damage occasioned thereby is damnum absque
injuria. The courts can give no redress for hardship to an individual
resulting from action reasonably calculated to achieve a lawful means.  22
WHEREFORE, under the compulsion of the foregoing premises, the
appealed decision of respondent Court of Appeals is hereby REVERSED
and SET ASIDE and the judgment of the trial court is correspondingly
REINSTATED.
Romero and Puno, JJ., concur.
Mendoza, J., took no part.
EN BANC
July 30, 1979
PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM NAME
"SYCIP, SALAZAR, FELICIANO, HERNANDEZ & CASTILLO." LUCIANO
E. SALAZAR, FLORENTINO P. FELICIANO, BENILDO G. HERNANDEZ.
GREGORIO R. CASTILLO. ALBERTO P. SAN JUAN, JUAN C. REYES.
JR., ANDRES G. GATMAITAN, JUSTINO H. CACANINDIN, NOEL A.
LAMAN, ETHELWOLDO E. FERNANDEZ, ANGELITO C. IMPERIO,
EDUARDO R. CENIZA, TRISTAN A. CATINDIG, ANCHETA K. TAN, and
ALICE V. PESIGAN, petitioners.
IN THE MATTER OF THE PETITION FOR AUTHORITY TO CONTINUE
USE OF THE FIRM NAME "OZAETA, ROMULO, DE LEON, MABANTA &
REYES." RICARDO J. ROMULO, BENJAMIN M. DE LEON, ROMAN
MABANTA, JR., JOSE MA, REYES, JESUS S. J. SAYOC, EDUARDO DE
LOS ANGELES, and JOSE F. BUENAVENTURA, petitioners.
RESOLUTION
MELENCIO-HERRERA, J.: ñé+.£ªwph!1
Two separate Petitions were filed before this Court 1) by the surviving
partners of Atty. Alexander Sycip, who died on May 5, 1975, and 2) by
the surviving partners of Atty. Herminio Ozaeta, who died on February
14, 1976, praying that they be allowed to continue using, in the names of
their firms, the names of partners who had passed away. In the Court's
Petitioners base their petitions on the following arguments:
1. Under the law, a partnership is not prohibited from continuing its
business under a firm name which includes the name of a deceased
partner; in fact, Article 1840 of the Civil Code explicitly sanctions the
practice when it provides in the last paragraph that:  têñ.£îhqwâ£
The use by the person or partnership continuing the
business of the partnership name, or the name of a
deceased partner as part thereof, shall not of itself make
the individual property of the deceased partner liable for
any debts contracted by such person or partnership.  1
2. In regulating other professions, such as accountancy and engineering,
the legislature has authorized the adoption of firm names without any
restriction as to the use, in such firm name, of the name of a deceased
partner;   the legislative authorization given to those engaged in the
2
practice of accountancy — a profession requiring the same degree of
trust and confidence in respect of clients as that implicit in the relationship
of attorney and client — to acquire and use a trade name, strongly
indicates that there is no fundamental policy that is offended by the
continued use by a firm of professionals of a firm name which includes
the name of a deceased partner, at least where such firm name has
acquired the characteristics of a "trade name."  3
3. The Canons of Professional Ethics are not transgressed by the
continued use of the name of a deceased partner in the firm name of a
law partnership because Canon 33 of the Canons of Professional Ethics
adopted by the American Bar Association declares that:  têñ.£îhqwâ£
... The continued use of the name of a deceased or
former partner when permissible by local custom, is not
unethical but care should be taken that no imposition or
deception is practiced through this use. ...  4
4. There is no possibility of imposition or deception because the deaths of
their respective deceased partners were well-publicized in all newspapers
of general circulation for several days; the stationeries now being used by
them carry new letterheads indicating the years when their respective
deceased partners were connected with the firm; petitioners will notify all
leading national and international law directories of the fact of their
respective deceased partners' deaths.  5
5. No local custom prohibits the continued use of a deceased partner's
name in a professional firm's name;   there is no custom or usage in the
6
Philippines, or at least in the Greater Manila Area, which recognizes that
the name of a law firm necessarily Identifies the individual members of
the firm. 
7
6. The continued use of a deceased partner's name in the firm name of
law partnerships has been consistently allowed by U.S. Courts and is an
accepted practice in the legal profession of most countries in the world. 8
The question involved in these Petitions first came under consideration
by this Court in 1953 when a law firm in Cebu (the Deen case) continued
its practice of including in its firm name that of a deceased partner, C.D.
Johnston. The matter was resolved with this Court advising the firm to
desist from including in their firm designation the name of C. D. Johnston,
who has long been dead."
The same issue was raised before this Court in 1958 as an incident in G.
R. No. L-11964, entitled Register of Deeds of Manila vs. China Banking
Corporation. The law firm of Perkins & Ponce Enrile moved to intervene
as amicus curiae. Before acting thereon, the Court, in a Resolution of
April 15, 1957, stated that it "would like to be informed why the name of
Perkins is still being used although Atty. E. A. Perkins is already dead." In
a Manifestation dated May 21, 1957, the law firm of Perkins and Ponce
Enrile, raising substantially the same arguments as those now being
raised by petitioners, prayed that the continued use of the firm name
"Perkins & Ponce Enrile" be held proper.
On June 16, 1958, this Court resolved:  têñ.£îhqwâ£
After carefully considering the reasons given by Attorneys
Alfonso Ponce Enrile and Associates for their continued
use of the name of the deceased E. G. Perkins, the Court
found no reason to depart from the policy it adopted in
June 1953 when it required Attorneys Alfred P. Deen and
Eddy A. Deen of Cebu City to desist from including in their
firm designation, the name of C. D. Johnston, deceased.
The Court believes that, in view of the personal and
confidential nature of the relations between attorney and
client, and the high standards demanded in the canons of
professional ethics, no practice should be allowed which
even in a remote degree could give rise to the possibility
of deception. Said attorneys are accordingly advised to
drop the name "PERKINS" from their firm name.
Petitioners herein now seek a re-examination of the policy thus far
enunciated by the Court.
The Court finds no sufficient reason to depart from the rulings thus laid
down.
A. Inasmuch as "Sycip, Salazar, Feliciano, Hernandez and Castillo" and
"Ozaeta, Romulo, De Leon, Mabanta and Reyes" are partnerships, the
use in their partnership names of the names of deceased partners will run
counter to Article 1815 of the Civil Code which provides: têñ.£îhqwâ£
Art. 1815. Every partnership shall operate under a firm
name, which may or may not include the name of one or
more of the partners.
Those who, not being members of the partnership,
include their names in the firm name, shall be subject to
the liability, of a partner.
It is clearly tacit in the above provision that names in a firm name of a
partnership must either be those of living partners and. in the case of
non-partners, should be living persons who can be subjected to liability.
In fact, Article 1825 of the Civil Code prohibits a third person from
including his name in the firm name under pain of assuming the liability of
a partner. The heirs of a deceased partner in a law firm cannot be held
liable as the old members to the creditors of a firm particularly where they
are non-lawyers. Thus, Canon 34 of the Canons of Professional Ethics
"prohibits an agreement for the payment to the widow and heirs of a
deceased lawyer of a percentage, either gross or net, of the fees
received from the future business of the deceased lawyer's clients, both
because the recipients of such division are not lawyers and because such
payments will not represent service or responsibility on the part of the
recipient. " Accordingly, neither the widow nor the heirs can be held liable
for transactions entered into after the death of their lawyer-predecessor.
There being no benefits accruing, there ran be no corresponding liability.
Prescinding the law, there could be practical objections to allowing the
use by law firms of the names of deceased partners. The public relations
value of the use of an old firm name can tend to create undue
advantages and disadvantages in the practice of the profession. An able
lawyer without connections will have to make a name for himself starting
from scratch. Another able lawyer, who can join an old firm, can initially
ride on that old firm's reputation established by deceased partners.
B. In regards to the last paragraph of Article 1840 of the Civil Code cited
by petitioners, supra, the first factor to consider is that it is within Chapter
3 of Title IX of the Code entitled "Dissolution and Winding Up." The
Article primarily deals with the exemption from liability in cases of a
dissolved partnership, of the individual property of the deceased partner
for debts contracted by the person or partnership which continues
the business using the partnership name or the name of the deceased
partner as part thereof. What the law contemplates therein is a hold-over
situation preparatory to formal reorganization.
Secondly, Article 1840 treats more of a commercial partnership with a
good will to protect rather than of a professional partnership, with no
saleable good will but whose reputation depends on the personal
qualifications of its individual members. Thus, it has been held that a
saleable goodwill can exist only in a commercial partnership and cannot
arise in a professional partnership consisting of lawyers.  9
têñ.£îhqwâ£
As a general rule, upon the dissolution of a commercial
partnership the succeeding partners or parties have the
right to carry on the business under the old name, in the
absence of a stipulation forbidding it, (s)ince the name of
a commercial partnership is a partnership asset
inseparable from the good will of the firm. ... (60 Am Jur
2d, s 204, p. 115) (Emphasis supplied)
On the other hand,  têñ.£îhqwâ£
... a professional partnership the reputation of which
depends or; the individual skill of the members, such as
partnerships of attorneys or physicians, has no good win
to be distributed as a firm asset on its dissolution,
however intrinsically valuable such skill and reputation
may be, especially where there is no provision in the
partnership agreement relating to good will as an asset. ...
(ibid, s 203, p. 115) (Emphasis supplied)
C. A partnership for the practice of law cannot be likened to partnerships
formed by other professionals or for business. For one thing, the law on
accountancy specifically allows the use of a trade name in connection
with the practice of accountancy.  
10
têñ.£îhqwâ£
A partnership for the practice of law is not a legal entity. It
is a mere relationship or association for a particular
purpose. ... It is not a partnership formed for the purpose
of carrying on trade or business or of holding
property."   Thus, it has been stated that "the use of a
11
nom de plume, assumed or trade name in law practice is
improper.  12
The usual reason given for different standards of conduct
being applicable to the practice of law from those
pertaining to business is that the law is a profession.
Dean Pound, in his recently published contribution to the
Survey of the Legal Profession, (The Lawyer from
Antiquity to Modern Times, p. 5) defines a profession as
"a group of men pursuing a learned art as a common
calling in the spirit of public service, — no less a public
service because it may incidentally be a means of
livelihood."
xxx xxx xxx
Primary characteristics which distinguish the legal
profession from business are:
1. A duty of public service, of which the emolument is a
byproduct, and in which one may attain the highest
eminence without making much money.
2. A relation as an "officer of court" to the administration
of justice involving thorough sincerity, integrity, and
reliability.
3. A relation to clients in the highest degree fiduciary.
 4. A relation to colleagues at the bar characterized by
candor, fairness, and unwillingness to resort to current
business methods of advertising and encroachment on
their practice, or dealing directly with their clients. 
13
"The right to practice law is not a natural or constitutional right but is in
the nature of a privilege or franchise.   It is limited to persons of good
14
moral character with special qualifications duly ascertained and
certified.   The right does not only presuppose in its possessor integrity,
15
legal standing and attainment, but also the exercise of a special
privilege, highly personal and partaking of the nature of a public trust."  16
D. Petitioners cited Canon 33 of the Canons of Professional Ethics of the
American Bar Association" in support of their petitions.
It is true that Canon 33 does not consider as unethical the continued use
of the name of a deceased or former partner in the firm name of a law
partnership when such a practice is permissible by local custom but the
Canon warns that care should be taken that no imposition or deception is
practiced through this use.
It must be conceded that in the Philippines, no local custom permits or
allows the continued use of a deceased or former partner's name in the
firm names of law partnerships. Firm names, under our custom, Identify
the more active and/or more senior members or partners of the law
firm. A glimpse at the history of the firms of petitioners and of other law
firms in this country would show how their firm names have evolved and
changed from time to time as the composition of the partnership
changed.  têñ.£îhqwâ£
The continued use of a firm name after the death of one
or more of the partners designated by it is proper only
where sustained by local custom and not where by
custom this purports to Identify the active members. ...
There would seem to be a question, under the working of
the Canon, as to the propriety of adding the name of a
new partner and at the same time retaining that of a
deceased partner who was never a partner with the new
one. (H.S. Drinker, op. cit., supra, at pp. 207208)
(Emphasis supplied).
The possibility of deception upon the public, real or consequential, where
the name of a deceased partner continues to be used cannot be ruled
out. A person in search of legal counsel might be guided by the familiar
ring of a distinguished name appearing in a firm title.
E. Petitioners argue that U.S. Courts have consistently allowed the
continued use of a deceased partner's name in the firm name of law
partnerships. But that is so because it is sanctioned by custom.
In the case of Mendelsohn v. Equitable Life Assurance Society (33 N.Y.S.
2d 733) which petitioners Salazar, et al. quoted in their memorandum, the
New York Supreme Court sustained the use of the firm name Alexander
& Green even if none of the present ten partners of the firm bears either
name because the practice was sanctioned by custom and did not offend
any statutory provision or legislative policy and was adopted by
agreement of the parties. The Court stated therein:  têñ.£îhqwâ£
The practice sought to be proscribed has the sanction of
custom and offends no statutory provision or legislative
policy. Canon 33 of the Canons of Professional Ethics of
both the American Bar Association and the New York
State Bar Association provides in part as follows: "The
continued use of the name of a deceased or former
partner, when permissible by local custom is not
unethical, but care should be taken that no imposition or
deception is practiced through this use." There is no
question as to local custom. Many firms in the city use the
names of deceased members with the approval of other
attorneys, bar associations and the courts. The Appellate
Division of the First Department has considered the
matter and reached The conclusion that such practice
should not be prohibited. (Emphasis supplied)
xxx xxx xxx
Neither the Partnership Law nor the Penal Law prohibits
the practice in question. The use of the firm name herein
is also sustainable by reason of agreement between the
partners. 18
Not so in this jurisdiction where there is no local custom that sanctions
the practice. Custom has been defined as a rule of conduct formed by
repetition of acts, uniformly observed (practiced) as a social rule, legally
binding and obligatory.   Courts take no judicial notice of custom. A
19
custom must be proved as a fact, according to the rules of evidence.   A
local custom as a source of right cannot be considered by a court of
justice unless such custom is properly established by competent
evidence like any other fact.   We find such proof of the existence of a
21
local custom, and of the elements requisite to constitute the same,
of reward, This spirit of public service in which the
20
profession of law is and ought to be exercised is a
prerequisite of sound administration of justice according
to law. The other two elements of a profession, namely,
organization and pursuit of a learned art have their
justification in that they secure and maintain that spirit. 25

wanting herein. Merely because something is done as a matter of

practice does not mean that Courts can rely on the same for purposes of In fine, petitioners' desire to preserve the Identity of their firms in the eyes
adjudication as a juridical custom. Juridical custom must be differentiated of the public must bow to legal and ethical impediment.
from social custom. The former can supplement statutory law or be
applied in the absence of such statute. Not so with the latter. ACCORDINGLY, the petitions filed herein are denied and petitioners
advised to drop the names "SYCIP" and "OZAETA" from their respective
Moreover, judicial decisions applying or interpreting the laws form part of firm names. Those names may, however, be included in the listing of
the legal system.   When the Supreme Court in the Deen and Perkins
22
individuals who have been partners in their firms indicating the years
cases issued its Resolutions directing lawyers to desist from including the during which they served as such.
names of deceased partners in their firm designation, it laid down a legal
rule against which no custom or practice to the contrary, even if proven, SO ORDERED.
can prevail. This is not to speak of our civil law which clearly ordains that
a partnership is dissolved by the death of any partner.   Custom which
23

Teehankee, Concepcion, Jr., Santos, Fernandez, Guerrero and De

are contrary to law, public order or public policy shall not be
Castro, JJ., concur
countenanced.  24

Fernando, C.J. and Abad Santos, J., took no part.

The practice of law is intimately and peculiarly related to the
administration of justice and should not be considered like an ordinary
Separate Opinions
"money-making trade."  têñ.£îhqwâ£

... It is of the essence of a profession that it is practiced in
a spirit of public service. A trade ... aims primarily at
personal gain; a profession at the exercise of powers
beneficial to mankind. If, as in the era of wide free
opportunity, we think of free competitive self assertion as
the highest good, lawyer and grocer and farmer may
seem to be freely competing with their fellows in their
calling in order each to acquire as much of the world's
good as he may within the allowed him by law. But the
member of a profession does not regard himself as in
competition with his professional brethren. He is not
bartering his services as is the artisan nor exchanging the
products of his skill and learning as the farmer sells wheat
or corn. There should be no such thing as a lawyers' or
physicians' strike. The best service of the professional
man is often rendered for no equivalent or for a trifling
equivalent and it is his pride to do what he does in a way
worthy of his profession even if done with no expectation
FERNANDO, C.J., concurring:
The petitions are denied, as there are only four votes for granting them,
seven of the Justices being of the contrary view, as explained in the plurality
opinion of Justice Ameurfina Melencio-Herrera. It is out of delicadeza that the
undersigned did not participate in the disposition of these petitions, as the
law office of Sycip, Salazar, Feliciano, Hernandez and Castillo started with
the partnership of Quisumbing, Sycip, and Quisumbing, the senior partner,
the late Ramon Quisumbing, being the father-in-law of the undersigned, and
the most junior partner then, Norberto J. Quisumbing, being his brother- in-
law. For the record, the undersigned wishes to invite the attention of all
concerned, and not only of petitioners, to the last sentence of the opinion of
Justice Ameurfina Melencio-Herrera: 'Those names [Sycip and Ozaeta] may,
however, be included in the listing of individuals wtes
AQUINO, J.,  dissenting:
I dissent. The fourteen members of the law firm, Sycip, Salazar, Feliciano,
Hernandez & Castillo, in their petition of June 10, 1975, prayed for authority
to continue the use of that firm name, notwithstanding the death of Attorney
Alexander Sycip on May 5, 1975 (May he rest in peace). He was the founder
of the firm which was originally known as the Sycip Law Office.
On the other hand, the seven surviving partners of the law firm, Ozaeta,
Romulo, De Leon, Mabanta & Reyes, in their petition of August 13, 1976,
prayed that they be allowed to continue using the said firm name
notwithstanding the death of two partners, former Justice Roman Ozaeta and
his son, Herminio, on May 1, 1972 and February 14, 1976, respectively.
They alleged that the said law firm was a continuation of the Ozaeta Law
Office which was established in 1957 by Justice Ozaeta and his son and that,
as to the said law firm, the name Ozaeta has acquired an institutional and
secondary connotation.
Article 1840 of the Civil Code, which speaks of the use by the partnership of
the name of a deceased partner as part of the partnership name, is cited to
justify the petitions. Also invoked is the canon that the continued use by a law
firm of the name of a deceased partner, "when permissible by local custom,
is not unethical" as long as "no imposition or deception is practised through
this use" (Canon 33 of the Canons of Legal Ethics).
I am of the opinion that the petition may be granted with the condition that it
be indicated in the letterheads of the two firms (as the case may be) that
Alexander Sycip, former Justice Ozaeta and Herminio Ozaeta are dead or
the period when they served as partners should be stated therein.
Obviously, the purpose of the two firms in continuing the use of the names of
their deceased founders is to retain the clients who had customarily sought
the legal services of Attorneys Sycip and Ozaeta and to benefit from the
goodwill attached to the names of those respected and esteemed law
practitioners. That is a legitimate motivation.
The retention of their names is not illegal per se. That practice was followed
before the war by the law firm of James Ross. Notwithstanding the death of
Judge Ross the founder of the law firm of Ross, Lawrence, Selph and
Carrascoso, his name was retained in the firm name with an indication of the
year when he died. No one complained that the retention of the name of
Judge Ross in the firm name was illegal or unethical.
# Separate Opinions
FERNANDO, C.J., concurring:
The petitions are denied, as there are only four votes for granting them,
seven of the Justices being of the contrary view, as explained in the plurality
opinion of Justice Ameurfina Melencio-Herrera. It is out of delicadeza that the
undersigned did not participate in the disposition of these petitions, as the
law office of Sycip, Salazar, Feliciano, Hernandez and Castillo started with
the partnership of Quisumbing, Sycip, and Quisumbing, the senior partner,
the late Ramon Quisumbing, being the father-in-law of the undersigned, and
the most junior partner then, Norberto J. Quisumbing, being his brother- in-
law. For the record, the undersigned wishes to invite the attention of all
concerned, and not only of petitioners, to the last sentence of the opinion of
Justice Ameurfina Melencio-Herrera: 'Those names [Sycip and Ozaeta] may,
however, be included in the listing of individuals wtes
AQUINO, J.,  dissenting:
I dissent. The fourteen members of the law firm, Sycip, Salazar, Feliciano,
Hernandez & Castillo, in their petition of June 10, 1975, prayed for authority
to continue the use of that firm name, notwithstanding the death of Attorney
Alexander Sycip on May 5, 1975 (May he rest in peace). He was the founder
of the firm which was originally known as the Sycip Law Office.
On the other hand, the seven surviving partners of the law firm, Ozaeta,
Romulo, De Leon, Mabanta & Reyes, in their petition of August 13, 1976,
prayed that they be allowed to continue using the said firm name
notwithstanding the death of two partners, former Justice Roman Ozaeta and
his son, Herminio, on May 1, 1972 and February 14, 1976, respectively.
They alleged that the said law firm was a continuation of the Ozaeta Law
Office which was established in 1957 by Justice Ozaeta and his son and that,
as to the said law firm, the name Ozaeta has acquired an institutional and
secondary connotation.
Article 1840 of the Civil Code, which speaks of the use by the partnership of
the name of a deceased partner as part of the partnership name, is cited to
justify the petitions. Also invoked is the canon that the continued use by a law
firm of the name of a deceased partner, "when permissible by local custom,
is not unethical" as long as "no imposition or deception is practised through
this use" (Canon 33 of the Canons of Legal Ethics).
I am of the opinion that the petition may be granted with the condition that it
be indicated in the letterheads of the two firms (as the case may be) that
Alexander Sycip, former Justice Ozaeta and Herminio Ozaeta are dead or
the period when they served as partners should be stated therein.
Obviously, the purpose of the two firms in continuing the use of the names of
their deceased founders is to retain the clients who had customarily sought
the legal services of Attorneys Sycip and Ozaeta and to benefit from the
goodwill attached to the names of those respected and esteemed law
practitioners. That is a legitimate motivation.
The retention of their names is not illegal per se. That practice was followed
before the war by the law firm of James Ross. Notwithstanding the death of
Judge Ross the founder of the law firm of Ross, Lawrence, Selph and
Carrascoso, his name was retained in the firm name with an indication of the
year when he died. No one complained that the retention of the name of
Judge Ross in the firm name was illegal or unethical.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23678             June 6, 1967
TESTATE ESTATE OF AMOS G. BELLIS, deceased.
PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-
appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis,
et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from an order
of the Court of First Instance of Manila dated April 30, 1964, approving
the project of partition filed by the executor in Civil Case No. 37089
therein.
1äwphï1.ñët
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of
the United States." By his first wife, Mary E. Mallen, whom he divorced,
he had five legitimate children: Edward A. Bellis, George Bellis (who pre-
deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna
Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he
had three legitimate children: Edwin G. Bellis, Walter S. Bellis and
Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis,
Jr., Maria Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in
which he directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be divided, in
trust, in the following order and manner: (a) $240,000.00 to his first wife,
Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each
and (c) after the foregoing two items have been satisfied, the remainder
shall go to his seven surviving children by his first and second wives,
namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna
Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in
equal shares. 1äwphï1.ñët
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San
Antonio, Texas, U.S.A. His will was admitted to probate in the Court of
First Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all
the bequests therein including the amount of $240,000.00 in the form of
shares of stock to Mary E. Mallen and to the three (3) illegitimate
children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis,
various amounts totalling P40,000.00 each in satisfaction of their
respective legacies, or a total of P120,000.00, which it released from time
to time according as the lower court approved and allowed the various
motions or petitions filed by the latter three requesting partial advances
on account of their respective legacies.
On January 8, 1964, preparatory to closing its administration, the
executor submitted and filed its "Executor's Final Account, Report of
Administration and Project of Partition" wherein it reported, inter alia, the
satisfaction of the legacy of Mary E. Mallen by the delivery to her of
shares of stock amounting to $240,000.00, and the legacies of Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in the amount of
P40,000.00 each or a total of P120,000.00. In the project of partition, the
executor — pursuant to the "Twelfth" clause of the testator's Last Will and
Testament — divided the residuary estate into seven equal portions for
the benefit of the testator's seven legitimate children by his first and
second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed
their respective oppositions to the project of partition on the ground that
they were deprived of their legitimes as illegitimate children and,
therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of
service of which is evidenced by the registry receipt submitted on April
27, 1964 by the executor.1
After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order overruling
the oppositions and approving the executor's final account, report and
administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is
Texas law, which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the
lower court on June 11, 1964, oppositors-appellants appealed to this
Court to raise the issue of which law must apply — Texas law or
Philippine law.
In this regard, the parties do not submit the case on, nor even discuss,
the doctrine of renvoi, applied by this Court in Aznar v. Christensen
Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent
where the decedent is a national of one country, and a domicile of
another. In the present case, it is not disputed that the decedent was both
a national of Texas and a domicile thereof at the time of his death. 2 So
that even assuming Texas has a conflict of law rule providing that the
domiciliary system (law of the domicile) should govern, the same would
not result in a reference back (renvoi) to Philippine law, but would still
refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the
situs theory (lex rei sitae) calling for the application of the law of the place
where the properties are situated, renvoi would arise, since the properties
here involved are found in the Philippines. In the absence, however, of
proof as to the conflict of law rule of Texas, it should not be presumed
different from ours.3 Appellants' position is therefore not rested on the
doctrine of renvoi. As stated, they never invoked nor even mentioned it in
their arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in relation to
Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions,
with regard to four items: (a) the order of succession; (b) the amount of
successional rights; (e) the intrinsic validity of the provisions of the will;
and (d) the capacity to succeed. They provide that —
ART. 16. 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 he the
nature of the property and regardless of the country wherein said
property may be found.
ART. 1039. Capacity to succeed is governed by the law of the
nation of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the
Civil Code, stating that —
Prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted.
This is not correct. Precisely, Congress deleted the phrase,
"notwithstanding the provisions of this and the next preceding article"
when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new
Civil Code, while reproducing without substantial change the second
paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must
have been their purpose to make the second paragraph of Art. 16 a
specific provision in itself which must be applied in testate and intestate
succession. As further indication of this legislative intent, Congress added
a new provision, under Art. 1039, which decrees that capacity to succeed
is to be governed by the national law of the decedent.

It is therefore evident that whatever public policy or good customs may be

involved in our System of legitimes, Congress has not intended to extend
the same to the succession of foreign nationals. For it has specifically
chosen to leave, inter alia, the amount of successional rights, to the
decedent's national law. Specific provisions must prevail over general
ones.

Appellants would also point out that the decedent executed two wills —
one to govern his Texas estate and the other his Philippine estate —
arguing from this that he intended Philippine law to govern his Philippine
estate. Assuming that such was the decedent's intention in executing a
separate Philippine will, it would not alter the law, for as this Court ruled
in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to
the effect that his properties shall be distributed in accordance with
Philippine law and not with his national law, is illegal and void, for his
national law cannot be ignored in regard to those matters that Article 10
— now Article 16 — of the Civil Code states said national law should
govern.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no
forced heirs or legitimes. Accordingly, since the intrinsic validity of the
provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be
applied to the testacy of Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with
costs against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,

Sanchez and Castro, JJ., concur.
 registered owner of a parcel of land located in Alfaro Street, Salcedo Village,
Makati City with an area of 840 square meters, more or less and covered by
Transfer Certificate of Title (TCT) No. 233435 of the Register of Deeds of
Rizal.

On April 20, 1976, Ayala sold the lot to Manuel Sy married to Vilma Po and
Sy Ka Kieng married to Rosa Chan. The Deed of Sale executed between
Ayala and the buyers contained Special Conditions of Sale and Deed
Restrictions. Among the Special Conditions of Sale were:chanrob1es virtual
1aw library

a) the vendees shall build on the lot and submit the building plans to the
vendor before September 30, 1976 for the latter’s approval

b) the construction of the building shall start on or before March 30, 1977 and
completed before 1979. Before such completion, neither the deed of sale
shall be registered nor the title released even if the purchase price shall have
been fully paid

c) there shall be no resale of the property

The Deed Restrictions, on the other hand, contained the stipulation that the
gross floor area of the building to be constructed shall not be more than five
(5) times the lot area and the total height shall not exceed forty two (42)
meters. The restrictions were to expire in the year 2025.
SECOND DIVISION
Manuel Sy and Sy Ka Kieng failed to construct the building in violation of the
Special Conditions of Sale. Notwithstanding the violation, Manuel Sy and Sy
[G.R. No. 134284. December 1, 2000.]
Ka Kieng, in April 1989, were able to sell the lot to respondent Rosa-Diana
Realty and Development Corporation (hereinafter referred to as Rosa-Diana)
AYALA CORPORATION, Petitioner, v. ROSA-DIANA REALTY AND
with Ayala’s approval. As a consideration for Ayala to release the Certificate
DEVELOPMENT CORPORATION, Respondent.
of Title of the subject property, Rosa-Diana, on July 27, 1989 executed an
Undertaking promising to abide by said special conditions of sale executed
DECISION
between Ayala and the original vendees. Upon the submission of the
Undertaking, together with the building plans for a condominium project,
known as "The Peak", Ayala released title to the lot, thereby enabling Rosa-
DE LEON, JR., J.:
Diana to register the deed of sale in its favor and obtain Certificate of Title
No. 165720 in its name. The title carried as encumbrances the special
conditions of sale and the deed restrictions. Rosa-Diana’s building plans as
Before us is a petition for review on certiorari seeking the reversal of a
approved by Ayala were "subject to strict compliance of cautionary notices
decision rendered by the Court of Appeals in C.A. G.R. C.V. No. 4598
appearing on the building plans and to the restrictions encumbering the Lot
entitled, "Ayala Corporation v. Rosa-Diana Realty and Development
regarding the use and occupancy of the same."cralaw virtua1aw library
Corporation," dismissing Ayala Corporation’s petition for lack of merit.
Thereafter, Rosa-Diana submitted to the building official of Makati another
The facts of the case are not in dispute:chanrobles virtual law library
set of building plans for "The Peak" which were substantially different from
those that it earlier submitted to Ayala for approval. While the building plans
Petitioner Ayala Corporation (hereinafter referred to as Ayala) was the
which Rosa-Diana submitted to Ayala for approval envisioned a 24-meter
high, seven (7) storey condominium project with a gross floor area of
3,968.56 square meters, the building plans which Rosa-Diana submitted to
the building official of Makati, contemplated a 91.65 meter high, 38 storey
condominium building with a gross floor area of 23,305.09 square meters. 1
Needless to say, while the first set of building plans complied with the deed
restrictions, the latter set exceeded the same.
During the construction of Rosa-Diana’s condominium project, Ayala filed an
action with the Regional Trial Court (RTC) of Makati, Branch 139 for specific
performance, with application for a writ of preliminary injunction/temporary
restraining order against Rosa-Diana Realty seeking to compel the latter to
comply with the contractual obligations under the deed of restrictions
annotated on its title as well as with the building plans it submitted to the
latter. In the alternative, Ayala prayed for rescission of the sale of the subject
lot to Rosa-Diana Realty.
The lower court denied Ayala’s prayer for injunctive relief, thus enabling
Rosa-Diana to complete the construction of the building. Undeterred, Ayala
tried to cause the annotation of a notice of lis pendens on Rosa-Diana’s title.
The Register of Deeds of Makati, however, refused registration of the notice
of lis pendens on the ground that the case pending before the trial court,
being an action for specific performance and/or rescission, is an action in
personam which does not involve the title, use or possession of the property.
2 The Land Registration Authority (LRA) reversed the ruling of the Register of
Deeds saying that an action for specific performance or rescission may be
classified as a proceeding of any kind in court directly affecting title to the
land or the use or occupation thereof for which a notice of lis pendens may
be held proper. 3 The decision of the LRA, however, was overturned by the
Court of Appeals in C.A. G.R. S.P. No. 29157. In G.R. No. 112774, We
affirmed the ruling of the CA on February 16, 1994 saying
We agree with respondent court that the notice of lis pendens is not proper in
this instance. The case before the trial court is a personal action since the
cause of action thereof arises primarily from the alleged violation of the Deed
of Restrictions.
In the meantime, Ayala completed its presentation of evidence before the trial
court. Rosa-Diana filed a Demurrer to Evidence averring that Ayala failed to
establish its right to the relief sought inasmuch as (a) Ayala admittedly does
not enforce the deed restrictions uniformly and strictly (b) Ayala has lost its
right/power to enforce the restrictions due to its own acts and omissions; and
(c) the deed restrictions are no longer valid and effective against lot buyers in
Ayala’s controlled subdivision.chanrob1es virtua1 1aw 1ibrary
The trial court sustained Rosa-Diana’s Demurrer to Evidence saying that
Ayala was guilty of abandonment and/or estoppel due to its failure to enforce
the terms of deed of restrictions and special conditions of sale against
Manuel Sy and Sy Ka Kieng. The trial court noted that notwithstanding the
violation of the special conditions of sale, Manuel Sy and Sy Ka Kieng were
able to transfer the title to Rosa-Diana with the approval of Ayala. The trial
court added that Ayala’s failure to enforce the restrictions with respect to
Trafalgar, Shellhouse, Eurovilla, LPL Plaza, Parc Regent, LPL Mansion and
Leronville which are located within Salcedo Village, shows that Ayala
discriminated against those which it wants to have the obligation enforced.
The trial court then concluded that for Ayala to discriminately choose which
obligor would be made to follow certain conditions and which should not, did
not seem fair and legal.
The Court of Appeals affirmed the ruling of the trial court saying that the
"appeal is sealed by the doctrine of the law of the case in C.A. G.R. S.P. No.
29157" where it was stated that
. . . Ayala is barred from enforcing the Deed of Restrictions in question
pursuant to the doctrine of waiver and estoppel. Under the terms of the deed
of sale, the vendee Sy Ka Kieng assumed faithful compliance with the special
conditions of sale and with the Salcedo Village Deed of Restrictions. One of
the conditions was that a building would be constructed within one year.
However, Sy Ka Kieng failed to construct the building as required under the
Deed of Sale. Ayala did nothing to enforce the terms of the contract. In fact, it
even agreed to the sale of the lot by Sy Ka Kieng in favor of petitioner Realty
in 1989 or thirteen (13) years later. We, therefore, see no justifiable reason
for Ayala to attempt to enforce the terms of the conditions of sale against the
petitioner.
x          x           x
The Court of Appeals also cited C.A. G.R. C.V. No. 46488 entitled, "Ayala
Corporation v. Ray Burton Development Corporation" which relied on C.A.
G.R. S.P. No. 29157 in ruling that Ayala is barred from enforcing the deed
restrictions in dispute. Upon a motion for reconsideration filed by herein
petitioner, the Court of Appeals clarified that "the citation of the decision in
Ayala Corporation v. Ray Burton Development Corporation, C.A. G.R. C.V.
No. 46488, February 27, 1996, was made not because said decision is res
judicata to the case at bar but rather because it is precedential under the
doctrine of stare decisis."cralaw virtua1aw library
Upon denial of said motion for reconsideration, Ayala filed the present
appeal.
Ayala contends that the pronouncement of the Court of Appeals in C.A. G.R.
S.P. No. 29157 that it is estopped from enforcing the deed restrictions is
merely obiter dicta inasmuch as the only issue raised in the aforesaid case
was the propriety of a lis pendens annotation on Rosa-Diana’s certificate of
title.
Ayala avers that Rosa-Diana presented no evidence whatsoever on Ayala’s
supposed waiver or estoppel in C.A. G.R. S.P. No. 29157. Ayala likewise
pointed out that at the time C.A. G.R. S.P. No. 29157 was on appeal, the
issues of the validity and continued viability of the deed of restrictions and
their enforceability by Ayala were joined and then being tried before the trial
court.
Petitioner’s assignment of errors in the present appeal may essentially be
summarized as follows:chanrob1es virtual 1aw library
I. The Court of Appeals acted in a manner not in accord with law and the
applicable decisions of the Supreme Court in holding that the doctrine of the
law of the case, or stare decisis, operated to dismiss Ayala’s appeal.
II. The Court of Appeals erred as a matter of law and departed from the
accepted and usual course of judicial proceedings when it failed to expressly
pass upon the specific errors assigned in Ayala’s appeal.
A discussion on the distinctions between law of the case, stare decisis and
obiter dicta is in order.
The doctrine of the law of the case has certain affinities with, but is clearly
distinguishable from, the doctrines of res judicata and stare decisis,
principally on the ground that the rule of the law of the case operates only in
the particular case and only as a rule of policy and not as one of law. 4 At
variance with the doctrine of stare decisis, the ruling adhered to in the
particular case under the doctrine of the law of the case need not be followed
as a precedent in subsequent litigation between other parties, neither by the
appellate court which made the decision followed on a subsequent appeal in
the same case, nor by any other court. The ruling covered by the doctrine of
the law of the case is adhered to in the single case where it arises, but is not
carried into other cases as a precedent. 5 On the other hand, under the
doctrine of stare decisis, once a point of law has been established by the
court, that point of law will, generally, be followed by the same court and by
all courts of lower rank in subsequent cases where the same legal issue is
raised. 6 Stare decisis proceeds from the first principle of justice that, absent
powerful countervailing considerations, like cases ought to be decided alike.
7
The Court of Appeals, in ruling against petitioner Ayala Corporation stated
that the appeal is "sealed" by the doctrine of the law of the case, referring to
G.R. No. 112774 entitled "Ayala Corporation, petitioner v. Court of Appeals,
Et Al., respondents" The Court of Appeals likewise made reference to C.A.
G.R. C.V. No. 46488 entitled, "Ayala Corporation v. Ray Burton Development
Corporation, Inc." in ruling against petitioner saying that it is jurisprudential
under the doctrine of stare decisis.chanrob1es virtua1 1aw 1ibrary
It must be pointed out that the only issue that was raised before the Court of
Appeals in C.A. G.R. S.P. No. 29157 was whether or not the annotation of lis
pendens is proper. The Court of Appeals, in its decision, in fact stated "the
principal issue to be resolved is: whether or not an action for specific
performance, or in the alternative, rescission of deed of sale to enforce the
deed of restrictions governing the use of property, is a real or personal
action, or one that affects title thereto and its use or occupation thereof." 8
In the aforesaid decision, the Court of Appeals even justified the cancellation
of the notice of lis pendens on the ground that Ayala had ample protection
should it succeed in proving its allegations regarding the violation of the deed
of restrictions, without unduly curtailing the right of the petitioner to fully enjoy
its property in the meantime that there is as yet no decision by the trial court.
9
From the foregoing, it is clear that the Court of Appeals was aware that the
issue as to whether petitioner is estopped from enforcing the deed of
restrictions has yet to be resolved by the trial court. Though it did make a
pronouncement that the petitioner is estopped from enforcing the deed of
restrictions, it also mentioned at the same time that this particular issue has
yet to be resolved by the trial court. Notably, upon appeal to this Court, We
have affirmed the ruling of the Court of Appeals only as regards the particular
issue of the propriety of the cancellation of the notice of lis pendens.
We see no reason then, how the law of the case or stare decisis can be held
to be applicable in the case at bench. If at all, the pronouncement made by
the Court of Appeals that petitioner Ayala is barred from enforcing the deed
of restrictions can only be considered as obiter dicta. As earlier mentioned,
the only issue before the Court of Appeals at the time was the propriety of the
annotation of the lis pendens. The additional pronouncement of the Court of
Appeals that Ayala is estopped from enforcing the deed of restrictions even
as it recognized that this said issue is being tried before the trial court was
not necessary to dispose of the issue as to the propriety of the annotation of
the lis pendens. A dictum is an opinion of a judge which does not embody the
resolution or determination of the court, and made without argument, or full
consideration of the point, not the proffered deliberate opinion of the judge
himself. 10 It is not necessarily limited to issues essential to the decision but
may also include expressions of opinion which are not necessary to support
the decision reached by the court. Mere dicta are not binding under the
doctrine of stare decisis. 11
While the Court of Appeals did not err in ruling that the present petition is not
barred by C.A. G.R. C.V. No. 46488 entitled "Ayala Corporation v. Ray
Burton Development Inc." under the doctrine of res judicata, neither,
however, can the latter case be cited as precedential under the doctrine of
stare decisis. It must be pointed out that at the time the assailed decision was
rendered, C.A. G.R. C.V. No. 46488 was on appeal with this Court.
Significantly, in the decision We have rendered in Ayala Corporation v. Ray
Burton Development Corporation 12 which became final and executory on
July 5, 1999 we have clearly stated that "An examination of the decision in
the said Rosa-Diana case reveals that the sole issue raised before the
appellate court was the propriety of the lis pendens annotation. However, the
appellate court went beyond the sole issue and made factual findings bereft
of any basis in the record to inappropriately rule that AYALA is in estoppel
and has waived its right to enforce the subject restrictions. Such ruling was
immaterial to the resolution of the issue of the propriety of the annotation of
the lis pendens. The finding of estoppel was thus improper and made in
excess of jurisdiction."cralaw virtua1aw library
Coming now to the merits of the case, petitioner avers that the Court of
Appeals departed from the usual course of judicial proceedings when it failed
to expressly pass upon the specific errors assigned in its appeal. Petitioner
reiterates its contention that the trial court’s findings that Ayala has waived its
right to enforce the deed of restrictions is not supported by law and evidence.
We find merit in the petition.
It is basic that findings of fact of the trial court and the Court of Appeals are
conclusive upon the Supreme Court when supported by substantial evidence.
13 We are constrained, however, to review the trial court’s findings of fact,
which the Court of Appeals chose not to pass upon, inasmuch as there is
ample evidence on record to show that certain facts were overlooked which
would affect the disposition of the case.
In its assailed decision of February 4, 1994, the trial court, ruled in favor of
respondent Rosa-Diana Realty on the ground that Ayala had not acted fairly
when it did not institute an action against the original vendees despite the
latter’s violation of the Special Conditions of Sale but chose instead to file an
action against herein respondent Rosa-Diana. The trial court added that
although the 38 storey building of Rosa-Diana is beyond the total height
restriction, it was not violative of the National Building Code. According to the
trial court the construction of the 38 storey building known as "The Peak" has
not been shown to have been prohibited by law and neither is it against
public policy.chanrob1es virtua1 1aw 1ibrary
It bears emphasis that as complainant, Ayala had the prerogative to initiate
an action against violators of the deed restrictions. That Rosa-Diana had
acted in bad faith is manifested by the fact that it submitted two sets of
building plans, one which was in conformity with the deed restrictions
submitted to Ayala and MACEA, and the other, which exceeded the height
requirement in the deed restrictions to the Makati building official for the
purpose of procuring a building permit from the latter. Moreover, the violation
of the deed restrictions committed by respondent can hardly be denominated
as a minor violation. It should be pointed out that the original building plan
which was submitted to and approved by petitioner Ayala Corporation,
envisioned a twenty four (24) meter high, seven (7) storey condominium
whereas the respondent’s building plan which was submitted to and
approved by the building official of Makati is that of a thirty eight (38) storey,
91.65 meters high, building. At present, the Peak building of respondent
which actually stands at 133.65 meters with a total gross floor area of
23,305.09 square meters, seriously violates the dimensions indicated in the
building plans submitted by Rosa-Diana to petitioner Ayala for approval
inasmuch as the Peak building exceeds the approved height limit by about
109 meters and the allowable gross floor area under the applicable deed
restrictions by about 19,105 square meters. Clearly, there was a gross
violation of the deed restrictions and evident bad faith by the Respondent.
It may not be amiss to mention that the deed restrictions were revised in a
general membership meeting of the association of lot owners in Makati
Central Business District — the Makati Commercial Estate Association, Inc.
(MACEA) — whereby direct height restrictions were abolished in lieu of floor
area limits. Respondent, however, did not vote for the approval of this
revision during the General Membership meeting which was held on July 11,
1990 at the Manila Polo Club Pavilion, Makati, Metro Manila and again on
July 12, 1990 at the Hotel Mandarin Oriental, Makati, Metro Manila. Hence,
respondent continues to be bound by the original deed restrictions applicable
to Lot 7, Block 1 and annotated on its title to said lot. In any event, assuming
arguendo that respondent voted for the approval of direct height restrictions
in lieu of floor area limits, the total floor area of its Peak building would still be
violative of the floor area limits to the extent of about 9,865 square meters of
allowable floor area under the MACEA revised restrictions.
Respondent Rosa-Diana avers that there is nothing illegal or unlawful in the
building plans which it used in the construction of the Peak condominium
"inasmuch as it bears the imprimatur of the building official of Makati, who is
tasked to determine whether building and construction plans are in
accordance with the law, notably, the National Building Code."cralaw
virtua1aw library
Respondent Rosa-Diana, however, misses the point inasmuch as it has
freely consented to be bound by the deed restrictions when it entered into a
contract of sale with spouses Manuel Sy and Sy Ka Kieng. While respondent
claims that it was under the impression that the deed restrictions were no
longer being enforced by Ayala, the Undertaking 14 it executed belies this
same claim. In said Undertaking, respondent agreed to "construct and
complete the construction of the house on said lot as required under the
special condition of sale." Respondent likewise bound itself to abide and
comply with . . . the condition of the rescission of the sale by Ayala Land, Inc.
on the grounds therein stated . . .
Contractual obligations between parties have the force of law between them
and absent any allegation that the same are contrary to law, morals, good
customs, public order or public policy, they must be complied with in good
faith. Hence, Article 1159 of the New Civil Code provides
"Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith."cralaw
virtua1aw library
Respondent Rosa-Diana insists that the trial court had already ruled that the
Undertaking executed by its Chairman and President cannot validly bind
Rosa-Diana and hence, it should not be held bound by the deed restrictions.
We agree with petitioner Ayala’s observation that respondent Rosa-Diana’s
special and affirmative defenses before the trial court never mentioned any
allegation that its president and chairman were not authorized to execute the
Undertaking. It was inappropriate therefore for the trial court to rule that in the
absence of any authority or confirmation from the Board of Directors of
respondent Rosa-Diana, its Chairman and the President cannot validly enter
into an undertaking relative to the construction of the building on the lot within
one year from July 27, 1989 and in accordance with the deed restrictions.
Curiously, while the trial court stated that it cannot be presumed that the
Chairman and the President can validly bind respondent Rosa-Diana to enter
into the aforesaid Undertaking in the absence of any authority or confirmation
from the Board of Directors, the trial court held that the ordinary presumption
of regularity of business transactions is applicable as regards the Deed of
Sale which was executed by Manuel Sy and Sy Ka Kieng and respondent
Rosa-Diana. In the light of the fact that respondent Rosa-Diana never alleged
in its Answer that its president and chairman were not authorized to execute
the Undertaking, the aforesaid ruling of the trial court is without factual and
legal basis and surprising to say the least.
The fact alone that respondent Rosa-Diana conveniently prepared two sets
of building plans — with one set which fully conformed to the Deed
Restrictions and another in gross violation of the same — should have
cautioned the trial court to conclude that respondent Rosa-Diana was under
the erroneous impression that the Deed Restrictions were no longer
enforceable and that it never intended to be bound by the Undertaking signed
by its President and Chairman. We reiterate that contractual obligations have
the force of law between parties and unless the same are contrary to public
policy morals and good customs, they must be complied by the parties in
good faith.
Petitioner, in its Petition, prays that judgment be rendered:chanrob1es virtua1
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a) ordering Rosa-Diana Realty and Development Corporation to comply with
its contractual obligations in the construction of the Peak by removing, or
closing down and prohibiting Rosa-Diana from using, selling, leasing or
otherwise disposing of, the portions of areas thereof constructed beyond or in
excess of the approved height, as shown by the building plans submitted to,
and approved by, Ayala, including any other portion of the building
constructed not in accordance with the said building plans, during the
effectivity of the Deed Restrictions;
b) Alternatively, in the event specific performance has become
impossible:chanrob1es virtual 1aw library
(1) ordering the cancellation and rescission of the April 20, 1976 Deed of
Sale by Ayala in favor of the original vendees thereof as well as the
subsequent Deed of Sale executed by such original vendees in favor of
Rosa-Diana, and ordering Rosa-Diana to return to Ayala Lot 7, Block 1 of
Salcedo Village;
(2) ordering the cancellation of Transfer Certificate of Title No. 165720 (in the
name of Rosa-Diana) and directing the office of the Register of Deeds of
Makati to issue a new title over the lot in the name of Ayala; and
(3) ordering Rosa-Diana to pay Ayala attorney’s fees in the amount of
P500,000.00, exemplary damages in the amount of P500,000.00 and the
costs of suit.
It must be noted that during the trial respondent Rosa-Diana was able to
complete the construction of The Peak as a building with a height of thirty
eight (38) floors or 133.65 meters and with a total gross floor area of
23,305.09 square meters. Having been completed for a number of years
already, it would be reasonable to assume that it is now fully tenanted.
Consequently, the remedy of specific performance by respondent is no
longer feasible. However, neither can we grant petitioner’s prayer for the
cancellation and rescission of the April 20, 1976 Deed of Sale by petitioner
Ayala in favor of the original vendees thereof as well as the subsequent Deed
of Sale executed by the original vendees in favor of respondent Rosa-Diana
inasmuch as the original vendees were not even made parties in the case at
bar. Moreover, petitioner Ayala, having agreed to the resale of the property
by the original vendees, spouses Manuel Sy and Sy Ka Kieng, to respondent
Rosa-Diana despite the failure of Manuel Sy and Sy Ka Kieng to comply with
their obligation to construct a building within one year from April 20, 1976,
has effectively waived its right to rescind the sale of the subject lot to the
original vendees.
Faced with the same question as to the proper remedy available to petitioner
in the case of "Ayala Corporation v. Ray Burton Development Inc.," a case
which is on all fours with the case at bench, we ruled therein that the party
guilty of violating the deed restrictions may only be held alternatively liable for
substitute performance of its obligation, that is, for the payment of damages.
In the aforesaid case it was observed that the Consolidated and Revised
Deed Restrictions (CRDR) imposed development charges on constructions
which exceed the estimated Gross Limits permitted under the original Deed
Restrictions but which are within the limits of the CRDR’s.
The pertinent portion of the Deed of Restrictions reads:chanrob1es virtual
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3. DEVELOPMENT CHARGE
For any building construction within the Gross Floor Area limits defined under
Paragraphs C-2.1 to C-2.4 above, but which will result in a Gross Floor Area
exceeding certain standards defined in Paragraphs C-3.1-C below, the
OWNER shall pay MACEA, prior to the construction of any new building, a
DEVELOPMENT CHARGE as a contribution to a trust fund to be
administered by MACEA. This trust fund shall be used to improve facilities
and utilities in Makati Central District.
3.1. The amount of the development charge that shall be due from the
OWNER shall be computed as follows:chanrob1es virtual 1aw library
DEVELOPMENT CHARGE = A x (B-C-D)
where:chanrob1es virtua1 1aw 1ibrary
A — is equal to the Area Assessment which shall be set at Five Hundred
Pesos (P500.00) until December 31, 1990. Each January 1st thereafter, such
amount shall increase by ten percent (10%) over the Area Assessment
charged in the immediately preceding year; provided that beginning 1995
and at the end of every successive five-year period thereafter, the increase in
the Area Assessment shall be reviewed and adjusted by the VENDOR to
correspond to the accumulated increase in the construction cost index during
the immediately preceding five years as based on the weighted average of
wholesale price and wage indices of the National Census and Statistics
Office and the Bureau of Labor Statistics.
B — is equal to the Gross Floor Area of the completed or expanded building
in square meters.
C — is equal to the estimated Gross Floor Area permitted under the original
deed restrictions, derived by multiplying the lot area by the effective original
FAR shown below for each location.
We then ruled in the aforesaid case that the development charges are a fair
measure of compensatory damages which therein respondent Ray Burton
Development Inc. is liable to Ayala Corporation. The dispositive portion of the
decision in the said case which is squarely applicable to the case at bar,
reads as follows:chanrob1es virtual 1aw library
WHEREFORE, premises considered, the assailed Decision of the Court of
Appeals dated February 27, 1996, in CA-G.R. C.V. No. 46488, and its
Resolution dated October 7, 1996 are hereby REVERSED and SET ASIDE,
and in lieu thereof, judgment is hereby rendered finding that:chanrob1es
virtual 1aw library
(1) The Deed Restrictions are valid and petitioner AYALA is not estopped
from enforcing them against lot owners who have not yet adopted the
Consolidated and Revised Deed Restrictions.
(2) Having admitted that the Consolidated and Revised Deed Restrictions are
the applicable Deed Restrictions to Ray Burton Development Corporation,
RBDC should be, and is bound by the same.
(3) Considering that Ray Burton Development Corporation’s Trafalgar plaza
exceeds the floor area limits of the Deed Restrictions, RBDC is hereby
ordered to pay development charges as computed under the provisions of
the consolidated and Revised Deed Restrictions currently in force.
(4) Ray Burton Development corporation is further ordered to pay AYALA
exemplary damages in the amount of P2,500,000.00 attorney’s fees in the
amount of P250,000.00.
SO ORDERED.
There is no reason why the same rule should not be followed in the case at
bar, the remedies of specific performance and/or rescission prayed for by
petitioner no longer being feasible. In accordance with the peculiar
circumstances of the case at bar, the development charges would certainly
be a fair measure of compensatory damages to petitioner Ayala.
Exemplary damages in the sum of P2,500,000.00 as prayed for by petitioner
are also in order inasmuch as respondent Rosa-Diana was in evident bad
faith when it submitted a set of building plans in conformity with the deed
restrictions to petitioner Ayala for the sole purpose of obtaining title to the
property, but only to prepare and later on submit another set of building plans
which are in gross violation of the Deed Restrictions. Petitioner Ayala is
likewise entitled to an award of attorney’s fees in the sum of P250,000.00.
WHEREFORE, the assailed Decision of the Court of Appeals dated
December 4, 1997 and its Resolution dated June 19, 1998, C.A. G.R. C.V.
No. 4598, are REVERSED and SET ASIDE. In lieu thereof, judgment is
rendered
a) ordering respondent Rosa-Diana Realty and Development Corporation to
pay development charges as computed under the provisions of the
consolidated and Revised Deed Restrictions currently in force; and
b) ordering respondent Rosa-Diana Realty and Development Corporation to
pay petitioner Ayala Corporation exemplary damages in the sum of
P2,500,000.00, attorney’s fees in the sum of P250,000.00 and the costs of
the suit.chanrob1es virtua1 1aw 1ibrary
SO ORDERED.
Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.
1. C.A. G.R. C.V. No. 45987 stated that the 2nd set of building plans
contemplated a 91.65 meter high, 38 storey, condominium with a gross floor
area of 23,305.09 meters. However, the height clearance permit granted by
Department of Transportation and Communications shows that Rosa-Diana
sought a permit for a proposed 133.05 meter high, 30 storey building (Rollo,
p. 133) It is likewise interesting to note that although under the 2nd set of the
building plans, the gross floor area of the building allegedly covers 23,305.09
square meters, the sanitary/plumbing permit issued by the Metropolitan
Manila Commission shows that the total area of the building is in fact 32,208
square meters (Rollo, p. 129).
2. C.A. Rollo, p. 355.
3. C.A. Rollo, pp. 348-350.
4. 5 Am Jur 2d, Appeal and Error § 746.
5. Allen v. Bryant, 155 Cal 256 100 P 704.
6. 5 Am Jur 2d, Appellate Review § 599 citing Samsel v. Wheeler Transp.
Servs., 246 Kan 336, 789 P2d 541.
7. 5 Am Jur 2d, Appellate Review § 599 citing State ex rel. Moore v. Molpus
(Miss) 578 So 2d 624.
8. Rollo, p. 322.
9. Rollo, p. 326.
10. 21 C.J.S. 311 citing State v. Tingle, 60 S 728, 103 Miss 672; In re Herle’s
estate, 300 NY S 103, 165 Misc 616.
11. 20 Am Jur 2d, Courts § 39.
12. 294 SCRA 48, 64 [1998].
13. Banson v. Court of Appeals, 246 SCRA 42, 46 [1995].
14. Rollo, p. 108.
G.R. No. L-5691 December 27, 1910
S. D. MARTINEZ and his wife, CARMEN ONG DE MARTINEZ, plaintiffs-
appellees, vs. WILLIAM VAN BUSKIRK, defendant-appellant.
Lionel D. Hargis for appellant. Sanz and Oppisso for appellee.
MORELAND, J.:
The facts found by the trial court are undisputed by either party in this
case. They are —
That on the 11th day of September, 1908, the plaintiff, Carmen
Ong de Martinez, was riding in a carromata on Calle Real, district
of Ermita, city of Manila, P.I., along the left-hand side of the street
as she was going, when a delivery wagon belonging to the
defendant used for the purpose of transportation of fodder by the
defendant, and to which was attached a pair of horses, came
along the street in the opposite direction to that the in which said
plaintiff was proceeding, and that thereupon the driver of the said
plaintiff's carromata, observing that the delivery wagon of the
defendant was coming at great speed, crowded close to the
sidewalk on the left-hand side of the street and stopped, in order
to give defendant's delivery wagon an opportunity to pass by, but
that instead of passing by the defendant's wagon and horses ran
into the carromata occupied by said plaintiff with her child and
overturned it, severely wounding said plaintiff by making a serious
cut upon her head, and also injuring the carromata itself and the
harness upon the horse which was drawing it.
x x x           x x x          x x x
These facts are not dispute, but the defendant presented
evidence to the effect that the cochero, who was driving his
delivery wagon at the time the accident occurred, was a good
servant and was considered a safe and reliable cochero; that the
delivery wagon had sent to deliver some forage at Paco Livery
Stable on Calle Herran, and that for the purpose of delivery
thereof the cochero driving the team as defendant's employee
tied the driving lines of the horses to the front end of the delivery
wagon and then went back inside of the wagon for the purpose of
unloading the forage to be delivered; that while unloading the
forage and in the act of carrying some of it out, another vehicle
drove by, the driver of which cracked a whip and made some
other noises, which frightened the horses attached to the delivery
wagon and they ran away, and the driver was thrown from the
inside of the wagon out through the rear upon the ground and
was unable to stop the horses; that the horses then ran up and on
which street they came into collision with the carromata in which
the plaintiff, Carmen Ong de Martinez, was riding.
The defendant himself was not with the vehicle on the day in question.
Upon these facts the court below found the defendant guilty of negligence
and gave judgment against him for P442.50, with interest thereon at the
rate of 6 per cent per annum from the 17th day of October, 1908, and for
the costs of the action. The case is before us on an appeal from that
judgment.
There is no general law of negligence in the Philippine Islands except that
embodied in the Civil Code. The provisions of that code pertinent to this
case are —
 Art. 1902. A person who by an act or omission causes damage to
another when there is fault or negligence shall be obliged to
repair the damage so done.
Art. 1903. The obligation imposed by preceding article is
demandable, not only for personal acts and omissions, but also
for those of the persons for whom they should be responsible.
The father, and on his death or incapacity the mother, is liable for
the damages caused by the minors who live with them.
Guardians are liable for the damages caused by minors or
incapacitated persons who are under their authority and live with
them.
Owners of directors of an establishment or enterprise are equally
liable for the damages caused by the employees in the service of
the branches in which the latter may be employed or on account
of their duties.
The State is liable in this sense when it acts through a special
agent, but not when the damages should have been caused by
the official to whom properly it pertained to do the act performed,
in which case the provisions of the preceding article shall be
applicable.
Finally, masters or directors of arts and trades are liable for the
damages caused by their pupils or apprentices while they are
under their custody.
The liability referred to in this article shall cease when the
persons mentioned therein prove that they employed all the
diligence of a good father of a family to avoid the damage.
Passing the question whether or not an employer who has furnished a
gentle and tractable team and a trusty and capable driver is, under the
last paragraph of the above provisions, liable for the negligence of such
driver in handling the team, we are of the opinion that the judgment must
be reversed upon the ground that the evidence does not disclose that the
cochero was negligent.
While the law relating to negligence in this jurisdiction may possibly be
some what different from that in Anglo-Saxon countries, a question we do
not now discuss, the rules under which the fact of negligence is
determined are, nevertheless, generally the same. That is to say, while
the law designating the person responsible for a negligent act may not
be the same here as in many jurisdictions, the law determining
what is a negligent act is the same here, generally speaking, as
elsewhere. (Supreme court of Spain, 4 December, 1903; 16 May, 1893;
27 June, 1894; 9 April, 1896; 14 March, 1901; 2 March, 1904; 7
February, 1905; 16 June, 1905; 23 June, 1905; 13 April, 1903; 7 March,
1902; 12 June, 1900; 2 March, 1907; 18 March, 1898; 3 June, 1901.)
It appears from the undisputed evidence that the horses which caused
the damage were gentle and tractable; that the cochero was experienced
and capable; that he had driven one of the horses several years and the
other five or six months; that he had been in the habit, during all that time,
of leaving them in the condition in which they were left on the day of the
accident; that they had never run away up to that time and there had
been, therefore, no accident due to such practice; that to leave the
horses and assist in unloading the merchandise in the manner described
on the day of the accident was the custom of all cochero who delivered
merchandise of the character of that which was being delivered by the
cochero of the defendant on the day in question, which custom was
sanctioned by their employers.
In our judgment, the cochero of the defendant was not negligent in
leaving the horses in the manner described by the evidence in this case,
either under Spanish or American jurisprudence. (Lynch vs. Nurdin, 1 Q.
B., 422; Rumsey vs. Nelson, 58 Vt., 590; Drake vs. Mount, 33 N. J. L.,
442; Hoboken Land and Improvement Co. vs. Lally, 48 N. J. L., 604;
Wasmer vs. D. L. & W. R. R. Co., 80 N. Y., 212.) 
lawphi1.net
In the case of Hayman vs. Hewitt (Peake N. P. Cas., pt. 2, p. 170), Lord
Kenyon said:
He was performing his duty while removing the goods into the
house, and, if every person who suffered a cart to remain in the
street while he took goods out of it was obliged to employ another
to look after the horses, it would be impossible for the business of
the metropolis to go on.
In the case of Griggs vs. Fleckenstein (14 Minn., 81), the court said:
The degree of care required of the plaintiff, or those in charged of
his horse, at the time of the injury, is that which would be
 exercised by a person of ordinary care and prudence under like
circumstances. It can not be said that the fact of leaving the horse
unhitched is in itself negligence. Whether it is negligence to leave
a horse unhitched must be depend upon the disposition of the
horse; whether he was under the observation and control of some
person all the time, and many other circumstances; and is a
question to be determined by the jury from the facts of each case.
In the case of Belles vs. Kellner (67 N. J. L., 255), it was held that it was
error on the part of the trial court to refuse to charge that "it is not
negligence for the driver of a quite, gentle horse to leave him unhitched
and otherwise unattended on the side of a public highways while the
driver is upon the sidewalk loading goods on the wagon." The said court
closed its opinion with these words:
There was evidence which could have fully justified the jury in
finding that the horse was quite and gentle, and that the driver
was upon the sidewalk loading goods on the wagon, at time of
the alleged injury, and that the horse had been used for years in
that way without accident. The refusal of the trial court to charge
as requested left the jury free to find was verdict against the
defendant, although the jury was convinced that these facts were
proven. lawphil.net
In the case of Southworth vs. Ry. Co. (105 Mass., 342), it was held:
That evidence that a servant, whom traders employed to deliver
goods, upon stopping with his horse and wagon to deliver a
parcel at a house from fifty to a hundred rods from a railroad
crossing, left the horse unfastened for four or five minutes while
he was in the house, knowing that it was not afraid of cars, and
having used it for three or four months without ever hitching it or
knowing it to start, is not conclusive, as a matter of law, of a want
of due care on his part.
The duty, a violation of which is claimed to be negligence in the respect in
question, is to exercise reasonable care and prudence. Where
reasonable care is employed in doing an act not itself illegal or inherently
likely to produce damage to others, there will be no liability, although
damage in fact ensues. (Milwaukee Ry. Co. vs. Arms, 91 U. S., 489;
Parrott vs. Wells, 15 Wall., 524; Brown vs. Kendall, 6 Cushing, 292;
Jackson Architectural Iron Works vs. Hurlbut, 158 N. Y., 34
Westerfield vs. Levis, 43 La. An., 63; Niosi vs. Empire Steam Laundry,
117 Cal., 257.)
The act of defendant's driver in leaving the horses in the manner proved
was not unreasonable or imprudent. Acts the performance of which has
not proved destructive or injurious and which have, therefore, been
acquiesced in by society for so long a time that they have ripened into
custom, can not be held to be themselves unreasonable or imprudent.
Indeed the very reason why they have been permitted by society is that
they beneficial rather than prejudicial.  Accidents sometimes happen and
itc-alf
injuries result from the most ordinary acts of life. But such are not their
natural or customary results. To hold that, because such an act once
resulted in accident or injury, the actor is necessarily negligent, is to go
far. The fact that the doctrine of res ipsa loquitur is sometimes
successfully invoked in such a case, does not in any sense militate
against the reasoning presented. That maxim at most only creates
a prima facie case, and that only in the absence of proof of the
circumstances under which the act complained of was performed. It is
something invoked in favor of the plaintiff before defendant's case
showing the conditions and circumstances under which the injury
occurred, the creative reason for the doctrine of res ipsa
loquitur disappears. This is demonstrated by the case of Inland and
Seaboard Costing Co. vs. Tolson (139 U.S., 551), where the court said
(p. 554):
. . . The whole effect of the instruction in question, as applied to
the case before the jury, was that if the steamboat, on a calm day
and in smooth water, was thrown with such force against a wharf
properly built, as to tear up some of the planks of the flooring, this
would be prima facie evidence of negligence on the part of the
defendant's agent in making the landing, unless upon the whole
evidence in the case this prima facie evidence was rebutted. As
such damage to a wharf is not ordinarily done by a steamboat
under control of her officers and carefully managed by them,
evidence that such damage was done in this case was prima
facie, and, if unexplained, sufficient evidence of negligence on
their part, and the jury might properly be so instructed.
There was presented in this case, and by the plaintiffs themselves, not
only the fact of the runway and the accident resulting therefrom, but also
the conditions under which the runaway occurred. Those conditions
showing of themselves that the defendant's cochero was not negligent in
the management of the horse, the prima facie case in plaintiffs' favor, if
any, was destroyed as soon as made.
It is a matter of common knowledge as well as proof that it is the
universal practice of merchants to deliver merchandise of the kind of that
being delivered at the time of the injury, in the manner in which that was
then being delivered; and that it is the universal practice to leave the
horses in the manner in which they were left at the time of the accident.
This is the custom in all cities. It has not been productive of accidents or
injuries. The public, finding itself unprejudiced by such practice, has
acquiesced for years without objection. Ought the public now, through the
courts, without prior objection or notice, to be permitted to reverse the
practice of decades and thereby make culpable and guilty one who had
every reason and assurance to believe that he was acting under the
sanction of the strongest of all civil forces, the custom of a people? We
think not.
The judgement is reversed, without special finding as to costs. So
ordered.
Arellano, C. J., Mapa, Johnson, Carson and Trent, JJ., concur.
Separate Opinions
TORRES, J., dissenting: I am of the opinion that the judgment should be
affirmed.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 72873 May 28, 1987
CARLOS ALONZO and CASIMIRA ALONZO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and TECLA
PADUA, respondents.
Perpetuo L.B. Alonzo for petitioners.
Luis R. Reyes for private respondent.
CRUZ, J.:
The question is sometimes asked, in serious inquiry or in curious
conjecture, whether we are a court of law or a court of justice. Do we
apply the law even if it is unjust or do we administer justice even against
the law? Thus queried, we do not equivocate. The answer is that we do
neither because we are a court both of law and of justice. We apply the
law with justice for that is our mission and purpose in the scheme of our
Republic. This case is an illustration.
Five brothers and sisters inherited in equal pro indiviso shares a parcel of
land registered in 'the name of their deceased parents under OCT No.
10977 of the Registry of Deeds of Tarlac. 1
On March 15, 1963, one of them, Celestino Padua, transferred his undivided share of the herein
petitioners for the sum of P550.00 by way of absolute sale. 2 One year later, on April 22, 1964,
Eustaquia Padua, his sister, sold her own share to the same vendees, in an instrument denominated
"Con Pacto de Retro Sale," for the sum of P 440.00. 3
By virtue of such agreements, the petitioners occupied, after the said
sales, an area corresponding to two-fifths of the said lot, representing the
portions sold to them. The vendees subsequently enclosed the same with
a fence. In 1975, with their consent, their son Eduardo Alonzo and his
wife built a semi-concrete house on a part of the enclosed area. 4
On February 25, 1976, Mariano Padua, one of the five coheirs, sought to
redeem the area sold to the spouses Alonzo, but his complaint was
dismissed when it appeared that he was an American citizen .  On May 5
27, 1977, however, Tecla Padua, another co-heir, filed her own complaint
invoking the same right of redemption claimed by her brother.  6
The trial court * also dismiss this complaint, now on the ground that the right had lapsed, not
having been exercised within thirty days from notice of the sales in 1963 and 1964. Although there was
no written notice, it was held that actual knowledge of the sales by the co-heirs satisfied the
requirement of the law. 7
In truth, such actual notice as acquired by the co-heirs cannot be
plausibly denied. The other co-heirs, including Tecla Padua, lived on the
same lot, which consisted of only 604 square meters, including the
portions sold to the petitioners .   Eustaquia herself, who had sold her
8
portion, was staying in the same house with her sister Tecla, who later
claimed redemption petition.   Moreover, the petitioners and the private
9
respondents were close friends and neighbors whose children went to
school together. 10
It is highly improbable that the other co-heirs were unaware of the sales and that they thought, as they
alleged, that the area occupied by the petitioners had merely been mortgaged by Celestino and
Eustaquia. In the circumstances just narrated, it was impossible for Tecla not to know that the area
occupied by the petitioners had been purchased by them from the other. co-heirs. Especially significant
was the erection thereon of the permanent semi-concrete structure by the petitioners' son, which was
done without objection on her part or of any of the other co-heirs.
The only real question in this case, therefore, is the correct interpretation
and application of the pertinent law as invoked, interestingly enough, by
both the petitioners and the private respondents. This is Article 1088 of
the Civil Code, providing as follows:
Art. 1088. Should any of the heirs sell his hereditary rights
to a stranger before the partition, any or all of the co-heirs
may be subrogated to the rights of the purchaser by
reimbursing him for the price of the sale, provided they do
so within the period of one month from the time they were
notified in writing of the sale by the vendor.
In reversing the trial court, the respondent court ** declared that the notice required
by the said article was written notice and that actual notice would not suffice as a substitute. Citing the
same case of De Conejero v. Court of Appeals 11 applied by the trial court, the respondent court held
that that decision, interpreting a like rule in Article 1623, stressed the need for written notice although
no particular form was required.
Thus, according to Justice J.B.L. Reyes, who was the ponente of the
Court, furnishing the co-heirs with a copy of the deed of sale of the
property subject to redemption would satisfy the requirement for written
notice. "So long, therefore, as the latter (i.e., the redemptioner) is
informed in writing of the sale and the particulars thereof," he declared,
"the thirty days for redemption start running. "
In the earlier decision of Butte v. UY, 12 " the Court, speaking through the same learned
jurist, emphasized that the written notice should be given by the vendor and not the vendees,
conformably to a similar requirement under Article 1623, reading as follows:
Art. 1623. The right of legal pre-emption or redemption
shall not be exercised except within thirty days from the
notice in writing by the prospective vendor, or by the
vendors, as the case may be. The deed of sale shall not
be recorded in the Registry of Property, unless
accompanied by an affidavit of the vendor that he has
given written notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that of the
adjoining owners.
As "it is thus apparent that the Philippine legislature in Article 1623
deliberately selected a particular method of giving notice, and that notice
must be deemed exclusive," the Court held that notice given by
the vendees and not the vendor would not toll the running of the 30-day
period.
The petition before us appears to be an illustration of the Holmes dictum
that "hard cases make bad laws" as the petitioners obviously cannot
argue against the fact that there was really no written notice given by the
vendors to their co-heirs. Strictly applied and interpreted, Article 1088 can
lead to only one conclusion, to wit, that in view of such deficiency, the 30
day period for redemption had not begun to run, much less expired in
1977.
But as has also been aptly observed, we test a law by its results; and
likewise, we may add, by its purposes. It is a cardinal rule that, in seeking
the meaning of the law, the first concern of the judge should be to
discover in its provisions the in tent of the lawmaker. Unquestionably, the
law should never be interpreted in such a way as to cause injustice as
this is never within the legislative intent. An indispensable part of that
intent, in fact, for we presume the good motives of the legislature, is
to render justice.
Thus, we interpret and apply the law not independently of but in
consonance with justice. Law and justice are inseparable, and we must
keep them so. To be sure, there are some laws that, while generally
valid, may seem arbitrary when applied in a particular case because of its
peculiar circumstances. In such a situation, we are not bound, because
only of our nature and functions, to apply them just the same, in slavish
obedience to their language. What we do instead is find a balance
between the word and the will, that justice may be done even as the law
is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly
apply the law as it is worded, yielding like robots to the literal command
without regard to its cause and consequence. "Courts are apt to err by
sticking too closely to the words of a law," so we are warned, by Justice
Holmes again, "where these words import a policy that goes beyond
them." 13 While we admittedly may not legislate, we nevertheless have the power to interpret the
law in such a way as to reflect the will of the legislature. While we may not read into the law a purpose
that is not there, we nevertheless have the right to read out of it the reason for its enactment. In doing
so, we defer not to "the letter that killeth" but to "the spirit that vivifieth," to give effect to the law maker's
will.
 The spirit, rather than the letter of a statute determines its
construction, hence, a statute must be read according to
its spirit or intent. For what is within the spirit is within the
letter but although it is not within the letter thereof, and
that which is within the letter but not within the spirit is not
within the statute. Stated differently, a thing which is
within the intent of the lawmaker is as much within the
statute as if within the letter; and a thing which is within
the letter of the statute is not within the statute unless
within the intent of the lawmakers. 14
In requiring written notice, Article 1088 seeks to ensure that the redemptioner is
properly notified of the sale and to indicate the date of such notice as the starting
time of the 30-day period of redemption. Considering the shortness of the period,
it is really necessary, as a general rule, to pinpoint the precise date it is supposed
to begin, to obviate any problem of alleged delays, sometimes consisting of only
a day or two.
The instant case presents no such problem because the right of
redemption was invoked not days but years after the sales were made in
1963 and 1964. The complaint was filed by Tecla Padua in 1977, thirteen
years after the first sale and fourteen years after the second sale. The
delay invoked by the petitioners extends to more than a decade,
assuming of course that there was a valid notice that tolled the running of
the period of redemption.
Was there a valid notice? Granting that the law requires the notice to be
written, would such notice be necessary in this case? Assuming there
was a valid notice although it was not in writing. would there be any
question that the 30-day period for redemption had expired long before
the complaint was filed in 1977?
In the face of the established facts, we cannot accept the private
respondents' pretense that they were unaware of the sales made by their
brother and sister in 1963 and 1964. By requiring written proof of such
notice, we would be closing our eyes to the obvious truth in favor of their
palpably false claim of ignorance, thus exalting the letter of the law over
its purpose. The purpose is clear enough: to make sure that the
redemptioners are duly notified. We are satisfied that in this case the
other brothers and sisters were actually informed, although not in writing,
of the sales made in 1963 and 1964, and that such notice was sufficient.
Now, when did the 30-day period of redemption begin?
While we do not here declare that this period started from the dates of
such sales in 1963 and 1964, we do say that sometime between those
years and 1976, when the first complaint for redemption was filed, the
other co-heirs were actually informed of the sale and that thereafter the
30-day period started running and ultimately expired. This could have
happened any time during the interval of thirteen years, when none of the
co-heirs made a move to redeem the properties sold. By 1977, in other
words, when Tecla Padua filed her complaint, the right of redemption had
already been extinguished because the period for its exercise had
already expired.
The following doctrine is also worth noting:
While the general rule is, that to charge a party with
laches in the assertion of an alleged right it is essential
that he should have knowledge of the facts upon which he
bases his claim, yet if the circumstances were such as
should have induced inquiry, and the means of
ascertaining the truth were readily available upon inquiry,
but the party neglects to make it, he will be chargeable
with laches, the same as if he had known the facts. 15
It was the perfectly natural thing for the co-heirs to wonder why the spouses Alonzo, who were not
among them, should enclose a portion of the inherited lot and build thereon a house of strong
materials. This definitely was not the act of a temporary possessor or a mere mortgagee. This certainly
looked like an act of ownership. Yet, given this unseemly situation, none of the co-heirs saw fit to
object or at least inquire, to ascertain the facts, which were readily available. It took all of thirteen years
before one of them chose to claim the right of redemption, but then it was already too late.
We realize that in arriving at our conclusion today, we are deviating from
the strict letter of the law, which the respondent court understandably
applied pursuant to existing jurisprudence. The said court acted properly
as it had no competence to reverse the doctrines laid down by this Court
in the above-cited cases. In fact, and this should be clearly stressed, we
ourselves are not abandoning the De Conejero and Buttle doctrines.
What we are doing simply is adopting an exception to the general rule, in
view of the peculiar circumstances of this case.
The co-heirs in this case were undeniably informed of the sales although
no notice in writing was given them. And there is no doubt either that the
30-day period began and ended during the 14 years between the sales in
question and the filing of the complaint for redemption in 1977, without
the co-heirs exercising their right of redemption. These are the
justifications for this exception.
More than twenty centuries ago, Justinian defined justice "as the constant
and perpetual wish to render every one his due." 16 That wish continues to
motivate this Court when it assesses the facts and the law in every case brought to it for decision.
Justice is always an essential ingredient of its decisions. Thus when the facts warrants, we interpret
the law in a way that will render justice, presuming that it was the intention of the lawmaker, to begin
with, that the law be dispensed with justice. So we have done in this case.
WHEREFORE, the petition is granted. The decision of the respondent
court is REVERSED and that of the trial court is reinstated, without any
pronouncement as to costs. It is so ordered.
Teehankee, C.J., Yap, Narvasa, Melencio-Herrera Gutierrez, Jr., Paras,
Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.
Fernan and Feliciano, JJ., are on leave.
EN BANC
GR No. L-49090 February 28, 1947
TEODORA L. VDA. De Miranda and others, plaintiffs-appellants,
vs. Feliciano IMPERIAL IMPERIAL AND JUANA, defendants-appellees.
Manuel M. Calleja and D. Ramon C. Fernandez on behalf of the appellants.
D. P. Perez Toribio appellees.
BRIONES, J. :
This is a matter before the war. The lawsuit was filed before the Court of First
Instance of Albay on November 25, 1941, ie, almost on the eve of the
outbreak of the Pacific War. The Court delivered its judgment on March 17,
1943. The matter was taken to before this Supreme Court under the appeal
filed by the applicant on June 9, 1943. Before he could decide, the file is
burned together with the other records of this Court in the conflagration of
Manila for the battle of liberation. What we have, therefore, before us is a
reconstituted with documents provided by the lawyer of the appellant, namely
record: ( a ) copies of the appeal record (record on appeal); ( b ) copies of the
argument submitted by counsel for the appellant. The respondent has not
submitted any allegation or if, or through his lawyer. Lawyers for both parties
were duly notified of the proceedings of reconstitution by the commissioner of
this Court, but the only ones who have appeared have been lawyers for the
appellant, delivering copies of which have been mentioned.
It is alleged in the lawsuit that before November 17, 1938 the defendants
conjuges, Feliciano and Joan of Imperial Imperial, Imperial Elias debian the
amount of P1,000; that in consideration of this debt and to guarantee
payment had subsided, as antichresis Imperial Elias said the possession and
enjoyment of three plots of land paddy your propiedead; that on that date
November 17, 1938, the defendants proposed to the applicant, Theodora L.
Vda.Miranda, who lend them the amount of P1,000 to rescue Elias Imperial
grounds, subrogated it as a creditor in place of Elias under the same terms
and conditions of antichresis concluded with the latter; that inasmuch as the
applicant had the quantity ordered and, moreover, the defendant is his sister,
a widow of a brother of this, I accept the proposal, effectively delivering the
amount of P1,000 to the defendants, who then see the returned Elias
Imperial to rescue farms; that in the case of relatives, the contract was not
reduced to writing, but after I did the rescatey Imperial Elias stated at the foot
of the ownership documents for the three plots of land, the documents were
handed in the act of redemption the applicant who was then present in the
company of the defendant as evidence of the loan and the transfer of the
new contract antichresis; that since the applicant was enjoying the products,
receiving his participation in the crops corresponding to 1939 and 1940 at
a rate of two harvests a year, and the first crop of 1941, or a total of 5
harvests from November 17 1938 to April 1941; that the applicant could no
longer enjoy the second harvest of 1941, ie corresponding to October, as the
defendants resolved since such appropriate harvest and subsequent to the
present; the harvest gathered by the defendants in October, 1941, and
should belong to the applicant, was 50 cavanes of rice, whose price in the
market was at P2.50 the dig that is, a total of p120. Therefore, the applicant
requests that, "under the first ground of action , the defendants be ordered to
accord a document of mortgage in favor of the applicant to ensure the three
plots of land mentioned above to ensure payment to the applicant of the she
pesos paid by Mr. Elias Imperial on behalf of such defendants, establishing
therein within three months to pay, or time that is reasonable in the prudent
judgment of the Court and by interest at the rate of twelve ( 12%) percent per
year; " and "under the s econd cause of action , the defendant is ordered to
pay the applicant the sum of P120 as the value of the rice crop raised plots of
land described in this lawsuit and illegally appropriated by these defendants,
plus court costs; " and "calls, finally, any other just and equitable remedy."
Regarding the first ground of action the defendants are defended on the
grounds that the applicant only received the amount of P500, to which they
added another P500 to rescue Elias Imperial grounds; and that this debt was
more than P500 paid with the products of the land that the applicant received
on 5 consecutive harvests, "this automatically extinguished the rights and
contractual obligations of the parties." Regarding the second ground of
action, deny, and say the crop in October 1941 and all that were collected
after they legally belonged to the defendants; and that the October harvest,
as in previous years, they reported as 70 cavanes participation of palay.
The defendants raised, moreover, in its defense a counterclaim alleging (1)
that between the applicant and the defendant, Joan of Imperial, a verbal
agreement was held in vitud which is received in that the sum of P500 to
rescue terrnos refefridos, on the understanding that the applicant would
make theirs every product under the same terms and conditions of the
previous contract with Imperial Elias until your credit quedase entirely paid for
such products: (2) that, indeed, the rescue was undertaken by returning Elias
Joan documents with a note of cancellation of the debt at the foot of the
same, but after the plaintiff took the documents provided under the pretext
familiar with the surrounding land, and this is the explanation of how the
documents ended up in the hands of the applicant holding them until the day
of the hearing; (3) that, in addition to the 3 plots in question, the applicant's
products enjoy a fourth plot of the defendants amounts to 10 cavanes of rice
each harvest; (4) that the 4 plots the applicant came to receive as
participation in the five crops that collected a total of 400 cavanes of rice, and
that then dig traded at P2.50 on the market; (5) Therefore, the applicant
made no less than P1,000 with the products received by it and deducting
from this sum owed by the defendants P500, P100 more in interest at the
legal rate, still remains in favor such a balance of P400, so ask for a
judgment against the applicant issued by the latter amount.
After seen the issue the Court delivered its judgment in which are estimated
diguientes conclusively proven the facts: (1) that for about 10 years prior to
November 17, 1938 the defendants had Eleas Imperal owing to the amount
of P1,000: (2) between the creditor and the debtor was held accessory
contract antichresis under which one would enjoy as effectively enjoy
during the period of 10 years for all products of the 3 land that has been
mentioned, considering these products and interests of the borrowed money;
(3) that during and enjoy the land, not a single grain of rice produced is
aplicio to pay or repay the principal of the loan; (4) that the November 17,
1938 the defendants received from the applicant not P500, as those claims,
but P1,000 to rescue farms hands of Imperial Elias being the agreement
between the parties that the applicant would be subrogated as a creditor
instead of the Imperial Elias under the same terms and conditions of the
contract signed with this antichresis;"After careful consideration of the
evidence and all the attendant circumstances, the Court concludes and,
therefore, also states that the applicant pay the demandadosP1,000
atualmente and that the agreement between the parties was that the
applicant would receive the products placed above the 3 plots in antichresis
for Elias Imperial, as interest on the loan until it was entirely paid "; that,
indeed, the applicant was quietly getting the products in 5 consecutive
cosehcas, but after harvest in April, 1941, the defendants completely
dispossessed the plaintiff, appropriating all crops.
Of the facts established in the judgment, as this is extracted, it is clear that
the contato versa antichresis on that matter is defined in Article 1885 of the
Civil Code which stipulates that: "The contracting parties may stipulate that
offset the interest on the debt with the fruits of the property given in
antichresis. " However, the court a quo, instead of applying this article as it
should by imperative stating the facts proven and established at trial, made
the following statement: "However, despite this agreement, the claim that the
defendants' the amount of the proceeds received by the applicant should
apply to the payment of the principal of its debt desu deducting the interest at
the legal rate, it must be sustained. " That is, the Court applies to the case
not Article 1885 cited above but Article 1881 of the Civil Code which reads as
follows: "For the antichresis the creditor acquires the right to receive the fruits
of a property of his debtor's liability
to apply to the payment of interest, if they ought to have been, and then to
the capital of your credit. " And the Court bases its finding in the judgment
delivered by the former Court of Appeals in the case of Santa Rosa against
Noble (GR No. 43769, Off Gaz 35, 2734;.. The Lawyer's Journal, Vol V, No.
23. p. 1109), presentation of Judge Hon. Jose Lopez Vito.
So the court a quo, after making the corresponding arithmetic operation
applying, first, the payment of interest, and then to the principal of the debt,
awarded for the applicant a balance of P435.17 and orders will continue to
apply to products satisfy the land until full payment, or rectify the defendants
at once with interest at the rate of 6 percent per year since 1 May 1941.
Against the failure so dictated the applicant has brought the present appeal,
not asking more questions of law, namely that the Court erred in failing to
apply to this case in all its rigor to Article 1885 of the Civil Code; that the
Court could not, of a fiat, create arbitrarily for the parties not concluded a
contract between them; that Article 1885 refers specifically to a type of
antichresis and 1881 article and article to another;when the agreement is, as
in the present case, the products of the farm given in in antichresis be offset
by interest on the debt, no part of the products should be applied to the
repayment of capital; and therefore, she, the appellant is entitled to be
returned integral capital of your credit, or the cantidada of P1,000, but the
goods or interests.
The Court a quo founded his fault entirely analogous said two separate
issues, especially since both come from the same region - the Bicol - and
relate to a contract very common in this region, there commonly called the
contract "Sangla" or " garment, "and that in the Visayas where the Cebuano
dialect is spoken and Mindanao is called" saop "and also" pledge"sometimes.
It seems superfluous to say that only the sentences of this Supreme Court
case law or doctrine sit in this jurisdiction. However, this did not start that a
conclusion or to the Court of Appeals that covers some point of law still
unresolved in our jurisprudence can serve as a legal standard to the lower
courts, and that that conclusion or statement rises to doctrine if, after of being
tested in elcrisol the analysis and judicial review, hallaramos that had merit
and sufficient carats for consagracioncomo rule of law. For this purpose and
for this purpose we have examined carefully and thoroughly the Court of
Appeal in that case against Noble Santa Rosa, coming, as stated above, the
Bicol region as well as the hand. No sign - we are not now called for it, nor is
it necessary to do so - the interesting insights that the Court of Appeals made
in that judgment, we believe, however, that the court a quo erred in applying
to this case, as there are between cases fundamental differences, namely:
First difference : In the matter of the Court of Appeals was usury "issue,"
capital controversial point. So says this Court in its judgment: "But the
defendants argue that the contract stated in Exhibit E is usury, which raises
the question of whether the Act No. 2655 known Usury Act that sets the rate
of interest it is permissible to collect on the loans, it is applicable to contracts
antichresis. " Although not say it in a way, the Court of Appeals ruling that the
Act was applicable Usuara, consequently fixing the chargeable interest in,
practically prosecuted statutory rate of 6 percent and declare as usurious
contract that antichresis He was. In the case before us the question of usury
was not raised in the pleadings nor ever even in the trial; and the judgment
there any pronouncement in fact usury; and inasmuch as in this appeal not
Planteam more issues of law that it being established and accepted without
question the facts contained in the sentenica, that is this review that our
faculty has to adhere strictly and inflexibly to such facts, without us be
allowed to go beyond their radio.After all, it is not surprising that the
defendants have not raised any question on usury, as popr 10 years had
been indebted to Elias Imperial without, apparently, differences endeavor
relationships (in fact Elias I stated at the hearing in favor of the defendants),
and we have seen that the applicant has only just subrogation instead of
Elias in the contract antichresis. Second difference : Clearly antichresis that
that case is Santa Rosa against Noble is defined in Article 1881 of the Civil
Code, antichresis "the creditor acquires the right to receive the fruits of a
building of the debtor the obligation to apply to the payment of interest, if they
ought to have been, and then to the capital of your credit. " Here is what the
Court of Appeal, in its judgment that commented on this subject: "As to
whether the same rate set by the usury law should be applied when there is
an express stipulation that the fruits will began with debt interest pursuant to
Article 1885, with quaere: not being the case that is submitted to our
consideration today, having declared us that Exhibit "E" falls low over the
provisions of Article 1881 of the Civil Code ". (Emphasis added.)
Instead, the antichresis on that issue in the present case is defined in Article
1885, which provides that "the contracting parties may stipulate that the
interest on the debt with the fruits of the property given in antichresis be
compensated." Here is the strict ruling of the court a quo on the matter: "After
a careful consideration of the evidence and all the attending Circumstances,
the court Concludes, and holds THEREFORE, whos That the plaintiff loaned
the defendants P1,000, and That the agreement Between the parties Was
That the plaintiff would receive the products of the three parcels of land
formerly conveyed in Antichresis to Elias Said Imperial as interests on loan
Until the same is paid . " 1 (emphasis added.)
Exist, according to the same conclusion court a quo, that covenant that farm
products to be offset by interest on the debt, in accordance with Article 1885
of the Civil Code, the change is arbitrary court, making for the parties to
uncontrato they have not concluded, or to put it more specifically, truly
transforming the pact agreed to something that falls under an article of the
code that was neither in the mind nor the will of the parties. Article 1255 of
the Civil Code stipulates that "contracting parties may establish the
covenants, terms and conditions as they see fit, provided they are not
contrary to law, morality or public order." This excludes contracts the fiat
court. Courts can interpret contracts; what they can not do is mold, for jarlos
the parties. We agree with the Court of Appeals that the contract called
"Sangla" or "pledge" (on property) in Bicol, "soap" or "pledge" in Visayas and
Mindanao, really has the characters of the antichresis and therefore can
considered as such. Besides the sale pact retro, that contract is the best
known and usual in our towns and rural districts - Take hold of the peasant
and farmer, and to improve and expand their crops, and to buy new land to
increase their possessions, and to marry their children and provide them, and
even sometimes to give a dignified and proper burial of their dead. And why
not say so? Per unhappy passion play culminating sometimes in that contract
to embitter the existence if north to work the ruin of the small owner.
The question we now have to determine is, namely: is automatic or
ministerially antichresis applicable to the usury, as appears to be inferred
from the judgment appealed? Certainly not. Antichresis as contract - either
under Article 1881, and under Article 1885 of the Civil Code - it is not
necessarily usurious; it can be, that if usurious. But so that you can declare,
is not onlyabsolutely necessary that usury be an "issue," a contentious
capital allegations point and at trial, so that each party has its "day in court,"
that is, that can defend properly and adequately, but also, must be
demonstrated and positively established that usury is of such proportions
that, on shock the conscience, tilt the mood to believe that the contract has
been used as a costume or to artilugo violate or circumvent the usury law.
The reason for this is simple: in the antichresis there is a contingent element
random by nature. The perception of the products by the creditor, which is its
main feature, is subject to various contingencies and eventualities. There
may come a poor harvest, or none, and because he has vented a typhoon,
and because they have overflowed rivers Coming up a flood, and because a
flock of locusts devastated crops and plantations, and because deep social
upheavals have subverted peace and order preventing tilling the fields,
etcetera, etcetera. So the antichresis can not automatically apply
ministerially, Articles 2, 3 and 8 of Law No. 2655 on usury, as these relate to
the perception of a fixed amount of products: the debtor must submit
unswervingly or its equivalent in money, whether good or bad harvest,
whether or not there. The fact that sometimes antichresis the amount of
fruits, to be the settlement exceeds the rates set by the law of usury, usurious
contract does not, because the law assumes that such
excess is collecting the dividend the creditor in exchange for the risk
premium and contingencies which has paid up capital of the credit.
In American jurisprudence also certain types of contract analogous to our
"Sangla" or known "saop." as they demonstrate the following authorities:
In view, however, of the rule That a creditor's return need not be limited to
the statutory rate when it is Affected by a contingency putting the whole of it
at hazard, a contract is ordinarily not usurious under Which the creditor is to
receive, in His consideration of forbearance or loan, property or services of
uncertain value, even though the likely value is greater than lawful interest,
UNLESS the excess is so palpable as to show a corrupt intent to violate or
evade the usury laws , UNLESS the contract is made Such for the purpose of
evasion or violation. 2 (66 CJ, 212.)
Where the lender is to receive money for something else than His loan, as
property or services, the value of Such profit Necessarily Being uncertain, the
contract is not usurious, even though the likely value is greater than legal
interest , UNLESS the consideration so Given . is so palpably in excess of
the cetain profit allowed by law as to show a corrupt intent to violate the
usury laws "February 39 Cyc 959;. Wright vs. McAlezander 11 Wing, 236;.
Rapier v C. Gulf City Paper. 77 Ala., 126. (102 Southern Reporter, p. 204.)
So, an agreement That Instead of interest, the lender of money Should
receive the rents and profits of Certain land for a term of years, is not
usurious Where no intention to evade the statue is shown; and thefact That
Such rents and profits happen to amount to more than lawful interests does
not render the contract usurious . 3 (Webb on Usury, p. 85.)
Manresa, lecturing on the relative convenience of the antichresis although
sometimes, as a tool of usury, makes the following pertinent observations:
In doing so the authors of the Code, they responded with great success to a
need imposed by modern principles that the laws of mutual inspiration,
according to which there is no economic or legal reason to condemn the
antichresis. In addition, they sought thus avoid damages to the debtor who,
otherwise, were inevitable, since experience well palpably had shown that,
despite the prohicion laws, the anticretico covenant was very common in
practice, because the prohibitory provisions were being circumvented,
disguising the convention with the form or name sales pact retro, so far
favored the borrower, as the legislature intended, it caused him great grief,
since it can not grant the creditor enjoyment of the fruits to be applied to the
repayment of interest or partial payment of principal, they were forced to sell
the goods in the manner, shedding a property that could hardly acquire
again. (Manresa, Comm. In Cod. Civ. Spanish, Volume 12, p. 545.)
The rule, then, is, or should be, the following: (a) the antichresis known in this
country with the vernacular name "Sangla" or "saop" can not be assessed
and reported as usurious, unless usury in itself it arises ocmo an "issue," a
contentious issue between the parties, in accordance with the procedural
statutory rules on the matter; ( b ) and that the contract is considered and
declared usury is not enough that the products of the property given in
antichresis to perciberse by the creditor exceeds any legal fees both in terms
of interest, but it must be as excess palpable, so repulsive and so shocking to
the conscience necessarily the feeling that the contract has been forged to
hide the malicious intent to violate or evade usury law; ( c ) no mediating
these circumstances, the "Sangla" or "saop" must be respected and
compliance left expedited under Article 1881 or Article 1885 of the Civil
Code, as the case may be, and the courts anything done to change the terms
of antichresis which must be law between the parties.
The present case presents some difficulties with regard to the failure to be
issued. The plaintiff sought judgment and oblique to the defendants to grant
in its favor a mortgage document on the three plots of land to secure
payment of the debt of P1,000, "setting therein within three months to the
payment or the time limit reasonable under the preduente judgment of the
Court and by interest at a rate of 12 percent a year, or in place, any other
remedy ineligible ". In our view, this would only delay the disposal and final
settlement of the issue to the detriment of the parties and expeditious
administration of justice.
Having defendants possession of the plots of land for them in antichresis
transferred to claimants and enjoyed its fruits from the month of October
1941 up to date, and demostratod plaintiffs give its agreement by teminado
the contract to present anticretico demand the November 25, 1941, not to
recover these parceles of land, but to demand payment of the debt with
interest from that date, upon revocation of sentenciaapelada, we issued the
following ruling :.
(1) the defendant was ordered to pay the applicants the sum of one thousand
pesos (P1,000), amount of credit of the latter, with interest at the rate of 6
percent a year from November 25, 1941 in that the suit was filed, and the
court costs and must be paid that sum with interest and costs to the plaintiffs,
or deposited in the Court of First Instance of Albay within three months after
officially this moratorium is lifted ;
(2) In default of payment, as is required in the previous paragraph, the three
plots of land on which deals with this issue will be sold by the Sheriff at public
auction in accordance with the law on payment of mortgage credit;
(3) Meanwhile no payment is made, as is ordered in this judgment, the sum
owed their legal interests and court costs pass as a lien (lien) preferably on
the three plots of land in question. So it is ordered. Moran, Pres., Fair,
Bengzon, Padilla and Tuazon, JJ., concur.
Separate Opinions
PARAS, J., dissenting:, Although the trial court held That "the plaintiff whos
loaned the defendants P1,000, and That the agreement Between the parties
Was That the plaintiff would receive the products of the three parcels of land
formerly conveyed in Antichresis to Elias Said Imperial as interests on loan
Until the same is paid, "it NEVERTHELESS sustained, citing the decision of
the Court of Appeals in the case of Santa Rosa vs. Noble (35 Off. Gaz.,
2724), "the contention of the defendants That the value of the products
received by the plaintiff, after deducting therefrom interests at the legal rate,
Should be applied to the principal of Their debt."
The plaintiff has appealed; does not controvert the correctness of the
appraisal made by the trial court of the value of the products received by her
from the lots in question: but contends That Should Have Said court applied
article 1885 of the Civil Code Which Provides That "May the contracting
parties That stipulate the interest of the debt be off in September against the
fruits of the estate Given in Antichresis. " In other words, it is the view of the
plaintiff That the products, Regardless of Their value, Should belong to her in
payment of the interest on defendant's loan of P1,000. Also this is the view
Expressed in the majority opinion. I dissent. The right of the contracting
parties to Establish any PACTS, clauses, and conditions They deem
Advisable May, is subject to the proviso That "they are not Contrary to law,
morals, or public order." (Article 1255, Civil Code.) After the enactment of the
Usury Law (Act No. 2655), Which fixes the rate of interest, in the absence of
express stipulation, at six per centum per annum (section 1) and provides
(section 8) That "all loans under Which payment is to be made in agricultural
products or seed or in any other kind of commodities Shall Also be null and
void UNLESS That They Provide Such products or seeds or other
commodities Shall be appraised at the time When the obligation falls due at
the current market price locally, "article 1885 of the Civil Code must be
Considered modified, if not repealed under the repealing clause (section 11)
of the Usury Law. In other words, any antichretic agreement, Either under
article 1881 or article 1885, may now be validly enforced only in the light of
the Provisions of the Usury Law. The unrestricted freedom conceded in
article 1855 was good before the Government HAD ITS policy laid down
Regarding interest on loans. Article 1881 punishes therefore the general rule
to govern necessarily always enforced and that there is no special agreement
indicated and 1885 establishes the exception to that rule if the pact
stipulated.
This is a result of the freedom granted to the fixing of the interest rate for
legal abolished by law in 1856, the parties are free to set the amount and
condition of such interest, may perceive them in money than in kind, and
therefore compensated with the fruits interests. (12 Manresa, Civil Code, p.
482.) That the majority argue the Usury Law can not be applied Because the
defense of usury was not set up. It Appears, however, that, as amitted by the
majority, the defendant Alleged In His answer That "the applicant made no
less than P1,000 in products received by it and deducting from this amount
the P500 owed by the defendants, more P100 in interest at the legal rate, still
remains in favor of these a balance of P400, so ask for a judgment against
the applicant issued by the latter amount. " If This allegation did not amount
to a charge That the plaintiff received more than the legal interest, it was
sufficient to apprise the court and the plaintiff That it was the contention of
the defendant That the plaintiff HAD right not to apply the products entirely in
compensation Their interest notwithstanding of the agreement, and This
Issue Should be decided in the light of Existing law Which was it NOT TEODORA L. VDA. De Miranda and others, plaintiffs-appellants,
necessary for the defendant to specify in His answer. We would not just thus vs. Feliciano IMPERIAL IMPERIAL AND JUANA, defendants-appellees.
be digressing from the issues raised by the parties, or creating new ones, by GR No. L-49090 February 28, 1947
simply adjudicating cases concrete conformably to law. FACTS: Defendants Feliciano and Juana Imperial barrowed from plaintiff
Miranda the amount of P1,000; that in consideration of this debt and to
. . . It is clear that the courts may in each case determine the nature of the guarantee payment they executed verbal antichresis in favor of the latter. In
obligation and conditions attached to it, if the agreement is given to the an action filed by Miranda against Imperial, the lower court in
effects from law. . . . (11 Manresa, Civil Code, p. 550.) The contingent deciding based its finding in the judgment delivered by the Court of Appeals
character of the arrangement Contemplated by Article 1885, ITS can not in the case of Santa
warrant continued existence. The Usury Law, Which is of later date and Rosa vs. Noble. Obtaining a negative judgment, appellant has brought the
controlling THEREFORE, Protects Borrowers and at the same time Eliminate present appeal claiming that the court erred in applying the case of Santa
the element of chance That May prove disadvantageous to Lenders Who are Rosa vs. Noble alleging that cases decided by the court of appeals does not
to be paid in agricultural products. constitute precedent and hence may not be applied in deciding cases.
The appealed judgment Should be Affirmed. ISSUE: Whether the decisions of the Court of Appeals constitute precedents.
HELD: Only the decisions of Supreme Court establish jurisprudence or
Footnotes doctrines in the jurisdiction. However, this does not prevent that a conclusion
1 "After careful consideration of the evidence and surrounding or pronouncement of the Court of Appeals which covers a point of law still
circumstances, the Court concludes, therefore also stated that the applicant undecided in our jurisprudence may serve as juridical guide to the inferior
now ready to P1,000 defendants, and that the agreement between the courts, and that such conclusion or pronouncement be raised as a doctrine if,
parties was that the applicant would receive the products of the three plots after it has been subjected to test in the crucible of analysis and revision, this
given above in antichresis Elias Imperial as interest on that loan , until it paid Supreme Court should find that it has merits and qualities sufficient for its
regardless. " consecration as a rule of jurisprudence.
2 "In view, however, the rule that revenue from a creditor should not be
limited to the legal rate when it is affected by a contingency that puts
everything at risk, a contract is not ordinarily usurious when the creditor
receives in consideration of its loan or largesse, property or services of
doubtful value, even if it is greater than or legal interest rate, unless the
excess is so palpable that show a corrupt intent to violate or evade usury law,
or unless the contract was made for the purpose of such violation or evasion
"(66 CJ, 212).
3 "When the contract is for the lender to get something other than money for
his loan, that is, in kind or services, siendoel necessarily uncertain value of
such profits, usurious contract is likely although the value is greater than the
interest legal , unless the consideration is also given so palpably in excess of
the profit permitted by law it is deduced and demonstrated the vicious
intention of violating usury laws. " (39 Cyc, 959;. Wright vs. McAlexander 11
Wing, 236;. Rapier vs. Gulf City Paper Co., 77 Wing, 126.).
4 "So, a contract in which, instead of interest, the lender receives the income
and gains some ground for a period of years, is not usurious if it is proven
that there was intent to evade the law, and the fact that such income and
gains mounted to or more than the legal interest rate does the usurious
contract . " (Webb on Usury, p. 85.)